India’s beauty market could reach $42bn by FY31, boosting Nykaa and Honasa outlook
Aditya Birla Money Research sees India’s beauty and personal-care market growing from $23 billion in FY26 to $42 billion by FY31, driven by digital discovery, organised retail and multichannel expansion. It initiated Buy coverage on Nykaa and Honasa, while flagging the challenge of scaling profitably.
What happened
India’s beauty and personal-care market could nearly double to $42 billion by FY31. Aditya Birla Money Research initiated Buy coverage on Nykaa and Honasa,
Key facts
- India BPC market projected to grow from $23 billion in FY26 to $42 billion in FY31
- Growth expected above 12% annually through FY31
- India expected to become the world's fourth-largest BPC market by 2030
- BPC shoppers projected to rise from 140 million in FY26 to 200 million by FY30
- Gen Z and Gen Alpha spending share projected at 50% by FY31, from 32% in FY24
- Online BPC share projected to rise from 25% in FY26 to 34% in FY31
- More than 150 new-age BPC brands may exceed ₹1 billion revenue by FY31; 10-15 may exceed ₹10 billion
- Nykaa target price: ₹390
- Honasa target price: ₹635
Why this matters
With India’s online beauty shopper base approaching 200 million and organized retail gaining share, brands should prioritize partnerships, acquisitions and distribution capabilities that strengthen multichannel reach.
What to watch
- Online beauty share progression toward the projected 34% by FY31 and active digital beauty shopper growth toward 200 million.
- Nykaa’s beauty GMV growth, retail-media/advertising revenue, private-label mix, EBITDA margin and inventory days.
- Honasa’s offline store-door additions, revenue growth by brand, gross margin, EBITDA trajectory and marketing spend as a percentage of sales.
- Discount intensity and beauty assortment expansion by Amazon, Flipkart, Blinkit, Zepto, Swiggy Instamart and Tata-owned retail channels.
- Premium skincare, dermocosmetic and fragrance demand trends, especially outside major metros.
- Any deterioration in discretionary consumption, rising import costs or regulatory scrutiny of product claims and influencer advertising.
- Nykaa is likely to deepen exclusive brand partnerships, retail-media monetisation, private labels and omnichannel fulfilment rather than rely solely on marketplace GMV.
- Honasa is likely to prioritise profitable offline distribution expansion, hero-SKU concentration and selective new-brand launches or acquisitions.
- Beauty brands will increase spending on creator commerce, vernacular content, skin diagnostics and loyalty programs to lower repeat-customer acquisition costs.
- Quick-commerce and large marketplaces are likely to expand beauty assortments, creating a new delivery-speed expectation for replenishment-led categories.
- Investors will increasingly differentiate companies by contribution margins, repeat rates, advertising revenue and inventory turns rather than headline revenue growth.