“We have invested behind customer acquisition, and that reflects in the marketing and S&D expenses as a percent of Net Sales Value (NSV) being at about 13.1% this quarter,” said Anchit Nayar, CEO of Nykaa’s beauty business, during the company’s Q2FY26 earnings call. His comment came in response to a question on marketing intensity and whether the company planned to moderate spending going forward.
Nayar added that the company’s strategy continues to revolve around penetration and premiumisation in beauty. “India has some of the lowest penetration of beauty consumption in the world, and investment needs to be made to continue to drive that,” he noted. He also pointed out that Nykaa is allocating spending toward new users, brand launches, and category expansion, rather than discounts.
Moving to fashion, the management reiterated its confidence in the business despite it being in a recovery phase. “We seem to be on the right track in fixing the fundamentals of the business,” stated Abhijeet Dabas, who leads Nykaa Fashion, pointing to improvements across customer acquisition, marketing efficiency, and brand onboarding.
Executives also acknowledged broader competition from horizontal e-commerce players and quick commerce but maintained that Nykaa’s model depends on assortment depth, brand relationships, and omnichannel retail, rather than price-led scale.
How is the beauty vertical faring?
Responding to questions on profitability and margin variation across segments, the company reiterated that beauty consists of multiple channels, e-commerce, physical retail stores, House of Nykaa beauty brands, and Superstore (eB2B), each with different cost structures. The online business continues to be the most mature and margin-accretive, while the eB2B Superstore business remains scale-driven and currently operates at thinner margins.
Beauty Gross Merchandise Value (GMV) grew 28% year-on-year (YoY) in Q2, while Net Sales Value (NSV) rose 27% YoY. The beauty Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin reached 9%, up from 8.6% a year ago.
On the retail side, Nykaa added 19 new stores during the quarter, taking its footprint to 265 stores across 90 cities. The company emphasized that stores are being used to drive premium product discovery and experiential buying. “One in every three retail customers got a makeover in our stores,” Nayar noted, adding that fragrance diagnostics and skincare diagnostic tools are being deployed to influence product choice.
Nykaa also continued placing strategic bets on Korean beauty, which the company said is seeing strong uptake among younger consumers. Nayar stated that Korean brands are scaling at “about 60% growth year-over-year.” due to pricing, packaging, and trend alignment.
Meanwhile, Nykaa Now, the company’s rapid delivery layer, now operates through 53 stores across seven metros, fulfilling 70% of orders in the top 110…
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