10 hrs ago
Nykaa Profit Surges as Analyst Urges Caution After Rally
Nykaa made much more profit this quarter than it did a year ago.
Its sales and operating earnings also grew strongly.
The company’s share price has risen sharply, from about Rs 140 to around Rs 340 in three months.
An analyst warned that the stock may not keep rising in a straight line.
He expects it could move sideways between Rs 300 and Rs 350 in the next few months.
People planning to hold the stock for less than two months may consider taking profits.
The analyst said they could look for another buying opportunity if the price falls toward Rs 300 to Rs 280.
Investors willing to hold for more than six to eight months may continue holding, with a possible target near Rs 420.
Nykaa’s Q1 FY27 profit rose more than three-fold year-on-year to Rs 79.76 crore.
Revenue increased 29 percent to Rs 2,782 crore, while EBITDA rose 68 percent to Rs 236 crore.
Analyst Bhagwat said Nykaa’s rise from around Rs 140 to Rs 340 in three months could limit immediate upside.
For short-term traders, he expects the stock to move broadly between Rs 300 and Rs 350.
Bhagwat advised short-term investors to book profits, while long-term investors could target the all-time high near Rs 420.
- Who
- Nykaa and analyst Bhagwat.
- What
- Nykaa reported strong quarterly growth, while the analyst gave different guidance for short-term and long-term investors.
- Where
- Nykaa is based in Mumbai.
- When
- In the company’s first quarter of FY27; the analyst’s short-term range covers the next few months.
- Why
- The analyst said the stock’s sharp recent rally may lead to a pause, although the longer-term outlook remains constructive.
Short-Term Caution
Long-Term Optimism
Response after the recent rally
Short-Term Caution
Short-term investors may consider booking profits because the stock has climbed from around Rs 140 to Rs 340 in three months and may lose momentum.
Long-Term Optimism
Long-term investors may remain constructive because the analyst said the broader trajectory is still intact.
Expected price movement
Short-Term Caution
The stock could trade sideways in a Rs 300-Rs 350 range over the next few months.
Long-Term Optimism
Investors with a holding period beyond six to eight months could look toward the all-time high near Rs 420.
Buying strategy
Short-Term Caution
Investors with horizons shorter than two months were advised to seek re-entry on dips around Rs 300 to Rs 280.
Long-Term Optimism
Investors able to tolerate near-term volatility may stay invested rather than react to a possible pause.
Key facts
- Q1 FY27 profit
- Rs 79.76 crore, compared with Rs 24.47 crore a year earlier.
- Revenue from operations
- Rs 2,782 crore, up 29 percent year-on-year.
- Gross profit
- Rs 1,276 crore, up 33 percent year-on-year.
- EBITDA
- Rs 236 crore, up 68 percent year-on-year.
- EBITDA margin
- 8.5 percent, compared with 6.5 percent a year earlier and the highest level in 12 quarters.
- Short-term view
- Expected trading range of Rs 300-Rs 350; profit booking was advised for investors with horizons below two months.
- Long-term target
- The analyst identified a target zone near Nykaa’s all-time high of Rs 420 for investors holding more than six to eight months.
Quotes
Bhagwat
Analyst commenting on Nykaa’s recent stock performance
“Nykaa has reversed strongly and from Rs 140-odd levels, in the last three months it’s gone all the way up to Rs 340”
businesstoday.in
“The journey is not going to be one way for the stock”
businesstoday.in
Sources
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