Nykaa Shares Drop 4% Despite Q4 Profit Surge- Analysts Weigh In

Nykaa share price: Shares of FSN E-Commerce Ventures Ltd. plummeted around 4% after the company's Q4 results drew mixed views from D-street analysts. The company's net profit figure experienced a 110% year-on-year (YoY) surge to ₹19 crore in the quarter ending March. Revenue from operations figure jumped 24% during the same period to ₹2,062 crore

At 12:50 pm, the shares of the company were trading at ₹195.63 price level, down by 3.75% on the National Stock Exchange.

For the entire FY25, net profit levels grew by 81% YoY and stood at ₹72 crore. Nykaa's revenue from operations stood at ₹7,950 crore in FY25. In Q4FY25, EBITDA increased to ₹133 crore, marking a double-digit rise of 43%. Ebitda margins stood at 6.5% in the quarter ending March compared to 5.6% recorded in the corresponding quarter of the previous fiscal.

"Curtailing losses in the fashion segment, scale-up in ad revenue in BPC and calibrated A&P spends are key levers for margin. In FY25, margin gain was healthy at 6.0% (up 60bps YoY), despite competition from quick commerce and peers. Going ahead, benefitting from operating leverage on the higher scale, expect Ebitda margin to be 7.5%/8.8% in FY26E and FY27E," Elara Capital stated in its report.

Analysts Weigh In

So far this year, the shares of the company have soared over 18% on the bourses. JM Financials has reiterated its 'Buy' rating on the stock with a revised target price of ₹250. "Despite unfavourable demand environment, Nykaa has delivered against the odds to improve margins while delivering industry-leading growth across segments. Furthermore, our channel checks suggest that the company continues to gain market share in both online BPC and fashion," the brokerage firm said in its report.

Elara Securities has maintained its 'Accumulate' rating on the stock with a revised SoTP target price of ₹215 from ₹195. "We expect BPC/fashion verticals to print revenue CAGR of 29.7%/24.9% in FY25-28E. Losses in fashion are likely hitting trough and recovery to be key monitorable. We cut our EPS estimates by 5-12% for FY26E-27E to reflect Fashion segment losses in Q4," the brokerage firm said.