Shares of Nykaa declined sharply on Monday as the company posted its earnings for the quarter ended June.

What Happened: The beauty and fashion retailer’s net profits for the April-June period came in at ₹5.4 crore, up 8% from the ₹5.01 crore profit reported in the same period last year. The company’s revenue from operations went up 23.81% to ₹1,421.8 crore. Both the topline and bottom line missed street estimates.

The omnichannel retailer’s profit for the period attributable to equity shareholders of the parent was at ₹3.30 crore, down 27% from the ₹4.55 crore it booked in the year-ago period. EBITDA grew 60% year-over-year to ₹73.5 crore with an EBITDA margin of 5.2%.

Analyst Reactions: BofA Securities downgraded the stock’s rating to ‘neutral’ as the company’s Q1 number missed estimates slashing the price target to ₹160 from ₹175. The brokerage said that the downside risk still remains if competition intensifies.

ICICI Securities also downgraded the stock to ‘add’ from ‘buy’ with a target price of ₹165. The brokerage firm said that the margin improvement was lower than expected.

Morgan Stanley, on the other hand, maintained its ‘overweight’ rating for the stock with a target price of ₹175. The firm said that the company’s management is focused on driving profitability metrics and expects to benefit from the festive demand in the coming quarters.

Price Action: Nykaa’s share price was down 3.56% to trade at ₹141 as the markets opened on Monday.

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