Nykaa Q1 FY27: Growth Accelerates, Margins Expand, and Fashion Reaches Breakeven

Nykaa opened FY27 with a sharper mix of growth and profitability. For the quarter ended June 30, 2026, the company reported GMV of Rs 5,590 crore, up 34% year on year. Net revenue rose 29% to Rs 2,782 crore, marking what management called its highest growth in the last 13 quarters.

The more important shift was visible in profitability. Gross profit increased 33% to Rs 1,276 crore, and gross margin expanded 123 basis points to 45.9%. EBITDA grew 68% to Rs 236 crore, translating into an 8.5% margin, up from 6.5% a year ago. PAT rose to Rs 80 crore, up 226% year on year, taking PAT margin to 2.9%.

Two operational themes stood out across the presentation and management commentary. First, scale is compounding across customers, brands, and distribution. Second, the company is now translating that scale into operating leverage across both Beauty and Fashion. This quarter, even Fashion reported positive EBITDA, a milestone that has been building for several quarters.

Financial snapshot and what moved the levers

Nykaa’s quarterly performance was supported by gross margin expansion, stable marketing intensity, and lower overhead ratio. The company highlighted that profitability improvement was also supported by rising share of House of Nykaa (owned brands) and an uptick in marketing and service income.

At a consolidated level, revenue from operations came in at Rs 2,782 crore. Fulfilment expense rose to Rs 274 crore, or 9.9% of revenue, while marketing and selling and distribution expense stood at Rs 412 crore, or 14.8% of revenue. Employee and other expenses were Rs 353 crore, or 12.7% of revenue. EBITDA margin expanded 196 basis points year on year.

The company also reported a sharp improvement in capital efficiency. Annualised ROCE was 26.8% in Q1 FY27 compared to 21.2% in FY26. Fixed asset turnover improved to 10.7x (annualised), and working capital days were reported at 29.

Beauty: Strong growth with double-digit EBITDA margin

Beauty remains Nykaa’s largest and most profitable vertical, and the quarter reinforced the business model’s operating leverage. Beauty GMV was Rs 4,105 crore and Beauty NSV was Rs 2,371 crore, up 29% year on year. Beauty EBITDA rose 48% to Rs 244 crore, and EBITDA margin expanded to 10.3%.

Management attributed the growth to strong platform performance, marquee sale events, robust customer acquisition, and retail network expansion. On the call, the Beauty leadership reiterated that the growth strategy rests on penetration and premiumization.

Penetration was visible in traffic and transacting customer metrics. Beauty visits increased 22% year on year to 500 million. Annual unique transacting customers for Beauty reached 20.8 million, up 25%.

Premiumization showed up in average order value. Beauty AOV increased 5% year on year to Rs 2,102. Management also explained premiumization as a combination of higher ASP products, wider baskets, and higher frequency, not only an AOV metric.

Nykaa also reinforced its role as the entry partner for global beauty brands in India. The company highlighted the India launch of Rare Beauty in June 2026, which it stated has quickly become a top 5 premium brand on the platform. The quarter also saw launches such as SK-II and K18.

Retail continued to expand. The company ended the quarter with 324 stores across 105 cities, adding 11 stores in Q1. It also opened its largest ultra-luxe store at Ambience Mall, Vasant Kunj, a 5,000 plus square foot flagship featuring shop-in-shops and brand-led services.

Nykaa Now: Quick delivery without margin dilution, so far

Nykaa Now expanded from 3 cities in Q1 FY26 to 13 cities in Q1 FY27, with more than 1,000 marquee brands available. The company stated a plan to expand to 25 plus cities by end of FY27.

On the earnings call, management said it was not seeing EBITDA margin dilution from Nykaa Now and highlighted that customers using Nykaa Now are showing increasing purchase frequency. Management also said Nykaa Now’s order AOV is not meaningfully different from mainline orders. The key cost watch item was fulfilment, which is inherently higher on a cost-per-order basis for point-to-point delivery.

Fashion: Growth accelerates and EBITDA turns positive

Fashion delivered a standout quarter on both growth and profitability. Fashion GMV rose 53% year on year to Rs 1,471 crore. Fashion NSV increased 54% year on year to Rs 451 crore.

The more notable development was profitability. Fashion EBITDA margin improved to 0.1% from -6.2% in Q1 FY26. The company described this as a structural improvement driven by marketing efficiencies and overhead leverage.

Customer funnel metrics remained strong. The business reported 211 million visits, 24.8 million MAUV, about 4.7 million AUTC (up 38%), and 3.0 million orders (up 48%). The company also stated that unique visitor to order conversion improved to 4.0% with a 70 basis point year on year increase and that CAC reduced by about 30% over the last two years.

A key driver in the narrative was the Nike partnership. Nykaa Fashion operates Nike.in and the Nike app in India and also lists Nike on Nykaa Fashion and Nykaa Man. Management said the Nike app crossed 1.5 million installs within six months of launch and that Nike is among the top three brands on Nykaa Fashion.

Management did not disclose the exact economic terms, but described the Nike.in arrangement as retailer-like, with commission and service elements, and stated it is protected against inventory risk.

The company also highlighted its AI-led Virtual Closet feature, launched in May 2026. It reported 200,000 plus virtual avatars created and stated that conversion is 2x higher among customers using the feature.

House of Nykaa and Superstore: Scaling brands and distribution

House of Nykaa continues to scale as a portfolio of owned consumer brands. The company reported annualised GMV of Rs 3,760 crore and annualised NSV of Rs 2,200 plus crore. In Q1 FY27, House of Nykaa Beauty NSV was Rs 508 crore, up 40% year on year.

Channel diversification was highlighted as a strategic strength. For Q1 FY27, the company disclosed a channel mix for House of Nykaa Beauty NSV: 33% via Nykaa online, 10% via Nykaa stores, 19% via Nykaa B2B, 37% via exports, and 1% via other third-party channels.

The company also announced the acquisition of a 51% stake in Aminu, a premium dermocosmetic skincare brand. Key transaction terms disclosed were a consideration of Rs 32 crore for 51%, with the remaining 49% to be acquired over the next few years. The transaction is expected to close in Q2 FY27 subject to regulatory approvals and closing conditions. Aminu reported FY26 net revenue of Rs 19 crore and was described as having 30 plus SKUs and in-house R and D capabilities.

Superstore by Nykaa continued expanding its retailer network and improving unit economics. Q1 FY27 Superstore GMV was Rs 336 crore, and NSV growth was 28% year on year. Management said GMV was impacted by GST-led MRP reductions and expects that impact to normalise over the coming quarters, with commentary pointing to Q3 onwards.

Takeaways from Q1 FY27

Q1 FY27 strengthened the case that Nykaa’s scale is now translating into operating leverage. Beauty delivered strong growth with expanding margins, and Fashion reached near breakeven EBITDA while accelerating growth.

The company also continued to invest in capabilities that could widen its competitive moat. These included omnichannel retail expansion, quick delivery through Nykaa Now, and AI features aimed at higher conversion and service efficiency.

For investors, the quarter’s core message was not only about higher growth. It was about growth with improving returns on capital, reflected in the reported ROCE of 26.8% (annualised) and continued working capital discipline. The next few quarters should indicate how sustainably Nykaa can expand margins while scaling newer initiatives such as Nykaa Now and selective enterprise partnerships like Nike.