India’s e-commerce sector is expanding rapidly and creating renewed interest among investors looking to understand which business models can scale sustainably.
Among the standout players shaping this evolution are FSN E-commerce Ventures Ltd (popularly known as Nykaa) and Meesho, two platforms redefining how India shops across beauty, fashion, and value-led categories.
As investors assess e-commerce stocks in India, comparing these companies’ operations, revenue engines, and profitability drivers becomes essential.
This editorial breaks down both businesses to present a clear, structured view of their strengths, challenges, and long-term potential.
Business Overview of E-Commerce Stocks
Meesho Ltd
Meesho is a multi-sided technology platform that connects consumers, sellers, logistics partners, and content creators through a value-driven e-commerce marketplace.
The company focuses on enabling affordable online shopping while giving small sellers a low-cost route to scale.
Its zero-commission model is central to its proposition, allowing merchants to list products without traditional platform fees.
Operations are supported by Valmo, an asset-light logistics network that coordinates delivery, returns, and fulfilment through multiple partners.
Meesho holds a strong position in India’s value e-commerce market and, as per Redseer, is the country’s largest platform by Annual Transacting Users (ATUs) for the 12 months ending September 2025, driven heavily by adoption in Tier 2+ regions.
Revenue Streams and Performance
The Marketplace segment dominates Meesho’s revenue, contributing 99.93% of operating income (Rs 55,739.09 million) in the six months ended September 2025.
Income is earned through seller-focused services such as order fulfilment, returns management, advertising, and data-driven tools rather than commissions.
New Initiatives contribute a small share, including early-stage financial services and local logistics programs.
Growth Plans and Expansion
Meesho’s next phase of growth is anchored in its Horizon 2 Initiatives, which include scaling content-led commerce, strengthening Meesho Mall to attract brands, and enabling financial services through regulated partners.
The company aims to deepen its presence in high-frequency categories like daily essentials while expanding a low-cost local logistics network.
Technology remains a key priority, with Meesho AI Labs developing India-focused AI models to enhance personalisation, risk controls, and ad efficiency.
Significant capital is being deployed toward cloud infrastructure and AI teams through FY27-28.
Meesho’s long-term goal is to broaden digital commerce access across India’s large and expanding retail market.
FSN E-commerce Ventures Ltd (Nykaa)
FSN E-Commerce Ventures Ltd (Nykaa) operates as a digitally native platform offering an integrated beauty, personal care, and fashion retail experience.
Positioned as India’s leading omnichannel lifestyle destination, Nykaa combines curation, content, and commerce to serve a wide consumer base.
The company plays a significant role in shaping India’s beauty landscape and is among the largest importers and distributors of global brands.
Nykaa functions through an omnichannel model that includes mobile apps, websites, and a growing store network.
Its business is divided into Beauty and Fashion verticals. The Beauty segment covers e-commerce, 187 physical stores across 68 cities, owned brands, and the eB2B platform, Superstore. The inventory-led BPC model ensures authenticity and quality.
The Fashion vertical operates largely as a marketplace supported by proprietary labels.
Nykaa’s strategy focuses on customer acquisition and premium curation, with Annual Unique Transacting Customers rising 27% YoY to 17.5 m in Q2 FY26.
It commands over 30% share in India’s omnichannel beauty retail market.
Revenue Streams and Performance
Nykaa’s revenue is driven primarily by the Beauty and Personal Care vertical, which contributed 73% of FY24 GMV and 84.3% of consolidated revenue.
Income comes from product sales and marketplace services. The BPC segment recorded Rs 53,855 m in revenue in FY24.
Owned brands, such as Dot & Key, operate at profitable high-teen margins.
Growth Plans and Expansion
Nykaa plans to scale its offline footprint to 400+ stores by FY28 and introduce new formats such as Nykaa Perfumery.
Category expansion focuses on luxury beauty, Korean skincare, and scaling owned brands, including Kay Beauty’s international foray.
Technology investments aim to enhance personalisation, while initiatives like Nykaa Now and supply-chain regionalisation improve fulfilment speed.
Long-term growth is supported by India’s fast-expanding BPC market and international expansion in the GCC under the brand Nysaa.
Meesho vs Nykaa Financial Performance
Revenue
Revenue Highlights (FY23-H1FY26)
| Revenue (in Rs m) | FY23 | FY24 | FY25 | H1FY26 |
| Meesho | 57,345.19 | 76,151.48 | 93,899.03 | 55,775.38 |
| Nykaa | 51,438 | 63,856 | 79,498.20 | 45,009.20 |
Source: Company FY25 Report and RHP Filings
Meesho’s consolidated revenue grew from Rs 57,345.2 m in FY23 to Rs 93,899 m in FY25, because of strong growth in placed orders and rising monetisation from fulfilment and advertising services.
Growth in FY25 was intentionally moderated as the platform passed efficiency gains to sellers by reducing average charges, reinforcing its affordability-led model.
Nykaa also delivered good results with consolidated net revenue rising 25% YoY to Rs 23.46 bn in Q2 FY26.
The Beauty and Personal Care vertical saw 27% YoY growth in Net Sales Value (NSV). In comparison, Fashion achieved 37% YoY expansion in Gross Merchandise Value (GMV), supported by a 32% YoY increase in customers.
Profitability
Profitability (FY23-H1FY26)
| Operating Profit (in Rs m) | FY23 | FY24 | FY25 | Q1 FY25 |
| Meesho | -16,719.02 | -3,145.33 | -1,084.29 | -4,332.14 |
| Nykaa | 2,560 | 3,462 | 4,739.10 | 2,996.30 |
| Net Profit (in Rs m) | FY23 | FY24 | FY25 | Q1 FY25 |
| Meesho | -16,719.02 | -3,276.41 | -39,417.05 | -7,007.18 |
| Nykaa | 209.61 | 397.49 | 720.7 | 574.5 |
| Operating Profit Margin (%) | FY23 | FY24 | FY25 | Q1 FY25 |
| Meesho | -29.15% | -4.13% | -1.15% | -7.77% |
| Nykaa | 5.00% | 5.40% | 6.00% | 6.70% |
| Net Profit Margin (%) | FY23 | FY24 | FY25 | Q1 FY25 |
| Meesho | -29.15% | -4.30% | -41.98% | -12.56% |
| Nykaa | 0.40% | 0.60% | 0.90% | 1.30% |
Source: Company FY25 Report and RHP Filings
Meesho’s profitability profile shows good operational improvement from FY23 to FY25, with operating loss narrowing from Rs 16,719 m to Rs 1,084 m as the company gained scale, reduced advertising and employee costs, and improved logistics efficiency through Valmo.
However, profitability weakened in H1 FY26, with operating loss widening to Rs 4,332 m due to higher marketing spends, increased technology costs, and rising logistics payouts.
Net losses remained elevated in FY25 and H1 FY26 because of large exceptional expenses, including one-time tax costs, ESOP-related charges, and a vendor dispute settlement.
Nykaa, in contrast, displayed steady profitability expansion. Operating profit (EBITDA) rose from Rs 2,560 m in FY23 to Rs 3,462 m in FY24, supported by fulfilment efficiencies, better employee cost leverage, and improved Fashion unit economics.
Profitability momentum continued into H1 FY26, with EBITDA margin reaching around 6.7% and PAT margin improving to 1.3%, driven by strong gross margins, a recovering Fashion business, and consistent performance in the Beauty vertical.
Risks of Investing in E-Commerce Stocks
- Macroeconomic Sensitivity: E-commerce demand is highly dependent on inflation, interest rates, and overall consumer spending. Any economic slowdown or reduction in discretionary income can materially hurt order volumes and revenue growth.
- Intense Competitive Pressure: Competition from horizontal platforms, vertical specialists, and quick-commerce players forces constant discounting and high marketing spends, pressuring margins and making it difficult to sustain long-term market share leadership.
- Operational and Supply Chain Exposure: Dependence on logistics partners, fulfilment networks, and technology systems makes companies vulnerable to delivery disruptions, infrastructure failures, and rising operational costs, directly affecting customer experience and profitability.
- Profitability Volatility from Exceptional Costs: Large one-time tax expenses, restructuring charges, or ESOP-related payouts can significantly distort net profitability, masking improvements in core operations and increasing uncertainty around long-term financial stability.
- Regulatory and Compliance Uncertainty: Frequent changes in e-commerce rules, data protection laws, tax regulations, and labour codes create compliance risks. Any misalignment can lead to penalties, operational restrictions, or increased cost burdens for the business.
Which E-Commerce Stock is Best?
Nykaa and Meesho represent two distinct but rapidly scaling models within India’s evolving e-commerce landscape.
Each platform shows strong growth drivers, unique operational strengths, and meaningful risks that investors must evaluate carefully.
This comparison highlights both structural opportunities and challenges related to competition, profitability, and regulation.
Investors should assess these insights in alignment with their own risk appetite, investment horizon, and research.
Happy investing.
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