Yes, there is a word that Muslims often use to respond to compliments, and that word is "Masha Allah" (ما شاء الله). It is commonly used in Islamic cultures to acknowledge that the compliment is due to the grace and will of Allah (God).
When someone compliments you, responding with "Masha Allah" expresses humility and gratitude, as it attributes the compliment to Allah's blessings rather than taking credit for it yourself. It's a way of acknowledging that beauty, talent, or any other positive attribute is a gift from God.
So, in the example you provided, if someone says you are beautiful, responding with "Masha Allah" would be appropriate and convey the sentiment you mentioned: "It's by God's grace." It's a way of thanking the person while also acknowledging the source of the compliment.
On the other hand, "Alhamdulillah" (الحمد لله) is commonly used to express gratitude and praise to Allah. While it is not typically used as a direct response to compliments, it can still be used in a context where you want to express gratitude for something positive that has happened to you.
Ultimately, the choice of response may vary depending on cultural norms and personal preferences, but "Masha Allah" is generally the more common response to compliments in Islamic cultures.