FSN E-Commerce Ventures (Nykaa) reported a strong third quarter for FY26, achieving 27% year-on-year growth in net revenue, reaching INR 2,873 crores, driven by a 28% GMV growth (INR 5,795 crores). Consolidated EBITDA hit a record high of INR 230 crores, resulting in the highest-ever EBITDA margin of 8.0% of net revenue. The Beauty vertical sustained 27% GMV growth, while Fashion profitability sharply improved with EBITDA margin rising to -2.0%.
Q3 FY26 Consolidated Financial Highlights
FSN E-Commerce Ventures announced robust results for the quarter ended December 31, 2025 (Q3 FY26), marking it as the biggest quarter ever across multiple parameters. Net revenue grew by 27% year-on-year to INR 2,873 crores, fueled by a 28% YoY GMV growth to INR 5,795 crores. The company achieved its highest-ever consolidated EBITDA margin at 8.0% of net revenue, representing a 63% year-on-year growth in EBITDA to INR 230 crores. Gross profit stood at INR 1,297 crores, a 31% YoY increase.
Profit After Tax (PAT) was reported at INR 68 crores (2.4% of net revenue). Management noted that after adjusting for a one-time impact related to a new labor code, the PAT would have been INR 78 crores, yielding a 2.7% margin.
Beauty Vertical Performance
The Beauty business demonstrated sustained strength, delivering 27% year-on-year GMV growth, with Net Sales Value (NSV) growing at 29%. The EBITDA margin for the Beauty business expanded by 134 basis points on an NSV basis. Ms. Falguni Nayar highlighted strong omnichannel performance, improving unit economics in eB2B, and successful growth for the House of Nykaa Brands.
The company is actively investing in customer acquisition, resulting in a total of 18.7 million unique transacting customers, a 26% YoY increase. A major highlight was strengthening the partnership with L’Oreal, including the exclusive launch of La Roche-Posay and taking over the end-to-end operations for Kiehl’s in India.
Fashion Vertical Profitability Turnaround
The Fashion business showed a significant acceleration in profitability. GMV grew 31% YoY to nearly INR 1,500 crores, while NSV grew by 25%. Crucially, the Fashion EBITDA margin improved significantly, moving from -5.4% a year ago to -2.0% this quarter (a 340 basis points improvement on an NSV basis). New customer acquisition for Fashion was particularly strong at 45% YoY.
Key strategic achievements included the successful debut of H&M Beauty and the launch of a deep strategic partnership with Nike to run its D2C platforms (Nike.in and Commerce Apps) exclusively in India. The quarter also featured the largest-ever Pink Friday sale.
House of Nykaa Brands (Own Brands) Momentum
The House of Nykaa business achieved an annualized GMV run rate of INR 3,500 crores (48% YoY growth). The beauty segment within this contributes INR 3,100 crores. Key brands showed standout growth:
- Dot & Key: Approaching INR 1,900 crores annualized GMV, showing 100%+ growth and maintaining high-teens EBITDA margins.
- Kay Beauty: Crossed INR 500 crores annualized GMV with 60%+ growth.
- Nykaa Cosmetics: Approaching a INR 500 crore annualized GMV run rate.
- Nykd (Fashion): Annualized GMV of INR 150 crores.
Distribution and Retail Expansion
The B2B Distribution business (Nykaa Distribution) also scaled effectively, growing NSV by 31% (GMV growth of 23% due to GST changes). Vishal Gupta noted the addition of marquee brands like Colgate Palmolive and Johnson & Johnson. The company’s own brands distribution reached over 100,000 transacting retailers (2.7x growth in one year).
Physical retail footprint expanded with 11 new stores in Q3, bringing the total count to 276 stores across 94 cities, delivering healthy double-digit like-for-like growth. New experiential formats, including Nykaa Perfumery (fragrance-only stores), were launched. These stores report an AOV 3x higher than standard specialty stores, with 45% of sales coming from men’s fragrances.
Operational Efficiency and Outlook
Management emphasized continuous focus on unit economics. Fulfillment expenses increased slightly by 13 basis points YoY due to faster delivery focus in Fashion. Employee expenses saw an improvement of 64 basis points YoY due to scale. Fixed asset turnover improved to 10.5x annualized, and working capital days improved by 4 days to 30 days for 9 months FY26. ROCE stands at 19.1% annualized.
Q&A Insights
Management confirmed that the Average Order Value (AOV) for new customers remains healthy and is not dipping meaningfully despite aggressive customer acquisition efforts. Regarding EBITDA sustainability, while profitability across all four beauty sub-segments is structurally improving, management noted the possibility of reinvesting profits back into beauty.com for market share expansion, though overall EBITDA margin is expected to improve sustainably over the long term.
Source: BSE
