Nykaa Q2 update lifts profit outlook with 61% rise

FSN E-Commerce Ventures (

) reported a strong Q2FY27 business update, with consolidated Ebitda expected to rise 61% year-on-year to ₹256 crore and net profit nearly tripling to ₹101 crore. The stock gained 5% post-update, extending its 2026 return to 28% despite broader market pessimism. The company’s consolidated GMV is estimated to have grown ~30% YoY, with net revenue growth in the high 20s. Beauty and personal care (BPC), Nykaa’s largest segment, maintained high-20s growth despite a larger base, supported by new customer additions and traction in House of Nykaa brands. Fashion continues to be the swing factor, with NSV growth in the high 40s, materially ahead of estimates, aided by over 250 new brands and exclusive Nike drops. Importantly, Fashion is inching closer to Ebitda profitability after near break-even in Q1. Margins are improving on operating leverage. In Q1, consolidated Ebitda rose 66% YoY to ₹236 crore, with margin expansion from 6.5% to 8.5%. Analysts expect Q2 margins to hold at 8.5%. Nomura notes that consistent improvement in Ebitda margin from 8.7% in FY26 to 11% in FY28F will be the key catalyst. Risks remain. Competition in fashion is intense, with rivals deploying aggressive discounting and deeper capital bases. Nykaa’s B2B SuperStore, while scaling rapidly with 17% GMV growth, carries lower margins and could dilute profitability if it grows disproportionately. Our view: Nykaa’s festive season momentum and strong customer acquisition underpin near-term earnings strength. However, with much of the optimism already priced in, sustained margin expansion will be critical for valuation support. Investors should watch Fashion’s profitability trajectory and competitive intensity in the coming quarters. Disclosure: This article is for informational purposes only and does not constitute investment advice. Please consult a SEBI-registered investment advisor before making investment decisions