Summary
FSN E-Commerce Ventures Limited - Q3 FY26 Earnings Call Summary Thursday, February 05, 2026 5:00 PM IST
Event Participants
Executives 6 Abhijeet Dabas (EVP, Nykaafashion.com), Adwaita Nayar (ED & CEO, House of Nykaa Brands), Anchit Nayar (ED & CEO, Beauty), Falguni Nayar (Executive Chairperson, MD & CEO), P. Ganesh (CFO), Vishal Gupta (CEO, Nykaa Distribution)
Analysts 6 Kapil Singh, Nihal Mahesh Jham, Nikhil Choudhary, Percy Panthaki, Sachin Dixit, Vijit Jain
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| GMV (Consolidated) | ₹5,795 crores | +28% YoY; Driven by strong seasonal demand and festive sales across Beauty and Fashion. |
| Net Revenue | ₹2,873 crores | +27% YoY; Sustained mid-20s growth for 14 consecutive quarters. |
| Gross Profit | ₹1,297 crores | +31% YoY; Margin expanded to 45.2% (+144 bps YoY) due to House of Nykaa growth and higher service income. |
| EBITDA (Consolidated) | ₹230 crores | +63% YoY; Highest ever EBITDA margin at 8.0% (+180 bps YoY) driven by scale and operational efficiencies. |
| PAT | ₹68 crores | +156% YoY; Reported margin of 2.4%. Adjusted for ₹16 crore labor code provision, PAT was ₹78 crores (2.7% margin). |
| Beauty GMV | ₹4,302 crores | +27% YoY; Strong performance in omnichannel retail, flagship “Pink Friday” sale, and eB2B unit economics. |
| Fashion GMV | ₹1,493 crores | +31% YoY; Continued growth revival with 45% YoY increase in new customer acquisition. |
| House of Nykaa GMV | ₹872 crores | +48% YoY; Annualized GMV run rate reached ₹3,500 crores, led by skin care brand Dot & Key. |
| AUTC (Beauty) | 18.7 million | +26% YoY; Added 4 million annual unique transacting customers over the past 12 months. |
| Cash & Liquidity | 30 Days (WC) | -4 days YoY; Working capital efficiency improved; ROCE rose to 19.1% (annualized). |
Geographic & Segment Commentary
- Beauty & Personal Care (BPC): Delivered record GMV and a 10.1% EBITDA margin. The segment benefited from a 29% NSV growth outperformance and improving unit economics in the Superstore eB2B business. Strategic focus remains on premiumization through global brand launches like La Roche-Posay and Kylie Cosmetics.
- Fashion: Showed significant profitability improvement, with EBITDA losses narrowing to -2.0% from -5.4% a year ago. The segment saw marquee brand wins including the launch of H&M and a strategic partnership with Nike to run their India D2C operations. New customer acquisition grew 45% YoY, reflecting strong platform health.
- House of Nykaa (Owned Brands): Now an annualized ₹3,500 crore GMV business. Dot & Key is the standout performer at ₹1,900 crore annualized GMV with high-teens EBITDA margins. The portfolio expanded its footprint through 14,000+ general trade doors and international expansion in the UK and Middle East.
Company-Specific & Strategic Commentary
- Nike D2C Partnership: Nykaa Fashion entered a strategic partnership to manage Nike’s official D2C digital platforms (Nike.in and apps) in India, providing full-stack services including tech, marketing, and fulfillment.
- Nykaa Now (Quick Commerce): Service stabilized across seven Tier 1 cities with 30-minute to 2-hour delivery promises. Hyperlocal capabilities are now enabled in all 276 retail stores to support luxury brand delivery.
- Content-to-Commerce: Leveraged a network of 100,000+ influencers. New partnerships with YouTube (integrated shopping) and Snapchat (Gen Z creator nurturing) aim to deepen engagement with younger audiences.
- New Retail Formats: Launched “Nykaa Perfumery,” a fragrance-only experiential concept. These stores report AOVs 3x higher than standard specialty stores, with over 45% of business coming from the men’s segment.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| EBITDA Margin | Structural Improvement | Management expects sustainable expansion as scale-led operating leverage offsets customer acquisition costs. |
| BPC Growth | Mid-20s Sustainable | Outlook remains bullish based on high repeat customer rates and increasing e-commerce penetration in Beauty. |
| Fashion Profitability | Path to Breakeven | Continued narrowing of losses expected through higher AOVs and improved marketing efficiency. |
Risks & Constraints
| Risk | Context |
|---|---|
| Consumption Slowdown | While Nykaa outperformed in Q3, management monitors broader discretionary spending trends in the Fashion segment despite recent recovery. |
| Digital Ad Inflation | Sustaining high levels of customer acquisition requires constant investment in marketing (16% of revenue), which could pressure margins if conversion rates dip. |
| Competition | The rise of quick commerce competitors in BPC necessitates Nykaa’s investment in “Nykaa Now” to protect market share in Tier 1 cities. |
Q&A Highlights
BPC Margin Sustainability
- Question: Is the 10% BPC EBITDA margin sustainable or a seasonal peak? (Sachin Dixit)
- Answer: While Q3 is seasonally strong due to ad income from the Pink Friday sale, structural improvements in B2B unit economics and the high-margin House of Brands mix provide a floor for continued margin expansion (Anchit Nayar).
Nike Partnership Model
- Question: How does the Nike D2C deal differ from a standard marketplace model? (Kapil Singh)
- Answer: This is a full-stack service model where Nykaa runs the official brand website and apps. It generates revenue through fulfillment and service fees, positioning Nykaa as a strategic operator rather than just a reseller (Falguni Nayar/Abhijeet Dabas).
Customer Acquisition Quality
- Question: Are new customers delivering lower AOVs as you expand beyond Tier 1? (Sachin Dixit)
- Answer: New customer AOVs are inherently lower than repeat customers, but they have remained stable. The “magic” of the platform is moving these users up the consumption journey through education and content (Anchit Nayar).
Quick Commerce (Nykaa Now)
- Question: Is Nykaa Now dilutive to margins given the delivery speed? (Nikhil Choudhary)
- Answer: It is not currently dilutive. The focus is on increasing Frequency of Purchase (FOP), which offsets potential AOV dilution, leading to higher Annual Consumption Value per customer (Anchit Nayar).
Key Takeaway
Nykaa delivered a robust Q3 FY26, characterized by record consolidated EBITDA margins of 8.0% and a 28% YoY growth in GMV to ₹5,795 crores. The Beauty vertical achieved a milestone 10.1% EBITDA margin, supported by efficient scaling of its eB2B “Superstore” and the continued dominance of Dot & Key, which now operates at a ₹1,900 crore annualized GMV. The Fashion segment showed a sharp recovery, narrowing losses significantly while securing a high-profile full-stack partnership with Nike. Management successfully balanced aggressive customer acquisition (adding 4 million annual unique beauty customers) with balance sheet discipline, improving ROCE to 19.1%. Looking ahead, the company is pivoting toward experiential retail through new fragrance formats and quick-commerce integration, aiming to sustain mid-20s growth while structurally expanding profit margins.
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