Nykaa's faster growth keeps Street bullish, but valuations rich too

The July-September quarter (Q2) business update on revenue by FSN E-Commerce Ventures (Nykaa) was well received by most investors and the share price surged over 6 per cent, driven by one block deal, on Monday.

- DEVANGSHU DATTA

Even after Wednesday's minor dip, it was still higher at ₹257.50 as compared to Monday's close of ₹255.55. The key highlights from the quarterly update are as follows.

In Beauty & Personal Care (BPC), net revenue growth is estimated at midtwenties (25-26 per cent year-on-year (Yo-Y) versus Q1FY26 at 23.9 per cent).

The Yo-Y growth of net merchandise value (NSV) for BPC is in midtwenties (Q1FY26 at 24.8 per cent). This indicates sustained growth for more than ten consecutive quarters. Management also claims House of Nykaa brands witnessed rapid growth including the strong performance of acquired brands like Dot & Key as well as homegrown brands.

In Fashion, net revenue growth is estimated at low twenties (21-22 per cent Yo-Y versus Q1FY26 at 15.1 per cent). Fashion NSV growth will be in the higher mid-twenties in Q2FY26 (Q1FY26 at 20 per cent) with traction in the core platform business. Net revenue growth will be lower than NSV growth due to lag in advertising and marketing income.