Nykaa, the FSN E-Commerce Ventures, saw its shares trading at ₹170.67, up 0.73 per cent on NSE at 11.35 AM on Tuesday, despite the company’s third-quarter net profit missing market expectations. Morgan Stanley maintained an ‘Overweight’ rating with a target price of ₹200, while JM Financial set a higher target of ₹240, citing the company’s strong performance in its beauty and personal care (BPC) segment.
In the third quarter, the beauty e-commerce platform reported a 51 per cent year-on-year rise in consolidated net profit to ₹26.41 crore. Revenue grew by 26.7 per cent to ₹2,267.21 crore, with the BPC segment contributing ₹2,060.01 crore to the quarterly revenue. However, the fashion vertical posted a loss of ₹25.41 crore due to weak demand.
The company’s EBITDA increased by 42 per cent to ₹140.8 crore, with the operating margin expanding by 70 basis points to 6.2 per cent. The gross merchandise value rose by 25 per cent to ₹4,528 crore, driven by a 32 per cent growth in beauty GMV to ₹3,390 crore. Order volumes also saw a 30 per cent growth, marking the highest growth in nine quarters.
Nykaa expanded its physical presence to 221 stores across 73 cities, with retail space growing by 31 per cent year-on-year to 2.1 lakh square feet. Additionally, the company increased its stake in Earth Rhythm Private Limited to 74.63 per cent with an additional investment of ₹39.50 crore in November 2024.
Despite the underwhelming Q3 profit, analysts remained bullish on Nykaa’s prospects. On February 11, 2025, the company continues to be viewed favorably by investors.
