e-commerce
Nykaa raises marketing spend 24 per cent as profit jumps 207 per cent
Beauty and fashion expenses rise, but their share of segment sales declines as Nykaa eyes Simply Nam
MUMBAI: Nykaa is spending more to stay in the beauty business, but it appears to be getting more bang for its marketing buck. The beauty and fashion platform raised its consolidated marketing and selling and distribution (S&D) expenses by 24 per cent year-on-year to Rs 457 crore in the September quarter of FY27, even as the expenditure declined as a share of revenue.
FSN E-Commerce Ventures, which operates Nykaa, spent Rs 457 crore on marketing and S&D in Q2 FY27, compared with Rs 368 crore in the corresponding quarter last year. The outlay stood at 15.2 per cent of revenue from operations, down from 15.7 per cent in Q2 FY26. Sequentially, however, the expense increased 11 per cent from Rs 412 crore in the June quarter.
The higher spending came alongside a sharp improvement in the company’s bottom line. Consolidated profit after tax (PAT) jumped 207 per cent to Rs 101 crore from Rs 33 crore a year earlier, while revenue from operations grew 28 per cent to Rs 3,006 crore against Rs 2,346 crore in Q2 FY26.
The company attributed the improvement in marketing efficiency to better productivity in performance marketing across its Beauty and Fashion platforms. It also pointed to improved productivity among business development executives in its Superstore business.
Nykaa’s Beauty business accounted for the larger share of the marketing bill, with expenses rising to Rs 330 crore in Q2 FY27 from Rs 260 crore in the year-ago quarter. Yet, the outlay as a proportion of the segment’s net sales value (NSV) edged down to 13 per cent from 13.1 per cent.
The segment’s NSV grew 28 per cent year-on-year to Rs 2,536 crore, indicating that the business expanded while keeping marketing and S&D expenditure broadly steady as a share of sales.
Fashion, meanwhile, recorded a sharper improvement in this measure. Its marketing and S&D expenses increased to Rs 116 crore from Rs 93 crore in Q2 FY26. However, the expense as a share of NSV fell to 22.7 per cent from 26.9 per cent.
That came against a 47 per cent year-on-year increase in Fashion NSV to Rs 509 crore. In other words, the segment spent more in absolute terms but its marketing and distribution bill took up a smaller slice of sales.
The improvement in spending ratios across both businesses was accompanied by stronger operating profitability. Consolidated EBITDA rose 65 per cent to Rs 263 crore from Rs 159 crore in the corresponding quarter last year. EBITDA margin expanded to 8.7 per cent from 6.8 per cent.
Alongside its quarterly results, Nykaa’s board approved the acquisition of an 82 per cent equity stake in Simply Nam Beauty Private Limited for a consideration of up to Rs 33 crore.
The deal will give Nykaa a majority holding in the premium makeup brand, founded by celebrity makeup artist Namrata Soni. Soni will retain an 18 per cent stake and take on the roles of co-founder and chief product officer.
The proposed partnership brings together Nykaa’s distribution network and omnichannel retail presence with Simply Nam’s product development capabilities and community-led approach to beauty.
The acquisition also adds another brand to Nykaa’s beauty portfolio as the company continues to operate across online and offline channels. Its latest quarterly numbers present a business spending more on customer acquisition and distribution in absolute terms, while improving the proportion of revenue consumed by those expenses.
For Nykaa, the next test will be whether that improving efficiency can keep pace with its expansion ambitions, particularly as it adds brands and competes for attention in an increasingly crowded beauty and fashion market.
