Nykaa slides after disappointing third-quarter — Goldman Sachs, Jeffries hold target price

Shares of Nykaa’s parent company FSN E-Commerce Ventures declined over four percent from the previous close on the BSE on Tuesday as the company on Monday reported a 71 percent year-on-year (YoY) decline in net profit at Rs 8.1 crore for the third quarter that ended December 31, 2022.

At 10:01 am shares of FSN E-Commerce Ventures are trading at Rs 143, down 4.2 percent from the previous close on the BSE.

The shares have been on a downward trend line since December 2021 after touching a high of Rs 430. There were multiple attempts to go above the trend line but it never got out of the range.

There was one brief attempt when the stock traded above the line in November 2022, touching a high of about Rs 224, but then promptly fell under the line two days later fell again.

Now the level which will be in focus will be Rs 150-Rs 180 and will the stock breach be above this range?

Brokerage firm Jefferies has a Buy rating on the shares of FSN E-Commerce with a target price of Rs 200. As per the brokerage firm, the gross merchandise value growth for the third quarter of FY23 was strongly led by the fashion vertical while the beauty and personal care segment was impacted by a high base and shift in the festive season.

Goldman Sachs has a Neutral call on the shares of FSN E-Commerce with a target price of Rs 200. As per the brokerage firm the company’s overall profits are meaningfully below estimate on lower gross margins and higher than expected spending on eB2B vertical.

With no clear signs of a near-term pick up in BPC growth, lower FY23-25E revenue estimate by up to 4 percent, with consequent EBITDA cuts much sharper at 14-28 percent, the brokerage firm added in a note.