Beauty online marketplaces Nykaa and Tira are accelerating investments in private labels and acquired brands, aiming to boost profitability and drive long-term growth. According to Business Standard, margins are significantly better with private labels, helping both companies plug market gaps where other brands are missing. Devangshu Dutta, CEO of Third Eyesight, explained that "with private labels, margins are better. It also helps both companies plug the gap in the market where other brands are not present." Harish Bijoor, brand strategy consultant, added that "typically, most companies are getting insular. The idea is to own brands and own the profits from those brands." This strategy allows marketplaces to lock in profits instead of losing out to other brands that sell on the platform.
Nykaa shares are in focus after the company announced an ambitious five-year growth roadmap targeting to double business scale by FY30. The beauty and fashion platform aims to become a $5 billion-plus gross merchandise value (GMV) platform by FY30, roughly 2.5-3 times its current scale. The company is targeting revenue growth of 2.5x-3x by FY30 while aiming for EBITDA to increase 4x-5x over the period. Morgan Stanley reiterated 'overweight' and hiked target price to ₹321, an upside of 7.6%, while Jefferies maintained 'buy' with a target price of ₹350, marking an upside of 17.4%. However, Macquarie reiterated 'underperform' with a target price of ₹210, a downside of 29.5%, citing concerns about acceleration in rest-of-beauty GMV growth momentum.
House of Nykaa delivered exceptional performance in FY26, generating ₹3,176 crore of GMV with a remarkable 50% year-on-year increase. According to Business Standard, the platform served more than 17 million consumers and expanded distribution beyond online to 150,000 general trade doors. The company now operates 12 brands across beauty and fashion categories at various growth stages, with seven brands in beauty and five in fashion. Dot & Key has grown 13 times over the last three years, while Kay Beauty has grown three times during the same period. Nykd remains the focus brand, with the company targeting ₹6,000 crore GMV from its in-house brands by FY30, up from around ₹2,100 crore in FY25.
The strong performance of House of Nykaa positively impacted margins, with gross margin improving by 132 basis points in FY26. As reported by Business Standard, P Ganesh, CFO of FSN E-Commerce Ventures, attributed this improvement to "strong performance of House of Nykaa and improved service income across businesses." Motilal Oswal reports indicate that "House of Brands is expected to grow faster than the core marketplace business and become a meaningfully larger contributor to group revenues and profits by FY30." The report highlights that profit contribution is expected to increase disproportionately, given the higher gross margins, stronger pricing control, and lower dependence on third-party brands. This strategic focus on private labels creates a structural incubation advantage, allowing the company to identify emerging brands and categories early before allocating capital behind them.
India Inc faces significant challenges ahead with geopolitical tensions in West Asia and El Nino conditions potentially hurting company profits. According to The Economic Times, operating profit margins could shrink while rural demand might be disrupted and revenue growth is projected to slow down. Companies may face higher costs for imports and fuel, with some sectors showing resilience in investment. The future credit profile depends on managing global risks, highlighting the broader challenges facing Indian corporations in the current economic environment. This backdrop provides context for Nykaa's ambitious growth plans as the company navigates industry-wide headwinds while focusing on margin-accretive in-house brand strategies.
