Business

Stocks to buy: Buy, sell or hold? How to play Nykaa after strong performance in Q6

New Delhi: Brokers are mostly positive for FSN E-Commerce Ventures, the parent company of, after the company reported strong operating results for the June quarter 2022.

Nykaa’s 6th quarter consolidated profit increased 33% year-on-year to Rs 4.55 crore from Rs 3.41 crore in the corresponding quarter of last year.

The new age internet company’s Q1 revenue jumped 41% year-on-year to Rs 1,148.4 crore from Rs 817 crore in the June quarter of the last financial year.

Corporate radar



Gross margin improved by 380 bps YoY in Q1FY23. The fashion retailer’s total merchandise value, or GMV, also increased 47 percent year-on-year to 2,155.8 crore.

Citi maintains a buy rating on Nykaa with a target price of Rs 1,640, which is a 16% increase from Rs 1412 recorded on Friday.

The company reported strong core profit/growth margins. Contribution rate increased by 200 points per second quarter-on-quarter. The global investment bank values ​​Nykaa based on 24x FY24E EV/GP.

Another brokerage, which also maintains a buy rating on Nykaa but has cut its price target to Rs 1,743 from Rs 1,859 previously, making higher capital costs and stiff competition the main risks to the market. pricing.

“Overall, we’re still constructive on Nykaa,” it said. “Globally, it’s one of the most profitable and management-owned new-age businesses and offers growth opportunities for decades.”

However,

has maintained its strong rating on Nykaa with a target price of Rs 1,400 due to stiff competition from peers and verticals. It expects BPC revenue to grow, but Nykaa’s journey could be different.

“We cut our EBITDA estimates by about 10-15% for the two new fish companies adjusted for higher investments in new businesses.” The brokerage firm considers the pursuit of high growth and low chances of success in the fashion business due to high competition as the main risks.

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