Nykaa Share Price Falls 6% Despite Q4 Update Signalling Steady Growth

FSN E-Commerce Ventures Ltd., the parent of fashion and beauty retailer Nykaa, saw its shares decline 6.11% on Monday, even as the company said it expects continued growth momentum in the March quarter of fiscal 2025. This comes amid a broader market selloff due to global risk sentiments, following US President Donald Trump's reciprocal tariffs and counter tariff by various nations.

Nykaa's consolidated net revenue is expected to grow in the low to mid-20s in percentage terms year-on-year for the fourth quarter, according to a business update. This takes the company’s full-year fiscal 2025 revenue growth to similar levels, indicating consistent growth across all quarters.

The company’s beauty vertical is estimated to see Gross Merchandise Value growth in the low-30s, significantly ahead of industry levels, it said in the update on Sunday. This performance was driven by consistent order volume growth from sustained customer acquisition efforts, strong same-store sales growth, and the addition of 19 new retail stores during the quarter.

The 'House of Nykaa' portfolio also continued to gain traction, with both home-grown and acquired brands performing well.

Meanwhile, GMV growth in the fashion vertical is expected to be in the high teens, led by a sequential improvement in the core platform business. However, net revenue growth in this segment is expected to be lower due to muted performance of Nykaa-owned fashion brands and lower content activity in the January quarter, which typically peaks in the preceding quarter.

Citi expects Nykaa’s fourth quarter revenue to rise 25%, with Ebitda growing 46% YoY, and net profit surging over three-fold to Rs 328 crore. It also forecasts margin expansion across both the beauty and fashion verticals, according to its note on Sunday. 

Nykaa stock fell as much as 6.11% during the day to Rs 165.97 apiece on the NSE. It was trading 2.72% lower at Rs 171.98 apiece, compared to a 4.02% decline in the benchmark Nifty 50 as of 9:46 a.m. 

It has risen 2.18% in the last 12 months and 5.11% on a year-to-date basis. The total traded volume so far in the day stood at 6.11 times its 30-day average. The relative strength index was at 48.35.

Fifteen out of 25 analysts tracking Nykaa have a 'buy' rating on the stock, three recommend a 'hold' and seven suggest a 'sell', according to Bloomberg data. The 12-month analysts' consensus target price on the stock is Rs 182.63, implying an upside of 3.3%.