Nykaa shares to gain focus as Q4 profit surges 298% on-year; HSBC sets the highest target

Shares of FSN E-Commerce Ventures, operating fashion to beauty e-retailer, in Thursday’s session (May 23) started trade on a positive note after the company’s quarterly results were announced on Wednesday after market hours.

In early trade, Nykaa shares zoomed over 4 per cent to day's high price of Rs 187 per share, after opening at Rs 183.2 per share on the BSE.

For the January-March quarter of the fiscal year 2023-24, the company reported a 298 per cent jump in its consolidated net profit at Rs 9.1 crore. In the same quarter of the previous FY23, the company's PAT was recorded at Rs 2.3 crore. Revenue from operations during the reporting quarter surged 28 per cent on-year to Rs 1,668 crore. EBITDA during the period logged gains of 32 per cent on year to Rs 93.3 crore in Q4FY24. Furthermore, the EBITDA margin also came in higher at 5.6 per cent during the period as against 5.4 per cent reported in the same period last year.

The company’s beauty business hit the milestone of US$1 billion GMV or gross merchandise value in FY24. Also, the company’s BPC segment saw a consolidated GMV growth of 30 per cent on year, the highest in the last six quarters, supported by accelerated customer acquisition.

In its investor presentation, the company highlighted that there was continued growth momentum across all verticals and is servicing a much wider TAM or total addressable market.

Also, it noted that the capex during the previous FY has come down significantly from Rs 223.5 crore in FY23 to Rs 115 crore.

Here’s how global brokerages view Nykaa post its Q4FY24 earnings:

Though global brokerages are largely split on the outlook of Nykaa, HSBC and Jefferies have given a ‘buy’ call with the highest target of Rs 250 by the former, suggesting a potential upmove of up to 40 per cent  from the previous close. Meanwhile, Macquarie sees a downside of up to 25%.