Nykaa Q1 Update: Beauty business continues consistent performance, fashion improves

Shares of FSN E-Commerce Ventures Ltd., parent compny of fashion and beauty retailer Nykaa, are in focus on Monday, July 7, after the company released projections of its first quarter performance on Sunday.

Nykaa expects its consolidated net revenue growth for the June quarter to be at the lower end of mid-twenties.

The company said its gross merchandise value (GMV) growth is expected to be higher, crossing mid-twenties, indicating consistent momentum over several quarters.

Nykaa is also estimating its beauty vertical to deliver GMV growth in higher mid-twenties. "This was despite disruption on account of geo-political tensions that led to softer sentiment during the Q1's flagship sale, causing some loss of business," it said.

Nykaa said all its businesses including its e-commerce platform, retail stores, eB2B distribution and the House of Nykaa brands delivered a solid performance.

House of Nykaa brands also continued to accelerate the company's growth trajectory with strong performance of home-grown and acquired brands, it said.

Nykaa is expected its beauty vertical's net revenue to increase in mid-twenties, similar to previous quarters.

Nykaa's fashion vertical is estimating GMV growth of mid-twenties as well. The company said this is an improvement over the previous quarters and was driven by improving traction in the core platform business, supported by an expanding assortment and robust customer acquisition.

The fashion vertical's net revenue is estimated to improve sequentially to mid-teens, though lower than the GMV growth, it said.

Nykaa had seen a block deal last week, where one of its early investors, Harindar Pal Singh Banga had sold shares worth close to ₹1,200 crore. You can read more on how Nykaa has earned consumers but lost shareholders over the last two years.

Brokerage firm Nomura has a "neutral" rating on Nykaa with a price target of ₹216. It said that on a consolidated basis, it expects revenue growth of 23% during the June quarter, which is slightly below its full-year estimates of 26% and 24.5% for financial year 2026 and 2027, respectively. For the same time frame, it sees EBITDA margin of 7.5% and 8.7%, respectively.

CLSA has an "outperform" rating on Nykaa with a price target of ₹229. It believes that revenue growth will be slightly lower, dragged down by lower revenue growth for the beauty business.

Nykaa shares ended the previous session 1.93% lower at ₹198.4 apiece. The stock has gained 20.5% this year, so far.

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