Nykaa shares hit record low. Is it an opportunity for you to buy?

Nykaa share price: The stock of FSN E-Commerce Ventures -- parent of cosmetics-to-fashion retailer Nykaa -- extended losses for the fourth session in a row to a record low on Tuesday. At the record low of Rs 132.55 apiece on BSE, Nykaa shares changed hands at a discount of 87.8 per cent to the issue price of the company's IPO. 

What's hurting the stock?

At current levels, the stock of the beauty and personal care (BPC) e-commerce firm has lost 14.5 per cent of its value in four days. This comes close on the heels of the news of a block deal worth Rs 212 crore ($26 million).

The deal was executed at a price of Rs 148 a share -- a discount of 4.5 per cent from its previous close. Around 1.4 crore shares changed hands under the block deal.  

Also Read: Nykaa shares falls after block deal; analysts say stock expensive

The Nykaa stock has shed more than 65 per cent since the company's listing on the bourses in November 2021. 

Nykaa's IPO concluded with an overall subscription of 82 times, with strong participation of institutional investors and high-net-worth individuals. 

Is there an opportunity for investors to grab the stock for their portfolio at these levels? 

What to expect from Nykaa results

Growth in the December quarter will be driven by festive demand during the holiday season for Nykaa, besides penetration in new channels and newer initiatives, according to JM Financial Research Analyst Sachin Dixit said.

While there has been a tougher macro environment, the analyst expects Nykaa's beauty and personal care vertical to still do well due to the relative inelasticity of its shoppers, he said. 

Also Read: Nykaa shares hit fresh lifetime low amid slew of bulk, block deals

Nykaa Fashion might still not see market share gains due to high competitive intensity but can still deliver decent growth, Dixit added.

With Nykaa's BPC business delivering strong operating leverage and company-wide lowering of fulfillment costs from regional centers, JM Financial's Dixit analyst expects the overall EBITDA margin to improve by 152 basis points (bps) sequentially and by 21 bps on a year-on-year basis.

Anil Singhvi’s view on Nykaa

Earlier, Zee Business Managing Editor Anil Singhvi had recommended holding the stocks of new-age companies such as Nykaa. 

"A lot of times when you are unable to sell at the right price, you must not look to sell it at any price that comes your way," he had said. 

Also Read: Why are Zomato, Policy Bazaar and Nykaa stocks to Hold? Managing Editor Anil Singhvi explains