Nykaa shares slip despite strong Q4 business update and growth outlook

Brokerages, however, remain optimistic, expecting improved profitability and a narrowing of losses in the fashion segment.

Global brokerage Macquarie has maintained an “outperform” rating on the stock, noting that Nykaa’s Q4 update indicates steady growth in its core beauty segment and better-than-expected performance in the fashion business.

The brokerage firm has set Rs. 210 as the target price underlining a drop of 16% from the current trading of Rs. 248.5.

All about Q4 business update

In an exchange filing, Nykaa said its consolidated Gross Merchandise Value (GMV) growth is expected to be in the late twenties, while consolidated Net Sales Value (NSV) growth is likely to be in the early twenties.

Marking its strongest performance in the last 12 quarters, the company expects overall consolidated growth to remain in the late twenties.

Nykaa said the topline growth was driven by robust acceleration in its fashion vertical, while the beauty segment maintained steady performance.

For the full financial year, the company expects consolidated NSV growth to be in the late twenties, improving from the mid-twenties growth recorded over the past two years.

Impact of West Asia conflict

The company said it has not seen any material impact on business due to the ongoing West Asia conflict.

Its current exposure to the region remains minimal, contributing less than 1 percent to overall revenue and still in an early stage of development.