Nykaa Eyes Next Growth Curve With Margin Boost, Fashion Turnaround — Profit Exclusive

Nykaa is gearing up for its next phase of profitable growth. The company reported a 40% rise in Ebitda to Rs 470 crore for FY25, while GMV stood at Rs 15,600 crore, growing 28% year-on-year.

'We see margin growth beyond the 6% level going forward,' said Adwaita Nayar, co-founder of Nykaa and CEO of Nykaa Fashion, in an exclusive interview to NDTV Profit. 'The levers for that will be a steady beauty business, and new businesses like fashion and superstore starting to make money.'

The fashion arm, which contributes significantly to the brand’s long-term ambition is still in the red but improving. 'Fashion is five times the size of the beauty market and we see a huge opportunity. The business is just five years old and already clocked Rs 4,000 crore in GMV,' Nayar said.

While the company isn’t putting an official timeline on when the fashion vertical will turn profitable, the improvement trajectory is evident. 'We’re currently at -8% Ebitda and improved by 200 basis points in FY25,' said Nayar.

Based on this pace of improvement, and as Nayar herself remarked, 'you can do the math,' it suggests that Nykaa Fashion could break even in roughly four years, assuming consistent progress.

Beauty continues to be Nykaa’s mainstay, with the company holding over 30% market share. 'Our beauty segment is growing at 30% while the market grows at 20%. Competition has always existed but it’s not affecting us right now,' Nayar stated.

Despite macro headwinds, consumer demand remains strong. 'Q3 is always the strongest quarter, but even beyond that, we’ve not seen any slowdown,' she said. Offline sales contribute just 10% of GMV, but are highly relevant especially for premium and luxury brands, where offline makes up nearly 50% of revenue. 'Nykaa has the highest sales per square foot throughput globally,' she added.

Looking back, Nayar recalled how Nykaa began. 'Thirteen years ago, we felt there was a big void in the beauty space and tried to fill it. We ourselves were not cosmetics enthusiasts, but the market was completely underdeveloped.'

After starting online in 2013, Nykaa ventured into offline retail two-to-three years later. Today, 90% of the business is online, with 10% GMV from physical stores. 'We’ve always believed in vertical commerce that’s why we have separate apps for beauty and fashion,' she explained.

Nykaa’s House of Brands strategy is now a key margin driver. 'We’ve built 7 brands so far. These businesses are margin accretive — retailer margins are 40–50%, and our own brand gross margins start anywhere between 65–80%,' said Nayar.

The brand has also been aggressive about bringing top global names to Indian consumers. 'In FY25 alone, we launched Chanel, YSL, NARS, and Olaplex. Assortment will remain our core focus,' she said. Nayar also highlighted how beauty buying patterns are evolving: 'Carts are much larger and brighter now. There’s increasing sophistication in how women are consuming beauty.'

Technology and personalisation will power Nykaa’s next phase. 'We are embracing AI to offer a more personalised experience to our customers,' said Nayar.

Looking ahead, the company’s ambitions are broader than just beauty and fashion. 'We don’t want to just be a beauty company. We want to have a beauty arm, a fashion arm, a distribution arm, a house of brands arm, and a Middle East business arm,' she concluded.