Nykaa Q2 update: Festival tailwinds, fashion momentum set to boost revenue growth

Nykaa Q2 update: Festival tailwinds set to boost revenue growth

E-commerce major Nykaa expects a sharp acceleration in revenue growth for the September quarter (Q2 FY26), powered by an early start to the festival season and a rebound in its fashion business.

In a quarterly business update to the stock exchanges, the company said its consolidated gross merchandise value (GMV) growth is likely to come in “close to thirties”, compared to the mid-twenties range seen over the past few quarters. This is being driven by strong growth in beauty and renewed momentum in fashion.

“This superior performance is driven by renewed growth in the Fashion vertical and healthy performance of the Beauty vertical,” Nykaa said in its filing. “As a result, Nykaa has delivered yet another quarter of healthy performance with consolidated net revenue growth expected to be mid-twenties in Q2 FY2026, aided by an early start to the festive season.”

How is Nykaa’s beauty business performing?

Nykaa’s beauty vertical continues to be the company’s growth engine, with net revenue and net sales value (NSV) expected to rise in the mid-twenties during Q2. This will mark more than 10 consecutive quarters of sustained growth in the segment.

The company said its “House of Nykaa” brands remain a key driver, with acquired labels like Dot & Key performing strongly alongside homegrown brands such as Kay Beauty and Nykaa Cosmetics. This combination has helped Nykaa maintain steady growth in a segment that is already its largest revenue contributor.

What’s driving growth in the fashion segment?

Nykaa’s fashion business, which had been growing more slowly in recent quarters, is showing signs of acceleration. The vertical is expected to post NSV growth in the higher mid-twenties, led by a wider brand assortment and robust customer acquisition on its core platform.

Net revenue growth in fashion is expected to improve to the low twenties, up from low-to-mid teens previously. This growth lags NSV because of a delay in recognising advertising and marketing income. The company said fashion is benefitting from strong festive season demand and an expanded catalogue of offerings across price points and brands.

How is the festive season influencing performance?

Nykaa said its overall consolidated net revenue growth for Q2 is expected to come in at mid-twenties, supported by the early onset of festival shopping. The upbeat forecast comes against the backdrop of a record start to India’s online festival season.

Platforms such as Amazon and Flipkart have reported unprecedented traffic and sales during their flagship sale events, aided by GST cuts, Gen Z shoppers and strong demand for premium products.

According to a report by Datum Intelligence, online festival sales touched Rs 60,700 crore in the first week, up 29 percent year-on-year, and are expected to cross Rs 1.2 lakh crore this year. This compares with nearly Rs 1 lakh crore in sales last year and Rs 81,000 crore in 2023.

How did Nykaa perform in Q1?

In the June quarter, Nykaa posted a 142 percent year-on-year jump in net profit to Rs 23.3 crore, while revenue from operations grew 23 percent to Rs 2,155 crore. The beauty segment grew 24 percent year-on-year, while fashion rose 15 percent.

With its core businesses firing and festival demand kicking in early, Nykaa is betting that this growth momentum will carry through the rest of the festive quarter.