Nykaa Jumps 2.5% After It Projects Mid-20% Revenue Growth In Q1

Shares of beauty ecommerce major Nykaa surged 2.5% to INR 203.05 on the BSE today after the company said it expects its consolidated revenue growth to be in mid-twenties YoY in the first quarter of FY26. 

In its quarterly revenue update, the beauty and personal care (BPC) company said that FY26 started on a “good note” and it expects its revenue growth to be “at the lower end of mid-twenties”. Gross merchandise value (GMV) growth is projected to cross mid-twenties.

Nykaa said that geopolitical tensions led to softer sentiment during its Q1 Flagship Sale, causing some loss of business for its beauty vertical. Despite this, it expects the vertical to deliver GMV growth in the higher mid-twenties.

“The strong growth came on the back of solid performance across all businesses including ecommerce platform, retail stores, eB2B distribution and the House of Nykaa portfolio. House of Nykaa brands continued its accelerated growth trajectory with strong performance of home-grown as well as acquired brands,” Nykaa said. 

The fashion vertical, which has relatively been a laggard, is projected to see its net revenue grow in the mid-teens sequentially. However, the Falguni Nayar-led company said that Nykaa’s fashion business saw a strong improvement in Q1 over the previous quarters, and its GMV will increase in mid-twenties.

At 11:00 AM, shares of Nykaa were trading 2.4% higher at INR 202.75 on the BSE. Following the Q1 update, brokerage Morgan Stanley maintained its overweight rating on the stock with a price target of INR 225. 

Shares of Nykaa have gained nearly 24% year to date. This has also resulted in profit booking, with the company’s early investor and founder of The Caravel Group, Harindarpal Singh Banga, offloading 60 Mn shares of Nykaa for over INR 1,200 Cr in a bulk deal last week. 

The uptick in its share price has come on the back of improvement in Nykaa’s financial performance. In Q4 FY25, the company’s net profit surged 110% to INR 19.1 Cr from INR 9.1 Cr in the year-ago period. Operating revenue zoomed 24% to INR 2,061.8 Cr during the quarter under review from INR 1,667.9 Cr in Q4 FY24. 

Segment-wise, beauty vertical’s revenue grew 25% YoY to INR 1,849.8 Cr in Q4 FY25. Meanwhile, fashion vertical’s revenue rose a mere 11% YoY to INR 161 Cr during the quarter, indicating the struggles of the segment compared to the fashion business. However, the company is targeting an EBITDA breakeven for its fashion vertical in FY26.