Nykaa's profit jump came from beauty while its fashion arm holds at breakeven

Nykaa sells cosmetics and clothing online and, for beauty, through its own stores. In the September 2026 quarter its EBITDA, earnings before interest, tax, depreciation and amortisation, was ₹263 crore, up from ₹159 crore a year earlier. The fashion business, which management had guided to break even, contributed little of that gain. It reached breakeven when management said it would and has sat close to zero since, which leaves beauty carrying the group's profit growth.

In May 2025 the company said it aimed to break even in fashion during the fiscal year that followed, and in August it kept that guidance, saying fashion was on course to get there within the year. The loss narrowed quarter by quarter, and the margin turned positive in the final quarter of that fiscal year. Across the full year fashion still lost money, at a margin of minus 2.6%, so the guidance was met at the exit rate rather than for the year.

Since then the line has hardly moved. In the three quarters since breakeven the margin has read 0.3%, 0.1% and 0.2%: no measurable progress, though no return to losses. Growth stayed fast: fashion's net sales value rose 47% last quarter, against 27% a year earlier, though slower than the 54% of the quarter before. The finance chief said both businesses remain focused on investing behind growth, and Falguni Nayar, the chief executive, said marketing is where the next margin gain will come from. A flat margin while sales grow this fast can be a choice as much as a stall.

Management's own divisional figures show where the profit came from. Group EBITDA rose ₹104 crore, and beauty's EBITDA rose by most of that, with fashion's improvement a small part. Calculated from those figures, beauty supplied about 86% of the group's increase, and its own margin widened from a year earlier.

Much of the group's improvement came from gross margin, which rose by just over one percentage point to 46%. The finance chief credited a rising share of House of Nykaa, the company's own brands, and higher marketing income, the fees brands pay to be promoted on its sites. The group's EBITDA margin widened by about two points over the year, calculated from the filed revenue and EBITDA.

Fashion's next step is a long way off. Abhijeet Dabas, who runs the business, said the company guides only on the longer term rather than the next two or three quarters, and that the target is a margin in the high single digits by fiscal 2030, then above 10% at steady state. Asked about timing, Nayar said: "So it may not just rush to that level, but yes, whether '30, '31 or earlier. Yes, it's not next year for sure."

For near-term profit that slow path matters less than it might seem. One percentage point of fashion margin on last quarter's net sales value is about ₹5 crore of EBITDA, or about 2% of the group's quarterly total, by our calculation. Fashion's breakeven was the milestone management guided to; the profit growth since rests mainly on beauty, and on the own brands and marketing income that lifted gross margin.

The cash side has a test of its own. The finance chief said inventory was built up for a festive season that falls this year in the quarter now under way, and borrowings rose over the six months to the end of September. The current quarter will show both whether that stock turns into sales and whether fashion's margin moves off zero in a seasonally busier period.