Nykaa shares fall over 4% despite strong Q1 but analysts see more upside

Shares of FSN E-Commerce Ventures Ltd., the parent company of Nykaa, fell nearly 3% on Wednesday, August 5, despite reporting another strong quarterly performance, with robust revenue growth, sharp margin expansion and a more than three-fold jump in profit.

For the June quarter (Q1FY27), Nykaa reported a 29.1% year-on-year increase in revenue 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.

The company’s portfolio of 13 owned consumer brands continued to outperform, posting 43% year-on-year growth.

Within its core beauty business, gross merchandise value (GMV) rose 28% to ₹4,105 crore, while the fashion segment maintained strong momentum. Nykaa also expanded its offline footprint, adding 11 stores during the quarter to take its total store count to 324 across more than 100 cities.

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

How brokerages reacted to Nykaa Q1

HSBC maintained its ‘Buy’ rating with a target price of ₹380, citing robust GMV growth across both beauty and fashion, continued scaling of the house of brands portfolio and sustained operating leverage.

The brokerage raised its FY27 EBITDA estimates by 3% following the quarterly beat.CLSA reiterated its ‘Outperform’ rating with a target price of ₹376, noting that revenue growth and EBITDA exceeded expectations. The brokerage highlighted accelerating fashion growth, aided by stronger brand partnerships, while margin-accretive owned brands continued to drive profitability in the beauty segment.

Nomura retained its ‘Buy’ rating and raised confidence in Nykaa’s long-term growth trajectory, assigning the highest Street target of ₹411. The brokerage expects premiumisation, expanding brand partnerships, the continued scale-up of owned brands and physical expansion into Tier-II and Tier-III cities to support both revenue growth and margin expansion.

Jefferies also reiterated its ‘Buy’ rating with a target price of ₹400, describing the quarter as a strong beat across key metrics. The brokerage highlighted healthy user growth in beauty, premiumisation trends, more than 50% growth in fashion, the scaling up of Nykaa’s house of brands and the increasing reach of its quick-commerce offering.

Of the 26 analysts that have coverage on Nykaa, 14 of them have a ‘Buy’ rating, while six each have a ‘Hold’ and a ‘Sell’ call on the stock.