In contrast, Morgan Stanley is more confident in Nykaa’s trajectory. It highlighted a 6.5% consolidated Ebitda margin in the quarter ended March, up 90 basis points year-on-year and robust GMV growth of 27%. The beauty vertical remains a standout, with 31% GMV growth and margin expansion to 9.6%. The eB2B superstore business also impressed, growing 57% year-on-year and contributing 8% to beauty GMV.

Fashion GMV grew 18% year-on-year, ahead of the 10–11% industry average. While margins remain under pressure, Morgan Stanley noted management’s confidence in improving trends and sees early signs of recovery in fiscal 2026.

The brokerage sees near-term volatility as a stepping stone to profitability, while HSBC sees risk of margin compression and an overvalued stock price.

However, both brokerages acknowledged strong execution in beauty, driven by higher-margin own brands and operational efficiency. Nykaa Now, the company’s rapid delivery arm, is scaling well in metro cities.