Shares of FSN E-Commerce Ventures, which operates under hero Brands, fell more than 4% in early Thursday deals 1,780 each on the BSE after announcing its Q3FY22 results on Wednesday. The stock is down more than 14% so far in 2022 (year-to-date or YTD).
Cosmetic-to-fashion retailer reports nearly 57% drop in consolidated net profit 29 crore in the third quarter ended December 2021 as compared to 68.9 crore in the year-ago quarter.
“If we talk about Nykaa’s third quarter earnings it looks good as there is strong sales growth with good gross margin but profit is less due to higher marketing spend. It is one of the few new age commercial companies. It is one that is profitable hence investors prefer to invest in this stock despite expensive valuations,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.
Technically, Meena said that the stock is trying to form a base in the 1700-1600 zone while the 2000 level will act as a significant barrier, hence 1700-2000 is a well defined trading band for the time being And this is a decisive move from the band. Will decide the future direction of the market.
Nykaa’s consolidated revenue from operations up nearly 36% during October-December 2021 1,098 crore, from 807.9 crore in the year-ago period.
Nykaa’s consolidated GMV (gross trading value) grew 26% sequentially on a quarter-on-quarter basis and 49 percent on a year-on-year basis. 2043.5 crore in the December 2021 quarter.
Founded in 2012 by former investment banker Falguni Nair, FSN E-Commerce Ventures Ltd also has its proprietary manufactured brand products under its two business verticals – Nykaa and Nykaa Fashion.
Sumeet Bagdia of Choice Broking expects the weakness in Nykaa stock to continue and believes a correction is possible.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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