13 Aug , 2025 By : Debdeep Gupta
Shares of FSN E-commerce Ventures Ltd, the Nykaa parent and operator, gained up to four percent in the morning session after the beauty e-tailer posted its earnings show for the quarter ended June.
FSN E-Commerce posted a consolidated net profit of Rs 24 crore in Q1, up 79 percent from Rs 14 crore a year ago. Revenue from operations rose 23 percent to Rs 2,155 crore from Rs 1,746 crore in Q1FY25.
EBITDA margin rose 100 basis points year-on-year to 6.5 percent in Q1FY26, driven by better gross margins and operating leverage. In the BPC segment, contribution margin improved 70 basis points to 21 percent, while EBITDA margin grew 50 basis points to 8.4 percent.
The fashion segment saw contribution margin fall 280 basis points to 14 percent, but EBITDA margin improved 470 basis points to -10.5 percent.
Nykaa's management retained the guidance of achieving EBITDA margin breakeven in the Fashion business in FY26E. BPC continues to deliver healthy growth with better profitability; at the same time losses in Fashion are narrowing.
At 9.20 am, Nykaa's shares were trading at Rs 212 per share, higher by 3.7 percent on the NSE.
Nuvama Institutional Equities said, "Nykaa sustained a strong momentum in its BPC segment while Fashion registered a pickup in growth this quarter. Management expects competitive intensity to ease up, supporting sustainable GMV growth." The brokerage retained its 'buy' rating, with a price target of Rs 235 per share.
Nomura maintained its Neutral rating on Nykaa, raising the target price to Rs 223 from Rs 216, citing strong growth but margins lagging estimates. Annual unique transacting customers rose 26 percent year-on-year, while average order value grew 4 percent, driven by premiumisation, though demand trends remain mixed.
On the flip side, HDFC Securities maintained its 'reduce' call, with a price target of Rs 180, as the brokerage noted that valuations remained lofty.
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