Nykaa’s H1 working-capital outflow rose to Rs 475.8 crore

FSN E-Commerce Ventures Limited, referred to in the presentation as Nykaa, reported a Rs 475.8 crore working-capital cash outflow in H1 FY27, compared with Rs 133.1 crore in H1 FY26, as inventories used Rs 564.7 crore of cash. The outflow came even as operating profit net of lease payments increased to Rs 388.8 crore from Rs 218.9 crore.

Why did Nykaa’s working-capital outflow rise in H1 FY27?

Nykaa’s working-capital outflow rose because inventory investment and other working-capital uses exceeded cash released by receivables and trade payables. The cash-flow statement records Rs 475.8 crore of funds used for working-capital change in H1 FY27, up Rs 342.7 crore from Rs 133.1 crore in H1 FY26. Inventory was the largest component, accounting for Rs 564.7 crore of cash use during the half year.

The balance sheet shows expansion in the underlying working-capital base. Inventories increased by Rs 567.5 crore between March 31, 2026 and September 30, 2026, reaching Rs 2,209.7 crore from Rs 1,642.2 crore. Total current assets classified as working capital rose by Rs 496.3 crore to Rs 2,600.5 crore, while total current liabilities classified as working capital increased by Rs 253.3 crore to Rs 1,496.8 crore.

Nykaa’s net working capital, calculated in the presentation as total current assets less total current liabilities, increased to Rs 1,103.6 crore at September 30, 2026 from Rs 860.7 crore at March 31, 2026. That was a Rs 242.9 crore balance-sheet increase, while the cash-flow table reported Rs 475.8 crore of H1 cash utilisation after including inventory, receivables, trade payables, security deposits and other items. The disclosures therefore measure related items on different bases.

How did Nykaa’s inventory, receivables and payables change?

Nykaa added inventory while reducing receivables, and its trade-payable balance also increased during H1 FY27. Inventory used Rs 564.7 crore of cash, versus Rs 155.4 crore in H1 FY26, increasing the year-on-year inventory cash use by Rs 409.3 crore. On the balance sheet, inventory stood at Rs 2,209.7 crore at September 30, 2026, compared with Rs 1,642.2 crore at March 31, 2026.

Receivables provided Rs 72.0 crore of cash in H1 FY27, compared with Rs 36.6 crore in H1 FY26. Receivables including unbilled declined to Rs 390.8 crore at September 30, 2026 from Rs 462.0 crore at March 31, 2026. The Rs 71.2 crore fall in the balance-sheet balance broadly aligns with the Rs 72.0 crore source reported in the cash-flow statement.

Trade payables provided Rs 252.1 crore of cash in H1 FY27, compared with Rs 99.9 crore in H1 FY26. The associated balance-sheet liability rose by Rs 253.3 crore to Rs 1,496.8 crore at September 30, 2026 from Rs 1,243.5 crore at March 31, 2026. These cash sources did not offset the inventory build and the Rs 221.5 crore cash use reported under others, compared with Rs 106.8 crore a year earlier.

How did Nykaa fund its H1 FY27 cash requirements?

Nykaa funded its H1 FY27 cash requirements through Rs 388.8 crore of operating profit net of lease payments and Rs 240.5 crore of borrowing proceeds. Total sources of funds were Rs 662.7 crore, compared with Rs 286.2 crore in H1 FY26. Operating profit net of lease payments increased by Rs 169.9 crore year on year, while borrowing proceeds increased by Rs 212.5 crore from Rs 28.0 crore.

The H1 FY27 sources also included Rs 16.7 crore from employee stock option plan share issuance, Rs 8.8 crore of interest on fixed deposits and Rs 8.0 crore invested by Apparel Group in Nessa. In H1 FY26, those respective sources were Rs 18.4 crore, Rs 5.1 crore and Rs 15.7 crore. The presentation does not state how the Apparel Group investment was deployed beyond its inclusion in sources of funds.

Uses of funds totalled Rs 672.4 crore in H1 FY27, exceeding the Rs 662.7 crore sources by Rs 9.7 crore. Besides working capital, Nykaa spent Rs 72.9 crore on capital expenditure, Rs 20.9 crore on investment in Earth Rhythm and Aminu net of cash acquired, Rs 30.4 crore on interest on borrowings and Rs 72.4 crore on tax paid. H1 FY26 utilisation was Rs 308.3 crore, including Rs 75.2 crore of capital expenditure and Rs 58.5 crore of tax paid.

What changed in Nykaa’s borrowings, cash and operating profit?

Nykaa’s borrowings rose to Rs 990.7 crore at September 30, 2026 from Rs 747.2 crore at March 31, 2026, an increase of Rs 243.4 crore. The H1 FY27 cash-flow statement separately reports Rs 240.5 crore of proceeds from borrowings and Rs 30.4 crore of interest on borrowings. Lease liabilities increased by Rs 37.5 crore to Rs 528.1 crore during the same six-month balance-sheet period.

Cash and bank balances including fixed deposits declined by Rs 9.6 crore over the half year to Rs 408.6 crore at September 30, 2026 from Rs 418.3 crore at March 31, 2026. The cash-flow reconciliation starts with Rs 418.3 crore, adds Rs 662.7 crore of sources and deducts Rs 672.4 crore of utilisation. By comparison, Nykaa’s closing cash and bank balance was Rs 316.5 crore in H1 FY26.

Operating earnings increased during the same period. Revenue from operations rose 29% year on year to Rs 5,788 crore in H1 FY27, while earnings before interest, tax, depreciation and amortisation, or EBITDA, rose 66% to Rs 499 crore from Rs 300 crore. EBITDA margin increased to 8.6% from 6.7%, and net profit increased to Rs 181 crore from Rs 57 crore. These reported profit measures increased while the working-capital cash outflow widened.

Conclusion

Nykaa’s H1 FY27 disclosures show that higher operating earnings did not translate into a corresponding increase in cash available after working-capital movements. Inventory was the main disclosed call on funds at Rs 564.7 crore, partly offset by Rs 252.1 crore from trade payables and Rs 72.0 crore from lower receivables, resulting in a Rs 475.8 crore working-capital outflow.

The next disclosed balance-sheet markers to watch are inventory, which stood at Rs 2,209.7 crore at September 30, 2026, and borrowings, which stood at Rs 990.7 crore. Nykaa’s presentation provides no inventory target, working-capital target or borrowing-repayment schedule, so subsequent disclosures will show how these balances move alongside revenue and operating-profit trends.