Nykaa Q3 Results: 61% Net Profit Growth, But Shares Slip 2%; Morgan Stanley Maintains Overweight Rating

Nykaa, India's celebrated beauty and wellness brand, reported impressive Q3 FY25 results on Monday, with a huge 27% year-on-year revenue growth. Headquartered in Mumbai, Nykaa was founded by Falguni Nayar, and it is considered the first Indian unicorn startup led by a woman. Post the announcement of its Q3 results, Nykaa's shares this morning started the day on a strong note but later witnessed a decline of over 2%, despite the positive earnings.

Nykaa Shares Today

Shares of Nykaa, trading under FSN E-Commerce Ventures Limited, rallied by as much as 3% to hit an intraday high today. As of 12 noon, the stock is trading at Rs. 166.98, after declining 1.45%. Over the past 30 days, Nykaa shares have gained approximately 3%. However, the stock has faced challenges since its 2021 listing, with prices down by 56% since then. Over the past six months, the stock has declined by 12.85%, though it has posted a 16.44% gain over the past 12 months. As of February 11, Nykaa's market capitalization stands at Rs. 48,632.62 crore, and it is currently listed among the BSE 200 companies.

Nykaa Q3 FY25 Results

FSN E-Commerce Ventures Limited (Nykaa) unveiled its financial results for Q3 FY25, where the company reported a 27% year-on-year increase in revenue from operations, reaching Rs. 22,672 million.
As of the exchange filing, Nykaa's gross profit also saw significant growth, rising 30% YoY to Rs. 9,911 million, while EBITDA surged by 42% YoY, totaling Rs. 1,408 million for the quarter. As a result, EBITDA margins expanded to 6.2%, compared to 5.5% in the same period last year.

The company's profit before tax rose by an impressive 68% YoY, reaching ₹446 million, and net profit stood at ₹264 million, marking a 51% increase YoY. In addition, Nykaa's consolidated Gross Merchandise Value (GMV) grew by 25% YoY, reaching Rs. 45,279 million.

Nykaa Business Highlights

Nykaa's Beauty Vertical has witnessed impressive growth, with a 32% year-on-year increase in Q3 FY25. In addition to its online success, Nykaa's offline presence continues to expand as the company reported that it has added 221 physical stores across 73 cities, and over 47 new stores have been added in the past year.
Furthermore, in Q3 FY25, Nykaa launched 200+ new brands and has become a go-to beauty store in India.

Nykaa Share Target Price

The stock of FSN E-Commerce Ventures Limited (Nykaa) has attracted varied opinions from analysts. Morgan Stanley has an "Overweight" (OW) rating on Nykaa's stock, indicating a positive outlook. The firm has set a target price of Rs.200, suggesting significant potential upside for the shares. On the other hand, Bank of America (BOFA) has maintained a more cautious stance, keeping its "Underperform" rating on Nykaa. The firm has set a target price of Rs. 150.