Nykaa Shares Rocket After Q3 As Brokerages Remain Upbeat

Nykaa‘s share price broke its five-straight session losing streak going up around 6% to hit an intraday high of ₹170

What Happened: Nykaa posted a net profit of ₹17.5 crore, marking a 106% increase from the previous year’s period. This surge in profitability was driven by robust demand during the festival and wedding seasons. Revenue also saw a notable uptick, rising by 22% to ₹1,788.8 crore compared to ₹1,462.83 crore in the same period last year.

The company said that its focus on improving profitability is evident in the expansion of its EBITDA margin to 5.5%, up from 5.3% in the previous year’s quarter. Nykaa’s gross merchandise value (GMV) grew by 29% year-on-year to ₹3,619.4 crore, with strong contributions from all divisions.

The beauty and personal care (BPC) division, which is Nykaa’s flagship business, saw a 25% increase in GMV to ₹2,369.7 crore. Nykaa Fashion also demonstrated robust growth with a 40% increase in GMV to ₹1,012.5 crore.

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Analyst Reactions: HSBC maintained its “buy” rating for the stock but reduced the price target to ₹240 from ₹250. The brokerage said that the company’s EBITDA was slightly lower than expected. It expects the omnichannel retailer’s revenue to double every 2-3 years for the next five years.

Jefferies also maintained its “buy” rating for the stock revising the target price to ₹210 from ₹230. The research firm also said the company’s December quarter EBITDA was lower than expected.

Elara Capital maintained its “accumulate” rating for the stock reducing the price target to ₹185 from ₹200. The analysts highlighted that fashion segment results were a positive surprise. The brokerage added that it expects the fashion business to turn EBITDA positive by March 2026.

Kotak Securities maintained its “add” rating but revised the price target to ₹165 from ₹170. The brokerage said that the company’s revenue growth was decent but margins were sluggish.

Price Action: Nykaa’s share price was trading 5.05% higher at ₹168.55 as the markets opened on Wednesday morning.

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