Nykaa FY26: Mid-20s growth continues as margins and ROCE step up

FSN E-Commerce Ventures Limited (Nykaa) closed FY26 with its strongest profitability profile since listing, while sustaining mid-20s growth across its core engines. For Q4FY26, consolidated GMV rose 28% YoY to 5,241 crore and revenue from operations increased 28% YoY to 2,648 crore. The quarter also delivered record margins: gross margin at 45.4%, EBITDA margin at 8.4%, and PAT margin at 3.0%.

For the full year, revenue from operations crossed the 10,000 crore mark, reaching 10,022 crore (up 26% YoY), which management highlighted as the company’s first 1 billion dollar revenue milestone. EBITDA grew 59% YoY to 752 crore and PAT rose 183% YoY to 204 crore. Importantly, the operating model looked more efficient too, with working capital days improving to 28 and ROCE rising to 21.2%.

A two-vertical business with Beauty still doing the heavy lifting

Nykaa’s segment reporting shows Beauty remains the dominant contributor to revenue. In FY26, Beauty revenue from operations was 9,139 crore, while Fashion contributed 832 crore. This mix explains why margin expansion in Beauty has such a large influence on consolidated profitability.

Beauty posted FY26 GMV of 14,954 crore, up 27% YoY, with NSV at 8,504 crore and EBITDA margin of 9.6% of NSV. Q4FY26 was particularly strong, with Beauty NSV up 29% YoY and EBITDA margin improving to 10.3%.

Management attributed performance to stronger marketing efficiency and engagement across the funnel. FY26 Beauty metrics included 1,894 million visits, 44.7 million MAUV, 19.7 million annual unique transacting customers, and 65.8 million orders.

Fashion had a better year than FY25, with FY26 GMV up 30% YoY to 4,954 crore and NSV up 29% YoY to 1,447 crore. Losses narrowed sharply, with Fashion EBITDA improving to -37 crore (from -93 crore in FY25). The quarter was a notable milestone: Q4FY26 Fashion EBITDA turned marginally positive at 0.3% of NSV, which management described as a meaningful acceleration.

What is changing inside the model: mix, efficiency, and operating leverage

Nykaa’s FY26 margin improvement came through multiple levers rather than a single one. Gross margin improved 132 bps YoY to 45.1%, which the company linked to higher salience of House of Nykaa and improved service income. Employee and other expenses improved 56 bps to 12.7% of revenue, reflecting scale-led productivity gains.

Fulfillment expense as a percent of revenue rose slightly to 9.6% (up 23 bps), which management positioned as investments in the fulfillment network to improve order-to-delivery efficiency. Marketing and selling and distribution was broadly stable at 15.3% of revenue.

Vertical reporting provides a clean view of unit economics. Beauty’s FY26 contribution margin was 22.5% of NSV and EBITDA margin was 9.6% of NSV. Fashion’s gross margin was high at 47.8% of NSV, but marketing and S&D remained elevated at 26.4% of NSV, keeping the business in loss for the year even after substantial improvement.

House of Nykaa and Superstore: newer engines getting bigger

A key part of the FY26 narrative was the accelerating scale of newer verticals and the company’s owned brands portfolio.

House of Nykaa delivered FY26 GMV of 3,176 crore across beauty and fashion, up 49% YoY, with 17 million plus customers served to date and distribution scaling to 150K plus general trade doors. The investor presentation disclosed House of Nykaa Beauty GMV of 2,788 crore and highlighted a channel mix of 45% Nykaa online, 9% Nykaa stores, 16% Nykaa B2B, 30% other third-party channels, and 1% exports.

Within owned brands, Dot and Key recorded FY26 GMV of 1,790 crore, Kay Beauty 380 crore GMV, and Nykaa Cosmetics 400 crore plus GMV. Management repeatedly framed owned brands as a portfolio strategy rather than an attempt to force share on Nykaa’s multi-brand platform. On the call, it emphasized that the platform aims to be fair to third-party brands, and owned brands are expected to win on merit.

Superstore by Nykaa continued to scale the B2B business, with FY26 GMV of 1,187 crore and a retailer base of 493K. Management noted a behavioural milestone: 30% plus of repeat orders were placed without feet-on-ground intervention, indicating higher self-serve adoption.

Guidance tone: optimistic on execution, cautious on macro

Management largely avoided formal forward guidance. It said April and May were good in terms of growth momentum but cautioned that oil prices, rupee depreciation and inflation could affect consumption. It also suggested beauty demand may be more resilient because it is a small luxury category.

On store expansion, management indicated FY27 retail additions should be similar to FY26, and referenced an earlier plan to reach about 500 stores over 3 to 4 years. It also discussed Nykaa Now, stating the rapid delivery network had been built out with about 75 to 80 rapid stores across the top 7 metros, covering 80% to 90% of relevant pincodes with a 30 minutes to 2 hours promise. The stated plan for FY27 is to market Nykaa Now more actively now that assortment and speed have been established.

Takeaways

FY26 shows Nykaa is expanding profitably while still investing in customer acquisition and newer engines. Beauty continues to deliver predictable mid-20s growth with improving margins. Fashion is not yet profitable for the year, but the Q4 break-even milestone suggests operating leverage is beginning to show. The balance sheet also improved, with net debt reduced to 329 crore and ROCE rising to 21.2%.

The key question for FY27 is whether the company can continue improving profitability while navigating macro uncertainty, and whether Fashion can sustain the exit trajectory seen in Q4. Nykaa enters the year with momentum, a larger omnichannel network, and a growing owned brands portfolio that management believes can scale across multiple channels.