Posted on March 7, 2025, by Niftynews
Nykaa share price surged by 2.5% on March 7, 2025, after UBS, a prominent Swiss brokerage, upgraded Nykaa stock from “Neutral” to “Buy.” The brokerage firm lowered its target price slightly to ₹200, down from ₹205, signaling an 18.48% upside from the previous close of ₹168.80 on March 6, 2025.
The Nykaa share price saw an early rally, climbing as much as 2.45%, reaching an intraday high of ₹172.95 per share. However, by 9:25 AM, the stock slightly retreated and was trading at ₹168.65. Despite this, Nykaa stock remains one of the most actively traded e-commerce stocks in India, with investors closely watching the stock’s movement.
Why UBS Upgraded Nykaa Share Price
UBS’s decision to upgrade Nykaa share price reflects the company’s strong performance, particularly in its beauty and personal care segment. Despite intensifying competition, Nykaa has managed to exceed expectations, with growth continuing in key areas. UBS highlighted that the beauty division has experienced improved growth while maintaining stable margins, which is a testament to the company’s operational efficiency and market positioning.
UBS also praised the company’s strategic moves in its fashion segment, where management has adopted a more measured approach, notably reducing marketing investments. This strategy has helped maintain profitability, even as Nykaa competes with both domestic and international players in the e-commerce space.
Nykaa’s Strong Financial Performance
In its Q3FY25 results, Nykaa reported impressive growth, posting a 51.3% increase in net profit compared to Q3FY24. The company’s net profit for the quarter amounted to ₹26.4 crore, up from ₹17.45 crore in the same period last year. This marks a significant jump of 103.6% in net profit sequentially, from ₹13 crore in the previous quarter.
Furthermore, Nykaa’s revenue from operations saw a 26.7% increase, rising to ₹2,267.2 crore from ₹1,788.8 crore in Q3FY24. These robust financial results play a key role in supporting the Nykaa share price, reinforcing investor confidence in the company’s continued growth trajectory.
Future Growth Potential of Nykaa Share Price
While UBS slightly adjusted its target price, Nykaa share price continues to be an attractive option for long-term investors. The 18.48% upside from the revised target price indicates room for growth, especially given Nykaa’s leading position in India’s rapidly growing e-commerce sector. The company’s performance in both the beauty and fashion segments will be critical drivers of future stock price growth.
Moreover, Nykaa has effectively leveraged its online and offline platforms to expand its market reach. With more than 100 physical stores across India and an increasingly strong online presence, Nykaa is well-positioned to capitalize on the growing demand for beauty, wellness, and fashion products in India.
Nykaa Share Price Outlook: What Investors Should Know
Despite the minor reduction in target price, Nykaa share price remains an attractive investment for those looking to tap into India’s fast-growing e-commerce market. The company’s beauty division continues to show resilience, while the fashion segment is likely to benefit from more efficient marketing strategies in the future.
The current stock price provides a good entry point for investors, particularly given the company’s growth potential and its solid market position. As Nykaa continues to expand its product offerings and refine its operations, its stock price could see sustained upward momentum, making it a promising stock for both short-term and long-term investors.
Conclusion: Is Nykaa Stock a Good Investment?
With a 2.5% jump in the Nykaa share price after the UBS upgrade and strong financial performance, the stock remains an appealing choice for investors. UBS’s revised target price of ₹200 represents a solid upside from the current price levels, indicating that Nykaa has strong growth potential.
For those considering investment in Nykaa shares, the company’s resilience in the beauty and wellness sectors, its strong financials, and strategic adjustments make it a solid pick for the future.
