I keep myself updated on Nykaa by reading this thread. Helps me in getting views from both sides.
Somehow I have not been too convinced about the competitive edge of Nyka versus the biggies like Amazon, Flipkart, Ajio, Tata Neu (Cliq) etc. The latter are deep pocketed companies and can afford to keep losing money for long periods of time.
I feel Zomato is a much more interesting company in terms of competitive advantage. Only two players with others like Uber Eats etc having gone away. Even smaller mom and pop companies operating in smaller cities have disappeared.
The reason I find it will be difficult to displace is that it has a pan India network established with restaurant people, a good IT infrastructure and alliances in place with the delivery boys. In case of Nykaa, I think the biggies will simply get into its domain and try to damage it.
If and when the cash burn phase is over in Zomato, it can become very interesting. As of now it also seems to be under the pump, and looking at the charts, it seems before any fundamental changes, technical charts will provide clear cut indications here. As of now only in watchlist.
The psychology surrounding Nykaa seems to be just about right for a bottom formation. News about the promoter losing 1 billion USD valuation in this fall have been flashed on news. And huge volumes with the fall on friday of above 40 lacs indicates panic and manic selling. Volumes of more than 40 lacs in the counter have happened only on a handful of ocassions since listing.
With the kind of falls we have seen in the likes of Nykaa and Zomato, the good part for someone who is watching from a distance is that once a bottom is formed, there will have to be a lot of consolidation before a major upmove happens. So there will be time enough to get in, once the dust settles.
| Subscribe To Our Free Newsletter |
