Financial Performance Highlights

Annual Financials (FY26 vs FY25):

  • Revenue: ₹80 crore in FY26 vs ₹48 crore in FY25 (67% YoY growth)
  • EBITDA: ₹16 crore in FY26 vs ₹6 crore in FY25
  • PAT: ₹11.22 crore in FY26 vs ₹3.11 crore in FY25 (260% YoY growth)
  • EBITDA Margin: 20% in FY26 vs 13% in FY25
  • PAT Margin: 14% in FY26 vs 6.5% in FY25
  • ROE: 78% for FY25-26
  • ROCE: 59% for FY25-26

Half-Yearly Financials (H2 FY26 vs H2 FY25):

  • Revenue: ₹43 crore in H2 FY26 vs ₹29 crore in H2 FY25

Business Operations and Strategy

Product Portfolio: The company operates in beauty, cosmetics, and personal care segments with approximately 350 SKUs across face makeup, eyes, lips, body care, and accessories (makeup brushes, sponges).

Distribution Channels:

  • Current sales split: 60% online, 40% offline
  • Online sales: 50% from company's own website, 50% from marketplaces
  • Offline channels: 22 retail stores (3 COCO, 19 FOFO stores) across India
  • Six warehouses and dark stores supporting operations
  • FOFO stores also function as distribution points for smaller retailers

Growth Initiatives:

  • Targeting 50% revenue growth in FY27
  • Expanding into South India, Central India, and North East markets
  • Entering modern trade with first kiosk opened at Omaxe Mall, New Delhi
  • Planning quick commerce entry within 1-2 months through partnerships
  • Developing 20-25 new products for launch in next 6 months, including higher MRP products (₹999-₹2,500)
  • Building new warehouse in Ludhiana expected operational by April 2027

Marketing Strategy:

  • Allocating 20% of revenue to marketing spend
  • Focus on influencer marketing and makeup masterclasses
  • 40% month-on-month repeat customer rate on website
  • Average Order Value (AOV) increased by approximately ₹100
  • No current brand ambassador to control costs

Operational Metrics

Inventory Management:

  • Historical dead inventory approximately 1%
  • Slow-moving products distributed as free samples in masterclasses before expiry
  • No significant returns from Nykaa (B2B channel)

Receivables:

  • Receivables increased to ₹15 crore in FY26 from ₹8 crore in FY25
  • Nykaa payment terms: 2-3 months, sometimes up to 120 days
  • Working capital requirements increasing with business expansion

Supply Chain:

  • Raw materials sourced from Germany (kajal), Thailand (foundation), Taiwan, China, and India
  • No current supply chain disruptions from geopolitical situations
  • Maintaining quality standards through third-party manufacturing with quality checks

Management Commentary

The company emphasizes its "affordable luxury" positioning as a replacement for international brands. Management maintains focus on profitable growth with an asset-light model, noting they "do not want to spend 200 rupees to sell 100 rupees worth of goods."

EBITDA margins are expected to remain consistent at around 20% as any margin improvement will be reinvested in marketing and customer acquisition. The company believes color cosmetics requires both online and offline presence due to the "touch-and-feel" nature of product selection.

Capital Structure Impact

The recent IPO has strengthened the balance sheet with growth capital being deployed mainly toward working capital requirements and improving product availability. No specific dilution or capital structure changes discussed.

Forward-Looking Statements

Management provided explicit guidance of 50% revenue growth for FY27. The company expects the offline-online sales mix to shift toward 50-50 in FY27 due to faster offline expansion. EBITDA margins are projected to remain at current levels with increased marketing spend.