Nykaa shares gain 4% ahead of Q2 scorecard

Nykaa shares: Shares of FSN E-Commerce Ventures, operating fashion-to-jewellery e-retailer Nykaa, traded higher by over 4 per cent at Rs 146.3 ahead of its September quarter numbers due to be released later today. At day's high the stock gained up to 5 per cent to Rs 147.45.

In Friday’s session (November 3), the stock of Nykaa ended at Rs 140.3 per share on the BSE.

In its business update released last month, the company said despite the subdued discretionary consumption on the back of a delayed festive season, Nykaa has witnessed a strong quarter across all verticals. The company, at a consolidated level, expects its net sales value (NSV) for the Q2 period to increase in the mid-twenties and revenue to grow in the early twenties on a YoY basis, both at levels similar to Q1 FY24.

Post the business update, Nomura retained its ‘Neutral’ stance on the counter with a target price of Rs 163. The brokerage estimates the e-tailer’s consolidated revenue growth at 23 per cent year-on-year, while the EBITDA margin is seen at 5.8 per cent, up 60 basis points sequentially. “Thus, for FY24F, while revenue growth of ~22% y-y can have some upside risk, the company needs to show stronger EBITDA margin improvement in 2HFY24F to meet our EBITDA margin estimate of ~6.6% for FY24F,” said the brokerage in its report post-Nykaa’s business update for the September quarter.

Nykaa's Q1 performance

In the quarter ended June, the company’s topline scaled higher to Rs 1428.5 crore as against Rs 1156.8 crore logged in the same quarter a year ago. Operating profit for the quarter increased 59 per cent year-on-year to Rs 73.5 crore, while EBITDA margin jumped to 5.17 per cent during the quarter as against 4.01 per cent in the same quarter last year.