Nykaa margin rises for fourth straight quarter as profit growth accelerates
Costs grew slower than revenue YoY, while a lower tax rate amplified net profit; margin remained below the consumer discretionary peer median.
Filed 04 Nov 2026, 16:02 IST · after market close · FSN E-Commerce Ventures Ltd (NYKAA)
Key takeaways
- Consolidated revenue grew +28.14% YoY while expenses grew +25.44%, lifting operating margin by 1.95 percentage points to 8.73%.
- Net profit rose +206.82% YoY, helped by an 8.59-percentage-point fall in the tax rate to 31.86%.
- Operating margin reached a fourth consecutive quarterly high at 8.73%, but remained 3.10 percentage points below the 204-peer sector median.
Price around the results
Revenue growth converted into wider operating margin
This consolidated quarter saw revenue grow +28.14% YoY, faster than expenses at +25.44%, which drove a +65.18% increase in operating profit and a 1.95-percentage-point margin expansion. Sequentially, revenue rose +8.05% and expenses +7.76%, lifting operating margin by 0.25 percentage points. The margin has now increased for four straight quarters, from 6.78% in Q2FY26 to 8.73%.
Tax benefit amplified profit; other income was not the main driver
Net profit growth was helped by the tax rate falling 8.59 percentage points YoY and 6.39 percentage points sequentially, even as interest expense rose +14.14% QoQ. Other income contributed 6.41% of pre-tax profit, so it was a supporting item rather than the main source of earnings. The operating margin still trailed the 11.83% median for 204 reported Consumer Discretionary peers by 3.10 percentage points.
Retail and fulfilment expansion remain management priorities
The company reported 338 beauty stores after adding 14 in Q2FY27, and said it had added more than 330 brands over the last year. Management said Nykaa Now was planned to expand from 15 cities in Q2FY27 to more than 25 cities by the end of FY27, with more than 1,000 premium and luxury offerings. Management also said H1FY27 capex was Rs 62 cr and that investment continued in retail, fulfilment and technology; it reported leakage-reduction initiatives that improved GMV-to-NSV conversion.
The stock reaction is pending after a mixed history
The consolidated results were filed after market close, so there was no market reaction yet. After the previous eight results, the stock rose four times and fell four times, with a median absolute move of 4.29%. Management also said GST-led MRP reductions affected part of the Superstore portfolio and were expected to normalise in the coming quarter.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹3,006 cr | ₹2,782 cr | +8.05% | +28.14% |
| Other income | ₹10 cr | ₹9 cr | +2.26% | +36.19% |
| Expenses | ₹2,743 cr | ₹2,546 cr | +7.76% | +25.44% |
| Operating profit | ₹263 cr | ₹236 cr | +11.23% | +65.18% |
| Operating margin (%) | 8.73% | 8.48% | — | — |
| Interest | ₹31 cr | ₹27 cr | +14.14% | -3.02% |
| Depreciation | ₹93 cr | ₹89 cr | +4.01% | +17.65% |
| Profit before tax | ₹149 cr | ₹129 cr | +14.98% | +168.17% |
| Tax | ₹47 cr | ₹49 cr | -4.21% | +111.25% |
| Net profit | ₹101 cr | ₹80 cr | +26.87% | +206.82% |
| EPS (₹) | ₹0.35 | ₹0.28 | +25.00% | +191.67% |
Operating margin of 8.73% compares with a Consumer Discretionary sector median of 11.83% across 204 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Nykaa added 330 or more new brands in the last year.
Guidance & outlook
- Nykaa Now is planned to expand from 15 cities in Q2FY27 to more than 25 cities by the end of FY27.
Expansion
- Nykaa had 338 beauty stores, including 14 new stores added in Q2FY27.
- Nykaa reported 62 crore rupees of capex in H1FY27 and continued investing in retail, fulfilment and technology.
- Nykaa stated that it was continuing to invest in retail expansion, fulfilment capabilities and technology.
New orders
- Superstore had 554,000 onboarded retailers across more than 1,200 cities.
- Superstore expanded its retailer network by adding more than 100 cities in the last year.
New products
- Nykaa exclusively launched COS, H&M’s dedicated sportswear brand, in Q2FY27.
New initiatives
- Nykaa implemented leakage reduction initiatives in H1 to improve GMV-to-NSV conversion.
- Nykaa Now offered more than 1,000 curated premium and luxury offerings.
Problems & risks
- GST-led MRP reductions affected a portion of the Superstore portfolio, with the effect expected to normalise in the coming quarter.
What to watch
- Whether operating margin holds above 8.73% after four consecutive quarterly increases.
- Whether the tax rate remains below 31.86% after its sequential decline of 6.39 percentage points.
- Whether Nykaa Now expands beyond 15 cities toward the more-than-25-city plan management described for FY27.