Nykaa Shares Slip Despite Strong Q1; Brokerages See Up To 40% Upside

Shares of FSN E-Commerce Ventures, the parent of Nykaa, fell nearly 3% on Wednesday despite the beauty and fashion retailer reporting a strong June-quarter performance, with higher revenue, expanding margins and a more than three-fold jump in net profit.

The stock declined as much as 3% even after the company posted revenue growth of 29.1% year-on-year to ₹2,782 crore. EBITDA rose 67.8% to ₹236 crore, while EBITDA margin expanded to 8.5% from 6.5% a year ago.

Net profit more than tripled to ₹80 crore from ₹24.5 crore in the corresponding quarter last year.

Nykaa's portfolio of 13 owned consumer brands continued to outperform, delivering 43% year-on-year growth. Beauty GMV increased 28% to ₹4,105 crore, while the fashion business maintained healthy momentum. During the quarter, the company added 11 stores, taking its offline network to 324 stores across more than 100 cities.

Nykaa also acquired a 51% stake in premium beauty and skincare brand Aminu Wellness for ₹32 crore. The brand reported FY26 revenue of ₹19.4 crore.

Growth Across Beauty And Fashion Impresses Brokerages

Brokerages remained positive on Nykaa's outlook, citing broad-based growth across beauty and fashion, improving profitability and continued operating leverage.

HSBC maintained its Buy rating with a target price of ₹380, while raising its FY27 EBITDA estimates by 3% after the earnings beat. The brokerage highlighted robust GMV growth, strong execution in the beauty business, scaling of the owned brands portfolio and sustained operating leverage.

CLSA reiterated its Outperform rating with a target price of ₹376, saying both revenue and EBITDA exceeded expectations. It noted that stronger brand partnerships accelerated fashion growth, while higher-margin owned brands continued to support profitability in the beauty segment.

Brokerages See Up To 40% Upside

Nomura retained its Buy rating and assigned the Street-high target price of ₹411, expressing confidence in Nykaa's long-term growth prospects. The brokerage expects premiumisation, expanding brand partnerships, continued growth in owned brands and deeper expansion into Tier-II and Tier-III cities to drive both revenue growth and margin expansion.

Jefferies also reiterated its Buy rating with a target price of ₹400, describing the June quarter as a strong beat across key operating metrics. It said healthy beauty user growth, premiumisation, more than 50% growth in the fashion business, the scaling up of Nykaa's house of brands and the increasing reach of its quick-commerce offering continue to strengthen the company's long-term growth outlook.