Nykaa Fashion reaches third EBITDA-positive quarter as NSV rises 47%

Nykaa Fashion reported EBITDA of Rs 1 crore in Q2 FY27, its third successive EBITDA-positive quarter, as net sales value rose 47% year on year to Rs 509 crore and customer-acquisition cost fell 30%. The result reversed an EBITDA loss of Rs 12 crore in the corresponding quarter a year earlier.

How did Nykaa Fashion return to EBITDA profitability?

Nykaa Fashion reached Rs 1 crore of EBITDA in Q2 FY27, compared with a Rs 12 crore EBITDA loss in the corresponding quarter last year. Management said the business had first broken even in Q4 of the previous fiscal year and had now remained profitable for three successive quarters, attributing the change to structural improvements in the underlying business rather than growth alone.

The margin outcome followed a 370-basis-point year-on-year improvement in EBITDA, with one basis point equal to one-hundredth of a percentage point. Marketing and selling-and-distribution, or S&D, expenses improved by more than 400 basis points year on year, while overhead expenses improved by close to 200 basis points. Management also said fulfilment expenses were kept in check despite efforts to deliver orders faster.

The Fashion result was part of a wider Q2 FY27 improvement at Nykaa, whose consolidated EBITDA rose 65% year on year to Rs 263 crore and whose EBITDA margin expanded 196 basis points to 8.7%. At the group level, management said better performance-marketing efficiency across Beauty and Fashion, alongside productivity gains in Superstore, helped marketing and S&D expense as a share of revenue fall 50 basis points to 15.2%.

What drove Nykaa Fashion’s 47% NSV growth?

Nykaa Fashion grew net sales value, or NSV, by 47% year on year to Rs 509 crore in Q2 FY27, while gross merchandise value, or GMV, increased 42%. Management linked the expansion to continued additions of brands across women’s and men’s categories, as well as emerging categories including kids and, to a lesser extent, home.

Women’s western wear, men’s fashion apparel and sports were identified as the fastest-growing areas during the quarter. Nykaa Fashion added more than 250 brands across categories, including Superdry, ANTA Shoes, ECCO, Sleepwell and Childhome. The additions broadened the assortment while retaining an emphasis on premium and luxury labels, according to management.

The growth rate also accelerated against the previous year: Fashion NSV grew 47% in Q2 FY27, versus 27% a year earlier. Beauty NSV grew 28% in Q2 FY27, versus 27% a year earlier, meaning Fashion increased at a faster rate than Beauty by 19 percentage points in the reported quarter.

Management described its partnerships with H&M Group brands as part of its premium-fashion strategy. H&M launched on Nykaa Fashion in Q3 FY26 and became one of the platform’s top brands, according to management; H&M MOVE followed in Q1 FY27. COS, another H&M Group brand, was launched exclusively online through Nykaa Fashion in the previous quarter, after its India offline launch a few months earlier.

Why did customer-acquisition costs fall at Nykaa Fashion?

Nykaa Fashion reduced customer-acquisition cost, or CAC, by 30% year on year while increasing customer acquisition by 31% in Q2 FY27. Management said product enhancements, personalisation, artificial intelligence and funnel optimisation enabled the platform to convert visits into transacting customers and orders at a better rate.

Visits grew 25% year on year, but management said transacting customers and orders grew faster because conversion improved. The company did not disclose the absolute number of orders, visits, transacting customers or CAC. It did disclose that Fashion’s cumulative customer base had exceeded 12 million customers by the end of the quarter.

Management said many new customers came from premium customer bases, assessed partly through an over-indexing toward iOS and premium Android devices rather than only the tier of the customer’s city. This approach is intended to identify affluence characteristics among customers, but Nykaa Fashion did not provide a percentage mix of customers by device type.

The platform’s average order value, or AOV, was close to Rs 4,400 in Q2 FY27. Management described this as industry-leading and said the expansion of its luxury proposition could support both AOV and the quality of business. The relationship between lower CAC and the more than 400-basis-point improvement in marketing and S&D expenses is the operating mechanism management highlighted behind the quarter’s profitability progress.

How is Nykaa Fashion building its premium and luxury assortment?

Nykaa Fashion is expanding a separate Luxe proposition with curated international luxury and Indian designer labels, personalised concierge services, styling, customisation, alterations and post-order support. Management said the Luxe shop-in-shop had been launched a few months before the Q2 FY27 call and was designed as a dedicated experience for luxury customers and brands.

During the past quarter, Nykaa Fashion onboarded international luxury brands including Prada, Michael Kors, Fendi, Cavalli and Valentino. Management said it works only with authentic brand partners, and positioned the additions as a means to build consumer trust. It also said its existing Indian designer-label assortment had been a longstanding strength.

The company’s premium focus is visible in the Rs 4,400 AOV and in its stated effort to acquire customers using premium devices. However, the transcript does not disclose Luxe revenue, its share of NSV, the sales contribution from individual brands, or the profitability of luxury orders. Those omissions limit the ability to separate the impact of luxury expansion from the broader 47% NSV increase.

Nykaa Fashion also said its differentiation for brand partners includes leading with non-discounted sales and giving prominence to selected brand propositions. The H&M, H&M MOVE and COS launches span Q3 FY26, Q1 FY27 and the previous quarter respectively, giving the platform a sequence of brand partnerships alongside the broader addition of more than 250 brands.

Conclusion

Nykaa Fashion’s Q2 FY27 result shows that a Rs 13 crore year-on-year EBITDA swing occurred alongside 47% NSV growth, a 30% CAC reduction and over 400 basis points of improvement in marketing and S&D expenses. The combination indicates that the reported profit was associated with both faster sales growth and lower customer-acquisition spending per new customer.

The next issue is whether the business can continue converting brand additions, Luxe expansion and product-led funnel improvements into profitable growth. Management said it was looking forward to Q3, while the transcript does not provide a Fashion EBITDA target, margin target, CAC target or revenue outlook. Investors will therefore need to watch whether subsequent results sustain positive EBITDA while Fashion continues investing in customers, fulfilment and premium brand partnerships.