FSN E-Commerce Ventures Limited (NYKAA) Q1 2027 Earnings Call Transcript

Hi, good evening, everyone. This is Michelle from Kores Call. Welcome to FSN E-Commerce Ventures Limited Q&FY27 Earnings Call. From the management at NICA, we have Ms. Falguni Nair, Executive Chairperson, MDN CEO, Mr. Anshit Nair, Executive Director and CEO, Beauty, Ms. Adwita Nair, Executive Director and Co-Founder and CEO of House of NICA Brands, Mr. Vishal Gupta, CEO, NICA Distribution. Abhijit Dabbar, CEO, Naika Fashion, and Mr. P. Ganesh, Chief Financial Officer. Before we start, we would like to point out that some of the statements made in today's call may be forward-looking in nature, and a disclaimer to this effect has been included in the earnings presentation shared with you earlier. Kindly note that this call is meant for investors and analysts only. By participating in this event, you consent to such recording, distribution, and publication. All participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation from management concludes. With that, over to you Falguni, ma'am, for opening remarks. Thank you.

Thank you very much, Michelle, and good afternoon, everyone. We at NICA are really happy to present this afternoon. We've just ended our board meeting and happy to present our first quarter financial year 27 results. I'll start with one NICA highlight. I'd like to be happy to share that what we have seen in this quarter has been a strong growth across I'll just read for a minute. Yeah, so I'll start with the performance snapshot for the first quarter. I'm really happy to share that the GMV for the quarter has turned out at 5,590 crores, which is a 34% year-on-year growth, and net revenue similarly for the quarter is at rupees 2,782 crores, which is a 29% year-on-year growth. On the gross profit also, the company has seen the gross profit of 1,276 crores, a growth of 33% year-on-year, and a margin of 45.9%. For the EBITDA, happy to report the EBITDA at 236 crores for the quarter, a 68% year-on-year growth, and an 8.5% margin for the quarter. And finally, the PAT is at 8 rupees 80 crores, a 226% year-on-year growth with 2.9% PAT margin for the quarter. So, happy to present the results, and moving on to the next slide. You know, what we've seen is that both the beauty and the fashion vertical have seen acceleration in growth and profitability. So if we were to look at the beauty vertical, and here we've tried to share the first quarter data for about three, four years in a row, which is quarter 124 all the way to quarter 127. And the NSV growth for beauty vertical is – the NSV for the beauty vertical for this quarter is 2,371 crores. And that's a 29% year on your growth. And if you look at it, it is up from 1,212 growth about three years ago. On the fashion vertical, similarly, We can see that the NSV has grown from 209 crores in quarter one of 24 to this quarter, the fashion vertical NSV is at 451 crores. This represents a 54% growth on a year-on-year basis. So happy to report that both verticals are accelerating in the growth that they are seeing. On the EBITDA front also, the year-on-year EBITDA growth for beauty vertical is at about 48%, and the EBITDA itself is at 244 crores for quarter 127, and the EBITDA margin is 10.3%. This is higher than 9% a year ago. And it is an improvement over the last three, four-year period. Similarly, in the fashion, you can see that the improvement in EBITDA has been quite tremendous. So, from a negative 14.1% EBITDA margin in quarter one financial year 24, you can see that this year we are almost at a flat break-even margin, just 0.1% in the quarter one of this year. And that is, again, a huge improvement in EBITDA margin over the last one year. Moving on, sharing with you the composition of this growth. And like I said, from a key strategic initiative perspective, growth for both the verticals has strengthened over the last few quarters, and it is coming in from all components of these vertical businesses. So, for example, in case of beauty, be it e-commerce, be it retail, and be it house of Naika, each one is facing a pretty strong growth momentum. And similarly, in fashion, the customer growth has been quite significant. Enriched by the brand portfolio that we are now having on our platform, as well as encouraging response from the Nike partnership. On the consumer front, we are now happy to report that almost 60 million consumers are NICA consumers who have ever bought a NICA, and this is a 33% growth year-on-year. And we have been expanding a consumer-immersive event. So if you see, NICA has been – really, there's a lot of industry talk about on-the-ground event and, you know, experiential being very big, and NICA has always been doing a lot of that. But now we're scaling it up further through a lot of events like L'Oreal Paris Cannes, of course, that we do. But besides that, the beauty bars. Many flagship sales, makeup masterclasses, experiential pop-ups. We did a Rare Beauty launch event, House of Nykaa, many new launch events, as well as the campus programs that we have for Gen Z. So a lot of immersing experiences for the consumers. On the House of Nykaa front, now we almost have 13 consumer brands, and they're growing at 43% year-on-year basis. K-Beauty and Nykaa Cosmetics each earned a number of industry recognition this year for their innovation. Including the leading award from UK through CWUK, as well as awards within India from Femina, ET, and others. Our brand partners, brand partners of NICA across its platforms are growing, the numbers are growing. So we now deal with 10,000 plus brand partners across beauty and lifestyle. And in fact, almost 160 were added in this quarter alone. And many important ones amongst those were brands like Rare Beauty, SK2, Birkenstock and Fashion, as well as Debenhams. So on all fronts, high quality brand partners are signing up. From the retail business perspective, now we are at 324 stores across 100-plus cities. In fact, 11 stores were open this quarter. And we also opened our largest ever ultra-luxe Nika store in Wasson, Konish, which is at 5,000 square feet. We are also now offering exclusive brand outlets to some of our brand partners through a strategic partnership, one with Charlotte Tilbury as well as Keele. So getting more engaged, and also a lot of innovation was brought in through formats like Nica Perfumery and many of the EBO formats for our own brands like K-Cafe and others. On the AI initiative, we have been quite active, and multiple high-impact AI initiatives have been launched during the quarter. We launched Virtual Closet for our fashion platform, and it is converting browsers into buyers. And my colleagues, during the later part of the presentation, will discuss more about these. Similarly, we also now have Naina, our AI voice assistant, and it is resolving nearly half of the customer calls at human quality. And Ask Zyka has emerged, which is our advice platform, advice AI initiative for our beauty platform, and it has emerged as a trusted beauty advisor. Moving on to the next slide. So really happy to say that if you look at it even over a three-year period, we have been able to grow turnover from 1,422 crores to 2,000, this is the net revenue, 2,782 crores for the quarter. And during this period, the EBITDA margins have improved from 5.2% to now at 8.5% for the quarter. And in fact, if you were to compare to a year, it's improved by almost 200 basis points. And on the path margin also, there's been significant improvement with path margin now at 2.9%. The revenue growth momentum has built up now to 29% year-on-year revenue growth. Return on capital employed has also improved over this period to 26.8% from just about 12.7% a year earlier. And the capital employed in the business has been kept under control with – it was about 1,658 crores in quarter one of financial year 24, and today it stands at 2,211 crores. So a tight capital execution leading to higher return on capital employees. Next slide. And this has made NICA into a $2.4 billion GMV powered by demand, assortment, and distribution flywheel. So if you look at the demand engine, and we talked about many of these earlier, that the customer base has grown rapidly from 26 million customers about three quarters earlier to now 60 million customers. Our social engine presence of our creator networks are growing massively. So our creator network is now 170,000 creators on our Nikon app. As well as 2.3 million content pieces created by these nappers annually. Our social media community continues to grow, and it now stands at 19 million. And many consumer engagement initiatives from NICA land, as well as many of the beauty bars, as well as the college campus events, are really getting and attracting a lot of consumers into their engagement. On the assortment, also, we talked about it, and you can see that it has, in fact, grown from about 5,000 brands working with us just about three years ago to now 10,000 brands trusting Naika as their retail partner. And, in fact, 5,300 brands, as many as 5,300 brands have been onboarded in the last three years alone. And within that, deep partnerships with many of the brand partners like Peet, Nike, Foot Locker, and Revolve on the fashion side and Charlotte Tilbury and Kiehl's and many others on the beauty side. On the distribution engine front, similarly, the network of 324 stores is a very big asset, almost up 2x from about three years ago, and it now touches many more cities. So, from being present in 60 cities earlier, now we are present in 105 cities. Similarly, registered retailers on our superstore platform have improved from... From 403, that's about 400,000 retailers about a year ago to now 523,000 retailers. So a solid distribution platform is being built, which touches 1,200-plus cities. And this is allowing us to acquire mandates from a lot of brand partners for distribution in these markets. We cover, obviously, 19,000 PIN codes, and also almost 13 cities in the country are now covered through NICA Now, which is a quick delivery platform. And similarly, this number is likely to go up further by the end of the year. So with that, we feel that the GMV has been able to grow at almost 3x versus about three years ago through a very conscious effort to build categories as well as build customers and build our influence. So it's been an execution which has leveraged Flywheel from assortment to distribution to demand creation and touches everyone from brand partners to customers to ecosystem to retailers and distributors. So really happy with what Laika has been able to build over the last few years. With that, next slide. With that, I would like to hand over to Anshit to take us through the beauty of the channel retail.

Yeah, thank you very much, and thank you to everybody who's taken the time to join us for our call. So, as mentioned, I think Beauty has had a very strong quarter one in FY27 with 28% to 29% growth on both GMV and NSV, and at the same time delivering a very healthy EBITDA margin of 10.3%, which is 150 basis points higher than Q1 of FY26. A lot of this growth is coming on the back of strong customer acquisition as well as successful execution of certain key sales during the quarter. On top of that, retail has continued to strengthen its performance with double-digit same-store sales growth and continues to be an area of growth for us.

Next slide, please. So, we've spoken in the past about the two main pillars of the beauty

vertical growth strategy is penetration as well as premiumization, and both of those pillars are playing out nicely for us, and you can see that on the penetration side, we have increased the number of visits to our platform to close to half a billion in Q1 FY27, which is a 22% growth year-over-year, and the number of annually unique transacting customers on the platform has now crossed 20 million. In terms of premiumization, we're seeing positive signs on that front with the average order values at the aggregate growing by roughly 5%. If I look at the average order values split between new and existing customers, the growth and the premiumization of the customer's basket is even more obvious. So our hypothesis on driving growth through both penetration and premiumization

has played out nicely in Q1. Speaking about brand launches

as well as assortment, as you know, Nykaa has always had and continues to have a strong assortment of exclusive and new brands that we bring into the India market. And Q1 was no different. With the launch of Selena Gomez's Rare Beauty, one of the most iconic brands from the U.S. market, has launched on Nykaa in June of 2026. Very quickly, that brand has gone on to become a top five brand within the prestige space on the NICA platform. And there is a nice quote from the CEO of Rare Beauty who speaks about the incredible opportunity that India is offering as well as the partnership with Nika. And we have a small video from Selena Gomez herself that we'd like to share with you.

Hi, guys. I'm so excited to share that we're bringing Rare Beauty to Nykaa in India. Nykaa is such an amazing partner, and it makes me so happy to keep growing Rare Beauty in India. You'll now be able to shop both in stores and online. Thank you again for all of your love and support, and I hope you enjoy.

The purpose of the video is to also convey that India is becoming so critical to all global brands as they think about their growth over the next several years. And when they think India, they think like as the partner of choice for their go-to-market as well as their brand-building strategy. So, in addition to Rare, this quarter, we also had a few other very, I would say, high-profile launches. Some of those are listed on this page. I'll just mention a few. K18, which is a prestige haircare brand from the Unilever portfolio, has launched with us on NICA. As well as SK-2, which is a high-end Japanese skincare brand that is owned by P&G. And finally, Anua, which is a very trending Korean brand, also launched from NICA this quarter. So to show you that there are brands coming from all parts of the world, from the U.S., from Korea, from China even, and even from Japan. And again, looking to India as a growth opportunity and within India, NICA in particular. Now, this quarter, we also had two flagship sales. One was the pink summer sale, which we hosted in May, and the NICA birthday sale, which is our annual sale to celebrate the anniversary of the founding of NICA. And both sales delivered, I would say, very good outcomes in terms of traffic, customer acquisition,

as well as revenue outcomes for the platform. Speaking a bit about retail, we added 11 new

stores in quarter one that took the stock out to 324, and our coverage to over 105 cities today. In terms of same-store sales growth, we did double-digit growth on a like-for-like basis, which is very strong. And today, over 50% of our stores are in Tier 2 cities and beyond. So we have a very well-diversified geographical, you know, network of stores, servicing multiple different customer profiles and multiple different geographies. In terms of format, as you're aware, today we have multiple formats in terms of concepts for retail. We have three multi-brand specialty stores, which is Nike, Lodge, On-Trend, and Profumity. But interestingly, we have We've been experimenting with new formats such as the K-Cafe, as well as Nykaa Wanderlust Kart and Nykaa Kiosk that are much, I would say, lower capex and quicker to execute a launch that is helping us to increase our footprint and to bring innovative new concepts, retail concepts,

into the market. Next slide, please.

As was shown earlier, we are very proud to launch or to introduce to you our newest and largest store in the country today at Ambien's Basant Kunz Mall in Delhi. It is over 5,000 square feet in terms of size and has over 100 brands that are being retailed through the store. The idea to increase the size of our stores goes back to something which we've been speaking about for a while, which is making the stores more about experiences, more about engagement, more about community. And that requires a larger floor plate, as well as the fact that with the sheer number of brands looking to enter the India market, we need more space to be able to curate the right assortment of brands for our customers. And in addition to having, I would say, the best brands available in this store, we also have multiple services such as makeover services, brow services, skin consultation and diagnostic services, as well as hair styling and consultation as well. So this, we believe, is the future of retail in India. We are early to it. We have invested ahead of the curve to build something incredibly innovative, disruptive. And this is how the new generation likes to shop, and you can expect to see more such innovative formats from us in the coming quarters. Next slide, please. Spending a minute on Nikon Now, I'm happy to say that Nikon Now has expanded and accelerated its growth quite, I would say, remarkably, from being present in just three cities with limited assortment in Q1 of FY26, we're present in 13 cities with over 1,000 brands available through Nikon Now. So not only are we delivering packages within 60 minutes, which we believe is competitive. But more importantly, we're offering the widest assortment of beauty and personal care products available amongst any of the quick commerce platforms in the country. So we're combining speed with choice. And I think that's an important differentiator in our strategy. And that's something which we were committed to being able to do since day one of the launch of Nika Now. In terms of expansion, we plan to be at over 25 cities by the end of FY27 and cater to a meaningful percent of our owners. Coming through the NICA now fulfillment model, which means within 60 minutes. Next slide, please. Yeah, so spending a minute on NICA as not just a retail platform, but NICA is truly a, in a way, a media slash marketing platform in the sense that we now have. We have over 170,000 content creators who work with the platform. We have over 90 million followers across our social media channels, and we are playing a very critical and crucial role in helping to evolve the way Indian consumers will consume this category in the coming years. And we've done that through really focusing on education and entertainment through the digital channels, which is where a lot of our consumers are engaging and educating themselves.

Next slide, please. And with that, I will hand it over to Advetha to talk about the housing Hi, everyone.

Looking forward to talking about the House of Naika business today. Today, the House of Naika business has an annualized GMB of 3,760 crores. It's grown at 40% year-on-year. And on an NSP basis, that's a 2,200 crore top line with 36% year-on-year growth. Till date, we've served 18 million customers across these brands. And as a reminder, we have distribution across Nika platforms as well as 3P, whether that's online or offline. On the right-hand side, we mentioned the brands in our portfolio. There are 13 brands at this time, seven of which are in beauty and six in fashion. Moving on. So on the NFC front, if we just double-click on the beauty brands, the seven beauty brands that I mentioned, in Q1, we delivered 508 crores of NFC. This is a 40% year-on-year growth. And on the right-hand side, you can see how that distribution spans across Nika Online at 33%. Nika Stores at 10%. 19% is actually what we call our B2B business. So it's both through Superstore as well as through Modern Trade, General Trade, all the offline distribution that we have. And then lastly, you know, there's 3P sales, which is across B2C sites, as well as 3P e-commerce players. Can move on. As a reminder, we have three large brands that constitute the portfolio, Dot and Key, which is a $1,300 crore NSV annualized run rate brand. It had two excellent launches this quarter, Melty Lip Balm, as well as the Dragon Fruit Bounce Sunscreen. We have then K-Beauty, which is growing exceptionally well and is now a 300-croyer annualized NSV business. This quarter, it launched the Cashmere Lip Blur, which became a huge success, really important for the brand, and also was a top seller on the platform. So there was a good customer connect there. And then lastly, we have NYFA Cosmetics, which is a 270 drawers of annualized NSC and also had some very strong lip launches this year, including the LipGrip and a few other products. Moving on. In K-Beauty, to launch the Lip Blur, we collaborated with Sabah Azad to come up with a lovely video, and we'll show that to you now. And this is all with the intent of making sure that this is an enduring brand that is able to stand on its own two feet.

I can't believe you called me on the phone with him.

This is an exciting quarter.

We were recognized both internationally and domestically for our brands. The one I really catch on is on the left-hand side. K-Beauty actually won the Best New Brand Award at the CEW Awards in the UK. This is a very prominent award series that happens in the UK, and it's considered a really... The most important amongst beauty brands. So this was a really big win, and we're really proud of that. And then there were a bunch of awards in India as well that our brands won across Femina, ET, and other platforms. Moving on. We're also excited today to announce that we are acquiring Aminu, which is a premium derma cosmetic skincare brand. Personally, I'm really excited about the brand. It's very, very rich in its derma abilities and its R&D abilities. They have some of the best R&D and formulations that we've seen out there. And as of today, in FY26, it closed with 19 floors of net revenue. It's doing exceptionally well in FY27. It's been completely bootstrapped till now. It's been built very well by the founders, Prachi and Aman, and they do focus on a more premium skincare space. Like I said, what's really appealing to us is really two things. One is their R&D depth and focus. So they have over 30 proprietary formulations. Prachi herself is a cosmetologist and has a lot of experience in coming up with the right types of products and being very rigorous in the standard she puts the products through. And the second thing we're very excited about is that the brand has a significant distribution already set up in the salon businesses. And so we feel both these are really formidable moats, and we're excited to welcome this brand into our portfolio. Moving on. I think in the past, often investors and analysts have asked us, you know, what is the strategy with House of Nykaa? Where are you going to enter next? And we had shown this in the investor day, but I'll bring it back today as well. Here you can see the seven brands we have and where they sort of play. And then we're sort of indicating where we'd like to go from here. So Amino does address the premium skincare space. It is more premium than the brands we have today from a pricing perspective. And so it does fill a gap that we are actively looking for, both in terms of the R&D capabilities as well as in terms of the price point that it plays at. And then some of the other purple buckets are areas that we're continuing to explore and understand how we enter into. Moving on. Just sort of recapping, and the last slide on amino itself, today it has three hydro products. Across a longevity serum, an eye serum, which is amongst the bestseller on Nykaa in that particular category, and a sleep oil. And it has a very good set of assortment that's also coming over the next year across lip and moisturizers and face washes. So we're excited to see where this portfolio goes. And like I said, very excited about the quality of founders that we're entering into partnership with. So on the next slide, we just talk about the terms of, you know, the deal. And so we are acquiring 51% today. The remaining 49% will be acquired over the next few years. As per terms that we've set out in the documents, and the Aminu team, excellent founders, very passionate, very rigorous, and very clear about what they're doing, will continue running the business, and we will support them in every way that we can. And hopefully this is, you know, really set up for success, and we're very much looking forward to it. With that, I'll hand over to Vishal to talk us through the Superstore business.

Thanks, Advaita. Hello, and very good evening to everyone on the call. Like Falgany, ma'am, said, Naika Flywheel is customers and brands. So, we made very good progress in Superstore as well on this Flywheel. We added 30% more retailers who are our customers to reach half a million customers. We are in 1,200 cities with 100 more cities added. And you can see as a result of that, we grew NSV at 28% driven by the expansion in the network, which is our customers, as well as more from the same customers, which is the AOV growth that you see. So very good, you know, 28% kind of NSV growth. There's a, GMV is slightly lower because of the GST led MRP impact, but very good NSV growth. And, you know, this growth helps us on our path to profitable scale, where we improved our EBITDA by more than 300 BIPs. There's a slight increase in fulfillment cost led by the one-off impact of the new labor code. But you can see that, you know, getting more from the same retailer base and getting more from the same field force actually really helps us to improve our S&D expense, where we improved by more than 200 BIPs. And increased scale obviously also leads to overhead efficiency of almost 200 BIPs. So overall, very good FBita improvement as well. Next slide. And this is a brand flywheel where you will see that we have 240 plus brands and we continue to, you know, attract new brands, very successful brands. We added 18 new brands in last quarter itself. You can see the brands there, you know, well-known brands in the skin space. And we are also aggressively expanding our portfolio in the wellness space, especially for pharmacies. And you can see the yoga bar and sipla coming in. So we're all very good progress on the flywheel. We are also leveraging tech a lot because ultimately NICA DNA is tech. And you can see that, you know, how we are really leveraging tech and data science and soon AI to engage our customers and to get more productivity. For example, this is automated WhatsApp which goes to retailers and they can order through that. We are doing engagement activities like spin the wheel, etc. to keep the retailers engaged. Next. We're also able to really leverage our data science to have a predictive engine on which retailer is going to buy which brand. And then we are really able to guide our field force on whom to contact, when, and with which brand. So who, what, when. So this is really helping us improve our efficiencies and, you know, it will only be, you know, we'll get more impact as we go along. Yes, overall, good customer growth, good, more and more brands, great leverage of technology, which really puts us, you know, on our path to profitable growth. Thanks, now over to Abhijit.

Hi, good evening to everyone, and thank you, firstly, for joining the call. You know, on the fashion business, very happy to share with everyone that we continue to build on the inputs, which we have successively been putting in place over the last couple of years. You know, we are very happy to report one of our fastest growth quarters in the past many quarters, 53% growth on GMB, 54% growth on NSC year-on-year. On the back of, like we've been consistently reporting over the past few, and let's call it assortment growth, which has happened across all categories, women's, men's, kids, and also more emerging categories like home, consistent addition of strong brands. We've continued to invest behind customer acquisition, and as the flywheel of customer acquisition leading to a wider customer base, and us as a platform being able to retain customers in the same way takes over, That shows in healthier growth going forward. And also, we are seeing very encouraging signs from the Nike partnership, which we spoke about in our last call. You know, just to jog everyone's memory, we now run the Nike Commerce platforms, D2C platforms in the country, which means Nike.in and the D2C app across both iOS and Android. We are seeing very good early traction from that. So overall, you know, all of those factors have contributed to very strong growth in this quarter, as you can see on the slide. And structurally, we've been making improvements in how we run the business, most particularly on the customer flywheel leading to marketing efficiencies and, you know, overhead efficiencies leading to also then being this quarter being overall profitable for the fashion business, building on quarter four already being profitable. So also happy to share that in quarter one of this year, we continue to be profitable overall as a business. Next slide. Talking about the customer funnel, we keep sharing this in all transparency in every call that on one hand, we continue to acquire customers at a very healthy clip. So this quarter was no exception, 44% higher customer acquisition year on year. But then, as you can see on the left side, that leads to consistently higher visits to the applications, and then all the way down to, you know, from visits to then monthly active users, transacting customers, and the total orders placed. All metrics are looking healthier as a result of not just acquisition, but also then being able to retain customers in, you know, in the same fashion as we have always been. We have touched a cumulative customer base of 12 million customers for the fashion vertical only, and as a result of becoming better at marketing, we are now at a 30% lower CAC in the last two years, which augurs well for the business. Thanks, mate. Talking about categories which are underlying the GMV growth, so, you know, across women, men, kids, across the board, we have, you know, seen very healthy growth. Women, which is the majority of our business and our customer base, has grown to 40% year on year, within which, as you can see on the slide, footwear and in particular activewear have grown even faster than the overall women's category. We are seeing athleisure becoming very mainstream across both men and women, and that is reflected in these numbers. Men has grown 83% overall year-on-year across apparel footwear, consistently high growth, and kids have grown also close to 60%, 57% year-on-year. Below on the slide, there are some brand names, brand logos, logos of marquee brands, which we launched over the last quarter. I won't go through all the names, but brands like Birkenstock, the Debenhams portfolio brands, H&M Move, which is a sub-brand from H&M, obviously adds salience to our portfolio of brand offerings for customers.

Next slide.

You know, on the Nike partnership, you know, of course, the partnership is twofold. On one hand, like I mentioned, we run the D2C customer-facing channels for Nike in India. On the other hand, we also now have Nike available on Nike Fashion, and across both of those formats of partnership, you know, it continues to go from strength to strength. Very strong early traction on the D2C partnership. We've already crossed 1.5 million app installs within less than six months of launch, and that's a fast-growing number. We have seen great traction in a lot of exclusive launches, which we did in the last quarter. You know, the Football World Cup, obviously, which just went by, was a marquee occasion where the partnership just, you know, came into prominence. And you'll see a few more examples on the slide, you know, the Lego shoe collection for kids and the Air Max 90 series and many more. Those are just some examples of, you know, products which were exclusively merchandised on the D2C platform and did really well. On the right side, it's also worth calling out that Nike being available on MyCarFashion just adds a different dimension to the partnership. And I'm happy to share with everyone that Nike is now overall for the fashion platform among the top three brands. So, you know, the partnership with Nike is multidimensional. It is on the marketplace side as well as a more deeper strategic engagement on the D2C side, but both are off to a great start over the last six months. Thanks, Lloyd. So there'll be a video playing on the slide, but I'll talk through this, because I think everyone will get the gist. You know, we have committed to making on the fashion app, we've committed to making the shopping experience for customers the most cutting edge and the most enjoyable, and we continue to invest in technology. You know, AI is the buzzword, but really as a fashion platform, for us, the task is to integrate AI in meaningful ways for our customers. And one of the feedbacks that we consistently receive is that how can we simulate the trial room experience on the app, which has multiple benefits, you know, in the way customers talk. We launched something called Virtual Closet, where now customers can see a product rendered on themselves. And, you know, by creating an avatar, they can see the product rendered on themselves. This launched in May 26th. You're seeing, you know, a video which brings that to life. But just in a month, we have seen massive traction. We've seen more than 200,000 virtual avatars being created. From the customers who are creating their avatars, we see more than 2x higher conversion. And this is just the start because, you know, the ambition is to continue to invest in technology and ring to wear really differentiated, meaningful shopping experiences which are powered through AI, but very good early traction, and we'll continue to report more on this fund in quarters to come. Next slide. Lastly, just to recap, you know, the profitability improvement that we briefly saw in the very first slide. So in the quarter, you know, we have, like I said, we continue to remain profitable after Q4. It has been a profitable quarter overall, which means the 627 basis points year-on-year improvement versus the same quarter last year. And underlying this, you know, cross-line items in the P&L, we've seen improvement, but worth calling out two of the line items, which is... Changed most meaningfully. On the marketing side, marketing and S&D expenses side, we've seen a 534 basis points improvement to 22.9%. And this is just a structural improvement on the back of this lower CAC and being able to retain customers at an increasingly better clip. And with scale, we are seeing also 292 basis points improvement in overhead expenses. So, really, the improvement in EBITDA, which we are now seeing after quarter four and then also the first quarter of this year, is structural in nature. And I'm very happy that the inputs that we have been making consistently are now starting to show results. With that, I will hand over to Ganesh for the next section. Thank you.

Thank you, Abhijit, and good evening, everyone. I will now take you through the financial performance for the quarter. As we can see, we have started FY27 on a very strong note. Net revenue grew at 29% versus 23% a year ago. Also, there's been sharp acceleration in our profitability. As you can see, our EBITDA grew by 68% YOY, with EBITDA margin reaching 8.5% during the quarter versus 6.5% a year back. Similarly, our PAT growth has also been very strong at 226% YOY, taking the PAT margin to 2.9%. Moving to the next slide. The strong performance for NICA is evident across both our business verticals. Beauty NSV growth stood at 29% for the quarter versus 25% a year ago. Fashion has had a standout quarter as we saw in the numbers which Abhijit shared as well with NSV growth coming in at 54% versus what was only 20% a year ago. On profitability, both businesses have continued to expand margins supported by operating leverage and scale efficiencies. Both verticals are witnessing strong growth while simultaneously expanding margins. Moving to the next slide. Here we have our consolidated performance for the first quarter of FI 27. As I mentioned earlier, revenue from operations grew 29% YOY, reflecting healthy momentum across both our business verticals. Gross margin expanded 123 basis points to 45.9%, aided by the strong performance of House of Nika brand's portfolio and improved marketing and service income. Fulfillment expenses increased by 42 basis points as we continue to invest in infrastructure expansion, which is leading to O2D efficiencies. The increased fulfillment expenses incidentally were offset by a like improvement in marketing efficiency of particular basis points. We continue to make marketing investments that support strong customer acquisition across both beauty and fashion. This coupled with scale and productivity efficiencies have led to EBITDA growth of 68% YOY, which is 196 basis points margin expansion on a YOY basis. Moving ahead, this is a vertical reporting which provides an in-depth performance details across our business verticals. At the vertical level, as we can see, both businesses clocked improved performance. Both beauty and fashion saw sharp acceleration in growth YOY and a notable margin expansion across both the businesses. Benefiting from scale, operating leverage, efficiencies, and productivity gains. Next slide. Here I would like to spend a moment to say as an organization, our focus has always been on efficient capital utilization and long-term value creation. So what this slide highlights is how our philosophy of prudent capital utilization has enabled us to deliver an increasingly strong balance sheet. Fixed asset turnover, as we can see, has improved to 10.7 times as of quarter end of June 26 versus 9.9 times in FY26. Similarly, working capital days, which was already at a healthy 34 days in FY25, has improved to under 30 days, both in FY26 and something which we have sustained during this quarter as well. So, this has been driven by disciplined inventory and receivers optimization. So, together with stronger earnings, these gains have lifted ROC sharply to 26.8% as of June 26. Of course, these are annualized numbers, versus 21.2% in FI26. So, therefore, to conclude, what I would like to add is NICA has delivered strong, broad-based growth, acceleration in profitability, and strong capital productivity. We are pleased with the balance we have achieved between ambition and discipline, investing in customer acquisition and future capabilities by steadily expanding margins and returns. With our differentiated omnichannel platform, powerful brand ecosystem, and sharper operating leverage, we remain confident in our ability to create sustainable long-term value. With that, I would now like to open the floor for questions.

Thank you very much, sir. We will now begin the question and answer session.

If you would like to ask a question, please click on the video question tab. Before asking the question to the management, please introduce yourself, providing your name and your organization name. If possible, you may switch on your video as well. Please limit yourself to a maximum of two questions so we can accommodate as many as possible. Ladies and gentlemen, we will wait for a moment while the question queue ascends.

The first question is from Aditya Soman. Please introduce yourselves and proceed with the questions.

Hi, can you hear me?

Yes, you're audible. Please proceed.

Excellent. Hi, this is Aditya from CLSA. So, two questions. Firstly, can you throw some more light on sort of the economic arrangement between you and Nike? And if that's not possible, just the type of contract that you would typically have or financial arrangement you'll have here? And second, again, related to Nike, how do you use the customer data? Does that decide with you or does it stay with Nike?

Right. So let me answer both questions. Thank you for the question.

So like I said, the partnership with Nike is in two parts. One is a standard marketplace partnership where we list Nike on the marketplace platform, just like we list many other brands. And that's one part of the partnership. The second is where we completely end-to-end operate their D2C customer platforms, which is across web and app. So Nike.in, as well as the consumer-facing apps, which is the app on iOS and Android, are built and operated 100% by MyCarFashion. So it's a much deeper integration on that side. And end-to-end, including fulfillment and everything which goes into running those platforms is done by us. I will not go into financial contractual details because that's not relevant, but the arrangement is very different. Marketplace is just listing Nike on the platform as we do with many other brands. The other one is us operating a different sales channel for them completely end-to-end.

Yeah, thanks for that. Just in terms of running the Nike.in platform, I just want to understand, would you get a percentage of the sales? I mean, obviously, you can't share the exact numbers, but just to try and understand what type of arrangement this would be, or how does it work between you and Nike?

So we don't go into those kind of details, but when I say we operate the entire platform, we, you know, we sell everything that's sold on Nike.in is, you know, is as part of the fashion vertical, is part of the number three report.

Yeah, but I think Abhiji, what they may be looking for is it's like a retailer-like arrangement where we get... A commission-like numbers and some other service numbers based on the sales that we achieved.

Yeah.

And we are protected against, you know, inventory. And, I mean, there are similar arrangements like a retailer.

Yeah, I think on the Nike.in side, on the D2C side, it's an inventory arrangement. On the marketplace side, it's a standard marketplace arrangement, if that further answers your question.

Yes, it does. Perfect. Thank you. Thank you so much.

Thank you. We'll take the next question from Vidisha Seth. Kindly introduce yourselves and proceed with your questions, please.

Hi, am I audible?

You are, ma'am, please.

Hi, this is Vidisha from Ambit Capital. My first question was on NICA now. So with this NICA now aspiration to reach 25 odd cities, how do you expect the EBITDA drag from this NICA now proposition to trend going forward? It might be early days, but at what point does NICA now's overall contribution turn margin accretive?

Yeah, so maybe I'll take that question.

So look, I think we've already now been live with NICA now for almost a year, and it is now at critical mass in the metros in which it is live. And those, as you can imagine, tend to be the larger metros where a significant amount of our demand is currently coming from. And we, and as you can see from our results, there is not any margin dilution, even though NICA now has reached a certain size and scale whereby it is already meaningful in the cities in which it is present. And so, you know, our only read is that we don't think this will be dilutive in a, you know, if at all. In fact, we are currently seeing that. The frequency of purchase from customers who are now engaging with Nykaa now is increasing. And that was always our hypothesis that if, you know, Nykaa now would become a destination for customers to make those last-minute unplanned purchases on Nykaa, which... You know, maybe in the past was being fulfilled by other platforms because Naika did not have this quick delivery capability. So there are new use cases which are now being fulfilled through Naika Now, which were not being done earlier. So net we see this as a creative from a LTV perspective. And the AOVs for the Naika Now owners are not meaningfully different from the mainline owners either. The only cost which we are currently keeping an eye on is the fulfillment cost, whereby, you know, point-to-point fulfillment of an order, an icon-out order, is, you know, on a cost-per-order basis naturally would be more expensive. But, again, the benefit of the increase in frequency of purchase, the average order value staying consistent, I think these things are all offsetting. Some of that increase in fulfillment, and that's why you're seeing that despite NICA now having become meaningful in the past several quarters, we've still shown even the improvement this quarter. I hope that answers the question.

Sure. Just a small follow-up to this. In terms of the category mixed in NICA now versus NICA, if you could call out some merchants that you're seeing over there.

You know, it's...

Currently, it's not looking very different. Like we're seeing a lot of, I mean, ultimately, we are not a horizontal quick commerce player, right? We are a beauty player. So naturally, it's all beauty categories that are doing well. And our business does revolve around four or five key categories. And those are makeup, skincare, haircare, bath and body, and fragrance. And those are the same categories that we're seeing obviously do well on Myka now as well. I think what's... Interesting on Ica now is, of course, new subcategories, which, you know, are starting to see some growth, incremental growth, such as, you know, certain personal care type categories that you need in a hurry. So things like low ASP face washes and, you know, cleansers and, you know, bath gels, et cetera. So those are also... Pure incremental business for us because those are categories in which historically NICA never had a big role to play.

Got it. Got it. And my second question was on superstores. So when does the GMV growth normalize here towards the 40-45% Kager ambition called out during the analyst meet? Because even when we compare it to the GST-led shift, the gap in growth seems to be a little higher.

Yeah, so let me answer in two ways. Firstly, the GST impact will start normalizing from Q3 onwards. So you will see very close numbers between NSV growth and GMV growth. You know, so that's one. Secondly, yes, we had called out and the CAGR was 35% plus, which is a small gap versus a 28% NSV that you see. And there are three pronged, you know, things that we're doing, which will take us to that 35%. We continue expanding our retailer network, number one. Number two, we are also, like I had shown in my brand partnership chart, we are expanding our category footprint and adding more wellness categories, which will give us more throughput and leveraging data science and technology to drive more brands in more stores and basically leveraging our network more. So, I think with that, we will be able to, you know, be on our guidance by FY2030.

No, I'll get back in the queue. Thank you. The next question is from Kapil Singh. Please introduce yourself and proceed with the questions.

Hello, am I audible? Yes, you are.

Yeah, good evening, and thanks for taking my question.

First, we just wanted to understand top down, you know, we are seeing a growth acceleration for last few quarters. Are we still on that trajectory? And what is really contributing to it? If you can articulate a bit in terms of whether it's the market conditions are also improving, or, you know, across the platform, some actions you have been taking, just some more details here, That would help.

Sorry, is this for any particular segment of the business?

I think each of the businesses, if they want to add, would be helpful. But generally, the observation is that growth is accelerating across segments, both for beauty and passion. So, you know, maybe we'd like to hear from both from Ankit and Abhijit, if possible.

Yeah, you know, maybe I'll go, I'll start, but I'll

just, I mean, I'll just caution you that, like, that's a very, very long conversation. There's not one or two things that we can point to. And in fact, we try to cover this in our investor day, which I assume you were a part of. We try to cover this every quarter on these calls by, you know, giving you. As much of an update on the business as we can. So, you know, there's no single thing. Yes, the market has been strong, and I'm sure you follow other consumer companies, so you know that generally results were good. The market has held up nicely. And of course, there are aspects of our business where we have executed well. We've done, you know, we've executed, we've performed, we've delivered for our brand partners, we've acquired customers well. On the beauty side, every quarter I talk about penetration and premiumization, so you're seeing that play out in the growth. We continue to acquire new customers to the platform. We continue to hold an appeal for younger Gen Z consumers through all of the work we do on college campuses, onboarding new brands, building new stores. So it's difficult for me to really try to, in a short answer, summarize exactly what it is, but it's a multitude of factors. And it's a combination of a good market, strong execution, very high quality customer base that Naika has, and continuing to build the right platform and the right marketing and the right technology to service a very unique consumer. So, yeah, I mean, if anyone else would like to add, please feel free, but I think that's it for me.

I will add on top of it, I think, Ansheth, you captured it well. Indeed, in yesterday, we had the opportunity to cover this in more detail. I think on one hand, there is a consistent execution, just quality of execution across many aspects which go into making a retail business, which is just keep on adding great brands, work with the brands to bring the best merchandise to customers, use technology more and more to elevate the shopping experience for customers, to personalize, and through that, And improve metrics like conversion, retention, so on and so forth, which we, you know, don't share in as much detail here, but that's just the very nuts and bolts of execution. In case of, you know, both businesses, I mean, I think you also asked a question, is there something wider in the industry which is going on? Irrespective of which source you refer to, it's fair to say that both businesses have, you know, consistently grown faster than industry. And in case of fashion, in addition to what Anshit already shared, you know, execution of rigor, rigor of execution aside, I think there are also structural improvements and step change improvements we have made in the last couple of years on assortment edition. And we called this out in maybe the previous call that just over the last year, we added more than 1,200 brands, and we've continued to do that every quarter. And these are, you know, many of the marquee brands that we can think of were in that list, H&M, Nike more recently. So, you know, those are just step change improvements. The platform assortment is more holistic. Additional brands have happened not just in women, which has been the core strength for Nykaa fashion always, but also men, kids, increasingly home, and so on. And we've also continued to add more business lines. The D2C partnership with Nike, the enterprise business line, is an example. So, you know, we continue to execute on the known facets of a retail business while also adding step change improvements in the form of new business lines. And, you know, all of that put together leads to outsized growth versus the industry. That's what I would say.

Sure, that helps. Thank you. And just on the, we've talked a few times about marketing efficiency. So, you know, what really is happening over there and how much more scope is there, whatever color you can share there would be helpful.

I think I'll come in here. Actually, I was going to add to this that from our financial numbers, you can see that the growth and improvement in EBITDA margin is coming with, at least in the last one year, where fulfillment costs have gone up slightly. So obviously, we're prioritizing faster delivery, better customer experience. And similarly, marketing costs have not come down significantly. We've protected them at a similar level. So, obviously, in fashion, there's been improvement in marketing costs. There's a fee chain improvement, but I'm talking about beauty. So, what has happened is that we are seeing efficiency in marketing, but we are pushing the pedal on acquisition, customer acquisition, and through that, you know, we are delivering, and that's not just for beauty.com, but that's similar for all our house of brands. It's similar for fashion, many other, you know, every business of ours. So, marketing continues to be an investment that we make, and through that, we are seeing growth momentum also being supported. Like if you see Superstore, in Superstore, most of the growth has come without adding any feet on street. So in many ways, we were trying to improve the productivity and get to better unit cost economics. But to our growth, if we were to add additional distribution through feet on street, that helps us roll out further addition of retail network, then there could be additional growth added to the mix.

Sure. Thank you.

And for the AI benefit, we are seeing a better ability to, you know, productive marketing. Productivity of marketing remains good, and we are investing that through reaching out and getting more customers on board.

Yeah, and I think it's also worth highlighting that one thing we've always said for many years is as a business matures, the share of business coming from existing buyers starts to become a larger percent of the overall revenue mix. And as you know, a lot of marketing cost goes towards new customer acquisition. And that amount of money, even if you're growing that in absolute terms year over year, it is now being spread over a larger base of shoppers and of revenue. So that is the leverage that you get as you continue to mature and you continue to have. A larger number of cohorts, customer cohorts, are shopping on the platform, and that's been a large part of... The reason why the beauty business has managed to get to the EBITDA margin it has, and we've always guided that fashion was just several years behind beauty on its own journey of building a very meaningful base of repeat buyers, and I think you're seeing a similar story play out with the kind of marketing spend reduction in percentage terms that fashion has managed to show year over year. But again, Abhijit can add more.

I'll just add one more layer on that. That is exactly right, that we are now seeing a higher share of revenue come from repeat customers. And like I said, that's, you know, for us to be able to retain the customers that we acquire, and it's all very well to acquire customers, but as a platform, we need to be able to retain them for efficiencies to improve. And that's what we see happening, just like we saw first in beauty and fashion. That's one aspect. The second is I want to draw attention back to what I shared on the customer funnel slide in the fashion section, that even the customer acquisition costs, even the new customer acquisition costs are actually increasingly better, and that's as a result of many things that we do behind the scenes. One is just, you know, more robust assortment, which leads to conversion rates on acquiring customers to improve, but then also being able to target with the use of technology, the right product to the right customers. A whole lot of things go into making the customer acquisition cost itself better, which allows us to acquire customers still at a very high percentage, 44% higher year-on-year-on new customer acquisition, but at healthier tax. That has led to step change improvement in fashion. We've not slowed down customer acquisition, but that's happening at significantly better CACs. And increasingly, we have a much higher cumulative customer base, and both of those are showing up in the sizable improvement in marketing efficiency.

Yeah, thank you so much for the detailed answer. That's very helpful.

Thank you. The next question is from Swapnel Portduke. Please introduce yourself and proceed with the questions.

Hi, thanks for the opportunity. This is Swapnel Portduke from JN Financial. My first question is in the BPC segment. So, if I were to look at your order volume numbers on a Q&Q basis, it seems there was a certain dip of 1% Q&Q. Can you please explain that? What is the reason behind that? Is it similarity or something else?

Is that, is that, are we, can

we go to the slide wherever you're seeing that information?

It was 17.5 million last quarter, now it's 17.3.

You're saying sequentially?

Sequentially, Q&Q, yeah.

Yeah, I mean, I think it's very similar, as we always say, ultimately, this business does have certain quarters and certain seasons that are. That naturally have more demand. You know, it might be, as you always say, Q3 is our best quarter because of festive weddings, as well as certain large flagship sales that we do. And Q4, you know, last year was probably a strong quarter. I think it's quite similar. I don't see it as being very meaningfully different quarter and quarter, but I would encourage you to look at a more apples to apples comparison, which is the year-on-year comparison of the number of orders, right? And I think that's where we're showing close to 20% growth on the beauty side. And that's, you know, that's really how we track that. Are we growing the business both on a volume and value basis by making the comparison slightly more apples to apples?

Thank you very much. The other question is with respect to the pricing difference between your core platform and the Nikonov platform, is there any pricing difference that you typically have and that adjusts for your cost of fulfillment in some way?

No, because as you might be aware, all of these discounts that are passed on to the consumer on the MRP is funded by the brand, right? So, Nykaa as a retailer does not do retailer-funded discounting as a policy. So, that's a cost that the brand has chosen to bear. And that price at which the brand is choosing to sell to the customer is offered. Uh, across both Nikka now as well as the main line. So currently, there is no differential pricing on Nikka now versus the main line.

Got it. And the other question is on your fashion business. Now, the business obviously is growing at a very healthy pace and partly aided by your Nike partnership. But that partnership will come in your base numbers somewhere in mid 4Q, FI27. So if I were to look at your numbers beyond this partnership, how should one look at the growth that you're looking at? Because unless you get some other partner, and that too of the size of Nike, the growth numbers thereafter may see some adjustment. Is that the right way to look at it, or something is on the cards there as well?

Okay, so I think, um, Let me address the question here. Firstly, just anchoring to long term, you know, we still guide to what we shared in the investor day just a couple of weeks ago, which is 3 to 3.5x growth over a four to five year period, and we still retain that. At the same time, I think engines we are building and, you know, the NICA fashion core platform, the enterprise business, other business lines that we run within the fashion vertical, we do everything to do even better than what we guided. And that's the numbers you're seeing as a result of that. Without going into too many details, I think it's still very early days for the Nike partnership, the D2C partnership particularly, and that may seem like it's a new business line which gets added to the numbers reported here. But the numbers here are actually largely reflective of the underlying platform growth in a very big way. And we are fairly confident that itself will continue to be quite healthy, irrespective of us adding other potential partners such as Nike.

Hope that answers your question.

Yeah, thanks.

So just the last one, there will be some shift in festivities this time around. So how to look at, you know, the numbers from a 2Q and 3Q perspective, given that the base would be different from last year.

So, is that a question for fashion, or is that overall a question on seasonality?

It's a question for both BPC and fashion, because last year, Festus came in early, and this time around, the Festus will get pushed out to the 3Q quarter.

So I think, as we've always said, we do have,

there is some amount of business that for us comes from the festive period, but it's not, we're not so overly dependent on festive, right? Our categories, especially the beauty side, a lot of our categories are everyday use categories, and a lot of it is for personal consumption. So I don't think that business will be affected too much, but whatever festive demand we do capitalize on, which we do, and we've always said that, that benefit tends to accrue in Q3. I think you will continue to see that play out in a similar way. So I think still a lot of the dates are in Q3 this year, and that is generally when we tend to have our best quarter. And you can look at our past several reported years, and you'll see Q3 generally tends to be the highest in terms of absolute revenue that the business does. And I think if there are dates that are being pushed into Q4, then some of that benefit might accrue in Q4 as well.

But to me, it seems most of the dates are falling in key trade. Thanks a lot for the opportunity and all the peace.

Thank you. The next question is from Sachin Salgaunkar. Please introduce yourself and proceed to the questions.

Hi. Thank you for the opportunity. This is Sachin Salgaunkar from Bofa Securities. I have three questions. First question on beauty. When we look at repeat rates, are these repeat rates equally across mass, premium, luxury, or, you know, is there a concentrated in any specific category? I'm asking that because, you know, your AOV improved 7% on a YY basis. So, is that a trend we should continue to expect going ahead as well because of a bit more of premiumization or makeshift change?

On beauty, we've always said that premiumization can happen in many forms. One is the ASP premiumization, which is where customers will buy a higher ASP product, and that's one form of premiumization. But even the frequency of purchase increasing is, for us, the form of premiumization, as well as consumers educating themselves and being more. I would say up to speed and more comfortable with the category and therefore buying a wider assortment, so increasing their items per transaction average basket size. So there is an ABS premiumization, FOP premiumization, and an AOV premiumization on the back of ASP or on the back of ABS. So we are investing behind driving premiumization across all those three variables. And a part of that premiumization you're seeing flow through onto AOV. And some of that is coming from selling higher ASU products, and some of it is coming from an expansion in the basket size. And the expansion in the basket size is something that takes some time to start to show into the numbers because the education has to be done over a long period of time to influence the customer to change their buying behavior, Which ultimately can only be altered if the. So, we try to change the consumption behavior that ultimately will result in a positive outcome on the buying behavior. So, I don't know if that answered your question, but... Yeah, that's kind of why you're seeing that. Even though we continue to acquire many new customers whose AOV tends to be lower than the weighted average AOV that we're currently seeing on this slide, despite acquiring new customers, the fact that we're able to grow the average owner value at the aggregate level should tell you that we are able to meaningfully influence our existing shoppers' buying behavior on the platform.

Got it, Anshith. And, you know, a quick follow-up out there is, presume safe to say that, you know, these trends could be sustainable because of the multiple levers you mentioned for the improvement in AOV.

Yes, I think repeat customer AOV growth is something which we are working on day in, day out, and that is sustainable. And even on new customers, we feel that ultimately the consumption, the per capita consumption of beauty in India is so low that as affordability, as awareness, and as availability increases, we start to see new customers coming into the beauty. So, in our opinion, given all the work we are doing as NAICA, as well as the macro outlook on rising penetration and rising consumption, I think the average order value moving in the right direction is definitely our base case at this point in time.

All right. Second question is on fashion for Abhijit. Abhijit, obviously, you know, agreements like Nike and H&M, in a way, allow you guys to move away from a marketplace model partly towards an inventory-led model. So, assuming, you know, there are similar such partnerships in future also, how should we think about the mix between marketplace and inventory for fashion business? And a related question is, is there a thought process to open stores for fashion just the way you guys have stores for beauty?

Yeah, all right, Sachin. Thanks for the question. I think, firstly, on... On the likes of H&M and Nike, you know, for the large part, barring the Nike D2C partnership, which we've spoken adequately about, the rest of the multi-brand retail business is still and continues to be predominantly marketplace. And that's how it will be going forward. Inventory-based business is a very small portion. Partnerships such as the Nike D2C partnerships will also be selective in nature. So, it will be predominantly a marketplace business, and that's how we want to build it. We believe that's the right, healthy way of building a multi-brand fashion retail business anyway. H&M, you mentioned H&M is actually not an inventory-based business. It's a marketplace, standard marketplace agreement where they list products on us just like so many other brands. So, that's on that question. Just to also maybe clear the confusion a little bit because H&M is not an inventory partnership at all. On the second one, not for now. I mean, we are focused on just building out digitally with partners, so not for the moment.

Got it. And last question is mainly on buying behavior. And I did elaborate a lot in terms of, you know, how Nykaa is focused in terms of changing buying behavior. So the question out here is, you know, thanks to Nykaa now and your ability to deliver things faster to consumer, are you actually seeing a new arc, what you call as use cases unlocked because the customer behavior is changing on the back of rapid delivery? And anything particular which is getting sold better than your expectations, particularly on replenishment-led categories?

Looking at the hypothesis, it would improve the repeat frequency of purchase, and it would give us an ability to continue to build personal care. Like, you're aware that NICA is a big leader in beauty, a strong beauty category, which is makeup and high-end skin care. And, of course, we play in hair and bath and body and, you know, many of the personal care categories, and to a significant extent. But, like, if you look at, say, toothpaste, we may not be doing much business. So with NICA now and as it plays out more and as we roll it out, I do feel that we all feel that over time, customers can increase the frequency of purchase on NICA and buy more of personal care. So that's an assumption that we are working with.

Yeah, sorry, I had a little bit of a lag on my end on the computer, but I think FN has summarized it well. Ultimately, as we've discussed in the past, this is an opportunity for us to drive incremental demand in categories where we have had low penetration in the past, and that continues to be the hypothesis, and that's what we're working to build and I can now experience around. So, yes, I think what you will see is... And given where our strengths lie, that will continue to be, you know, in core beauty subcategories that will also continue to be fulfilled through Naika now. And that's what really differentiates us against some of the other platforms that are selling, you know, selling beauty or through quick commerce capabilities. But this gives us a chance to also start getting into categories where we've been relatively underpenetrated in the past. And we have a right to win because we're delivering in competitive speed, with competitive speed, but giving the customer a much, much wider assortment available through Nykaa now. And also the fact that Nykaa is a platform that is very much trusted for delivering authentic products to the consumers, we believe should help us to really identify new areas of growth, new subcategories of growth through Nykaa now.

Perfect. Thanks all and all the best.

Thank you. The next question is from Parsi Pantaki from IFL Securities. Please go ahead.

Yes, please proceed, sir.

Yeah. So, I just wanted to understand the target market for the beauty products in terms of number of customers. You have already reached close to 20 million plus. If I look at urban women in the age group of 15 to 50, that's about 150 million. And this is before applying. The income filter or anything of that sort. So, just wanted to understand in like a medium Over a five-year kind of a view. What do you think is your total target audience after you apply an income filter? And also typically how these things work out is that when the headroom is very high, the YOY growth also is high and as the headroom gets lower, the YOY growth comes off. So just from that point of view, Because right now, your total growth is largely led by AOTC. So, how do you look at the AOTC growth beyond, let us say, two, three-year period, total five-year horizon? Do you think you can maintain this kind of run rate? And also, what is the target market in terms of AOTC in your calculation over, let's say, a five-year kind of horizon?

So, in our annual day, we had deep time from this in a very detailed manner, and it's all there on the exchange website. So, I would urge you to do that, or even our investor teams can share with you. But I think the answer, it definitely lies that fashion online has been as big as like 60, 55 to 65 million consumers who have bought fashion online. And fashion online is a serious consumer. So in many ways, you know, we always believe that that much of a headroom was available to us. And on top of that, now, if you see, we believe that the way the income levels are shifting, that number itself will be about $100 million going forward in five years. So, yeah, we believe that somewhere between $65 million to $100 million will be the relevant term for NICA. And also, we are servicing men, though predominantly women, but increasingly, we are adding men to our mix. So, we are not restricted only by women customers. Both fashion as well as we have a platform like a man, and even on beauty, there is a certain percentage consumption towards men, especially in personal care category and grooming categories.

Yeah, and just to add to that, you know, you have to, again, I keep repeating that, even the existing 20 million, you know, as we said, we were 60 million shoppers who ever bought on NICA, which, you know, 20 million are buying in the last 12 months or on an annual basis. So one, there is a huge opportunity to get the buyers who are infrequently transacting on the platform, who have shopped on Nika in the past, which is a very large number of consumers, to start engaging and transacting on the platform more. That's one. The second is the frequency of purchase of our existing 20.8 million annual unique transacting buyers is X. And as I said, the frequency of purchase is very low. When compared to global averages. And the ticket size is also low compared to global averages. So there is so much still to be done with the 60 million shoppers who have ever shopped on NICA, increasing their frequency of purchase, increasing their average order values, and therefore, a lot of growth to be had from the annual consumption value that is yet to come from the base of shoppers already on the platform. And on top of that, there is still a very long way to go, as you mentioned, in terms of the total addressable market of urban households. Urban households that are relevant to us. And in terms of a price filter, you know, we don't really see ourselves as needing to apply a price filter because we have assortment available at all price points across the spectrum. So we sell everything from, you know, the most, I would say, mass, mass siege, FMCG type SKUs all the way to the most premium products. So we have something for everybody. You know, we're also now catering to buildings. Communication in vernacular languages and enabling voice-based search. So we are also definitely an option for a much wider

audience than you might be thinking.

Thank you, sir, for answering those questions.

That was the last question we can take today. You may reach out to NICA's investor relations team for any additional queries. I would now like to hand the conference over to the management for closing comments. Thank you and over to you, ma'am.

Yeah, thank you very much. I'd just like to thank each one of you for participating in the call today and, you know, discussing with us about the performance. So, thank you very much and look forward to continuing to see you guys.

Thank you.

Thank you, members of the panel. Thank you, sir. Thank you, members of the management. Ladies and gentlemen, on behalf of FSN eCommerce Ventures Limited, that concludes this conference. We thank you for joining us, and you may exit the meeting now. Thank you.

Goodbye.