CLSA raises Nykaa target price after Q2 results; retains Outperform rating, stock reacts
Nykaa reported 28% year-on-year (YoY) growth in revenue in the second quarter of FY27, while its Ebitda margin expanded 196 basis points to 8.7%.
- Nov 5, 2026,
- Updated Nov 5, 2026 12:28 PM IST
FSN E-Commerce Ventures Ltd, the parent company of Nykaa, is in focus after global brokerage CLSA raised its target price on the stock to Rs 409 from Rs 376 while maintaining its 'Outperform' rating. The revised target price represents an upside potential of around 16% against the brokerage's reported market price of Rs 352.60. CLSA's revised valuation comes after Nykaa reported a strong September-quarter performance, with a significant improvement in profitability supported by operating leverage and better margins.
Nykaa reported 28% year-on-year (YoY) growth in revenue in the second quarter of FY27, while its Ebitda margin expanded 196 basis points to 8.7%. Ebitda increased 5% and 2% above CLSA's estimates and consensus expectations, respectively. The brokerage said the company's sales performance was broadly in line with expectations, but its profit after tax (PAT) exceeded estimates.
Nykaa shares touched a high of Rs 364.70, compared with the previous close of Rs 355.10, marking a rise of around 3%.
CLSA attributed the margin improvement to operating leverage, supported by stronger business performance and lower customer acquisition costs. It noted that fashion customer growth remained robust as Nykaa strengthened brand partnerships on its platform and expanded its luxury catalogue. The brokerage also highlighted the beauty business's performance, with net sales value (NSV) growing 28% YoY.
Nykaa's beauty business recorded 28% NSV growth, supported by 26.3% growth in average order value (AOV) and 4.9% AOV growth. NSV for its own brands increased 39% YoY. The beauty Ebitda margin improved 150 basis points to 10.5%, largely driven by operating leverage. However, the brokerage noted that the festive season shifted entirely to the third quarter of FY27, affecting the frequency of purchases during the September quarter.
The fashion business also delivered strong growth, with gross merchandise value (GMV) increasing 42% and NSV rising 47%. This was driven by 37% growth in AOV, resulting in a 38% increase in orders. Nykaa Fashion added more than 250 brands during the quarter and continued expanding its luxury catalogue, including through partnerships with international brands.
The brokerage raised its FY27-FY29 estimates by 1% to 5% to reflect better margins, while factoring in higher tax rates. It reiterated its 'Outperform' rating and increased its target price to Rs 409 from Rs 376, citing improving profitability, operating leverage and continued growth across its beauty and fashion businesses.
FSN E-Commerce Ventures Ltd, the parent company of Nykaa, is in focus after global brokerage CLSA raised its target price on the stock to Rs 409 from Rs 376 while maintaining its 'Outperform' rating. The revised target price represents an upside potential of around 16% against the brokerage's reported market price of Rs 352.60. CLSA's revised valuation comes after Nykaa reported a strong September-quarter performance, with a significant improvement in profitability supported by operating leverage and better margins.
Nykaa reported 28% year-on-year (YoY) growth in revenue in the second quarter of FY27, while its Ebitda margin expanded 196 basis points to 8.7%. Ebitda increased 5% and 2% above CLSA's estimates and consensus expectations, respectively. The brokerage said the company's sales performance was broadly in line with expectations, but its profit after tax (PAT) exceeded estimates.
Nykaa shares touched a high of Rs 364.70, compared with the previous close of Rs 355.10, marking a rise of around 3%.
CLSA attributed the margin improvement to operating leverage, supported by stronger business performance and lower customer acquisition costs. It noted that fashion customer growth remained robust as Nykaa strengthened brand partnerships on its platform and expanded its luxury catalogue. The brokerage also highlighted the beauty business's performance, with net sales value (NSV) growing 28% YoY.
Nykaa's beauty business recorded 28% NSV growth, supported by 26.3% growth in average order value (AOV) and 4.9% AOV growth. NSV for its own brands increased 39% YoY. The beauty Ebitda margin improved 150 basis points to 10.5%, largely driven by operating leverage. However, the brokerage noted that the festive season shifted entirely to the third quarter of FY27, affecting the frequency of purchases during the September quarter.
The fashion business also delivered strong growth, with gross merchandise value (GMV) increasing 42% and NSV rising 47%. This was driven by 37% growth in AOV, resulting in a 38% increase in orders. Nykaa Fashion added more than 250 brands during the quarter and continued expanding its luxury catalogue, including through partnerships with international brands.
The brokerage raised its FY27-FY29 estimates by 1% to 5% to reflect better margins, while factoring in higher tax rates. It reiterated its 'Outperform' rating and increased its target price to Rs 409 from Rs 376, citing improving profitability, operating leverage and continued growth across its beauty and fashion businesses.