Shares of FSN E-Commerce Ventures Ltd that operates under the Nykaa brand was down over % on Tuesday's early trade after the company's consolidated net profit for Q3FY23 (October-December) slumped over 70% on year to ₹8.48 crore on Monday.
However, the revenue from operations, jumped about 33% on year to ₹1,462.82 crore from ₹1,098.3 crore.
During the Q3FY23 conference call, the company explained that the change in the holiday season had an impact on the quarter ended December. Compared to Q3FY22, which had 42 days, Q3FY23 only had 34 days. This could have impacted on growth would have been 3% as a result.
"Gross margins were down due to seasonality reasons. There is some element of down trending which has an impact on the margins. Inventory has come down," said the company.
According to brokerage, Nuvama Wealth Management Ltd, the company reported a mixed bag. The brokerage in its report said that the company met growth expectations, but margins undershot as gross margin for both Beauty & Personal Care and Fashion felt the macro as well as down-trading impact.
"The confluence of both growth and profitability would be critical for valuations to improve. Besides, the gross margin miss, an aberration as per management, must reverse else as any structural impact could negate benefits in marketing and fulfilment," added the brokerage in its report.
On Tuesday, the stock has so far fallen 54.35% from 52-week high of 315.4 recorded on April 11, 2022.
The stock price fell 45.2% and underperformed its sector by 34.2% in the past year.
According to a Mintgenie poll, 20 analysts recommend 'buy' rating on the stock.
