Nykaa raises marketing spend to ₹412 crore as Q1 profit more than triples

63

TL;DR:

Nykaa increased marketing and selling spend 26% to ₹412 crore, yet Q1 revenue rose 29%, profit more than tripled and EBITDA margin reached 8.5%. The key signal being efficiency marketing cost falling as a share of revenue.

Article:

Nykaa lifted advertising, marketing, selling and distribution spending 26% year on year to ₹412 crore in the June quarter, while revenue from operations rose 29% to ₹2,782 crore and net profit climbed to ₹79.76 crore from ₹24.47 crore. The timing matters because the beauty and fashion retailer is funding customer acquisition, faster delivery and store expansion without surrendering operating leverage.

The strongest signal is not the absolute spend, but its efficiency. Marketing and selling costs fell to 14.8% of revenue from 15.2% a year earlier, even as EBITDA increased 68% to ₹236 crore and the EBITDA margin widened to 8.5% from 6.5%. Gross profit rose 33% to ₹1,276 crore.

On the earnings call, Nykaa CFO P. Ganesh said the company continued to make marketing investments supporting customer acquisition across beauty and fashion, while a 42-basis-point improvement in marketing efficiency offset higher fulfilment costs. Founder and CEO Falguni Nayar said, “We remain focused on building with discipline, innovation, and long-term value creation.”

Fashion supplied the clearest proof of the strategy. Its gross merchandise value rose 53% to ₹1,471 crore, net sales value jumped 54% to ₹451 crore, and the segment moved to a 0.1% EBITDA margin from negative 6.2%. Management also reported customer acquisition costs in fashion were about 30% lower than two years earlier.

Nykaa now has to show that this improvement survives tougher competition and continued spending on quick commerce, retail stores and premium brand launches. The next marker is whether repeat customers keep reducing acquisition cost as a share of revenue. If that holds, the ₹412-crore marketing bill will look less like promotional inflation and more like disciplined growth investment.