Nykaa's Q4 margin widened as profit growth outpaced revenue
Consolidated operating margin rose 1.95 percentage points YoY as expenses grew slower than revenue, while a lower tax rate amplified net profit.
Filed 21 May 2026, 20:44 IST · after market close · FSN E-Commerce Ventures Ltd (NYKAA)
Key takeaways
- Consolidated operating margin widened 1.95 percentage points YoY to 8.42% as expenses grew 25.76% against 28.44% revenue growth.
- Net profit rose 313.39% YoY, helped by a 16.63-point drop in the tax rate and an 11.79% fall in interest costs.
- The stock's initial 1.00% rise was below its 4.29% median absolute move after the past eight results.
Price around the results
Revenue growth translated into sharper operating leverage
FSN E-Commerce Ventures reported consolidated revenue growth of 28.44% YoY in Q4FY26, while expenses grew 25.76%, lifting operating profit by 67.17%. Sequentially, revenue declined 7.83% and expenses declined 8.26%, so operating profit fell 2.98% even as operating margin improved 0.42 percentage points. Net profit still rose 16.25% QoQ to Rs 78.75 cr.
Lower tax and finance costs amplified the earnings increase
The YoY margin improvement came from costs growing slower than revenue, while interest expense fell 11.79% and depreciation rose 15.53%. The tax rate dropped 16.63 percentage points YoY to 35.2%, which amplified the 313.39% increase in net profit. Other income accounted for 7.53% of profit before tax, so the reported earnings increase was not entirely operating in origin.
Margin has improved for five straight quarters but remains below peers
Operating margin rose from 6.21% in Q3FY25 to 6.47%, 6.53%, 6.78%, 8.00% and 8.42% through Q4FY26, marking five consecutive quarterly increases. Nykaa's 8.42% margin was 6.39 percentage points below the 14.81% median for 93 Consumer Discretionary peers that had reported. It ranked 17th from the bottom on this measure.
Management linked the quarter to beauty and fashion acceleration
Management said beauty saw faster growth and profitability in Q4FY26, while fashion recorded growth acceleration alongside margin improvement. The company said Nykaa Retail added 76 stores and entered 20 new cities in FY26, with capex of Rs 145 crore. Management also said it would continue investing in retail expansion, fulfilment capabilities and technology while optimising capex.
The market reaction was modest versus Nykaa's result history
The stock rose 1.00% on the first trading day after the results, after opening with a 3.28% gap, but was down 2.84% by the fifth session. Across the past eight result reactions, the stock was up four times and down four times, with a median absolute move of 4.29%. The initial move was therefore smaller than its usual post-result swing.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,648 cr | ₹2,873 cr | -7.83% | +28.44% |
| Other income | ₹9 cr | ₹-10 cr | — | +2.23% |
| Expenses | ₹2,425 cr | ₹2,644 cr | -8.26% | +25.76% |
| Operating profit | ₹223 cr | ₹230 cr | -2.98% | +67.17% |
| Operating margin (%) | 8.42% | 8.00% | — | — |
| Interest | ₹26 cr | ₹29 cr | -9.71% | -11.79% |
| Depreciation | ₹84 cr | ₹81 cr | +4.13% | +15.53% |
| Profit before tax | ₹122 cr | ₹110 cr | +10.86% | +207.26% |
| Tax | ₹43 cr | ₹42 cr | +2.13% | +108.63% |
| Net profit | ₹79 cr | ₹68 cr | +16.25% | +313.39% |
| EPS (₹) | ₹0.27 | ₹0.22 | +22.73% | +285.71% |
Operating margin of 8.42% compares with a Consumer Discretionary sector median of 14.81% across 93 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +1.00% | +0.73% |
| Next session | -1.62% | — |
| 5 sessions | -2.84% | -1.69% |
| 15 sessions | -0.62% | — |
| 30 sessions | +14.83% | — |
Volume on the results session was 9.37× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Beauty reported acceleration in growth and profitability in Q4FY26.
- The fashion business reported meaningful growth acceleration and strong margin improvement in Q4FY26.
Guidance & outlook
- Nykaa said it would continue investing in retail expansion, fulfilment capabilities and technology while optimizing capex.
Expansion
- Nykaa Retail added 76 new stores in FY26, its highest-ever annual store addition.
- Nykaa Retail expanded into 20 new cities in FY26.
- FY26 capex was Rs 145 crore.
- Superstore added 1.3 lakh retailers in one year.
New initiatives
- Nykaa Retail launched premium and experiential formats for different consumer needs in FY26.
Competition
- Nykaa Retail described itself as the largest beauty network, covering 99 cities.
What to watch
- Whether consolidated operating margin holds above 8.42% after five straight quarterly improvements.
- Whether expense growth remains below revenue growth after the Q4FY26 gap of 25.76% versus 28.44%.
- Whether the tax rate stays near 35.2% rather than reverting toward the higher Q4FY25 level.