FSN E-Commerce Ventures, the parent company of Nykaa, has released its financial results for the third quarter of fiscal year 2025 (Q3 FY25). The results highlight strong growth in revenue, profitability, and customer engagement, demonstrating the company’s continued dominance in the beauty and fashion e-commerce space.
Financial Highlights
Revenue Growth
Nykaa reported consolidated revenue from operations of ₹2,267.2 crore, reflecting a 26.7% year-over-year (YoY) increase from ₹1,788.8 crore in the same quarter of the previous year. This growth was primarily driven by higher order volumes, an expanding customer base, and the company’s ability to retain loyal shoppers through effective marketing strategies.
The strong performance in both the Beauty & Personal Care (BPC) and Fashion segments contributed to the revenue surge. Additionally, strategic partnerships, an improved supply chain, and an increase in premium product offerings helped bolster sales.
Net Profit and Profitability Metrics
Nykaa’s net profit soared by 51.3% YoY, reaching ₹26.41 crore in Q3 FY25, compared to ₹17.45 crore in the same quarter last year. Sequentially, net profit more than doubled from ₹12.97 crore in the previous quarter, demonstrating improved operational efficiency and higher-margin sales.
The company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin stood at 6.8%, marking a notable improvement from the 5.9% margin recorded in Q3 FY24. This enhancement in profitability was a result of better cost management, higher gross margins in the beauty category, and economies of scale.
Gross Merchandise Value (GMV) Performance
Nykaa’s GMV grew by 25% YoY, reaching ₹4,527.9 crore. GMV growth indicates a rise in total sales across Nykaa’s platforms, showcasing the increasing popularity of its products and services.
Segment-wise Performance
Beauty & Personal Care (BPC) Segment
Nykaa’s Beauty & Personal Care (BPC) business remains the company’s primary growth driver, contributing over 90% of its total revenue. The segment saw a 27% YoY revenue growth, increasing from ₹1,622 crore in Q3 FY24 to ₹2,060 crore in Q3 FY25.
Key factors driving this growth include:
- Customer Base Expansion: The cumulative number of beauty shoppers on Nykaa’s platform has grown to 32 million, a significant rise from the previous year.
- Higher Order Volume: Nykaa recorded a 30% YoY increase in beauty orders, marking the highest growth in the last nine quarters.
- Premium Brand Growth: The addition of luxury and international beauty brands helped push average order values higher.
- Omnichannel Presence: Nykaa expanded its physical retail presence with new store openings, allowing customers to experience products in person before purchasing online.
Fashion Segment Performance
Nykaa’s fashion business continues to gain traction, reporting a 25% increase in GMV. While still a smaller portion of overall revenue compared to BPC, the fashion segment is steadily growing, driven by:
- Exclusive Brand Tie-ups: Collaborations with renowned designers and brands have improved customer engagement.
- Nykaa Fashion’s Private Labels: The company continues to invest in its own private-label fashion brands, which offer higher profit margins.
- Increased Average Order Value: Customers are spending more per order, indicating a shift toward premium and high-value fashion products.
Nykaa’s Physical Retail Growth
Nykaa continues to strengthen its offline retail presence, expanding the number of physical stores in premium malls and high-street locations across India. The company now operates over 200 brick-and-mortar stores, catering to customers who prefer an in-store experience before making a purchase.
The expansion of physical stores has played a key role in increasing brand awareness and trust, especially in smaller cities where consumers may be hesitant to buy beauty and fashion products online.
Key Business Developments in Q3 FY25
1. Surge in Demand During Festive Season
Nykaa experienced record sales during the Diwali and holiday season, with high demand for beauty products, skincare, and fashion accessories. The company’s festive sales campaigns, exclusive deals, and influencer-driven marketing strategies helped boost conversions.
2. Strengthening of Logistics and Supply Chain
To ensure faster and more efficient delivery, Nykaa has enhanced its logistics network by adding more warehouses and fulfillment centers. This has resulted in:
- Faster Delivery Times: Orders are being fulfilled more quickly, improving customer satisfaction.
- Lower Return Rates: Improved quality checks and efficient order management have helped reduce returns.
- Optimized Inventory Management: Stock availability has improved, reducing the likelihood of products going out of stock.
3. Growth in Nykaa’s Private Label Offerings
Nykaa’s private label products, including Nykaa Cosmetics, Kay Beauty (by Katrina Kaif), and Nykaa Naturals, continue to perform well, offering better profit margins and exclusive value propositions. The private label segment has been instrumental in improving the overall profitability of the business.
4. International Expansion Plans
Nykaa is gradually expanding its footprint beyond India by launching operations in select international markets. The company is targeting regions with a high demand for premium beauty products, such as the Middle East and Southeast Asia.
Stock Market Performance & Investor Sentiment
Following the announcement of Q3 FY25 results, Nykaa’s stock witnessed a sharp increase in investor confidence, with its share price surging by 8% in intraday trading.
Key reasons for positive investor sentiment include:
- Strong revenue and profit growth.
- Consistently increasing order volume and customer base.
- Expansion of offline retail and international business.
- Strengthened logistics and supply chain operations.
Market analysts remain optimistic about Nykaa’s future performance, citing its brand loyalty, premium customer base, and strong omnichannel presence as key competitive advantages.
Future Outlook for Nykaa
Nykaa is well-positioned for continued growth in FY25 and beyond, with a focus on:
- Strengthening its Private Label Business: Introducing more exclusive and high-margin private label products.
- Expanding Physical Retail: Opening more stores in key metro cities and high-potential Tier-2 locations.
- Enhancing Digital and AI Capabilities: Implementing AI-driven personalized recommendations to improve customer experience.
- Growing International Operations: Expanding into new markets to diversify revenue streams.
With the Indian beauty and fashion e-commerce market expected to grow at a CAGR of over 20% in the next five years, Nykaa is in a strong position to capitalize on this demand and strengthen its leadership in the industry.Nykaa’s Q3 FY25 results highlight a robust financial and operational performance, driven by increasing customer engagement, strong beauty segment growth, and improving profitability. The company’s ability to navigate market challenges and invest in strategic expansions bodes well for its long-term success. With a strong festive season, new brand launches, and offline retail expansion, Nykaa is set to sustain its upward growth trajectory in the coming quarters.