India’s beauty market seen nearing $42B by FY31; Nykaa and Honasa gain Buy calls
Aditya Birla Money Research projects India’s beauty and personal-care market to grow from $23 billion in FY26 to $42 billion by FY31, with online sales rising from 25% to 34%. The brokerage initiated Buy coverage on Nykaa and Honasa Consumer.
What happened
Nykaa · India’s beauty and personal-care market could reach $42 billion by FY31, driven by younger shoppers and online discovery. Aditya Birla Money Research
Key facts
- India BPC market projected to grow from $23 billion in FY26 to $42 billion by FY31
- More than 12% projected CAGR
- India projected to become the fourth-largest BPC market by 2030
- BPC shoppers projected to rise from 140 million in FY26 to 200 million by FY30
- Online sales projected to increase from 25% in FY26 to 34% by FY31
- Nykaa target price: ₹390
- Honasa target price: ₹635
- Gen Z and Gen Alpha share of BPC spending projected to rise from 32% in FY24 to about 50% by FY31
- More than 150 new-age BPC brands projected to exceed ₹1 billion revenue by FY31
- Only 10-15 brands projected to exceed ₹10 billion revenue by FY31
Why this matters
Rising digital penetration and a larger beauty profit pool strengthen the case for acquisitions or partnerships in direct-to-consumer brands, creator-led discovery, beauty tech and last-mile capabilities.
What to watch
- Quarterly online beauty penetration growth versus the projected rise from 25% to 34% by FY31.
- Nykaa beauty GMV growth, EBITDA margin, ad-revenue mix, repeat rates and offline-store productivity.
- Honasa's revenue growth, offline distribution expansion, gross-margin stability, EBITDA trajectory and brand-level concentration.
- Customer-acquisition-cost trends, discount intensity and influencer-marketing inflation across digital beauty.
- Quick-commerce beauty assortment expansion, average order values and participation by premium brands.
- Premium skincare, dermocosmetics, haircare and fragrance growth relative to mass personal-care categories.
- Competitive launches and pricing actions from HUL, L'Oréal, Lakmé, P&G, Reliance Retail and marketplace rivals.
- Nykaa is likely to deepen premium-brand exclusives, retail-store expansion, loyalty personalization and beauty-advertising products to defend take rates.
- Honasa is likely to prioritize larger offline distribution, hero-brand renovation, selective acquisitions and profitability improvement over broad new-brand launches.
- Incumbent FMCG, global beauty groups and retailers are likely to increase influencer spending, quick-commerce partnerships and science-led product launches in skincare, haircare and derma beauty.
- Quick-commerce platforms may become a major incremental beauty channel, compressing delivery expectations and raising competitive intensity for replenishment categories.
- More brands will localize assortments and price packs for tier-2 and tier-3 consumers, increasing demand for regional fulfillment and vernacular content.