Shares of FSN E-Commerce Ventures , the parent company of fashion and beauty retailer Nykaa, are expected to be in focus following the company's strong quarterly update for Q3 FY26. The company has delivered consolidated Gross Merchandise Value (GMV) and Net Sales Value (NSV) growth in the late twenties, reflecting renewed momentum across both key business verticals.

Consolidated Performance Overview

Nykaa expects to deliver consolidated net revenue growth at the upper end of mid-twenties for Q3 FY26, marking a slight acceleration from the mid-twenties growth maintained over the past several quarters. This performance demonstrates the company's ability to sustain momentum across its diversified business model.

Beauty Vertical Achieves Record Performance

The Beauty vertical is expected to deliver accelerated NSV growth of late twenties, marking the highest growth rate in the past six quarters. This stellar performance comes during a seasonally strong quarter, making it the largest quarter to date in terms of absolute scale. The growth was broad-based across each of Nykaa's beauty businesses.

Several factors contributed to this superior performance including outstanding performance of House of Nykaa brands, success of the Pink Friday sale, and robust new customer acquisition. As a result of this strong operational performance, the Beauty vertical's net revenue growth is expected to be in the upper end of mid-twenties.

Fashion Vertical Continues Revival Trajectory

The Fashion vertical maintained its revived growth trajectory with NSV growth of mid-twenties in Q3 FY26. This performance reflects the successful revival initiatives implemented since the start of the financial year, driven by strong performance of the core platform business, strategic new brand additions, and robust customer acquisition initiatives.

However, net revenue growth for the Fashion vertical is expected to be in the late teens, lower than NSV growth. This differential is primarily attributed to subdued content and marketing income, along with ongoing channel optimization of fashion owned brands.

Q2 Financial Results Show Strong Profitability

In the previous quarter, Nykaa reported impressive financial results with consolidated net profit jumping 243% year-on-year to ₹34.00 crore compared to ₹10.00 crore in the corresponding period last year. The profit after tax is attributable to equity shareholders of the parent company.

Revenue from operations in Q2 stood at ₹2,346.00 crore, representing a 25% increase over ₹1,875.00 crore in the corresponding quarter of the previous financial year. EBITDA margin improved to 6.80%, up 125 basis points from 5.50% in the year-ago period, while PAT margin rose by 71 basis points to 1.40%.

Stock Performance and Market Position

Nykaa shares have demonstrated exceptional performance, rising nearly 60% in 2025. The company serves almost 49 million customers through its online platforms and 265 offline beauty destinations. The House of Nykaa represents the company's own consumer brands, including established names like Nykaa Cosmetics, Dot & Key, Kay Beauty, and fashion labels such as Nykd by Nykaa and 20 Dresses.

India's beauty landscape in 2025 reflected a market driven by performance over trends, with consumers demonstrating increased sophistication in product selection and ingredient awareness. Nykaa 's Beauty Rewind 2025 report, covering over 45 million users and deliveries to more than 19,000 pincodes, reveals a beauty ecosystem where experimentation remained high but loyalty was earned through consistent product performance.

Color Cosmetics: Lip Products Lead Market Dominance

Lip products maintained their position as the cornerstone of color cosmetics throughout 2025. The platform's sales data demonstrates remarkable consistency in this category:

Eye makeup demonstrated particularly strong consumer stickiness, with kajal transitioning from occasional wear to everyday essential. Base makeup expanded beyond special occasions, with foundation volumes indicating deeper penetration into daily beauty routines. Blush emerged as a standout performer, driven by both mass-market and celebrity-backed brands.

Skincare: Foundation of Beauty Spending

Skincare products formed the backbone of consumer spending patterns, with basic skincare steps showing sustained high-frequency purchases throughout 2025:

Cetaphil Gentle Skin Cleanser achieved the distinction of becoming the most-reviewed beauty product on the platform, accumulating over 1.30 lakh ratings with an average score of 4.50 stars. This performance underscores the importance of proven, gentle formulations in building consumer trust.

Serums transitioned firmly into mainstream adoption, with products featuring clearly labeled active ingredients and concentrations experiencing strong demand. Vitamin C and niacinamide-based formulations led this category, with Minimalist's 10% Vitamin C serum ranking among top performers, reflecting growing ingredient awareness among Indian consumers.

Korean Beauty and International Trends

Korean beauty products crossed a significant adoption threshold in 2025, moving from trend-driven discovery to habitual use in Indian skincare routines. Key products that achieved sustained repurchase rates included:

• Beauty of Joseon Relief Sunscreen
• COSRX Advanced Snail 96 Mucin Power Essence

This shift indicates that K-beauty has successfully established itself beyond novelty purchases, with consumers integrating these products into regular skincare regimens based on performance rather than trend appeal.

Performance-Driven Makeup and Haircare Evolution

Makeup preferences demonstrated a clear shift toward performance-led formulations. Tinted moisturizers and breathable bases gained significant traction, while liquid lipsticks with long-wear and transfer-proof claims dominated lip color sales. Category leaders included:

Haircare witnessed similar evolution toward ingredient-focused solutions. Scalp-focused treatments gained prominence, with over one crore rosemary-based haircare products sold during the year. WishCare Hair Growth Serum achieved remarkable consistency, selling at a rate of one unit per minute, reflecting rising consumer interest in ingredient-led hair and scalp care.

Fragrance Diversification and Quick Commerce Impact

Fragrance buying behavior showed significant diversification in 2025, with Nykaa selling five fragrances every minute. Consumers moved away from single signature scents toward building comprehensive fragrance wardrobes aligned with different moods and occasions, spanning both luxury and mass-market segments.

Quick-commerce capabilities increasingly influenced purchasing decisions, with Nykaa's delivery service achieving six-minute delivery times in cities including Hyderabad and Delhi. This speed correlated with larger basket sizes, culminating in the year's highest-value order: a ₹4.00 lakh purchase of 91 products by a shopper in Nagpur.

The 2025 data reveals an Indian beauty market characterized by speed, ingredient awareness, and routine-driven consumption patterns, where experimentation remains accessible but brand loyalty requires consistent product performance.