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Informist, Thursday, May 21, 2026

 

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--FSN E-Comm: Nykaa Fashion serving 11 mln customers currently 
--CONTEXT: Comments by FSN E-Comm mgmt in post-earnings analyst concall 
--FSN E-Comm: Nykaa Beauty serving 45 million customers currently 
--FSN E-Comm: Strong sales in Korean brands drove Nykaa Beauty FY26 growth 
--FSN E-Comm: Very optimistic about FY27 growth of own beauty brands 
--FSN E-Comm: See emerging own brands as engines of future growth 
--FSN E-Comm: H&M is number 1 brand for Nykaa Fashion since launch 
--FSN E-Comm: Incurred capex of INR 1.45 bln FY26, 1% of revenue 
--FSN E-Comm: Inflation impact on consumption makes us cautious for FY27 
--FSN E-Comm: Luxury pdts consumption not impacted during tough times 
--FSN E-Comm: Procurement costs going up, pressure on brand to hike prices 
--FSN E-Comm: Brands trying their best not to pass on procurement costs rise 
--FSN E-Comm: Price hikes not likely in near term, but can happen 
--FSN E-Comm: Competitive intensity not dn, but co positioned differently 
--FSN E-Comm: See own brands as tool to increase profitability 
--FSN E-Comm: Currently co's retail business has highest margin profile 
--FSN E-Comm: See FY27 retail stores expansion similar to that in FY26 

 

By Ashutosh Pati and Rajesh Gajra

 

MUMBAI – FSN E-Commerce Ventures Ltd. is cautious about rising procurement costs putting pressure on brands to increase product prices, the management said at a post-earnings call with investors and analysts Thursday. Procurement costs are rising due to inflation led by a surge in crude oil prices in the wake of the war in West Asia.

The company's management said that currently these brands are "trying their best" to not pass on the cost increases to customers and so price hikes are "not likely in the near term". However, it did not rule out the possibility. A top official said it was hard to say what the impact on customers' behaviour will be if prices are increased. The management pointed out that consumption of luxury products is usually not impacted even during tough times.

 

The management said April and May have been good for the overall business. FSN E-Commerce remains optimistic about the growth of its own brands under the House of Nykaa in the financial year 2026-27 (Apr-Mar) and sees emerging own brands as the "engines" of the company's future growth. The company's own brands are also expected to be the tool to increase profitability in the coming years, a top official said.

FSN E-Commerce's fashion segment, Nykaa Fashion, became profitable in the March quarter and reported an earnings before interest, tax, depreciation, and amortisation margin of 0.3%. The segment's competitive intensity has not waned, but the company is positioned differently as it focuses more on the "premium" fashion online market and does not cater to mass categories, the management said. "And therefore we go after certain kind of brands, we go after certain kind of customers," it said. H&M is the number one brand for this segment since its launch on the Nykaa platform last year.

The company expects to add 50-70 retail stores in FY27, similar to last year, a top official said. The company had added 76 new stores in FY26, as per its investor presentation. The company achieved its highest ever quarterly EBITDA margin of 8.5% in the March quarter, led by its core retail business, which continues to improve on marketing efficiencies and improvement in fulfilment costs, the management said. Its retail business has the highest margin profile for the company, it added.

The company had incurred capital expenditure of INR 1.45 billion in FY26, which the management said was 1% of its revenue. Strong sales in Korean brands drove Nykaa Beauty's growth during the year, it said. Nykaa Beauty is currently serving 45 million customers while Nykaa Fashion is serving 11 million. The company reported a net profit of INR 783.80 million for the March quarter, up around four times on year. Its revenue for the quarter rose 28% to INR 26.48 billion.

FSN E-Commerce declared its March quarter results after market hours Thursday. Its shares closed at INR 274.50 on the National Stock Exchange, up 0.4% from Wednesday.  End

 

Edited by Rajeev Pai

 

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