The shares of FSN E-Commerce Ventures Ltd Nykaa have reached a new All time low of Rs 975 after it declined by 5 percent till the afternoon on Friday. In the past five days, the stock price has shed approximately 15 percent.
In the past month, the stock has shed approximately 22 percent and so far this year it has declined by 53 percent YTD.
The sharp fall is seen as the stock is approaching the end of the one-year lock-in period for its pre-IPO investors. The stock was listed on the exchanges in November 2021, the lock-in period for which will expire on November 10th, 2022.
The stock is also seeing a sell-off by foreign investors in the last few weeks. The shareholding pattern of the company shows that Foreign Institutional Investors held a 29.9 percent stake in the company.
Here’s what analysts have to say about the stock going ahead:
“We expect a significant structural growth opportunity, due to India’s favorable demographics, rising affluence driving aspirational spending, increased women labour force participation, and rising social media influence. We have a target of Rs 1,365 (Upside of 37%) on the stock.” Nomura Financial Advisory & Securities.
“We have a ‘BUY’ rating on the stock with a Sep ’23 target price of Rs 1,780 (Upside of 78%) and believe any short-term dip should be a great accumulation opportunity for investors looking to build long-term positions in Nykaa,” said JM Financial.
“Nykaa’s BPC business should continue to be unaffected, as it is an advertising platform itself; the fashion business could see elevated ad spends. We bake in delayed profitability of this vertical, resulting in a 16-21 percent cut in the FY 2023-25 EPS and a new FV of Rs 1,640. The stock price correction is an opportunity to BUY,” Kotak Institutional Equities.
In Q2FY23, the company reported a total revenue of Rs 37 crores which increased from Rs 4 crore in the same quarter a year earlier. In the quarter under review, their net profit stood at Rs 9 crores up from Rs 1 crore in Q2FY22.
FSN E-commerce Ventures Ltd popularly known as “Nykaa” is a digitally native consumer technology platform that delivers a content-led, lifestyle retail experience to consumers.
Written by Anoushka Roy
