Nykaa Shares Jump Significantly After Positive Forecast ON CAGR By Brokerage Firm

Indian fashion e-commerce brand Nykaa or FSN E-Commerce Ventures, appears to have withered some of its past troubles that had dawned upon the company immediately after its much-talked-about IPO.

After a positive forecast report from Elara Capital, an Indian brokerage firm, the company's shares have risen by 3.37 per cent or Rs 5.76, taking the price of each individual share to Rs 176.82.

CAGR To Grow At 25%

According to the report from the brokerage firm, Nykaa is in a relatively stable position, as the Mumbai-based company is expected to attain a compound annual growth rate (CAGR) of 25 per cent in the next three years, from FY 2024 to FY 2027.

Here, CAGR is the mean annual growth rate of an investment over a period that is longer than the duration of one year.

Elara deemed the growth of the company stable amid rising competition in the segment. It also comes at a time when major e-commerce companies are diversifying into multiple segments within the e-commerce paradigm.

Currently, Nykaa is said to be facing a stiff competition from Reliance Tira and Tata Cliq. When it comes to the big brands, the traditional stalwarts of Amazon and Flipkart, along with Myntra and Purpelle, are some of the other competitors in the market.

Nykaa's Dominance in BPC

According to a data set compiled by A Minhas, the beauty and personal care or BPC segment is led by Nykaa, with 38 per cent, followed by Amazon and Flipkart with 20 per cent. Purpelle has a total share of 10 per cent. This data reflects the market share for 2021.

In 2021, after listing itself on the equity markets, Nykaa's share value jumped to Rs 406.18 per share in November 2021, before being diminished in a year to Rs 201.10 by October 2021. The shares only improved after August 2023.

The BPC company itself estimates its gross merchandise value (GMV), which is the total value of goods sold on a platform, of its business, to grow ninefold.