Nykaa Shares Surge 5% on Strong Q3FY25 Performance and Growth in Beauty Segment
Nykaa’s share price soared by 5.21% on Monday, January 6, 2025, hitting an intraday high of Rs 176.50, driven by a strong business update for the December quarter (Q3FY25).
Strong Growth in Q3FY25
Nykaa’s consolidated net revenue growth for Q3FY25 is expected to be in the mid-twenties, surpassing its consolidated Gross Merchandise Value (GMV) growth, signaling an improved GMV-to-Net Revenue conversion rate. The beauty segment, which is a key driver for Nykaa, showed accelerated growth, with net revenue surpassing mid-twenties percentage growth. GMV in the beauty vertical is expected to grow in the low-thirties, showcasing strong momentum across Nykaa’s e-commerce platform, retail stores, owned brands, and eB2B distribution.
One of the highlights of Nykaa’s growth has been the performance of its eB2B platform, Superstore by Nykaa. The platform now contributes 8% to the beauty vertical’s GMV, up from 7% a year ago, and serves approximately 260,000 transacting retailers across more than 1,100 cities. This strong customer acquisition continues to drive expansion.
Fashion Segment Performance
While Nykaa’s beauty division flourished, its fashion segment showed more subdued performance. Net revenue growth in fashion is expected to reach around 20%, with net sales value (NSV) growth estimated to be in the low-to-mid teens. Nykaa remains optimistic about the long-term growth potential of the online fashion segment, even though demand remains weak in the short term.
Analyst Insights
Analysts at JM Financial praised Nykaa’s performance, especially in the Beauty and Personal Care (BPC) segment, which achieved year-on-year growth in the low-thirties. The eB2B platform’s growth has contributed significantly to the BPC GMV, and analysts estimate core BPC YoY growth in the range of 27-29%. Despite concerns regarding Quick Commerce (QC), analysts believe that QC is unlikely to significantly impact Nykaa’s market position in BPC.
In the fashion space, analysts have lowered growth expectations but noted that Nykaa likely gained market share amid the challenges facing online fashion players. The brokerage maintained Nykaa as a top pick in the internet sector with a target price of Rs 240 for March 2026, reflecting a 43% upside potential.
About Nykaa
Founded in 2012 by Falguni Nayar, Nykaa has become one of India’s leading e-commerce platforms for beauty, wellness, and fashion products. Headquartered in Mumbai, Nykaa offers an extensive range of products, including makeup, skincare, haircare, and wellness items. The platform also provides unique services such as a beauty blog, expert advice portal, virtual makeover tool, and beauty helpline. Nykaa operates a growing network of over 100 physical stores across India and has a market capitalisation of Rs 50,061.16 crore.
At 12:25 PM on January 6, Nykaa’s shares were trading 4.38% higher at Rs 175.10, while the BSE Sensex was down by 1.17% at 78,299.66.
Despite challenges in the fashion segment, Nykaa’s performance in the beauty space and its strong growth prospects have contributed to the surge in share price, making it a stock to watch for future growth.
