Mumbai: Shares of FSN E-Commerce Ventures, the parent company of Nykaa, rose around 4% in early trading on October 5 as investors responded positively to brokerage expectations ahead of the company’s second-quarter results for FY2026-27.

The stock was trading at around Rs 338.10 on the NSE at about 9.32am, up 4.08% from its previous close of Rs 324.90, according to NDTV Profit. The gains came as brokerages remained positive about Nykaa’s growth prospects, particularly in its beauty and personal care business, while also expecting improving momentum in fashion.

The company has also indicated that its consolidated net revenue for the September quarter is expected to grow in the high twenties on a year-on-year basis, adding to investor interest ahead of the results.

Brokerages remain positive on Nykaa

The latest rise in the stock was supported by favourable brokerage commentary.

BofA Securities maintained a ‘Neutral’ rating on Nykaa but raised its target price expectation to Rs 370. Nomura retained its ‘Buy’ rating with a target price of Rs 411.

Both brokerages expect the company to maintain strong growth, although their estimates differ on the pace of expansion and profitability.

The differing ratings also show that while analysts remain positive about Nykaa’s operating performance, there are varying views about how much of the expected growth is already reflected in the stock price.

BofA expects margin improvement

BofA expects Nykaa to deliver another strong quarter of gross merchandise value growth, although it expects the pace to moderate compared with the first quarter.

The brokerage estimates that Nykaa’s EBITDA margin could improve to 8.9% in the second quarter from the previous quarter.

However, BofA also believes the scope for a major positive surprise may be limited because market expectations have already moved higher.

This means investors could pay close attention not only to revenue and GMV growth but also to the company’s ability to expand margins while maintaining its growth trajectory.

Nomura sees strong beauty and fashion growth

Nomura has maintained a more bullish stance on the company with its ‘Buy’ rating.

The brokerage expects strong revenue growth to continue, with Nykaa’s beauty and personal care business maintaining momentum. It also expects the company’s fashion business to show accelerating growth.

Nomura estimates an 8.7% EBITDA margin for the second quarter.

The assessment suggests that the beauty business continues to be the primary growth engine, while improving performance in fashion could provide an additional source of expansion for the company.

September quarter revenue growth in focus

Nykaa’s own business update has also contributed to the market’s attention.

FSN E-Commerce Ventures said it expects consolidated net revenue growth in the high twenties during the second quarter of FY2026-27. The company operates across beauty and personal care as well as fashion, making performance in both segments important for the September-quarter results.

Investors will therefore be watching the results for details on revenue growth, gross merchandise value, operating margins and the performance of individual businesses.

The company’s ability to sustain growth while improving profitability is particularly important because Nykaa has been one of the stronger-performing consumer internet stocks in recent periods.

Nykaa stock has delivered strong returns

Nykaa’s share-price performance has also kept the stock in focus.

According to the NDTV Profit report, the stock had delivered more than 132% returns over three years and had gained around 29% in calendar 2026 as of the October 5 report.

The company’s market capitalisation was around Rs 96,842 crore, while its price-to-earnings multiple was around 359 times, highlighting the premium valuation at which the stock was trading.

A high valuation can increase investor sensitivity to quarterly results because the market may expect continued strong earnings and growth to justify the premium.

Beauty remains key growth driver

Nykaa’s beauty and personal care business remains central to its growth strategy.

The segment benefits from India’s expanding online beauty market, increasing digital consumption and growing demand for branded cosmetics and personal care products.

Brokerage commentary suggests that this business continues to show strong momentum.

At the same time, Nykaa has been working to improve the performance of its fashion business. Nomura’s expectation of accelerating fashion growth could provide another positive factor if the September-quarter results support that assessment.

Investors await Q2 earnings

With the stock rising ahead of the results, the September-quarter numbers are likely to be closely watched by investors.

Key factors will include the company’s revenue growth, GMV expansion, EBITDA margin and management commentary on demand trends.

Investors will also assess whether the company’s growth remains broad-based across beauty and fashion or is concentrated primarily in the beauty segment.

Any indication of stronger-than-expected margin expansion could support the positive sentiment, while weaker growth or cautious guidance could put pressure on the stock.

The contrasting BofA and Nomura estimates also indicate that the market is likely to focus on the quality and sustainability of Nykaa’s growth rather than revenue expansion alone.

What investors will watch next

The immediate trigger for Nykaa’s share price is the upcoming second-quarter financial performance.

The company has already indicated high-twenties consolidated net revenue growth for the quarter, while brokerages expect continued momentum in beauty and improving growth in fashion.

Margin performance will be equally important. BofA expects an 8.9% EBITDA margin, while Nomura estimates 8.7%.

The results will therefore provide investors with an opportunity to compare actual performance against these expectations and assess whether Nykaa can maintain its growth trajectory while improving operating profitability.

Conclusion

Nykaa shares gained around 4% in early trading on October 5 as investors remained optimistic ahead of the company’s Q2 FY2026-27 results.

Brokerages have maintained a positive view of the company’s growth prospects. BofA expects an 8.9% EBITDA margin and has a Rs 370 target price with a ‘Neutral’ rating, while Nomura has retained its ‘Buy’ rating with a Rs 411 target and expects an 8.7% EBITDA margin.

Nykaa has also indicated that consolidated net revenue could grow in the high twenties during the September quarter. With beauty and personal care continuing to drive growth and fashion showing signs of improvement, investors will now focus on the company’s actual results and margin performance.