Q1 2027 Fsn E-Commerce Ventures Ltd Earnings Call
Speaker #1: Like to point out that some of the statements made in today's call may be forward-looking in nature, and a disclaimer to this effect has been included in the earnings presentation.
Speaker #1: Shared with you earlier. Kindly note that this call is meant for investors and analysts only. By participating in this event, you can send to such recording distribution and publication.
Speaker #1: All participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation from management concludes.
Speaker #1: With that, over to you, Falguni ma'am, for opening remarks. Thank you.
Speaker #2: Thank you very much, Michelle, and good afternoon, everyone. We at Nykaa are really happy to present this afternoon, just we've just ended our board meeting, and happy to present our first quarter financial year 27 results.
Speaker #2: I'll start with one Nykaa highlight. What I'd like to—happy to share that what we have seen in this quarter has been a strong growth across—I'll just wait for a minute—yeah.
Speaker #2: So I'll start with the performance snapshot for the first quarter. Really happy to share that the GMV for the quarter has turned out at 5,590 crores, which is a 34% year-on-year growth, and net revenue similarly is for the quarter is at rupees 2,782 crores.
Speaker #2: Which is a 29% year-on-year growth. On the gross profit also, the company has seen the gross profit of 1,276 crores, a growth of 33% year-on-year, and a margin of 45.9%.
Speaker #2: For the EBITDA, happy to report the EBITDA at 236 crores for the quarter. A 68% year-on-year growth, and an 8.5% margin for the quarter.
Speaker #2: And finally, the PAT is at 8 rupees 80 crores, a 226% year-on-year growth, with 2.9% margin PAT margin for the quarter. So happy to present the results, and moving on to the next slide.
Speaker #2: You know, what we've seen is that both the beauty and the fashion vertical have seen acceleration in growth and profitability. So if we were to look at the beauty vertical, and here we've tried to share the first quarter data for about 3, 4 years in a row, which is quarter 1, 24, all the way to quarter 1, 27.
Speaker #2: And the industry growth for beauty vertical is the industry for the beauty vertical for this quarter is 2,371 crores, and that's a 29% year-on-year growth.
Speaker #2: And if you look at it, it is up from 1,212 crores about 3 years ago. On the fashion vertical, similarly, we can see that the industry has grown from 209 crores in quarter 1 of 24 to this quarter, the fashion vertical industry is at 451 crores.
Speaker #2: This represents a 54% growth on a year-on-year basis. So happy to report that both verticals are accelerating in the growth that they're seeing. On the EBITDA front also, the year-on-year EBITDA growth for beauty vertical is at about 48%, and the EBITDA itself is at 244 crores for quarter 1, 27, and the EBITDA margin is 10.3%.
Speaker #2: This is higher than 9% a year ago, and it is an improvement over the last 3, 4 year period. Similarly, on the fashion, you can see that the improvement in EBITDA has been quite tremendous.
Speaker #2: So from a negative 14.1% EBITDA margin in quarter 1 financial year 24, you can see that this year we are almost at a flat break-even margin, just 0.1% in the quarter 1 of this year.
Speaker #2: And that is, again, a huge improvement in EBITDA margin over last 1 year. Moving on, sharing with you the composition of this growth. And like I said, from a key strategic initiative perspective, growth for both the verticals has trended.
Speaker #2: Over last few quarters, and it is coming in from all components of these vertical businesses. So for example, in case of beauty, it be e-commerce, be it retail, and be it House of Nykaa, each one is facing a pretty strong growth momentum.
Speaker #2: And similarly in fashion, the customer growth has been quite significant. Enriched by the brand portfolios that we are now having on our platform, as well as encouraging response from the Nike partnership.
Speaker #2: On the consumer front, we are now happy to report that almost 60 million consumers are Nykaa consumers, where we have bought a Nykaa. And this is a 33% growth year-on-year.
Speaker #2: And we have been expanding our consumer immersive events. So if you see Nykaa has been really there's a lot of industry talk about on-the-ground event and, you know, experiential being very big.
Speaker #2: And Nykaa has always been doing a lot of that, but now we are scaling it up further through a lot of events like L'Oréal Paris Cannes, of course, that we do, but besides that, the beauty bars, many flagship sales makeup masterclasses, experiential pop-ups.
Speaker #2: We did a rare beauty launch event, House of Nykaa, many new launch events, as well as the campus programs that we have for Gen Z.
Speaker #2: So a lot of immersing experiences for the consumers. On the House of Nykaa front, now we almost have 13 consumer brands, and they're growing at 43% year-on-year basis.
Speaker #2: K-beauty and Nykaa cosmetics, each earned a number of industry recognition this year for their innovation, including the leading award from UK through CEW UK, as well as awards within India from Femina, ET, and others.
Speaker #2: A brand partners, brand partners of Nykaa across its platforms are growing. The numbers are growing. So we now deal with 10,000 plus brand partners across beauty and lifestyle.
Speaker #2: And in fact, almost 160 were added in this quarter alone. And many important ones amongst those were brands like Rare Beauty, SK2, Birkenstock in fashion, as well as Ebenham.
Speaker #2: So on all front, high quality brand partners are signing up. From the retail business perspective, now we are at 324 stores across 100 plus cities.
Speaker #2: In fact, 11 stores were opened this quarter. And we also opened our largest ever ultra-lux Nykaa store in Watsons Gormish, which is at 5,000 square feet.
Speaker #1: Hi. Good evening, everyone. This is Michelle from Kora's Call. Welcome to FSN E-Commerce Ventures Limited Q1 FY 27 earnings call. From the management at Nykaa, we have Ms. Falguni Nayar, Executive Chairperson, MD and CEO; Mr. Anchit Nayar, Executive Director and CEO, Beauty; Ms. Adwaita Nayar, Executive Director.
Speaker #2: We are also now doing offerings exclusive brand outlets to some of our brand partners who are strategic partnership, one with Charlotte Tilbury as well as Kiehl's.
Speaker #2: So getting more engaged and also a lot of innovation was brought in through formats like Nykaa Perfumery, and many of the EBO formats for our own brands like K-Cafe and others.
Speaker #2: On the AI initiative, we have been quite active. And multiple high-impact AI initiatives have been launched during the quarter. We launched virtual closet for our fashion platform, and it is converting browsers into buyers.
Speaker #2: And my colleagues, during the later part of the presentation, will discuss more about these. Similarly, we also now have Nina, our AI voice assistant, and it is resolving nearly half of the customer calls at human quality.
Speaker #2: And ask Nykaa has emerged, which is our advice platform, advice AI initiative for our beauty platform. And it has emerged as a trusted beauty advisor.
Speaker #2: Moving on to the next slide. So really happy to say that if you look at it even over a 3-year period, we have been able to grow turnover from 1,422 crores to 2,000.
Speaker #2: This is a net revenue, 2,782 crores for the quarter. And during this period, the EBITDA margins have improved from 5.2% to now at 8.5% for the quarter.
Speaker #2: And in fact, if you were to compare to a year ago, it's improved by almost 200 basis points. And on the path margin also, there's been significant improvement with path margin now at 2.9%.
Speaker #2: The revenue growth momentum has built up now to 29% year-on-year revenue growth. Return on capital employed is also improved over this period to 26.8% from just about 12.7% a year earlier.
Speaker #2: And the capital employed in the business has been kept under control, with it was about 1,658 crores in quarter 1 of financial year 24, and today it stands at 2,211 crores.
Speaker #2: So a tight capital execution leading to higher return on capital employed. Next slide. And this is made Nykaa into a 2.4 billion dollar GMV-powered by demand assortment and distribution flywheel.
Speaker #2: So if you look at the demand engine, and we talked about many of these earlier, there's a customer basis grown rapidly from 26 million customers about 3 quarters earlier to now 60 million customers.
Speaker #2: Our social engine presence, our creator networks are growing massively. So our creator network is now 170,000 creators on our Nykaa map, as well as 2.3 million content pieces created by these nappers annually.
Speaker #2: Our social media community continues to grow, and it now stands at 19 million. And many consumer engagement initiatives from Nykaa Land, as well as many of the beauty bars, as well as the college campus events, are really getting and attracting a lot of consumers into their engagement.
Yeah, so I'll start with the performance, snapshot for the first quarter. Uh, really happy to share that the gmv for the quarter has turned out at 5590 crores which is a 34% year-on-year growth. Uh and um net revenue similarly is um, is for the quarter is 27 and 82 cores, which is a 29% year-on-year growth on the growth gross profit. Also, the company has seen the gross profit of 1,276 crores. A growth of 33% year on year and a margin of 45.9%.
Speaker #2: On the assortment also, we talked about it, and here you can see that it has, in fact, grown from about 5,000 brands working with us just about 3 years ago to now 10,000 brands trusting Nykaa as their retail partner.
For the Aida happy to report that 2364 36 crores for the quarter or 68% year-on-year growth and an 8.5% margin for the quarter. And finally the path is at 88 rupees 80 crores 2026 percent year on year, growth with 2.9% margin of P margin for the for the quarter.
So happy to present the results and moving on to the next site.
Speaker #2: And in fact, 5,300 brands as many as 5,300 brands have been onboarded in the last 3 years alone. And within that, these partnerships with many of the brand partners like Pete Nike, Foot Locker, and Revolve, on the fashion side, and Charlotte Tilbury and Kiehl's and many others on the beauty side.
Speaker #2: On the distribution engine front, similarly, the network of 324 stores is a very big asset up from almost up 2x from about 3 years ago.
Speaker #2: And it now touches many more cities. So from being present in 60 cities earlier, now we are present in 105 cities. Similarly, registered retailers on our superstore platform have improved from 403, that's about 400,000 retailers about a year ago to now 523,000 retailers.
You know what we've seen is that both the Beauty and the profession vertical have seen acceleration in growth and profitability. So if we were to look at the beauty work and here, we've tried to share the first quarter data for about 4 3, 4 years in a row, which is quarter 1, 124 all the way to quarter 1 127. And, uh, the nsv growth for beauty workers is, um, the, the nsv for the beauty vertical, for this quarter is 2371 crores, and that's a 29% year-on-year growth. And if you look at it, um, it is, um, it is up from 1,212 crores, about 3 years ago.
On the fashion vertical. Similarly.
Speaker #2: So a solid distribution platform is being built, which touches 1,200 plus cities. And this is allowing us to acquire mandate from a lot of brand partners for distribution in these markets.
We can see that the NSC has grown from 209 crores, in quarter, 1 of any 4 to this quarter, the fashion. Uh, what do you call nsv is at 451 crores? This represents a 54% growth on a year-on-year basis. So happy to report that both particles are accelerating in the growth that they have seen.
Speaker #2: We cover, obviously, 19,000 pin codes, and also almost 13 cities in the country are now covered through Nykaa now, which is a quick delivery platform.
Speaker #2: And similarly, this number is likely to go up further by the end of the year. So with that, we feel that the GMV has been able to grow at almost 3x versus about 3 years ago, through a very conscious effort to build categories as well as build customers and build our influence.
On the Aveda front also, the year-on-year growth for the beauty work is at about 48%, and the EBITDA itself is at ₹244 crore for Q1 FY27, and the Aveda margin is 10.3%. This is higher than 9% a year ago, and it is an improvement over the last three to four year period.
Speaker #2: So it's been an execution which has leveraged flywheel from assortment to distribution to demand creation and touches everyone from brand partners to customers to ecosystem to retailers and distributors.
Speaker #2: So really happy with what Nykaa has been able to build over the last few years. With that, next slide. With that, I would like to hand over to Anchit to take us through the beauty omnichannel retail.
Speaker #1: Yeah. Thank you very much. And thank you to everybody who's taken the time to join us for our call. So as mentioned, I think beauty has had a very strong quarter 1 and FY 27 with 28 to 29% growth on both GMV and NSV.
Speaker #1: And at the same time, delivering a very healthy EBITDA margin of 10.3%, which is 150 basis points higher than Q1 of FY 26. A lot of this growth is coming on the back of on the back of strong customer acquisition as well as successful execution of certain key sales during the quarter.
Moving on, sharing with you the composition of this growth. And like I said, from a key strategic initiative perspective, growth for both the verticals has trended over the last few quarters and it is coming in from all components of these vertical businesses. So for example, in the case of beauty, it becomes Beauty Retail and B House of Nykaa. Each one is facing a pretty strong growth momentum. And similarly, in fashion, the customer growth has been quite significant and is enriched by the brand portfolio that we are now having on our platform, as well as encouraging response from the Nykaa partnership on the consumer front. We are now happy to report that almost 60 million consumers are Nykaa consumers who have ever bought at Nykaa, and this is a 33% growth year on year.
Speaker #1: On top of that, retail has continued to strengthen its performance with double-digit same-store sales growth. And continues to be an area of growth for us.
Speaker #1: Next slide, please. So we've spoken in the past about the two main pillars of the beauty verticals growth strategy is penetration as well as premiumization and both of those pillars are playing out nicely for us.
And we have been expanding our consumer immersive events. So if you see, like, there has been really a lot of industry talk about, um, on-the-ground events and, you know, experiential being very big, and Nykaa has always been doing a lot of that. Uh, but now we are scaling it up through a lot of events like, um, L'Oréal Paris scans, of course, that do, but besides that, the beauty bars.
Speaker #1: And you can see that on the penetration side, we're having increased the number of visits to our platform to close to half a billion in Q1, FY 27, which is a 22% growth year over year.
Speaker #1: And the number of annual unique transacting customers on the platform has now crossed 20 million. In terms of premiumization, we're seeing positive signs on that front with the average order values at the aggregate growing by roughly 5%.
Speaker #1: If I look at the average order values split between new and existing customers, the growth and the premiumization of the customers' basket is even more obvious.
Many flagship sales, makeup master classes, and experiential pop-ups were held. We did a Rare Beauty launch event, House of Nykaa. There were many new launch events, as well as the campus programs that we have for Gen Z. So, a lot of emerging experiences for the consumers on the House of Nykaa front. Now, we almost have thirteen consumer brands, and they're growing at 43% year-on-year. Kay Beauty and Nykaa Cosmetics each earned a number of industry recognitions this year for their innovation, including the Leading of World award from the UK through CWK, as well as awards within India from Femina and others.
Speaker #1: So our hypothesis on driving growth through both penetration and premiumization has played out nicely. In Q1. Speaking about brand launches as well as assortment, as you know, Nykaa has always had and continues to have a strong assortment of exclusive and new brands that we bring into the India market.
Speaker #1: And Q1 was no different with the launch of Selena Gomez's Rare Beauty, one of the most iconic brands from the US market, has launched on Nykaa in June of 2026.
Speaker #1: Very quickly, that brand has gone on to become a top 5 brand within the Prestige space on the Nykaa platform. And there is a nice quote from the CEO of Rare Beauty, who speaks about the incredible opportunity that India is offering as well as the partnership with Nykaa.
A brand Partners brand partners of Nika across. Its platforms are growing, the numbers are growing. So we now deal with 10,000, plus the partners across Beauty and lifestyle and in fact, almost 160 were added in this quarter alone and many important ones. Among those were plans like rare Beauty, sk2 work in stock in fashion as well as Deb andham. So, on all front high quality brand partners are signing up from the retail business perspective. Now, we are at 324 stores across 100 plus cities. In fact, 11 stores will open this water and we also opened our larger several Ultra locks like our store in Western punj which is at 5,000 square ft.
Speaker #1: And we have a small video from Selena Gomez herself that we'd like to share with you.
We are also now doing offerings, exclusive brand outlets, to some of our brand partners who are strategic partnerships—one with Charlotte Tilbury as well as Scales.
Speaker #3: Hi, guys. I'm so excited to share that we're bringing Rare Beauty to Nykaa in India. Nykaa is such an amazing partner and it makes me so happy to keep growing Rare Beauty in India.
So, getting more engaged, and also a lot of innovation was brought in through, um, formats like Nykaa Perfumery, and many of the EBO formats for our own brands like K Café and others.
Speaker #3: You'll now be able to shop both in-stores and online. Thank you again for all of your love and support, and I hope you enjoy.
Speaker #1: I think the purpose of the video is to also convey that India is becoming so critical to all global brands as they think about their growth over the next several years.
On the AI initiative, we have been quite active, and multiple high-impact initiatives have been launched during the quarter. We launched Virtual Closet for the fashion platform, and it is converting browsers into buyers. My colleagues, during the later part of the presentation, will discuss more about these.
Speaker #1: And when they think India, they think Nykaa as the partner of choice for their go-to-market as well as their brand-building strategy. So in addition to Rare, this quarter we also had a few other very, I would say, high-profile launches.
Similarly, we also now have NINA, our REI voice assistant, and it is resolving nearly half of the customer calls at human quality.
Speaker #1: Some of those are listed on this page. I'll just mention a few. K18, which is a Prestige haircare brand from the Unilever portfolio, has launched with us on Nykaa.
And as Nikov has emerged, which is our advice platform, I advise AI—um, AI initiative for our beauty platform—and it has emerged as a trusted beauty advisor.
Speaker #1: As well as SK2, which is a high-end Japanese skincare brand that is owned by P&G. And finally, ANUA, which is a very trending Korean brand also launched with Nykaa this quarter.
Moving on to the next slide.
Speaker #1: So to show you that there are brands coming from all parts of the world, from the US, from Korea, from China even, and even from Japan.
So, really happy to say that if you look at it, you know, over a three-year period, we have been able to grow turnover from ₹1,422 crore to ₹2,782 crore for the quarter. This is net revenue. And during this period, the EBITDA margins have improved from 5.0% to now at 8.5%.
Speaker #1: And again, looking to India as a growth opportunity and within India, Nykaa in particular. Now, this quarter we also had two flagship sales. One was the Pink Summer Sale, which we hosted in May.
Speaker #1: And at the Nykaa Birthday Sale, which is our annual sale to celebrate the anniversary of the founding of Nykaa. And both sales delivered, I would say, very good outcomes in terms of traffic, customer acquisition, as well as revenue outcomes for the platform.
Speaker #1: Speaking a bit about retail, we added 11 new stores in quarter 1 that took the stock out to 324. And our coverage to over 105 cities today.
Speaker #1: In terms of same-store sales growth, we did double-digit growth on a lifelike basis, which was very strong. And today, over 50% of our stores are in Tier 2 cities and beyond.
Speaker #1: So we have a very well-diversified geographical network of stores. Servicing multiple different customer profiles and multiple different geographies. In terms of format, as you're aware, today we have multiple formats.
Speaker #1: In terms of concepts for retail, we have three multi-brand specialty stores, which is Nykaa Luxe, on-trend in perfumery, but interestingly, we have been experimenting with new formats such as the K-Cafe, as well as Nykaa Wanderlust Cart and Nykaa Kiosk that are much, I would say, lower capex and quicker to execute and launch.
Next slide. And this is, this has made Nykaa into a $2.4 billion GMV powered by a demand, assortment, and distribution flywheel. So, if you look at the demand engine—and we talked about many of these earlier—the customer base has grown rapidly from 26 million customers about three quarters earlier to now 60 million customers. Our social engine presence, our customer creator networks, are growing massively. So our creator network is now 170,000 creators in the Nykaa app.
Speaker #1: That is helping us to increase our footprint. And to bring innovative new concepts, retail concepts, into the market. Next slide, please. As was shown earlier, we are very proud to launch or to introduce to you our newest and largest store in the country today at Ambience Vasant Kunj Mall in Delhi.
As well as 2.3 million content pieces created by these Nappers annually. Our social media Community continues to grow and it now stands at 19 million and many consumer engagement initiative, from NECA land, as well as. Um, many of the beauty bars, as well as the college campus events are really getting and attracting a lot of consumers into their their engagement.
Speaker #1: It is over 5,000 square feet in terms of size. And as over 100 brands that are being retailed through the store. This the idea to increase the size of our stores goes back to something which we've been speaking about for a while, which is making the stores more about experiences, more about engagement, more about community.
On the assortment also, we talked around about it and you can see that it has in fact grown from about 5,000 brands working with us just about 3 years ago to now 10,000 brands trusting Nykaa as their retail partner. And in fact, as many as 5,300 brands have been onboarded in the last 3 years alone, and within that, deep partnerships with many of the brand partners like Speedo, Nike, Foot Locker, and Revolve on the—
Fashion site in Charlotte Tilbury and Kiehl's, and many others on the beauty side.
On the distribution engine, similarly,
Speaker #1: And that requires a larger floor plate. As well as the fact that with the sheer number of brands looking to enter the India market, we need more space to be able to curate the right assortment of brands for our customers.
Speaker #1: And in addition to having a, I would say, the best brands available in this store, we also have multiple services such as makeover services, browse services, skin consultation, and diagnostic services, as well as hairstyling and consultation as well.
Uh, the network of 324 stores is a very big asset, up from almost, up to—uh, from about three years ago—and it now touches many more cities. So, from being present in 60 cities earlier, now we are present in 105 cities.
Similarly, registered retail retailers on our SuperStore platform have improved from
Speaker #1: So this we believe is the future of retail in India. We are early to it. We have invested ahead of the, I would say, ahead of the curve, to build something incredibly innovative, disruptive.
Speaker #1: And this is how the new generation likes to shop. And you can expect to see more such innovative formats from us in the coming quarter.
403, or that's about 400,000 retailers about a year ago, to now 523,000 retailers. So, a solid distribution platform is being built, which touches 12-plus cities. And this is allowing us to acquire mandate from a lot of brand partners for distribution in these markets.
Speaker #1: Next slide, please. Spending a minute on Nykaa now, I'm happy to say that Nykaa now has expanded and accelerated its growth quite I would say, remarkably.
Speaker #1: From being present in just three cities, with limited assortment in Q1 of FY26 today, we're present in 13 cities with over 1,000 brands available through Nykaa now.
Speaker #1: So not only are we delivering packages within 60 minutes, which we believe is competitive, but more importantly, we're offering the widest assortment of beauty and personal care products available amongst any of the quick commerce platforms in the country.
We cover obviously, 19,000 PIN codes, and also almost 13 13 13 cities in the country. And now, covered through Nikon now, which is a quick, uh, delivery platform. And, uh, similarly, this number is likely to go up for the, uh, by the end of the year. So with that, we feel that the gmv has been able to grow at almost 3x versus about 3 years ago, through a very conscious effort, to build categories, as well as build customers and build our influence. So, it's been an execution, which has leveraged flywheel from assortment to distribution to demand creation.
Speaker #1: So we're combining speed with choice. And I think that's an important differentiator in our strategy. And that's something which we were committed to being able to do since day one of the launch of Nykaa now.
Anyone from brand partners to customers to ecosystem to retailers and distributors—so happy with what I have been able to build over the last few years.
With that, next slide. With that, I would like to hand over to Anchit, to take us through the beauty on retail.
Speaker #1: In terms of expansion, we plan to be at over 25 cities by the end of FY27. And cater to a meaningful percent of our owners coming through the Nykaa now fulfillment model, which means within 60 minutes.
Yeah, thank you very much, and thank you to everybody who's taken the time to join us for our call.
Speaker #1: Next slide, please. Yeah. So spending a minute on Nykaa as not just a retail platform, but Nykaa is truly a, in a way, a media/marketing platform in the sense that we now have over 170,000 content creators who work with the platform.
So um as mentioned I think UT has had a very strong uh quarter 1 and FY. 27 with 28 to 29% growth on both gmv and nsv. Uh and at the same time, delivering a very healthy, uh, ibida margin 10.3%, which is 130 basis points, higher than q1 of 426. A lot of this growth is coming on the back of uh, on the back of a strong customer acquisition as well as successful execution of certain key sales, uh, during the quarter.
Speaker #1: We have over 90 million followers across our social media channels. And we are playing a very critical and crucial role in helping to evolve the way Indian consumers will consume this category in the coming years.
uh, on top of that, retail has continued to strengthen its performance with double digit, same store, sales growth and uh continues to be an area of growth uh for us
next slide, please.
Speaker #1: And we've done that through really focusing on education and entertainment through the digital channels, which is where a lot of our consumers are engaging and educating themselves.
Speaker #1: Next slide, please. And with that, I will hand it over to Adwaita to talk about the House of Nykaa.
So, we've spoken in the past about the two main pillars of the beauty verticals. Growth strategy is penetration as well as premiumization, and both of those pillars are playing out nicely for us. You can see that on the penetration side—having three times the number of visits to our platform.
Speaker #2: Hi, everyone. Looking forward to talking about the House of Nykaa business today. Today, the House of Nykaa business has an annualized GMV of 3,760 crores.
Too close to half a billion in Q1 FY27, which is 22% growth year-over-year. And the number of annual unique transacting customers in the platform has now crossed 20 million.
Speaker #2: It's grown at 40% year on year. And on an NFC basis, that's a 2,200 crore top line with 36% year on year growth. Till date, we've served 18 million customers across these brands.
Speaker #2: And as a reminder, we have distribution across Nykaa platforms as well as 3P, whether that's online or offline. On the right-hand side, we mentioned the brands in our portfolio that are 13 brands at this time, 7 of which are in beauty and 6 in fashion.
Then, if I look at the average order value split between new and existing customers, the growth and the premiumization of the customer's basket is even more obvious. So, our hypothesis on driving growth through both penetration and premiumization has played out nicely in Q1.
Speaking about, uh, brand launches as well as assignment, as you know, and as always had an exclusive,
Speaker #2: Moving on. So on the NFC front, if we just double-click on the beauty brands, the 7 beauty brands that I mentioned, in Q1, we delivered 508 crores of NFC.
Media market and q1.
Speaker #2: This is a 40% year on year growth. And on the right-hand side, you can see how that distribution spans across Nykaa online at 33%, Nykaa stores at 10%, 19% is actually what we call our B2B business.
With the long show, one of the most iconic brands from the US market has launched on Nykaa in June of 2026. Very quickly, that brand has gone on to become a top five brand within the prestige space on the Nykaa platform.
Speaker #2: So it's both through superstores, well as through modern trade, general trade, all the offline distribution that we have. And then lastly, there's 3P sales, which is across B2C sites, as well as 3P e-commerce sales.
And, um, there is a nice quote from the CEO of Rare Beauty, who speaks about the incredible, uh, opportunity that India is offering as well as the partnership with Nykaa. And we have a small video from Selena Gomez herself that we'd like to share with you.
Hi guys.
Speaker #2: Can move on. As a reminder, we have three large brands that constitute the portfolio: Dot & Key, which is a 1,300 crore NFC annualized run rate brand.
It's so exciting to share that we're bringing Rare Beauty to Nykaa and India. Nykaa is such an amazing partner, and it makes me so happy to keep growing Rare Beauty in India.
Speaker #2: It's had two excellent launches this quarter: Melty Lip Balm, as well as the dragon fruit bounce sunscreen. We have then K Beauty, which is growing exceptionally well and is now a 300 crore annualized NFC business.
You'll now be able to shop both in stores and online. Thank you again for all of your love and support, and I hope you enjoy.
Speaker #2: This quarter, it launched the Cashmere Lip Blur, which became a huge success, really important for the brand and also was a top seller on the platform.
I think the purpose of the video is to also convey that India is becoming so critical to all global brands as they think about their growth over the next several years. And when they think India, they think of us as the partner of choice for their go-to-market, as well as their brand building strategy.
Speaker #2: So there was a good customer connect there. And then lastly, we have Nykaa Cosmetics, which is a 270 crores of annualized NFC and also had some very strong lip launches this year, including the Lip Grip and a few other products.
Speaker #2: Moving on. In K Beauty, to launch the Lip Blur, we collaborated with Sabah Azad to come up with a lovely video. And we'll show that to you now.
Speaker #2: And this is all with the intent of making sure that this is an enduring brand that is able to stand on its own two feet.
Speaker #3: Oh my God, I can't believe you caught me on a phone with him. Come on, do me a favor. It ain't gonna be easier.
So, in addition to rare this quarter, we also had a few other. Very, I would say, high-profile launches, some of those are listed on this page. I'll just mention a few K18 which is a Prestige Hair Care brand. Uh from the community for portfolio, has launched with us on like up as well as sk2 which is a high-end uh, Japanese skincare brand, that is owned by PNG. Uh, and finally anua, which is a very trending, uh, Korean brand also launched for microscopes. So to show you that there are Brands coming from all parts of the world, from the US, from Korea from, uh, China even and even from Japan. Uh, and again, looking to India as a growth opportunity and within India, like, in particular,
Speaker #2: This is also an exciting quarter, as you'll ll recognize, both internationally and domestically for our brands. The one I'll really touch on is on the left-hand side, K Beauty actually won the best new brand award at the CEW Awards in the UK.
Now, this quarter we also had two flagship sales. One was the Pink Summer Sale, which we hosted in May, and the other was the Nykaa Birthday Sale, which is our annual sale to celebrate the anniversary of the founding of Nykaa.
Speaker #2: This is a very prominent award series that happens in the UK. And it's considered a really the most important amongst beauty brands. So this was a really big win and we're really proud of that.
And what sales delivered? I would say, uh, very good outcomes in terms of traffic, customer acquisition, as well as, uh, revenue outcomes for the platform.
Speaker #2: And then there were a bunch of awards in India as well that our brands won across seminar, ET, and other platforms. Moving on. We're also excited today to announce that we are acquiring Aminu, which is a premium derma cosmetic skincare brand.
Speaking a bit about retail, we added Revenue stores in Q1. That took the store count to 324 and our coverage to over 105 cities today.
In terms of, uh, same store sales growth, we did double-digit growth, uh, on a for-like basis, which is very strong, and today, over 50% of our stores are in tier 2 cities and beyond.
Speaker #2: Personally, I'm really excited about the brand. It's very, very rich in its derma abilities and its R&D abilities. They have some of the best R&D and formulations that we've seen out there.
So, we have a very well-diversified, geographical, uh, you know, network of stores, servicing multiple different customer profiles and multiple different geographies.
Speaker #2: And as of today in FY26, it closed with 19 crores of net revenue with growing exceptionally well in FY27. It's been completely bootstrapped till now.
Speaker #2: It's been built very well by the founders, Prachi and Aman. And they do focus on a more premium skincare space. Like I said, what's really appealing to us is really two things.
In terms of format, as you're aware, today we have multiple formats in terms of concepts for retail. We have three multi-brand specialty stores, which are Nykaa Luxe, On Trend, and Perfumery. But interestingly, we have...
Speaker #2: One is their R&D depth and focus. So they have over 30 proprietary formulations. Prachi herself is a cosmetologist and has a lot of experience in coming up with the right types of products and being very rigorous in the standard sheet with the products through.
Speaker #2: And the second thing we're very excited about is that the brand has a significant distribution already set up in the salon businesses. And so we feel both these are really formidable moats.
been experimenting with new formats such as the K Cafe as well as Nika wart and Nika kiosk that are, uh, much I would say lower capex and quicker to, um, quicker to execute and launch that is helping us to increase our footprint and to bring Innovative New Concepts retail Concepts uh into the market.
Next slide, please.
Speaker #2: And we're excited to welcome this brand into our portfolio. Moving on. I think in the past, often investors and analysts have asked us, what is the strategy with House of Nykaa?
Speaker #2: Where are you going to enter next? And we had shown this in the investor day, but I'll bring it back today as well. Here you can see the 7 brands we have and where they sort of play.
Speaker #2: And then we're sort of indicating where we'd like to go from here. So Aminu does address the premium skincare space. It is more premium than the brands we have today from a pricing perspective.
As was shown earlier, we are very proud to launch, or to introduce to you, our newest and largest store in the country today at Ambience Person K Mall in Delhi. It is over 5,000 square feet in terms of size and has over 100 brands that are being retailed through the store. The idea to increase the size of our stores goes back to something which we've been speaking about for a while, which is making the stores more about experiences, more about engagement, more about community.
Speaker #2: And so it does fill a gap that we are actively looking for. Both in terms of the R&D capabilities as well as in terms of the price point that it plays at.
The India market—we need more space to be able to curate the right assortment of brands for our customers.
Speaker #2: And then some of the other purple buckets are areas that we're continuing to explore and understand how we enter into. Moving on. Just sort of recapping and the last slide on Aminu itself.
And in addition to having, I would say, the best brands available in this store, we also have multiple services such as makeover services, brow services, skin consultation and diagnostic services, as well as hair styling and consultation as well.
Speaker #2: Today, it has three hydro products. Across the longevity serum, an eye serum, which is amongst the best seller on Nykaa. And that particular category.
Speaker #2: And a sleep oil. And it has a very good set of assortment that's also coming over the next year across lip and moisturizers and face washes.
Speaker #2: So we're excited to see where this portfolio goes. And like I said, very excited about the quality of founders that we're entering into partnership with.
So, this we believe is the future of retail in India. We are early to it; we have invested ahead of the— I would say, ahead of the curve to build something incredibly innovative, disruptive. And this is how the new generation likes to shop, and you can expect to see more such innovative formats from us in the coming quarters.
Next slide, please.
spending a
Speaker #2: On the next slide, we just talk about the terms of the deal. And so we are acquiring 51% today. The remaining 49% will be acquired over the next few years.
Speaker #2: As per terms that we've set out in the documents. And the Aminu team excellent founders, very passionate, very rigorous, and very clear about what they're doing.
um I'm happy to say that and I can now has has expanded and accelerated its growth quite uh I would say um remarkably uh from being present in just 3 cities with limited assortment in q1 of FY. 26 today we're present in 13 cities
Speaker #2: We'll continue running the business. And we will support them in every way that we can. And hopefully, this is really set up for success.
With over a thousand brands available through my account now, so not only are we delivering packages within 60 minutes, which we believe is competitive.
Speaker #2: And we're very much looking forward to it. With that, I'll hand over to Vishal to talk us through the superstar business.
Speaker #4: Thanks, Adwaita. Hello and very good evening to everyone on the call. Like Falguni, ma'am said, Nykaa Flywheel is customer and brands so we made very good progress in superstore as well on this flywheel.
Speaker #4: We added 30% more retailers who are our customers to reach half a million customers. We are in 1,200 cities with 100 more cities added.
Speaker #4: And you can see as a result of that, we grew NSV at 28% with driven by the expansion in the network, which is our customers, as well as more from the same customers, which is the AOB growth that you see.
Uh, but more importantly, we are offering the widest, assortment of beauty and personal care. Products available amongst any of the quick Commerce Platforms in the country. So, we're we're combining speed with, uh, choice and I think that's an important differentiator in our strategy and that's something which we were committed to being able to do since day 1 of the launch of mica. Now, in terms of expansion, we plan to be at over 25 cities by the end of FY 27. And, um, you know, cater to his to a, a meaningful percent of our orders. Um, coming through the Nikon out fulfillment model, which means within 60 minutes.
Next slide, please.
Speaker #4: So very good. 28% kind of NSV growth. There's a GMV slightly lower because of the GST-led MRP impact. But very good NSV growth. Next slide.
Speaker #4: And this growth helps us on our path to profitable scale. Where we improved our EBITDA by more than 300 BIPs. There's a slight increase in fulfillment cost led by the one-off impact of the new labor code.
Yeah. So spending a minute on, um, on Nykaa as not just a video platform, but Nykaa is truly, in a way, a media marketing platform in the sense that we now have...
We have over 170,000 content creators who work with the platform, and we have over 90 million followers across our social media channels.
Speaker #4: But you can see that getting more from the same retailer base and getting more from the same field force actually really helps us to improve our S&D expense where we improved by more than 200 BIPs.
Speaker #4: And increased scale obviously also leads to overhead efficiency of almost 200 good EBITDA improvement as well. Next slide. And this is a brand flywheel where you will see that we have 240-plus brands and we continue to attract new brands very successful brands.
And we are playing a very critical and crucial role in helping to evolve the way Indian consumers will consume this directly in the coming years. And we've done that through, uh, through really, uh, focusing on education and entertainment through the digital channels, which is where, uh, where a lot of our consumers are engaging and educating themselves.
Next slide, please.
And with that, I will hand it over to Avet to talk about the House of Nykaa.
Speaker #4: We added 18 new brands in last quarter itself. You can see the brands. They are well-known brands in the skin space. And we are also aggressively expanding our portfolio in the wellness space, especially for pharmacies.
Speaker #4: And you can see the Yoga Bar and Cipla coming in. So overall, very good progress on the flywheel. We are also leveraging tech a lot because ultimately, Nykaa DNA is tech.
Hi everyone. Uh, looking forward to talking about the house of Na business today. Uh, today, the house of Na business has an annualized gmv of 3760 crores. It's grown at 40% here on your and, uh, on an NSP basis. That's a 2200 crore Topline with 36%, uh, year on your growth.
To date, we have served 18 million customers at the brands. And as a reminder, we have distribution across Nykaa platforms as well as third-party channels, whether that's online or offline.
Speaker #4: And you can see that how we are really leveraging tech and data science and soon AI. To engage our customers and to get more productivity.
On the right-hand side, we mentioned in our portfolio that there are 13 brands — at this time, 7 of which are in beauty and 6 in fashion.
Speaker #4: For example, this is automotive WhatsApp, which goes to retailers and they can order through that. We are doing engagement activities like spin the wheel, etc.
Speaker #4: to keep the retailers engaged. Next. We are able to also able to really leverage our data science to have a predictive engine on which retailer is going to buy which brand and then we are really able to guide our field force on whom to contact, when, and with which brand.
Speaker #4: So who, what, when. So this is really helping us improve our efficiencies and it'll only be we'll get more impact as we go along.
moving on, moving on. So on the NFC front, if we just double click on the beauty brand, the beauty brands that I mentioned in q1, we delivered 5108 crores of NFC. This is a 40% year-on-year growth and on the right. You can see how that distribution spans across online at 33% next was at 10:00. Uh, 19% is actually what we call our B2B business. So it's both through Superstore as well. As through Modern trade, General trade, all the offline distribution that we have. And then lastly, you know, there's 3 p sales, which is across d2c sites as well as 3p e-commerce players.
Can move on.
Speaker #4: Yes, overall, good customer growth, good more and more brands, great leverage of technology, which really puts us on our path to profitable growth. Thanks.
Speaker #4: Now over to Abhijeet.
Speaker #1: Hi, good evening to everyone. And thank you, firstly, for joining the call. On the fashion business, very happy to share with everyone that we continue to build on the inputs which we have successively been putting in place over the last couple of years.
Speaker #1: We are very happy to report one of our fastest growth quarters in the past many quarters 53% growth on GMV, 54% growth on NSV year on year.
Speaker #1: On the back of, like we've been consistently reporting over the past few and let's call assortment growth, which has happened across all categories, women, men, kids, and also more emerging categories like home, consistent addition of strong brands.
And then, lastly, we have Cosmetics, which is a ₹270 crore annualized NSB, and also had some very strong lip launches this year, including the Lip Grip and other products.
Moving on.
Speaker #1: We've continued to invest behind customer acquisition and as the flywheel of customer acquisition leading to a wider customer base and us as a platform being able to retain customers in the same way, takes over, that shows in healthier growth going forward.
In K Beauty, to launch the Lip Blur, we collaborated with Saba Azad to come up with a lovely video—and we'll show that to you now. And this is all with the intent of making sure that this is an enduring brand, that, you know, is able to stand on its own two feet.
Speaker #1: And also, we are seeing very encouraging signs from the Nike partnership, which we spoke about in our last call. Just to jog everyone's memory, we now run the Nike Commerce platforms D2C platforms in the country, which means nike.in and the D2C app across both iOS and Android.
Speaker #1: We are seeing very good early traction from that. So overall, all of those factors have contributed to very strong growth in this quarter as you can see on the slide.
This is an also, an exciting quarter as we were recognized, both internationally and domestically for Our Brands, the 1 I'll really touch on is on the left hand side. K Beauty actually won the best new brand award at the cew awards in the UK. These, this is a very prominent award um, series that that happens in the UK. And it's considered a really
Speaker #1: And structurally, we've been making improvements in how we run the business, most particularly on the customer flywheel leading to marketing efficiencies and overhead efficiencies leading to also then being this quarter being overall profitable for the fashion business, building on quarter four already being profitable.
The most important amongst beauty brands. So, this was a really big win, and we're really proud of that. And then there were a bunch of awards in India as well that our brands won across Femina, ET, and other platforms. Moving on.
Speaker #1: So also happy to share that in quarter one of this year, we continue to be profitable overall as a business. Next slide. Talking about the customer funnel, we keep sharing this in all transparency in every call that on one hand, we continue to acquire customers that are very healthy clips.
We're also excited today to announce that we are acquiring a menu, which is a premium durmak Cosmetics. Skincare brand.
Speaker #1: So this quarter was no exception. 44% higher customer acquisition year on year. But then as you can see on the left side, that leads to consistently higher visits to the application.
Speaker #1: And then all the way down to from visits to then monthly active users, transacting customers and the total orders placed. All metrics are looking healthier as a result of not just acquisition, but also then being able to retain customers in the same fashion as we have always been.
Speaker #1: We have touched a cumulative customer base of 12 million customers for the fashion vertical only. And as a result of becoming better at marketing, we are now at a 30% lower CAC in the last two years, which is which augurs well for the business.
Personally, I'm really excited about the brand. Um, it, you know, it's very, very rich in its Derma abilities and its R&D abilities. Uh, they have some of the best, um, R&D in formulations that we've seen out there and, um, as of today in fy22 close with 19 floors of net revenue with growing exceptionally well in FY, 2782. As is really 2. Things 1 is their R&D depth and focus. So they have over 30 proprietary formulations. Uh, PRI health is a cosmetologist has a lot of experience in uh coming up with the right types of products and being very rigorous in the standard, she puts the products through. And the second thing we're very excited about is that the brand has a significant distribution already set up in the salon businesses. And so we feel both. These are really formidable modes and we're excited to welcome this brand into our portfolio.
Moving on.
Speaker #1: Next slide. Talking about categories which are underlying the GMV growth. So across women, men, kids, across the board, we have seen very healthy growth.
Speaker #1: Women, which is a majority of our business and our customer base, has grown 40% year on year. Within which, as you can see on the slide, footwear and in particular active wear, have grown even faster than the overall women's category.
Speaker #1: We are seeing athleisure becoming very mainstream across both men and women. And that is reflected in these numbers. Men has grown 83% overall year on year.
I think in the past, often investors and analysts have asked us, you know, what is the strategy with House of Nykaa? Where are you going to enter next? And we had shown this in the investor presentation, but I'll bring it back to you as well. Here you can see the seven brands we have and where they sort of play, and then we're sort of indicating where we'd like to go from here. So, Aminu does address the premium skincare space. It is more premium than the brands we have today from a pricing perspective, and so it does fill a gap that we are actively looking for.
Speaker #1: Across apparel footwear, consistently high growth. And kids have grown also close to 60%, 57% year on year. Below on the slide, there are some brand names, brand logos of marquee brands which we launched over the last quarter.
Both in terms of R&D capabilities, as well as in terms of the price point that it plays at, and then some of the other purple buckets are areas that we're continuing to explore and understand how we enter into, moving on.
Speaker #1: I'll not go through all the names, but brands like Birkenstock, the Devonims portfolio brands, H&M MOVE, which is a sub-brand from H&M, obviously add salience to our portfolio of brand offerings for customers.
Speaker #1: Next slide. On the Nike partnership, of course, the partnership is twofold. On one hand, like I mentioned, we run the D2C customer-facing channels for Nike in India.
Speaker #1: On the other hand, we also now have Nike available on Nike fashion. And across both of those formats of partnership, it continues to go from strength to strength.
Just sort of recapping and, and the last slide on Amino itself. Today, it has 3 hero products across the longevity serum, um, an eye serum which is amongst the best seller on Nika and that particular category and a sleep oil. And um, it has a very good set of Assortment that's also coming over the next year across, uh, lip and moisturizers and face washes. So we're we're excited to see where this portfolio goes. And like I said, very excited about the quality of Founders that were entering into partnership with on the next slide. We just talked about the terms of, um, you know, the deal. So we are requiring 51% today, the remaining 49% will be acquired over the next few years. Um, as per terms that we've
Set out in the documents and the amino team.
Speaker #1: Very strong early traction on the D2C partnership. We've already crossed 1.5 million app installs within less than six months of launch. And that's a fast-growing number.
Excellent founders. Very passionate, very rigorous, and very clear about what they're doing. They will continue running the business, and we will support them in every way that we can.
And, hopefully, this is really set up for success, and we're very much looking forward to it.
With that, I'll hand over to Vishal to talk about the full Superstar business.
Speaker #1: We have seen great traction in a lot of exclusive launches, which we did in the last quarter. The football World Cup, obviously, we just went by was a marquee occasion where the partnership just came into prominence.
Speaker #1: And you'll see a few more examples on the slide. The LEGO shoe collection for kids. And the Air Max 90 series. And many more.
Speaker #1: Those are just some examples of products which were exclusively merchandised on the D2C platform. And did really well. On the right side, it's also worth calling out that Nike being available on Nike fashion just adds a different dimension to the partnership.
Speaker #1: And happy to share with everyone that Nike is now overall for the fashion platform among the top three brands. So the partnership with Nike is multi-dimensional.
Added. And you can see, as a result of that, we grew NSV at 28%, driven by the expansion in the network, which is our customers, as well as more from the same customers. That is the growth that you see. So, very good, you know, 28% kind of NSV growth.
Speaker #1: It is on the marketplace side as well as a more deeper strategic engagement on the D2C side. But both are off to a great start over the last six months.
Uh, GMV is slightly lower because of the GSTL and MRP impact, but very good MSD growth. Next slide.
Speaker #1: Next slide. So there'll be a video playing on the slide, but I'll talk through this because I think everyone will get the gist. We have committed to making on the fashion app, we've committed to making the shopping experience for customers the most cutting edge and the most enjoyable.
Speaker #1: And we continue to invest in technology AI is the buzzword, but really as a fashion platform, for us, the task is to integrate AI in meaningful ways for our customers.
Speaker #1: And one of the feedbacks that we consistently receive is that how can we simulate the trial room experience on the app, which has multiple benefits in the way customers shop.
And you know this growth um helps us on our part to profitable scale where we improved our Abita by more than 300 bips. There's a slight increase in fulfillment cost led by the 1 was impact 1, 1 of impact of the new labor code. But you can see that, you know, getting more of from the same retailer base and getting more from the same Field Force. Actually, really helps us to improve our SMD expense where we improved more than 200 bits and increased scale. Obviously also leads to overhead efficiency of almost 200 bips so overall you know, very good, every time Improvement as well. Next slide
Speaker #1: We launched something called virtual closet where now customers can see a product rendered on themselves. And by creating an avatar, they can see the product rendered on themselves.
Speaker #1: This launched in May 26. You're seeing a video which brings that to life. But just in a month, we have seen massive traction. We've seen more than 200,000 virtual avatars being created from the customers who are creating their avatars.
And this is the brand flywheel where you will see that we have 2 240 plus Brands. And we continue to you know track new brands, very successful Brands we added 18 new brands in last quarter itself. You can see the brands there, you know, well-known brands in the skin space and we are also aggressively expanding our portfolio. In the wellness space especially for pharmacies and you can see their yoga
Speaker #1: We see more than 2X higher conversion. And this is just the start because the ambition is to continue to invest in technology and bring to where really differentiated, meaningful shopping experiences which are powered through AI.
Coming in.
Speaker #1: But very good early traction. And we'll continue to report more on this front in quarters to come. Next slide. Lastly, just to recap, the profitability improvement that we briefly saw in the very first slide.
So, we're all seeing very good progress on the flywheel. We are also leveraging tech a lot because ultimately, Nykaa's DNA is tech and, um, you can see that, you know, how we are really leveraging tech and data science, uh, and soon AI, to engage the customers and to get more productivity. For example, this is automated WhatsApp, which goes to retailers and they can order through that. We are doing engagement activities, like, you know, spin the wheel, etc., to keep the retailers engaged. Next.
Speaker #1: So in the quarter, we've like I said, we've continued to remain profitable after Q4. It has been a profitable quarter overall, which means the 627 basis points year-on-year improvement versus the same quarter last year.
Speaker #1: And underlying this across line items in the P&L, we've seen improvement. But worth calling out two of the line items which have changed most meaningfully.
We are able to also able to really leverage our data science to have a predictive engine on which retailer is going to buy which which brand and then we are really able to guide our Field Force on whom to contact when and with which brand. So who what when right? So this is really helping us improve our efficiencies and you know it will only be uh you know will get more impact as we go along.
Speaker #1: On the marketing side, marketing and S&D expenses side, we've seen a 34 basis points improvement to 22.9%. And this is just structural improvement. On the back of just lower CAC and being able to retain customers at an increasingly better clip.
Yes, overall. Good customer growth, good more and more Brands, great, leverage of technology, which really puts us, um, you know, on our path to profitable growth. Thanks now over to avijit.
Speaker #1: And with scale, we are seeing also 292 basis points improvement in overhead expenses. So really the improvement in EBITDA, which we are now seeing after quarter four and then also the first quarter of this year, is structural in nature.
Speaker #1: And very happy that the inputs that we've been making consistently are now starting to show results. With that, I will hand over to Ganesh for the next section.
Speaker #1: Thank you.
Speaker #2: I'll now take you through the financial performance for the quarter. As we can see, we have started FY27 on a very strong note. Net revenue grew at 29% versus 23% a year ago.
Speaker #2: Also, there's been a sharp acceleration in our profitability as we can see our EBITDA grew by 68% YOY with EBITDA margin reaching 8.5% during the quarter versus 6.5% a year back.
Hi, good evening to everyone, and thank you, firstly, for joining the call. Um, you know, on the fashion business, very happy to share with everyone that we continue to build on the inputs, which we are successively being putting in place over the last couple of years. Um, you know, we are very happy to report 1 of our fastest growth growth quarters in the, in the past, many quarters, um, 53% growth on gmv, 54% growth on NSD year, on year, on the back of like, we've been consistently reporting over the past few, um, and this calls assortment growth, which has happened across, um, all categories, women's men's kids and also more emerging categories, like, home consistent additional strong Brands. We've continued to invest with our customer Acquisitions and, um, you know, as the flywheel of customer acquisition leading to a wider, customer base and us as a platform, they're being able to retain customers in the same way takes over that role in healthier growth going, um, going forward and also
Speaker #2: Similarly, our PAT growth has also been very strong at 226% YOY, taking the PAT margin to 2.9%. Moving to the next slide. The strong performance for Nike is evident across both our business verticals.
Speaker #2: Beauty industry growth stood at 29% for the quarter versus 25% a year ago. Fashion has had a standout quarter as we saw in the numbers which Abhijeet shared as well, with NSV growth coming in at 54% versus what was only 20% a year ago.
Um, we are seeing very encouraging signs from the Nike partnership, which we spoke about in a last call. Um, you know, just to blog, everyone's memory. We now, run the Nike Commerce platforms. Uh, d2c Platforms in the country which means nike.in and the d2c app across both IOS and Android. We are seeing very good early interactions from that. So overall, you know, all of those factors of contributed to, um, very strong growth.
Speaker #2: On profitability, both businesses have continued to expand margins supported by operating leverage and scale efficiencies. Both verticals are witnessing strong growth while simultaneously expanding margins.
Speaker #2: Moving to the next slide. Here we have our consolidated performance for the first quarter of FY27. As I mentioned earlier, revenue from operations grew 29% YOY, reflecting healthy momentum across both our business verticals.
In this quarter, um, as you can see on the slide and, um, structurally, we've been making improvements in how we, um, run the business, most particularly on, um, on the customer's flywheel leading to marketing efficiencies and um, you know, overall efficiencies lead to also then um being uh this quarter being overall profitable for the fashion business, billing on quarter 4 already being profitable. So also happy to share that in quarter 1 of this year, we continue to be profitable overall as a business
Next slide.
Speaker #2: Gross margin expanded 123 basis points to 45.9%, aided by the strong performance of House of Nike brand's portfolio and improved marketing and service income.
Speaker #2: Fulfillment expenses increased by 42 basis points, as we continue to invest in infrastructure expansion, which is leading to O2D efficiencies. The increased fulfillment expenses incidentally were offset by a like improvement in marketing efficiency of 42 basis points.
Speaker #2: We continue to make marketing investments that support strong customer acquisition across both beauty and fashion. This coupled with scale and productivity efficiencies have led to EBITDA growth of 68% YOY, which is 196 basis points margin expansion.
Speaker #2: On a YOY basis. Moving ahead. This is a vertical reporting which provides an in-depth performance details across our business verticals. At the vertical level, as we can see, both businesses clock improved performance.
Funnel. You know, we we keep sharing this in all transparency in every call. That on 1 hand, we continue to acquire customers at a very healthy clip. So this quarter was no exception, 44% higher, customer acquisition year on year, but then, um, as you can see, on the left side, um, that leads to consistently higher visits to the application and then all the way down to, you know, from visits to then, monthly active users. Um, transacting customers in the total orders, placed all metrics are looking healthier as a result of, not just acquisition, but also then being able to retain customers in, um, you know, in the same fashion as we have always been we have touched a cumulative customer base of 12 million customers for the fashion vertical only, and as a result of becoming better at marketing, we are now uh at a 30% lower CAC. Um this is the last 2 years, which is uh, which offers well for the business.
Next slide.
Speaker #2: Both beauty and fashion saw sharp acceleration in growth YOY, and the notable margin expansion across both the businesses. Benefiting from scale, operating leverage, efficiencies, and productivity gains.
Talking about categories which are underlying the GMV growth. So, you know, across women, men, kids, um, across the board we have, um, we have, you know, seen very healthy growth. Women, which is the majority of our business and our customer base, has grown 40% year on year, within which, as you will see on the slide, footwear and in particular activewear.
Speaker #2: Next slide. Here I would like to spend a moment to say, as an organization, our focus has always been on efficient capital utilization and long-term value creation.
Speaker #2: So what this slide highlights is how our philosophy of prudent capital utilization has enabled us to deliver an increasingly strong balance sheet. Fixed asset turnover as we can see has improved to 10.7 times as of quarter end ended June 26 versus 9.9 times in FY26.
Speaker #2: Similarly, working capital days in FY25 has improved to under 30 days both in FY26 and something which we have sustained during this quarter as well.
Have a grown even faster than the overall women's category. Uh, we are seeing athleisure becoming, you know, very mainstream, both men and women. Um, and that is reflected in these numbers. Men has grown 83% over a year on year, um, across apparel Footwear consistently high growth and kids has grown also closed 60% 57% year on year. Um, Below on the slide, there are some brand names, brand brand logos. Um, you know, logos of Marquee Brands which we are which we launched over the last quarter. Um, I'll not go to all the names but um, you know Brands like Birkenstock the Devon's portfolio of Brands H&M moved which is a sub-brand um from H&M. Obviously I had salience to our portfolio of um brand offerings for customers.
Next slide.
Speaker #2: So this has been driven by disciplined inventory and receivables optimization. So together with stronger earnings, these gains have lifted ROC sharply to 26.8% as of June 26, after these are annualized numbers, versus 21.2% in FY26.
Speaker #2: So therefore, to conclude, what I would like to add is Nike has delivered strong broad-based growth, acceleration in profitability, and strong capital productivity. We are pleased with the balance we have achieved between ambition and discipline.
You know, on the Nike partnership, you know, of course, um, the partnership is twofold on 1 hand. Like I mentioned we run the d2c customer facing channels for Nike in India. On the other hand, we also now have Nike available on Nika fashion and of course both of those formats of partnership. Uh, you know, it continues to go from strength to strength. Um, very strong early traction on the um, on the d2c partnership. Uh, we've already crossed 1.5 million app installs within, um, less than 6 months of launch and um that's a fast growing number. We've seen great Traction in a lot of exclusive launches which we did in the last quarter um you know, the football World Cup.
Speaker #2: Investing in customer acquisition and future capabilities by steadily expanding margins and returns. With our differentiated omnichannel platform, powerful brand ecosystem, and sharper operating leverage, we remain confident in our ability to create sustainable long-term value.
Speaker #2: With that, I would now like to open the floor for questions.
Speaker #1: Thank you very much, sir. We will now begin the question and answer session. If you would like to ask a question, please click on the video question tab.
Speaker #1: Before asking the question to the management, please introduce yourself, providing your name and your organization name. If possible, you may switch on your video as well.
Speaker #1: Please limit yourself to maximum of two questions so we can accommodate as many as possible. Ladies and gentlemen, we will wait for a moment while the question queue ascends.
Um, obviously what we just went by was, uh, was a marquee occasion where the partnership just, uh, you know, came into prominence. And you'll see a few more examples on the slide, um, you know, the Lego collection for kids and the Airmax 90 series, and many more. Those are just some examples of, um, of, you know, products which were exclusively merchandised on the D2C platform and, um, did really well. On the right side, it's also worth calling out that Nike being available on Nykaa Fashion just adds a different dimension to the partnership and, um, happy to share with everyone that Nike is now overall, for the fashion platform, among the top three brands. So, you know, the partnership with Nike is multi-dimensional, it is on the marketplace side as well as a more deeper, strategic engagement on the D2C side, but both are off to a great start, um, over the last six months.
next slide.
Speaker #1: The first question is from Aditya Soman please introduce yourself and proceed with your questions.
Um, so there'll be a video playing on the slide but I'll talk through this um, because I think everyone will get the gist. You know, we we have we have committed to making on the fashion app. We've committed to making the shopping experience for customers, uh, the most Cutting Edge and the most enjoyable and we continue to invest in technology. You know, AI is the buzz word, but really as a fashion platform for us, the task is to integrate AI in meaningful ways for, uh, for our customers and 1 of the feedbacks that we consistently receive. Is that how can we simulate the trial room experience on that which has multiple benefits? Um, you know, in the
Speaker #3: Hi. Can you hear me?
Speaker #1: Yes, you are audible. Please proceed.
Speaker #3: Excellent. This is Aditya from CLSA. So two questions. Firstly, can you throw some more light on sort of the economic arrangement between you and Nike?
Speaker #3: And if that's not possible, just the type of contract that you would typically have or financial arrangement you'll have here. And second, again, related to Nike, how do you use the customer data?
Speaker #3: Does that reside with you or does it stay with Nike?
Speaker #4: Right. So let me answer both questions. Thank you for the question. So like I said, the partnership with Nike is in two parts. One is a standard marketplace partnership where we list Nike on the marketplace platform, just like we list many other brands.
Because, you know, the ambition is to continue to invest in technology and bring to bear, really differentiated meaningful shopping experiences which are powered through AI. Um, but very good early traction and we'll, we'll continue to report more on this front end quarters to come,
Speaker #4: And that's one part of the partnership. The second is where we completely end-to-end operate their D2C customer platforms, which is across web and app.
Speaker #4: So Nike.in as well as the consumer-facing apps, which is the app on iOS and Android. Our built and operated 100% by Nike Fashion. So it's a much deeper integration on that side.
Speaker #4: And end-to-end, including fulfillment and everything which goes into running those platforms is done by us. I will not go into financial contractual details because that's not relevant.
Speaker #4: But the arrangement is very different. Marketplace is just listing Nike on the platform as we do with many other brands. The other one is us operating a different sales channel for them completely end-to-end.
Speaker #3: Yeah. Thanks for that. Just in terms of the running the, say, Nike.in platform, so I just want to understand, is this like would you get a percentage of the sales or I mean, even if obviously you can't share the exact numbers, but just to try and understand what type of arrangement this would be or I mean, how does it work between you and Nike?
Next slide, um, lastly. Just to recap, you know, the, the profitability Improvement that we briefly saw in the very first slide. So in the quarter, you know, we've uh, like I said, we continue to remain profitable after Q4. Um, it has been a profitable quarter overall, which means the 627 basis points year on year movement versus the same quarter last year. And underlying this, uh, you know, cross line items in the pnl we've seen Improvement. But, um, worth calling out 2 of, uh, of the line items which have which have changed most meaningfully on the marketing side, marketing and SMD expense side. We've seen a 4 534 basis points Improvement to 22.9% and this is just, you know, structural Improvement. Um, on the back of this um, lower cat and being able to retain customers um at um at an increasingly better uh Whip. And with scale, we are seeing also 292 basis points improved in overhead expenses. So really the Improvement in Abida, which we are now seeing after quarter 4 and then also the first
Part of this year is structural in nature. Um, and um, I'm very happy that the inputs that we've been making.
With that, I will hand over to Ganesh for the next section. Thank you.
Speaker #4: So we don't go into those kind of details. But when I say we operate the entire platform, we sell everything that's sold on Nike.in.
Thank you, and good evening, everyone.
I'll now take you through the financial performance for the quarter.
As we can see, we have started fee 27 on a very strong note.
Speaker #4: It's as part of the fashion vertical. It's part of the numbers we report.
Net revenue grew at 29% versus 23% a year ago.
Speaker #1: Yeah, but I think Abhijeet, what they may be looking for is it's like a retailer-like arrangement where we get commission like numbers and some other service numbers based on the sales that we achieve.
Also, there's been a sharp acceleration in our profitability. As you can see, our EBITDA grew by 68% year-on-year, with EBITDA margin reaching 8.5% during the quarter versus 6.5% a year back.
Speaker #1: And we are protected against inventory and I mean, there are similar arrangements like a retailer.
Similarly, our P growth has also been very strong at 226% by your by taking the PHD margin to 2.9%.
Speaker #4: Yeah. I think on the Nike.in side, on the D2C side, it's a arrangement. On the marketplace side, it's a standard marketplace arrangement. If that further answers your question.
Moving to the next slide.
Speaker #3: Yes, it does. Perfect. Thank you. Thank you so much.
The strong performance for Nykaa is evident across both our business verticals. Beauty and Same-Store Growth stood at 29% for the quarter, versus 25% a year ago.
Speaker #1: Thank you. We'll take the next question from Vidisha Seth. Kindly introduce yourself and proceed with your questions, please.
Question has had a standout quarter as we saw in the uh numbers which a shared as well with nsv growth coming in at 50% versus what was only 20% a year ago.
Speaker #5: Hi. Am I audible? Yes. Hi. This is Vidisha from Ambit Capital. My first question was on Nike now. So with this Nike now aspiration to reach 25 odd cities, how do you expect the EBITDA drag from this Nike now proposition to trend going forward?
On profitability, both businesses have continued to expand margins, supported by operating leverage and scale. Efficiencies in both verticals are witnessing strong growth while simultaneously expanding markets.
Going to the next slide.
Here, we have our Consolidated performance for the first quarter of Phi 27.
As I mentioned earlier, revenue from operations grew 29% year-on-year, reflecting healthy momentum across both our business verticals.
Speaker #5: It might be early days, but at what point does Nike now's overall contribution turn margin accretive?
Gross margin expanded 123 basis points to 45.9%. Aided by the strong performance of House of Micah Brands portfolio and improved marketing, and service income
Speaker #4: Yeah. So I'll maybe I'll take that question. So look, I think we've already now been live with Nike now for almost a year. And it is now at critical mass in the metros in which it is live.
Fulfillment expenses increased by 42 basis points as we continue to invest in infrastructure expansion, which is leading to O2 deficiencies.
The increase in fulfillment expenses, incidentally, were offset by
a like,
Speaker #4: And those, as you can imagine, tend to be the larger metros where a significant amount of our demand is currently coming from. And we, and as you can see from our results, there is not any EBITDA margin dilution even though Nike now has reached a certain size and scale whereby it is already meaningful in the cities in which it is present.
Improvement in marketing efficiency of 40 basis points.
We continue to make marketing investments that support strong customer acquisition across both Beauty and Fashion.
This coupled with scale and productivity efficiencies have like a beta growth of 68% V or Y which is 196 basis points margin expansion now yoy basis.
Moving ahead.
Speaker #4: And so our early read is that we don't think this will be dilutive in a if at all. In fact, we are currently seeing that the frequency of purchase from customers who are now engaging with Nike now is increasing.
Speaker #4: And that was always our hypothesis that if Nike now would become a destination for customers to make those last-minute unplanned purchases on Nike, which maybe in the past was being fulfilled by other platforms because Nike did not have this quick delivery capability.
This is a vertical reporting, which provides in-depth performance details across our business verticals at the vertical level. As we can see, both businesses clocked improved performance—both Beauty and Fashion—so sharp acceleration in growth year over year and notable margin expansion across both the businesses.
Benefiting from scale, operating leverage, efficiencies, and productivity gains.
Next slide.
Speaker #4: So there is there are new use cases which are now being fulfilled through Nike now, which were not being done earlier. So net, we see this as a creative from a LTV perspective.
So what this slide highlights is how our philosophy of prudent, Capital utilization has enabled us to deliver.
Speaker #4: And the AOVs for the Nike now orders are not meaningfully different from the mainline orders either. So the only cost which we are currently keeping an eye on is the fulfillment cost whereby point-to-point fulfillment of an order a Nike now order is on a cost per order basis naturally would be more expensive but again, the benefit of the increase in frequency of purchase, the average order value staying average order value staying consistent, I think these things are all offsetting some of that increase in fulfillment.
Quick asset turnover. As we can see as improved to 10.7 times as of end of June 26th 1990 in, Phi, 26. Similarly, working capital days which was already at a healthy 34 days in equite, 25.
Has improved to under 30 days. Both in FY 26 and something which we have sustained during this quarter disciplined inventory and receivables optimization
So together with stronger earnings.
Speaker #4: And that's why you're seeing that despite Nike now having become meaningful in the past several quarters, we've still shown EBITDA improvement this quarter. So I hope that answers the question.
These gains have limited assoc sharply to 26.8% as of June 26th, of course, these are annualized numbers versus 21.2% in Phi 26.
Speaker #1: Sure. Just a small follow-up to this. In terms of the category in which the Nike now versus Nike, if you could call out some outlines that you're seeing over there.
So therefore to conclude what I would like to add is Nika is delivered, strong broad-based growth acceleration and profitability and strong Capital productivity.
Speaker #4: It's currently it's not looking very different like we're seeing a lot of I mean, ultimately, we are not a horizontal quick commerce player, right?
We are pleased with the balance we have achieved between ambition and discipline investing in customer acquisition and future capabilities while steadily expanding margins and returns.
Speaker #4: We are a beauty player. So naturally, it's all beauty categories that are doing well. And our business does revolve around four or five key categories.
With our differentiated omni-channel platform, powerful brand ecosystem, and sharper operating leverage, we remain confident in our ability to create sustainable long-term value.
Speaker #4: And those are makeup, skincare, hair care, bath and body, and fragrance. And those are the same categories which we're seeing obviously do well on Nike now as well.
With that out. Now like to open the floor for questions.
Speaker #4: I think what's interesting on Nike now is, of course, new subcategories see some growth, incremental growth, such as certain personal care type categories that you need in a hurry.
Speaker #4: So things like low ASP, face washes, and cleansers, and bath gels, etc. So those are also pure incremental business for us because those are categories in which historically Nike never had a big role to play.
Thank you very much, sir. We will now begin the question and answer session. If you would like to ask a question, please click on the video question tab before asking the question to the management. Please introduce yourself, providing your name and your organization name. If possible, you may switch on your video as well. Please limit yourself to a maximum of two questions so we can accommodate as many as possible. Ladies and gentlemen, we will wait for a moment while the question queue ascends.
Speaker #1: Got it. Got it. And my second question was on superstore. So when does the GMV growth normalize here towards the 40, 45 percent Kager ambition called out during the analyst meet?
Speaker #1: Because even when we compare it to the GST-led shift, the gap in growth seems to be a little higher.
Speaker #3: Yeah, yeah. So let me answer in two ways. Firstly, the GST impact will start normalizing from Q3 onwards. So you will see very close numbers between NSV growth and GMV growth.
The first question is from, uh, please introduce yourself and proceed with the questions.
Speaker #3: So that's one. Secondly, yes, we had called out, and the CAGR was 35% plus, which is a small gap versus a 28% NSV that you see.
Hi. Uh, can you hear me?
Speaker #3: And there are three pronged things that we are doing which will take us to that 35%. We continue expanding our retailer network, number one.
Speaker #3: Number two, we are also like had shown in my brand partnership chart, we are expanding our category footprint. And becoming adding more wellness categories which will give us more throughput.
Speaker #3: And leveraging data science and technology to drive more brands in more stores. And more basically leveraging our network more. So I think with that, we will be able to be on our guidance by FY 2030.
Yes, you're audible, please proceed, excellent. I, uh, saw that here from clsa, uh, so 2 questions. Uh, firstly, uh, can you throw some more light on sort of the economic Arrangement between you and Nike? And, and if that's not possible, just the type of contract, uh, that that you would typically have or, or, or financial Arrangement, you'll have here. And and second, uh, again related to Nike, uh, how do you use the customer data? Does that aside with you, or does it say the Nike?
Right? So let me answer both questions, thank you for the question. Um,
Speaker #1: No, thank you. I'll get that. Yes. I'll get back in the queue. Thank you. The next question is from Kapil Singh. Please introduce yourself and proceed with your questions.
Speaker #5: Hello. Am I audible?
Speaker #1: Yes, you are.
Speaker #5: Yeah. Good evening and thanks for taking my question. Firstly, just wanted to understand top-down we are seeing a growth acceleration for last few quarters.
so like I said, the partnership with Nike is in 2 parts, 1 is a standard Marketplace partnership where we list Like You on the marketplace platform. Just like we list many other brands. And that's 1 part of the partnership. The second is where we completely end-to-end operate, their d2c customer platforms, which is across web and app, so nike.in, as well as the consumer-facing apps, which is the app on IOS and Android or built and operated 100% by my cost fashion. So it's a it's a much deeper integration on that side. Um and um and end to end, including fulfillment and everything uh which goes into running. Uh those platforms is done by us. I will not go into Financial um contractual details because that's uh not a trend.
Speaker #5: Are we still on that trajectory? And what is really contributing to it? If you can articulate a bit in terms of whether it's the market conditions are also improving or across the platforms some actions you have been taking just some more details here would help.
Relevant. But the arrangement is very different. Marketplace is just listing Nike on the platform, as we do with many other brands. The other one is us operating a different sales channel for them completely, end to end.
Speaker #1: Sorry, is this for any particular segment of the business or?
Speaker #5: I think each of the businesses, if they want to add, would be helpful. But generally, the observation is that growth is accelerating across segments, both for beauty and fashion.
Yeah. Uh, thanks for that. Uh, just in terms of the uh, running the say thank you in, uh, uh platform. Uh, so I just wanted to understand is this like, would you get a percentage of the sales or or I mean, even obviously you can't share the exact number, but just to try and understand what type of arrangement uh this would be or or I mean how, how does that work between you and I?
Speaker #5: So maybe we'd like to hear from both from Anchit and Abhijeet if possible.
Speaker #4: Yeah. Maybe I'll go I'll start, but I just I mean, I'll just caution you that that's a very, very long conversation. There's not one or two things that we can point to.
In is um um you know is as part of the fashion vertical. It's part of the number we bought. Yeah but I think I think it would they may be looking for is it's like a retailer like arrangement
Speaker #4: And in fact, we try to cover this in our investor day, which I assume you were a part of, try to cover this every quarter on these calls by giving you as much of an update on the business as we can.
Where we get a commission like numbers and some other service numbers based on the sales that we achieve.
Yeah, and we are protected against, you know, inventory and I mean there are similar Arrangements like a retailer.
Speaker #4: So it's there's no single thing yet the market has been strong and I'm sure you follow other consumer companies, so you'll know that generally results were good.
yeah, I think on the on the Nike dot in sight on the d2c side, it's a, um, it's an invoice on the marketplace side, it's a standard Marketplace arrangement,
Speaker #4: So the market has held up nicely. And of course, there are aspects of our business where we have executed well. We've done we've executed.
Um, if that further answers your question,
Yes, it does. Perfect. Thank you. Thank you so much.
Speaker #4: We've performed. We've delivered for our brand partners. We've acquired customers well. On the beauty side, every quarter I talk about penetration and premiumization, so you're seeing that play out in the growth.
Thank you.
We'll take the next question from Vidisha S. Kindly introduce yourself and proceed with your questions, please.
Speaker #4: We continue to acquire new customers to the platform. We continue to hold an appeal for younger Gen Z consumers through all of the work we do on college campuses.
Hi. Uh, am I Audible?
Speaker #4: Onboarding new brands, building new stores. So it's difficult for me to really try to in a short answer summarize exactly what it is, but it's a multitude of factors.
Speaker #4: And it's a combination of a good market, strong execution, very high-quality customer base, and Nike has and continuing to build the right platform and the right marketing and the right technology to service a very unique consumer.
Your mom please visit. Hi, this is vischa from Ambit Capital. My first question was on Nika now. Uh, so with this, uh, Nika now aspiration to reach uh, 25 watt cities, how do you expect the Aida drag from this, uh, nikana proposition to Trend going forward? It might be early days, but at what point does Nika now, now's overall contribution turn
Creative.
Speaker #4: So yeah, I mean, if anyone else would like to add, please feel free, but I think that's it from me.
Speaker #2: No, I will add on top of it. I think Anchit, you captured it well. Indeed, in the investor day, we had the opportunity to cover this in more detail.
Yeah, so I'll maybe I'll take that that question. Um, so look, um I think we've already now been lying when I can now for almost a year.
And it is now at critical mass in the metros in which it is live.
Speaker #2: I think on one hand, there is this consistent execution just quality of execution across many aspects which go into making a retail business, which is just keep on adding great brands, work with the brands to bring the best merchandise to customers.
and those, as you can imagine, tend to be the larger metros where
A significant amount of our demand is currently coming from.
And we, as you can see from our results, there is not any evidence.
Speaker #2: Use technology more and more to elevate the shopping experience for customers, to personalize, and through that, improve metrics like conversion, retention, so on and so forth, which we don't share in as much detail here, but that's just the very nuts and bolts of execution.
Margin dilution. Even though I can now has reached a certain size and scale whereby it is already meaningful in the cities in which it is present.
Speaker #2: In case of both businesses, I mean, I think you also asked a question, is there something wider in the industry which is going on?
Um and um so you know our early read is that we don't think this will be uh dilutive uh in in a in a, you know, if at all. In fact, we are currently seeing that
Speaker #2: Irrespective of which source you refer to, it's fair to say that both businesses have consistently grown faster than industry. And in case of fashion, in addition to what Anchit already shared, execution of rigor of execution aside, I think there are also structural improvements and step change improvements we have made in the last couple of years on assortment addition.
The frequency of purchase from customers who are now engaging with my account is increasing.
And that was always our hypothesis, that if, you know, Nykaa now would become a destination for customers to make those last-minute unplanned purchases on Nykaa, which...
Speaker #2: And we called this out in maybe the previous call that just over the last year, we added more than 1,200 brands, and we've continued to do that every quarter.
Speaker #2: And these are many of the marquee brands that we can think of were in that list. H&M, Nike, more recently. So those are just step change improvements.
You know, maybe in the past where was being fulfilled by other platforms? Because Nika, did not have this quick delivery capability. So there is in there, is there are new use cases, which are now, being fulfilled through Nikon now, which were not being done earlier. So net, net. We see this as a creative from a LTV perspective.
And the AOVs for the orders are not meaningfully different from
Speaker #2: The platform assortment is more holistic. Addition of brands has happened not just in women's, which has been the core strength for Nike fashion always, but also men's kids, increasingly home and so on.
Speaker #2: And we've also continued to add more business lines. The D2C partnership with Nike, the enterprise business line is an example. So we continue to execute on the known facets of a retail business while also adding step change improvements in the form of new business lines.
the mainline orders either. So the only cost which we are currently keeping an eye on is the Fulfillment cost whereby, you know, point to point fulfillment of a of an order. Uh, and I can now order is, you know, on a cost per order basis, naturally would be, would be more expensive.
But again, the benefit of the increase in frequency of purchase, the average order value is staying average. Order. Value is staying
Speaker #2: And all of that put together leads to outsized growth versus the industry. That's what I would say.
Speaker #5: For sure. That helps. Thank you. And just on the we've talked a few times about marketing efficiency. So what really is happening over there and how much more scope is there, whatever color you can share there would be helpful.
Consistent. I think these things are all offsetting, uh, some of that increase in fulfillment and that's why you're seeing that despite not having become meaningful in the past, uh, several quarters. Uh, we've still shown, uh, ibida, uh, Improvement, uh, this quarter.
So I hope that answers the question. Sure, just a small follow up to this in terms of the category makes the Nikon Now versus Nikon, if you could call out some uh, trends that you're seeing over there.
you know, it's um, um,
Speaker #1: I think I'll come in here. Actually, I was going to add to this that from a financial numbers, you can see that the growth and improvement in EBITDA margin is coming.
currently the, it's not looking very different. Like, we're seeing a lot of. I mean, ultimately, we are not a horizontal quick Commerce player, right? We are a beauty player so naturally naturally
Speaker #1: With at least in the last one year, where fulfillment costs have gone up slightly. So obviously, we're prioritizing faster delivery, better customer experience. And similarly, marketing costs have not come down significantly.
It's all Beauty, uh, Beauty categories that are doing well.
Speaker #1: We've protected them at a similar level. So obviously, in fashion, there's been improvement in marketing costs. There's the C-chain improvement, but I'm talking about beauty.
Speaker #1: So what has happened is that we are seeing efficiency in marketing, but we are pushing the pedal on acquisition, customer acquisition, and through that, we are delivering and that's not just for beauty.com, but that's similar for all our house of brands.
Speaker #1: It's similar for fashion, many other every business of ours. So marketing continues to be an investment that we make. And through that, we are seeing growth momentum also being supported.
Get that categories that uh you need in a in a hurry. So things like low, ASP face washes and uh, you know, cleansers and you know, bath gels, Etc. So those are also pure incremental uh, uh, business first. Because those are categories in which historically Nikon never had a big role play.
Got it, got it. And my second question was on,
Speaker #1: Like you can see, superstore, in superstore, most of the growth has come without adding any feet on street. So in many ways, we were trying to improve the productivity and get to better unit cost economics.
Speaker #1: But through our growth, if we were to add additional distribution through feet on street, that helps us roll out further addition of retail network, then there could be an additional growth added to the mix.
Speaker #1: For the AI benefit, we are seeing better ability to productive marketing, productivity of marketing remains good, and we are investing that through reaching out and getting more customers on board.
Speaker #4: Yeah. And I think it's also worth highlighting that one thing we've always said for many years is, as a business matures, the share of business coming from existing buyers starts to become a larger percent of the overall revenue mix.
Speaker #4: And as you know, a lot of marketing costs go towards new customer acquisition. And that amount of money, even if you're growing that in absolute terms, year over year, it is now being spread over a larger base of shoppers and of revenue.
Superstar. Uh, so when does the gmv growth normalize, uh, towards the 40 45% gigger ambition called out during the analysis because even when we compare it to the GST, L shift, the Gap in growth. Seems to be very higher. Yeah, yeah, yeah. So, uh, let me answer in 2 ways. Firstly, the GST, uh, impact will start normalizing from Q3 onwards. So you will see, uh, very close numbers between nsv growth and gmv growth, you know? So, uh, that's why, secondly, yes we had called out and the CGR was 35% plus, which is a small Gap versus a 28% nsv that you see. And there are 3 pronged, you know, things that we are doing, which will take us to that 35%. We continue expanding our retailer, Network number 1. Number 2, we are also like had shown in my brand partnership chart, we are expanding our category footprint and you know uh becoming adding more Wellness categories which will you know, give us more
To report and leverage data science and technology to drive more brands, more stores, and more—uh, you know, basically leveraging our network more.
Speaker #4: So that is the leverage that you get as you continue to mature and you continue to have a larger number of cohorts, customer cohorts, shopping on the platform.
So I think with that, we will be able to, you know, be on our guidance by fee 2030.
No, thank you. I'll get very much work. I'll get back in the—
Speaker #4: And that's been a large part of the reason why the beauty business has managed to get to the EBITDA margin it has. And we've always guided that fashion was just several years behind beauty on its own journey of building a very meaningful base of repeat buyers.
Thank you. The next question is from Kapil Singh. Please introduce yourself and proceed with your questions.
Speaker #4: And I think you're seeing a similar story play out with the kind of marketing spend reduction in percentage terms that fashion has managed to show year over year.
Speaker #4: But again, Abhijeet can add more.
Hello. Am I audible? Yes, you are.
Speaker #2: I'll just add one more layer on that. That is exactly right that we are now seeing a higher share of revenue come from repeat customers.
Speaker #2: And like I said, that's for us to be able to retain the customers that we acquire, and it's all very well to acquire customers, but as a platform, we need to be able to retain them for efficiencies to improve.
Speaker #2: And that's what we see happening just like we saw first in beauty and fashion. That's one aspect. The second is I want to draw attention back to what I shared on the customer funnel slide in the fashion section that even the customer acquisition cost, even the new customer acquisition costs are actually increasingly better.
Yeah, uh, good evening. And thanks for taking my question. Uh, firstly just wanted to understand top down, you know, we are seeing a growth acceleration for last, uh, you got us, are we still on that trajectory and, uh, what is really contributing to it? If, if you can articulate a bit in terms of whether it's the market conditions are also improving or, you know, across the platforms, some actions, you have been taking, uh, just some more details here, would help
Speaker #2: And that's as a result of many things that we do behind the scenes. One is just more robust assortment, which leads to conversion rates on acquiring customers to improve.
Cody, is this for any particular segment of the business? So,
Speaker #2: But then also being able to target with the use of technology, the right product to the right customers, a whole lot of things go into making the customer acquisition cost itself better, which allows us to acquire customers still at a very high percentage, maybe 44% higher year on year on new customer acquisitions, but at healthier stacks.
I think each of the businesses, if they want to add, uh, would be helpful. Um, but generally the observation is that growth is accelerating across segments, uh, both Beauty and Fashion. So, uh, you know, maybe we would like to hear uh, from both from and possible.
yeah, you know, maybe I'll go I'll start but I'll just
Speaker #2: That has led to step change improvement in fashion. We've not slowed down customer acquisition, but that's happening at better CACs, significantly better CACs. And increasingly, we have a much higher cumulative customer base, which both of those are showing up in the sizable improvement in marketing efficiency.
Speaker #5: Yeah. Thank you so much for the detailed answer. That's very helpful.
Speaker #1: Thank you. The next question is from Swapner Port Duke. Please introduce yourself and proceed with the questions.
Speaker #6: Hi. Thanks for the opportunity. This is Swapner Port Duke from JN Financial. My first question is in the BPC segment. So if I were to look at your order volume numbers on a Q1, Q2 basis, it seems there was a certain dip of 1% Q1, Q2.
Speaker #6: Can you please explain that? What is the reason behind that? Is it seasonality or something else?
portion you that like that's a very, very long conversation. There's not 1 or 2 things that we can point to. And in fact, we try to cover this in our investor day which I assume you were a part of try to cover this every quarter on these calls by, you know, giving you, uh, as much of an update on the business as we can. So, you know, it's it's it's there's no single thing. Yes, the market has been strong and I'm sure you follow other consumer companies. So you'll know that generally results rewards. The market is is held up nicely. And of course, there are aspects of our business where we have executed. Well, we've done. Uh, you know, we've executed, we've performed we've delivered for our brand Partners we've acquired customers as well on the beauty side every quarter. I talk about penetration and premiumization. Uh, so you're seeing that play out in the growth. We continue to acquire, uh, new customers to the platform. We continue to hold and appeal for younger gen gen Z consumers, to all of the work we do on college campuses.
Speaker #4: Is that are we can we go to the slide wherever you're seeing that information?
Onboarding new brands, building new stores. So it's difficult for me to really try to in in a short answer summarize exactly what it is but it's it's a multitude of factors.
Speaker #6: It was 17.5 million last quarter. Now it's 17.3.
Speaker #4: You're saying sequentially?
Speaker #6: Sequentially, Q1, Q2. Yeah.
Speaker #4: Yeah. I mean, I think it's relatively similar as we always say. Ultimately, this business does have certain quarters and certain seasons that are that naturally have more demand it might be as we always say, Q3 is our best quarter because of festives, weddings, as well as certain large flagship sales that we do.
And it's a combination of a good market, strong execution, a very high-quality customer base that Nykaa has, and continuing to build the right platform, the right marketing, and the right technology.
Uh, to service a very, uh, a very unique consumer.
Speaker #4: And Q4, last year, was probably a strong quarter. So I think it's quite similar. I don't see it as being very meaningfully different quarter on quarter, but I would encourage you to look at a more apples to apples comparison.
Speaker #4: Which is the year-on-year comparison of the number of orders, right? And I think that's where we're showing close to 20% growth on the beauty side and that's really how we track that.
Speaker #4: Are we growing the business both on a volume and value basis by making the comparison slightly more apples to apples?
Speaker #6: Understood. The other question is with respect to your the pricing difference between your core platform and the Nykaa Now platform. Do you is there any pricing difference?
Speaker #6: And that you typically have so and that makes your that adjusts for your cost of fulfillment in some way?
Now, I will add on top of it. I think you've captured it well um indeed you know in the investor day we had the opportunity to cover this in more detail. I think on 1 hand, there is this consistent execution, just quality of execution across many aspects which going to making a retail business which is just keep on adding great Brands work with, you know, the brands to bring the best merchandise customers, um, use technology more and more to elevate the shopping experience for customers to personalize and through that, uh, improve metrics, like, conversion retention so on and so forth, which we, you know, don't share in as much detail here, but that's just the very nuts and bolts of execution, in case of, you know, both business. I mean, I I think you also asked a question, is there something wider in the industry which is going on? Um, it is respective of which source you refer to, it's fair to say that both businesses have you know, consistently grown faster than industry. Um and um and um, in case of fashion in addition to what, um, anjit already
Shared.
Speaker #4: No, because as you might be aware, all of these discounts that are passed on to the consumer on the MRP is funded by the brand, right?
Speaker #4: So Nykaa is a retailer does not do retailer-funded discounting as a policy. So that's a cost that the brand has chosen to bear. And that price at which the brand is choosing to sell to the customer is offered across both Nykaa Now as well as the main line.
Uh, you know, execution of trigger rigor of execution aside. I think there are also structural improvements and step change improvements. Um, we have made in the last couple of years on assortment Edition and we called this out in. Uh maybe the previous call that just over the last year, we added more than 12200 Brands and we continue to do that every quarter and these are you know many of the Marquee brands that we can think of were in that list, um H&M Nike more recently. So you know those are just step change improvements.
Speaker #4: So currently, there is no differential pricing on Nykaa Now versus the main line.
Speaker #6: Got it. And the other question is on your fashion business. Now, the business obviously is growing at a very healthy pace and partly aided by your Nike partnership.
Speaker #6: But that partnership will come in your base numbers somewhere in mid 4Q, FY27. So if I were to look at your numbers beyond this partnership, how should one look at the growth that you're looking at?
The platform assortment is more holistic edition of brands has happened. Not just in women's, which has been the core strength for Nika's Nika fashion always but also men's hommes kids, increasingly home and so on. And we've also continued to add more business lines. Um the d2c partnership with Nike the Enterprise business line is is is an example. So, you know, we continue to execute on um on on the known facets of a retail business. While also adding step change improvements um in the form of new business lines. So and and you know, all of that put together leads to outsized growth versus the industry.
That's what I would say.
Speaker #6: Because unless you get some other partner to and that two of the sales of Nike, the growth numbers thereafter may see some adjustment. Is that the right way to look at it or something is on the cards there as well?
A short uh that helps thank you and uh just on the uh we've talked a few times about marketing efficiency. Uh so uh you know what really is happening over there and how much more scope is there. Whatever color you can share there would be helpful.
Speaker #2: Okay. So I think let me address the question in a firstly just anchoring to long-term. We still write to what we shared in the investor day just to a couple of weeks ago.
Speaker #2: Which is 3 to 3.5x growth over a 4 to 5-year period. And we still retain that. At the same time, I think engines we are building and the Nykaa fashion core platform, the enterprise business, other business lines that we run within the fashion vertical, we do everything to do even better than what we guided and that's the numbers you're seeing is a result of that.
Oh, I think I'll come in here. Actually, I'm going to add to this that from a financial number, you can see that the growth and improvement in EBITDA margin is coming, uh, with, uh, in the lead in the last 20 years, uh, where fulfillment costs have gone up slightly. So obviously we're prioritizing faster delivery, better customer experience, and similarly, marketing costs have not come down significantly—we've protected them at similar levels.
Speaker #2: Without going into too many details, I think it's still very early days for the Nike partnership. The D2C partnership particularly and that may seem like it's of course, it's a new business line which gets added to the numbers reported here.
Speaker #2: But the numbers here are actually largely reflective of the underlying platform growth in a very big way. And we are fairly confident that that itself will continue to be quite healthy.
So obviously, in in fashion, there's been Improvement in marketing cost, there's a CG Improvement, but I'm talking about beauty. So, what has happened is that we are, we are seeing efficiency in marketing, but we are pushing the pedal on acquisition customer acquisition. And, um, and through that, you know, we are delivering, uh, and that's not just for beauty.com, but that's similar for all our house of Brands. It's similar for fashion, many other, you know, every business of ours. So marketing continues to be an investment that we make. And through that, we are seeing growth momentum also being supported.
Speaker #2: Irrespective of us adding other potential partners such as Nike. Hope that answers your question. I hope that answers.
Speaker #6: Yeah. Thanks. Thanks. So just the last one. There will be some shift in festivities this time around. So how to look at your the numbers for from a 2Q and 3Q perspective?
Like, if you see a Superstore—uh, in Superstore, most of the growth has come without adding any feet on street. So, uh, in many ways, we were trying to improve the productivity and get better unit cost economics. But to our growth, if we were to add additional distribution through feet on street, that helps us roll out further addition of retail network. Then there could be additional growth added to the mix.
Speaker #6: Given that the base would be different from last year. Thanks.
Sure, thank you AI benefit is seeing a better ability to, you know, productive marketing productivity of marketing remains good. And we are investing that through reaching out and getting more customers on board.
Yeah, I think it's also worth highlighting that one thing we've always said, uh, for many years is—
Speaker #2: So is that a question for fashion or is that overall a question on seasonality?
Speaker #6: It's a common question for both BPC and fashion. And because last year festives came in early and this time around the festives will get pushed out to the 3Q quarter.
As a business matures uh the share of business coming from existing buyers, starts to become a larger percent of the overall Revenue mix. And, um, as you know, a lot of marketing, uh, cost goes towards new customer acquisition and that, that amount of money, even if you're growing that in absolute terms year over year,
Speaker #4: Yeah. So I think as we've always said, we do have there is some amount of business that for us comes from the festive period.
It is now being spread over a larger base of uh, of of Shoppers and of revenues. So that is the that is the leverage that you get as you continue to mature and you continue to have
Speaker #4: But it's not we're not so overly dependent on festive, right? Our categories, especially the beauty side, are a lot of our categories are everyday use categories and a lot of it is for personal consumption.
a shopping on the platform and that's been a large part of
Speaker #4: So I don't think that business will be affected too much. But whatever festive demand we do capitalize on, which we do and we've always said that, that benefit tends to accrue in Q3.
Speaker #4: I think we will continue to see that play out in a similar way. So I think still a lot of the dates are in Q3 this year.
Speaker #4: And that is generally when we tend to have our best quarter. And you can look at our past several reported years and you'll see Q3 generally tends to be the highest in terms of absolute revenue that the business does.
Speaker #4: And I think if there are dates that are being pushed into Q4, then some of that benefit might accrue in Q4 as well. But to me, it seems most of the dates are falling in Q3.
Speaker #6: Got it. Thanks a lot for the opportunity and all the best.
Speaker #1: Thank you. The next question is from Sachin Salgaonkar. Please introduce yourself and proceed with your questions.
the reason why the beauty business has managed to get to the IBA Mahr has, and we've always guided that fashion was just several years behind beauty, on its own journey of building, a very meaningful base of repeat buyers. And I think you're seeing a similar story, play out with the kind of um marketing, uh, spend reduction in percentage terms that fashion has managed to show year over year. But again at work, I'll just add 1 more, um, 1 more, um, uh, layer on that. That exactly. Right. That we are now seeing a higher share of Revenue come from repeat customers. And like I said that's, you know, for us to be able to retain the customers that we acquire and it's all very well to acquire customers. But as a platform, we need to be able to retain them or efficiency to improve. And that's what we see for first in Beauty in fashion, that's 1 aspect, the second is I want to draw attention back to what I shared on the customer funnel, slide in the fashion section that even the customer acquisition costs. Even the new customer acquisition costs are actually increasingly better and that's as a result of
Speaker #5: Hi. Thank you for the opportunity. This is Sachin Salgaonkar from Bofa Securities. I have three questions. First question on beauty. When we look at repeat rates, are these repeat rates equally across mass premium luxury or is there a concentrated in any specific category?
Speaker #5: I'm asking that because your AOV improved 7% on a YY basis. So is that a trend we should continue to expect going ahead as well?
many things that we do, um, behind the scenes 1 is just, um, you know, more robust assortment which leads to, um, conversion rates on acquiring customers to improve, but then also being able to Target with the use of Technology, the right product to the right customers, a whole lot of things go into making the customer acquisition cost itself better, which allows us to acquire customers still at a very high um, percentage maybe 44% higher year on year on
Speaker #5: Because of a bit more of premiumization or mixture change?
Speaker #4: On beauty, we've always said that premiumization can happen in many forms. One is the AFC premiumization, which is where customers will buy a higher AFC product.
Um, new customer acquisition but at healthier CS that has led to step change Improvement in, um, in fashion that, you know, we've not slowed down customer acquisition but that's happening A Better Tax significantly better tax and increasingly. Um, we are, you know, we have a much higher cumulative, customer base, which and both of those are showing up in the sizable Improvement in marketing efficiency.
Speaker #4: And that's one form of premiumization. But even a frequency of purchase increasing is for us a form of premiumization. As well as consumers educating themselves and being more I would say up to speed and more comfortable with the category and therefore buying a wider assortment.
Yeah, thank you so much for the detailed answer. That's very helpful.
Thank you. The next question is from SWAP. Okay. Please introduce yourself and proceed with the question.
Speaker #4: So increasing their items per transaction or average basket size. So there is an ABS premiumization, FOP premiumization, and an AOV premiumization on the back of ASP or on the back of ABS.
Speaker #4: So we are investing behind driving premiumization across all those three variables. And a part of that premiumization you're seeing flow through onto AOV. And some of that is coming from selling from selling higher ASP products and some of it is coming from an expansion in the basket size.
Hi. Uh, thanks for the opportunity. This is from James Financial. My first question is in the VC segment, so if I were to look at order volume numbers on a Q on QBC, uh, it seems there was a a certain deep of 1% Q on Q. Uh, can you please explain that? Is it? Uh, uh, what is the reason behind that? Is it seasonality or something else?
Is that is that are we disc?
Million last quarter. Now it's 7 7.3.
Speaker #4: And the expansion in the basket size is something that takes some time to start to show into the numbers because the education has to be done over a long period of time to influence the customer to change their buying behavior.
You're saying sequentially sequentially? Yeah, yeah. I mean,
Speaker #4: Which ultimately can only be altered if the consumption behavior is changed. So we try to change the consumption behavior that ultimately will result in a positive outcome on the buying behavior.
I think, similar as we always say, ultimately, uh, this business does have, um, certain quarters and certain seasons that are—
Uh that naturally have more demand. Uh, you know it might be as we always say Q3 is is our is our best quarter because of
Speaker #4: So I don't know if that answered your question, but yeah, that's kind of why you're seeing the even though we continue to acquire many new customers whose AOV tends to be lower than the weighted average AOV that we're currently seeing on the slide, despite acquiring new customers, the fact that we're able to grow the average order value at the aggregate level should tell you that we are able to meaningfully influence our existing shoppers buying behavior on the platform.
Festive weddings as well as certain large Flagship sales that we do. And, uh, Q4 um, you know, last year was probably a strong quarter. So I think it's quite similar. I don't see it as being very meaningfully, different quarter on quarter. But I would, I would encourage you to look at a more apples to apples comparison, which is the year on year comparison of the number of orders, right? And I think that's where we're showing.
Speaker #5: Got it. Thank you. Then a quick follow-up out there is presume safe to say that these trends could be sustainable because of the multiple levers you mentioned for the improvement in AOV.
Close to 20% growth uh on the beauty side uh and that's, you know, that's really how we track that. Are we growing the business both on a volume and value basis. Uh by making the comparison slightly more apples to apples.
Speaker #4: Yes. I think repeat customer AOV growth is something which we are working we work on day in, day out. And that is sustainable. And even on new customers, we feel that ultimately the consumption, the per capita consumption of beauty in India is so low that as affordability, as awareness, and as availability increases, you'll start to see new customers coming into the beauty category at higher average order value.
Understood the other question is with respect to your uh, the uh, the pricing difference between your core, uh, platform. And the Nikon platform, uh, do you, uh, uh, is there any, uh, pricing difference on on that? You typically have? Uh, and that makes me your uh, that adjusts for your cost of fulfillment in, in some of
Speaker #4: So in our opinion, given all the work we are doing as Nika as well as a macro outlook on rising penetration and rising consumption, I think the average order value moving in the right direction is definitely our base case at this point in time.
No, because, um, as you might be aware, all of the discounts that are passed on to the consumer on the MRP are funded by the brand, right? So Nykaa as a retailer does not do retailer-funded discounting as a policy.
So, that's a cost that the brand has chosen to bear.
Speaker #5: Got it. Second question is on fashion for Vijit. Vijit obviously agreements like Nike and H&M in a way I love you guys to move away from a marketplace model partly towards an inventory-led model.
And, uh, that, uh, price, uh, it's—the brand is choosing to sell to the customer—is offered, uh, across both Nykaa now as well as the main line. So currently, there is no differential pricing on Nykaa versus the main line.
Speaker #5: So assuming there are similar such partnerships in future also, how should we think about the mix between marketplace and inventory for fashion business? And a related question is, is there a thought process to open stores for fashion just the way you guys have stores for beauty?
Got it. And the other question is on your fashion. Uh, business. Now the the business obviously is growing at a very healthy pace, so and partly aided by your Nike partnership.
But, uh, the partnership will come in your base numbers. Uh, somewhere, you need Q4, FY '27.
Speaker #3: Yeah. Hi, Sachin. Thanks for the question. I think firstly on the likes of H&M and Nike, for the large part, barring the Nike D2C partnership, which we've spoken adequately about, the rest of the retail multi-brand retail businesses still and continues to be predominantly marketplace.
So, so if I were to look, uh, you at your numbers Beyond this partnership, uh, uh, how should 1 look at the growth, uh, that you're looking at Because unless you get some other partner to and that 2 of the sales of my day, uh, the growth numbers that thereafter may see some adjustment is that the right way to look at it or if something is on the cards there as well.
Speaker #3: And that's how it will be going forward. Inventory-based business is a very small portion partnerships such as the Nike D2C partnerships will also be selective in nature.
Speaker #3: So it will be predominantly a marketplace business. And that's how we want to build it. We believe that's the right healthy way of building a multi-brand fashion retail business anyway.
Speaker #3: H&M, you mentioned H&M is actually not an inventory-based business. It's a marketplace standard marketplace agreement where they list products on us just like so many other brands.
Speaker #3: So that's on that question. Just to also maybe clear the confusion a little bit because H&M is not an inventory partnership at all. On the second one, not for now.
Okay, so I think, um, um, let me address the question in a, um, firstly just anchoring to long-term, you know, we still guide to what we shared in the investor day just to, you know, couple of weeks ago, which is 3 to 3.5 x growth over a 4 to 5 year period and we still retain that at the same time, I think the angels we are building um and um, you know, the Nika fashion core platform, the Enterprise business other business lines that we run within the fashion vertical. Uh we do everything to do even better than what we guided. Um and that's the numbers you're seeing is a result of that.
um,
Speaker #3: I mean, we are focused on just building out digitally. With partners. So not for the moment.
Speaker #5: Got it. And last question is mainly on buying behavior and answered that elaborate a lot in terms of how Nike is focused in terms of changing buying behavior.
without going into too many details, I think it's still very early days, uh, for the Nike partnership, the d2c partnership particularly, um, you know, and that may seem like it's, of course, you know, it's, it's a new business line which gets added to the numbers reported here, but the numbers here are actually largely reflective of the underlying platforms growth.
um, in a very big way and um, we we are, you know, fairly confident that
Speaker #5: So the question out here is, thanks to Nike now and your ability to deliver things faster to consumer, are you actually seeing new what do you call as use cases unlock because the customer behavior is changing on the back of rapid delivery?
That itself will continue to be quite healthy irrespective of us, you know, adding other potential partners, such as, uh, Nike.
Speaker #5: And anything particular which is getting sold better than you're expectations, particularly on replenishment-led categories?
Speaker #2: I think the hypothesis it would improve the repeat frequency of purchase and it would give us an ability to continue to build personal care.
That answers your question, I hope. Thanks. Uh, so just uh, the last 1 uh there will be some uh, shift in festivities at this time around. So how to look at your uh you know uh the numbers for 2 and 3 Q perspective, uh give it the base would be different uh from last year, thanks.
Speaker #2: Like you're aware that Nike is a big leader in beauty category which is makeup and high-end skincare. And of course, we play in hair and bath and body and many of the personal care categories.
So, is that a question for fashion, or is that overall a question on seasonality?
Speaker #2: And to significant extent, but like if you look at say toothpaste, you may not be doing much business. So with Nike now and as it plays out more and as we roll it out, I do feel that we all feel that over time, customers can increase the frequency of purchase on Nike and buy more of personal care.
Uh, and because uh, last year Fest came in early and this time around the festive will get pushed out to uh, the 3Q quarter.
Speaker #2: So that's an assumption that we are working on.
Speaker #4: Yeah. Sorry. I had a little bit of a lag on my end on the computer. But I think FN has summarized it well. Ultimately, as we've discussed in the past, this is an opportunity for us to drive incremental demand in categories where we have had low penetration in the past.
Yes. So I think as we've always said we we do have. Uh, there is some amount of business that uh that for us comes from the festive period.
Um, but it's not—we're not so overly dependent on festive, right? Our categories, especially on the beauty side, are...
Speaker #4: And that is that continues to be the hypothesis. And that's what we're working to build the Nike now experience around. So yes, I think what you will see is given where our strengths lie, that will continue to be in core beauty subcategories, that will also continue to be fulfilled through Nike now.
A lot of our categories are Everyday, Use categories and a lot of it is for personal consumption, so I don't think that business will be affected too much but whatever, festive. Demand we do capital is on which we do. And we've always said that that benefit tends to Q3
Speaker #4: And that's what really differentiates us against some of the other platforms that are selling beauty or through quick commerce capabilities. But this gives us a chance to also start getting into categories where we've been relatively underpenetrated in the past.
I think, uh, we will continue to see that play out in a similar way. So, I think still a lot of the dates are in Q3 this year, and, uh, that is generally when we tend to have our best quarter. You can look at our possible, uh, reported years, and you'll see Q3 generally has to be the highest in terms of absolute revenue that the business does. And, um, I think, uh, if there are days that are being pushed into Q4, then some of that benefit might occur in Q4 as well.
Speaker #4: And we have a right to win because we're delivering in competitive speed with competitive speed. But giving the customer a much, much wider assortment available through Nike now.
but to me, it seems most of the dates are falling in in in Q3
Got it. Uh, thanks a lot for the opportunity and all the best.
Speaker #4: And also the fact that Nike is a platform that is very much trusted for delivering authentic products to the consumers we believe should help us to really identify new areas of growth, new subcategories of growth through Nike now.
Thank you. The next question is from Sachin SEL, Ger.
Please introduce yourself and proceed with your questions.
Speaker #5: Perfect. Thanks all and all the best.
Speaker #1: Thank you. The next question is from Percy Panthaki from IFL Securities. Please go ahead.
Speaker #3: Visible?
Speaker #1: Yes, please proceed, sir.
Hi, thank you for the opportunity. This is Sacha from both our Securities. Uh, I have 3 questions. First question, on beauty. Uh when we look at uh repeat rates are these repeat rates equally across Mass premium luxury, or you know, is there a concentrated in any specific category? I'm asking that because you know, your aov improved 7% on a Wii basis. So is that a 10 we should continue to expect going ahead as well, because of a bit, more of a premiumization or mix of change.
Speaker #3: Yeah. So I just wanted to understand the target market for the beauty products in terms of number of customers. You've already reached close to 20 million plus.
Speaker #3: If I look at urban women in the age group of 15 to 50, that's about 150 million. And this is before applying of income filter or anything of that sort.
Speaker #3: So just wanted to understand in like a medium-term over a five-year kind of a view, what do you think is your total target audience after you apply an income filter?
On beauty, we've always said that premiumization can happen in many, uh, forms. One is the, the ASP premiumization, which is where customers will buy a higher ASP product, and, um, that's one form of premiumization. But even frequency of purchase increasing is, for us, a form of premiumization, as well as consumers educating themselves and being more, uh, I would say up to speed and more comfortable with the category and therefore buying a wider assortment, so increasing their items per transaction or every basket size. So, there is, there is an ASP, uh, pre—
Speaker #3: And also typically how these things work out is that when the headroom is very high, the YOI growth also is high and as the headroom gets lower, the YOI growth comes off.
Minimization for premiumization and AOV premiumization, on the back of ASB or on the back of ABS. So, we are investing behind driving premiumization across all those three variables.
and uh, a part of that, uh, premiumization you're seeing flow through on to a
Speaker #3: So just from that point of view, because right now your total growth is largely led by AOTC, so how do you look at the AOTC growth beyond, let's say, two, three-year period total five-year horizon?
And some of that is coming from selling, uh, from uh, selling higher, ASU production, some of it is coming from expansion in the basket size.
Speaker #3: Do you think you can maintain this kind of a run rate? And also, what is the target market in terms of AOTC in your calculation over, let's say, a five-year kind of horizon?
And the expansion of the basket size is something that takes some time, uh, to start to show into the numbers because the education has to be done over a long period of time to influence, the customer to change their buying Behavior, Uh, which ultimately you can only be altered if the, uh, consumption behavior is changed. So we try to change the consumption behavior. That ultimately will result in a
Speaker #4: So in our annual
In a positive outcome on the buying Behavior.
Speaker #2: day, we had deep dived on this in a very detailed manner. And it's all there on the exchange website. So I would urge you to do that or even our investor teams can share with you.
So I, I don't know if that answers your question, but um,
Speaker #2: But I think the answer, it definitely lies that fashion online has been as big as the 60, 55 to 65 million consumers who have bought fashion online.
Speaker #2: And fashion online is a serious consumer. So in many ways, we always believe that that much of a headroom was available to us. And on top of that, now if you see, we believe that the way the income levels are shifting, that number itself will be about 100 million dollars going forward in five years.
Yeah, that's kind of why you're seeing that, even though we continue to acquire many new customers whose AOV tends to be lower than the weighted average AOV that you're currently seeing on this slide—despite acquiring new customers, the fact that we're able to, uh, grow the average order value at the aggregate level should tell you that we are able to meaningfully influence our existing shoppers' buying behavior on the platform.
A.
Speaker #2: So yeah, we believe that somewhere between 65 to 100 million will be the relevant temp for Nike. And also, we are servicing men, though predominantly women, but increasingly we're adding men to our mix.
Speaker #2: So we are not restricted only by women customers. Both fashion as well as we have a platform, Nike Man. And even on beauty, there is a certain percentage consumption towards men.
Speaker #2: Especially in personal care category and grooming categories.
Speaker #4: Yeah. And just to add to that, you have to again, I keep repeating that even the existing 20 million as we said, we were 60 million shoppers who ever bought on Nike, which 20 million are buying in the last 12 months or on an annual basis.
Izing consumption. I think the average order value moving in. The right direction, is definitely our base case at this point in time.
Got it.
Speaker #4: So one, there is a huge opportunity to get the buyers who are infrequently transacting on the platform who have shopped on Nike in the past, which is a very large number of consumers, to start engaging and transacting on the platform more.
Speaker #4: That's one. The second is the frequency of purchase of our existing 20.8 million annual unique transacting buyers is X. And as I said, it is the frequency of purchase is very low.
Speaker #4: When compared to global averages. And I think it's size is also low compared to global averages. So there is so much still to be done with the 60 million shoppers who have ever shopped on Nike increasing their frequency of purchase, increasing their average order values.
Um, second question is on fashion for Bijit. Um, Bijit, obviously, you know, agreements like Nike and H&M in a way, I believe, have led you guys to move away from a marketplace model, partly towards an inventory-led model. Um, so assuming, you know, there are similar such partnerships in future also, how should we think about the mix between marketplace and inventory, uh, for the fashion business? And a related question is, is there a thought process to open stores for fashion, just the way you guys have stores for beauty?
Yeah, I searched in—uh, thanks for the question. I think, firstly, on—um,
Speaker #4: And therefore, a lot of growth to be had from the annual consumption value that is yet to come from the base of shoppers already on the platform.
Speaker #4: And on top of that, there is still a very long way to go when you as you mentioned in terms of the total addressable market of urban households that are relevant to us.
Speaker #4: And in terms of a price filter, we don't really see ourselves as needing to apply a price filter because we have a assortment available at all price points across the spectrum.
Speaker #4: So we sell everything from the most, I would say, mass, massage, FMCG type SKUs all the way to the most premium products. So we have something for everybody.
On the likes of H&M and Nike, you know, for the large part, baring, the Nike d2c Partnership if you've spoken adequately about, um, the rest of the retail multi-brand. Retail is still and continues to be um, predominantly Marketplace, and that's how it will be going forward. Um, inventory based business is a very small portion Partnerships such as the Nike d2c Partnerships will also be selective in nature, so it will be predominantly a Marketplace business. Um, and um, and that's how we want to build it. We believe that's a a right healthy way of building a multi-brand, Fashion retail business. Anyway, um, H&M you mentioned, hmm, was actually not an inventory based business. It's a Marketplace, um, standard Marketplace agreement where they
Speaker #4: We are also now catering to building communication in vernacular languages, enabling voice-based search. So we are also definitely an option for a much wider audience than you might be thinking.
List products and I was just like so many other brands, so that's on that question. Um, just to also maybe clear the confusion a little bit because it you know, H&M is not an inventory um partnership at all.
um,
On the second 1 uh not for now. I mean we are we are focused on just building out digitally uh, with Partners. Uh,
So not, um, for the moment.
Speaker #1: Thank you, sir, for answering those questions. That was the last question we can take today. You may reach out to Nike's investor relations team for any additional queries.
Speaker #1: I would now like to hand the conference over to the management for closing comments. Thank you and over to you, ma'am.
Speaker #2: Yeah. Thank you very much. I'd just like to thank each one of you for participating in the call today. And discussing with us about the performance.
Speaker #2: So thank you very much. And look forward to continuing to see you guys.
Speaker #4: Thank you.
Speaker #1: Thank you, members of the management. Thank you, sir.
Got it. And last question is, mainly on buying behavior and answer that elaborate a lot in terms of, you know, how Nika is focused in terms of changing buying Behavior. So the question out here is, you know, thanks to Nikon now and your ability to deliver things faster to Consumer. Are you actually seeing a new are? What do you call is? Use cases analog because the customer behavior is changing on the back of the rapid delivery and anything particular, which is getting sold better than your expectations particularly on replenishment like categories.
Speaker #3: Thank you.
Speaker #1: Thank you, members of the management. Ladies and gentlemen, on behalf of FSN e-commerce ventures limited, that concludes this conference. We thank you for joining us.
I think the hypothesis would it would improve the, the repeat frequency of purchase and it would uh, give us an ability to continue to build Personal Care. Like you're aware that like as a big leader in. So Beauty was 12 Beauty category which is makeup and hand skin care. And of course we can hair and
And you know many of the personal significant extent. But like if you look at say toothpaste, we may not be doing much business, so with Nika now and as it plays out more and as we roll it out, I do feel that. We all feel that over time, customers can um, increase the frequency of purchase on Nika and buy more of personal care. So that's an assumption that we are working on.
Yeah, sorry. I had a little bit of a lag on my end on the computer, but I think FN has summarized it well. Ultimately, as we discussed in the past, this is an opportunity for us to drive incremental demand in categories where we have had no penetration in the past.
And um, that is that continues to be the the hypothesis and that's what we're working to build and I can now experience around. So yes, I think what you will see is uh given where our strengths lie that will continue to be you know in in core beauty subcategories that will also continue to be fulfilled through Nikka now. And that's what really differentiates us against some of the other platforms that are selling uh you know selling beauty or through quick Commerce capabilities. But this gives us a chance to also start getting into uh categories where we we've been uh relatively underpenetrated in the past and we have a right to win because we're delivering in competitive speed with competitive speed, but giving the customer a much much wider assortment uh uh available uh, through Nika now. And also, the fact that Nika is a platform that is very much trusted.
Uh, for delivering authentic products to the consumers. We Believe should help us to, uh, really identify new areas of growth, uh, new subcategories of growth through Mac and now,
Perfect. Thanks, all, and all the best.
The next question is from Percy P from IFL Security. Please go ahead.
Yes, please sir.
Yeah, so uh, I just wanted to understand, uh, the target, uh, market for the beauty products. In terms of number of customers, you have already reached close to 20 million plus
Uh, if I look at, uh, urban women in the age group of, uh, 15 to 50, uh, that's about, uh, 150 million. Uh, and this is before applying the income filter or anything of that sort. So, uh, uh, just wanted to understand in like a medium-term over a 5 year kind of a view. Uh, what do you think is uh uh your uh, total target audience after you apply and income filter? And also typically how these things work out is that when the Headroom is very high, uh, the bioi growth, uh, also is high and as the Headroom, uh, uh, gets lower, the Wii growth comes off. So, just from that point of view, uh, uh, uh, because right now, your total growth is largely led by, uh, uh, aotc. So, how do you look at the aotc, uh, growth, uh, Beyond let's say,
2 3 year period. Uh, uh, uh, uh, say total 5 year Horizon? Do you think you can maintain this? Kind of a 100 uh, and also uh what is the target uh market in terms of aotc in your calculation or let's say, 5, kind of horizon. So, in our annual day, we had deep dived on listener on in a very detailed manner, it's all there on the exchange website. So, I would urge you to do that or even I invest the teams can share with you, but I think the answer definitely lies that Fashion online has been as big as like 65 to 65 million. Uh, consumers who have bought Fashion online and Fashion online is the serious consumer. So, in many ways, you know, we always believe that that much of a Headroom was available to us and on top of that. Now, if you see, we believe that way the income levels are shifting. That number itself, will be about 100 million dollars going forward in 5 years. So, yeah, that we believe this,
Somewhere between 65 to 100 million will be the relevant tab for Nika.
And also we are servicing men through predominantly women but increasingly we're adding men to a mix.
So we're not restricted on that in customers, both fashion as well as—we have a platform like a man, and even on beauty, there is a certain percentage of consumption towards men, especially in personal care and grooming categories.
Yeah. And and just to add to that um you know you have to again I keep repeating that even the existing 20 million C. You know as we said we were 60 million Shoppers who ever bought on Nika. You know, 20 million are buying in the last 12 months or
So, one, there is a huge opportunity to get the buyers who are infrequently transacting on the platform, who have shopped on Nykaa in the past—which is a very large number of consumers—to start engaging and transacting on the platform more. That's one. The second is the frequency of purchase of our existing 20.8 million annual unique transacting buyers is X.
And, as I said, the frequency of purchases is low.
Uh, when compared to global averages, exactly. And I think its size is also low compared to the global average. So there is so much still to be done with the 60 million shoppers who have ever shopped online, like increasing their frequency of purchase, increasing their average values. And therefore, a lot of growth will be had from the annual consumption value that is yet to come from the base of shoppers already on the platform. And on top of that, uh, you know, there is still a very long way to go when you, as you mentioned, in terms of the total addressable market of urban households and the revenue to...
For uh, for a much wider audience than you might uh than you might be thinking.
Thank you, sir, for answering those questions. That was the last question we can take today. You may reach out to Nykaa's Investor Relations team for any additional queries. I would now like to hand the conference over to the management for closing comments. Thank you, and over to you, Ma'am.
Yeah, thank you very much. I’d just like to thank each one of you for participating in the call today, and for discussing with us about the performance. So, thank you very much and I look forward to continuing to see you guys.
Thank you. Thank you members of thank you. Thank you. Thank you members of the
