Shares of FSN E-Commerce Ventures Ltd., parent company of beauty and personal care brand Nykaa are up for the fourth day in a row on Tuesday. The stock has gained nearly 15% over the last four trading sessions.
The stock made an intraday high of ₹191.25 in today's session, which is higher than Nykaa's adjusted IPO price of ₹187.25. The price is adjusted to factor in the 5:1 bonus issue that the company had announced in November 2022.
Nykaa had made its stock market debut back in 2021 at an IPO price of ₹1,125.
₹200 A Key Level
₹200 has been a key level for Nykaa as it has not closed above those levels since November 2022. Over the last 15 months, the stock has been stuck in a range of ₹114 on the lower end and ₹196 on the upper end. Today's surge takes it closer to the upper end of the range.
Today's high of ₹191 also took the stock above the 23.6% retracement level which was ₹189.2. The retracement lines were plotted from the November 2022 peak to the April 2023 bottom.
Shares of Nykaa are also surging on strong volumes. Nearly 2.6 crore shares of the stock have already been traded so far, compared to its 20-day average of 30 lakh shares at this time of the day.
Strong Business Update
Nykaa's Beauty and Personal Care (BPC) vertical grew in the mid-twenties with net sales value rising 20% from last year, as per its December quarter business update.
The company also said that its December quarter revenue may grow in the mid-twenties year-on-year and net sales value will also grow in the mid-twenties.
What Does The Street Reckon?
Brokerage firm HSBC maintained its "buy" recommendation on the stock and also raised its price target to ₹250 from ₹240 earlier.
HSBC wrote in its note that Nykaa is well positioned to capture the long-term value in the BPC segment with its scale and leadership.
"The stock was in constant formation of lower highs and lower lows since getting listed on Indian bourses. The stock has recently formed higher highs and higher lows, thereby confirming trend reversal and looks poised for a move towards 300 level which is the 61.8% fibonacci retracement of the entire fall since listing," said Gaurav Bissa of InCred Equities.
"A close above ₹190 will result in a small swing high breakout which can push the stock towards ₹205 in the immediate term. The volumes continue to remain high suggesting towards increased interest by the market participants," he added.
Shares of Nykaa are off the day's high but are trading 5% higher at ₹185.65.
First Published: Jan 9, 2024 12:56 PM IST
