Nykaa stock hits all-time low; market cap falls below ₹50,000 cr

Shares of FSN E-Commerce Ventures, the parent of fashion and beauty retailer Nykaa, hit a record low on Thursday even as the broader market traded in the green.

The stock fell 5.7% to hit a fresh all-time low of ₹1048 on the National Stock Exchange, taking the company's market capitalisation below ₹50,000 crore for the first time since listing.

Nykaa, which had a blockbuster listing in November last year, currently trades 59% lower than its all-time high of ₹2,574 achieved on November 26, 2021. Shares of the e-commerce firm have declined 49.77% on a year-to-date basis and fallen 9.56% in the last five trading sessions.

This comes at a time when investors have turned wary of new-age technology stocks. Shares of logistics major Delhivery have tumbled 32% in the last five trading sessions.

Shares of parent firms of Nykaa, Policybazaar and Paytm are likely to face selling pressure as one-year anchor lock-in ends next month.

In an exchange filing on Wednesday, Nykaa said a meeting of the board of directors of the company is scheduled to be held on November 01, 2022 to consider and approve the unaudited standalone and consolidated financial results of the company for the quarter and half year ended September 30, 2022, along with the limited review report of the auditors for the corresponding period.

Earlier this month, the Nykaa board approved bonus shares in the ratio of 5:1 i.e. five bonus shares for every one share held in the company. This was the first bonus issue by the beauty and fashion e-tailer after it made its debut on the domestic bourses last year.

Global brokerage BofA Securities recently maintained its 'neutral' rating on Nykaa with a target price of ₹1,685, citing that its cosmetics business remained steady, and margins were largely flattish. The agency in its report said that there would be limited inflation impact on the company, while its pace of margin would be slower than last year.

In the June quarter, Nykaa reported a 33.4% growth in consolidated net profit at ₹4.55 crore, versus ₹3.41 crore in the year-ago period. Sequentially, the profit declined 47.6% from ₹8.56 crore in the March quarter.

The beauty e-commerce platform’s revenue from operations jumped 40.5% to ₹1,148.4 crore in Q1 FY23, as against ₹817 crore in the same quarter last fiscal. During the quarter, Nykaa's gross merchandise volume (GMV) grew 47% YoY to ₹2,155.8 crore.