A record FY26 revenue of approximately $1 billion. A beauty segment compounding at 27%+ for three straight years.
The Indian online retail space has had an uneven two years. Post-listing euphoria faded through 2024 and much of 2025 as fashion and discretionary categories faced margin pressure, high return rates and intense competition. A section of the market concluded the new-age retail story needed another full cycle to prove itself.
The name that has quietly reset that narrative is Nykaa (NSE: NYKAA). The stock trades at ₹344, with a market capitalisation of ₹968 billion, and sits near the top of its 52-week range of ₹219 to ₹351.
“Nykaa saw a significant turnaround in FY26 with a record ~$1bn revenue, following two years of volatility post-listing led by sluggish growth and persistent margin pressure in fashion vertical,” says Anand Rathi in a note.
The Dual Framework
The company’s strategy rests on what Anand Rathi calls a “dual-engine” framework — rising profitability through premiumisation in the core Beauty and Personal Care (BPC) business, alongside a structural rescue of the fashion vertical’s unit economics.
“Its corporate pivot relies on a high-performing ‘dual-engine’ framework: (a) rising profitability via premiumisation in core Beauty & Personal Care (BPC) market; and (b) structurally rescuing the economics of Fashion vertical,” says Anand Rathi in its report.
The thesis assumes both engines fire — one as the cash cow, the other as the inflection story.
The BPC Segment
The BPC segment, which accounts for roughly 75% of GMV, remains the core growth and profit driver. Segmental GMV rose approximately 27% year-on-year in FY26 to around ₹91 billion — the third consecutive year of 27%+ growth. The cumulative beauty customer ecosystem has expanded to over 42 million users.
“The BPC segment (~75% of GMV) remains Nykaa’s core growth and profit driver, aided by exclusive brand tie-ups, premium merchandising and curated consumer experience. The business continues to benefit from India’s rising BPC spend, higher online adoption and improved operating leverage, with EBITDA margin expected to expand steadily over the medium-term,” Anand Rathi says.
The Fashion Breakeven
The more significant development is in the fashion vertical. For over two years, Nykaa Fashion acted as a drag on consolidated margin due to high return rates, high A&P cost and intense competition.
Targeted operational correction has driven a marked turnaround. Fashion GMV rose approximately 30% year-on-year to around ₹49.5 billion in FY26. EBITDA margin moved from (10.2%) in Q4 FY25 to approximately 0.3% in Q4 FY26 and 0.1% in FY27. Segmental NSV grew approximately 54% year-on-year in Q1 FY27.
“Targeted operational correction has driven a marked turnaround with Fashion GMV rising by ~30% YoY to ~Rs49.5bn in FY26 with ~0.3% EBITDA margin in Q4FY26 and ~0.1% in FY27 from (10.2%) in Q4FY25,” Anand Rathi notes.
The pivot has been away from discount-led growth toward premiumisation, curated assortment and a managed marketplace model, aided by strong demand across women’s apparel, premium western wear and curated home verticals.
Strategic Allocations
Capital has been directed across three specific areas. The ‘House of Nykaa’ owned-brand portfolio — including Dot & Key and Kay Beauty — is now at approximately ₹17 billion annualised NSV run-rate, up from ₹5.1 billion in FY23. The omnichannel footprint has reached approximately 338 stores by September 2026, making it India’s largest specialty beauty network. The Superstore by Nykaa eB2B arm has expanded to approximately 493,000 retailers and scaled GMV approximately 4x over three years to ₹11.9 billion.
The Numbers
| Metric | Value |
|---|---|
| Current Market Price | ₹344 |
| Target Price | ₹400 |
| Upside | ~16% |
| Rating | BUY (Initiation) |
| Valuation Basis | 50x FY29E EBITDA |
| Market Cap | ₹968 bn |
| 52-week Range | ₹351 / ₹219 |
| FY26 Revenue | ~$1 bn |
| BPC GMV (FY26) | ₹91 bn (+27% YoY) |
| Fashion GMV (FY26) | ₹49.5 bn (+30% YoY) |
| House of Nykaa NSV Run-rate | ₹17 bn (vs ₹5.1 bn in FY23) |
The Rating
Anand Rathi has initiated coverage on Nykaa with a BUY rating and a target price of ₹400, valuing the stock at 50x FY29 estimated EBITDA.
“We initiate coverage on Nykaa with BUY rating and a TP of Rs400, valuing the stock at 50xFY29e EBITDA. We believe Nykaa should trade at a premium compared to its retail peers, considering massive long-term growth runway, category leadership and margin expansion across core segments,” Anand Rathi says.
The key risks notes are a demand slowdown in discretionary space, higher customer acquisition costs, and intense competition across both BPC and fashion.
