Nykaa rally: Planning to buy fashion retailer stock after recent up move? Here's what analyst says

FSN E-Commerce Ventures Ltd, the parent of Nykaa, may have staged a sharp comeback on the bourses, but the next leg of the move is unlikely to be as smooth as the last one. Market expert Akshay Bhagwat said the beauty and fashion retailer’s stock, after a steep rebound in recent months, now appears headed for a phase of consolidation rather than a straight-line rally. The stock has gained 25% in three months and 45% in a year.

Bhagwat’s assessment comes at a time when Nykaa has begun to regain investor confidence, helped by improving fundamentals, better quarterly earnings and a visible easing in the negative sentiment that had weighed on the stock earlier.

Fashion-to-beauty retailer Nykaa reported an over three-fold rise in quarterly profit to Rs 79.76 crore in Q1 of financial year 2026-25 (FY27) against Rs 24.47 crore in the same period a year ago.

The Mumbai-based firm clocked a profit of Rs 78 crore in the previous quarter.

Gross profit rose 33 percent year-on-year to Rs 1,276 crore, while EBITDA increased 68 percent to Rs 236 crore. EBITDA margin rose to 8.5 percent from 6.5 percent a year ago, marking its highest level in the last 12 quarters.

Nykaa’s revenue from operations rose 29 percent YoY to Rs 2,782 crore in the last quarter against Rs 2,155 crore a year ago. It clocked a revenue of Rs 2,648 crore in the previous quarter.

Sharp rebound, but momentum may cool

Bhagwat pointed to the scale of the recent recovery to explain why caution is warranted at current levels. “Nykaa has reversed strongly and from Rs 140-odd levels, in the last three months it’s gone all the way up to Rs 340,” he said.

That kind of rally, he suggested, leaves limited room for an immediate follow-through. “The journey is not going to be one way for the stock,” Bhagwat said, adding that the counter could now lose momentum and slip into a sideways trading band.

Key levels investors should watch

For short-term traders, Bhagwat sees Nykaa moving broadly in a Rs 300-Rs 350 range over the next few months. The implication is not necessarily a sharp correction, but a pause as the market digests the recent gains and waits for fresh triggers.

His advice is clear for investors with a limited holding horizon. “If it is short term, your time horizon is lesser than two months, the advice is book profits at current rates and look for re-entries on dips around Rs 300 to Rs 280,” he said.

Long-term case still intact

That caution, however, does not amount to a bearish call on the stock’s broader trajectory. Bhagwat maintained that investors with a longer holding period could still stay constructive, especially if they are willing to ride out near-term volatility.

For those with an investment horizon of more than six to eight months, he pegged the next meaningful upside zone near Nykaa’s all-time high. “Your target zone is near the all-time high of Rs 420,” he said.

Why time horizon matters now

The Nykaa call also reflects the broader market mood. With benchmark indices under pressure and experts increasingly describing the current environment as stock-specific rather than index-led, strategy is becoming more dependent on entry price, patience and risk appetite.

For Nykaa investors, that means the decision to sell is no longer just about the stock’s recovery story. It is about matching expectations with time horizon: traders may want to monetise the rebound, while long-term investors may still have reason to stay the course.