Shares of FSN E-Commerce Ventures Ltd., the parent of Nykaa, rose over 2 percent to Rs 202.4 on Monday, July 7, after it shared a business update for the first quarter that suggests stable growth momentum, even as external headwinds weighed on sales events.
The company expects its consolidated revenue to grow at the lower end of the mid-20 percent range in Q1, while overall GMV growth is projected to surpass that, continuing its multi-quarter run of solid performance.
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Nykaa’s beauty segment — its largest business — is estimated to clock GMV growth in the higher mid-twenties. The company noted that while sales during the quarter were impacted by geopolitical tensions that dampened consumer sentiment during a key flagship event, the business held firm. It expects revenue from the beauty vertical to rise in the mid-twenties, keeping pace with previous quarters.
Its fashion arm, meanwhile, appears to have turned a corner. GMV in this segment is also expected to grow in the mid-twenties — an improvement from recent trends — backed by stronger demand on its core platform, a wider product range, and steady new customer additions. Revenue from fashion is projected to grow in the mid-teens, improving sequentially, through trailing GMV.
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Across formats — online, offline retail, eB2B, and its proprietary House of Nykaa brands — the company reported a robust showing. The House of Nykaa portfolio, which includes both homegrown and acquired labels, continued to strengthen its position as a key growth lever.
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Nomura has maintained a Neutral rating on Nykaa with a target price of Rs 216 per share, which implies an upside potential of 9 percent from the last close on the NSE. The brokerage expects the company to report consolidated revenue growth of 23 percent for the first quarter of FY26, broadly in line with estimates. However, this is slightly below the full-year revenue growth expectations of 26 percent for FY26 and 24.5 percent for FY27. Nomura also forecasts EBITDA margins of 7.5 percent in FY26 and 8.7 percent in FY27.
CLSA has an Outperform call on Nykaa with a target price of Rs 229 per share. According to the brokerage, the company indicated consolidated GMV growth was in the higher end of the mid-twenties range, largely meeting expectations. However, revenue is likely to come in slightly lower, dragged down by slower growth in the beauty segment. The beauty business was impacted by geopolitical tensions during Nykaa’s flagship sales event. Despite this, the segment is expected to post mid-twenties GMV growth. Meanwhile, fashion GMV growth also picked up to the mid-twenties, with revenue growth in the mid-teens, well ahead of CLSA’s expectation of 10.7 percent.
At about 9:35 am, shares of the company were trading at Rs 200, higher by 1 percent. Nykaa shares have risen 21 percent since the beginning of the year.
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