Synopsis:
Honasa Consumer posted modest Q1FY26 growth with stable margins, driven by strong e-commerce and modern trade traction, while Nykaa delivered robust double-digit sales and profit gains, aided by category leadership, new launches, and offline expansion. Which stock to buy after the Q1 results?
The beauty and personal care (BPC) sector in India continues to witness strong consumer demand, driven by rising disposable incomes, urbanisation, and increased awareness of self-care. Digital-first strategies, celebrity endorsements, and rapid product innovation are further propelling growth, with leading players expanding aggressively both online and offline. Against this backdrop, Honasa Consumer Ltd and FSN E-Commerce Ventures Ltd (Nykaa) have emerged as two of the most prominent names in the industry, each with distinct strategies and performance trends in the latest quarter.
Honasa Consumer Ltd
Honasa Consumer Ltd, with a market capitalization of Rs. 9,771 crore, opened today at Rs. 302.90 per share and has delivered a negative 43 percent return over the past year. As India’s largest digital-first beauty and personal care company, it operates a diverse portfolio of six brands and is uniquely positioned to tap into evolving BPC trends. Leveraging data-driven innovation, a strong omnichannel distribution model, and a sustainability-focused approach, Honasa aims to solidify its leadership in the space.
In Q1FY26, sales increased from Rs. 554 crore in Q1FY25 to Rs. 595 crore, up by 7.4 percent year-on-year. Operating profit remained stable at Rs. 46 crore. Profit before tax moved from Rs. 52 crore to Rs. 56 crore, marking a 7.6 percent rise, while net profit climbed from Rs. 40 crore to Rs. 41 crore, up by 2.5 percent. Operating profit margin stood at 8% percent, EBITDA margin at 7.7 percent, and PAT margin at 6.9 percent.
Operationally, Honasa’s focus categories, contributing over 80 percent of revenue, continued to outperform with double-digit YoY growth, driven by strong e-commerce traction and over 30 percent YoY offtake growth in modern trade. Mamaearth sustained double-digit growth across e-commerce, modern trade, and general trade, supported by targeted brand-building and an ‘always-on’ media strategy. The Derma Co. achieved over 100 percent YoY growth in its face cleanser category, becoming the third segment after serums and sunscreens to cross the Rs. 100 crore ARR mark.
Younger brands maintained momentum with over 20 percent growth, while general trade distribution expanded with over 50 percent YoY growth in direct outlets billed. The company reached 2,40,113 FMCG retail outlets in India as of June 2025, marking a 20 percent increase in distribution year-on-year, and spent Rs. 206 crore on advertising in Q1FY26, slightly higher than Rs. 200 crore in Q1FY25.
FSN E-Commerce Ventures Ltd (Nykaa)
Nykaa, with a market capitalization of Rs. 69,526 crore, opened today at Rs. 239.60 per share and has delivered a positive 13 percent return over the past year. The company is a digitally native consumer technology platform offering beauty, personal care, and fashion products, including an expanding range of owned brands. Known for its content-led retail approach, Nykaa has built a strong brand presence in both online and offline channels.
In Q1FY26, sales rose from Rs. 1,746 crore in Q1FY25 to Rs. 2,155 crore, a growth of 23.4 percent year-on-year. Operating profit improved from Rs. 96 crore to Rs. 141 crore, up by 46.8 percent. Profit before tax doubled from Rs. 22 crore to Rs. 44 crore, while net profit increased from Rs. 14 crore to Rs. 24 crore, up by 71.4 percent. Operating profit margin stood at 7 percent, EBITDA margin at 6.5 percent, and PAT margin at 1.1 percent.
On the operational front, Nykaa Cosmetics strengthened its leadership in the lipsticks and eyeshadows categories, achieving an annualised GMV run rate of Rs. 350 crore, with over 20 percent of sales driven by new product launches. Kay Beauty, co-founded with Katrina Kaif, recorded 56 percent YoY growth, a Rs. 250 crore annualised GMV run rate, and 40 percent retention, while preparing for its UK debut via Space NK. House of Nykaa achieved an annualised GMV run rate of Rs. 2,700 crore, growing 57 percent YoY, with its House of Beauty portfolio surging 70 percent to Rs. 2,300 crore. Dot & Key doubled its GMV to Rs. 1,500 crore, maintaining high retention rates and strong EBITDA margins.
Nykaa’s offline retail network reached 250 beauty stores across 82 cities as of July 2025, with retail space expanding 36 percent YoY to over 2.5 lakh sq. ft. The larger-format experiential flagship stores boosted premiumisation, while the retail network achieved 33 percent GMV growth, highlighting its profitability and consumer connect.
Written by Manan Gangwar
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