FSN E-Commerce Ventures, the parent of Indian beauty products retailer Nykaa, has been on a tear recently following the release of its September quarter business update, indicating a sustained growth in 1HFY26.
The shares touched a 40-month high following the release of the update on Monday, gaining 11% so far in the current month to reach ₹257.40 apiece.
This surge reflects a resurgence in Nykaa shares over recent months, driven by bullish investor sentiment following the company’s improving financials, strategic acquisitions, new brand tie-ups, and steady demand for makeup and skincare products, which have helped the stock close higher over the past six months.
The recent rally has also pushed the stock to gain 57% in 2025 so far, and if the stock maintains this momentum in the following months, it would mark its biggest yearly gain since listing in November 2021.
Rich valuations had earlier put the stock under pressure, but the recent financial performance has eased concerns somewhat, although the stock still trades at a premium compared to peers.
Higher sales of premium products have helped the company achieve sharp growth in its top line over the last two quarters, along with margin expansion, as it added brands such as luxury offering Chanel, Korean skincare label Aestura, and sunscreen maker Supergoop to its product lineup, coupled with its own brands.
The premium segment in India’s $28 billion beauty and personal care industry has defied a broader slowdown in urban consumption, as upper-middle-class and affluent consumers continued to splurge on discretionary items.
Q2FY26 revenue update: Strong growth continues
In the September quarter as well, the company expects its , with NSV and net revenue growth projected in the mid-twenties. House of Nykaa brands have continued their accelerated growth trajectory, with strong performance from both home-grown and acquired brands.
The company expects the fashion vertical to deliver NSV growth in the higher mid-twenties, indicating a strong improvement over the previous quarters.
Fashion vertical’s net revenue growth is expected to improve to low twenties from low to mid-teens from last few quarters, though lower than the NSV growth due to lower advertising and marketing income.
On a consolidated level, net revenue growth is expected to be in the mid-twenties, aided by an early start to the festive season. GMV growth is expected to outpace revenue growth, approaching the thirties.
Analysts expect stock to continue its winning momentum
Domestic brokerage firm JM Financial expects the stock to continue outperforming as it believes it is one of the cleanest consumption-led plays in India.
The brokerage noted that the company’s fashion segment is also catching up strongly and is expected to break even in 3Q. With the BPC segment continuing its growth momentum and fashion recovering strongly, operating leverage is expected to improve further. Hence, EBITDA margin expansion of over 155 basis points YoY to 7.1% in 2Q is anticipated.
The brokerage maintains a ‘buy’ rating on the stock, with a target price of ₹260 apiece.
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