BackNykaa shares surge post Q4 results. What analysts say
Nykaa's Q4 profit more than halved to ₹7.5 crore
PremiumShares of Nykaa surged nearly 3% to ₹1,390 apiece on the BSE in Monday's opening deals even as FSN E-Commerce, which operates under the Nykaa brand, reported a decline of about 57% in its consolidated profit to ₹7.57 crore for the fourth quarter ended March 2022, mainly account of new investments.
Its revenue from operations increased by over 31% to ₹973 crore during the quarter under review, from ₹740.5 crore in the year-ago period.
Nykaa’s Q4FY22 revenue performance was in line with street estimates. Analysts at ICICI Securities like the higher investments in growing new businesses with resilient BPC margins.
“Regionalisation of warehousing to drive better consumer experience was much required given that horizontal players are already providing better consumer experience. eB2B business presents good long-term potential with scale-led benefits likely to occur for the core business also," the brokerage house said in a note.
The gross merchandise value (GMV) in beauty and personal care vertical grew by 29% to ₹1,248.5 crore in the March 2022 quarter from ₹964.5 crore a year ago. The fashion vertical recorded 84% growth during the quarter to ₹482.7 crore from ₹262 crore earlier.
“Competition will likely intensify from both vertical and horizontal peers. While we expect BPC revenues to grow, we believe Nykaa’s journey could be different – it will have to go more mainstream to drive this growth," as per ICICI Securities. It has maintained Hold on Nykaa shares with target price of ₹1,300.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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