FSN E-Commerce Ventures (Nykaa) stock hit a new 52-week high of ₹285.60 intraday on Friday after its robust March quarter (Q4FY26) results. Nykaa Fashion turned Ebitda-positive for the first time, easing concerns around cash burn, and propping up overall profitability.
Consolidated gross margin expanded to a 14-quarter high of 45.4% in Q4FY26, aided by a better sales mix led by its own brand portfolio under ‘House of Nykaa’. This includes fast-growing brands such as Dot & Key, Kay Beauty and Earth Rhythm.
Their gross merchandise value (GMV) jumped 49% year-on-year to ₹3,176 crore in FY26, driven by Dot & Key, which itself reached ₹1,790 crore GMV.
Fashion pivot
Ebitda margin improved 195 basis points year-on-year to a record 8.4%, helped by Nykaa Fashion’s profitable pivot. The segment’s margin improved 1,052 basis points year-on-year to 0.3% in Q4FY26, while its full-year Ebitda margin stood at -2.6%.
To be sure, fashion still contributes less than 10% of overall revenues, which crossed the ₹10,000-crore mark in FY26. However, management’s strategy of premiumization, sharper customer targeting and brand partnerships has supported robust growth in the segment.
This time, fashion has seen growth and profitability moving together. While the trajectory is positive, the fashion vertical has seen volatility earlier and sustaining both growth and profitability together remains key, said Motilal Oswal Financial Services.
Growth engines
Overall, Nykaa’s Q4FY26 revenue rose 28% year-on-year to ₹2,648 crore, while Ebitda surged 67% to ₹223 crore. Revenue was in line with consensus expectations, while Ebitda was 5% ahead of Bloomberg consensus estimates. Net profit more than quadrupled to ₹79 crore.
New customer acquisitions jumped 40% over last year, driven by a wider assortment with more than 1,280 fashion brands added during FY26, alongside marquee global partnerships such as H&M and Nike. The fashion segment’s GMV rose 29% year-on-year, outpacing the beauty and personal care (BPC) segment for the third straight quarter.
Still, BPC remains Nykaa’s crown jewel. The segment delivered nearly ₹15,000 crore GMV in FY26, growing 27% year-on-year, while Ebitda margins crossed 10% in Q4.
Growth was led by structural shifts playing out in the industry; Korean beauty brands and derma-cosmetics expanded 58% and 40%, respectively.
“Nykaa’s step-up in customer acquisition (especially in BPC at a time when peers have stepped back) is certainly encouraging. However, how much of it is sustainable remains to be seen in the medium term,” said HDFC Securities.
Risks ahead
But it’s not all smooth sailing.
Sequentially, revenue and profits declined during the quarter. Nykaa’s GCC operations were affected by the West Asia war, although the impact remained limited given the region’s small contribution to overall business.
That said, second-order risks to discretionary demand from inflation and uncertainty cannot be ruled out. The management has also flagged macro concerns such as inflation, currency depreciation and global uncertainty.
Competition is also intensifying as more players chase a larger share of the $100-billion total addressable market across beauty, personal care, retail and fashion. While Nykaa’s premium positioning offers some protection, pressure on margins cannot be dismissed.
Meanwhile, the stock has gained 36% over the past year, suggesting much of the growth optimism is already priced in. It currently trades at nearly 72x FY27 EV/Ebitda, based on Bloomberg consensus estimates, leaving little room for disappointment.