Broker’s call: FSN E-Commerce (Buy)

FSN E-Commerce Ventures (Nykaa) has reported a robust Q2-FY27 business update, forecasting continued growth momentum in its top line. Consolidated GMV is expected to increase around 30%, with NSV growth projected in the early 30s. The beauty segment delivered a healthy NSV growth of the late 20s, outperforming its mid-20s same-store sales.

Despite a challenging festive season base that began early last year, Nykaa's fashion business maintained solid performance, with NSV growth expected to reach the late 40s, significantly surpassing its mid-30s same-store sales growth. The company anticipates favorable operating leverage, enabling another quarter of healthy earnings.

While Q2 showed similar growth trends to Q1, the base was tough due to festive spends shifting to Q3, unlike the earlier Q2 base. This positive trend for Q3-FY27 is expected to further bolster the company's growth. The revised target price is set at ₹405 (previously ₹395), with the recommendation remaining Buy.