Nykaa Grants 4.05 Lakh ESOPs Ahead of Q4 Results

FSN e-Commerce Ventures, the parent company of beauty and fashion retail brand Nykaa, has granted approximately 4.05 lakh equity shares under its employee stock option plan (ESOP) ahead of its January-March quarter (Q4FY24) results announcement. 

The newly allotted shares are valued at Rs 7.1 crore based on the company’s closing price on May 21.

Companies often allot shares to employees to attract or retain talent, align employee and shareholder interests, and enhance overall performance. This move follows similar actions by other companies in the industry. For instance, Meesho announced an ESOP buyback plan of Rs 200 crore in March, followed by Pocket FM’s repurchase worth Rs 69 crore in April.

Analysts at Elara Securities project Nykaa will report a 19.8 percent year-on-year (YoY) rise in net profit to Rs 1,558 crore for Q4FY24. The recurring profit-after-tax (PAT) is expected to surge by 340 percent YoY to Rs 10 crore. Additionally, the company’s earnings before interest, tax, depreciation, and amortisation (EBITDA) are anticipated to grow by 23.5 percent YoY to Rs 87 crore for the quarter ended in March.

Nykaa has demonstrated steady performance over the last three quarters despite a general slowdown in consumer spending. Nuvama anticipates the company will report 24 percent and 34 percent YoY growth in beauty and personal care (BPC) and fashion gross merchandise value (GMV), respectively.

Meanwhile, analysts at Kotak Institutional Equities expect Nykaa’s EBITDA margins to expand by 82 basis points YoY in Q4FY24, attributed to loss reduction in the eB2B business and fixed-cost operating leverage.

Over the past three months, Nykaa’s shares have surged by more than 16 percent, significantly outperforming the Nifty 50 index, which gained just 1 percent during the same period. Nykaa shares reached a 52-week high of Rs 195 apiece on January 10, 2024.

With the upcoming Q4 results, Nykaa’s continued growth and strategic ESOP allocations reflect its robust positioning in the beauty and fashion retail sector.

Disclaimer: This information is covered based on the latest research and development available. However, it may not fully reflect all current aspects of the subject matter.

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