Why Nykaa Shares Are Shining Through Gloomy Market Session

Shares of Nykaa parent FSN E-commerce were climbing on Monday following an upbeat quarterly business update from the fashion and beauty e-tailer.

What Happened: FSN E-commerce reported consistent growth across its three business verticals in the December quarter, despite experiencing some impact on discretionary consumption due to short-term pressures.

Eye On The Future: Nykaa anticipates its beauty and personal care (BPC) vertical to achieve gross merchandise value (GMV) growth in the mid-20s for the October-December quarter, with net sales value (NSV) growth expected to be around 20% on a year-on-year basis.

The variance between GMV and NSV growth is attributed to brand-led pricing and discounting, particularly in mass and masstige categories, although the underlying order volume growth remains healthy and consistent, the company said.

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Beating The Industry: Nykaa’s BPC growth has outpaced the overall industry, with the company noting that the industry growth temporarily dipped below its long-term trajectory but is expected to revert to the median in the near to mid-term, given the strong macroeconomic and demographic outlook.

The company forecasts the combined NSV of all BPC businesses to grow at a low-to-mid-20s rate on a year-on-year basis.

In the fashion vertical, Nykaa expects GMV growth to be around 40%, with NSV growth anticipated in the low thirties. At the consolidated level, Nykaa projects its NSV to grow in the mid-twenties, while revenue is expected to grow in the low twenties on a year-on-year basis for the quarter.

Price Action: FSN E-Commerce’s share price was up 3.75% at ₹179.90 around noon on Monday.

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