Nykaa share price jumps 17% in 1 month; brokerages bullish on the new-age company stock. Should you buy?

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Nykaa share price today

Shares of FSN E-Commerce Ventures (Nykaa) have rallied around 17% in the last one month. In this period, the new-age company stock has outperformed benchmark Nifty which has risen nearly 2%. Nykaa shares were trading at around Rs 147 today on NSE [{ "selector": ".drpgr-a", "duration": "500ms", "fill": "forwards", "delay": "0ms", "keyframes": [ {"offset": 0, "transform": "translateY(calc(600px - 407px))", "opacity": "1"}, {"offset": 1, "transform": "translateY(0)", "opacity": "1"} ] }, { "selector": ".aczcp-a", "duration": "1000ms", "fill": "forwards", "delay": "0ms", "keyframes": [ {"offset": 0, "opacity": 0}, {"offset": 1, "opacity": "1"} ] }]

Why Nykaa shares are rising?

Shares of FSN E-Commerce Ventures (Nykaa) have rallied around 17% in the last one month. In this period, the new-age company stock has outperformed benchmark Nifty which has risen nearly 2%. Nykaa shares were trading at around Rs 147 today on NSE [{ "selector": ".rbqjn-a", "duration": "500ms", "fill": "forwards", "delay": "0ms", "keyframes": [ {"offset": 0, "transform": "translateY(calc(600px - 407px))", "opacity": "1"}, {"offset": 1, "transform": "translateY(0)", "opacity": "1"} ] }, { "selector": ".rlwll-a", "duration": "1000ms", "fill": "forwards", "delay": "0ms", "keyframes": [ {"offset": 0, "opacity": 0}, {"offset": 1, "opacity": "1"} ] }]

JM Financial on Nykaa stock

JM Financial has a buy call on FSN E-Commerce Ventures with a target price of Rs 210. The brokerage continues to believe in Nykaa’s right to win in BPC (both B2C and eB2B) while expecting Fashion segment to focus on sustainable growth in premium fashion [{ "selector": ".kbsrn-a", "duration": "500ms", "fill": "forwards", "delay": "0ms", "keyframes": [ {"offset": 0, "transform": "translateY(calc(600px - 407px))", "opacity": "1"}, {"offset": 1, "transform": "translateY(0)", "opacity": "1"} ] }, { "selector": ".ioqnx-a", "duration": "1000ms", "fill": "forwards", "delay": "0ms", "keyframes": [ {"offset": 0, "opacity": 0}, {"offset": 1, "opacity": "1"} ] }]

Nykaa share price target

Foreign brokerage Jefferies also has a 'buy' rating on Nykaa stock with a base target of Rs 200. It sees the stock testing Rs 260 level in its upside scenario and a share price as low as Rs 100 in its downside scenario [{ "selector": ".nibcl-a", "duration": "500ms", "fill": "forwards", "delay": "0ms", "keyframes": [ {"offset": 0, "transform": "translateY(calc(600px - 427px))", "opacity": "1"}, {"offset": 1, "transform": "translateY(0)", "opacity": "1"} ] }, { "selector": ".srzwz-a", "duration": "1000ms", "fill": "forwards", "delay": "0ms", "keyframes": [ {"offset": 0, "opacity": 0}, {"offset": 1, "opacity": "1"} ] }]

Catalysts for Nykaa shares

Among key catalysts for Nykaa, brokerage firm Jefferies finds accelerated growth in transacting customers on digital adoption, a steady rise in average order value (AOV) and order frequencies and growth in the overall BPC market as disposable incomes rise [{ "selector": ".zjeuz-a", "duration": "500ms", "fill": "forwards", "delay": "0ms", "keyframes": [ {"offset": 0, "transform": "translateY(calc(600px - 427px))", "opacity": "1"}, {"offset": 1, "transform": "translateY(0)", "opacity": "1"} ] }, { "selector": ".izpqd-a", "duration": "1000ms", "fill": "forwards", "delay": "0ms", "keyframes": [ {"offset": 0, "opacity": 0}, {"offset": 1, "opacity": "1"} ] }]

Nykaa profitability
outlook positive

According to analysts at Jefferies, premiumisation trend plays well in favour of Nykaa given the platform positioning. Outlook on profitability is also positive, led by better customer retention, own labels - even in fashion, positive contribution is a must, unlike peers [{ "selector": ".riurf-a", "duration": "500ms", "fill": "forwards", "delay": "0ms", "keyframes": [ {"offset": 0, "transform": "translateY(calc(600px - 420px))", "opacity": "1"}, {"offset": 1, "transform": "translateY(0)", "opacity": "1"} ] }, { "selector": ".kggdn-a", "duration": "1000ms", "fill": "forwards", "delay": "0ms", "keyframes": [ {"offset": 0, "opacity": 0}, {"offset": 1, "opacity": "1"} ] }]

Tailwinds for Nykaa shares

Nuvama Institutional Equities has a 'Buy' rating on Nykaa stock with a target price of Rs 186. "Stable growth in BPC, along with profitability improvement, is admirable. Going forward, comfort on competition and cash flow generation, as per us, can drive re-rating," it said [{ "selector": ".obdna-a", "duration": "500ms", "fill": "forwards", "delay": "0ms", "keyframes": [ {"offset": 0, "transform": "translateY(calc(600px - 420px))", "opacity": "1"}, {"offset": 1, "transform": "translateY(0)", "opacity": "1"} ] }, { "selector": ".wicfx-a", "duration": "1000ms", "fill": "forwards", "delay": "0ms", "keyframes": [ {"offset": 0, "opacity": 0}, {"offset": 1, "opacity": "1"} ] }]

Foreign brokerages on Nykaa

Nomura sees Nykaa shares at Rs 183, while Macquarie has 'Underperform' rating on the stock and pegs its value at Rs 115 per share. The global investment bank liked the company’s focus on driving market-leading GMV growth across beauty/fashion [{ "selector": ".jduxb-a", "duration": "500ms", "fill": "forwards", "delay": "0ms", "keyframes": [ {"offset": 0, "transform": "translateY(calc(600px - 431px))", "opacity": "1"}, {"offset": 1, "transform": "translateY(0)", "opacity": "1"} ] }, { "selector": ".rjggc-a", "duration": "1000ms", "fill": "forwards", "delay": "0ms", "keyframes": [ {"offset": 0, "opacity": 0}, {"offset": 1, "opacity": "1"} ] }]

Nykaa EBITDA outlook

Elara Capital also has a 'buy' rating on Nykaa shares with a target price of Rs 210. Analysts at Elara steady valuation re-rating in BPC, led by strong earnings CAGR of 38% in FY23-25E. "Any improved visibility for EBITDA break-even or profit in the fashion business may aid share price performance," it said [{ "selector": ".msequ-a", "duration": "500ms", "fill": "forwards", "delay": "0ms", "keyframes": [ {"offset": 0, "transform": "translateY(calc(600px - 390px))", "opacity": "1"}, {"offset": 1, "transform": "translateY(0)", "opacity": "1"} ] }, { "selector": ".pieue-a", "duration": "1000ms", "fill": "forwards", "delay": "0ms", "keyframes": [ {"offset": 0, "opacity": 0}, {"offset": 1, "opacity": "1"} ] }]

Disclaimer

Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today. Investors should consult their financial advisors before taking any position [{ "selector": ".qzbla-a", "duration": "500ms", "fill": "forwards", "delay": "0ms", "keyframes": [ {"offset": 0, "transform": "translateY(calc(600px - 410px))", "opacity": "1"}, {"offset": 1, "transform": "translateY(0)", "opacity": "1"} ] }, { "selector": ".xktln-a", "duration": "1000ms", "fill": "forwards", "delay": "0ms", "keyframes": [ {"offset": 0, "opacity": 0}, {"offset": 1, "opacity": "1"} ] }]

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