FSN E-Commerce Ventures, the parent of Indian beauty retailer Nykaa, saw its shares surge 10.60% this week, marking the biggest weekly jump in 14 months, on expectations of another strong September-quarter performance and signs of revival in its fashion business.
The surge is part of a continued rise in Nykaa, with the stock closing the last six months in the green and the momentum further extending into October, gaining another 14.12% so far.
The rally has also lifted the stock’s year-to-date return to 62%. If the stock maintains these levels in the coming months, it would mark its biggest yearly gain since listing in November 2021.
Fashion catches up with beauty-and-personal-care engine
The company, which released its September-quarter business update earlier this week, expects another quarter of healthy performance in Q2, with consolidated net revenue growth projected in the mid-twenties, driven by renewed growth in the Fashion vertical.
The company expects its fashion vertical to deliver net sales value (NSV) growth in the higher mid-twenties, marking its best performance in over a year.
Nykaa’s latest guidance anticipates the fashion vertical to break even in FY26, with analysts at JM Financial projecting that this could happen as early as Q3FY26.
While the company expects net revenue from the vertical to improve to the low twenties from the low-to-mid teens seen in recent quarters, growth remains slower than NSV due to lower advertising and marketing income. Sequential improvements, however, signal a recovery in consumer demand.
Fashion, once the laggard, is now catching up with Nykaa’s growth engine, the beauty-and-personal-care (BPC) business. Strong traction in the core platform—driven by an expanded brand assortment and robust customer acquisition—has helped the Fashion segment regain ground.
Meanwhile, the BPC segment continues to anchor Nykaa’s overall performance. Revenue and NSV are projected to grow in the mid-twenties, extending a multi-quarter streak of double-digit expansion. “House of Nykaa” brands, including homegrown names such as Kay Beauty and Nykaa Cosmetics, as well as acquired labels like Dot & Key, remain key growth pillars.
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.
With BPC continuing its growth momentum and fashion recovering strongly, operating leverage is expected to further improve, with JM Financial anticipating Nykaa’s EBITDA margin to expand by over 155 basis points year-on-year to 7.1% in the September quarter.
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