Nykaa: beauty pays the bills, fashion finally breaks even

FSN E-Commerce Ventures Limited (NSE: NYKAA) grew Q1 FY27 revenue 29% to ₹2,782 crore, its fastest pace in 13 quarters. Profit more than tripled to ₹80 crore. What happened Gross merchandise value rose 34% to ₹5,590 crore. EBITDA jumped 68% to ₹236 crore, and margin reached a 12 quarter high of 8.5%, up from 6.5%. Beauty earned ₹244 crore of EBITDA at a 10.3% margin. Fashion grew sales 54% and reached breakeven at a 0.1% margin. House of Nykaa, its own brands, is running at ₹3,760 crore of yearly sales, up 39%. Why it matters Younger buyers are spending more on beauty, and they buy online first. Nykaa is where global brands go to reach them. Fashion was a loss maker for years. It no longer drags the group down. My view Beauty alone made ₹244 crore. The whole company made ₹236 crore. So the other businesses together still lose money. Beauty is carrying the group. That is fine as long as beauty keeps growing. The real upside is fashion and own brands. If fashion reaches even a 5% margin, it adds meaningful profit on a base growing over 50% a year. Own brands earn far more than resold ones, so their 39% growth lifts margins too. The problem is the price. At around ₹330, the market value is about ₹95,000 crore. That is over 350 times trailing earnings and roughly 100 times this quarter's EBITDA run rate. The stock already prices in years of flawless growth. What I am watching Q2 FY27 results, due in November, fashion margin moving above 2%, and beauty growth holding above 25% through the festive season. On the chart, ₹348 is the 52-week high and ₹300 is key support. My stance: Hold. Great business, expensive stock. Add only near ₹280. Disclosure: I do not hold a position in FSN E-Commerce Ventures Limited at the time of writing. This is not investment advice.