Nykaa Parent's Stock Skyrockets to Annual Peak Following Robust Quarterly Earnings
FSN E-Commerce Ventures, the parent company of India's leading beauty retailer Nykaa, witnessed its shares surge an impressive 6.2% during Friday's trading session on February 6. The stock reached a significant milestone, hitting a one-year high of ₹274.45 per share. This remarkable rally extended the stock's winning streak to four consecutive sessions, fueled by growing optimism from brokerage firms following the company's outstanding performance in the December-ending quarter.
Brokerage Firms Express Strong Confidence in Nykaa's Future
According to reports from CNBC TV18, Japanese brokerage giant Nomura has upgraded Nykaa's rating from 'hold' to 'buy', simultaneously raising its price target to ₹305 from the previous ₹261. This adjustment suggests a potential upside of 17% from Thursday's closing price, although Mint has noted it could not independently verify this report. Nomura's bullish outlook is underpinned by expectations that the company's EBITDA will sustain a compounded annual growth rate exceeding 25%, even after achieving a remarkable 45% CAGR in recent years.
In a parallel development, domestic brokerage JM Financial has reinforced its positive stance on Nykaa, retaining its 'buy' rating with an ambitious target price of ₹325 per share. This target indicates a substantial upside potential of 25.8% from current levels. JM Financial praised Nykaa for delivering exceptional results against challenging odds, highlighting its ability to improve margins while maintaining industry-leading growth across all business segments.
Strategic Outlook and Profitability Projections
The brokerage firm anticipates that reduced marketing expenditures and strong operating leverage will continue to bolster Nykaa's profitability in the coming quarters. JM Financial projects that the company will sustain its growth momentum, with higher profits from the Beauty and Personal Care segment gradually offsetting losses in the eB2B division. Furthermore, the fashion segment is expected to achieve profitability by FY26 itself, marking a significant milestone in the company's diversification strategy.
JM Financial emphasized that Nykaa remains one of the most sustainable compounding stories within the Indian internet space, reflecting confidence in its long-term growth trajectory and market positioning.
Quarterly Financial Performance Highlights
Nykaa's consolidated financial statements for Q3FY26, filed on Thursday, revealed exceptional growth metrics. The company reported a consolidated net profit of ₹68 crore, representing a staggering 157% year-on-year increase. Consolidated revenue from core operations rose by 27% to ₹2,873 crore compared to the same period last year, while EBITDA reached ₹230 crore, marking a 63% year-on-year surge.
The company's margin performance was particularly noteworthy, with EBITDA margins expanding by 180 basis points to reach 8% during the quarter. This financial strength was primarily driven by robust demand for skincare and makeup products, with revenue from the beauty segment jumping 27% year-on-year to ₹2,622 crore in the December quarter.
Operational Metrics Demonstrate Strong Growth Trajectory
Nykaa achieved its highest-ever quarterly consolidated Gross Merchandise Value of ₹5,795 crore in the December quarter, representing a substantial 28% year-on-year increase. The company's customer base showed remarkable expansion, with annual unique transacting customers in the beauty segment growing by 26% to reach 18.7 million customers. The fashion vertical demonstrated even stronger growth, with a 33% increase to 4.1 million customers.
Total orders processed during the quarter reached 3 million, reflecting a significant 39% year-on-year growth. These operational metrics underscore Nykaa's continued dominance in the Indian beauty and fashion e-commerce landscape and its ability to attract and retain a growing customer base.
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