'Add' Nykaa Shares Maintains ICICI Securities Post Superior Q4 Execution In Beauty And Personal Care

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ICICI Securities Report

FSN E-Commerce Ltd. beauty and personal care net sales valeu grew 26%YoY in Q4 FY25 ahead of online beauty market (our estimate: ~10%YoY). This was achieved despite reduction in discounting intensity (~200bps QoQ).

Ad revenues at 5.5% of BPC gross merchandise value (ex-owned brands) have not yet recovered. We think this could be a key driver for margin improvement on FY26E.

Annual unique transacting customers growth was sustained at 27%YoY though marketing expenses declined ~110 bpsQoQ (as % of NSV). Resultant BPC Ebitda margin grew 80bps QoQ / 60bps YoY (~50bps beat on ISec est.).

Fashion GMV grew 18%YoY in Q4 FY25 (9M FY25 run rate 10.3%YoY) driven by increased discounts (~130bpsYoY) and lower take rate (~120bpsYoY). Working capital days improvement of ~19% YoY aided material improvement in CFO, a key positive.

We maintain Add given superior execution in BPC.

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