On Monday, the shares of the prominent beauty and fashion e-commerce company Nykaa extended the upward momentum from the previous week, experiencing a notable 5.5% surge to reach INR 177 in intraday trading on the BSE.
Nevertheless, the shares relinquished a portion of their gains, concluding today’s trading session with a 2.9% increase at INR 172.65 on the BSE.
Over the past week, the stock has witnessed a approximately 14% increase, driven by a positive shift in investor sentiment towards new-age tech stocks and robust growth in the company’s fashion segment during the September quarter.
Even though new-age tech stocks such as Zomato, Delhivery, and Paytm experienced significant rallies throughout the year, Nykaa had been trading lower year-to-date (YTD) until last week. Following a 9.5% surge on Friday, it shifted into positive territory, with shares showing an 8.4% increase YTD.
Following today’s surge, Nykaa shares have seen an 11.5% increase year-to-date (YTD).
An analyst remarked on the surge in the share price, noting that Nykaa had been poised for a rally for a while, aligning with the upward trend observed in other new-age tech stocks.
“Most other internet stocks had moved up and Nykaa was positioning itself for that. If we look at the Q2 earnings, while the results were okay, fashion vertical did quite well. Hence, a thesis was getting built that investors might finally start ascribing a value to the fashion vertical. So, a 10%-15% increase was anticipated following this,” the analyst said.
It’s worth mentioning that Nykaa has an investor’s meeting scheduled for Tuesday (November 21).
In the second quarter, Nykaa announced a net profit of INR 7.8 Cr, reflecting a 50% increase on a year-on-year (YoY) basis and a sequential rise of 44.4%.
The company’s total gross merchandise value (GMV) for the September quarter demonstrated a 25% year-on-year (YoY) increase, reaching INR 2,943.5 Cr. Notably, the growth in the fashion vertical outpaced that of the BPC (Beauty and Personal Care) vertical, with the GMV of the fashion segment experiencing a 27% YoY increase, totaling INR 762.8 Cr during the quarter.
The company’s shares have surged by 23% within a span of two weeks following the release of its Q2 financials.
Nevertheless, Nykaa experienced gains today, defying the broader market trend that concluded in the red, as global conflicts persist and concerns about a worldwide economic slowdown linger.