Nykaa targets break-even for fashion arm in FY26; forays into quick commerce

New Delhi: FSN E-Commerce Ventures, the parent company of Nykaa, has set a break-even target of FY26 for its cash-burning fashion arm on account of marketing efficiencies, overhead leverage, and own-brand growth.

Nykaa is also foraying into the quick-commerce arena with "Nykaa Now", which offers delivery times ranging from 30 to 120 minutes across seven major cities. The service is backed by a network of beauty warehouses, physical retail stores and rapid stores across the country.

The fashion vertical, which generated about Rs 3,800 crore in GMV (Gross Merchandise Value), is currently a drag on consolidated profitability, posting a negative EBITDA margin of -8.3 per cent for FY25.

The Mumbai-headquartered firm anticipates achieving EBITDA break-even by FY26 and reaching a "steady state" margin of approximately 10 per cent by FY28.

This turnaround will be driven through a mix of strong repeat buying, its own brands' growth, and significant leverage in overheads with scale, Nykaa said in its annual investor day presentation.

Nykaa's profit more than doubled to Rs 66.08 crore in FY25, from Rs 32.26 crore in the previous fiscal year.

Its revenue from operations in FY25 stood at Rs 7,949.82 crore, 24.4 per cent higher than Rs 6,385.62 crore in FY24.

During the fiscal year, Nykaa saw its cumulative customer base grow 28 per cent year-on-year to over 42 million.

It added 50 retail stores during the year, bringing the tally to 237 stores, while its gross merchandise value (GMV) stood at Rs 15,604 crore.

Nykaa in the presentation emphasised its "House of Nykaa" division, which encompasses its 12 owned beauty and fashion brands. This portfolio, including names like Dot & Key, Kay Beauty, and Nykd, generated Rs 2,100 crore in GMV in FY25.

The company looks to build this portfolio into a high-margin Consumer Packaged Goods (CPG) business, setting its sights on EBITDA margins of 25-27 per cent -- a level comparable to established giants like Hindustan Unilever and Marico.

It laid out a long-term GMV trajectory and said it aims to grow the organic portfolio at 30 per cent CAGR to Rs 6000 crore GMV by 2030.