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Shares of FSN E-commerce, which operates under Nykaa brand, soared 6 per cent to Rs 1,350 on the BSE in Thursday’s intra-day trade after the company said its board will meet on October 3 to consider a maiden bonus issue.
The board meeting of the company will be held on October 03, 2022, inter-alia, to consider and approve the issuance of bonus shares to the equity shareholders of the company and seeking shareholders’ approval by way of postal ballot and such other approval(s), for the same, Nykaa said in an exchange filing on Wednesday after market hours.
Nykaa is engaged in the business of manufacturing, selling & distribution of beauty, wellness, fitness, personal care, health care, skin care, hair care products on the online platforms or websites such as e-commerce, m-commerce, internet, intranet as well as through physical stores, stalls, general trade and modern trade etc.
At 09:19 AM, the stock traded 4 per cent higher at Rs 1,333, as compared to 0.92 per cent rise in the S&P BSE Sensex.
However, in past three months, Nykaa has underperformed the market falling up to 7 per cent, as against a 7 per cent rally in the Sensex. In the past six months, the stock has slipped 17 per cent, as compared to 1 per cent decline in the benchmark index. The stock had hit a record high of Rs 2,574 on November 26, 2021. It touched a record low of Rs 1,208.40 on May 12, 2022.
Nykaa made its stock market debut on November 10, 2021. The company had raised Rs 5,300 crore through initial public offering by issuing shares at price of Rs 1,125 per share.
While current inflationary pressures will affect consumer discretionary spends in the near term, medium term and long-term growth of both beauty & personal care as well as fashion remains strong. With the increase in disposable income in younger consumers, and online content-led discovery, beauty & personal care, wellness and fashion consumption is seeing increased share of the wallet, Nykaa said in its FY22 annual report.
Technical View
Bias: Negative
Support: Rs 1,280
After gyrating in a narrow trading range of Rs 1,330 to Rs 1,450 for major part of this quarter, the stock dropped to a low of Rs 1,245 earlier this week. However, with the news flow of bonus issue, the stock has managed to bounce back above its 20-DMA, placed at Rs 1,332.
The price-to-moving averages action is broadly negative, and the stock needs to sustain above its 20-DMA on a consistent basis to reverse the negative sentiment. On the downside, the stock may re-test support around Rs 1,280.
On the upside, the stock can rally towards its 50-DMA and 100-DMA, thus indicating targets of Rs 1,374 and Rs 1,395, respectively.
Among the key momentum oscillators, the 14-day RSI, and the Slow Stochastic have turned favourable for the stock on the daily chart.
(With inputs from Rex Cano)
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