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Nykaa’s parent, FSN E-Commerce Ventures, earned a net profit of ₹101 crore in the July–September quarter, about three times the ₹33 crore it made a year earlier. Revenue rose 28 per cent to ₹3,006 crore, and roughly nine of every ten rupees still came from beauty. Further down the results, inventory, borrowing and cash flow tell a more mixed story.

Rows of cosmetics and skincare products on brightly lit store shelves

Beauty still pays the bills

Of the ₹3,006 crore Nykaa reported as revenue from operations, about ₹2,700 crore, or roughly 90 per cent, came from beauty. Fashion contributed ₹287 crore and other businesses ₹19 crore. Measured by gross merchandise value (GMV), the total value of orders on its platforms, the company did ₹6,151 crore, up 30 per cent, of which ₹4,454 crore was beauty.

Beauty is also where the profit sits. The segment’s result before unallocated costs rose to ₹180 crore from ₹105 crore a year ago. In its early-October business update, the company said beauty revenue had grown in the late twenties per cent, and that sales at existing beauty stores grew in the early twenties per cent, the strongest like-for-like growth in six quarters.

Why profit grew faster than sales

Revenue rose 28 per cent; profit more than tripled. The gap comes from margins. Gross margin improved to 46.0 per cent from 44.9 per cent. Marketing and selling costs fell to 15.2 per cent of revenue from 15.7 per cent, and employee and other overheads to 11.9 per cent from 12.8 per cent. EBITDA, or earnings before interest, tax, depreciation and amortisation, rose 65 per cent to ₹263 crore.

Profit has now grown faster than sales for four straight quarters, with quarterly profit at ₹68 crore in December 2025, ₹79 crore in March and about ₹80 crore in June. Falguni Nayar, Nykaa’s founder and CEO, said the company had “continued to improve operational efficiency, particularly across marketing and overheads.” For the first half of the year, profit stood at ₹181 crore against ₹57.5 crore a year earlier, already close to the nearly ₹204 crore it earned in all of FY26.

More stores, more customers

Nykaa added 14 beauty stores and six cities in the quarter, taking it to 338 stores in 111 cities. Its retail space is up 26 per cent year on year to more than 3.4 lakh sq ft. Its customer base crossed 65 million at the end of September, up from 55 million at the end of March.

Superstore, the arm that supplies small retailers, grew more slowly. Its GMV rose 15 per cent to ₹328 crore, though the number of registered retailers rose 27 per cent to more than 5.5 lakh. The company is targeting ₹3,500 crore in Superstore GMV and over 10 lakh retailers by FY30.

The lines that need a closer look

Inventory rose by about ₹565 crore to ₹2,210 crore. Short-term borrowings climbed to ₹972.5 crore from ₹728.9 crore. And cash from operations in the first half was negative ₹28.6 crore, against a positive ₹129.3 crore a year earlier. In plain terms, Nykaa sold more and booked more profit, but more of its cash was tied up in stock.

Timing explains part of this. More of this year’s festive season falls in the October–December quarter than last year’s did, so some festive demand will show up in the third quarter rather than the second. Stocking up before Diwali is normal for a retailer. Whether that stock sells through is what the December-quarter numbers will show.

Fashion and the small-brand bets

Fashion is now close to break-even. Its net sales value grew 47 per cent to ₹509 crore, its EBITDA margin moved to 0.2 per cent of sales from minus 3.5 per cent, and the segment loss narrowed to ₹7.65 crore from ₹21.35 crore. The international beauty business, which includes the Gulf, lost ₹10.7 crore.

Nykaa also kept buying brands. With the results it disclosed an 82 per cent stake in Simply Nam for up to ₹33 crore in cash. It had earlier agreed to buy 51 per cent of Aminu, a bootstrapped premium skincare brand founded in 2019 that sells through about 180 salons as well as online, for up to ₹32 crore. Both are small cheques next to a quarterly revenue of over ₹3,000 crore, but they add to Nykaa’s own-brand shelf.

What to watch

The December quarter carries most of this year’s festive season. It will show whether the inventory build turns into sales and whether operating cash flow turns positive again. The other number to track is fashion: the company wants fashion GMV at 3 to 3.5 times its FY26 level of ₹4,954 crore by FY30, at high single-digit EBITDA margins. Today that margin is barely above zero.