FSN E-Commerce

FSN E-Commerce reported a strong Q3 FY26 with consolidated GMV growing 28% year-on-year to INR 5,795 crores and Net Revenue increasing 27% year-on-year to INR 2,873 crores. Gross Profit reached INR 1,297 crores, representing 45.2% of net revenue and a 31% YoY growth. The company achieved its highest-ever EBITDA margin of 8.0% of net revenue, translating to INR 230 crores, a 63% YoY increase. PAT stood at INR 68 crores (2.4% of net revenue), growing 156% YoY, and would have been INR 78 crores (2.7%) after adjusting for a one-time^📎 labor code impact. The company also demonstrated improved efficiency with working capital days at 30 days for 9 months FY26, a 4-day improvement YoY, and ROCE at 19.1% annualized for 9 months, up from 11.3% in FY25.

The Beauty vertical delivered a GMV of INR 4,302 crores, growing 27% year-on-year, and an NSV growth of 29%, accelerating from 26% a year prior. The EBITDA margin for the Beauty business reached 10.1% of net revenue for the quarter and 9.4% for the nine months. This 134 basis points expansion in Beauty EBITDA was driven by strong omnichannel performance, improved unit economics in eB2B, and outperformance of House of Nykaa Brands. The company also reported 18.7 million annual unique transacting customers, a 26% YoY increase, and highlighted its content-to-commerce strategy, with 76% of Gen Z content consumption being creator-driven.

The Fashion business recorded a GMV of INR 1,500 crores, growing 31% year-on-year, with NSV growth at 25%. Notably, the Fashion segment's EBITDA margin improved significantly from minus 5.4% a year ago to minus 2.0% this quarter, a 340 basis points improvement. This turnaround was attributed to robust customer acquisition, which was up 45% YoY, strong festive sales, and marquee brand wins like H&M, which became the number one brand on Nykaa Fashion since its launch. The company continues to expand its assortment across men's, kids', accessories, and home categories.

The House of Nykaa Brands achieved an annualized GMV run rate of INR 3,500 crores, marking a 48% year-on-year growth. This includes INR 3,100 crores from beauty and INR 400 crores from fashion. Key brands like Dot & Key grew over 100% to an annualized GMV of INR 1,900 crores with high-teens EBITDA margins, while Kay Beauty crossed INR 500 crores annualized GMV with over 60% growth. Nykaa Cosmetics is approaching INR 500 crores annualized GMV, and Nykd, a fashion owned brand, reached INR 150 crores annualized GMV. The growth is diversified across Nykaa Online, Nykaa Stores, Nykaa Distribution, and other third-party channels.

Nykaa announced a deep strategic partnership with Nike to run its official D2C digital commerce platforms in India (Nike.in and Nike Commerce Apps), managing end-to-end operations. The company also strengthened its relationship with L'Oreal, securing exclusive distribution rights for La Roche-Posay and NYX Makeup, and taking over Kiehl's operations in India. Additionally, Nykaa Distribution (eB2B) expanded its reach to 485,000 retailers throughout the country across 1,100 cities, growing NSV by 31% and adding 1 lakh transacting retailers in the last year, including for its own brands.

Nykaa expanded its physical footprint by opening 11 new stores in Q3, bringing the total count to 276 stores across 94 cities, covering 2.8 lakh square feet of retail space. The company introduced new experiential formats, including Nykaa Perfumery stores, which have 3x higher average order values than multi-brand specialty stores, with over 45% of business from men's fragrances. Other formats like Nykaa Luxe, Nykaa On Trend, Nykaa Kiosks, and Kay Kafe (blending beauty with coffee) aim to drive fragrance adoption, engage younger audiences, and bring more customers into the beauty funnel.

Nykaa Now, the company's quick commerce platform, has stabilized and picked up demand, now live in all seven Tier 1 cities with a delivery promise of 30 minutes to 2 hours. All retail stores are enabled with hyperlocal delivery capabilities. Management indicated that a significant percentage of orders in live cities are fulfilled by Nykaa Now, and while average order values might be lower, the increased purchase frequency is expected to offset any potential dilution, making it non-dilutive to overall profitability in a meaningful way.