India’s beauty market may nearly double to $42 billion by FY31; Nykaa, Honasa seen gaining

India’s beauty and personal care market could nearly double to $42 billion by FY31 from $23 billion in FY26, making the country the fourth-largest BPC market globally by 2030, according to Aditya Birla Money Research on Saturday.

The brokerage has initiated coverage on FSN E-Commerce Ventures, the parent of Nykaa, and Honasa Consumer with ‘Buy’ ratings, setting target prices of ₹390 and ₹635, respectively.

Only a few companies to gain

While the Indian beauty market is expanding rapidly, the brokerage expects only a handful of companies to emerge as sustainable winners as competition intensifies.

“Reaching consumers has become easier but driving repeat purchases without increasing A&P at the same pace remains difficult. We believe the next phase of growth would favour companies that can drive repeat purchases and scale profitably,” the report said.

India’s BPC market is expected to grow at a compound annual rate of more than 12% through FY31, driven by a growing consumer base, wider beauty routines and rising organised retail penetration.

The report said the sector is undergoing a major shift as product discovery increasingly moves away from traditional retail shelves to digital platforms, creators, reviews and online content.

“Beauty purchase decisions are increasingly made before the consumer reaches the checkout page or store. Reviews, creators, product claims, ingredients, and efficacy now play a larger role in discovery,” it said.

The number of BPC shoppers in India is also expected to increase from 140 million in FY26 to 200 million by FY30. Gen Z and Gen Alpha are projected to account for around 50% of BPC spending by FY31, compared with about 32% in FY24.

Online BPC is expected to account for 34% of the market by FY31, up from 25% in FY26. However, the brokerage said the sector would remain multi-channel, with quick commerce gaining in routine and replenishment purchases while specialist beauty platforms continue to play an important role in discovery and premium products.

Launching brands are easy, profitable scaling is challenging

The report also warned that while launching beauty brands has become easier due to digital media, marketplaces and contract manufacturing, profitable scaling will be more challenging.

“Revenue scale is easier; margin conversion is the real test,” the report said.

The number of new-age BPC brands with revenue above ₹1 billion is expected to rise from 70-80 in FY26 to more than 150 by FY31. However, only 10-15 brands are expected to cross ₹10 billion in revenue.

Aditya Birla Money said it prefers Honasa at current valuations, while Nykaa remains its long-term pick, citing its leadership in specialist beauty, scale advantages and improving profitability.