High valuation caps Nykaa's upside despite strong Q1 and margin gains

Nykaa posts 23% revenue growth and margin expansion, but lofty valuations may limit further stock gains

FSN E-Commerce Ventures, popularly known for its Nykaa range of beauty, fashion and lifestyle products, posted revenue growth of 23 per cent year-on-year (Y-o-Y) for the April-June quarter (Q1), aided by 26 per cent growth in overall gross merchandise value (GMV).

 

The beauty and personal care (BPC) segment reported a 26 per cent growth in GMV and revenue rose 25 per cent.

 

Fashion segment reported a 25 per cent Y-o-Y growth in GMV and a lower 15 per cent revenue growth.

 

BPC’s contribution and earnings before interest, taxes, depreciation and amortisation (Ebitda) margins expanded 73 basis points (bps) and 47