Nykaa’s share price took a significant dive on Monday, dropping by over 9% during trading hours. This decline is surprising given the company’s promising performance in Q4 FY2025, where it reported a solid growth trajectory. Despite the anticipated year-over-year consolidated net revenue growth expected to fall in the low to mid-twenties, market reactions have been less than favorable.
Impressive Revenue Growth Forecast
Nykaa’s overall revenue growth for the fiscal year FY2025 is projected to mirror this steady momentum, hovering around the mid-twenties percentage range. According to recent filings, the gross merchandise value (GMV) for the beauty sector is expected to significantly outpace industry benchmarks, reaching the low thirties.
Key drivers behind this impressive growth include:
- Aggressive Customer Acquisition: Recent investments have led to consistent rises in order volumes.
- Strong Retail Performance: The company has experienced significant same-store sales growth (SSSG).
- Retail Network Expansion: Nykaa expanded its retail presence by adding 19 new stores in Q4 FY2025.
Nykaa’s Diverse Brand Portfolio
The House of Nykaa is thriving, with both its in-house and acquired brands performing strongly. The beauty segment alone reported a mid-twenties net revenue growth, showcasing resilience and adaptability. In contrast, the fashion segment’s GMV is expected to grow in the high teens, indicating a positive trend in core platform operations.
However, challenges remain. Revenue growth projections may be tempered due to the underwhelming performance of Nykaa’s owned fashion brands and a slowdown in content-related initiatives during Q4 FY2025, which typically peaks in the third quarter.
Market Performance and Analyst Insights
On the stock market front, Nykaa’s shares opened at an intraday low of ₹160.05 on the BSE, reaching a high of ₹173.90 throughout the day. Rajesh Bhosale, an Equity Technical and Derivative Analyst at Angel One, noted that last week, Nykaa shares struggled to surpass the 200 DSMA threshold, leading to today’s sell-off amid broader market trends. He highlighted that the ₹160-165 range serves as a robust support level, while ₹185 marks a recent high, indicating a potential uptrend only beyond this point.
Anshul Jain, Head of Research at Lakshmishree Investment and Securities, pointed out that Nykaa shares have corrected by 31% over the past 18 weeks and are forming what appears to be a 21-week bullish base on weekly charts—a typical indicator of accumulation. For a more confident bullish outlook, Jain suggests that the stock needs to break and maintain levels above ₹180.
“Should it surpass this mark, we could see a rise toward the ₹210 zone. Until then, cautious investors should avoid preemptive buying as the stock remains within a range. It’s advisable to wait for confirmation before making a move for a higher probability trade,” Jain added.
Final Thoughts
As Nykaa navigates its growth amidst market fluctuations, investors and analysts will be keenly watching the company’s performance in the upcoming quarters. The combination of a robust retail strategy and a diverse portfolio could position Nykaa favorably in the competitive beauty and fashion landscape.
For more insights on market trends, check out our other articles on stock performance and investment strategies.
