Nykaa is setting the stage for the next phase of profitable growth, posting a 40 per cent increase in EBITDA to Rs. 470 crore (US $ 54.87 million) in FY ’25, while gross merchandise value (GMV) rose 28 per cent year-on-year to Rs. 15,600 crore (US $ 1.82 billion).
Adwaita Nayar—Nykaa co-founder and CEO of the firm’s fashion business—was optimistic that the operating margin of the company will cross 6 per cent in the near future, backed by a robust beauty business and better contribution from newer segments such as fashion and Nykaa Superstore.
Though Nykaa Fashion remains a loss-making unit, its growth path is back on track. “Fashion is a massive opportunity—it’s five times the size of the beauty market,” said Nayar, noting that despite being only five years old, the vertical has already clocked Rs 4,000 crore (US $ 466 million) in GMV. “We’re currently operating at -8 per cent EBITDA, but that’s a 200 basis point improvement over the previous year.” Though no official profitability timeline has been shared, Nayar hinted that, at this rate, break-even could be within four years.
Consumer confidence is still strong, in spite of overall economic fears. “The third quarter is always good, but we haven’t yet seen demand slide after that either,” Nayar noted. While offline retail contributes only 10 per cent to GMV, they play a critical role—particularly in the premium and luxury segments, where offline retail contributes almost half the sales. “Actually, Nykaa has one of the highest sales per square foot in the world,” she further noted.
Since opening up online in 2013 and foraying into bricks-and-mortar shortly after that, the company now gets 90 per cent of its business online. “We’ve launched seven in-house brands, all of which are margin-positive. Our own brands have gross margins of 65–80 per cent, while retailer margins run 40–50 per cent,” she added.
As it gazes into the future, Nykaa is going all in on technology. “AI will be a big contributor in giving our users a more personalised experience,” Nayar said. But the ambitions of the company reach far deeper than beauty. “We want to become a multi-vertical powerhouse—with formidable plays in beauty, fashion, distribution, brand incubation, and the Middle East,” she said, detailing Nykaa’s more encompassing vision for the future.
