Nykaa - Comprehensive Stock Analysis Report | Scrolls

by Karnivesh | 2026

Nykaa - Comprehensive Stock Analysis Report - Scrolls.pdf

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Nykaa began with a simple but powerful insight: India lacked a trusted, curated destination for beauty and personal care products. In a market dominated by unorganized retail and discount-driven platforms, Nykaa chose a different path one built on authenticity, premium curation, and consumer trust. Over time, this strategy transformed the company from an online beauty retailer into India’s leading omnichannel lifestyle platform, serving over 42 million customers across digital platforms, 237 physical stores, and a fast-growing B2B distribution network.

At the heart of Nykaa’s business lies Beauty, the company’s profit engine. Accounting for 76% of GMV, the beauty segment has reached meaningful scale with ₹11,775 crore GMV in FY2025, growing at 30% YoY. This scale is not just about volume it has translated into strong economics. Contribution margins of 22% and an all-time-high 5.4% EBITDA margin validate that curated beauty retail can be both high-growth and profitable in India. Global premium brands increasingly view Nykaa as the preferred gateway to the Indian consumer, reinforcing its moat.

Nykaa’s omnichannel strategy deepens this advantage. Physical stores across 79 cities are not merely branding tools they improve delivery speed, enhance customer engagement, and boost lifetime value. Omnichannel customers spend 4–5x more and transact 3–5x more frequently than online-only users, creating a powerful flywheel between digital and offline channels.

Beyond marketplaces, Nykaa has steadily built House of Nykaa brands into a meaningful profit lever. Owned beauty brands generated ₹1,695 crore GMV in FY2025, growing 55% YoY, with structurally higher margins than third-party brands. This vertical integration gives Nykaa control over assortment, pricing, and profitability an advantage that compounds as scale increases.

The company’s ambitions extend beyond beauty. Fashion, which contributes 24% of GMV, is still in its investment phase, but the direction is clear. While currently loss-making at -8.3% EBITDA margins, unit economics are improving steadily. Gross margins are nearing 50%, contribution margins have expanded to 7.9%, and recent quarters show accelerating growth. Fashion represents optionality: if it reaches profitability at scale, it could rival beauty in absolute profit over the long term.

Nykaa’s B2B Superstore adds another layer to the ecosystem. Serving 276,000 retailers, largely in Tier-II and Tier-III cities, Superstore achieved profitability in FY2025 while growing 57% YoY. This platform strengthens supplier relationships, expands geographic reach, and captures demand from the still-unorganized beauty market.

What distinguishes the current phase of Nykaa’s journey is the clear shift from expansion to operating leverage. Fulfillment costs have fallen from 13.3% of GMV to 9.5%, delivery times have halved to 2 days, and capital intensity is declining as major infrastructure investments peak. Consolidated profitability reflects this shift, with FY2025 net profit up 81% YoY and Q2 FY26 profit surging 243% YoY, signaling that scale is now translating into earnings.

However, this progress comes with expectations. Nykaa trades at a steep valuation, implying sustained 25–30% growth, continued margin expansion, and flawless execution across beauty, fashion, owned brands, stores, and new initiatives like rapid delivery. Any slowdown in growth, prolonged fashion losses, or competitive margin pressure could lead to sharp valuation corrections.

In essence, Nykaa today stands at an inflection point. It has proven that premium, trust-led, omnichannel retail can work in India and can be profitable. The next chapter will determine whether it can sustain growth while scaling profitability, justify its valuation, and evolve from a category leader into a long-duration compounding consumer platform. For investors, Nykaa represents a high-conviction growth story powerful in upside, but unforgiving of execution missteps.