Fsn E-Commerce Ventures Ltd (NSE: NYKAA) Q3 2026 Earnings Call dated Feb. 05, 2026
Corporate Participants:
Falguni Nayar — Managing Director and Chief Executive Officer
Anchit Nayar — Chief Executive Officer, Beauty E-Commerce.
Adwaita Nayar — Executive Director, Chief Executive Officer, Nykaa Fashion
Mr. Vishal Gupta — Chief Executive Officer
Abhijeet Dabas — Executive Vice President and Business Head for Fashion eCommerce
P Ganesh — Chief Financial Officer
Analysts:
Sachin Dixit — Analyst
Vijit Jain — Analyst
Nikhil Chaudhary — Analyst
Kapil Singh — Analyst
Prateek Pareek — Analyst
Nihal Mahesh Jham — Analyst
Presentation:
operator
Good evening everyone. This is Michelle from Chorus call. Welcome to FSN E Commerce Ventures Limited Q3FY26 earnings call. From the management at Nykaa we have Ms. Falguni Nar, Executive Chairperson, MD and CEO Mr. Anjit Nar, Executive Director and CEO Beauty Ms. Advaita Nair, Executive Director and Co Founder and CEO of House of Naika Brand Mr. Vishal Gupta, CEO, Nyka Distribution Mr. Abhijit Dabbas, Executive Vice President, NYKafashion.com 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. 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.
Falguni Nayar — Managing Director and Chief Executive Officer
Thank you. Good afternoon everyone. It’s a pleasure to talk to all of you about yet another quarter. I think we are I just wanted to begin with saying that it’s been a good quarter as you are all aware that quarter three December is a seasonally strong quarter and we are happy to say that the GMV growth has come out at around 28% year on year growth at rupees 5795 crore and at the net revenue level also the net revenue is at about 2873 crores which is a 27% year on year year. So with that we are happy to say that it’s been NICA firm has delivered for a long period almost 1314 quarters mid-20s growth on a sustainable basis.
So happy for that. On the gross profit line I think the gross profit has come out at 1297 crores which is a 45.2% of net revenue and this is a 31% year on year growth. So slight improvement at the gross profit level level. On a consolidated basis. On the EBITDA too we are happy to say that the EBITDA Is at about 230 crores for the quarter which is 8% of net revenue and a 63% year on year growth. This is the highest EBITDA margin ever and happy to deliver that to to everybody, all the stakeholders.
On the pat. We are at about 68 crores which is 2.4% of net revenue and about 157.6percent growth year on year. This pat number is after adjusting for one time impact of a new labor code which is. Which is taken away. So if you were to adjust for that the number would have been at 78 crores which would have been 2.7% of net revenue instead of 2.4%. With that I move on to the next slide. I think on a, on a. On a vertical basis, if you look at beauty, beauty growth has continued at 27% on a year on year basis basis.
On a very strong seasonal quarter that’s at GMV level and on net revenue it is at 29% and in fact on a net revenue basis it’s an acceleration from a year earlier when we had grown at about 26%. One can also say that on a ninth month basis the growth has come out at 27% both at GMV and the net revenue level. And what is really interesting is that the EBITDA of the beauty business business, it now stands at 10.1% of net revenue. On the fact that’s for the quarter and for the nine month it stands at 9.4%.
For the fashion business too, I think the GMV growth for the quarter was 31% year on year. However that at the NSV level the growth was 25 on a year on year basis and for the nine month period similarly the GMV growth was at 31% but the NSP growth has come out a little lower at 24%. There are reasons for that. We can deep dive later into that. But overall very healthy growth in both the numbers and from a EBITDA margin perspective. Happy to say that this quarter the fashion business ebitda margin is minus 2%.
It’s come down from minus 5.4% a year ago. And even on a nine month basis the losses for the fashion business now stand at 3.7% of net revenue. This I want to point out that this quarter saw marquee brand wins like H and M and also robust customer acquisition and strong festive sales which all led to delivery of a sharp improvement in profitability in the fashion business. On the beauty business, I’ll just point out for a minute that the performance is overall good. There’s a strong omnichannel performance in beauty. Also improving unit economics in EB2B has come to play in the EBITDA margin of the business as well as a growth outperformance in House of Nika with both strong growth as well as Strong margin expansion.
So in the beauty business pretty much all the cylinders have fired very nicely this quarter. With that we move on to the next slide. This is just taking stock of you know where we are with all our businesses that we are building. So like on in terms of now Nika has has four platforms. Nika Beauty, Nika Fashion, Nika man and Nysa which is our GCC platform. With growing presence in the GCC we now have 52 million customers who we have served till date through our all our platforms. And on a B2C basis if you look at it from a retail perspective you are aware that we have again multiple formats.
Nika Lux, Nika On Trend and Nika Kiosk which is for our own labels. And to that we’ve now added Nika Perfumery which are our perfume only stores and there is a strategic reason to to build those. And now the total number of store count stands at 276 stores in 94 cities. On the consumer brand also we own more than 12 consumer brand of significance. There are smaller brands too. Amongst these 12 brands the top five are Dot and Key K Beauty, Nyka Cosmetics, Naked and 20 Dresses. And these brands, all of the brands put together account now for $400 million annual GM and have serviced more than 16 million customers.
We are increasingly also getting involved with B2B2C business where we have deep partnership and full stack offering to players like Nike. You must have heard the announcement, it came post the quarter end where we have partnered with Nike to run their D2C business. Kiehl’s has similarly trusted us to run their entire India business be it their D2C website, their stores as well as exclusively E commerce and also sell it on other platforms. There was a similar business we had started doing with Footlocker earlier which has been growing and we also are exclusive import and distribution partner for many of the international brands.
In fact more than 40 international brands have trusted us with their brands in the country to grow these in the country. From a B2B business perspective we have the Superstore which serves retailers across general trade, create small format beauty outlets, pharmacies and salons. And obviously for on a multi brand portfolio basis we offer this to non, I mean to a whole bunch of brands. So it’s a platform and this has been growing very nicely. We reach out to more than 485,000 retailers throughout the country across 1100 cities. Within that there’s a smaller dedicated GTMT distribution business for our own brand.
Brands that focuses on mostly, you know like these are the BA service outlets and the the number of those is also now reaches to more than 1500. So overall a very good distribution footprint has been built with 2.6 billion annualized GMV across all the platforms. Talking about beauty multi brand retail, I’d like to hand it over to Anshit.
Anchit Nayar — Chief Executive Officer, Beauty E-Commerce.
Yeah thank you and good evening everybody. So I think as was said earlier on the call, it’s been a good quarter for the beauty vertical as well. We have delivered the highest GMV in our history at 4,302 crores and this was at a 27% growth year over year. It has also resulted in a 10.1% EBITDA margin margin which is a significant improvement over Q3 of last year. I think major reasons behind this strong performance have been our investments in customer acquisition are clearly paying off and we had a successful flagshipping Friday sale which usually occurs in the OND quarter in the month of November, end November, early December as well as a strong overall performance across the board from beauty.com our beauty retail stores as well as our house of brands which we will speak about our Nykaa House of brands which we will speak about in subsequent slides.
Next slide please. So just speaking a bit more about the customer acquisition, something we have discussed with all of you in the past. It is an area of investment for us. We do feel that India is under penetrated in terms of its beauty consumption and we want to be drivers of that penetration and that growth. And so we have been investing behind customer acquisition. As you can see we are now at about 18.7 million annual unique transacting customers which is a 26% growth year over year and almost 4 million customers larger than this time last year.
We wanted to spend a minute to talk about an interesting partnership of ours and that is our decade long partnership with l’. Oreal. As many of you know, l’ Oreal is the world’s largest beauty company and truly an inspiration and institution in its own right. They have an incredible portfolio of brands and I think they have been a partner to us since the very beginning. As you can see we launched some of their consumer product division brands in 2012. But every year since we have continued to add more brands from their portfolio to nykaa.com as well as NICAA stores.
As L’ Oreal does see India as a priority market, some key highlights to mention is for brands like Redken, Kerestas, ysl, Lancome, Ceravane, Kiehls, Nykaa was the first India partner and there are certain brands from their portfolio like Urban Decay, Nyx and IT Cosmetics where not only are we the retailer for them, but we are also the importer and distributor on record for these brands. And certain brands that are highlighted that are on that slide were also exclusive to Nyka. Now the reason why we wanted to talk about this relationship this quarter is because we have further strengthened our relationship with l’ Oreal this quarter with three incredible, incredible brands that they are bringing into India in partnership with us.
The first is La Roche Posay which is one of l’ Oreal’s most prominent derma cosmetic skincare brands globally. And that is an exclusive launch which we did for them. And this is the world’s number one dermatologist recommended skincare brand. It was launched exclusively with Nico in this quarter. Second is we have secured the rights for the exclusive distribution of NYX Makeup which is a very trendy Gen Z favorite makeup brand that is being launched that has launched exclusively with Nyka through our Nyka Global store which is our distribution business. Third, definitely last, definitely not last is our Kiehl’s partnership.
Kiehl’s is of part over 100-year-old skincare brand. Again a very popular brand from the L’ Oreal portfolio. L’ Oreal luxury portfolio. So it’s a prestige skincare brand and we are happy to say that we’re taking over the Kiehl’s operations in India and we will provide end to end full stack services for Kiehls in India. This includes operating their direct to consumer website, their freestanding stores as well as retailing the brand on nykaa.com and Naika store stores. Next slide please. Beyond the L’ Oreal group of course there have been other launches that we are quite happy with this quarter.
As you can see the number of brands, number of global brands launched on the portfolio launched on the platform is only increasing with time. Just a couple to mention this quarter has been Milk Makeup which is a very popular makeup brand from the us Kylie Cosmetics and Dolce and Gabbana as well as H and M Beauty. And then some brands were also very trendy Korean brands as well as Some Indian local D2C brands launched exclusively on Nike this past quarter as well. Spending a few minutes on our physical retail business. So today we just to give you an update, we have opened 11 new stores in Q3 and that takes our total retail store count to 276.
We’ve expanded into four new cities so today we have stores across 94 cities. So getting close to that 100 city mark which we’ve discussed in the past today about 2.8 lakhs square feet of retail space. And I think most importantly delivering healthy double digit like for like growth in the quarter. Beyond the core retail business we are also expanding with new innovative experiential formats. We believe that this is an important way to engage with younger audiences and to bring more customers into the beauty funnel. So of course on the left hand side you can see we’ve got our multi brand specialty store formats like Nyka Luxury as well as Nika on trend.
And now we’ve recently this quarter launched a new fragrance only store concept called Nykaa Perfume. We also have curated I would say more engagement driven formats like Nica kiosks which are short term lease pop up type formats where we exclusively retail our own brands and these tend to be in very high traffic zones within grade A and grade B malls. The Nykaa Wanderlust card is a great way to expose consumers to our bath and body offering. And this is also something that that is, I would say it can be quickly expanded given its low capex and low fixed cost model.
Next is some exclusive brand experiential formats. As I mentioned we will now be operating freestanding stores for Kiehl’s in India. And similarly we’ve opened a very interesting lifestyle cafe concept for K Beauty that’s called K Cafe and that’s where we’re blending beauty with coffee and community. And I think these are formats that really resonate with the younger audiences as they look to build relationships with brands for the long term. And on the right you’ll just see some images. Sorry, here you can see the images of our new Naika Perfumery retail concept which we’ve opened up currently.
We have two stores already open in the past three months, months and more to come. This is really to drive the adoption of fragrance by the Indian consumer. We think it’s an underpenetrated category but to improve the penetration we need to increase the education and awareness for fragrance and especially for luxury fragrances. And we’re doing that through this type of store concept. So through immersive experiences and through technology, through a very curated set of brands brands and very high quality service in the store. We are hoping to drive further adoption of this premium segment of fragrances in India.
So far the signs have been quite promising. The average order values in these fragrance stores are already at three times the average order value of our multi brand specialty stores. Interestingly, 45% plus of the business from These stores is coming from men’s freedom. So as a format, this store format is definitely playing out the way we expect it, which is to be much more, to have a much wider appeal than just our target female audiences. It’s also appealing to men in India. Next slide. So we’ve spoken to you again in the past about Nykaa Now.
I’m happy to say that Nykaa now has, has stabilized quite nicely and it has picked up in terms of the demand and the awareness for the Naikano offering. Today we have the largest beauty and personal care assortment across luxury D2C FMCG brands compared to any other platform that is offering quick delivery. And our Delivery promise is 30 minutes and we think that is suitable given the kind of, the access to the kind of brands and products which we are giving the customer. On top of the fact that we are now live in all seven tier one cities with Nykaa now we are also enabled, all of our retail stores are now enabled with hyperlocal delivery capabilities across the country and this is what’s allowing us to, to sell a lot of our luxury beauty brands through this quicker delivery model.
And on the right hand side you can see the, you know, the UI UX for our Nika now store within the app and some early marketing which we’ve done but there is a plan to do obviously a lot more marketing behind Nika now now that the network is robust and stabilized. Next slide please. So I think recently there’s been a lot of noise around the creator economy in India and how content and commerce are really driving the flywheel. But as many of you know, we’ve been speaking about the content ecommerce playbook since the very beginning of the journey as a company and we’re only seeing it pick up up over the past several quarters as Gen Z as an audience is one that is heavily influenced by content and social media.
So as you can see today that 76% of content consumed on social media was creator content and 70% of spends done by Gen Z customers was based on that content that they saw. And Nykaa has actually India’s largest network of influencers and content creators today. This is the affiliate network we have, we have been building over the past 10 years and today we’re proud to say we have over 100,000 influencers plus affiliates and over 2 million pieces of content was created by us in terms of post, videos and reels. On the right hand side you can see two, I would say disruptive partnerships that we have just signed One is with YouTube.
So Nykaa is partnering with YouTube YouTube to integrate shopping within the videos on the YouTube platform. And the second is our partnership with Snapchat to nurture and create the next generation of Gen Z beauty creators in India. Next please. Finally we, we did host Nyka Land, the third edition of Nykaa Land this quarter in November. And this was in Delhi for the first time in Delhi and we had 30,000 in customers who actually bought tickets to attend the event which was more than, almost 20% more than the number of tickets we sold last year. For our Bombay edition there were 12 plus master classes from renowned celebrity makeup artists.
10,000 pieces of content were created by 3,000 plus content creators who attended. And this drove almost 190 million reach over two and a half day festival. We had 60 global and domestic brands participate and we were also very happy to actually partner with the H and M group. H and M group also launched both their beauty and their fashion on Nykaa. But I’ll let Abhijit talk more about that in the fashion section. And as part of their launch with Nykaa they, you know, they also helped to co sponsor the event and we had a lot of live entertainment, entertainment and music and FNB at the event as well.
It was very well received by consumers. Finally, since it was the end of the calendar year, we also did a Nyka Beauty rewind to share with customers based on all of the, all the data points we have that what was India’s shopping behavior when it came to Beauty in 2025. So we did a lot of advertising across cities in terms of outdoor, digital, non digital. But more importantly we also created a commercial event out of this where all of the best sellers from the year were shoppable on our platform. And I think it was a very interesting commercial activation that had a lot of success.
And just to give you a sense of, yeah, I won’t read through some of these data points but as you can see on the next slide, some very interesting data points. We sell one fragrance every five seconds. We sell close to 2,000 lipsticks every hour and one moisturizer every two seconds. So it’s showing you just the sheer scale we are now operating at as a beauty business. So despite India being a market that still is highly underpenetrated when it comes to beauty consumption, you can see the scale of the market at play here. So we’re very, very happy and excited with where we are are.
But it’s also equally exciting to know how much headroom we have to grow with that. I think that’s the end of my section so I’ll hand it over to Advaita to take you through the House of Nika section.
Adwaita Nayar — Executive Director, Chief Executive Officer, Nykaa Fashion
Hi everyone. Today I’ll talk about the House of nika business for Q3. We’ve ended the quarter with 872 crores. That’s an annualized GMV run rate of 3500. It’s a 48% year on year growth. And as a reminder this is includes both our beauty and fashion brands. And if we just look at the bottom half of the slide you can see how that split is so of the 3500 annualized number, 3100 is in beauty. So. So bulk of it really is on the beauty side and there’s a 400 crore own brands business in fashion. The icons that you see at the the the logos you see below are the brands that we’re focus on focusing on in both these sections.
And I’ll talk about some of these larger brands in the following slides. The trajectory of the business has been quite impressive over the last couple of quarters. On the left hand side you can see the last eight quarters in Q3. On the beauty side of the business The GMV is 775 crores. It is a 65% year on year growth. So the beauty side of the business has been growing quite rapidly and the last couple of quarters have been 70% up and up. On the right hand side you can see how the split is across various channels.
So Nika online is about 45% of the business and the rest is split between Nika stores, Nika Distribution arms, whether that’s EB2B or our GTMT business. And then other third party channels is about 24% so that’s other marketplaces and so forth. So it is a well distributed business. As we’ve always said, we’re not building private labels but we’re building brands brands and therefore, you know, of course we will focus on Nika Distribution. But some amount of outside of Nika distribution is also important for this business. Moving on, double clicking on. One of the most promising brands in our portfolio is Dot and Key.
So Dot and Key today is running at about 1900 crores of annualized GMV. It’s grown 100% plus and it grew that much last year as well. So there’s been a very astounding trajectory for this brand brand. It’s very profitable business with high teens EBITDA margins and it’s often amongst the top couple skincare Brands on Nika but also on most other large platforms as well. The business has been built with a very strong focus in sunscreen, face wash, moisturizer and this quarter we also launched a very strong lip balm which has been doing very well. Moving on.
K Beauty, another brand of ours which has now crossed 500 crores of annualized GMV again is growing exceptionally well. Is is sort of a breakout brand for us with 60% plus growth. The new launches have been firing very well. On the right hand side you can see a little bit of a glimpse of a collaboration we did with the designers Falconi, Shane Peacock and again this collaboration has been received super well and is allowing us to premiumize the brand as well. Last time we also spoke about how we’ve taken this brand international. So the UK and the Middle east continue to be very high potential markets for us and we’re continuing to really focus on that as well.
Well moving on we’ve got Nyka Cosmetics next which is approaching a 500 crore annualized GMV run rate. Again new launches have been quite strong for it and this is a brand where we actually have a pretty large physical distribution as well. Beyond Nika online and Nika stores We have over 14,000 dedicated GMT doors and this is also a really great way for us to build brand Nika. All these products have the name Nika on it and then go and live in the homes of consumers. Moving on Nika Perfumes, that’s been another focus for us. So under the brand name Moi we’ve been launching perfumes and again this has been doing exceptionally well.
It’s the number one brand now in non luxury perfumes on Nika and we think fragrance is a very high potential category and we’ll continue to focus on it. Moving on Naked, this is probably the most important brand on our fashion on brand side of the portfolio. So this business is growing very well within fashion and it is now in its fifth year and it’s been a pretty strong business across lingerie, athleisure, sleepwear, shapewear. It’s also a business where we’ve been opening stores. So Today we have 30 exclusive brand out outlets and we have a considerable presence in GT as well.
Today this business is about 150 crores of annualized GMV. So net net, you know, before I hand over to Vishal, I think we’re feeling very strong. We’re feeling like, you know, the business is in a very strong place at the moment and we’re feeling pretty confident with the way in which the brands are coming about. The teams that we’re building to be able to execute this is obviously a very different DNA from the retailer DNA that we’ve had so far far. But we do believe that we’re sitting on some really really powerful brands, many of which are now becoming market leaders not just on our platform but on other platforms as well.
So we’ll continue to be very bullish and focus on this part of the business. And with that I’ll hand over to Vishal to talk about EB2B.
Mr. Vishal Gupta — Chief Executive Officer
Thanks Advaita. Good evening to everyone. I’m happy to share yet another quarter of very good results as we continue to scale with widening reach and improved profitability. You can see in the right most chart that we have grown our transacting retailers by 40% adding 1 lakh retailers in last one year and our business grew by 31% which is our net revenue. GMV is at 23 because of the changes in GST where the MRP came down but our net revenue net realization grew by 31% which is nice. Next. And within that you can see that our now scale and reach is so important and our brand partners love it.
So we were able to add a lot of marquee brands during this year. Brands Colgate, Palmer Leaf Portfolio, Johnson and Johnson Portfolio, Reckitts Portfolio in the big brands and in the regional D2C brand brands like Plix, Dermaco, Pilgrim, Chemiset play a lot of you know upcoming and good brands I our network and are happy to partner with us. Next. Not only that we have even scaled our own brands quite nicely. You can see 2.7x in one year reaching more than 100,000 transacting retailers across all over India India. So we are also able to build our own brands in our distribution system.
Next. And this is a scale business and as we scale we continue to improve our unit economics and this quarter we have improved 574bips of EBITDA margin coming out of fulfillment expenses, S and D cost and employee and other expenses. It’s not only scale but even individually like packaging cost, cost, addressing leakages. So scale based and actual you know unit improvements overall 574 bips improvement. So net net very encouraging quarter. Thanks over to Abhijit. Great.
Abhijeet Dabas — Executive Vice President and Business Head for Fashion eCommerce
Thanks Vishal. Good evening everyone. So as you know Falguni ma’ am shared up front this quarter has been a story of continued acceleration in the fashion business both on the growth as well as profitability side. So very happy to share that we clogged almost 1500 crore GMV for the third quarter which is a 31% growth year on year, continuing the trend of recovery that we’ve been seeing in this financial year. And while doing that, we’ve also been continuously fixing the underlying core platform and intrinsics of the platform which has resulted in in 340 basis points improvement in EBITDA margin also during the quarter.
So we’ve gone from minus 5.4% to minus 2% for this quarter. Next slide. Across the board. If you look at the metrics which indicate the health of the underlying fashion business, whether it’s visits, the number of customers, the retention of customers, new customer acquisition, overall all metrics are trending very healthily. In particular, new customer acquisition is up 45% year on year. And this is a quarter where we do the pink sale across both beauty and fashion as Anit spoke about earlier. So it is a quarter where we expect to acquire customers in a big way and that’s what the 45% new customer acquisition number reflects.
And it’s because of this that we are in a position that since the business is healthier, we are now starting to see signs of better operating leverage and efficiency showing up in the market margin improvement as well. Next slide. You know, one of our core promises to customers has been that we are a curated platform. Nika Fashion is a premium position curated platform which is a destination for the best brands across categories for customers to shop from. But also happy to share that, you know, this slide is becoming busier not just from brands in the women’s category but in the emerging categories as we call them as well.
So whether you talk about men’s kids or now also smaller categories like accessories and home, we have a fairly robust assortment of very strong brands across all of those categories. And, and that makes the proposition for customers more enticing. So and you know, just we have a, the platform is heading in the right direction by onboarding brands across all those categories across the board. Next slide. So Anja spoke about H and M debuting on Nika Fashion on Nika overall during Nika Land, H and M, you know, partnered with us and sponsored headline sponsored Nika Land.
As most of you know, H and M is not a brand which is new to India. It’s been around for I think close 10 years last year in India. But when they debuted on Nykaa Fashion both ways it was a win win because, because for us of course having a brand of the repute of H and M just strengthens the assortment and proposition for customers In a very big way. And that’s reflected in the fact that almost from the get go H and M has been the number one brand on Nykaa Fashion since launch. But even for H and M, the quality of customers that Nikaa Fashion as a platform is able to deliver and and the shape of business that Nykaa Fashion is able to deliver which is to be able to help themselves sell the more fashionable products, the more in season products.
It works both ways and it has been a big win win and a source of learning for both H and M and for us. So very successful launch and we hope many more marquee launches and many more wins to come in the coming quarters with H and M. And as you know Falguni ma’ am touched upon this is a new partnership that that we have just embarked on with Nike. We’ve entered into a deep strategic partnership with Nike to run Nike’s official digital direct to customer D2C digital commerce platforms in the country. What that means is Nikaa Fashion will now run exclusively in India nike.in as well as the Nike Commerce Apps which is the iOS and Android apps.
It’s a unique partnership. This is a different model than the the typical marketplace retail partnership that we do with most other brands and this is just launched just a few days ago. As part of this Nika Fashion will manage end to end everything for those platforms which means the on site experience, the digital marketing, fulfillment, customer experience and everything. And again you know it brings on one hand as we all know Nike’s undoubted global brand equity and product equity on one side to customers in India in in a way in which Nykaa Fashion brings to bear its deep expertise of the Indian market, the Indian ecosystem, its full stack capabilities and really the know how of how to work with a brand of Nike standing to deliver a premium experience to customers in India.
So very excited about what this holds for both Nike and for us. And lastly you know we also had a very successful Pink Friday sale. Like I mentioned earlier it is one of the sources of big customer acquisition for us. You know we continue to work with some marquee celebrities as you can see Ishan and Shanaya, but also a range of influencers. Overall this was the largest Pink Friday sale that we have ever had on Naika fashion, 44% higher year on year, you know customer acquisition, more than 30 million visits, more than 200 million social reach and some of the metrics towards the bottom of the slide I will not read but this was a meaningful contribution to us Having a successful quarter.
That’s all from my side. I’ll hand over to Ganesh. Thank you.
P Ganesh — Chief Financial Officer
Thank you Abhijit. Good evening everyone. I’ll now share an overview of our quarterly performance. We have had a very strong quarter with both our business verticals delivering robust growth. Beauty business continues to deliver on its growth momentum of 25% plus for the last several quarters. Fashion business saw its growth revival since quarter one and it continues to deliver accelerated growth. Now with that at one Nika level. We have been consistently delivering strong top line growth of mid-20s over the last 13 quarters as Falconi mentioned as well while driving strong improvement in our profitability. Also quarter three FY26 has been the biggest quarter ever for Nika on multiple parameters.
Our revenue from operations grew by 27% during the quarter. Profitability also saw a meaningful improvement with EBITDA margin coming in at 8% during the quarter which is 180 basis points points improvement driven by strong focus on driving efficiencies across the P L. We have taken a one time provision of about rupees sixteen crore in quarter three to account for the new labor code impact pat margin of 2.4% which is after the above one time impact is still the highest pat margin since our ipo. Our pat margin for the quarter before the exceptional item would have been 2.7% going to the next slide.
This slide provides a snapshot of our consolidated P and L statement. We saw a healthy gross margin improvement of 144 basis points YoY this quarter coming in at 45.2% which is the highest in the last 13 quarters. The margin expansion was supported by robust performance from House of Nika beauty brands and higher service income across vertebrates verticals. Our fulfillment expenses increased by 13 basis points standing at 9.4% on net revenue basis. Given our focus on faster delivery in fashion leading to increase in as shipment mix, fulfillment expenses and beauty continue to remain stable. We have continued to invest in performance, marketing and brand and category building initiatives leading to a 8 basis points increase in our marketing and S and D which now stands at 16% for the quarter.
We are already seeing a healthy return on this investment with accelerated new customer acquisition in both beauty and fashion reflected in the strong AOTC growth. Our brand and category building activities are also driving strong growth in House of Nykaa brands and enabling premiumization journey for the consumer in the beauty ecosystem system. Our employee expenses or improvement of 64 basis points yovi this quarter on the back of scale led efficiency going to the next Slide. Yeah. This slide now gives a vertical wise performance. We have delivered strong industry leading growth in both businesses with NSV Growing in mid-20s while delivering healthy margin improvement in both the business businesses.
Beauty EBITDA witnessed 134 basis points expansion and fashion EBITDA improved smartly by 340 basis points both on NSV basis. Going ahead. Next slide. Yeah yeah. This slide again captures a vertical reporting. Again this this again for reference highlights we have already covered in the previous slide so we can. We can go to the next slide. One. Yeah. Our continued focus on driving efficiency on our balance sheet is also evident. Our fixed asset turnover on an annualized basis now stands at 10.5 times. Our working capital days have been consistently improving over time and this is now at 30 days for nine months.
FY26 showing an improvement of four days over the previous year. ROC has also been improving over time and now stands at 19.11% annualized for nine months numbers versus 11.3% in FY25. So overall both on the P and L front as well as on balance sheet efficiency, the performance continues to move from strength to strength. With that I would like to hand over the call back to the operator for Q and A.
Questions and Answers:
operator
Thank you sir. We will now begin the question and answer session session. If you would like to ask a question, please click on the Ask a 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 maximum of two questions so we can accommodate as many participants as possible. Ladies and gentlemen, we will wait for a moment while the question queue assignment semblance. The first question is from Sachin Dixit. Please accept the prompt on your screen, introduce yourself and proceed with your question.
Sachin Dixit
Hi. Hope you can hear me now.
operator
Yes sir.
Sachin Dixit
Yeah my Both questions that I had were on beauty business only. So the first one was basically on the AOV versus Customer acquisition, right? So what we have seen so far is that there has been even sharper customer acquisition that we saw in this quarter. While AOV still continues to be healthy rather it keeps on improving, right? And while a lot of us actually believe that while we ramp up customer acquisition as the user base on NICA expense because slightly poorer quality customer might also start Factoring in, these AOVs might dip, right? So I just wanted to understand what is it that we are seeing or doing which is proving the street wrong consistently?
Anchit Nayar
God. Maybe I can kick that off. So I think so. Firstly we’ve always said that new customer AOVs tend to be lower than repeat customer AOV. And that doesn’t really have to do with the quality of the customer. That’s just how the customer, the more they engage with the platform, the more comfort they get shopping on the platform and the more they get educated by us about what types of products they should be using, that that’s when their basket starts to expand. And that’s the magic of what we do best, which is using content and education to drive certain purchase and consumer behavior.
So repeat customers have always had better AOVs than new customers, but we are fairly confident in our ability to move that new customer along their consumption journey within the category. And as you know, a majority of our revenue, despite such healthy new customer acquisition, a majority of our revenue still comes from repeat customers because of the frequency of purchase that they have. As well as, as you rightly mentioned, the AOVs also, I mean as I, as I said, the OVs tend to be higher as well in terms of the new customer, new customers that we are acquiring.
We are not seeing the AOVs for them dipping meaningfully. So I think it tells us that a, that there is still lots of, I would say still lots of opportunities, a lot of customers out there who are, are coming into the beauty funnel for the first time for whom affordability is not an issue. So I think that’s quite promising in our opinion.
Sachin Dixit
So just to clarify, like the new customers that you would have acquired, let’s say last year versus what we are acquiring today, there is no major AOV drop that we are seeing?
Anchit Nayar
Yeah, look, we don’t, I don’t think we disclosed that KPI. So I’m. Yeah, but I think that actually I can say, say that’s, that’s, that. That sounds right.
Falguni Nayar
Yeah. The number is the, the number is a pure new customer aov. So.
Sachin Dixit
Yeah, got it. Thanks for the clarity. My second question is on BPC business again. Sorry Faguni, you’re saying something?
Falguni Nayar
No, no, no. Just that.
Anchit Nayar
Yeah, sure.
Sachin Dixit
So second question was on BPC again, very sharp margin improvement we are seeing for the quarter. And if you are doing some triangulation, looks like ad income has also improved versus what we have seen in the last few quarters. Quarters. If that is so how much is the seasonality impact? If you can break out how much sustainable this margin that we are dropping this quarter is likely to be any color on those things. If that can provide that will be great.
Anchit Nayar
You know we always say that the beauty vertical reporting the gross profit margin here is A weighted average of, as you know, three or four very different businesses. Right. So you’ve got beauty.com, beautydt, retail, own brands as well as B2B. So the gross profit margin improvement is really an outcome of generally improvements across all four of those businesses that is ultimately resulting in a consolidated improvement in terms of ad income. Again, we don’t break it out separately, but generally what I can tell you is that things are better on that front. Yes, some of it is of course seasonal.
Also, as you know, we do our Pink Friday sale during the OND quarter and that is when we do get a lot of traffic, we do spend a lot of money on driving awareness for the sale. So there is a lot of demand in terms of brands wanting to participate in the sale and so ad dollars are collected against that. So there is some amount of seasonality. But. But generally also there has been, I think we’ve spoken about it in the past but we have really focused on improving what kind of capabilities we offer to brands in terms of their ability to advertise on our platform.
Historically it used to be all top of funnel advertising opportunities but we’ve built out the technology and what we call as the Martech stack to enable brands to do advertising across the funnel funnel mid funnel, lower funnel, advertising opportunities off platform through Nykaa, ability to do events, experiences, collaborate with influencers. So we’ve just created a much larger bouquet of offerings for brands which we’re able to monetize and so that’s more structural in nature. But some amount, as you rightly said, is also seasonal. But overall there is other general improvements across the other businesses like B2B and House of brands also that is helping the overall margin profile.
Sachin Dixit
Right. Thanks Anshit and all the best.
operator
Thank you. The next question is from Vijit Jain. Please accept the prompt on your screen, introduce yourself and proceed with your question. Mr. Jain, I can see your audio is not connected, sir.
Falguni Nayar
Right now.
operator
Mr. Jain, I would request you to kindly rejoin the queue. We’ll move on to the next question which is from Nikhil Chaudhary. Please accept the prompt on your screen, introduce yourself and proceed with your question.
Nikhil Chaudhary
AI, thanks for the opportunity. My first question is on Nika now given we have now reached a decent scale and we are talking about pushing for marketing any early color. In terms of how much scale we have already achieved in terms of let’s say number of orders, percentage mix and how is profitability in Nika now versus Nika platform.
Anchit Nayar
Yeah. So what I will say is it is now there is a significant percentage of orders in cities where NICA now is lack that are being serviced through NICA now. Exact numbers. You know, maybe we can get back back to you if we are, if that is being shared. But what I can say is that in cities and in PIN codes where it is now live the majority of the order, I mean a large percentage of the orders are now being fulfilled by NICAA now. And we are, as I said, going to also expand the number of operational hours for which NICA now is applicable.
So there’s a lot of, there’s a few changes which we are able to do quite quickly that should increase the share of orders that are being serviced through NICAA now quite quickly. And then there is some amount of hyperlocal delivery through our retail stores across the other 90, 95 cities where we have stores also that is leading to faster Delivery in Tier 2 and Tier 3 towns as well. In terms of the profitability of the margin per order, I mean, it’s not very different at this point in time. Is there a chance that the average order values for Nikona orders can be lower than mainline platform orders? Yes, that is possible.
And in fact it’s something which we’re not entirely against. We’re more focused on seeing that if the frequency of purchase increases because of NIKA now, then that benefit is more than an offset to the potential dilution of average order values through NICAA now. And ultimately, if there is a positive outcome on annual consumption value, which is just a multiplication of FOP and aov, then that’s a good outcome for us both from top line as well as from bottom line. So this is not a very dilutive, this is not dilutive currently, nor do we envisage this to be diluted to overall profitability in a meaningful way.
Nikhil Chaudhary
Got it. Second, on House of Nika, we’ve seen very strong growth, but especially the growth from third party channel was much meaningfully higher than Nika platform. I mean Nika platform nika store grew 45% versus third party platform yy growth of more than 100%. So just wanted to understand any color where we are growing and what is leading to such acceleration versus the core platform.
Falguni Nayar
Advaita, will you take.
Adwaita Nayar
Yeah, yeah, I’ll take that. No, I think. No, there’s a good growth kind of across all the channels. There are definitely some new third party channels that were added in the last year. So it’s more a reflection of just new channels being opened up rather than, you know, a slowdown in a particular channel.
Anchit Nayar
Versus like not it’s a size thing also. Right. Like Nika is, I mean Nika online is the biggest channel so it’s already operating off of a very large base whereas some of the newer channels are operating off smaller bases. So the growth looks higher.
Nikhil Chaudhary
Sure makes sense.
Falguni Nayar
Many channels underlying that is like 1012 different channels both online and offline.
Nikhil Chaudhary
Got it, got it. Last one for you. For last two years we have been consistently delivering strong growth close to 25% despite of consumption slowdown. Now finally most of the consumption focused company are talking about growth revival. Even you guys are talking about very strong KPI across the metrics. Can we say that growth can accelerate and are you seeing some early indicator in terms of further acceleration in BPC growth especially?
Falguni Nayar
I think the category growth has been strong and category growth is also increasing. In terms of category growth through E commerce is increasing because a lot of offline sales through GTMT are moving to E commerce through the quick commerce model. So E commerce is growing. So I think we do believe that E commerce component of beauty business is growing strong. And secondly, we also do feel that with the introduction of AI, the cost of marketing as well as, I mean not really cost of marketing but efficiencies, digital marketing and ability to do a lot of personalized journeys that can improve conversion makes us believe that one can hope for little better outcomes going forward.
But I mean I’m not guiding towards that but I think it remains a market opportunity but against the market market opportunity they could, could be obviously you know, need to stay on top of AI and how the discovery happens and lots of changes happening. But I think some of the partners that we Indian companies have like Google and Meta and others also doing very interesting things. So the whole landscape is changing, very difficult to guide but we remain prepared and hungry to continue to grow.
Nikhil Chaudhary
Got it. Falconi, thanks a lot again for giving me opportunity and good luck for coming period. Thank you.
operator
Thank you. The next question is from Kapil Singh. Please accept the prompt on your screen, introduce yourself and proceed with your question.
Kapil Singh
Hi, am I audible?
operator
Yes, please proceed sir.
Kapil Singh
Yeah, thanks for the opportunity. Just one question. You know you talked about the partnership with Nike. Is it a different kind of revenue model? Is it similar to what we are doing? What will be the revenue streams? Just some color on that. And do you think this is something that you could replicate across some other brands as well and some color as to why, you know, Nike chose you to do it this way?
Falguni Nayar
Yeah, I think, I think I’ll come in and then maybe ABHIJIT can add and Advita also can add. But I think, yes, I think the way the deal is structured, it is finally from a unit economic perspective for Nika boil down to very similar to E commerce revenues and margins where you know, there is some inventory, there is margins like an E commerce company and then there are costs for marketing and everything. But everything is well structured and covered. So we think this is a very good outcome for us. Secondly, I think from why we were chosen is because we have a tech stack that can be made ready to offer their website in the country and then we are also going to support it through digital marketing and fulfillment and customer experience.
So pretty much full fledged services Nika is able to offer not just on nika.com platforms or naikafashion.com platform, but beyond that to even a third party platform like Nike. And yes, it’s a, it’s a, it’s a way of operating in a service that we may offer to those strategic large partners. And to that to certain extent it has started with Foot Locker, then Nike and also in Beauty, we have just offered it to kiehls.com with that. If Advaita or Abhijit won’t come in.
Abhijeet Dabas
Yeah, no, I will just add on to that. So it’s a different nature of partnership versus typical marketplace kind of partnership that we do to onboard brands onto the marketplace platform. Because in this one the arrangement is that we will run the full stack operation for Nike’s D2C digital commerce platforms in the cloud country which is nike.in and the two apps, the two commerce apps across iOS and Android. So it’s a different nature of partnership. Why Nike chose Nika I think is best for Nike to answer. So we’re not going into that but what it does for Nika Fashion is that it positions us as a, as a player who on one side of course we have the fashion marketplace on which we continue to work with all, you know, brands across different categories.
But it also showcases that for the right brands where there is a match between their ambition and between us seeing strategic value in the relationship, we have a much wider set of capabilities which spans across, you know, creating a platform to do digital commerce in the country, deep expertise of the consumer and the ecosystem in India, how to run fulfillment at scale, how to provide the kind of premium experience that brands such as Nike key look for when they want to reach out to customers in India. So to that extent it does position us as, as a platform which has capabilities which go far beyond just being a marketplace.
Which we continue to do. But this is a different kind of model compared to that.
Kapil Singh
And just trying to understand if the.
Anchit Nayar
Profitability of this would be much better for us since we are doing a lot more. And can you give some color on the revenue streams here?
Abhijeet Dabas
No.
Falguni Nayar
So I would not guide on that now.
Abhijeet Dabas
Sorry, would not want to go into the commercial construct of the arrangement operations wise. Like I explained, it’s a different kind of construct compared to typical marketplace. But unfortunately we’ll not be going able to go into details of commercials or any such much.
Falguni Nayar
Yeah. All we can say is it will be a win win for both partners. You know, we will see value and we will also see value added if done right.
Anchit Nayar
Okay.
Kapil Singh
Okay. Thank you so much and congratulations on the great performance for the quarter. Best wishes.
operator
Thank you. The next question is from Parsi Pantaki. Please accept the prompt on your screen, introduce yourself and proceed with your question. Question. Mr. Pantaki, please accept the prompt.
Prateek Pareek
Am I audible?
operator
Yes sir.
Falguni Nayar
Yeah.
Prateek Pareek
Yeah. So I just wanted to understand the gross margin expansion for the beauty business business. What is driving that? I know that you don’t give the numbers separately for the B2B and the B2C portion of beauty and I don’t want the numbers as such but any kind of directional guidance as to is it mainly the B2B losses which is driving the gross margin higher or even the B2C portion of the beauty business is seeing a gross margin expansion. And if it is the latter, what is really driving that?
Falguni Nayar
Yeah, go ahead. Otherwise I can take it.
Anchit Nayar
Okay, I’ll. I’ll just, I’ll just say quickly that as I mentioned in my earlier comments, there are several things that are playing out that are that are leading to this margin accretion on gross margin within the One of the big drivers of course is that we keep saying that the House of Beauty or House of Brands business of ours, like a House of Brands brands continues to accelerate its growth. It is getting a lot of consumer traction across multiple brands whether it be Dot and Key K Beauty, Nyka Cosmetics. So there is a lot of consumer love there that is resulting in higher GMV contribution, higher revenue mix contribution to this segment.
So that is obviously having some benefit. Vishal spoke about the improvements he is driving in the unit economics of the B2B business business that has resulted in a 500 basis point plus improvement at EBITDA level. So of course there is improvement on the gross margin for the B2B business as well. And when it comes to beauty.com as I also Mentioned earlier for several reasons, the gross margin is also improved in that business because of the ad income and certain category mix evolution as well as it being a festive quarter. So there are several reasons behind this margin accretion that you’re seeing and the good news is that each of the business respectively are moving in the right direction.
Prateek Pareek
Anjit, Most of these reasons are sort of present in the past couple of quarters as well. Whereas the kind of expansion that we have seen this quarter is materially larger. So just wanted to understand if this quarter there’s anything specific like lower amount of discounting or any kind of GST LED sort of benefits or anything of that sort.
Falguni Nayar
No, no, there are no one offs. I think there’s improvement in in ad income for the core business overall. You know B2B net retention margins are much lower than gross profit margin of the beauty business. But in the base there was certain gross retention margin and that has improved to certain extent. And also own brands have also had a role to play in improving profitability of own brands also have a role to play. So we have worked on improving the gross margin of our own brands over last three to four, five quarters and some of that impact also gets further accelerated as the sales pick up.
Okay, okay.
Prateek Pareek
So this would sustain going ahead as well, right?
Falguni Nayar
Yeah, they’re not one off items but it has a mixed impact. So mix impact sometimes pulls something down and it also has a service ad income impact.
Anchit Nayar
Got it, got it.
Falguni Nayar
I mean if there is a bad quarter from a service income perspective, again it can move a bit but inherently it’s cool.
Anchit Nayar
Yeah, yeah. I wouldn’t say there will be a bad quarter from an ad income perspective but because of some of the structural changes we’ve made and that I discussed earlier on this call. But, but definitely the festive quarter, the festive season, which is Q3 does tend to be a better quarter from an ad income perspective.
Prateek Pareek
Got it. That’s all from me. Thank you and all the best.
operator
Thank you. The next question is from Vijay Jain. Please accept the prompt on your screen, introduce yourself and proceed with your question.
Vijit Jain
Hello, can you hear me?
operator
Yes sir, please receive.
Vijit Jain
Thank you and apologies for earlier. My first question is, you know Anjit, last time I think you’d mentioned that with the India, India UK trade deal there were going to be some moderate amount of benefits to the extent that you import from there. Of course India has done a lot of these free trade agreements, us, EU and you guys have a significant contribution of imports in your business. But just wanted to get you Guys, a sense on, you know, how these play into your business going forward in the next one to two years. That’s my first question.
Anchit Nayar
Yeah. So on, you know, we don’t have much on the export side yet, but as some of our own brands scale, you know, K Beauty is there in space and K in the UK and you know, they are, there’s potential to take some of our other own brands outside of India. So from an exports perspective, I think it’s still very small, but in the future there might be some more opportunity. On the import side, we do import brands. Quite a few brands from the us, not too many from the uk, several, but more from the US and Korea.
So I think we’ll wait and see what the, you know, what the exact. This thing is. But there could definitely be some benefit to us if the, if the, you know, if the tariffs are going to be lower within the beauty and cosmetics category, especially for things like registration or some of the other licenses which we have to get for the importing of some cosmetic products products. So it can be a net positive, but we’ve not fully quantified that yet. And once the, once there is more guidance, I think we’ll be able to have those conversations with our brand partners to be able to rework some of the agreements to capture some of these changes.
Mr. Vishal Gupta
Just to add to what Anchor mentioned. Yeah, just to add to what Anchit mentioned. While the details in terms of both time frame as well as how the duty structure pan out on the imports front is, is still to. Still to come in directionally. Directionally, it is expected to improve access to brand as far as consumers are concerned and from that angle it’s expected to be positive.
Vijit Jain
Got it. And just to be clear, this would be. You should benefit from the EU deal as well, right? Because they, they would be a key source of import for you as well.
Anchit Nayar
Yes, that’s right.
Vijit Jain
And lastly, you know, just sticking to this question, if you could give a broad sense of, of what the current, you know, import contribution to your business would be, that would be helpful. And then I had a question on perfumery. I’ll just ask that upfront in interest of time. So you’ve mentioned in the, you know, in, in the presentation that the AOV for perfumery is three times what you see in your other retail stores. So I mean, in general, you know, is it suffice to say that that that trend would be the similar one on online as well, online sales of perfumes and so perfumes would be a pretty substantial part of business now.
Right. Given given that high AOV and given the fact that, you know, I have, you have a comment in there, in the, in the presentation which says you sell one fragrance for five. Second, I did the math. It says 6 million fragrances. I don’t know if that is right for the year. It would seem to suggest that it’s a pretty substantial part of the business. So if you can give more color on how perfumery is tracking as well. Yeah, those are my last two questions.
Anchit Nayar
Sure, sure. So on the first point, yeah, I mean that’s a, it’s a good, good point you make around the EU deal. I think that is given a lot of beauty brands coming out of, come out of Europe, that can be a, that can definitely be a big benefit not only to us, but as an importer, but also to a lot of our brand partners who are currently importing from the EU zone. So there is a chance that if the tariffs are lower, they could even pass some of that advantage on to the consumer in terms of bringing the price multiplier down and making the products more, I would say, equitable on price to what it is in the US and European markets.
And that could make it more affordable to more customers. So I think there is probably a benefit to that. The, not only to us, but to our international, to our global brand partners in terms of the kind of additional volumes they could do with better pricing if that’s the decision they choose to make. So yes, it is definitely we’re looking forward to seeing how this plays out. In regards to our import share of business, we don’t disclose our imports portfolio in terms of what that is as a percent of total revenue. So I’m not going to comment on that.
But what I can say is that we do have not just our import brands, but a lot of brands, what we call as quote, unquote, international brands who are manufacturing outside of India and importing into India. That is quite a substantial significant percent of our revenues. And so there can be some benefit on that front. Now with regards to fragrance, what I said is that this Nyka perfumery store, the average order value is three times that of our regular retail store stores for a couple of reasons. One is, yes, generally fragrances are a higher ASP product than say makeup and skincare as a general rule of thumb.
But also secondly, because this is a slightly more luxury retail concept as you can see from the images. So the kind of brands we keep in this store are more of the higher end fragrance brands. So these brands are growing really Fast in the platform platform, but they are not necessarily the largest revenue contributors on the E commerce side of the business. So this is where we do believe that over time, India’s fragrance market will continue to evolve to get to this, to get to a higher share of mix from luxury fragrance brands. But currently on E commerce, it’s a bit more balanced between what we call as luxury fragrances as well as mass fragrances.
And mass fragrances have, they have a, have less of a delta when it comes to the ASP versus other categories.
Vijit Jain
Correct. But am I, am I in the right ballpark when I, when I do that? 6 million fragrance pieces sold in 2025, is that probably correct? I mean, you have.
Anchit Nayar
Yeah, you’re right. If it’s one every five seconds, I’ve never actually counted the total number of units we sell.
Falguni Nayar
It includes mass fragrance and minis. So.
Anchit Nayar
So no, no, no, that’s. Yeah, as I said, it’s not just fragrances we’re selling, we’re selling mass fragrances also. Very popular category now is body mists. Body mists are kind of like a, like a deodorant but for women and, you know, so that’s also a very popular category, especially amongst younger consumers.
Nikhil Chaudhary
Got it. Thank you so much and congratulations again to everyone. Those are my questions.
operator
Thank you. The next question is from Nihal Mahesh Cham. Please accept the prompt on your screen, introduce yourself and proceed with your question. Mr. Jam, please accept the prompt.
Falguni Nayar
Hi.
Nihal Mahesh Jham
Am I audible?
operator
So please proceed.
Nihal Mahesh Jham
Yes, so sorry, I, I just had. One question which was on the BPC. Margins, you know, historically we’ve guided that. Given the investments we have been trying to make into this business, that while giving a clear guidance, sort of maintain. That the margin will sort of remain. At the 9% ballpark, which we did in FY20 for the overall BPC. Given the kind of strong performance we’ve. Seen for the nine months where we’ve already seen like 100 pips expansion in the gross margin and the advertising levers. That Anjit mentioned about, is there a. Case that this can sort of structurally keep improving year on year? Just the thoughts on that.
Anchit Nayar
Yeah, I think each of the businesses. So again, the beauty vertical comprises four different businesses. So. So operationally we feel confident that each of those four businesses can continue to improve their profitability. Now, for the major contributor to this business vertical, which is the beauty.com business, there could be a decision to reinvest some of the profits back into the business in terms of continuing to expand our market share and our reach and our customer acquisition position. Whereas in B2B and in other businesses, there is meaningful improvement in profitability that will really make it to the bottom line.
So again, it’s a bit hard to say that at the, you know, at the consolidated level, where does this number end up? But each business individually is structurally in a good position to continue to improve their respective margin profile.
Nihal Mahesh Jham
Got it. Anshit, just one follow up that when you are highlighting the mix impact on gross margin, you basically mean within categories. Sold on Beauty.com, which are accretive to gross margin.
Anchit Nayar
Just to clarify. No, I mean like again, because as B2B continues to grow, it will continue to become a larger component of the beauty vertical. Right? As house of brands continues to grow at 60, 70%, whatever number that that is, it’s going to continue to become a larger percent of the overall beauty vertical. So as they will grow, their contribution grows, their impact on the overall gross margin profile of this vertical will also continue to grow. So it’s everything that’s impacting both the gross profit margin as well as the EBITDA margin. I apologize if I’m not doing a good job at explaining this.
Maybe somebody else that Ganesh would like to try.
Falguni Nayar
I’ll come in. I’ll come in. Anshit, I think you’ve done a good job at explaining but I think because we’re switching from gross profit margin to ebitda, it’s harder. So I think from EBITDA margin improvement, clearly I think we feel that there is a scope for continuing to improve EBITDA margins for the beauty consolidated like beauty vertical business because all the four businesses are going to gain from increase in scale and you know, marketing costs. S and D costs, not so much, but definitely marketing costs as well as other expenses. Expenses also will get a leverage of scale.
So I think we feel more confident about EBITDA margin improving. In the past we used to guide that we wanted to continue to add more, spend more marketing dollar to accelerate customer acquisition growth, which we have done a lot in the last few years and we’ll continue to acquire new customers and accelerate it. But it’s already very large numbers. So on a large base we are talking about it. So I think EBITDA margin should be good. I don’t want to guide towards any direction, but I think it can sustainably improve going forward on gross profit margin.
Like Anjit said, it’s more of a mix also that comes to play and hence it’s difficult to give the guidance of the overall consolidated number, but each of the businesses are working. They’ve already improved their own gross profit margin and they’re working towards improving it further.
Nihal Mahesh Jham
That is clear. Thank you. Thank you so much.
operator
Thank you. That was the last question we can take today. You may reach out to Nika’s investor relations team for any additional queries. I would now like to hand the conference back to Falconi, ma’, am, for closing comments. Thank you. And over to you, ma’. Am.
Falguni Nayar
Thank you very much, everyone, for being with us today for this conference call. And I hope we’ve been able to answer each of your questions. And it’s been a pleasure spending this hour with all of you. Thank you. And thank you to my team for facilitating this.
operator
Thank you, members of the management, on behalf of FNS E Commerce Ventures limited, thank you for joining us. And you may exit the meeting now. Thank you. Sam. Sa.