As Nykaa’s impressive growth continues, with substantial revenue expansion reported in the Q3 update for FY25, investors are eagerly watching for the next moves in the stock market. The beauty and fashion e-commerce platform seems set to hit new milestones, but is it wise to jump in now ahead of the Q3 results?
Nykaa’s stock opened on a positive note this week, touching an intraday high of ₹176.60 just after market hours, following the announcement of its Q3 update. With stock market experts predicting that the price could reach ₹185 apiece in the short term, many are eyeing the stock’s potential growth. But should you buy Nykaa shares now, or is it better to wait until the company’s Q3 results come in?
Strong Growth Across Verticals
The company’s latest performance reflects ongoing solid growth, particularly in its beauty division. According to Anshul Jain, Head of Research at Lakshmishree Investment and Securities, Nykaa has continued its impressive growth trajectory. The fashion vertical is expected to show a net revenue growth of 20%, while the beauty segment remains the real standout, with the GMV (Gross Merchandise Value) likely to grow by around 30%. The rise in revenue is attributed to Nykaa’s successful integration of multiple channels including e-commerce, retail stores, and owned brands, plus its expanding presence in the eB2B distribution space.
A closer look at the company’s diversified business model highlights a key driver of Nykaa’s recent performance: the expansion of its eB2B distribution business. “Superstore by Nykaa,” which focuses on supplying products to small retailers across the country, now accounts for 8% of the beauty division’s GMV. This is a step up from 7% a year ago, with a growing number of retail partners now reaching 2.6 lakh retailers across 1,100 cities. This could signal continued positive momentum in the company’s future growth.
Nykaa’s ability to continue scaling its business, both on the consumer-facing e-commerce front and through B2B expansion, positions it well for the future.
Share Price Outlook: Will It Reach ₹185?
Despite some near-term volatility in the stock, experts are optimistic about Nykaa’s future share price. The stock has already seen significant movement this year, and analysts are confident that it could reach ₹185 apiece soon, with some suggesting a “buy-on-dips” strategy.
Mahesh M Ojha, AVP of Research at Hensex Securities, stated that the stock has already formed a solid base in the ₹166-168 range, and with a potential breakthrough above ₹175, the share price could soon touch the ₹185 mark. This sets up an exciting scenario for investors looking for short-term gains, particularly if they buy shares before the full Q3 results are released.
The stock faces resistance around the ₹175 mark, but the general consensus is that if it breaks through this level, the upward momentum could continue. For long-term investors, holding onto their shares could prove beneficial if the company sustains its strong growth trajectory in the upcoming quarters.
Financials: What the Experts Are Saying
Looking into the company’s projected financials for Q3 FY25, Nykaa is on track to post strong growth. While GMV expansion for the company’s beauty segment is expected to be in the low thirties, net revenue is projected to surpass the mid-twenties. This discrepancy suggests that Nykaa’s ability to convert GMV into actual net revenue is improving, which bodes well for its long-term financial health.
In addition to its growth in the beauty space, the company’s fashion segment is also poised for success. A 20% increase in net revenue for the fashion division is a positive sign, indicating that Nykaa’s multi-vertical strategy is paying off.
Key Highlights:
- Beauty vertical: Expected GMV growth of 30%, with strong performance across all channels.
- Fashion division: 20% increase in net revenue, with continued growth in marketing, content, and service-related income.
- eB2B business: “Superstore by Nykaa” services 2.6 lakh retailers, a major growth factor for the future.
Nykaa’s diversified growth avenues should continue to provide the company with a solid foundation for sustained performance.
At this point, many market analysts are optimistic that Nykaa’s share price could see further upside, particularly as the company continues its strong growth across multiple verticals. The stock could potentially touch ₹185 in the near future, but investors should weigh the risks of short-term volatility against the potential for long-term rewards. Investors looking for short-term gains may want to buy in before the full Q3 results, while long-term holders may be better off holding steady as the company’s growth story unfolds.
