The brokerage house believes that Nykaa’s profits have been weaker than expected, but margins are better. At the same time, the long term growth outlook of the company is as positive as before.
Weakness is seen in the shares of ecommerce beauty company FSN E-Co Nykaa today. Today the stock of Nykaa has weakened by more than 4 percent and has come close to Rs 1750. After listing on November 10, the stock is down about 25 per cent. In fact, the company’s profit fell by 57 per cent to Rs 29 crore in the December quarter. The brokerage house believes that the company’s profits have been weaker than expected, but the margins are better. At the same time, the long term growth outlook of the company is as positive as before. With the growth of the company in the coming days, there may be a good rise in the stock. Let us tell you that in the New Age business, Nykaa is one of the few companies that are profitable.
Technical View: Why the stock may rise further
Swastika Investmart Ltd. Research head of Santosh Meena says that if we talk about earnings, then the results of Nykaa are looking good. Strong growth has been seen in sales. Gross margin has also been better. However, the profit of the company has decreased due to high marketing expenses. It is one of the few new age business companies that are bringing profits. In such a situation, even after high valuation, it can be invested in it. Technically the company’s stock is trying to make a base in the 1700-1600 zone. Whereas the level of 2000 is acting as a strong critical zone for this. In such a situation, the level trading band of 1700-2000 is visible. If the stock crosses it, then it may see a further uptrend.
Better long term growth outlook
Brokerage house Goldman Sachs has given investment advice in the stock of Nykaa. The brokerage house has given a target of Rs 2420 for the stock. The brokerage says that the company’s results were not as per the expectations, but the margins have been better. Improvement in margin profile is positive for the company. According to the brokerage, the long-term growth outlook remains positive as before.
Still stronger than issue price
The stock of Nykaa was listed in the market on 10 November 2021. The stock was listed on the exchange with a premium of 78 per cent. The issue price was Rs 1125, while it was listed on BSE at Rs 2001. On the day of listing, it closed at Rs 2207, ie 96 percent stronger than the issue price. Presently the share is at a price of Rs 1786.80, which is 58.83 percent higher than the issue price. However, it has weakened after the listing.
(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)
Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.
,