About the Company:

FSN E-commerce Ventures Ltd. (FSNEV) popularly known as "Nykaa" is a digitally native consumer technology platform, delivering a content-led, lifestyle retail experience to consumers. The company has a diverse portfolio of beauty, personal care, and fashion products, including owned brand products manufactured by it.

Company has a Cumulative Customer Base of 45 mn+, 250 Beauty stores making it the largest specialized beauty store network of 250+ stores across 82 cities including 3 new cities and 2 new airports In Q1 with a retail space of 2.5 Lacs+ Sq.ft. and house of 9,000+ Brands with 400+ brands launched in Q1 out of whcih Beauty – 100+ brands where from Beauty segment and 300+ brands under Fashion segment. Company has 44 warehouses across 15 cities.

Company has $2 bn Annualized GMV across all platforms. Its GMV reached 3208 Cr. marking 26% YoY growth in Q1Fy26 with AUTC at 16.5 Mn a 26% YoY growth and AOV at Rs. 2009 with 4% YoY growth.

Company’s various business segments includes Beauty business, Beauty Multibrand Retail, House of Nykaa: Beauty , Beauty eB2B: Superstore by Nykaa and Fashion. Nykaa has Unique store formats to deliver differentiated experience which includes NYKAA Luxe, the luxury store having 1.2L Sq.Ft. of retail space with 10 Flagship stores which are experience led stores with brand SIS, skin consultation tools and beauty services and 75 Luxe stores offering curated collection of 80+ premium beauty brands. The another format is NYKAA On Trend having 1.25L SqFt. Retail space with 116 Stores across India and a Destination for trending, D2C/ home grown & international brands with 56% penetration In Tier 2 & 3 cities. The third format is Nykaa Kiosk under which it has 46 Multibrand Kiosk offering exclusive House of Nykaa point of sales and 3 Single brand Kiosk offering Brand specific POS touch points in top malls which is the latest format launched in recent quarter. Company’s stores have became destination for indulgence as it offers Hair styling services, Nail spa services, Skin consultation and Facials and Makeovers (63k in Q1Fy26).

Company also have Largest network of beauty warehouses, physical retail stores and rapid stores across the country under NYKAA NOW. It delivers Best in Beauty delivered in 30 -120 mins through 50+ Rapid stores in 7 Cities and till date it has delivered 1.3Mn+ orders. It offers products from various brands such as MAC, KAMA Ayurveda, Laneige, Estee Lauder, Clinique, Pixi, Charlotte Tilbury, Loreal Paris, Maybelline Newyork, Lakme, Cetaphil, Cerave, Minimalist, Plum, Dot&Key, Nykaa Cosmetics, Kay Beauty, Foxtale, wish care and many more.

Under its Beauty and Personal care segment company offers 2,96,122 SKUs from 3,118 global and domestic brands primarily across make-up, skincare, haircare, bath and body, fragrance, grooming appliances, personal care, and health and wellness categories online beauty and personal care platforms in India. Apart from the tie-ups with several suppliers, the company also has its own brands such as “Nykaa Cosmetics”, “Nykaa Naturals” and “Kay Beauty”.

Company has a portfolio of 15 owned brands. The Co. also introduced five additional owned brands namely- Dot & Key, Nykaa SkinRx, Pipa Bella, Gajra Gang, and IYKYK. Dot & Key became leading D2C skincare brand with Rs 1,500 Cr+ GMV run rate. It has strengthened its presence as #1 brand in Skin care, Moisturizer and Sunscreen products with 50%+ Retention on own website and Nykaa. Kay Beauty also continues to scale as India’s largest celebrity beauty brand with INR 250 Cr + GMV Run rate a 56% YoY growth, 40%+ Retention rate and positioned as #1 Blush Brand in India. Kay Beauty is also set to make historic UK debut soon with exclusive launch at Space NK which is UK’s most prestigious luxury beauty retailer with 80+ stores across the country, making it the first beauty brand founded in India to join Space NK’s curated global portfolio.

Nykd by Nykaa achieved Rs 170 Cr + GMV run rate and Scaled ~3X in 3 years through Omnichannel Distribution on Nykaa.com, D2C website and Other online platforms along with 25 EBOs and 1000+ GT stores. It is amongst Among top selling in bra category on Amazon and #1 Lingerie brand on Nykaa Fashion. Company recently launched new products such as Magic Minimizer and Invisiblend bras.

Super Store by Nykaa is a eB2B store by the company. As of Q1Fy26 company has has GMV of 288 Cr a 40% YoY growth, with a transacting retailer count of 305’000 in 1110+ with a 45% YoY growth. By addressing underserved Tier 2 and Tier 3 markets with curated assortments and reliable fulfilment, Superstore is setting a new benchmark for beauty distribution in India.

Nykaa’s Fashion segment has become a gateway to premium and global Fashion in India. It offers Apparel and Accessories through1,553 brands and more than 4.3 million SKUs with fashion products across five divisions: women, men, kids, tech and home. It has recorded 165 mn Visits a 30% YoY growth, 20.4 mn MAUV a 29% YoY growth, 8.5 mn Cumulative customer base marking a 31% Yoy growth in New customers and served 2 mn Orders marking 19% Yoy growth. Overall it reported 70% YoY GMV growth of Global Store and 500 bps+ Share gain in women western wear. Company’s brand portfolio includes Revolve, Foot Locker, Cider, NAKD, Alo, Tribbonn, Lipsy London, Gymboree, Allsaints, Petal and Pulp, Superdown, Brixton and many more. Recently it added new brands such as Swarovski, Hopscotch (leading kidswear), Rare Rabbit, The Indian Garage Co. (fast-scaling menswear), and Victoria’s Secret (premium lingerie). The wide assortment is collectively enriching Nykaa Fashion’s product mix and reinforcing its appeal across diverse consumer cohorts.

Nykaa’s Pink Summer Sale which is one of the India’s biggest beauty sale delivered 2.9 mn orders across 19,000+ pincodes. It sold 1 Lipstick every 2 seconds, 16 Fragrances sold every 1 minute, 4 Lakh+ Luxe products sold and 500 mn+ Average reach. Company achieved 42% YoY Premium Beauty GMV and 51% New customer acquisition through this sale.

Nykaa showcased its deep brand partnerships on a global stage as L’Oreal Paris’s official beauty partner of India at the Cannes film festival, bringing the glamour of Cannes to the Indian consumers doorstep by offering exclusive assortment and content access to iconic red carpet looks.

Nykaa also unveiled new brand icons who embody and champion the Nykaa values. Bollywood actor Sharvari Wagh joined as the brand icon of Nykaa, building a strong connection with Gen Z and millennial audiences, deepening the brand’s relevance across campaigns and content. At the same time, Nykaa Luxe welcomed Lisa Haydon as its muse, further strengthening its position in prestige beauty. With her global appeal and timeless elegance, Lisa embodies the Luxe ethos, where iconic international beauty brands are curated for the Indian consumer.

The company’s wholly owned subsidiary ‘Nykaa Fashion Private Limited’ has acquired the brand ‘KICA’ for a consideration of up to Rs. 45.1 million, 18.5% stake in Earth Rhythm Private Limited and 60% stake in Nudge Wellness Private Limited. Now Nykaa is acquiring Remaining 40% Stake in Nudge Wellness, Making It a Wholly- Owned Subsidiary for a consideration of Rs. 14.26 lakhs. This transaction aligns with Nykaa’s strategic intent to building and scaling its presence in the wellness sector, particularly in the dietary supplements and nutricosmetics categories. The acquisition is subject to customary closing conditions and regulatory approvals.

Nykaa is also India’s Leading Influential Lifestyle platform with more than 13 million followers across social media platforms and Nykaa TV, a YouTube-based content platform, had a watch time of 6.6 million hours. The company does a lot of online engaging activities like influencer marketing, youtube channel etc. and it conducted 60 events across 30+ cities. 

The company is focusing to double on prestige fragrances and aims to gain significant market share. The company aims to reach next 100 stores in 2 years.

Fundamentals:

Financial Results:

Nykaa delivered a good Q1 FY26 performance, with consolidated GMV reaching Rs. 4,182 Cr, up 26% YoY. Its Revenue from operations rose 23% YoY to Rs. 2,155 Cr, indicating consistent growth momentum over several quarters and  EBITDA growth was even higher at 46% YoY, with EBITDA margin expanding to 6.5% from 5.5% in Q1 FY25. Company’s Net Profit growth was also strong at 79% YoY and the company continued to channel its strategic focus towards sustainable and profitable growth.

On business verticals front Nykaa’s Beauty vertical showed robust growth in Q1 FY26, with GMV increasing 26% YoY to Rs. 3,208 Cr. This was supported by strong all-round performance across e-commerce, retail stores, eB2B distribution and House of Nykaa portfolio. Platform growth was fueled by consistent focus on deepening penetration and premiumization, as is evident in strong new customer acquisition and improving AOV respectively. The cumulative beauty customer base expanded to nearly 37 mn in Q1 FY26, reflecting a 29% YoY increase. One Nykaa’s overall cumulative customer base is now over 45 mn.

Nykaa’s offline retail network continues to remain a key growth and premiumization driver, achieving a milestone of 250 beauty stores across 82 cities as of July 2025. Total retail space grew 36% YoY in Q1FY26 to 2.5 lakh+ sq. ft., supported by the rollout of larger-format experiential flagship stores. The profitable store network posted strong GMV growth of 33% YoY, underscoring Nykaa’s capital-efficient retail model, strong market position and consumer connect.

Nykaa’s Pink Summer Sale in May proved to be a powerful growth catalyst, driving 33% YoY GMV growth across the omnichannel beauty business. Premium beauty GMV surged 42% YoY, reflecting strong appetite for marquee international names and beloved homegrown brands alike. With over 84 million visits—a 57% YoY jump—the event reaffirmed its standing as a marquee moment in India’s beauty retail calendar.

House of Nykaa delivered exceptional performance, boasting an annualized GMV run rate of ~Rs. 2,700 Cr, reflecting a strong 57% YoY increase. Within this, the House of Beauty portfolio has scaled to an annualized GMV run rate of Rs. 2,300 Cr + with an impressive 70% YoY growth, establishing Nykaa as one of India’s largest House of Brands platforms in the beauty space - focused on delivering high-margin, high-loyalty products that resonate deeply with consumers.

Nykaa Cosmetics, the go-to colour cosmetics brand for millions of beauty fans, is blending consumer love with pioneering innovation to fuel its next phase of growth. With an annualized GMV run rate of Rs. 350 Cr, it has established itself as the #1 brand in both lipsticks and eyeshadows—two of India’s largest and fastest-growing makeup categories. New product launches are a key growth engine, contributing over 20% of overall sales and showcasing the brand’s agility in staying ahead of evolving beauty trends.

Kay Beauty, co-founded with actor Katrina Kaif, continued its strong growth trajectory in Q1 FY26, reaching an annualised GMV run rate of Rs. 250 Cr +, with 56% YoY growth. The brand maintains a robust 40% retention rate and is now the #1 blush brand in India, further cementing its leadership in color cosmetics. New products remain a key driver, with 25% of sales coming from recent launches.

Superstore by Nykaa has scaled to become the country’s largest B2B beauty distribution network and its Q1 FY26 saw GMV climb 40% YoY to Rs. 288 Cr, which was driven by expanding brand portfolio, deeper penetration and premiumization. Profitability improved meaningfully, with EBITDA margin expanding by 515 bps YoY and contribution margin improving by 309 bps YoY.

Nykaa Fashion posted a robust performance in Q1 FY26, signaling a strong rebound in growth alongside notable profitability improvements. GMV grew 25% YoY to Rs. 964 Cr. EBITDA margin (as a percentage of NSV) improved significantly, narrowing from -9.2% in Q1 FY25 to -6.2% in Q1 FY26. The core fashion platform saw a strong recovery, backed by enhanced customer engagement with 165 mn visits (30% YoY growth), an 8.5 mn-strong customer base (up 32% YoY), and over 2 mn orders (19% YoY growth).  

Conclusion:

India’s fashion and beauty retail sector is entering a dynamic growth phase, fueled by rising middle-class incomes, urbanization, and rapid digitization. The apparel market, valued at around US $107 billion in 2023, is projected to reach nearly US $146 billion by 2032, driven by increasing demand for athleisure, sustainable apparel, and expanding e-commerce. At the same time, the fashion retail market is expected to grow at a healthy pace of nearly 7% annually over the next decade, supported by rising internet penetration and the surge of direct-to-consumer brands.

Amid this favorable industry backdrop, Nykaa has established itself as a leader in India’s beauty and fashion e-commerce ecosystem. The company commands over 30% of the online beauty market and has become the largest specialty beauty retailer across both online and offline formats. In fashion, Nykaa Fashion holds close to 20% of the premium women’s online market, offering thousands of brands and delivering strong GMV growth with ambitious plans for expansion in the coming years.

Given the macro trends and Nykaa’s dominant position, the company’s fundamentals and strategic positioning appear strong. Its omni-channel presence, curated and owned brand mix, and increasing penetration into Tier II and Tier III markets support both resilience and growth. However, its elevated valuation means that investors must carefully weigh the significant growth opportunity against risks from intensifying competition and potential pressure on margins.

In conclusion, Nykaa remains a compelling growth story in India’s expanding fashion and beauty landscape. With the sector undergoing structural transformation and consumer demand shifting toward premium and digital-first experiences, Nykaa is well-placed to capture long-term gains. That said, its lofty valuation makes it best suited for growth-focused investors with a higher risk appetite, rather than conservative value-seekers.

HET ZAVERI
info@smartinvestment.in

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