Nykaa shares slip for seventh straight session; here’s why

Shares of Nykaa (listed as FSN E-Commerce Ventures Ltd ) fell for the seventh straight session today amid a spate of resignations at the beauty e-retailer. The online fashion retailer on March 24 announced the resignation of five senior executives. Those who resigned included the company’s chief commercial operations officer Manoj Gandhi, chief business officer of fashion division Gopal Asthana, chief executive officer of wholesale business Vikas Gupta and two vice-presidents of the fashion business.

Falling for the seventh straight session, Nykaa stock lost 5.08% to Rs 126.95 against the previous close of Rs 133.75 on BSE. The scrip has lost 17 per cent in 2023 and fallen 51.84 per cent in a year. Market cap of the firm slipped to Rs 36,482 crore on BSE. Total 2.59 lakh shares of the firm changed hands amounting to a turnover of Rs 3.36 crore on BSE. Nykaa shares hit a 52-week high of Rs 315.86 on April 11, 2022 and a 52-week low of Rs 120.75 on January 23, 2023.

Last month, Nykaa’s company secretary and compliance officer Rajendra Punde had resigned with effect from February 14.

In November 2022, chief financial officer Arvind Agarwal and chief technology officer Sanjay Suri had resigned. In August 2022, CEO of Nykaa’s private label division FSN Brands Reena Chhabra had also put in her papers.

Commenting on the series of exits, global investment firm Jefferies said, “Overall departure is small in the context of company size. Some departures are based on performance appraisal and, hence, are not entirely voluntary.”

It has a buy call on Nykaa with a target price of Rs 200 for the fashion firm. It also noted that the Nykaa team would be sought after by emerging competition and, hence, there will be ‘normal’ attrition. The company is likely to replace this with a mix of in-house and external talent, Jefferies added.

In early March, Macquarie initiated coverage on Nykaa stock with a price target of Rs 115. Macquarie's price target on Nykaa was the lowest on the street. Macquarie's bear case target for Nykaa was Rs 70, half the price from the current levels.

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