Nykaa Stock Rallies 5% In 1 Day; Vaishali Parekh Expects 21% Upside More, Here's Why!

Fashion and beauty products e-retailer, FSN E-Commerce Ventures aka Nykaa shares rallied nearly 5% on Wednesday after its investors' presentation. Amidst the stock's strong upside, Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher added Nykaa stock in her technical pick and recommended buying. Parekh's target price on Nykaa indicates a potential upside of over 21% going forward.

At the time of writing, Nykaa's stock price traded at Rs 142.40 apiece, up by 3.2% on BSE. The stock overall gained by 4.7% on BSE by hitting an intraday high of Rs 144.45 apiece.

Its market cap is over Rs 40,637.16 crore at the current market price.

While adding the stock as a technical pick, Parekh's note said, "NYKA has corrected from the peak of 425 and has made a higher bottom formation pattern, taking support near 130 levels, and has picked up momentum to improve the bias, with the RSI also indicating a trend reversal and on the rise to anticipate further upward movement in the coming days.

"We suggest buying and accumulating the stock for an upside positional target of 175 while keeping the stop loss near 130," she added.

In its investors presentation, going forward, Nykaa said that it is maintaining its growth ahead of the market. Also, the company plans to achieve better leverage on its operating costs.

Nykaa also plans to scale up its tech infrastructure to deliver best-in-class customer and partner experience. As part of its strategic investment, the e-commerce player plans to invest in brand building and capabilities building.

An industry-wise, Nykaa said the 4-year CAGR for the online BPC market (UAE+KSA) is 22% while it is 5% for the offline market. Further, at 16% and 9% penetration, e-commerce penetration in KSA & UAE are lower than many other comparable or even lower-income markets.

In five trading sessions, Nykaa stock gained by nearly 5.6% on the BSE. However, year-to-date, the stock has fallen by nearly 8%.