Nykaa Shares Hit New High After Q2 Net Profit Triples

Shares of FSN E-Commerce Ventures, known as Nykaa, touched a new 52-week high of ₹363.40 on Thursday following strong second-quarter financial results for the 2027 fiscal year.

Financial Growth

Revenue rose 28 percent to ₹3,006 crore compared to the previous year, while net profit tripled to ₹101 crore. Gross merchandise value increased 30 percent to ₹6,151 crore. This growth was led by the beauty and personal care segment, which saw gross merchandise value grow 25 percent to ₹4,454 crore. Annual unique transacting customers increased by 26 percent, and the total physical store count grew from 265 to 338 over the past year. The fashion segment also turned around, with gross merchandise value jumping 42 percent to ₹1,674 crore.

Segment Performance

Profitability improved across divisions as the Ebitda margin reached a multi-quarter high of 8.7 percent, up from 6.8 percent in the same quarter last year. The beauty and personal care margin expanded from 9 percent to 10.5 percent, helped by the growth of house brands like Dot & Key and Kay Beauty, which now account for 12 percent of that segment's gross merchandise value. Emerging brands such as Nykaa Wanderlust, Earth Rhythm, and Simply Nam also contributed to this momentum. Meanwhile, the fashion division sustained a positive Ebitda for the third straight quarter, recovering from a 3.5 percent loss previously. Fashion lowered its marketing and overhead expenses while adding 250 new brands and securing partnerships with H&M and Nike.

Risks and Outlook

Management aims to achieve a high-single-digit Ebitda margin in fashion by fiscal year 2030, though margin growth will likely be gradual as investments scale up. Market risks remain due to intensifying competition from rivals with deeper pockets or larger customer bases, along with potential margin pressure from the B2B distribution arm, Superstore. The stock has rallied 31 percent this calendar year, leading to a high valuation multiple.

Context

Retail companies in India often see strong profit growth when their digital platforms scale up and physical store expansion attracts more repeat buyers. However, high stock valuations mean that investors watch quarterly profit margins very closely for any signs of pressure from rivals.