Indian benchmark indices traded higher on Tuesday after starting flat. The BSE Sensex was at 60422 levels (up 0.55%) and the NSE Nifty 50 was at 17980 levels (up 0.48%) at 01:40 PM on Tuesday. Gains in financial and IT shares led the headline indices higher.
In an otherwise firm market, the shares of Nykaa and Indus Towers plunged to reach a 52-week low:
FSN E-Commerce Ventures Ltd (Nykaa)
Online beauty and personal care platform (BPC)- Nykaa’s share price dropped 5.49% on the National Stock Exchange (NSE) to hit a 52-week low and record low of ₹ 132.55 apiece. In fact, its share price has tumbled by more than 13% in the past five days on the back of heavy volumes.
The trading volume on the counter jumped nearly three-fold to 1.85 crore shares by 01:10 PM on Tuesday. In the past year, the company’s share price has decreased by 62% against a 1.95% decline in the Nifty 50.
Brokerages shared their views about the company’s quarterly results. JM Financial said that while there has been a tougher macro environment, it expects Nykaa BPC to still do well due to the relative inelasticity of Nykaa shoppers. Nykaa Fashion, however, might still not see market share gains due to heightened competitive intensity but can still deliver decent growth on a small base.
JM Financial added that the company continues to expand its omnichannel presence and its focus on new initiatives such as eB2B, might provide significant opportunity over the next 3-5 years.
Indus Towers
Wireless Communication provider- Indus Towers’ shares slipped 3.46% on Tuesday’s trades to reach a 52-week low of ₹ 175.70 apiece on the NSE. Indus Towers is scheduled to meet on January 24, 2023 to consider and approve the audited financial results of the October to December quarter. In the past month, the company’s share price has declined by 10.4%, against a fall of 2.41% in the Nifty 50.
Indus towers has witnessed a healthy growth in terms of operational performance. During the previous quarter, the company registered a net addition of 1,452 macro towers and 1,746 corresponding co-locations. However, it has had a difficult year with receivables from Vodafone Idea Limited (VIL), which is its second-largest tenant. The company has already made a provision of ₹ 3,000 crores and has decreased its dividend payout.
BNP Paribas believes that improvement in long-term revenue visibility from VIL can result in a further increase in earnings estimates as well as valuation multiple and is an upside risk to
estimates. Further consolidation of the Indian telecom industry is a downside risk for Indus Towers.
Written by Simran Bafna
