Nykaa shares gain 3% as Nomura, Jefferies hike target prices after strong Q2. Should you buy despite valuation concerns?

Shares of Nykaa-parent FSN E-Commerce Ventures gained 3% to Rs 365 on the BSE after the e-commerce giant reported a net profit of Rs 101 crore for the second quarter of FY27, more than tripling from Rs 33 crore reported in the corresponding quarter of the previous financial year, leading to several target price hikes from international brokerages.

While Nykaa’s bottomline soared 207% year-on-year, its revenue from operations increased 28% YoY to Rs 3,006 crore in the July-September quarter of the ongoing financial year 2027, from Rs 2,346 crore reported in the same quarter a year ago.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) soared 65% YoY to Rs 263 crore during the quarter under review, from Rs 159 crore in the year-ago period. EBITDA margin expanded by 196 bps to 8.7%, compared with 6.8% in Q2 FY26.


Also read | Nykaa Q2 Results: PAT soars 207% YoY to Rs 101 crore, revenue up 28%; co to acquire 82% stake in Simply Nam

Nykaa’s beauty vertical recorded a 28% YoY growth in net sales value (NSV), while EBITDA jumped 51%. Along with the Q2 earnings, the company also announced that its board has approved the proposal to acquire a majority stake in Mumbai-based beauty products brand Simply Nam, founded by celebrity makeup artist Namrata Soni. It will pay Rs 33 crore in cash for an 82% stake in Simply Nam, the company said in a stock exchange filing.

Nomura on Nykaa share price

Nomura maintained its ‘Buy’ rating on the shares of Nykaa and increased its target price to Rs 427 apiece from Rs 411 apiece. The latest target price implies more than 20% upside potential from the stock’s previous closing price of Rs 355.5 apiece on NSE.

The international brokerage said the company’s Q2 EBITDA was in-line with estimates, while premiumization and increased brand partnerships are expected to drive growth. “We expect Nykaa to sustain strong growth momentum with margin expansion,” it added.

Nomura raised its revenue growth estimates by 2-4% to 29% for FY27, 27% for FY28 and 26% for FY29. It also raised EBITDA margin expectations by 20-40bps to 8.9%, 10.2% and 11.4% for FY26, FY27 and FY28, respectively, to factor in cost efficiencies and operating leverage. Accordingly, it raised Nykaa’s EBITDA estimates by 3-4% over FY27-28. Consistent improvement in margins will be a key catalyst, according to the international brokerage.

Jefferies on Nykaa share price

Jefferies also maintained its ‘Buy’ rating for the shares of Nykaa and raised its target price to Rs 415 apiece from Rs 400 apiece, with the latest target price implying 17% upside potential. The international brokerage said the company delivered strong Q2 performance despite the festive shift, with EBITDA up 65% YoY backed by growth as well multi-quarter high margin.

Beauty sustained healthy momentum, while fashion segment too delivered strong growth and stayed at break-even, Jefferies noted, further pointing out that the company’s own brands continued to witness a dream run and Nykaa Now widened its reach & assortment. “Valuation remains punchy but should be viewed in the context of strong momentum on growth & margins,” it said.

Also read | Nykaa Q2 profit more than triples, operating revenue grows 28%

Motilal Oswal on Nykaa share price

Motilal Oswal Financial Services maintained its ‘Neutral’ call on the shares of Nykaa with a target price of Rs 370 apiece, implying more than 4% upside. Valuations remain a key deterrent, and the domestic brokerage awaits a better risk-reward profile to turn constructive on the stock.

“We believe Nykaa should continue to deliver healthy growth in Beauty, supported by premiumization, customer additions, and festive demand, while Fashion is showing improving growth and sustained break-even. Given the largely in-line performance this quarter, we keep our estimates unchanged,” it added.

Nykaa share price

Nykaa shares have gained around 5% in a month and 34% in 2026 so far, bucking the overall market downtrend that pushed the Nifty Midcap 50 index down in the red. The stock has overall gained 42% in the past one year.

In the longer term, Nykaa shares have delivered multibagger returns of more than 150% in three years. The company has a market capitalisation of around Rs 1.02 lakh crore.

Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.