1. At a Glance – Nykaa in One Breath (Hold It)
Nykaa, officially FSN E‑Commerce Ventures Ltd, is trading at ₹277 with a market cap of ₹79,168 crore, which is roughly the GDP of a small country that only sells serums, sneakers, and self-confidence. Q3 FY26 came in hot: revenue ₹2,873 crore (+27% YoY), PAT ₹68 crore (+179% YoY), operating margin touching ~8%, and GMV growth of 28%. Sounds dreamy? Then you see the valuation — P/E of 523, EV/EBITDA of 116, Price-to-Book of 57x. This is not a stock, this is a belief system.
ROE is 5.16%, ROCE 9.59%, debt ₹1,407 crore with Debt/Equity at ~1.0, and free cash flow still behaving like an introvert at a wedding. Yet, the stock is up ~49% over 1 year. Why? Because Nykaa doesn’t sell products — it sells aspiration in HD with influencer lighting.
So the big question before we dive deep: are we looking at the Amazon of Beauty… or the most beautifully packaged valuation risk in Indian markets?
2. Introduction – From Bank Locker to Beauty Locker
Nykaa’s story is legendary. Founded by a former investment banker, scaled with discipline, survived discount wars, and listed at a time when markets were drunk on tech optimism. Then came the hangover: margins thin, growth normalising, fashion bleeding, and the stock correcting hard.
Fast-forward to FY26, and Nykaa is back in the gym. Beauty margins are improving, owned brands are compounding like mutual funds in bull markets, and fashion has stopped burning cash like it’s Diwali every quarter. Q3 FY26 confirms this comeback narrative — not with hype, but with actual profits.
But here’s the irony: even after years of execution, Nykaa still earns ₹0.49 EPS (TTM). That’s less than the price of a sachet shampoo. And yet, the market values it like a luxury perfume brand with monopoly pricing.
So before we fall in love with the glow-up, let’s remove the makeup and look at the bones.
3. Business Model – WTF Do They Even Do?
Nykaa is not “just e-commerce.” It’s a content-commerce-brand flywheel.
- Beauty (75.5% of GMV): The cash cow. High repeat rates, premium users spending ~9x more than average, and 34 million customers who trust Nykaa more than relatives for skincare advice.
- Fashion (24.4% of GMV): Discovery-led, curated, and finally behaving like a grown-up business. Losses have narrowed, and premium brands are sticking around.
- Owned Brands: The real secret sauce. Dot & Key, Kay Beauty, Nykaa Cosmetics, etc. ₹1,700+ crore GMV, ~48% five-year CAGR. These brands don’t pay platform commissions — they are the platform.
- Offline Stores: 265 stores across 90 cities. Not for scale, but for trust. Indians still like touching lipstick before buying it.
- Nykaa Now: Quick commerce, 30–120 minute delivery. Because patience is out of fashion.
In short, Nykaa monetises trust + taste + timing. Question is: how much is that worth?
4. Financials Overview – The Numbers Do the Talking
Quarterly Comparison Table (₹ crore)
| Metric | Latest Qtr (Q3 FY26) | YoY Qtr (Q3 FY25) | Prev Qtr (Q2 FY26) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 2,873 | 2,267 | 2,346 | 26.7% | 22.5% |
| EBITDA | 230 | 141 | 159 | 63.1% | 44.7% |
| PAT | 68 | 26 | 33 | 178.6% | 106.1% |
| EPS (₹) | 0.22 | 0.09 | 0.12 | 144% | 83% |
Commentary:
This is not cosmetic growth. Operating leverage is finally kicking in. Expenses are growing slower than revenue, margins are expanding, and PAT growth is triple-digit. If Nykaa were a person, this is the phase where friends say, “You’ve changed… in a good way.”
But remember — annualised EPS still comes to ~₹0.49. At ₹277 CMP, that’s where the valuation tension begins.
5. Valuation Discussion
