Nykaa profit more than doubles in Q3 as beauty and fashion segments surge

Beauty ecommerce platform Nykaa saw its quarterly after-tax profit more than double to Rs 67.7 crore year-on-year, driven by strong growth in its beauty business as well as growing traction for its fashion arm.

The Falguni Nayar-led company saw its operating revenue jump by 27% in Q3FY26 to Rs 2,873.26 crore from Rs 2,267.21 in the corresponding quarter in the previous year. Sequentially, its revenue rose 22% from Rs 2,345.98 crore, as its bottom line improved from Rs 33 crore it made in the September quarter. It had posted a profit at Rs 26.4 crore.

Steady margin expansion, from 6.2% last year to 8% in the current quarter, helped improve the company's bottom line. Addressing the sustainability of these margins, Falguni Nayar noted that the improvement is not merely a seasonal spike: "There are no one-off items... we have worked on improving the gross margin of our own brands over the last three to four five quarters and some of that impact also gets further accelerated as the sales pick up". Nykaa also clocked its highest-ever quarterly gross merchandise value of Rs 5,795 crore as wedding season, and festive sales surged during the quarter. This is particularly interesting as a part of festive season shopping was pulled ahead in the second quarter.

The company's largest business, the beauty and personal care retail, saw its best ever GMV performance, a growth of Rs 4,302 crore up 27% from last year. The shift was driven by strong performance of the ecommerce platform, demand for its House of Nykaa brands and physical retail. The segment made Rs 156 crore in profit as compared to Rs 100 crore last year.

The company's owned brands under the House of Nykaa ecosystem has been emerging as key lever for its growth and expansion. The House of Nykaa beauty portfolio, which includes Dot & Key, Earth Rhythm, Kay Beauty among others clocks an annualised GMV run Rate of Rs 3,100 crore.

"Nykaa Fashion’s accelerated recovery in FY2026 is the direct outcome of a focused strategy centered on depth of assortment, marquee brand partnerships, and rising customer engagement," shared the company in a press note filed with exchanges.

The strategy for Fashion focuses on positioning the platform as a curated destination for premium brands, moving away from a pure mass-market approach. The company's investments in core and emerging categories during the year yielded results, with a GMV growth of 31% and a topline of Rs 235 crore. However, the growth came at a cost as the segment continues to remain in the red. It saw a loss of Rs 20 crore from Rs 12 crore in the previous quarter, hurt by high operating leverage and engagement costs.

The Mumbai-based company also doubled down on its faster delivery promise with Nykaa Now, lowering timelines to as low as 30 minutes and planning to increase the number of operational hours. The service has been scaled to seven key cities offering over 700 marquee names across Luxe, FMCG & D2C brands. It has also spurred faster delivery in tier-II and III towns as well, with hyper-local delivery through its retail stores across the other 90–95 cities where it has an offline presence.

Addressing potential concerns regarding the unit economics of such rapid delivery, management noted that the margin per order is currently not very different from the mainline platform.

"Is there a chance that the average order values (AOV) for Nykaa Now orders can be lower than mainline platform orders? Yes, that is possible, and in fact, it’s something which we’re not entirely against," said Anchit Nayar, CEO of Nykaa E-Retail in a post-earnings call with analysts; adding that the focus is on whether the frequency of purchase increases due to the convenience of the service, as that benefit would more than offset any potential dilution of AOVs.

"Ultimately, if there is a positive outcome on annual consumption value, which is just a multiplication of FOP (frequency of purchase) and AOV, then that’s a good outcome for us both from topline as well as from bottom line. So this is not very dilutive currently; nor do we envisage this to be dilutive to overall profitability in a meaningful way."