Nykaa Eyes 3–4x Growth as Fashion Unit Pushes Toward FY26 Breakeven

Nykaa is aiming to achieve fashion business breakeven by FY26, as it sharpens its focus on scaling its fashion segment and improving margins. According to Moneycontrol, the company anticipates that its fashion segment will reach breakeven by FY26.

Nykaa expects EBITDA margins to improve to mid-single digits by FY28, with a long-term goal of hitting 10 percent. Over the next five years, Nykaa is also aiming to grow its overall scale by three to four times.

Fashion Segment Gears Up for Growth

Nykaa’s management recently shared its vision to improve margins and control costs within its fashion vertical. The goal is to ensure that Nykaa’s fashion unit earnings turn positive in the next financial year. This move comes as the segment continues to evolve with new collections, celebrity collaborations, and seasonal campaigns.

Nykaa has several high-profile brand launches scheduled for the second half of FY26. Its own-label portfolio has already achieved a GMV of ₹2,100 crore across 12 brands. The company expects this organic portfolio to grow at a CAGR of 30%, with projections to reach ₹6,000 crore in GMV by FY30. Core focus areas for this growth include fragrances, bath and body products, and clean beauty offerings.

CLSA has given Nykaa an ‘outperform’ rating with a target price of ₹229. It expects the beauty and personal care (BPC) segment to grow at a 23% CAGR through FY30. While Nykaa is aiming for 3–4x growth in its fashion NSV over the next five years, CLSA estimates the growth will be less than 2x. It also projects fashion EBITDA margins to reach 10% in a steady state. CLSA believes earnings could be upgraded if the company executes well.

Meanwhile, Japan-based brokerage Nomura has kept a ‘neutral’ rating on Nykaa with a target price of ₹216. The company is targeting a 22–25% revenue CAGR, with the fashion segment expected to break even by FY26. Nomura forecasts 26% revenue growth in FY26 and 25% in FY27.

Nuvama Institutional Equities said, “We continue to reckon an improvement in profitability on the back of lower losses in the fashion and eB2B segments.”

Buy, Sell, or Hold?

So, what’s Nykaa’s stock investment advice right now? Analysts remain divided. Some suggest a ‘Hold’ position until more clarity emerges around fashion breakeven and margin improvements. Others recommend a cautious ‘Buy’ for those with a long-term horizon, especially as the company continues to show resilience in the beauty segment and innovation in fashion.

Nykaa remains one of India’s most prominent digital-first retail brands. While its core beauty business continues to perform well, the fashion vertical is still in its build-out phase. With a clear target to achieve fashion business breakeven in FY26, Nykaa investors will need to watch the company’s quarterly results and operational updates closely.