FSN E-Commerce Ventures Q1 FY27 earnings call

FSN E-Commerce Ventures Limited reported a robust Q1 FY27, with GMV growing 34% year-on-year to INR 5,590 crores and Net Revenue increasing 29% year-on-year to INR 2,782 crores. Gross Profit also saw a 33% year-on-year growth, reaching INR 1,276 crores with a margin of 45.9%. This strong top-line performance was coupled with significant profitability improvements, indicating healthy business momentum across its verticals.

The company's EBITDA surged 68% year-on-year to INR 236 crores, expanding the margin to 8.5% from 6.5% a year ago. PAT demonstrated exceptional growth of 226% year-on-year, reaching INR 80 crores with a 2.9% margin. Return on Capital Employed (ROCE) significantly improved to 26.8% from 21.2% in FY26, reflecting prudent capital utilization and disciplined inventory and receivables management, with working capital days now under 30.

Both core verticals showed accelerated growth and improved profitability. The Beauty vertical's NSV grew 29% year-on-year to INR 2,371 crores, with an EBITDA margin of 10.3%, up from 9% a year ago. The Fashion vertical delivered a standout performance, with NSV growing 54% year-on-year to INR 451 crores and achieving overall profitability at a 0.1% EBITDA margin, a significant improvement from negative 14.1% in Q1 FY24.

Nykaa expanded its physical footprint to 324 stores across 105 cities, opening 11 new stores this quarter, including its largest ultra-luxe store at 5,000 sq ft. The company onboarded 160 new brand partners this quarter, bringing the total to over 10,000, and launched high-profile brands like Rare Beauty, SK-II, and Birkenstock. The House of Nykaa Brands achieved an annualized GMV of INR 3,760 crores, growing 39% year-on-year, and acquired a 51% stake in premium dermocosmetic brand Aminu, which had INR 19 crores net revenue in FY26.

Nykaa's customer base grew 33% year-on-year to 60 million, with annual unique transacting customers exceeding 20 million. The company is leveraging AI initiatives, including a virtual closet for its fashion platform which has seen over 200,000 avatars created and a 2x higher conversion rate for users. Nykaa Now, its quick delivery platform, is now in 13 cities with plans to expand to over 25 cities by FY27, offering a wide assortment of beauty and personal care products.

The Superstore platform expanded its retailer network by 30% to 0.5 million retailers across 1,200 cities, driving a 28% NSV growth and over 300 basis points EBITDA improvement. Marketing efficiency improved by 42 basis points, and the company continues to invest in customer acquisition while maintaining productivity. The Fashion segment saw a 30% reduction in Customer Acquisition Cost (CAC) over the last two years, contributing to its profitability.