Nykaa (FSN E-Commerce Ventures Limited) has delivered strong financial results for the second quarter of fiscal year 2026, marking significant growth across key metrics and demonstrating continued momentum in its beauty and fashion verticals.

Key Financial Highlights

• Gross Merchandise Value (GMV): INR 4,744.00 crores, up 30% year-on-year
• Net Revenue: INR 2,346.00 crores, growing 25% year-on-year
• Gross Profit: INR 1,054.00 crores, increasing 28% year-on-year with a 44.9% margin
• EBITDA: INR 159.00 crores, surging 53% year-on-year with a 6.8% margin
• Profit After Tax (PAT): INR 33.00 crores, up 154% year-on-year

Segment Performance

Beauty Business

• GMV growth of 28% year-on-year
• Net Sales Value (NSV) of INR 1,981.00 crores for Q2
• EBITDA margin improved to 9.0%, up 40 basis points from the previous year

Fashion Vertical

• GMV growth of 37% year-on-year, reaching INR 1,180.00 crores
• NSV growth of 27% year-on-year, amounting to INR 346.00 crores
• Significant EBITDA improvement, from -9.0% to -3.5%

Operational Highlights

• Cumulative customer base reached 49 million, growing 32% year-on-year
• Beauty store network expanded to 265 stores across 90 cities, with 19 new stores opened in Q2
• Nykaa Now service operational in 53 stores across 7 cities, delivering 70% of orders within the next day in top 110 cities

Strategic Developments

1. Brand Ambassador: Nykaa welcomed Deepika Padukone as its brand ambassador, aligning with the modern Indian consumer's outlook.

2. International Expansion: Kay Beauty, one of Nykaa's owned brands, has shown strong performance in the UK market through its partnership with Space NK.

3. New Brand Partnerships: Nykaa Fashion announced a partnership with H&M, set to debut on the platform soon, offering the entire H&M assortment for India across categories.

4. House of Brands Growth: Nykaa's owned brands business reached an annualized GMV run rate of INR 2,900.00 crores, growing at 54% year-on-year.

5. Focus on Gen Z: Nykaa has launched several initiatives targeting Gen Z consumers, including a Campus Ambassador Programme and immersive on-ground events at college campuses.

6. Beauty Technology: The company introduced new tech features like a skin analyzer tool and beauty portfolio to enhance personalized recommendations and improve conversion rates.

Management Commentary

Falguni Nayar, Executive Chairperson, MD and CEO of Nykaa, stated, "We are delighted to report our highest year-on-year growth in the last 6 quarters, with consistent mid-20s growth since the last 12 quarters. Our focus on both penetration and premiumization is paying off, as reflected in our strong customer acquisition and improved margins."

Anchit Nayar, Executive Director and CEO of Beauty at Nykaa, highlighted the success of their omnichannel strategy and the growing importance of the fragrance category, stating, "Fragrance is one of our fastest-growing categories, and we're about to open fragrance-only stores called Nykaa Perfumery in key metros."

Adwaita Nayar, Executive Director and CEO of Nykaa Fashion, emphasized the success of their owned brands, saying, "Our House of Brands business has reached INR 2,900 crores of annualized GMV run rate, growing at 54% year-on-year."

Outlook

With strong growth across verticals, improved profitability, and strategic initiatives in place, Nykaa appears well-positioned for continued expansion. The company's focus on customer acquisition, brand partnerships, and technological innovations is expected to drive further growth in the coming quarters.

As Nykaa continues to strengthen its position in the beauty and fashion e-commerce space, investors and industry observers will be keen to see how the company leverages its current momentum to capture a larger share of the growing Indian market.

Nykaa (FSN E-Commerce Ventures) has reported a significant surge in its financial performance for the second quarter. The beauty and fashion e-commerce platform has demonstrated robust growth across key financial metrics, signaling strong market positioning and operational efficiency.

Financial Highlights

Key Performance Indicators

• Gross Margin: Reached a 12-quarter high at 50% of net revenues
• EBITDA Margin: Expanded to 6.8% from 5.5% in the previous year
• PAT Margin: Improved to 1.4% from 0.7%

Retail Expansion

Nykaa continues to strengthen its offline presence:

• Added 19 new stores across eight cities
• Total retail space now exceeds 2.7 lakh square feet

Analyst Perspective

Nuvama has maintained a 'Buy' rating on Nykaa stock:

• Target price raised from ₹235.00 to ₹285.00
• Cites stronger long-term growth prospects
• Notes that profit fell short of the ₹38.20 crore consensus estimate

Analysis

Nykaa's impressive financial results demonstrate the company's ability to drive growth and improve profitability in the competitive e-commerce sector. The significant year-on-year increase in net profit, coupled with robust revenue growth, suggests effective cost management and scaling of operations.

The expansion of gross and EBITDA margins indicates improved operational efficiency and potentially better inventory management. The company's highest EBITDA since its IPO is particularly noteworthy, reflecting successful strategic initiatives and market positioning.

Nykaa's continued investment in physical retail stores shows a commitment to an omnichannel strategy, which could help in capturing a wider customer base and enhancing brand presence across India.

While the profit fell short of analyst expectations, Nuvama's increased target price suggests confidence in Nykaa's long-term prospects. Investors may want to closely monitor the company's future performance and strategic moves in the evolving Indian e-commerce landscape.