FSN E-Commerce Ventures Ltd Management Discussions

A. Economic and industry overview

A1. Indian economy

Supported by a rebound in rural consumption and continued government infrastructure spending, India maintained its position as one of the worlds fastest-growing economies. Indias economy emerged as the fourth-largest globally in FY2025, with a GDP value of $3.9 trillion and a growth rate of 6.5%, which is materially higher than the global GDP growth rate of 2.8%, according to estimates from the IMF and the Bain Report.

India stood out as a bright spot, supported by resilient domestic consumption, a continued thrust on public capital expenditure particularly in infrastructure and a measured monetary policy approach. Retail inflation eased to 4.7% in FY2025, providing the RBI with headroom to initiate a 25-basis-point repo rate cut in February 2025, marking its first rate cut in five years. The move underscores the effectiveness of the RBIs pro-growth stance, successfully balancing economic momentum with price stability.

India GDP growth trend and forecast

Indias real GDP value has doubled in the last ten years. According to IMF estimates, Indias GDP will likely grow by 6.3%-6.5% over the next five years, making it the third-largest economy by FY2030.

India inflation rate trend (%)

Inflation rate has moderated over the years.

Outlook

The outlook for the Indian economy remains optimistic. Structural tailwinds, including demographic advantage, sustained infrastructure investments, a deepening digital ecosystem and manufacturing competitiveness, are expected to drive long-term growth. Despite persistent global headwinds, including tariff uncertainties and geopolitical disruptions, the RBI projects GDP growth to remain steady at 6.2% in FY2026, underscoring the economys resilience and policy-driven stability.

A1.1 Internet economy

Indias internet economy will likely reach $1 trillion by FY2030, accounting for roughly one-fifth of the nations GDP in FY2030, as per State of Indias Digital Economy (SIDE) Report FY2025. The country is on the verge of a transformative era, driven by unprecedented digital adoption, a robust startup ecosystem and supportive government policies. The report from the Ministry of Electronics and Information Technology states that India is currently the worlds third-largest digitalised economy in terms of overall digitalisation, contributing nearly 12% to the countrys GDP in FY2025. (Source: SIDE, IBEF)

Indias internet economy accelerated exponentially after COVID-19, driven by cheaper internet data options and a push for digital infrastructure nationwide. According to Kantar, Indias internet base stood at 886 million, almost 58% of the countrys population.

Growth drivers of Indias internet economy

Affordable data costs Increased smartphone penetration Expanding digital infrastructure Young and tech-savvy population

Many key segments in the internet economy will play a vital role to uplift the growth of the sectors:

1. E-commerce: According to Redseer, Indias e-commerce market, valued at about $60 billion in FY2025, is expected to reach $170-190 billion by FY2030. A larger share of shoppers comes from Tier-II+ cities, driven by increased digital infrastructure penetration, internet access, localised content and a hyperlocal supply chain. In FY2025, the number of e-commerce shoppers stood at 270-280 million, which is almost 30-32% of the internet user base in India, making India the second-largest e-commerce shopper base globally.

2. Fintech: India currently leads the world in real-time digital payments, with UPI processing over 18 billion transactions in March 2025, according to NPCI data.

3. Digital media and content: Digital media has become a cornerstone of entertainment, driven by the growing demand for regional and short-form content. OTT platforms, social commerce and creator-led ecosystems are reshaping Indias content and digital media landscape. According to a Kantar report, India had 732 million OTT and 655 million social media users in FY2025.

4. Government-led digital enablement: Supported by robust policy and funding, Indias digital infrastructure is rapidly expanding.

The Digital India Programme has received a H14,903 crores allocation until FY2026, focusing on cybersecurity, AI and digital literacy.

5. 5G infrastructure and digital connectivity: Indias 5G rollout is among the fastest worldwide, covering 773 out of 776 districts as of March 2025. This next-gen network enables low-latency digital experiences, seamless transactions and high-bandwidth content delivery, essential for e-commerce, AR/VR and digital discovery.

Outlook

Indias internet economy is not just limited to a sectoral story but drives the national growth engine. It has established itself to deliver more equitable digital growth in the future. The future growth trajectory of this sector will be underpinned by:

AI-led automation across sectors

Digital platform scaleup and further penetration

Formalisation of MSME through technology adoption

Increased participation of rural users in the digital economy

A2. Indian retail industry

The Indian retail industry is expected to reach a market value of $1.6-1.8 trillion by FY2030, according to Redseer estimates.

Indias retail industry currently ranks third largest in the world and continues its trajectory of robust growth and digital transformation. According to Redseer, the Indian retail market reached $1 trillion in FY2025. However, it remains highly fragmented, with unorganised channels as the largest retail channels, accounting for almost 79% of the overall retail market in India in FY2025.

Retail market size FY2025 ($ Tn)

India	1.0
China	6.8-7.0
US	5.2-5.4

The retail market will likely reach $1.6-1.8 trillion by FY2030, driven by rising incomes, urbanisation, digital integration and changing consumption behaviours. The unorganised retail market will likely contribute a sizeable share of 62%-66% by FY2030.

With improved GDP per capita, Indias retail market is following a similar trend to developed markets like the US and China, with discretionary spending taking a larger share of retail spending. According to a Redseer report for FY2025, nearly 53% of Indias overall retail spending came from discretionary categories, compared to 65-70% in China and 75-80% in the US.

Discretionary spending (as % of overall retail spending) in FY2025

India	53%
China	65-70%
US	75-80%

Organised retail share FY2025

India	21%
China	50%
US	80%

Indias e-retail market reached $60 billion in FY2025, with 270-280 million online shoppers, making it the second-largest digital consumer base globally. Growth moderated to 10-12% in FY2025 due to macroeconomic challenges, but the long-term outlook is strong, with an expected expansion to $170-190 billion by FY2030 at a CAGR of >18%. Positive macroeconomic developments are likely to boost consumer sentiment in India. Key factors include an estimated $10 12 billion increase in disposable income from tax relief in the Union Budget, salary hikes for over 10 million mid-income households starting January 2026 and improved credit affordability from a 25 bps repo rate cut and a 50 bps CRR reduction by the Reserve Bank of India. These changes may push Indias GDP per capita past the $3,500 $4,000 mark, a recognised point for accelerated digital retail adoption.

While Indias e-commerce growth story is remarkable, a comparative analysis with mature markets, such as China, reveals that the journey has only just begun. Despite its rapid growth, Indias e-commerce penetration remains relatively low at 6-7%, compared to its Asian counterparts, which have a penetration rate of 25-30%. This signals immense untapped potential for future expansion and innovation.

Indias e-commerce boom is a tale of ambition, opportunity and boundless potential. As internet penetration continues to soar, propelled by the proliferation of affordable smartphones and data plans, a digital renaissance is underway. Consumers from all walks of life are embracing the convenience and accessibility of online shopping, transforming how business is done and redefining the contours of commerce in the digital age.

India	FY2025	FY2030P
E-retail market size ($ billion)	60	170-190
% of overall retail market size	6-7%	11-12%

E-commerce shopper base

(India global rank in FY2025)

#6 in FY15

E-commerce shoppers (Mn) in FY2025

US	270
India	270-280
China	920

Outlook

Looking ahead, the retail sector in India is poised for substantial growth. Indias large and growing middle-class households, urbanisation of the population, economic growth beyond Tier-II cities and formalisation of the retail market towards more organised channels will support this growth.

The e-retail market will likely reach $170 $190 billion by FY2030. The long-term outlook for Indias retail industry is highly positive, fuelled by investments in digital infrastructure and the entry of global brands capitalising on consumers eagerness to engage with the latest trends and choices.

A2.1. India beauty and personal care (BPC) market

India is expected to become a $40-45 billion beauty and personal care market by FY2030, according to Redseer.

Indias beauty industry is rapidly expanding, with projections showing it will reach $40-45 billion by FY2030. Rising disposable incomes, heightened consumer aspirations and the impact of media and e-commerce drive this growth. As one of the fastest growing beauty market globally, Indias BPC industry is at a point in its journey, characterised by premiumisation, evolving consumer demographics and technological advancements.

Indias BPC market is emerging as a global hot spot, driven by its unique consumer preferences, value-conscious yet aspiration driven behaviour and diverse yet evolving beauty brands. The India beauty growth story is attracting brands worldwide to tap into this opportunity and revolutionise the beauty regimes and routines of Indian consumers.

BPC market growth (FY25-30 CAGR)
India	10-12%
China	4-5%
US	2-4%
Japan	2-3%
South Korea	2-3%
UK	1-3%

The market is shifting from basic utility to more sophisticated, personalised and experiential offerings, with segments like skincare, makeup, fragrances and haircare seeing broader engagement. While personal care retains a significant market share, beauty-led segments are experiencing the fastest growth, especially those emphasising multifunctionality and clean formulations. Key beauty categories, such as skincare, cosmetics and fragrances, will likely grow much faster than other categories, leading to an expansion of beauty products in the customers basket. The future growth trend of beauty products suggests a strong drive for premiumisation in the Indian BPC space with consumer preferring more sophisticated beauty regimes delivered by global brands entering the country and higher focus on education drives by beauty players to uplift consumer choice and awareness.

FY25-29 CAGR

Skincare	13%
Makeup	12%
Haircare	11%
Fragrance	10%
Bath & Body	9%
Oral care	9%
Wellness	6%

In line with global trends, Indian customers are placing more importance on high-quality and effective products and embracing more advanced beauty and self-care regimens. They are growing more selective in their preferences, frequently researching and examining ingredients, heeding advice from influencers and adopting both online and offline channels for their beauty purchases. Beauty brands with a quick turnaround in innovation, category building and distribution expansion to reach a wider customer cohort across the country are starting to witness positive outcomes early on, indicating a responsive and evolving market ready to embrace new trends and technologies.

Key drivers of growth

Premiumisation is accelerating

The premiumisation trend is transforming the beauty industry, with consumers increasing their preference for high-quality products. By FY2030, the premium beauty market will likely be valued at more than $3.2 billion, per Redseer. Consumers seeking superior products with premium ingredients that promise better results and efficacy are driving this shift. The rise in dual-income households and the growing spending power of consumers, especially Gen Z and Millennials, are major contributors to this trend. Premium beauty revolves around emotional gratification; consumers focus on product efficacy, sensory experiences and brand storytelling.

New audiences (Gen Z, millennials and Tier-II+ cities)

Indias beauty consumers are rapidly evolving, with Gen Z and Millennials driving the bulk of growth in the market. These digitally-savvy, younger consumers are embracing beauty with enthusiasm and dictating the markets direction. Their inclusivity, authenticity and transparency preferences shape how brands develop and market their products. In addition to metro cities, Tier-II and III cities are becoming increasingly important growth centres. Consumers from these regions are catching up with their metro counterparts regarding beauty consumption, with aspirations to access global and local brands. Social media and digital platforms have been instrumental in bridging the gap between metro and non-metro consumers, creating new opportunities for brands to expand their reach.

Homegrown brands - innovation and scale

Indias beauty landscape is also witnessing the rise of homegrown brands disrupting the market with innovative products tailored to local consumers. These brands have championed product differentiation through innovations in formats and ingredients. Many are also leveraging partnerships with larger incumbents to scale rapidly.

Stepification of beauty routines

Consumers relationship with beauty has evolved significantly over time. Beauty is no longer reserved for special occasions; it has become an integral part of daily life, especially among younger consumers. The report emphasises the concept of ‘stepification, where multi-step routines have become the norm in skincare, haircare and makeup. Consumers are now using a wider range of products in various formats to achieve their desired results.

Expanding marketing ecosystem - influencers and digital content

The influence of social media and digital content remains a key driver in the beauty industry. Digital content platforms are shaping consumer choices, with influencer marketing emerging as a powerful tool for brands to leverage. As consumers become more niche in their preferences, micro-influencers and beauty experts are gaining traction. These creators provide personalised recommendations and educational content that resonates with a highly engaged audience. Brands that harness the power of digital creators and focus on authentic, relatable content will benefit from greater consumer trust and loyalty.

Tech in beauty (AI, personalisation and virtual try-ons)

Technology is transforming the beauty industry with AI-driven personalisation and virtual try-ons. Brands leverage AI to provide personalised product recommendations tailored to customers skin types and preferences. Additionally, augmented reality (AR) enables consumers to virtually test products, such as lipsticks and foundations, online, replicating the in-store experience. This integration of AI and AR boosts customer satisfaction and helps brands optimise inventory and product development.

A2.1.1 Indian online beauty and personal care Key drivers of growth (BPC) market

According to Redseer, the Indian online BPC market is on track for significant growth. It will likely reach a gross merchandise value (GMV) of $14-15 billion by FY2030 (versus $5 billion in FY2025) at a CAGR of 23-25% over the next five years.

The online BPC segment in India is expected to witness substantial growth in the coming years, driven by increasing internet penetration and evolving consumer behaviour, characterised by greater trust in online platforms. The online BPC market, which accounts for 20% of the total BPC market in India as of FY2025, is expected to grow to around a third of the total BPC market by FY2030, according to Redseer.

Online platforms have proven to be a robust medium for brand discovery, visibility and availability in the BPC sector. The growing trend of online shopping is enabling BPC brands to establish a credible presence and effectively complement traditional retail channels.

Personalised product discovery

Multiple online beauty retailers in the country have built strong tech infrastructure to provide a more sophisticated and personalised discovery journey for consumers, paving the way for increased adoption of the online channel for hyper-personalised beauty consumer routines.

Access to wider assortments and global brands

Access to a larger beauty offering round the clock, with the convenience of doorstep delivery, cashless payments and 24/7 after-sales support, helps enhance the customer experience. Online channels allow consumers to access a broader selection of SKUs, which is often limited in traditional offline retail channels. Online BPC channels also help the Indian consumer get closer to global beauty trends by providing easy access to these international brands.

Social media and influencer marketing

Social media platforms are revolutionising beauty adoption in India by shaping consumer beauty regime preferences through beauty influencers and creators. Post-COVID-19, the higher adoption of social media platforms and engagement with key influencers in the beauty space enable consumers to discover the latest beauty trends, understand skin concerns and solutions and learn about new, upcoming brands and niche beauty regimes. Beauty retailers in the country with a smooth content-to-commerce tech stack are simplifying the beauty journey by fuelling easy discovery and trust in new brands.

Per Redseer, there remains considerable potential for greater penetration of beauty e-commerce in India (20% of the total BPC market in India in FY2025) compared to higher penetration rates observed in developed markets such as the US (26%-28%) and China (~44%) in FY2025. This suggests that the online BPC market in India could experience substantial growth as it continues to evolve and expand.

A2.1.1.2 Outlook

According to Redseer, Indias BPC market is currently the fastest-growing globally, undergoing a remarkable transformation driven by the adoption of holistic beauty routines. The widespread availability of domestic and international brands, along with rapid category diversification, has further accelerated the growth this category. Indias beauty market is shifting from a value-led to a value-plus approach, emphasising experience, expression and identity alongside price and performance. This trend is particularly strong among Gen Z and millennials, who are increasingly viewing skincare, wellness and self-care as interconnected. Consumers are seeking inclusive and innovative beauty solutions, prompting brands to focus on creating experiences rather than just selling products. Digital platforms will drive this change, serving as educators and engagement tools. The future lies in personalised, omnichannel journeys supported by a content-led commerce model, premium partnerships and a creator ecosystem that can shape the beauty landscape across India.

The modern BPC consumer journey is increasingly characterised by informed decision-making and an appetite for a wider range of products. Reflecting this trend, the online BPC market is expected to grow significantly its GMV is projected to triple from $5 billion in FY2025 to $14-15 billion by FY2030, with the number of online shoppers more than doubling over the same period.

A2.2. Indian fashion market

Fashion is one of the largest consumer categories in the discretionary basket in India. With a market size of $100 billion in FY2025, it will likely reach $185-200 billion in FY2030, growing at a 10-12% CAGR. In the retail market landscape, the fashion market is likely to develop the fastest, alongside the BPC market.

FY2025-30 CAGR	(%)
Fashion	10-12%
BPC	10-12%
Discretionary category	9-11%

Source: Redseer

The Indian fashion industry remains a dynamic consumer market, characterised by increasing affluence, digital access and evolving consumer preferences. However, the industry has been facing growth challenges for over a year, driven by multiple macroeconomic factors, including inflation and reduced discretionary spending in apparel, as well as global supply chain disruptions resulting from increasing geopolitical tensions and muted festive demand. Despite short-term growth hurdles, the market is well-positioned to achieve its long-term growth trajectory, supported by multiple favourable factors.

Key drivers of growth

Rising disposable incomes

The expansion of Indias middle class is creating a large consumption base for aspirational fashion. The share of income households between $3.75 and $13.75K has increased from 48% in FY2021 to 53% in FY2025. With further urbanisation supported by improved GDP per capita, the share of this income group is expected to improve significantly over the next few years.

Households by income groups (Mn)

Income group	FY2020	FY2021	FY2022	FY2023	FY2024	FY2025
<$3.75K	134	131	127	120	123	117
$3.75-10K	95	97	99	101	109	110
$10-13.75K	53	57	61	65	73	75
$13.75K+	31	34	36	39	44	45
$13.75K+	3	77.78	3	3	1	1

Source: Redseer

Urbanisation and deeper penetration

Aspirational fashion shoppers have expanded beyond Tier-I cities, with smaller cities driving new demand for fashion categories, primarily through online channels. According to Redseer, Tier-II+ cities contributed almost 58% of the online fashion market in FY2025. Even in traditional organised channels, big incumbents are expanding their store footprint in these smaller cities to tap into emerging opportunities.

Digital transformation

With the rise of technology adoption, retailers can transform consumers discovery journeys. Technological developments, such as AI-led personalisation and hyperlocal delivery capabilities, enhance the consumer experience. The rise of online shopping, influencer marketing and AR/VR-based try-on capabilities is vital in changing the consumers discovery and purchase journey.

A2.2.1 India online fashion market

Indias online fashion market is poised for substantial growth, projected to reach ~$55-60 billion by FY2030. This growth will likely occur at a CAGR of 22-25%, according to Redseer. Currently, the online fashion market in India is valued at nearly $18 billion (18% of the total market size). Indias online fashion market demonstrated resilience and sustained growth in FY2025, reinforcing its position as a key channel in the fashion industry. This growth was driven by digital adoption in non-metro cities, the emergence of new and emerging brands redefining fashion aspirations and the increasing influence of social media on shaping consumer choices. Emerging growth themes for the rapid expansion of the online fashion channel in the near to mid-term will be fuelled by omnichannel expansion from brands that traditionally opted for offline formats, as well as the rise of AI-led curation and on-demand manufacturing.

Online fashion	FY2025	FY2030P
Size ($ Bn)	18	55-60
CAGR (%)		22-25%
Online penetration (%)	18%	30%

Source: Redseer

A2.2.1.2 Outlook

Indias online and digital fashion market is on a strong growth trajectory, driven by technological advancements, evolving consumer behaviour and a rapidly modernising retail ecosystem. Increasing internet penetration and smartphone adoption particularly in urban and semi-urban areas have accelerated the shift towards online shopping, making e-commerce platforms the go-to destination for a diverse range of fashion products.

Brands that leverage digital channels to deliver personalised, value-driven experiences are well-positioned to succeed. Efficient supply chains have enabled quicker trend adoption, expanding consumer choice across segments and price points, particularly in fast-growing categories such as kids and mens fashion. The rise of domestic and direct-to-consumer (D2C) brands offering globally inspired styles has further enriched the market.

Rising digital literacy, greater social media influence and expanding demand from Tier-II cities and beyond will fuel future growth. Consumers are increasingly drawn to curated assortments and fashion content, reflecting a shift towards more informed, trend-aware shopping behaviour.

B. Business review

B1. Overview

As a digital-first consumer technology platform, we aim deliver an elevated lifestyle retail experience for Indian shoppers supported by content-led education and discoverability. Since our inception in 2012, we have made significant strides emerge as a platform of choice among Indian consumers for all lifestyle needs. We have invested capital and creative resources in developing a distinctive discovery experience for our customers. We offer an extensive selection of beauty and fashion products, including offerings from the House of Nykaa (owned brands in beauty and fashion categories) that we manufacture. This focused approach has enabled us to evolve into a multi-brand lifestyle retail platform and a brand incubator. Our goal is to cater to diverse consumer needs and provide convenience through a seamless omnichannel experience.

Online

Our online channels include apps, websites and mobile sites. As of March 31, 2025, we had almost 176 million cumulative downloads across mobile applications. In FY2025, almost 85% of our beauty online GMV came through our mobile applications.

Offline

Our offline channel comprises 237 physical stores (beauty) across 79 cities in India as of March 31, 2025. Our physical stores offer a curated selection of products and provide a seamless experience that seamlessly transitions between the physical and digital worlds. We also serve the unorganised BPC space through our Superstore app, which delivers to 2.76 lakh transacting retailers across 1,100 cities as of March 31, 2025.

Our lifestyle portfolio spans beauty and fashion products. Consumers have different journeys for lifestyle needs, leading us to build vertical-specific mobile applications, websites physical stores. These independent channels allow us to tailor our content and curation optimally for the convenience of consumers and to cater to the different consumer journeys that exist these business verticals:

Beauty: Beauty online, Beauty physical stores, Superstore by Nykaa, House of Nykaa Beauty, Nykaa Man Grooming

Fashion: Fashion online, House of Nykaa - Fashion, LBB, Nykaa Man Lifestyle

New businesses: New growth verticals

In addition to leveraging our strengths in comprehensive merchandising, brand relationships and delivery experience, we focus on educating consumers through digital content, digital communities and tech-product innovations, which is an integral component of our business model.

B2. Beauty

B2.1 Multi brand omnichannel beauty retail

As of March 31, 2025, our beauty offerings are extensive, comprising more than 40,000 SKUs from over 4,200 brands across makeup, skincare, haircare, bath and body, fragrance, grooming appliances, personal care and health and wellness categories.

Our strategic investments in distribution, marketing, technology and logistics enable us to offer a comprehensive brand portfolio and foster long-term, mutually beneficial relationship with brand partners and consumers. Through our digital platform, we provide the ultimate destination for brands to establish their presence and drive growth. We support prestige brands with omnichannel distribution and empower traditional brands to connect with millennials and Gen Z consumers.

Our beauty business operates primarily on an inventory-led model, sourcing directly from brands or authorised distributors. This approach ensures product authenticity, availability and timely delivery, which is critical for our consumers.

We also cater to different Indian skin types and concerns through our House of Nykaa beauty brand portfolio, which includes Nykaa Cosmetics, Nykaa Naturals, Kay Beauty, Dot & Key, Wanderlust, Earth Rhythm, Nykaa Perfumery and Nykaa Collection. These brands are available across our online and offline channels, as well as select third-party retailers. The GMV of our owned beauty brands increased by 55% YoY in FY2025, contributing 14.4% to the overall GMV of the beauty business vertical in FY2025, up from 12.1% in FY2024.

Recognising the importance of omnichannel beauty retail, we launched our first store in 2014 and have since expanded to 237 stores across 79 cities as of March 31, 2025. Our stores are categorised into Nykaa Flagship, Nykaa Luxe, Nykaa On Trend and Nykaa Kiosks, addressing specific consumer demographics and local market needs. They provide a crucial platform for brands to engage with customers through immersive touch-and-feel experiences, enhancing brand presence and storytelling. With a curated assortment of about 180 brands, our physical stores contributed almost 8% of our beauty GMV in FY2025. They engaged with nearly 0.8 million annual unique transacting customers, driving premium brand growth. In FY2025, nearly two-thirds of the premium brand GMV on our platform originated from physical stores, underscoring the importance of our omnichannel approach. Indias beauty landscape is rapidly evolving, making it an emerging hub for renowned global beauty brands. As a specialised beauty retailer, we identified this trend early and established our ‘Global Store proposition. This platform offers end-to-end services to nearly 45 Global beauty brands, including Charlotte

Tilbury, Fenty Beauty, Uriage, Eucerin, TIRTIR, AXIS-Y, OUAI and more, providing access to a customer base of more than 42 million through both online and physical channels. Additionally, our eB2B channel, ‘Superstore by Nykaa, reached over 2.76 Lakhs retailers across 1,100 Indian cities as of March 31, 2025, facilitating deeper market penetration for our partner brands.

B2.2 Superstore by Nykaa: Beauty eB2B distribution

In October 2021, we launched our Superstore App, an online channel with a separate mobile application for standalone local retailers in India. Through our eB2B channel, we enable brands to tap into a wider distribution network and reach a larger share of the BPC market, specifically the unorganised offline segment, which accounted for 52% of the overall BPC market in FY2025, according to Redseer estimates. Superstore by Nykaa is a democratised distribution channel powered by advisory and advocacy and has the following objectives:

Your all-in-one store	Super service
Top brands, international bestsellers and new online products are all in one place for local retailers	Enabling 24-hour doorstep delivery, ensuring safe credit facility and quick returns
Super flexibility	Super earnings
Retailers choose what to buy, how much to buy and when to buy	Retailers have access to popular products in their localities with improved selections

Superstore by Nykaa is enabling the growth of the entire beauty ecosystem in India by democratising access to distribution for new-age and global brands and facilitating premiumisation for FMCG brands by providing access to 2.76 lakhs selective doors across 1,100 cities as on March 31, 2025. In FY2025, the business scaled up by more than 33 times in terms of GMV since its launch In FY2025, the business delivered profitable growth with a 57% YoY increase in terms of GMV.

B2.3 Achievements of FY2025 Beauty vertical

Business performance: Beauty vertical includes beauty online, beauty physical stores, beauty owned brands, Superstore by Nykaa and Nykaa Man Grooming

Particulars	FY2025	FY2024	% increase/ (decrease)
Monthly average unique visitors (Mn)	35.7	30.2	18%
Annual unique transacting customers (Mn)	15.8	12.4	27%
Orders (Mn)	54.5	43.7	25%
AOV (Rs.)	2,021	1,985	2%
GMV (Rs. Cr)	11,775	9,055	30%

B.2.3.1 Achievements of FY2025 in eB2B (Superstore by Nykaa)

Business performance

Particulars	FY2025	FY2024	% increase/ (decrease)
Unique transacting retailers (‘000)	276	195	42%
Orders (‘000)	1,786	1,244	44%
Cities (#)	1,100	1,000	10%
GMV (Rs. Cr)	941	597	57%

B3. Fashion

In 2018, we launched Nykaa Fashion to provide consumers with a curated platform that inspires their fashion and lifestyle choices. Our platform offers a diverse range of products catering to women, men and children, encompassing a wide variety of demographics and price points. As of March 31, 2025, Nykaa Fashion has established partnerships with numerous brands, resulting in an extensive collection of fashion and lifestyle products. This collection comprises over 4,400 brands and 12 million SKUs across four consumer divisions: womens, mens, kids and home. Our merchandise spans various categories, including western wear, Indian wear, lingerie, footwear, bags, jewellery, accessories, athleisure, home decor and kitchen products, ensuring that we cater to our consumers diverse needs and preferences.

While offering a wide array of products, we greatly emphasise curation. We carefully select fashion-forward brands, evaluate their style and quality and curate specific styles within these brands to present to our customers. We also prioritise the sale of full-price products, reducing reliance on discounts and focusing on selling the latest designs of each season. Additionally, we leverage digital content, personalised mobile application experiences and proprietary recommendation algorithms to create unique and differentiated customer experiences. These efforts aim to build a discovery-led platform driven by style and tailored to individual preferences. As a consumer-centric platform, we have developed various distinct propositions within Nykaa Fashion to offer our customers enhanced, curated choices.

Global Store:We have partnered with multiple international brands to bring the latest global styles and trends to the country, creating a unique fashion shopping experience by enabling customers to access a differentiated assortment. Our Global Store GMV grew by 14% YoY in FY2025, slightly ahead of the Fashion verticals performance. Nykaa Fashion has formed strategic partnerships with multiple global brands, including Revolve, Foot Locker, Cider, BDG Threadbare and many more, to offer curated, fashion-forward global styles from over 650 renowned international brands as of March 31, 2025.

Hidden Gems: With our Hidden Gems, we offer customers a curated collection of niche, homegrown labels from across India, helping them discover unique styles. As of March 31, 2025, our Hidden Gems proposition featured unique styles from over 300 homegrown brands. Hidden Gems contributed to 15% of womens Indian wear GMV on Nykaa Fashion in FY2025. Given the evolving consumer preference for niche and curated offerings nationwide, this unique proposition will likely garner traction.

Luxe Store:Nykaa Fashions Luxe store focuses on bringing the best in the premium fashion space to meet the growing demand in this category. As of March 31, 2025, Nykaa Fashion offered more than 300 coveted luxury brands to Indian customers.

Gen Z Store: Nykaa Fashion caters to a young demographic by offering the latest and curated styles inspired by Gen Z trends. As of March 31, 2025, our Gen Z stores featured a unique assortment from over 100 brands, curated to align with the tastes and inspirations of Gen Z customers. Some of our owned brands have seen significant traction, enabling them to scale up rapidly.

Nykaa Fashion operates predominantly as a marketplace platform, utilising custom-built, scalable technology to support this operating model. Such a model lends itself to capital efficiency in the fashion business, where trends change quickly and frequently.

B3.2 LBB

We acquired LBB in 2022, a content platform with a substantial regional reach and a strong presence among Indian users across various lifestyle categories. The content platform has experienced healthy growth post-acquisition, enabling brand building and campaigns within the Nykaa ecosystem, while also providing marketing and brand visibility to third-party brands outside the Nykaa ecosystem.

Through our content platform ‘LBB, Nykaa has created more than 1 billion views through multiple visibility marketing campaigns on Nykaa events like Nykaaland, brand and category-building initiatives like Nykaa Wali Shaadi and various branding initiatives for new launches.

B3.3 Achievements of FY2025 Fashion vertical

Business performance: Fashion vertical includes Nykaa Fashion, owned fashion brands, LBB and Nykaa Man Lifestyle

% increase/ Particulars FY2025 FY2024 (decrease)

Monthly average unique 19.1 17.6 9% visitors (Mn) Annual unique transacting 3.2 3.0 6% customers (Mn) Orders (Mn) 7.6 7.0 9%

AOV (Rs.) 4,609 4,361 6% GMV (Rs. Cr) 3,804 3,385 12%

B.4. Nykaa Man

We launched the Nykaa Man mobile app and website in 2019, customising our model and experience for men and increasing education and awareness among men about beauty and lifestyle products.

B.5. New Businesses

New businesses include international operations (primarily the beauty omnichannel business in the GCC through our Nysaa platform). In FY2023, our Company partnered with Apparel Group LLC to launch Nysaa, an omnichannel, multi-branded beauty retail operation business in the countries which are part of the Gulf Cooperation Council (GCC) through an entity incorporated (Nessa International Holdings Limited, a strategic alliance between FSN International and Apparel Group, where FSN International owns 55% stake). A younger demographic (35-40% below the age of 25) in the region, along with high purchasing power, offers an excellent opportunity for the BPC category to increase penetration in the area and grow significantly.

Nykaa started its omnichannel beauty operations in GCC under the brand name ‘Nysaa by launching the Nysaa e-commerce platform in January 2024 and its first physical store in March 2024. For our GCC operations, we have partnered with 250 globally renowned and unique brands, including Kylie Cosmetics, By Terry, Iconic London, Dr Barbara Sturm, Beauty of Joseon, Augustinus Bader and many more, as of March 31, 2025. We currently have two physical stores in Dubai. In FY2025, New businesses contributions to the One Nykaa GMV stood at 0.2%.

B6. Value proposition

We built our business iteratively while innovating for consumer satisfaction and optimising purchase behaviour. The consumer journey for product selection often involves a significant amount of time spent exploring and evaluating options. We endeavour to understand the decision-making process and support critical moments across different stages of a consumers journey on our platform. Through integrations across touchpoints, we target consumers and design personalised browsing and purchase experiences to meet the diverse needs of our consumers. We evaluate the effectiveness of our value proposition by tracking, among other things, GMV from existing consumers. We have observed a high level of consumer loyalty to our platform.

Through Nykaa Prive, our consumer loyalty programme for the Beauty and Fashion vertical, members enjoy exclusive offers and discounts, complimentary gifts, free shipping and access to exclusive members-only content. The Prive members also enjoy priority access to our consumer service team. As of March 31, 2025, there were more than 13 million Nykaa Prive members across beauty and fashion verticals. Our consumers can earn Nykaa reward points by signing up, shopping, writing reviews and answers and referring new consumers to our platform. These reward points can be redeemed to make purchases on our platform. We are further redefining Nykaa Prive to make it more comprehensive and rewarding for our consumers.

Commitment to authenticity

We have implemented robust systems and processes to ensure the authenticity of all products sold on our platform, thereby fostering trust with both consumers and brands. Our beauty and personal care category primarily operates on an inventory-led model, sourcing directly from brands or their authorised Indian distributors. This direct sourcing ensures product authenticity, a critical factor for our discerning customers. Additionally, we conduct routine quality assurance checks at our warehouses. We maintain a curated platform and exclusively onboard authorised resellers for our fashion offerings. We have established comprehensive systems to monitor and promptly address consumer complaints, further solidifying our commitment to authenticity.

Content and context-first approach to retailing

Nykaas content and brand engines and ecosystem comprise:

We have a robust presence on social media (Instagram, YouTube, Facebook, Pinterest) and our editorial platforms, Nykaa Beauty Book and LBB.

Nykaa Play: This is our gamified on-app beauty discovery experience, which includes shoppable content, live streaming, games and influencer stores.

Nykaa experiences and events: From Nykaaland to Nykaa Luxe Stories, Nykaa Fragrance Collective, Nykaa Beauty Vault, Nykaa x LBB Weekend Access, Nykaa events are sought-after curated experiences which bring the world of beauty and fashion to life.

NAP: The Nykaa Affiliate Programme (NAP) is Indias most sought-after programme for beauty and lifestyle bloggers and creators who want to earn commission on their revenue.

Nykaa campaigns: Be it ‘Nykaa Its My Birthday, ‘Step by Step with Nykaa, ‘Ingredient in Focus, or ‘Nykaa On The Rise, Nykaas campaigns are designed to induce trials, discovery and repertoire expansion for our shoppers.

Nykaa insights: Our in-house centre of excellence for customer insights and customer research, which helps us unlock proprietary insights from our shopper community.

From educational beauty tutorials, trend-first conversations, routine adoption and product reviews to influencer collaborations and user-generated content, Nykaa leverages content to educate, inspire and connect with its audience by not only building category vocabulary for consumers but also being a thought leader by keeping them up to date with the latest, best and trending products in beauty.

Our mission is to be the most recognised lifestyle brand on the internet.

Scaling NAP: We currently have 6,000 members from the influencer and creator community to be a part of NAP, which speaks of the trust and recognition the programme has been able to build. Our influencer network has scaled up significantly over the years, translating into an increase in reach and engagement delivered by influencers as a channel of visits to the platform.

We revamped the experience on Nykaa Play to fuel our guided selling philosophy. Activations like ‘Biggest Beauty Binge, our live streaming-focused IP on Nykaa Play, have galvanised community engagement. Our Nykaa Play platform received nearly 14 million visits in FY2025.

We currently have over 17 million social media followers across all our social media handles. We foster regular engagement with our educational content to build a deeper understanding of the categories, discover new trends and learn about the latest offerings. As of March 31, 2025, on our Instagram handle, we had posted more than 1.3 lakhs of content, including posts, reels and videos.

Notable IPs of FY2025

Nykaaland: We organised our second edition of Indias largest beauty festival, Nykaaland, an innovative one-of-its-kind event to accelerate the growth of the beauty market. We received an overwhelming response from over 80 iconic global and local brands, 25,000+ attendees (1.7x YoY), 1,000+ Influencers and KOLs (key opinion leaders) and 5,000+ participants across multiple masterclasses led by renowned makeup artists like Sofia Tilbury, Patrick Ta and more. We had celebrity participation from Katrina Kaif, Jahnvi Kapoor, Masaba Gupta, Kriti Sanon, Jim Sarbh, Nushrratt Bharuccha and more. Overall, this event garnered over 5.5 billion impressions across more than 5,000 pieces of content on the internet.

Category-building Initiatives: We launched the Fragrance Collective campaign in the first quarter of FY2025 to drive focus on prestige fragrances on the Nykaa platform. The campaign offered an exclusive collective of discerning prestige keepers, meticulously curated to create a new fragrance category. The campaign enabled a 74% YoY growth in the prestige fragrance category in Q1 FY2025. The campaign achieved a reach of more than 10 million with collaboration from over 200 KOLs and influencers.

Owning weddings as a premiumisation trigger with ‘Nykaa Wali Shaadi: We launched the Nykaa Wali Shaadi campaign during the 2024 wedding season to capitalise on the $130 billion wedding market opportunity in India, the second-largest market globally and establish Nykaa as the go-to destination for all wedding beauty and lifestyle needs in the country. We conducted a 360-degree marketing campaign to connect with the demand for the wedding season and make Nykaa synonymous with the beauty needs of brides, bridesmaids, families and friends, gaining a significant 250 million social reach. Through collaboration with over 70 experts, we focus on driving the talk on the latest beauty trends and brands for the wedding season. We also launched four episodes of the season on JioHotstar, which gained significant traction, enabling it to rank among the top 10 shows across all OTT platforms in terms of viewership.

Deep, symbiotic relationship with brands

We deeply value our brand relationships and have a dedicated team of managers who collaborate closely with partners to develop and implement strategic growth and brand-building initiatives. Our extensive partnerships with beauty and personal care brands globally ensure a diverse and distinguished offering for our customers, encompassing global and domestic luxury/ prestige names such as Aestura, Chanel, Charlotte Tilbury, Clinique, Dr Jart+, Dyou, Estee Lauder, Eucerin, Fenty Beauty, Forest Essentials, Foxtale, GHD, Huda Beauty, Hyphen, Innisfree, Kama Ayurveda, Lakm , Lancome, LANEIGE, LOreal Paris, LOreal Professional, M·A·C, Maybelline New York, Minimalist, Nars Cosmetics, Neutrogena, Numbuzin, Obagi, Pixi Beauty, Sol de Janeiro, Supergoop, The Body Shop, The Derma Co., The Ordinary and Yves Saint Laurent. Our fashion portfolio features Accessorize London, Adidas, Aldo, Cider, Foot Locker, Forever New, Guess, Lipsy, Little Mistress, NA-KD, Puma, Rare Rabbit, Revolve, Skechers, U.S. Polo Assn., Vero Moda and Victorias Secret. Our expertise and comprehensive understanding of product assortments, informed by consumer insights, enable us to anticipate trends and customise brand-specific marketing and commercial strategies. We utilise our marketing channels to advise and guide our consumers and collaborate with social media influencers to effectively promote brands on our platform.

Beauty: Nykaa introduced 4,200+ brand partners and ~45 global brands in India

Fashion: Nykaa has over 4,400+ brand partners and offers curated style collections, such as ‘Hidden Gems for modern Indian designs and ‘First in Fashion for the latest seasonal styles

Diverse portfolio of House of Nykaa brands

We have developed a portfolio of 12 owned brands, which play a crucial role in expanding the assortment of products for our consumers. Many of our owned brands have high recall and function as independent brands. Third-party vendors manufacture products for these brands. Our House of Nykaa - Beauty Brands GMV grew by 55% YoY to reach H1,695 crores in FY2025, contributing 14.4% to our overall beauty GMV. Our Fashion Owned Brands GMV grew by 4% YoY to reach H431 crores in FY2025, contributing almost 11.3% to our overall fashion GMV. Many of our owned brands have gained significant scale while being profitable by serving customers across different touchpoints, both within and outside the Nykaa ecosystem.

50 %+

Retention on own website and Nykaa

4.4/5.0

Rating

Dot & Key: We acquired a 51% stake and an additional 39% in Dot & Key in September 2021 and September 2024, respectively. Post the acquisition in September 2021, the brand has scaled significantly, reaching a scale of more than H900 crores GMV. Dot & Key products are retailed across 237 Nykaa physical stores and are also available to customers through 20,000 select doors (GT stores) via Nykaas eB2B distribution channel. Dot & Key is a new-age brand that offers premium skincare products, aiming transform the way people look after themselves by drawing attention to often-overlooked areas and delivering highly targeted, high-quality and efficacious remedial products.

The fastest-growing major makeup brand

Brand snapshot

J240+ crores

GMV

60 +

New launches

Kay Beauty: Founded in 2019, Kay Beauty is one of the most loved celebrity make-up brands, developed as a partnership between Nykaa and one of Indias leading actors, Katrina Kaif. The brand has taken significant steps to champion both inclusivity and diversity through its product offerings, which are tailored to suit all Indian skin tones. Since its launch, Kay Beauty has garnered a substantial customer base of over 2.5 million, as of March 31, 2025. The brand also retails through 237 Nykaa physical stores and 700+ premium BA-assisted selective doors, as of March 31, 2025. Over time, the brand has become Indias most loved and awarded celebrity make-up brand, reaching a scale of more than H240 crores GMV in FY2025.

Our flagship makeup brand continued to grow at scale

Brand snapshot

J350+ crores

GMV

120+

New launches

38,000+

Selective doors (includes Superstore)

Nykaa Cosmetics: Launched in 2015, Nykaa Cosmetics represents a fun, playful and dynamic brand that offers on-trend, quality-driven international formulations accessible to all Indian skin types. The brand has become a go-to choice for Gen Z and millennial customers, empowering them to express their creativity through makeup and beauty tools. The brand has reached a scale of more than I350 crores GMV in FY2025.

Nykd: Nykd was launched in 2020 to simplify lingerie shopping for Indian women. With a focus on technology and second-skin comfort, the brand offers a range of lingerie, sleepwear and activewear. By FY2025, Nykd achieved a GMV of over I160 crores and became the top lingerie brand on Nykaafashion.com, also gaining popularity on Amazon.com.

Twenty Dresses: Acquired in 2019, Twenty Dresses offers young, fresh and in-vogue styles with its Western wear collection, which matches the moods and characters of everyday life. The brand has reached a GMV of more than H100 crores.

Comprehensive assortment and focus on curation and merchandising

We aim to strike a balance between the breadth and relevance of our product offerings, believing in the power of choice to meet our consumers diverse needs and tastes. Our lifestyle portfolio comprises over 8,600 brands and more than 12 million SKUs, carefully curated to serve our diverse consumer base.

As part of our merchandising strategy, we focus on ensuring market fit, meeting demand and aligning with consumer trends. We aim to introduce products that match our demand profile while phasing out less relevant items. Our curators collaborate with brands to provide our consumers with the latest lifestyle trends.

Our platform aims to inspire consumers by providing personalised content and products during their shopping journey. Using data from consumer activity and product attributes, we have developed advanced personalisation engines and custom features, such as landing pages and recommendation systems. Our goal is to improve the user interface for an exceptional consumer experience continually.

We invested in Nykaa Pro, a membership programme for beauty professionals and makeup artists that offers access to products, discounts, classes and educational content.

Omnichannel approach

Beauty consumers prefer to shop across online channels and physical stores. Many of the products we sell, especially those of high value and/or complex categories, such as fragrances and makeup, often require a ‘touch and feel experience to inform purchasing decisions. Our physical stores cater to the modern-day Indian consumer by seamlessly integrating the offline and online experiences.

As of March 31, 2025, we have one of the largest physical retail footprints among the multi-brand speciality beauty and personal care platforms, operating across value, prestige and luxury categories, with a dominant share in the premium segment in India. We currently have 237 physical stores in beauty across 79 cities in India, with a total retail space of 2.5 lakh square feet. As of March 31, 2025, more than two-thirds of our physical stores are located in non-metros. Our physical stores have shown healthy growth, with GMV growing by 31% YoY in FY2025, while the store network has been profitable.

Nykaa Flagship Store: Launched in FY2024, the Nykaa Flagship Store brings the best in beauty across the globe to create an immersive experience. We launched our first flagship store in the

Bouquet of services at Nykaa flagship stores

Gifting and experience zone Skincare consultation AI and virtual tools Beauty services heart of Mumbai, at Bandras Linking Road, with a retail space of over 2,500 square feet. As of March 31, 2025, we have seven flagship stores across India, with an average retail space of over 2,500 square feet. The flagship stores house over 90 marquee brands, including Bobbi Brown Cosmetics, Estee Lauder, Carolina Herrera, YSL Beauty, Dermalogica, Chanel and LANEIGE, with shop-in-shop experiences for brands such as Charlotte Tilbury, Dior, M·A·C and Rabanne.

Nykaa Luxe: This store format offers a luxury beauty experience which showcases prestige and luxury international and domestic brands. As of March 31, 2025, we had 76 Luxe Stores across India

Nykaa On Trend: These stores offer a differentiated experience for our consumers, with the current best-selling products from beauty and personal care brands. As of March 31, 2025, we had 107 On Trend Stores across India.

Nykaa Kiosks: These are free-standing units, usually in the atriums of shopping malls, where we predominantly sell our owned brands. As of March 31, 2025, we had 47 kiosks across India.

Consumer service and fulfilment

We understand the importance of assisted buying in driving awareness and sales. As of March 31, 2025, we had more than 774 beauty advisors at our 237 physical stores. Additionally, our consumer service team addresses post-order consumer queries. We leverage technology to optimise and automate the interactions where relevant.

C. Financial review

C.1. Key highlights

The business verticals primarily comprise Beauty, Fashion and Others. Beauty comprises an online beauty platform, House of Nykaa Beauty brands, physical retail stores, Superstore by Nykaa and the Nykaa Man BPC business. Fashion comprises Nykaa Fashion, House of Nykaa - Fashion brands, LBB (a content platform) and Nykaa Mans lifestyle business and New businesses include the Groups international beauty business (primarily Nysaa - Beauty omnichannel operation in the GCC region). The vertical-wise breakup of the gross merchandise value (GMV) is as follows:

Vertical GMV

(Rs. Cr)

Particulars	FY2025	FY20241	YoY change	GMV mix FY2025	GMV mix FY20241
Beauty	11,775	9,055	30%	75%	73%
Fashion	3,804	3,385	12%	24%	27%
New Businesses	25	7	266%	0%	0%
Total	15,604	12,447	25%	100%	100%

1Per new definition of vertical reporting commenced from June 2024 quarter onwards

The Beauty verticals contribution to consolidated GMV in FY2025 is 75%, representing a 30% YoY increase. Fashion contributes nearly 25% of the consolidated GMV and is showing a 12% increase YoY. The contribution of GMV from existing customers is 76% for the Beauty vertical, compared to 57% in the Fashion vertical.

Consolidated revenue for FY2025 is H7,950 crores and the vertical-wise split of the same is as below:

Consolidated revenue

(Rs. Cr)

ALIGN=RIGHT>24

Particulars	FY2025	FY20241	YoY change	Revenue mix FY2025	Revenue mix FY20241
Beauty	7,251	5,810	25%	91%	91%
Fashion	675	568	19%	8%	9%
New Businesses	7	224%	0%	0%
Total	7,950	6,386	24%	100%	100%

Beauty remains the most significant vertical, accounting for approximately 91% of the total revenue in both FY2025 and FY2024. It remains a significant contributor to the Groups overall revenue.

On the other hand, Fashion is an emerging, fast-growing vertical that has shown growth during FY2025 and will likely experience significant expansion shortly.

The New Businesses vertical, represented by our International beauty business, has experienced substantial growth, primarily driven by the expansion of offline and online multi-brand retail in the GCC region through strategic partnerships with the Apparel Group.

Summary of consolidated financial performance for the year ended March 31, 2025

Consolidated profit and loss account

(Rs. Cr)

Particulars	FY2025	FY2024	YoY change
Revenue from operation	7,950	6,386	24%
Cost of goods sold	(4,473)	(3,647)	23%
Gross profit	3,477	2,739	27%
Employee benefits expense	(666)	(565)	18%
Other operating expense	(2,337)	(1,828)	28%
Total operating expense	(3,003)	(2,393)	25%
EBITDA	474	346	37%
Depreciation and amortisation	(266)	(224)	19%
Finance cost	(107)	(83)	29%
Other income	27	30	(10%)
Profit before tax	128	69	86%
Tax expense	(54)	(25)	116%
Profit after tax	74	44	69%
Share in loss of associate	(2)	(4)	(50%)
Profit for the period	72	40	80%

Revenue from operation

(Rs. Cr)

Particulars	FY2025	FY2024	YoY change
Sale of product	6,858	5,478	25%
Sale of service	1,027	862	19%
Other operating revenue	65	46	41%
Total	7,950	6,386	24%

Revenue from operations comprises the sale of products and services, primarily marketing support services, marketplace services and other operating revenue.

Our revenue from operations increased by 24% to H7,950 crores for the year ended March 31, 2025, from H6,386 crores for the year ended March 31, 2024. The increase is attributable to the increase in Annual Unique Transacting Customers, the number of orders along with sustained/increased AOV across verticals.

Beauty	Fashion
Increase in the number of Annual Unique Transacting Consumers from 12.4 million in FY2024 to 15.8 million in FY2025	Increase in the number of Annual Unique Transacting Consumers from 3.0 million in FY2024 to 3.2 million in FY2025
Increase in the number of orders placed on the platform/ offline channel from 43.7 million in FY2024 to 54.5 million in FY2025	Increase in the number of orders placed on the platform/ offline channel from 7.0 million in FY2024 to 7.6 million in FY2025
Sustained AOV at Rs.2,021	Increase in AOV from Rs.4,361 in FY2024 to Rs.4,609 in FY2025

Revenue from the sale of services increased by 19% to H1,027 crores in FY2025 as compared to H862 crores in FY2024. This growth was driven by a 22% increase in revenue from marketing support services and a 12% increase in income from marketplace services.

Others operating revenue increased to H65 crores in FY2025, compared to H46 crores in FY2024, primarily due to a 44% growth in logistics service income.

Cost of goods sold (Rs. Cr)

Particulars	FY2025	FY2024	YoY change
Cost of material consumed	8	65	(88%)
Purchase of traded goods	4,683	3,782	24%
Change in finished goods and stock-in-trade	(218)	200	9%
Total	4,473	3,647	23%

The cost of goods sold increased by 23% to Rs.4,473 crores in FY2025 from Rs.3,647 crores in FY2024. This increase is primarily due to the higher sales of products that we purchase from brands or their authorised distributors and manufacturing of our House of Nykaa brand products. These products are sold directly to our consumers, in line with the growth in the number of orders on our platform and offline channel, driven by an increase in the number of Annual Unique Transacting Consumers.

Consequently, the Gross Profit for FY2025 stands at Rs.3,477 crores, with a margin of 43.7%, an increase of 84 basis points (bps), support by strong performance from the House of Nykaa beauty brand portfolio.

Employee benefits expenses

The employee benefits expenses for the year were at 8.4% revenue, an improvement of 47 bps over FY2024, reflecting the benefits of scale efficiencies.

Other operating expense

Other operating expense have increased by 28% to H2,337 crores for FY2025 from H1,828 crores for FY2024, primarily due to:

(i) The marketing and advertising expenses for the year is 12.5% of revenue, an increase of 94 bps over FY2024. It has increased to H995 crores for FY2025, compared to H739 crores for FY2024. The increase was driven by initiatives to acquire new customers and category building campaigns

Fulfilment expenses for FY2025 was H742 crores, an increase of 22% YoY. We leveraged further benefits from our fulfilment capabilities and existing warehouse network to further reduce air and split shipment and reduction of leakages in fashion, allowing us to improve the fulfilment expenses as a percentage of revenue by 19 bps YoY.

Selling & Distribution expenses was H216 crores, a 40% increase YoY on account of additional Beauty advisors onboarding as we expanded our beauty physical store footprint and scale up of our eB2B business leading to expanding our feet on street employees,

Other expenses was H384 crores, an increase of 17% YoY. In other expenses, Web & technology expenses increased by 12% YoY and G&A expenses increased by 20% YoY in FY2025.

Consequently, the EBITDA for FY2025 stands at H474 crores, representing a 37% increase over FY2024, along with a margin improvement of 54 bps, primarily driven by enhanced operating efficiency. The EBITDA margin for FY2025 is 6.0% vis-a-vis 5.4% in FY2024.

Depreciation and amortisation

Our depreciation and amortisation expense increased by 19% to H266 crores for FY2025, from H224 crores for FY2024, primarily due to the expansion of retail stores and capitalisation of technology projects.

Finance cost

Our finance costs comprise interest on borrowings, lease liabilities and other finance charges. The cost has increased by 29% to H107 crores for FY2025 from H83 crores for FY2024. This increase was primarily due to the working capital loan obtained from banks, which was made possible by the rise in business volumes.

Other income

Other income mainly comprises interest income on security deposits, bank deposits and foreign exchange gains. Our other income decreased by 10%, amounting to H27 crores for FY2025, compared to H30 crores for FY2024, primarily due to a decline in interest on bank deposits.

Profit before tax (PBT) and profit after tax (PAT)

The consolidated Profit Before Tax (PBT) for FY2025 was Rs.128 crores, with a tax expense of H54 crores. Accordingly, the consolidated Profit After Tax (PAT), after accounting for the share in loss of associate, stood at Rs.72 crores.

Consolidated balance sheet

(Rs. Cr)

Particulars	FY2025	FY2024	YoY change
Property, plant and equipment, right of use assets, other intangible assets, intangible assets under development, capital work-in-progress and goodwill	872	698	25%
Investments	-	34	(100%)
Deferred tax assets (net)	258	269	(4%)
Non current tax assets (net)	64	46	40%
Inventories	1,418	1,192	19%
Cash and bank balance	217	240	(9%)
Other financial assets	614	474	30%
Other assets	537	448	20%
Total assets	3,980	3,401	17%
Equity and liabilities
Equity share capital	286	286	0%
Other equity	1,016	977	4%
Equity attributable to equity holders of the parent	1,302	1,263	3%
Non-controlling interest	41	19	116%
Total equity	1,343	1,282	5%
Liabilities
Borrowings	961	680	41%
Lease liabilities	359	289	24%
Trade payables	635	387	64%
Other financial liabilities	574	679	(15%)
Provisions	29	19	52%
Contract liabilities	38	27	38%
Other current liabilities	41	38	8%
Total liabilities	2,637	2,119	24%
Total equity and liabilities	3,980	3,401	17%

Assets

Total assets increased by 17% to Rs. 3,980 crores for FY2025 from Rs. 3,401 crores for FY2024. The increase is primarily attributed to following:

(i) Increase in property, plant and equipment and right of use assets is on account of expansion of retail stores and fulfilment centres. Increase in other intangible assets (including intangible assets under development) is on account of capitalisation of technology projects and increase in goodwill arising from business combination of Earth Rhythm Private Limited.

(ii) Increase in inventories and other assets (GST input credit) is primarily in line with increase in business volumes.

(iii) Other financial assets (other than fixed deposits) mainly represents receivables from payment gateway partners and security deposits given for leases of stores and fulfilment centres and increase is on account of increased business volumes.

Equity

The equity share capital has increased due to the issuance of shares under ESOP scheme. There is an increase in other equity majorly on account of profits during the year and acquisition of non-controlling interest in subsidiaries offset by fair valuation of put option liability towards 10% stake in Dot & Key.

Liabilities

Total liabilities increased by 24% to Rs. 2,637 crores in FY2025 from Rs. 2,119 crores in FY2024. The major contributors to this increase are:

(i) Increase in working capital loans (current borrowings) and trade paybles in line with the increase in business volumes.

(i) Increase in lease liabilities is on account of expansion of retail stores and fulfilment centres.

(ii) Decrease in other financial liabilities is mainly on account of payment of put option liability to acquire 39% stake in Dot & Key.

Cash generation

The following table sets forth our cash flows for the

Particulars	FY2025	FY2024
Net cash flows from operating	467	0.3
activities
Net cash flows (used in) investing	(206)	(10)
activities
Net cash flows (used in)/from	(212)	44
financing activities
Net increase in cash and cash	49	34
equivalents

The Group generated an operating profit of Rs.506 crores in FY2025. A reduction of Rs.21 crores in working capital, driven by efficient management, contributed positively. Tax payments for the year amounted to Rs.60 crores. As a result, the cash flow from operations for FY2025 stood at Rs.467 crores.

The cash generated from operating activities has been utilised for investment in capital expenditures, the acquisition of additional stakes in subsidiaries and investments in fixed deposits. The cash flow from financing activities comprises the issuance of under an ESOP, the acquisition of a non-controlling interest in a subsidiary, a working capital loan and payments towards lease liabilities and interest.

Consequently, the closing cash and cash equivalents as of March 31, 2025, stood at Rs.125 crores, compared to the opening balance of Rs.76 crores, reflecting a net increase of Rs.49 crores.

C.2. Key financial ratios

Other financial assets	Units	FY2025	FY2024	YoY change (%/bps)
Return on net worth	%	5.6	3.3	235 bps
Return on capital employed	%	11.3	7.5	380 bps
Basic EPS	Rs.	0.2	0.1	109%
Gross profit margin	%	43.7	42.9	84 bps
EBITDA margin	%	6.0	5.4	54 bps
Net profit margin	%	0.9	0.6	28 bps
Current ratio	Times	1.2	1.2	2%
Interest coverage ratio	Times	4.4	4.2	6%
Inventory turnover ratio	Times	3.4	3.3	3%
Trade receivables turnover ratio	Times	32.6	31.5	3%
Trade payables turnover ratio	Times	9.2	11.8	(22%)

Return on net worth (RONW): Return on Net Worth (RONW) is a measure of a companys profitability expressed as a percentage It is calculated by dividing a companys net income by its average shareholders equity. RONW increased to 5.6% in FY2025 from 3.3% in FY2024. This increase was primarily due to the rise in net income.

Return on capital employed: Return on capital employed (ROCE) is a financial ratio that assesses a companys profitability and capital efficiency. It indicates how effectively a company generates profits from the capital it employs. ROCE is calculated by dividing EBIT by capital employed (Net Worth + Net Debt). ROCE increased to 11.3% in FY2025 from 7.5% in FY2024 as a result of an increase in earnings.

Basic EPS: Earnings per share (EPS) is calculated as a companys net profit attributable to equity holders divided by the weighted average outstanding number of equity shares. Basic EPS increased to Rs.0.23 in FY2025 from Rs.0.11 in FY2024 as a result of an increase in earnings.

Gross profit margin: Gross profit margin represents the earnings from the sale of products and services after deducting the cost of goods sold (COGS), expressed as a percentage of operating revenue. In FY2025, the gross profit margin rose by 84 basis points to 43.7%, up from 42.9% in FY2024, primarily driven by increased revenue from Owned Brands.

EBITDA margin: EBITDA margin is a measure of a companys operating profit as a percentage of its revenue. It increased by 54 bps to 6.0% in FY2025 from 5.4% in FY2024. This increase was due to higher revenues coupled with operational efficiencies.

Net profit margin: The net profit margin, also known as the net margin, measures the net income or profit generated as a percentage of revenue. It increased by 33 bps to 0.9% in FY2025 from 0.6% in FY2024. The increase was due to higher revenue coupled with operational efficiencies.

Current ratio: The current ratio is used to evaluate a companys liquidity position and is calculated by dividing its total current assets by current liabilities, including current debt. The increase in the current ratio is primarily due to an increase in assets, particularly inventories and other related assets in line with the rise in business volumes.

Interest coverage ratio: The interest coverage ratio is used to assess a companys ability to meet its interest payments on outstanding debt. It is calculated by dividing a companys operating earnings before interest, depreciation and tax by the finance cost. The increase in the interest coverage ratio is primarily due to an increase in EBITDA, compared to a increase in finance costs.

Inventory turnover ratio: The inventory turnover ratio measures the number of times a company has sold its inventory during a specific period. It is calculated by dividing the cost of goods sold by the average inventory for the same period. There is no significant change in the inventory turnover ratio.

Trade receivables turnover ratio: The trade receivable turnover ratio quantifies a companys efficiency in collecting its trade receivables. It measures the frequency with which a companys receivables are converted into cash during a specific period. This ratio is computed by dividing revenue from operations by average trade receivables.

Trade payables turnover ratio: The trade payable turnover ratio quantifies a companys efficiency in paying its trade payables. It measures the frequency with which a company pays off its creditors or suppliers during a specific period. This ratio is computed by dividing the purchases by average trade payables.

D. People and culture at Nykaa

At Nykaa, our people power our purpose. As we continue being Indias most admired beauty and lifestyle platform, it is our culture and people practices that differentiate us. Driven by an entrepreneurial mindset, a shared sense of ownership and a deep commitment to customer-centricity, our teams continue to deliver innovation, operational excellence and agility at scale.

Our culture is grounded in six core values: ‘Be Bold and Be Good, ‘Be Better Every Day, ‘Be the Customers Champion, ‘One Nykaa, ‘A Culture of Belonging and ‘Sustainability in Every Action. These values are principles that actively shape every part of our employee experience from hiring and development to engagement and recognition.

We are committed to fostering an environment where individuals thrive through meaningful work, continuous learning and strong connections. Our focus remains on building a high-performance, high-trust culture where every employee feels empowered to do their best work. As of March 31, 2025, Nykaa had 3,735 permanent employees spread nationwide.

Culture of diversity, equity and inclusion

Diversity is intrinsic to our culture and is a key driver of innovation and impact. We have embedded inclusion across all stages of the employee lifecycle, including hiring, development and engagement. Women comprise 43% of our workforce, with 30% representation in leadership. We continue to strengthen our policies around pay parity, POSH compliance, parental leave and equitable hiring, ensuring a workplace where all employees feel safe, included and respected.

Retaining our top talent remains a strategic priority. We focus on providing meaningful career development opportunities, competitive compensation and an inspiring work culture that encourages employees to grow with us. To support career progression, we have initiatives like ‘ICON - a programme designed to identify and promote internal talent transfer.

We remain deeply committed to nurturing a workplace where people feel inspired, empowered and truly part of something meaningful.

Building a culture of listening

In FY2025, we relaunched the Gallup One Nykaa Employee Engagement Survey, marking a significant milestone in our journey to co-create our culture. The survey achieved an 87% participation rate, one of the highest in the industry and provided valuable insights into our strengths and areas for improvement. Beyond this, we ensure consistent avenues for employee voice through regular One Nykaa town halls, divisional connect sessions, pulse surveys, Off the Record platforms and ‘Meet the CEO feedback surveys, as well as the 7-30-90 day feedback surveys and the SpeakUp platform. These mechanisms encourage continuous feedback, fostering a culture where people feel heard and valued.

At Nykaa, we are deeply committed to upholding the highest standards of ethics and fairness. To support this, we provide a dedicated communication channel where employees can report any concerns, issues or grievances they may have. To ensure transparency and integrity in the process, we have partnered with one of the leading firms among the Big Four to manage whistleblower cases independently.

Learning and growth

As Nykaa grows, so does our commitment to building future-ready talent. This year, we anchored our learning approach in two key priorities: bringing in the right external talent to support new business ambitions and enabling our internal teams to grow in their current roles while preparing for future challenges.

Every year, we bring in top talent from leading business and graduate schools across the country, integrating them into key functions and businesses such as E-commerce, Distribution, Owned Brands, Supply Chain, Retail, Technology and HR, to bring fresh perspectives, agility and a strong drive for impact. We place them across the organisation in roles that enable innovation, cross-functional collaboration and long-term growth.

We are committed to building a future-ready organisation by investing in the growth and development of our people. Through structured training programmes, challenging assignments and focused learning initiatives, we enable our employees to evolve continuously with the Company. We also encourage them to take on diverse projects, which helps grow their skills, perspectives and overall capabilities.

The Nykaa Manager Programme, delivered in partnership with external specialists, was a flagship learning journey that supported over 240+ managers across functions. Structured around the themes of managing self and managing teams, the programme achieved an average satisfaction score of 9.1 out of 10 and saw a rise in engagement scores among teams. This cohort demonstrated stronger engagement levels, indicating the programmes effectiveness in building connection and commitment.

Alongside structured programmes, we created multiple opportunities for self-driven learning. Our internal learning platform, Nykaa Academy, has partnered with Coursera, one of the industrys leading providers. Employees can access a diverse set of courses at no cost, selecting learning paths that align with their career goals and objectives. Learning at Nykaa was not limited to formal settings. It happened through AOP offsites for aspiration setting, team huddles, real business challenges, stretch assignments, internal mobility and exposure to new mandates as levers of learning. The Technology team had hands-on learning experiences with competitions like BugBash and Codeathon in partnership with Microsoft, enabling them to learn by solving real problems in high-energy, collaborative formats.

The Visionaries Unplugged series featured prominent speakers who shared insights and sparked inspiration across the Company. Within teams, there was organic learning through shared expertise and success stories.

Our frontline workforce, which represents the face of the brand for many of our customers, received continuous training to ensure consistent, high-quality service and a strong brand presence. Whether deepening domain expertise or stepping into a new role, our approach reinforced one core belief: that growth is not a one-off initiative, but a shared, everyday culture.

Performance and recognition

Nykaas compensation frameworks aim to embody the principles of fairness, meritocracy and transparency. We maintain a strong alignment between individual performance and rewards, ensuring that we recognise our employees for their contributions in a meaningful and motivating way. Our compensation structure comprises a competitive fixed salary along with variable pay components such as performance bonuses or incentives, creating a balanced and performance-driven approach.

We are committed to upholding pay parity across roles and genders and we regularly conduct comprehensive benchmarking exercises to ensure our compensation remains competitive within the industry. This approach supports our talent acquisition strategy and reinforces our ability to retain high-performing individuals.

Our performance management philosophy is equally rooted in meritocracy, fostering a culture of continuous improvement and professional growth. Through structured check-ins and formal performance reviews conducted throughout the year, we provide employees with actionable feedback and opportunities for development. Managers are encouraged to coach and guide, rather than merely evaluate and assess. This process enhances employee engagement, strengthens alignment with organisational goals and supports scalable growth across teams.

Recognition plays a decisive role in reinforcing our culture. Nykaa Chairpersons Annual Awards are a key moment in the year, spotlighting individuals who have delivered exceptional impact in ways that reflect Nykaas core values. Beyond this, we integrate recognition into everyday interactions through town halls and appreciation.

To encourage peer-led appreciation, we introduced Gratitude Cards personalised and straightforward notes that allow colleagues to acknowledge and thank each other for acts of collaboration, support or kindness.

Recognition at Nykaa continues to evolve from being a top-down initiative to a shared cultural norm. When people feel seen and valued for their efforts, exceptional performance follows naturally.

Fostering connection and community

At Nykaa, we have anchored employee experience in belonging and connection. Our engagement approach celebrates excellence and brings people together in ways that are both meaningful and memorable. The Long Service Awards recognised those who had completed ten years of service at Nykaa. We celebrated festivals and regional occasions that allowed teams across geographies to bond, creating shared cultural moments.

We also emphasised the importance of fun and informal interactions as integral to our culture. From cross-functional collaborations and offsites to casual team dinners, potlucks and sports events like the Nykaa Premier League, these moments helped build camaraderie and connection. Our wellness challenges, such as Marchathon, infused fun into fitness and brought teams together across locations.

To support our growing teams and evolving ways of working, we continue to enhance and expand our office spaces to spark innovation, enable spontaneous conversations and bring people together with purpose.

Employee well-being

We care deeply about the holistic well-being of our employees, encompassing their physical, mental, emotional and financial needs. Throughout the year, we expanded our wellness offerings to ensure that every Nykaa employee feels supported.

At Nykaa, we care deeply about the holistic well-being of our employees physical, mental, emotional and financial. As part of our Wellness 2.0 roadmap, we have built a comprehensive and segmented wellness ecosystem to support every Nykaalite. Our programme covers medical and accident insurance, hospitalisation benefits and voluntary parental insurance. Employees have access to unlimited doctor consultations, mental health counselling sessions and nutritionist support. We have partnered with leading providers to offer discounted gym memberships, preventive health check-ups, pharmacy and diagnostic services. To further promote a health-first culture, we host regular wellness workshops and invite experts for on-site consultations ensuring proactive, accessible and holistic care for our people.

Nykaa Gives: embedding purpose in work

Through Nykaa Gives, we bring our belief of ‘in giving, we receive to life. Our Nykaa Gives platform enables employees to give back to society through impactful initiatives. This year, employees participated in multiple purpose-driven initiatives, including donation drives during the Month of Giving in partnership with Goonj across Mumbai, Delhi and Bangalore, as well as a Secret Santa programme for underprivileged children and meal packaging programmes.

As part of our birthday week, we took our celebrations beyond ourselves, partnering with Rise Against Hunger India to host a pan-India meal packaging drive. Teams across our offices came together to pack almost 60,000 nutritious meals for communities in need. These moments were not just activities they reflected our deeper belief in collective purpose and service.

Culture of sustainability and compliance

At Nykaa, we believe that growth must go hand in hand with responsibility. As a young, dynamic and fast-growing company, we take pride in the strong emphasis our leadership and Board place on sustainability and regulatory compliance.

We operate with the conviction that success demands accountability. As a responsible corporate citizen, we are committed to upholding the highest standards of governance and ethical conduct.

Compliance and corporate governance

Our approach to effective compliance management is multidimensional and includes:

Comprehensive training and awareness initiatives Cross-functional collaboration and ownership Deployment of compliance management tools Periodic impact assessments and continuous improvement Advocacy of ethical practices across the organisation

Way forward

At Nykaa, people and culture form the foundation of our organisation. Every initiative, from learning and recognition to wellbeing and inclusion, is designed to enable our people to do their best work and foster a strong sense of connection and pride. As we continue to scale new heights, we remain committed to nurturing a culture that drives excellence, empowers individuals and celebrates their contributions. In doing so, we aim to create a workplace that delivers results and earns the enduring admiration of all our employees and stakeholders alike.

We support our governance framework with key policies such as:

Code of Conduct Whistleblower Policy Insider Trading Policy Related Party Transactions Policy Health, Safety & Environment (HSE) Policy

E. Health, safety and environment (HSE) highlights

At Nykaa, the concept of safety extends beyond compliance its embedded into the everyday functioning of the organisation. Across our workplaces, we have developed and implemented robust systems to ensure the health, safety and well-being of our employees, partners and consumers.

Creating safer workplaces

Workplace safety begins with infrastructure. Our workplaces are equipped with essential safety systems, including smoke detectors, fire hydrants, sprinklers and public address systems Fire safety compliance is a precondition before opening any workplace. Beyond infrastructure, we have built layers of preparedness into our operations Emergency Response Teams (ERTs) are active across all workplaces, conducting bi-monthly inspections and leading evacuation drills to ensure readiness.

Our occupational health and safety management system covers every part of our operations and is governed by a centralised HSE Policy. New contract workers receive structured safety inductions upon onboarding. We also conduct weekly safety training across our warehouses on 16 critical HSE topics, supplemented by customised posters and microlearning videos to maintain consistent and high awareness. This year, we introduced standardised training guidelines and rolled out incident case study discussions to support learning from real scenarios.

We recorded zero major safety incidents. Minor incidents were addressed through corrective actions, targeted training sessions and expanded awareness programmes.

Embedding a culture of accountability

Safety at Nykaa is not limited to infrastructure or procedure it depends on people. To empower our workforce, we have developed a structured incident reporting system with a designated Health, Safety and Environment (HSE) Single Point of Contact (SPOC) at each location. Employees are encouraged to report near misses, unsafe conditions and unsafe acts quickly via QR codes displayed throughout the workplace. These reports are investigated, followed up with corrective actions and reviewed monthly to ensure transparency and accountability.

To further strengthen our safety culture, we are planning to implement behavioural safety programmes and introduce activity-based Hazard Identification and Risk Assessment (HIRA).

Supporting employee health and well-being

Recognising the role of holistic well-being in organisational performance, Nykaa has launched an employee wellness programme that provides both physical and mental health support. This programme includes discounted gym memberships, unlimited teleconsultations with doctors across 32+ specialities, access to dietitians, therapists and on-site counselling sessions. Additionally, employees and their families can access health content, receive discounted clinic visits, undergo health tests and utilise a round-the-clock helpline for support.

While our operations are considered low-risk and do not involve exposure to hazardous materials, we ensure medical preparedness by maintaining accessible first-aid kits at all locations and having a medical professional available for consultation. This approach reflects our commitment to maintaining a safe and supportive work environment for all employees.

Environmental stewardship and compliance

Nykaas environmental footprint is modest given our business model. Nonetheless, we adhere to regulatory requirements and actively pursue responsible practices. Since April 2021, we have been fully compliant with Extended Producer Responsibility (EPR) regulations and are certified as a ‘Brand Owner and Importer by the Central Pollution Control Board (CPCB). We met our EPR targets for FY2025 and completed all mandatory filings.

Expired or damaged inventory is disposed of through authorised vendors via incineration and plastic packaging waste is recycled through registered recyclers. Water usage is tracked via installed meters and limited to domestic needs. Diesel generators serve as backup only and plans are underway to operationalise renewable energy in selected locations from FY2026.

All operations comply with applicable environmental laws and regulations. No penalties or violations were reported during the year.

F. Technology

At Nykaa, technology is more than just a pillar; it is the very essence of our operations, serving as the strategic engine that propels our growth and innovation. In FY2025, we embarked on a transformative journey, accelerating our evolution from a ‘Digital Native to an ‘AI Native Platform. This monumental shift is deeply embedding artificial intelligence across every facet of our technological infrastructure, business processes and customer interactions, propelling us towards unparalleled experiences and robust operational excellence.

Our unwavering commitment is to make every interaction with Nykaa seamless, personalised and truly delightful. Behind every delightful customer experience lies a backbone of robust and efficient operations. Our tech teams have delivered remarkable results in optimising internal processes, translating into significant gains and fortifying our future readiness.

Our commitment to becoming an AI-native platform is underscored by ambitious initiatives that will further deepen our hyper-personalisation capabilities, enhance operational efficiencies and unlock new avenues for innovation. This continuous evolution, driven by advanced AI, will solidify Nykaas position as a future-ready enterprise, poised for sustained growth and robust value creation in an increasingly digital and intelligent world.

G. Supply chain

G.1. Overview

As of March 31, 2025, we have an integrated supply chain comprising 44 warehouses across India, with a total capacity of 15.7 lakh square feet, supported by 237 physical stores.

Fulfilment and operational excellence

As of March 31, 2025, we served more than 19,000 pin codes, covering almost 98% of the serviceable pin codes across the country. Orders are monitored and tracked closely to ensure timely dispatch. We have an allocation engine, which helps fulfil orders by utilising inventory efficiently across our warehouses. Through localised fulfilment, which ensures delivery from the nearest fulfilment centre, we optimise shipment costs and inventory management. We have integrated our supply chain with several sellers warehouses to support the sale of fashion products through our curated platform.

We manage four models: inventory, sale or return (SOR), curated platform (marketplace) and just-in-time inventory models. We have invested in technology, people and processes to support and scale these models. Our flexibility to operate each model is a core strength, as we believe that brands and products require a customised approach to selling. For our inventory and SOR models, our investment in technology is geared to enable fungible inventory across online and offline channels, allowing for efficient inventory management.

We have also built B2B2C capabilities for Nykaa Fashion, enabling consumers to benefit from global brands and our platform.

Our luxury orders are packed and tracked separately and we maintain consistent communication with the brands and sellers to ensure efficient and seamless delivery of shipments to consumers.

G.1.1. Achievements of FY2025

We strived to elevate customer delight and same-day/next-day delivery further by utilising our existing supply chain tech stack. In FY2025, over 70% of beauty orders from the top 110 cities were delivered within the same day or the next day and ~80% of the beauty order volume was delivered in the top eight cities.

Our fashion vertical is based primarily on curation, where we provide a platform to market third-party vendor products and facilitate their sale and delivery. Here, we also employ a just-in-time delivery model that eliminates inventory risk, enabling our supply chain to be nimble and adaptive to our product catalogue. This approach addresses current trends and consumers needs without incurring the risk of obsolescence and makes objective determinations on new categories, thereby minimising inventory risk.

We continue to work with delivery companies such as Blue Dart Express Limited, Delhivery Limited, Ecom Express Limited and Xpressbees Logistics Solutions Private Limited and this year, we added Shadowfax Technologies Private Limited and Altruist India Private Limited (Dependo) to execute our deliveries and ensure smooth and efficient courier delivery of products to our consumers

Focus on sustainability

We leveraged paperless infrastructure to improve workforce efficiency and reduce costs We have implemented paperless picking in most of our warehouses, resulting in a 90% reduction in paper usage across the organisation. We continued to focus on using sustainable, eco-friendly packaging on the majority of our orders. We used paper fillers and Hexcush (eco-friendly, honeycomb paper bubble wrap) for beauty and personal care, while we used paper flyers for fashion products.

Inventory management

Our inventory management is guided by supply chain forecasts, which consider historical sales trends, lead time, safety stock, minimum order quantity and replenishment frequency. We have negotiated stock correction and return-to-vendor clauses to mitigate excess inventory and close-to-expiry products. We have implemented initiatives like Electronic Data Exchange (EDI) with blockchain technology to optimise the supply chain. This approach streamlines brand partner transactions and provides visibility into .data for seamless alignment. We manage over 12 million SKUs across categories and warehouses. Our concurrent inventory audit mechanism ensures accuracy, with in-house teams conducting regular material, allocation and cycle counts audits.

H. Internal control systems and their adequacy

Given the nature and size of our business operations, your Company has designed an adequate internal control system to ensure the following:

Transactions are accurately recorded, completed and authorised. Adherence to accounting standards, compliance with applicable laws and alignment with Company policies and procedures. Effective use of resources and safeguarding of assets. Prevention and detection of fraud.

Your Company has complied with the specific requirements outlined in Section 134(5)(e) of the Companies Act, 2013, which mandates the establishment and implementation of an Internal Financial Control framework that supports compliance with the Act concerning the Directors Responsibility Statement.

The key components of our internal control system include:

Establishment and periodic review of business plans. Identification of key risks and opportunities, with regular reviews by senior management and the Board of Directors. Policies for operational and strategic risk management. A clear and well-defined organisational structure along with limits of financial authority. Continuous identification of areas that require stronger internal controls. Standard operating procedures to ensure the effectiveness of business processes. Systems to monitor compliance with statutory regulations. Well-defined principles and procedures for evaluating new business proposals or capital expenditures. A robust management information system. Comprehensive information security policies and guidelines. A thorough internal audit and review system. A well-defined internal financial controls framework. An effective whistle-blowing mechanism. Training and awareness sessions on policy and code of conduct compliance.

The Internal Financial Controls have been documented and integrated into business processes. The design and operational effectiveness of these controls are tested annually by management, with the support of external consultants and are subsequently audited by statutory auditors.

Our statutory auditors have issued an unqualified report for the year ended 31 March 2025, following an assessment of the effectiveness of these controls. We believe that strengthening Internal Financial Controls (IFC) is a continuous process and we will continue to seek enhancements to our internal controls, focusing on preventive and automated measures rather than merely relying on mitigating detective and manual controls.

Furthermore, your Company, with the support of an appointed Internal Audit firm, conducts risk-based internal audit reviews in accordance with the annual Internal Audit plan approved by the Audit Committee of the Board. The Internal Audit function assesses compliance with the established design of internal controls, while ensuring operational efficiency and effectiveness.

Any significant deficiencies in internal control that are identified are tracked for resolution and validated. A summary of the Internal Audit findings and the status of implementing mitigation action plans for any residual risks identified is submitted to and discussed with the Audit Committee on a quarterly basis.

Your Company remains committed to leveraging technology to strengthen its internal control framework continually.

I. Enterprise risk management

In todays fast-paced business world, risks are constantly evolving as customer preferences shift rapidly and regulations change frequently. At Nykaa, we continually look ahead, actively scanning the business landscape to identify and mitigate potential risks that could impact our strategic objectives.

Our Risk Management Framework is key to our performance and progress. Its a consistent, clear and strong system for managing risks throughout the entire Nykaa group. This framework helps us ensure that our risk management activities are well-designed, effectively implemented and operating efficiently.

Enterprise risk management (ERM) at Nykaa

Nykaas Enterprise Risk Management (ERM) framework is robust and comprehensive, designed to align with industry best practices, including the COSO ERM framework and ISO 31000 Risk Management processes. This framework enables us to effectively balance our growth ambitions with the associated risks, thereby helping us achieve our strategic and operational objectives.

Our risk management process covers the entire value chain. We analyse significant risks including emerging threats that could disrupt business operations in both the short and long term. Each risk is evaluated based on its nature, likelihood and potential impact. We develop clear action plans to mitigate material risks and continuously monitor the effectiveness of our risk management strategies across the entire value chain.

Risk management governance framework

Nykaas Risk Management Framework is designed to be an end-to-end framework for managing and reporting risks from the Groups operations to the Board. Nykaa adopts an integrated approach to risk management throughout the organisation, involving cross-functional business teams, senior leadership and an Internal Risk Steering Committee. Oversight of the Enterprise Risk Management (ERM) framework is provided by the Board, specifically through the dedicated Risk Management Committee (RMC) of the Board. The RMC reviews the effectiveness of risk identification, evaluation and risk management framework, including the mitigation of material and emerging risks. Additionally, the Risk Management policy outlines the Boards requirements for establishing and complying with a framework that facilitates the effective, consistent and aligned management of business risks, in line with the Companys risk appetite. The Head of Risk Management plays a key role in supporting the Board in risk management matters through deliberations with the Risk Management and Audit Committee.

Key risks and mitigating actions

Given below are the risks that we have identified as most relevant and material to our business and its performance. We recognise that this is not an exhaustive overview of all risks applicable to the Company. New risks may emerge and existing ones may also evolve. We endeavour to ensure that key risks are identified and that appropriate risk mitigation measures are implemented promptly.

The key risks identified and the risk management measures instituted are given below:

1. Business risks (macroeconomic/geopolitics/ competition/customer preferences)

Macroeconomic volatility and trade-linked cost pressures

Brief risk description: Global and local macroeconomic fluctuations including persistently high inflation, interest rate variability, currency depreciation and trade tariff wars can impact consumer confidence and constrict disposable incomes. As a retailer in the beauty and personal care space, this may affect the discretionary spending patterns of consumers and, in turn, our revenue generation and growth trajectories.

Risk mitigation: Nykaa retails a diverse portfolio of products across various price segments, catering to different customer segments with varying spending power. We retail both discretionary and essential items, enabling customers to quickly discover products that suit their evolving needs during economically volatile periods. We also develop detailed long-term and short-term business forecasts, which are periodically re-evaluated, enabling efficient resource allocation and deployment.

Rapidly evolving consumer behaviour

Brief risk description: Customer tastes, preferences and purchasing behaviour are evolving at a pace faster than ever before. Customers interest in categories, brands and product types can change in tandem with their preferred medium of purchase, encompassing both digital and physical formats.

Risk mitigation: We actively mitigate the risks of evolving consumer preferences and intense competition by continuously expanding our lifestyle portfolio. This strategy enables us to enter new categories and expand our brand and product offerings, thereby significantly reducing our dependency on any single product type, category or brand.

Simultaneously, we are strengthening our omnichannel presence. Our robust digital ecosystem spans mobile applications and desktop formats and we continually explore and implement new sales channels. This approach, coupled with our expanding offline retail footprint and strategic investments in technology-enabled distribution, diversifies our business formats and enhances our ability to adapt to shifting consumer behaviours and preferred purchasing channels.

2. Operational risks

Market relevance, customer acquisition and retention risk

Brief risk description: The Companys revenues, profitability and long-term brand equity can be threatened by the dynamic and intensely competitive digital retail landscape. Two main factors drive this threat: rapidly evolving customer expectations encompassing demands for convenience, personalised discovery, alignment with values (such as sustainability) and integrated shopping experiences (both digital and physical) and the proliferation of marketing channels combined with a reliance on third-party platforms.

As Nykaa expands its reach across beauty and fashion, failure to continuously understand and adapt to evolving consumer behavioural patterns across the Total Addressable Market (TAM), or to effectively acquire and retain customers cost-effectively, could lead to reduced platform stickiness, declining brand loyalty and a loss of market share to new competitors offering quicker, more curated or hyper-localised experiences. This misalignment ultimately risks eroding our market relevance and diluting long-term brand equity.

Risk mitigation: We make significant efforts to build the right customer acquisition through a 360-degree marketing strategy that spans digital marketing, mass media, multiple content channels and offline marketing. Hence, we do not have any overdependence on a single marketing channel. Customer loyalty is delivered through differentiated experiences, rewards and loyalty programme and targeted reactivation strategies. We continuously monitor retention metrics across customer segments to proactively take measures that ensure we deliver the right experience for all, while also innovating and investing in technology to provide a superior customer experience.

Inadequate business continuity management

Brief risk description: The absence of a well-defined Business Continuity Management (BCM) framework and robust Business Continuity Plans (BCPs) poses a substantial risk to the Company. Without these, an unforeseen disaster or disruption (e.g., natural calamity, system failure) could lead to prolonged business outages, resulting in significant financial losses, operational paralysis, reputational damage and potential legal repercussions. Our ability to rapidly recover, minimise downtime and protect critical assets and personnel would be severely compromised.

Brief risk description: We have significantly strengthened our resilience against business disruptions through a robust Business Continuity Management (BCM) framework. This framework comprehensively covers all critical organisational domains, including technology infrastructure, security, human resources, administration and core business operations, such as warehouse and logistics operations and customer support.

Our proactive measures include conducting regular enterprise-level Disaster Recovery (DR) drills. We have completed Business Impact Analyses (BIA) and Risk Assessments (RA) for all critical systems and processes across all identified functions. Crucially, Recovery Point Objectives (RPO) and Recovery Time Objectives (RTO) have been clearly defined for these critical processes, ensuring our capacity for rapid recovery and minimal operational downtime in the face of unforeseen events.

3. Legal and compliance risks

Market relevance, customer acquisition and retention risk

Brief risk description: An evolving and complex regulatory landscape can impact the retail, digital, e-commerce and consumer products industries, both in India and globally. Changes in these regulations may necessitate adjustments to business processes or lead to increased compliance costs.

Risk mitigation: Nykaa ensures that statutory compliance is met and adherence to all relevant laws of the land. We have invested in people capabilities, an IT-enabled compliance management system (including monitoring of SEBIs PIT regulations) and established processes to monitor the regulatory landscape for changes proactively. Furthermore, we provide ongoing education to our business units on compliance requirements and engage with government bodies and industry associations to stay informed about all relevant developments. We have also invested in a digital compliance tracking and monitoring tool that covers all key compliances across the business, as well as a quarterly certification process for these compliances, overseen by the person responsible for the function. We have also invested in the digitisation of the Board meeting processes and key regulatory amendments (like Market Rumour Verification and Reporting).

4. Technology and info-security risks

Cybersecurity and data privacy risk

Brief risk description: An evolving technology and data infrastructure threat landscape, driven by deepening digital engagement with consumers, suppliers and partners, is resulting in an increasing risk of cyberattacks, data breaches and system disruptions.

Unauthorised access, misuse of sensitive data, or disruptions in IT infrastructure could severely impact business operations, hinder sales, disrupt supply chains and compromise consumer trust. Furthermore, growing reliance on third-party technology providers and cloud-based solutions introduces additional complexities in managing IT security. Safeguarding our IT ecosystem is a top strategic priority as we continue our digital transformation.

Risk mitigation: We maintain a comprehensive, multi-layered security posture to proactively safeguard our digital assets and sensitive information. Our approach is rooted in industry leading standards, including ISO 27001 certification and alignment with the NIST Cybersecurity Framework.

Our cybersecurity strategy is built on significant investments in advanced defences and rigorous risk mitigation practices.

We engage independent third-party auditors to assess critical IT systems that store sensitive data, driving continuous improvements and ensuring robust protection.

Our information security controls emphasise prevention, timely detection and effective remediation of threats. These controls are continuously monitored and enhanced across our IT infrastructure through an ongoing programme, ensuring they remain effective against evolving risks.

To reinforce our human firewall, we provide frequent cybersecurity training to all employees, fostering a culture of vigilance and awareness. Our digital infrastructure integrates advanced cybersecurity technologies, including:

Advanced threat monitoring and analytics

Strong access controls safeguarding customer, financial and sensitive data

Third-party risk management for supplier chain management

Compliance with applicable regulatory requirements

Additionally, we conduct regular Business Continuity Plan (BCP) and Disaster Recovery (DR) drills to ensure operational resilience in the event of adverse conditions.

Together, these layers create a robust defence framework designed to protect our organisation, our client and their data against emerging cybersecurity and privacy threats.

5. People risks

Workforce capability and talent retention risk

Brief risk description: Our business innovation and excellence depend on the skill development of our workforce along with Nykaas agile ways of working. Our ability to attract and retain talent is critical to the success of our operations. Employees lacking the right skills in an evolving landscape could further impact our ability to innovate. The competitive labour market for key skill sets, combined with the potential attrition of key staff and managerial personnel, could affect our growth.

Risk mitigation: We proactively mitigate workforce risks through strategic investments in our people and by attracting top talent from diverse backgrounds. Our ability to rapidly scale our employee base while maintaining an agile work environment effectively addresses growing business needs. We champion a high-performance culture grounded in diversity and inclusion, ensuring our team is equipped with the right tools for continuous upskilling and reskilling.

6. Financial risks/Treasury risks

Foreign exchange (forex) exposure risk

Brief risk description: Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Groups exposure to the risk of changes in foreign exchange rates primarily relates to its operating activities, which are denominated in foreign currency, specifically trade payables and advances paid to vendors.

Risk mitigation: The Groups foreign currency risks are identified, measured and managed at regular intervals in accordance with the Groups policies. When a derivative is entered into to hedge any foreign currency exposure, the Group negotiates the terms of those derivatives to match the terms of the hedged exposure.