Nykaa shares rally 5% ahead of Q2 results
The stock, which has advanced 13% in the last six months, is still trading around 34% below its 52-week high level of Rs 224.65.
In Q2, the new-age company is expected to report a double-digit year-on-year (YoY) growth in revenue for the September quarter, driven primarily by the beauty and personal care and fashion segments, which are seen growing 21-31%.
Nuvama Institutional Equities expects overall gross merchandise value growth of 25% YoY for the Nykaa brand owner.
The industry estimates indicated slightly subdued discretionary consumption, primarily on account of a delayed festive season, but Nykaa on the contrary, has witnessed a strong quarter across all verticals, analysts said.
Kotak Institutional Equities expects an improvement in the operating margin to 5.9% (up 90/70 bps yoy/qoq), driven by positive operating leverage.
After having faced investor wrath in 2022, most new-age companies are seeing a turnaround in 2023 with the likes of Zomato and Paytm leading the way.
Zomato, whose shares have already crossed past the listing price of Rs 115, surprised Street by reporting food delivery GOV growth at 20/9% YoY/QoQ.
«Unit economics to steadily improve with scale as Zomato unlocks cost efficiencies and as customer willingness to pay for convenience increases. We value Zomato's delivery business at an exit multiple of 52x Sep'25E Ebitda and quick commerce at 9x Sep'25E Sales, to arrive at a price target of Rs165,» Jefferies said.
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