Shares of Falguni Nayar-led online beauty retailer Nykaa hit their all-time low today amid a rally in the broader market. The stock listed as FSN E-Commerce Ventures touched a record low of Rs 1,061.55 , down 4.42 per cent ┬аon BSE. The stock has been losing for the last two days. Nykaa stock is trading lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The scrip has lost 49.5 per cent in 2022 and fallen 8.73 per cent in a week.
Market cap of the firm fell to Rs 50,421 crore on BSE. Total 0.33 lakh shares of the firm changed hands amounting to a turnover of Rs 3.53 crore.
Abhijeet from Tips2trade said, “Heavy sell off due to anchor investors exiting & uncertainty in terms of financial performance of the new age startups has led to Nykaa stock price making a new yearly low. Even though stock price is heavily oversold, if Nykaa doesn’t close above ┬аRs 1085 on the daily charts, a fall till Rs 985 looks possible.”
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Tirthankar Das, Technical & Derivative Analyst, Retail, Ashika Stock Broking suggests sell on rise strategy in case of Nykaa stock.┬а
“Consecutive lower low formation in both weekly and daily time frame indicates that the trend in the stock has been methodically negative. However, amid such negativity, prices are at an extreme oversold conditions in daily time frame. Hence, a relief rally or a consolidation in prices can be seen before swaggering back to its negative momentum. Outlook in the stock is likely to remain negative until and unless it trades above the recent swing high of ┬аRs 1,350 which seems to have a feeble chance. Hence, ideal approach should be to sell on rise as fresh sell crossover is seen MACD in weekly time frame as well. Lower target from 161.8% & 178.2% projected retracement comes around 950 and 930 respectively, ” said Das.┬а
Shares of Nykaa made a stellar listing on bourses on November 10 last year, gaining 82 per cent to Rs 2,054 on NSE against the IPO issue price of Rs 1,125. Since listing, the stock has plunged over 48 per cent till date.
Despite the recent correction, brokerages are bullish on the stock.
Kotak Institutional Equities in a note last week said that the cost of digital advertising is set to remain elevated for Nykaa, given high competition among brands to target specific customers and high cost of influencers. “Nykaa’s BPC business should continue to be unaffected, as it is an advertising platform itself; the fashion business could see elevated ad spends. We bake in delayed profitability of this vertical, resulting in a 16-21 per cent cut in the FY2023-25 EPS and a new FV of Rs 1,640. The stock price correction is an opportunity to BUY,” it said.┬а
Another brokerage Nomura India last week initiated coverage on Nykaa with a target of Rs 1,365, factoring in an 18 per cent revenue growth compounded annually over FY25-40 into its target. The foreign brokerage, which sees Nykaa’s Ebitda margin stabilising at 18 per cent level, does not rule out the potential for the stock to double over next five years.
In the first quarter of the current fiscal, the firm reported a 33.4 per cent rise in consolidated net profit at Rs 4.55 crore in the first quarter ended June 30, 2022. The company had posted a net profit of Rs 3.41 crore in the year-ago period. Sequentially, the beauty e-commerce platform profit declined 47.6 per cent from Rs 8.56 crore in the previous quarter (Q4FY22). Revenue from operations climbed 40.5 per cent to Rs 1148.421 crore in Q1 against Rs 816.991 crore in the same quarter last fiscal.
