Brokerages bullish on Nykaa's BPC growth, cautious on fashion outlook

Nykaa in focus: Nykaa’s 2025 Annual Investor Day presentation received a broadly positive response from brokerages, who highlighted continued strength in the Beauty and Personal Care (BPC) vertical while adopting a more cautious tone on the company’s ambitious fashion targets.

 

Nomura described Nykaa’s growth plans in the BPC segment as being “in line with our view,” and highlighted the company’s strong positioning in the premium beauty space. 

 

It expects Nykaa to deliver “27 per cent/25 per cent revenue growth in FY26/27F” in BPC, with margins expanding steadily despite management not offering any specific guidance. 

 

However, the brokerage remained measured about the fashion segment, calling the company’s outlook “ambitious.” 

 

 

Nomura said, “It may be tough in our view to deliver stronger growth with sharp improvement in margins” considering the “high level of competition.” 

 

On profitability, it sees fashion margins improving but remaining negative at -7 per cent by FY27F. Nomura concluded that while there’s potential for upside, execution remains key. It values the stock at a discounted cash flow (DCF)-based target price of ₹216, calling the current ~5x FY26F EV/sales multiple “in the fair value zone.” The brokerage has kept the ratings unchanged at ‘Neutral’.

 

Meanwhile, JM Financial stressed upon Nykaa’s “aggressive growth aspirations across BPC and fashion,” and pointed to positive traction in its eB2B Superstore vertical. 

 

The brokerage highlighted that the company has now guided for fashion earnings before interest, tax, depreciation and amortisation (Ebitda) breakeven in FY26, which is earlier than its own FY27 expectation. 

 

While management refrained from issuing specific Ebitda guidance for BPC, JM Financial stated, “We expect contribution margins to remain stable, with Ebitda margin expansion likely supported by operating leverage.” 

 

It also noted Nykaa’s confidence in scaling, saying, “Mid-20s GMV growth in BPC and a 3-4x increase in Fashion net sales value (NSV) over the next five years reflect management’s strong confidence.” 

 

The brokerage believes Nykaa has shown robust execution “in a tepid demand environment,” and sees further margin enhancement as a possibility. It maintains a ‘Buy’ rating with a target price of ₹250 for March 2026.

 

Nuvama echoed a similarly positive sentiment, with a focus on profitability and long-term sustainability. 

 

The brokerage pointed out that Nykaa management expects the “BPC business to grow at a mid-20 per cent compound annual growth rate (CAGR) during FY25–30E” and that “Fashion business is to attain Ebitda margin breakeven in FY26.” It also highlighted strong potential in the House of Nykaa, noting its gross merchandise value (GMV) target of ₹6,000 crore by FY30E. 

 

On the quick commerce front, Nuvama mentioned that “NykaaNow is available in seven cities with a target to expand to ten cities.” 

 

The brokerage underscored the company’s disciplined approach, stating, “Management focus remains on sustainable growth by adding quality customers to the funnel rather than discounting products.” It expects profitability to improve “on the back of lower losses in the fashion and eB2B segments,” and retained its ‘Buy’ rating with a DCF-based target of ₹235.

 

Those at Emkay, too, recommended an ‘Add’, with a target price of ₹230 as they see steady growth in BPC, improving profitability in Fashion, and long-term value creation through new initiatives like Nykaa Now and House of Nykaa.

 

That said, the brokerages remain bullish on Nykaa’s BPC prospects and confident in its broader digital and omnichannel strategy. While Fashion remains an area requiring careful execution, analysts see room for upside if the company delivers on its ambitious growth and profitability milestones.