Shares of the fashion and beauty retailer Nykaa jumped over 3.5% to reach Monday's intraday high of ₹130.80. The stock, like several of its peers in the new-age tech companies category, has been seeing volatility. Just last week, the stock hit its 52-week low of ₹120.70 before bouncing back over 7% the day after.

The share saw renewed interest from institutional investors and mutual funds in December after it posted strong second-quarter numbers.

Foreign institutional investors (FIIs) increased their position in the omnichannel retailer from around 6% to 11.1%. Domestic Institutional Investors followed suit and more than doubled their stock holdings from around 3% to 6.4%. Mutual fund holdings in the stock also doubled to 4.1% in December. 

Nykaa saw a drop in interest from retail investors as their holdings dropped from 38.6% to 30% in December. As the stock goes through an almost 30% valuation correction in three months, it has received a positive outlook from several brokerages such as Kotak Institutional Equities and ICICI Securities, for the time being.

Kotak has a price target of ₹230 on the stock, while ICICI Securities’ target is ₹145.

The company was profitable before it went public and still remains profitable — a fact that sets it apart from a lot of its peers in the digitally grown startup category. Market estimates remain optimistic that Nykaa's profitability trend will continue as the company posts its Q3 numbers. 

Price Action: Nykaa was up 3.5% to trade at ₹130.30 in the early hours of trading on Monday. 

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