Shares of FSN E-Commerce Ventures (Nykaa) tanked 4 per cent as brokerages were divergent on the stock following Q4FY25 performance with strong growth in the beauty and personal care (BPC) segment and weakness in fashion margins.

Nuvama Institutional Equities cheered Nykaa’s strong and in-line Q4 numbers, stating that BPC continues to deliver strong double-digit growth along with improving profitability. The brokerage, increasing medium-term growth and profitability on the stock, retained buy at a higher target price of ₹235 from ₹205 earlier.

Elara Capital said that the company outperformed online BPC industry, while its growth in fashion is also scripting a come-back. It has maintained accumulate rating at an hiked target price from ₹195 to ₹215.

However, the market experts observed that the management indicated fashion business shall report demand traction in Q1FY26 as the industry headwinds have bottomed out. 

Factoring in losses in the fashion segment, Elara analysts trimmed the EPS estimates for FY26-27 by 5-12 per cent.

Global brokerage Jefferies retained buy at a target price of ₹240 per share.

On the other hand, HDFC Securities analysts downgraded the stock to reduce at a target price of ₹180 stating that the path to profitability for fashion and eB2B segments remains a key monitorable.

Nomura has maintained neutral rating on Nykaa at an increased target price of ₹216 from ₹190 earlier. The brokerage believes that the company’s focus on onboarding new global brands, expanding stores and product curation should continue to drive strong revenue growth in BPC. “But margin improvement thus far has been slow and needs to pick up for us to turn more constructive. In fashion, the focus on improving profitability is positive, given the highly competitive segment,” it said.

Macquarie maintained underperform rating at ₹145 per share, stating unfavourable factors such as continued weakness in beauty ad income and sharp 900 bp q-o-q moderation in fashion contribution margin on lower own brand sales.

Nykaa on Friday reported consolidated net profit for the quarter ended March 2025 at ₹20.28 crore as against ₹6.93 crore in the corresponding quarter last year.

On a standalone basis, its PAT fell to ₹14.62 crore in the quarter under review as against ₹86.31 crore in the corresponding quarter last year.

The stock ended 4.33 per cent lower on the BSE at ₹194.45, hitting an intraday low of ₹192.85.

Published on June 2, 2025