Nykaa Q2 profit surges 72% amid 40% jump in marketing and sales costs

Nykaa posted a 72% rise in net profit for the second quarter of fiscal year 2025, reaching ₹10 crore on-year, driven by significant revenue gains across its beauty and fashion segments. However, the result fell short of market forecasts, with analysts polled by IBES expecting a profit of ₹28.7 crore. 

For the July to September quarter, the company reported a 24% on-year increase in revenue from operations, totalling ₹1,875 crore, per its exchange filing. This uptick was fuelled by a 24% rise in gross merchandise value (GMV), reaching ₹3,652.5 crore. Gross profit rose 26% to ₹821 crore, with gross margin improving by 69 basis points to 43.8%.

Segment performance

Its beauty segment registered a 29% increase in GMV, largely propelled by strong premium fragrance sales. This growth was further supported by its Hot Pink Sale, which drew in 23 million unique visitors. Nykaa’s owned beauty brands contributed with a 48% GMV rise. In the fashion sector, GMV saw a more moderate 10% increase, while the gross margin for fashion expanded by 567 basis points to 49.7%.

Expansion efforts and new launches

The company continued expanding its retail presence in Q2, opening two additional flagship beauty stores, bringing its total count to 210. In its e-commerce segment, the company launched 170 new beauty brands and 260 fashion brands. The company’s eB2B platform, Superstore by Nykaa, recorded an 80% year-on-year GMV increase, with a 60% rise in order volume and extended its reach to over 1,060 cities. The companys' cumulative customer base grew by 31% on-year to 37 million, bolstered by continued investments in customer acquisition and retention initiatives.

Financial metrics

The company's EBITDA rose 29% to ₹103.7 crore, with the EBITDA margin improving by 18 basis points to 5.5%. Adjusted EBITDA, excluding ESOP expenses, climbed 39% to ₹115.5 crore, reflecting a margin of 6.2%, an increase of 66 basis points. Profit before tax surged by 60% to ₹21.3 crore, with net profit margin up by 17 basis points, despite a 40% rise in marketing and sales expenses to ₹286 crore as the company increased its branding and customer acquisition efforts.

Share performance

Ahead of the quarterly results, The company's share price dropped over 2 %, closing at ₹179. The stock has increased more than 18 % over the past year but has underperformed compared to the Nifty 50 index. The company’s market capitalisation currently exceeds ₹51,000 crore.