FSN E-Commerce Ventures Ltd., the parent company of Nykaa, projects a solid financial performance in the first quarter of FY26. In a regulatory filing, the company stated that it expects its consolidated net revenue to grow in the mid-20% range compared to the same period last year. The beauty and personal care segment remains the main growth engine, while the fashion business begins to show signs of recovery.
Nykaa continues to dominate the Indian beauty retail landscape. The company draws strength from its diversified business model, which includes its online marketplace, physical stores, eB2B operations, and a growing list of in-house and exclusive brands. These verticals work in unison to power robust growth even in a challenging consumer environment.
Beauty Business Powers Growth
Nykaa’s beauty vertical stands out as the strongest performer. The company expects gross merchandise value (GMV) in this category to rise in the high-20% range year-over-year in Q1 FY26. This growth comes from multiple channels—online platforms, physical retail, business-to-business (eB2B) sales, and the exclusive brands under the “House of Nykaa” portfolio.
The company’s online beauty business continues to attract customers from across the country. Nykaa’s website and mobile app maintain high engagement, supported by frequent product launches, influencer collaborations, and beauty content that educates and converts consumers.
The physical retail segment also contributes meaningfully. Nykaa now operates more than 170 stores across India. The company strategically opens new outlets in Tier 1 and Tier 2 cities to capture untapped demand. These stores offer consumers an immersive experience, allowing them to test products and receive expert guidance, which boosts conversion rates and average order values.
The company’s eB2B segment, Superstore by Nykaa, continues to expand its footprint. It supplies beauty products to small retailers and salons, bridging the gap between brands and last-mile sellers. This vertical helps the company reach customers in semi-urban and rural regions where Nykaa’s retail footprint remains limited.
In addition to third-party products, Nykaa’s “House of Nykaa” brand portfolio plays a crucial role in driving margins and customer loyalty. This umbrella includes in-house brands like Kay Beauty, Nykaa Naturals, and Wanderlust, along with exclusive global partnerships. These brands deliver higher gross margins and help differentiate the platform from competitors.
Fashion Segment Begins Recovery
Nykaa’s fashion business, though still smaller than the beauty vertical, has started to recover. The company reports early signs of a turnaround, supported by improved merchandising, better consumer targeting, and sharper pricing strategies.
Nykaa Fashion hosts a curated selection of over 1,500 brands and continues to grow its catalogue. The platform targets premium and mid-premium shoppers who prefer niche fashion offerings over mass-market products. The company has improved its user interface and personalized recommendations, which increase user engagement and drive conversions.
In recent quarters, Nykaa faced challenges in its fashion business due to intense competition from players like Myntra, Ajio, and Tata Cliq. High return rates and lower average order values affected profitability. However, the company has taken several corrective steps, including better inventory management, stronger brand partnerships, and investments in private labels.
Private labels such as Nykd (intimate wear), Likha (contemporary ethnic wear), and RSVP (party wear) show strong performance. These labels deliver better margins and help build brand recall. With these initiatives, the company aims to bring fashion closer to its beauty model—one that combines content, community, and commerce.
Managing Challenges and Market Sentiment
Nykaa’s Q1 FY26 performance comes in the backdrop of muted consumer sentiment. The company noted that geopolitical tensions along the Indo-Pak border impacted its flagship sale event during the quarter. Despite this, the beauty segment performed well, showcasing the brand’s resilience and consumer trust.
Consumers today remain cautious in their spending, especially in discretionary categories. However, beauty and skincare remain relatively insulated, as many consumers consider these products essential rather than luxury. Nykaa benefits from this trend, especially as younger shoppers seek affordable indulgences and skincare routines.
The company also faces rising competition in the beauty space. New entrants, international brands, and D2C startups continue to vie for attention and market share. Nykaa counters this by offering a trusted platform, curated selection, loyalty programs, and fast delivery services. It also invests in technology to personalize the shopping experience, using AI to recommend products and create virtual try-on tools.
Strategic Outlook for FY26
Looking ahead, Nykaa plans to continue investing in its core verticals while optimizing costs and improving profitability. The company focuses on four strategic pillars: expanding its brand portfolio, scaling eB2B distribution, deepening consumer engagement, and improving operational efficiency.
In the beauty segment, Nykaa will increase its exclusive brand offerings and launch new in-house brands tailored to Indian skin tones and preferences. It also aims to localize international brands for the Indian market, providing unique access to global products.
In fashion, the company plans to strengthen its private labels and expand categories such as footwear, accessories, and premium ethnic wear. It will also improve its backend operations to reduce return rates and ensure timely delivery.
For eB2B, Nykaa targets a broader retailer base in Tier 3 and Tier 4 markets. By offering a seamless ordering experience through the Superstore app, the company enables small vendors to access a wide range of products at competitive prices.
To improve engagement, Nykaa will double down on content-led commerce. Its YouTube channel, Nykaa TV, and influencer-driven content remain key to educating consumers and driving purchase intent. The company also invests in beauty consultants and skin diagnostic tools to help consumers make informed choices.
Financial Discipline and Execution
Nykaa remains committed to financial discipline. The company continues to monitor costs while allocating capital toward long-term growth. In the past, investors raised concerns about high marketing expenses and limited profitability. Nykaa now focuses on improving operating leverage and unit economics.
In FY25, the company reported consistent revenue growth with improving margins. It streamlined its logistics, renegotiated supplier contracts, and optimized its supply chain. These efforts should carry forward into FY26, helping the company deliver profitable growth.
Nykaa also benefits from its strong brand equity and consumer trust. Its reputation as a pioneer in beauty e-commerce gives it a competitive edge, especially when new players struggle to establish credibility.
Conclusion
FSN E-Commerce Ventures Ltd., through Nykaa, enters FY26 on a strong note. With expected consolidated revenue growth in the mid-20% range for Q1, the company shows resilience in a soft macroeconomic environment. The beauty segment continues to lead the way, supported by multiple channels and a diverse brand portfolio. The fashion vertical begins to recover, aided by better strategy and execution.
Nykaa stands at a pivotal point in its journey. By focusing on innovation, consumer engagement, and operational excellence, the company aims to consolidate its leadership in beauty and strengthen its position in fashion. With continued growth across channels and a clear strategic roadmap, Nykaa remains a key player in India’s booming beauty and lifestyle retail sector.
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