Nykaa's Q2 FY26: Accelerating Growth and Strategic Wins Across Beauty and Fashion

FSN E-Commerce Ventures Limited, popularly known as Nykaa, has delivered a robust performance in the second quarter of fiscal year 2026, showcasing accelerated growth momentum across its diverse portfolio. The company reported a consolidated Gross Merchandise Value (GMV) of INR 4,744 crore, marking a significant 30% year-on-year (YoY) increase, which is its highest growth in the last six quarters. Revenue from operations also saw a healthy 25% YoY rise, reaching INR 2,346 crore, continuing a consistent trend of mid-20s growth over the past twelve quarters. This strong top-line performance translated into enhanced profitability, with EBITDA growing 53% YoY to INR 159 crore, expanding the EBITDA margin to 6.8%—the highest since its IPO. Net Profit After Tax (PAT) surged by an impressive 154% YoY to INR 33 crore, achieving a PAT margin of 1.4%, also a record high since its public listing. This quarter underscores Nykaa's unwavering commitment to profitable and sustainable growth, driven by strategic initiatives across its beauty and fashion verticals.

The Beauty segment remains Nykaa's core strength, delivering consistent GMV growth of over 25%. This growth is fueled by a dual focus on penetration and premiumization, with accelerated customer acquisition and retention efforts. The cumulative Beauty customer base reached approximately 40 million, reflecting a 31% YoY increase. Nykaa continues to solidify its position as India's premier destination for luxury and international beauty brands, adding iconic names like Prada Beauty, La Prairie, Maison Margiela, and IT Cosmetics. Furthermore, Nykaa is championing the K-Beauty wave in India, expanding its portfolio with trending brands such as Arencia, Dr. Althea, Torriden, and AMPLE:N, achieving over 60% YoY GMV growth in this category. The company's physical retail footprint also expanded significantly, with 19 new stores opened across 8 new cities, bringing the total to 265 beauty stores covering over 2.7 lakh sq ft. These stores serve as key levers for premiumization, with two-thirds of store GMV coming from premium brands. Innovations like 'Kay Kafe' offer unique experiential retail, blending beauty with lifestyle.

Financial Highlights (Q2 FY26)

Segment Performance (Q2 FY26)

The Fashion business, while undergoing a strategic reorientation, demonstrated a significant revival, delivering 37% YoY GMV growth. This improvement is largely attributable to operational leverage and increased customer traction. Management has strategically pruned non-Nykaa channels, such as GT/MT and large-format store distribution, to focus on higher-quality business and enhance profitability. This reorientation has led to a substantial improvement in the Fashion vertical's EBITDA margin, narrowing from -9.0% in Q2 FY25 to -3.5% in Q2 FY26. Key brand additions like GAP, Guess, Rare Rabbit, Mufti, and the landmark debut of H&M Fashion have reinforced Nykaa's differentiated curation and growing appeal in premium fashion. The House of Nykaa, encompassing its owned beauty and fashion brands, recorded an impressive 54% YoY GMV growth, reaching an annualized GMV run rate of INR 2,900 crore. Dot & Key, a leading D2C skincare brand, achieved an annualized GMV run rate of INR 1,500 crore with 110%+ YoY growth and high-teens EBITDA margins. Kay Beauty, co-founded with Katrina Kaif, crossed INR 350 crore in annualized GMV and made a successful UK debut at Space NK, emerging as the #1 search term on the retailer's platform.

Nykaa's eB2B Superstore continues to expand its reach, becoming India's largest B2B beauty distribution network with over 3.3 lakh retailers across 1,100+ cities. It achieved an annualized GMV run rate of INR 1,100 crore, up 25% YoY, despite a temporary impact from GST changes on some product categories. The Superstore's profitability is strengthening, with gross margin and EBITDA margin improving by 134 bps and 422 bps YoY, respectively, driven by an increased share of House of Nykaa brands and scale efficiencies. The company's capital efficiency has also seen consistent improvement, with ROCE nearly doubling over the last three years to 14.1%, reflecting disciplined capital allocation and operational excellence.

This quarter highlights Nykaa's strategic clarity and disciplined execution. The company's focus on deepening market penetration, accelerating customer acquisition, and enhancing the customer experience through technology and experiential retail is clearly yielding results. The robust performance across both Beauty and the reviving Fashion segments, coupled with strong growth in owned brands and capital efficiency, positions Nykaa for sustained long-term growth and reinforces investor confidence in its scalable ecosystem.