Nykaa's Q1 update paints a pretty picture for long-term growth

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The stock of FSN E-Commerce Ventures (Nykaa) hit a new 52-week high of ₹319.80 on Monday following a stronger-than-expected June quarter (Q1FY27) business update.
Consolidated net revenue likely grew around 30%, driven by almost 50% growth in the fashion vertical, materially ahead of consensus estimates of 24%, said JM Financial Institutional Securities. Also, momentum sustained in the beauty vertical that is expected to clock net revenue growth in the high-20s. Both the verticals saw healthy customer acquisitions.
Importantly, the Q1FY27 update reinforces a broader narrative that has been building over the past year: Nykaa is steadily evolving from a beauty e-commerce platform into an omnichannel fashion and beauty business.
Nykaa’s store footprint rose to 324 in Q1FY27 versus 313 in Q4FY26. It could touch 500 in 3-4 years, aimed at the organized offline beauty segment with 2030 total addressable market (TAM) expected at $15 billion.
Beauty, which contributed over 90% to consolidated FY26 revenue of ₹10,000 crore, remains the mainstay segment. Growing contribution of House of Nykaa brands like Dot & Key (13x growth in three years) and Kay Beauty (3x growth), and increasing premiumization through the likes of Korean beauty and derma-cosmetics have expanded Ebitda margin to 9.6% in FY26, from 8.9% in FY25.
The goal is to grow GMV by 2.5x to $5 billion by FY30, with 2-3x revenue growth and 4-5x Ebitda growth. Nomura Global Markets Research doesn’t expect much impact of inflation on demand, and sees Ebitda margin improvement from 7.5% in FY26 to an estimated 8.9%/10% in FY27/28 as a key catalyst. But following 56% gains in the last one year, Nykaa trades at 117x FY28 estimated price-to-earnings, per Bloomberg. So, execution is crucial.

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