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.
It is also strengthening quick commerce through Nykaa Now and deepening partnerships with global beauty brands. TAM for Fashion is estimated at $55 billion by 2030, compared to $15 billion for online beauty. So, Fashion, which used to be Ebitda negative until FY26, is scaling up rapidly.
Plus, lower leakages through returns and cancellations have ensured improvement in the gross merchandise value (GMV) to net sales value (NSV) funnel, while operating leverage turned Fashion Ebitda positive in Q4FY26. The trend is expected to sustain given Q1FY27’s sharp revenue growth, also suggesting the runway extends well beyond the latest quarter.
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.