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Nykaa Shares Rise Today: Shares of Nykaa, a brand specializing in beauty, wellness, and fashion products, rose by nearly 3% in trading on Tuesday; Buy, sell or hold?
Nykaa Share Price: Nykaa Shares Rise 3% After Q3 PAT Surges 61% YoY, Should You Buy, Sell, or Hold?
Nykaa Stock Rises After Q3 Earnings: Shares of Nykaa, a brand specializing in beauty, wellness, and fashion products, rose by nearly 3 per cent in trading on Tuesday, February 11, following the company’s December quarter (Q3FY25) results.
Nykaa’s stock opened at Rs 171.85, compared to the previous close of Rs 169.60 on the BSE. The share price then continued to climb, reaching a high of Rs 174.60, marking a 2.94 per cent increase from the prior close.
The company reported a 61% year-on-year (YoY) increase in consolidated net profit, reaching Rs 26.12 crore, although this fell short of the expected Rs 36 crore.
Revenue, however, met expectations, rising 27% YoY to Rs 2,267 crore. The company posted an EBITDA of Rs 141 crore for the October-December 2024 quarter, with a margin of 6.2%, both in line with estimates.
On a sequential basis, profit after tax (PAT) more than doubled from Rs 10 crore in the previous quarter (September), while revenues increased by 21% quarter-on-quarter (QoQ). Other income for the quarter decreased to Rs 5.53 crore, down from Rs 7.58 crore in the same quarter last year.
The company highlighted its expanding beauty retail network, now with 221 physical stores across 73 cities, having opened over 47 stores in the last year. With a GMV productivity of Rs 4,250 per square foot per month, Nykaa claims to have one of the most profitable store networks in the sector.
Nykaa Target Price
According to Trendlyne data, the average target price for Nykaa shares is Rs 193, suggesting a potential upside of 14% from current market levels. The consensus recommendation from 24 analysts is a ‘Buy’ rating.
Should you buy Nykaa stock after the Q3 results?
Following Nykaa’s impressive Q3 performance, some experts have expressed confidence in the company’s potential for continued growth.
Anshul Jain, Head of Research at Lakshmishree Investment and Securities, noted that FSN E-Commerce Ventures reported a remarkable 61 per cent year-on-year increase in profit after tax, reaching ₹26 crore. Jain attributed this success to strong demand in the beauty and fashion sectors, contributing to robust topline growth. He highlighted Nykaa’s resilience in the evolving e-commerce landscape, positioning it well for future expansion.
From a technical perspective, the stock appears to have growth potential.
Mahesh M Ojha, AVP of Research at Hensex Securities, emphasized that Nykaa’s share price is poised for an upward movement on the technical charts. He suggested that investors could consider buying Nykaa shares in the ₹167 to ₹169 range, with a near-term target of ₹185 to ₹200. However, he recommended a stop loss below ₹158 for new positions and advised current shareholders to hold the stock while maintaining a trailing stop loss below ₹158.
Kushal Gandhi, a Technical Analyst at StoxBox, noted that the price action of Nykaa initially suggested a promising shift towards a more dynamic phase, indicating a potential uptrend.
However, the stock has since declined by over 30% from its 52-week highs and is currently trading just below both the 50-week moving average and the 200-day moving average. As a result, Nykaa has shown a decline in its EPS, price strength, and buyer demand. From a technical standpoint, the stock lacks positive momentum, as indicated by the RSI across daily and higher timeframes staying below median levels, with no divergence from the price action.
Given that the stock is trading below key moving averages and has recently experienced a negative crossover, it is advised not to purchase additional shares of Nykaa until it decisively reclaims the 200 DMA, which is currently around the 180 levels.
