Shares of FSN E-Commerce Ventures Ltd, the parent of beauty products retailer Nykaa, sank on Monday, June 2, after the e-commerce giant reported a strong earnings show for the quarter ended March 31, 2025.
The Nykaa parent reported 193 percent surge in consolidated net profit at Rs 20 crore for the quarter ended March 31, 2025. It reported consolidated net profit of Rs 7 crore in the year-ago period.
The firm's consolidated revenue rose 24 percent to Rs 2,062 crore in Q4FY25 as against Rs 1,668 crore in Q4FY24. The firm's consolidated EBITDA rose 43 percent year-on-year to Rs 133 crore and EBITDA margin in Q4FY25 was 6.5 percent as compared to 5.6 percent a year ago.
Further, Nykaa reported consolidated beauty operations sales of Rs 1,895 crore in Q4FY25 as compared to Rs 1,520 crore in Q4FY24. The firm's consolidated fashion revenue rose to Rs 161 crore in March quarter from Rs 145 crore a year ago.
At 9.20 am, shares of the firm were quoting Rs 202.28 apiece, lower by half a percent on the NSE.
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The beauty and person care segment continued to deliver strong double-digit growth along with
improving profitability. Management indicated fashion business shall report demand traction in Q1FY26 as most of the industry headwinds have bottomed out, noted Nuvama Institutional Equities. The broking house hiked its target price to Rs 235 per share, from Rs 205 earlier, while retaining its 'buy' rating.
"Nykaa’s focus on onboarding new global brands, expanding stores and product curation should continue to drive strong revenue growth in BPC. But margin improvement thus far has been slow and needs to pick up for us to turn more constructive. In Fashion, the focus on improving profitability is positive, esp. given the highly competitive segment," said Nomura.
The Japan-based broking house reiterated its 'neutral' rating, but hiked its target price to Rs 216 per share, up from Rs 190 earlier.
HSBC downgraded Nykaa shares to a 'hold' rating, cutting its price target to Rs 200 per share. The brokerage said there is limited clarity on the earlier commitment of the management to break-even in the fashion business EBITDA margin by FY26. The brokerage sees risks to the consensus margin improvement expectations of 150 basis points.
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