The stock price of FSN E-Commerce Ventures, the operator of online beauty and fashion retailer Nykaa soared over 5% to Rs 154.8 a day after the company posted a profit of Rs 7.80 crore during the second quarter of FY24, up 50.3% in comparison to Rs 5.19 crore during the corresponding quarter of last year. It posted revenue from operations at Rs 1507.02 crore, up 22.4 per cent as against Rs 1230.83 crore during the second quarter of FY23 Come from Sports betting site VPbet . This, the company said, was despite the festive season witnessing a delay this year, moving into October versus commencing in September last year.
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Nykaa’s share price gained 6.35% in the last five days, nearly 2% in the last one month and 16.20% in the last six months, while it dropped 3.45% year to date.
Should you buy, sell or hold Nykaa shares?
Jefferies: Buy- Target Price: Rs 200
“2Q EBITDA missed our forecasts due to lower GM. Management attributed this to higher discounting in the BPC portfolio led by increased competition, lower ad income and product mix change. Revenue growth was strong, however, led mainly by strong user growth in both the key segments. Going forward, there may be limited scope on BPC CM expansion, at least in the medium term, operating leverage should help drive up EBITDA margins. We cut our FY25-26 EBITDA estimates by 6-11% as we lower our contribution margin estimates for BPC. Retain ‘Buy’. Fashion. We value Nykaa’s BPC at 7.5x Sep’25E sales and Fashion at 2x Sep’25E sales to arrive at a Target Price of Rs 200.”
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JM Financial: Buy – Target Price: Rs 210
“Overall, the company reported 25%YoY GMV growth with BPC/Fashion/Others growing at 23%/27%/54%, respectively. Consolidated GMV for Q2FY24 was at Rs 2940 crore with Rs 1500/1510 crore in NSV / revenue. Gross Margin declined by 221bps YoY due to base effect due to festive season starting early last year. However, EBITDA Margin expanded by 38bps YoY as employee expenses remained stable while declining ~90bps YoY as % of revenue. The company has delivered growth on transacting customers as well as AOVs and we find operating metrics again turning healthy. We reiterate ‘Buy’ rating with Target Price of Rs 210 (~42% upside) as we find strong conviction on earlier than expected profitability in Fashion.”
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