Fsn E-Commerce Ventures Ltd (NSE: NYKAA) Q4 2025 Earnings Call dated May. 30, 2025
Corporate Participants:
Falguni Nayar
Anchit Nayar — Executive Director
Adwaita Nayar — Executive Director
Vishal Gupta — Executive Vice President
Abhijeet Dabas — Executive Vice President and Business Head for Fashion eCommerce
Ganesh — Chief Financial Officer
Unidentified Speaker
Analysts:
Sachin Salgaunkar — Analyst
Kapil Singh — Analyst
Sachin Dixit — Analyst
Unidentified Participant
Abhishek Benerjee — Analyst
Sheila Rathi — Analyst
Presentation:
Operator
Hi, good evening, everyone. This is Michelle from Chorus Call. Welcome to FSN E-commerce Ventures Limited Q4 FY ’25 Earnings Call. From the management at, we have Ms, Executive Chairperson, MD and CEO; Mr Anchit Nayer, Executive Director and CEO, Beauty; Ms Adveta Nair, Executive Director and CEO, Fashion; Mr Vishal Gupta, CEO, Distribution; Abhijit Tabas, Executive Vice-President, Nykafashion.com; Mr, 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 can send 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 for opening remarks.
Falguni Nayar
Thank you. Good afternoon, everyone in Europe where I am. But it’s a pleasure to see all of you, good evening to all of you and really happy to present the quarter and the full-year results for, 31 March 2025. Starting with one Nyka highlights, happy to say that the GMV for the 4th-quarter continued to grow at a fast pace of 27% year-on-year growth and the GMV for the quarter was INR4,102 crores. Our net revenues similarly showed a 24% year-on-year growth coming out at INR2,062 crores. Gross margins were healthy at 44.1% for the one and this in — this reflects an improvement of 151 basis-points on a year-on-year basis. EBITDA has come out at INR133 crores for the quarter. That’s a 6.5% EBITDA on a percentage to revenue basis and that’s about a 43% year-on-year growth or improving profit margins compared to the revenue growth. And finally, on the PAT, at INR19 crores PAT with 0.9% of net revenue and a year-on-year growth of 110%.
Next, the results for the full-year are similar with 25% growth in GMV with the GMV of OneNiCar at INR15,604 crores. Net revenue came out at INR7,950 crores, almost $1 billion revenues and that showed a 24% year-on-year growth on a full-year basis. Gross margin came out at 43.7%, an 84 basis-point improvement on an annual basis and EBITDA for the full-year at INR474 crores, that’s a six percentage of net revenue and 37% year-on-year growth. On the PAT, the PAT is at INR72 crores, again 0.9% of net revenue and 81% year-on-year growth on a full-year basis. Next, moving on, giving some color on beauty and fashion, beauty has had a strong year, growing at 31% on — in the 4th-quarter to result in a GMV of INR3,058 crores and similarly, the full-year growth has come out at 30% and that’s about INR11,775 crores GMV.
On a net revenue basis also, the beauty business has grown at 25% on a year-on-year basis with a net revenue at INR1,895 crores for the quarter and INR7,251 crores for the full-year, which is a similar 25% year-on-year growth. This reflects a strong performance across all of the beauty verticals, which includes e-commerce, physical retail, our House of brands as well as eB2B business, which provides further distribution to retailers. On the fashion front, the picture was slightly subdued with 18%. However, you can see a clear improvement for this quarter. The 4th-quarter GMV — GMV GMV improvement in fashion is 18% year-on-year growth, a revival from the previous quarter. And similarly, for the full-year, the fashion growth has come out at 12% on a year-on-year basis on a GMV basis at INR3,804 crores of GMV, total GMV. And if we were to look at it on a net revenue basis, again, the improvement was 11% for the quarter and almost 19% on a year-on-year basis with the full-year — full-year fashion GMVs at INR675 crores. The fashion growth revival is against a muted performance still in the industry. Industry however it is reflected through both growth in fashion.com vertical as well as the which is part of now the fashion vertical and that momentum is likely to continue. Next, 2025 was a — for Nyka was truly a transformative year for success. We now have 42 million cumulative customer-base, which is a 28% growth. So we have clearly accelerated customer acquisition in more recent quarters and you can see the impact of that. Similarly, the store rollout now we have 237 stores, largest beauty retail network in the country and almost 50 stores were added in the financial year ’25, which is again the highest-ever number of store rollout in a year. We now have 8,600 brands across beauty and fashion, the largest beauty assortment in India and highest-ever brands launched in 2025. 2025 was a very successful year from brand launches where a lot of global brands now see India as an important market. And through the year, we saw launches of iconic brands like NARS,, and more recently, Chanel on platform. In fashion the story is similar with many iconic brands like Victoria Secret and others choosing to launch on, including domestic D2C brands which are also coming up in fashion brands like Stitch, HubScotch and many others which are doing well have also chosen to list on. Consumer emotion initiatives continued. Nyka Land was the biggest beauty festival. You heard about it earlier. Nyka Shadi also did really, really well. It was our effort to, I think beauty consumption and weddings in India go well together and this show allowed that to be told as a story. And this was among the top-10 OTT shows for several weeks on OTT platform. So that was a clear success from a positioning perspective. From a makeover perspective also, we’ve been accelerating the amount of makeovers we do in our store where all across our physical store network, we are engaging customers more with makeovers that results in further education and growth of beauty — beauty consumption. With this, we have almost $1.8 billion of GMV across all our platforms from Nyka Beauty to Nyka Fashion to Nica Man and also the superstore which services the retailers next with that I hand over to Anshit to talk about beauty multi-brand okay. Thank you very much.
Anchit Nayar — Executive Director
So I’ll walk everyone through the results for the beauty vertical relatively quickly. I think as mentioned, it was a very strong year for the beauty business and the business delivered 30% — roughly 30% growth in all four quarters, as you can see from the bar chart on this slide. For Q4, the growth was at 31% year-over-year at INR3,058 crores of GMV. On an annualized — on a full-year basis, it’s INR11,775 crores and a 30% growth year-over-year. We believe this is significantly ahead of the rest of the industry, the rest of the India online BPC ecosystem, which we believe is growing roughly mid 23% to 25% CAGR over the past several years. In terms of the key growth drivers for this growth momentum, which we have seen this year and in the past several quarters, the first has been accelerated customer acquisition.
Has invested behind acquiring new customers into the beauty funnel and bringing more shoppers into — into online shopping for beauty products. Second, we continue to be the partner of choice for both global and domestic beauty brands and we continue to strengthen this partnership and that has resulted in several very exciting brand launches, which we will discuss with you in subsequent slides. Third, our retail network continues to expand at a healthy clip. Almost 50 stores were added in this year alone, which is the largest number of store additions we’ve done in our history. And at the same time, we continue to deliver very healthy same-store sales growth, which will be again expanded on in subsequent slides. And lastly, but I think equally importantly, we have managed to deliver very strong performance for our key brand partners that is ultimately resulting in this strong growth momentum that the beauty business has seen. Just doubling — just double-clicking on the customer acquisition piece, as you can see in Q4 and at the exit of FY ’25, we’ve ended with 15.8 million annual unique transacting customers.
This is a 27% growth year-over-year. So I think significant growth in transacting customer-base, while managing to moderate and keep marketing expenses relatively in-line. You can see we’ve ended the year at 9.3% of NSV and 9% for Q4. So just expanding a bit more on the fact that ICA remains the number-one partner of choice for global Beauty brands, you can see on this slide some of the biggest and best-known global brands have chosen to partner with for their India market launch. You can see brands such as NARS,, which is a leading hair-care — a luxury haircare brand that is owned by the L’Oreal Group did launch on Nyca in this past year, YSL again owned by the L’Oreal Group, launched exclusively on Nyca. Is a Derma skincare brand owned by the Bursdolf Group. This was a launch exclusively on and is an incredibly strong brand in the skincare space and you can see GHD, Obargi, Dr Jat, etc. So the list is long. I won’t go through all of them. But just to give you a sense that global brands are looking at India, continue to look at India now more than ever as a priority market. And within India, they see Nyeka as the partner of choice given the kind of scale of distribution, the quality of customers as well as the bespoke marketing and brand equity building that we help our brands to do in the market.
Next slide, please. Next slide, please. Yeah. So you know, this is now just quickly touching upon FY ’26 because it’s fresh off the — fresh off the press and we thought we’ll share it with you as well. FY ’26, in Q1, we’ve continued with this strong performance of global iconic brands being launched on. Some of them are mentioned here such as Chanel, which is one of the most iconic luxury beauty brands in the world, Armani Beauty as well, Estura, Supergroup, Nexus and Love, etc., many of these brands have come again, as I mentioned earlier on the call exclusively to despite there being many retail options available in the country today. Just spending a minute on the Chanel launch because I think it’s important to mention, I would say this is a milestone for in its journey as a beauty retail platform.
It is a — as I mentioned earlier, Chanel is one of the most iconic global luxury brands in the world and they have chosen to partner with Nyka to launch their beauty and fragrance portfolio in the market. What we’re showing you here is the kind of bespoke work which we did in partnership with Chanel to make sure that we were representing the brand in the way that they like to be represented globally and making that possible in India. These are just examples of how the brand is represented on our app, but you can also please go see our physical stores and see how the brand is being displayed in-stores. So this was something which we worked on with the Chanel Group for many years to get them comfort with India, get them comfort with and ultimately launch in the market with us exclusively. Next slide. Just giving another example of a brand, Super Group is a brand which we are not only retailing exclusively in India, but it’s also a brand which we are serving as the importer and distributor for.
And this is through our Global Store business, which we’ve spoken about in the past. So this is a brand which we import and we manage end-to-end services for the brand in the country. It is a highly popular trending sun protection brand from the US and for us, Sun Care has been a big priority, especially in the summer months in India and how do we continue to encourage more Indians to adopt Sun Care as part of their everyday routine. And this brand goes a long way and continue to help us to achieve that mission. And today skin today for us, Sun Care is one of the — is the third-largest category within skincare on. So it has grown in popularity immensely and it’s one of the top three search terms on Nyca. And this brand, which we are importing and retailing has quickly gone on to become the number-one premium suncare brand on the platform as well spending a minute on physical retail, as you can see, we are today at 237 stores across 79 cities in FY ’25, we added 50 new stores across 11 new cities. So really taking our retail penetration deeper into the country. Today, we have 2.5 lakh square feet of retail space and this is a 45% increase year-over-year. GMV growth, very healthy in physical retail as well at 31%. Same-store sales growth, I think this is the metric which we are very happy about, which is 15% same-store sales growth in what I think has been a volatile and slightly tepid market on the physical retail side for most of the country, but I think delivering very strong like-for-like growth shows that there is clear product market fit for retail network as well. And as you know, our store network is profitable. And as we’ve mentioned in the past, our stores tend to break-even usually within the first year or less than that even. And now you can see from the map on the left, we are very well distributed across the country. We continue to have the largest store count in the north, but very quickly we are expanding in the south and in the East as well. This is just some quick photos of how our stores are looking. They have — clearly we are upgrading both the design as well as the experiences in our store to reflect the new reality of the market, which is consumers want more engagement, more experiences and wants to lead the way in really how we innovate in terms of beauty retailing in the country. This is images of our stores. As you can see, there is a lot of experiential zones, a lot of areas for consumers to come and engage with products to as we say, come and play, come and play with makeup, come and play with skincare and to educate themselves because we believe that education is ultimately the best enabler for consumption. In terms of the kind of brands, you can see the names mentioned on the slide, we are also in a — in a big push to become the destination for experiences. We are pushing services a lot in our stores. So a big focus on gifting and experiences, a lot of — a lot of work we’re doing with beauty tech around skin consultations and AI and virtual tools. But I think most importantly has been a strong emphasis on providing both free and paid — free and paid makeovers as well as skin diagnostics in our stores to our consumers. And now we have done — I think this year itself hundreds of thousands of makeovers have been given to our consumers. Finally, we also had our Pink Love sale-in this — in Q4 of FY ’25. And this sale, as you know, it’s a flagship sale of ours. We do it once a quarter. The Ping Glove sale was done in FY — in Q4 and had a phenomenal result. You can see massive reach as well as massive unique visitor count. So clearly, our sales are becoming flagship occasions for the Indian shopper to come and to really experience and to engage with the category. Lastly, I’ll just spend a minute to talk about our content to commerce flywheel. It’s something which we’ve mentioned in the past, but I did want to spend a minute today walking through all of the levers which we have and I think is quite unique in having built a very strong content to commerce flywheel. And as you can see from this slide, we have multiple platforms through which we are able to create this content. The first is, of course, the Nika affiliate program. This is our influencer and content creator program. Today, there’s over 28,000 affiliates and influencers who are registered and are creating content on behalf of the platform. They are creating over 500,000 pieces of content in the year alone and this goes a long way in driving a lot of amplification for the platform. Secondly is Play. This is our on-app beauty discovery platform where consumers can come and watch live streams and short-form video content. So very much in the same vein as live and social commerce that we’re seeing in other markets. This has now gained a considerable scale, over 4 million views to our live streams and 15,000 shoppable videos have now been uploaded to Nika Play. Third, of course, as you know, we are a large influencer on social media platforms across Instagram, YouTube and Facebook with over 17 million followers. We have one of the largest social media followings for any retail company in the country and 130,000 posts on our Instagram. Finally, on thought leadership, we believe strongly in responsibility towards growing the beauty market and to grow the beauty market to drive heightened demand, we need to drive heightened awareness and education and that is best done through these proprietary IPs we’ve created that have been shown on the page here. This goes again to reiterate both with our brand partners as well as our consumers, position as the leader and the thought leader as well as the trend creator in the industry. And here are just some images of some of the kind of on-ground experiential events which we do as part of our overall content to commerce. And with that I’ll pass it over to Adveta walk you through House of Brands.
Adwaita Nayar — Executive Director
Hi, hi, everyone. So today, I’m looking-forward to talking about our own brands business. We’ve been building a portfolio of brands over the last couple of years and we’re really starting to focus on it, building the right org chart and the right capabilities internally. On this slide, you can see that we have 12 brands today in our portfolio, about seven of them are on the beauty side and the rest are on fashion. And these are split across what we call high-growth and matured brands, which are now significant in size and scale, and we’ll talk about that shortly and then emerging as well.
The brands span across categories from makeup to skincare to lingerie to bath and body. And today this entire portfolio of the House of brands portfolio as we’re calling it, is about a INR2,100 crore GMV business. Can move on. Just double clicking just on the beauty side of the owned brands portfolio. In FY ’25, this portfolio has now achieved about INR1,700 crores of GMV, showing a 55% year-on-year growth. In-quarter four itself, there was an acceleration further and there’s been a 72% year-on-year growth taking the GMV for Q4 to 526. On the right-hand side, you can see how this GMV split across our own channels. So the pinks are the Online and the stores, but also there is about 40% of this business, which comes from other channels. And on the beauty side, that predominantly is GT as well as a little bit of D2C and Amazon business as well. Moving I’m going to now double-click on our three largest brands on the beauty side. First, we have Dotten Key. This is today one of the largest D2C skincare brands in the country. We bought this brand. We acquired this brand about four years ago and it was just INR38 crores in top-line and today it’s about INR530 crores of top-line.
It’s been a tremendous 14x growth over four years. And I think importantly, they’ve built a brand with a lot of brand love and brand residence with consumers. Today, they are often the number-one skincare brand on. And even on other channels, their products are often top-ranked with incredibles ratings and reviews. So this brand is completely on an upswing and we’re really leaning into the growth that the brand is achieving here. Some fantastic entrepreneurs run this brand and it’s doing very well. We can move on. The second brand I’m going to talk about is Nyka Cosmetics. So obviously, this is our flagship brand. It has the word Nyca in it. This is a brand that we’re feeling great about. The growth has been really strong this past year. It’s now over INR350 crores in terms of GMV. It’s a brand that’s known for trendiness for newness. It’s had over 120 launches this past year.
It’s a very big part of the Niga platform business and also the Niga stores business and we feel that it adds value to both the platform and the stores and simultaneously also benefits from the distribution that has. Today, it also has about 38,000 doors in GTN in the market. But yeah, predominantly, it’s a online stores and a GD distributed business. There have been some really good launches this year. We’ve been really trying to uplift the brand in terms of premiumization, in terms of leaning into trends, in terms of upgrading the packaging, really trying to hit the innovation on its head. And I feel that we’ve been successful this year-on that as well and a lot of the new launches have delivered outsized returns. Moving on. I’m going to show you a video now of Cosmetics just to give you a sense of what the brand is like.
We’ve recently signed as our ambassador and we feel that she really embodies that young fun spirit that the brand is really looking to kind of capture. And so I’ll let you watch this video. Liquid lipsticks drying pout, not my lip cloud. Cosmetics New lip cloud lipstick it’s super light, super comfy, cloudy soft moose, blurred matte finish in 10 everyday shades. The 3rd brand I’m going to talk about is K Beauty. This is a brand that we’ve been building along with Katrina. I feel that it’s really come of — come into its — it’s really exploding this year and it’s one of the fastest-growing brands on the platform. It’s at about INR240 crores of GMV. Again, the innovations have been fantastic this year. The HydroCrem lipstick was often the top-performing lipstick on the site. The jelly Blush and the full coverage Foundation have all been complete blockbusters that have sort of shaken out the category. I think this brand really stands out for one being quite premium. So it is quite a premium brand and I think the consumers are accepting it even at that price point. It’s got great gross margins. And also, I think the innovation is truly world-class and we’re working with some of the best formulators globally on this brand. Moving on here we’ll show you a quick video of this brand to give you a flavor of the positioning another brand that we’re incubating, it’s not as large as the previous three brands, but it’s a brand that we’re really starting to lean into this year as year is a brand called Wandelast. It’s a bath and body brand. We feel like it’s a massive opportunity in India today. There aren’t enough brands playing in the sensorial bath and body space and we really want to lean into it. It’s hit about INR50 crores of GMV. We’ve redone the packaging, the branding. It’s going to be a brand that’s a lot about gifting and the gift sets are also doing extremely well on the platform today. We can move on. Moving on to the fashion side, our own brands portfolio in fashion. Other two major brands that we’re supporting here. One is Naked, which is our lingerie brand and one is 20 dresses. On the left-hand side, you can see that today, this portfolio has about INR430 crores of GMV in FY ’25. While overall, the growth has been a bit muted year-on-year at 4%, if you see right below that, the growth on our own platforms, which is our.com, has been 21%. So I think it’s been a sort of deliberate strategy to focus on platforms and de-emphasize our third-party platforms for fashion specifically. And we felt that the quality of business was just much better on our own platforms than on others. And so that’s the shift that you’re seeing and that’s — that’s sort of the reason why growth has been much stronger on our own platforms versus overall in. And I think that same messaging you can see on the right-hand side and you can see how the GMV mix is changing where itself is contributing a lot more to the sales of these brands and we’re deemphasizing some of the other channels. Can move on? So as I mentioned, two major brands that we’re focusing on fashion, one is a laundryie brand. I think there’s fantastic product market fit here. It’s the number-one laundry brand on and it’s often one of the top three lingerie products on Amazon. The customer retention rates are great, the reviews and ratings are great. And we do feel that we’ve got a very exceptional product team here, which comes with a lot of experience. It’s a really tough product to make. And I think we have a bit of a moat in terms of our capability set here. On the right-hand side, 20 dresses, which is our Western Web brand, again, has crossed INR100 crores in GMV and it’s a top-five brand on fashion in the Western category. So with that, I’m going to hand over to Vishal to talk about EB2B, but just wanted to put in a note that we’re feeling very bullish about our own brand strategy. We feel it’s really coming together and we’re incubating these incredibly strong brands that are really starting to take-over or really take-off. And I think later this year, when we have the Investor Day, we’re going to lean into the story and tell you a lot more about our own brand strategy, but feeling very excited that is transitioning from being both a retailer, but now also we have our ambition on building this house of brands and we’re really developing our capabilities to do the same. And with that, I’ll hand over to Vishal to talk about the Superstore business. Thank you.
Vishal Gupta — Executive Vice President
Thanks,. So moving on to the Superstore EB2B business. We continue on our momentum to build profitable scale and you can see then in two years, we have roughly tripled our business to now almost INR950 crores GMV with a 57% year-on-year growth and we now contribute to about 8% of the beauty GMV. But I think what is important is not just growth, but also the quality of the growth and it’s a very nice balance between expansion to new retailers, which is very important as we become important to our brand partners. So scale becomes very important. But equally, we are also getting more business from our transacting retailers, which is sort of repeat behavior. It’s a very — because from 57% growth, 42% came from transacting retailers, rest from repeat business, yeah.
And we are covering up 276,000 retailers, 1,100 cities. So we are actually building meaningful scale, which is important to our brand partners. Next? Yeah, you can see from this slide as well, a very healthy order growth of 44% driven by retailer expansion. And also in quality of growth, what we sell is also important. So we are also premiumizing because that is also one of our levers to path to profitability to get more money from same orders. Yeah. Next. And no wonder you will see across all the different metrics of operating margin, we are actually improving quite significantly. We improved gross margin by almost 200 bps on the back of your mix and higher ad income. You can see fulfillment costs coming down, leveraging scale and also move from third-party to owned warehouses because we have now scaled for operating own warehouses, yeah, everywhere.
And selling and distribution cost also comes down. So overall contribution margin improved by almost 500 bps. Now double-clicking on gross margin next slide, as Adveita mentioned that she showed our good brands in beauty-owned brands. And you can see that even in our eB2B retailer network, we are able to leverage that and in a short period, we have grown almost 9x in terms of GMV and it’s now contributing to a healthy high-single-digit in our business overall. So it’s a nice space and you can see our featured brands also growing, which is our profitable brands and this drives that profitability via mix. Apart from this, this are because of scale and trust that our brand partners have on our platform, we are able to leverage that into more ad income and almost 52% growth in ad income. So all-in all, I would like to again say that we are well on our way to profitable scale with one another good quarter and another year-on that journey. Thanks. Handing over to Abhijit.
Abhijeet Dabas — Executive Vice President and Business Head for Fashion eCommerce
Yes, hi, good evening, everyone. So I’ll keep this very quick because some of the messages were already covered. So in Q4, as you see sequentially how the fashion business has performed through the year. Finally, in Q4, we are starting to see a turnaround and we are entering the next year with strong positive momentum behind us. Q4 was INR1,000 plus crore in GMV and more importantly, 18% year-on-year growth. Our estimates are that the industry growth has been much lower around, 10%, 11% by comparison. So we have grown much faster than that. And more importantly, as we head into the next year, we are entering on the back of very strong momentum. What this translates to in terms of the year-on-year numbers, we are — we closed the year at INR3,800 crore GMV, which was a 12% year-on-year growth. But also at the same time, we continue to improve our profitability.
We have delivered close to 200 basis-points improvement in EBITDA, which is structural improvement, and I’ll talk more about that as we go later on. Next slide. So one of the cornerstones of our strategy always has been to bring the best brands, both from India as well as internationally to our customers both across beauty and fashion and we have continued that plank of our strategy during this year, more than 800 marquee brands have been added across categories with some salient names which have been added in Q4 itself. I’ll just point out from this slide what those brand names are. So the likes of Victoria’s Secret in women’s lingerie, on the men’s side, multiple editions, Rare Rabbit, Snitch, the Indian Garage company, HopScotch, which is one of the largest brands in the country for kidswear and La on the homeware — on the home furnishing side. S
O these are brands which we have added just in Q4. And overall a very large number of brands added and all doing meaningfully large business with us through the year. Next slide. So along with the growth that is now back as of the last quarter through the entire year, one thing which we have consistently moved Very rapidly towards is becoming more profitable. And we have delivered 200 basis-points EBITDA margin improvement for the full-year. A large part of that has come through by consistent efforts to improve gross margin. So there is a 419 bps 420 bps improvement in gross margin over last year-on the back of more content income, but also structural improvement in gross margins for the underlying fashion business itself. We have improved fulfillment expenses by 136 bps in large measure because of lower leakages. Leakages are a structural problem in the online fashion industry, but the team has taken multiple initiatives to reduce leakages in the fashion business. We have continued to invest on the other side ahead of the curve on marketing because this is still a very young business and we have not slowed down on customer acquisition. So marketing investments have continued, which will hold us in good stead as we enter the next year as well. And we’ve also continued to invest ahead of the curve in content, campaigns and events. As a result of which marketing expenses have been higher by 350 bps. But in-spite of that, overall on the contribution margin front, we have been better compared to last year-by 160 bps. We have managed great control over our fixed expenses, which means that on SG&A and other expenses, we have delivered close to 40 bps improvement. And hence, overall on EBITDA, we have delivered close to 200 basis-points improvement. So the key message on the fashion business is that we are entering next year-on the back of great momentum and we’ll be very happy to share during the Investor Day more color on what is the plan for the years to come sir
Ganesh — Chief Financial Officer
, Bijit. So we’ll now focus on the financial performance for the quarter ended 25 as well as the full-year FY ’25. We maintained our strong growth momentum in Q4 with top-line growing by 24% and with EBITDA growing even faster at 43%, resulting in an EBITDA margin expansion and with EBITDA coming in at 6.5% for the quarter. This improvement has been driven by healthy gross profit growth, while we have continued to invest in marketing to drive future growth. Building on a strong quarter, we closed FY ’25 with a 24% growth in top-line and a 37% growth in EBITDA, leading to a full-year EBITDA margin of 6%. Next slide. Yeah, this is a snapshot of the P&L for the quarter as well as the full-year. As we can see, our consolidated profit for Q4 as well as FY ’25 have grown handsomely. Gross profit grew 28% Y-o-Y, outpacing revenue growth of 24% during the quarter and a similar trend is seen in the full-year as well. Further, there is an improvement across most cost line items, which has led to an EBITDA margin expansion by 88 basis-points during the quarter and 54 basis-points for the full-year. PAT has also — adjusting on the previous slide. Thank you. PAT has also surged by 110% to deliver a margin of 0.9% for the quarter and 0.5% for the full-year versus 0.5% in the corresponding quarter the previous year. The key point to note over here is that gross margin — the EBITDA margins have continued to grow strongly and leverage benefits have started kicking-in both on employee cost as well as on other expenses. Now we can move to the next slide. Here is a quick snapshot of our annual vertical performance.
As we can see, there’s robust GMV and NSV growth in beauty and when it comes to gross margin, there is improvement which is seen across beauty as well as fashion verticals and this has contributed to improved EBITDA margins across verticals. Moving ahead, here we can see the gross margin expansion of 134 basis-points, which has been delivered in FY ’25. In the Beauty business, the improvement stands at 90 basis-points and this is also aided by strong performance of our own brands. In fashion, higher-service and marketing income contributed to gross margin expansion of 419 basis-points. Moving ahead, continuing with some of the other cost line items, here we see a trend in fulfillment expenses. As a percentage of NSV, these costs have remained largely flat while we are focused on improving our order-to-delivery timelines. So this has led to overall efficiency gain at one-level with fulfillment expenses standing at 9.5% of NSV.
Yeah, we can move to the next slide. As we have seen in some of the earlier presentations, Abhijit mentioned about it, mentioned so also Anchit, we have been focusing on investing beyond accelerated customer acquisition and this is reflected in the increased marketing investments in the year I mentioned a while back about leverage benefits starting to show-up and this is something which is very clearly reflected in this slide where leverage benefit started to kick-in with a 37 basis-points improvement when it comes to employee expenses, while other expenses are also showing improvements from here. That brings us to the quarterly vertical reporting. Here again we can see scale efficiencies being seen across cost line items and margin expansions are being seen while marketing investments have continued to move-up. So overall, overall, this is a picture where cost efficiencies across multiple lines are coming through and this is helping us to invest further in marketing. And that’s a reflection of the full-year vertical which shows a similar trend. Coming to some of the balance sheet items.
We had mentioned in the past that our peak capex was in the year FY ’22 and FY ’23 where coming out of COVID, we had invested in-office space, warehousing capacity on the back of our regionalization strategy, we had increased significantly, in fact by 70% in FY ’23. From there, as we had indicated, there is a moderation in the overall capex. So FY ’24, it was at INR115 crores, which is now at INR128 crore in FY ’25. What this has done for us and we can see in the chart on the right-hand side is bulk of it is coming through our investment in tech as well as in the expansion of stores. Anjit mentioned about 50 stores being rolled-out during the year and that is getting reflected over here. Next one. Focusing on-balance sheet and efficiency in terms of capex. Fixed asset turnover is steady at 9.1%. That’s a significant improvement in working capital with reduction in both inventory days, receivable days as well as improvement in payable days.
So this has — this is reflected in the form of working capital days coming down to 34 from 42 a year back and with ROCE now in double-digits and going up to 11.3% next slide. This is a summary of our balance sheet. So as you can see, what stands out over here is the working capital reduction with working capital days coming down from 42 to 34 days. What this is also reflecting is improved cash-flow position, which you will see in the subsequent slide. So the operating cash-flow now stands at INR467 crores. And what I would like to also point out is after lease payments as well as capex, there is still a significant amount of surplus cash. So this is a reflection of the strong cash flows that we have started to generate over-time. Yeah. And just to just to round-up, this is a summary of the business restructuring for streamlining operations, which we had announced earlier. We would like to update — update all of you that in May 2025, we received NCLT approval for both the schemes, which is the merger of LBB into fashion. LB was already 100% subsidiary of the fashion business. The other one is the demerger of our Superstore business into Naikai Retail. Both of these have received NCLT approvals and the financials now factor that in. Needless to mention, there is no impact as far as consolidated financials are concerned, what this will do for us is it will unlock synergies and lead to greater operational efficiencies going-forward. Yeah. With that, I would like to open the floor for Q&A
Questions and Answers:
Operator
Thank you, Ganesh. We will now Begin the question-and-answer session. If you would like to ask a question, please click on the Ask a Question tab and separately you can type-in your questions in the text box provided. Before asking the question to the management, please introduce yourself providing your name and your organization name. If possible, you must switch on your video as well. Please limit yourself to 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 assembles the first question is from Sachin Salgaunkar from Bank of America please accept the prompt on your screen unmute your audio we don’t proceed with your question
Sachin Salgaunkar
Hi, thank you for the opportunity. I have two questions. One on the BPC business, one on fashion. On BPC business, the question is how should one think about steady-state margins? For last couple of years, the margins are hovering in the range of 8.7% to 8.9% and would love to understand some of the levers in this direction. And separately, also wanted to understand how is the traction for the fast delivery, what Nyka has introduced in terms of 10 minute to our same day next day delivery? And is there an intent of expanding that into other cities? And second question is on fashion. Again, similar question, what could be the steady-state growth one could think about from a fashion industry perspective, the industry was clearly going through a slowdown last year. Are we out of that slowdown and should we start the growth accelerating?And any changes to your EBITDA breakeven guidance out here.
Adwaita Nayar
Maybe I can kick-off with the beauty questions and then we’ll come to fashion. So I think, Sachil, on your first question around the margin outlook for the beauty vertical, I would again just encourage you to remember that the beauty vertical consists of three different businesses with very different margin profiles. So of course, you’ve got the beauty multi-brand retail business, then you’ve got the owned brands business and you’ve now got EB2B as well. And as we’ve shared in the past, all three have considerably different margin profile. So I think each business individually, especially on eB2B as well as owned brands definitely shown improvement in the margins and we’ll continue to do so. The beauty multi-brand retail business, I would say, is in a very, very healthy place in terms of its margin profile and we are focused on continuing to reinvest in customer acquisition on that front.
So the outlook for the margin profile for the entire vertical is in a way also an outcome of the way that the mix evolves. Some of — in a way, the mix is really at play here. If own brands and EB2B, which currently have a lower-margin profile than the multi-brand retail business, if they continue to grow faster than the retail business that could put some downward pressure on margins at the consolidated beauty level. But as I mentioned and I’ll emphasize again, all three businesses individually are improving their margins you just — there’s probably just a bit less scope to do so on the more established, mature beauty retail multi-brand retail omnichannel business. So that’s the answer to the first question.
Regarding our Nika Now, which is our — which is our rapid delivery that we’ve rolled-out, today that is live in multiple cities, majority — majorly the metros. And we have seen relatively good traction and a good percentage of our orders are now being fulfilled in those metros, which are being serviced through now through this rapid delivery framework, which is ensuring delivery within 60 minutes. And so that is now very, very convenient for the consumer. So that is live and it’s now well beyond the test stage in a few key metros. There is a plan to expand it to several other metros in the coming months. But again, we will — we will probably update you more in detail on now at the Annual Day, which we will do later in the year and in the coming months actually. But we are seeing very promising traction on that front.
One thing I’ll mention there is the key differentiator for us is we will have the — we have the largest assortment of beauty products available through our rapid delivery network. We’ve made a lot of our assortment available for now and that’s really been a big differentiator to the consumer to have that power of choice, which is still, I would say, not as well-developed on some of the other rapid delivery platforms that are out there. I’ll pause there, see if there’s anything FL would like to add otherwise Abhijit can go-ahead on the fashion, please. No, I just wanted to say we are also building it in a way with a promise of within two-hour delivery with most likely delivery timelines of 60 minutes, which is a better way to build a beauty or beauty or quick commerce business.
Sachin Salgaunkar
And, just a quick follow-up out here. When we talk about steady-state margins, any number in mind? I do understand the margins are improving and the mix matters a lot.
Falguni Nayar
It’s difficult to guide towards that, but the reality is that every — I mean the way to improve margins would be our higher own brand mix, higher-service income, including marketing and better-quality brands that give us the value what brings to the table and hence are ready to give better margins. We see that even in our eB2B business and also in beauty business and in fashion business. So I think there’s just so many drivers that it’s hard-to-do the same. But I think Nyka likes to work on all of that to try to improve margins over a period of time. Thank you. Yes, hi. So I’ll quickly also answer the two questions on fashion.
Abhijeet Dabas
So Sachin, your first question was, are we now finally coming out-of-the rather stagnant period of growth for the industry as a whole. So look, I think long-term, the view on fashion as an online business still remains that we are — as a country, we are just very underpenetrated still on online penetration in terms of the overall fashion category, which still remains true. Particularly coming out of COVID for a few years, during COVID, many online businesses grew very fast, only then to be corrected a little bit because many shoppers who bought online were maybe pre-COVID, more you know more accustomed to buying online and offline. Some of those who are purely buying online during COVID may have gone back to buying offline again and hence some correction in the industry numbers was due to happen in the years coming out after COVID.
As far as our business goes, our — like we mentioned before, it’s a business which is — which is very fashion first, which is very trend first and we anchor on working with key brands, with marquee brands. As a challenge actually most brands are also facing, brands today are also moving — trying to move to a world where online selling for them can also move away from discounts and more towards passion-based selling, storytelling, things like that. And in that sense, a platform like becomes a natural choice for — for most brands of any salience and we are seeing a lot of traction in being able to partner with brands on those fronts. So irrespective of how soon the industry overall recovers. I have confidence that we will continue to build-on the momentum we have hit in Q4 and continue to build from there because directionally, we are headed in the right direction and we are playing to our strengths.
So fairly confident that numbers will continue to look up. On the second question that you asked, which is any guidance on margins, again, same point that Anchit made, we’ll talk more about this and for longer duration during the upcoming Investor Day. But structurally, even during this year, we have made structural improvements towards profitability. The 200 basis-points I spoke about are not one-off improvements. These are structural improvements, which even as scale comes back, they will stay because we are trying to address challenges to profitability with a long-term nature in mind, things like leakages, which sooner or later we have to solve.
So improvements which are coming in because we have chanced upon solutions which help us reduce or control leakages, those are structural in nature. Similarly, being selective about which brands we work with and keeping our unit economics healthy from the get-go, get-go are structural ways of building the business, right? So I think structurally, we are making improvements. Actual guidance, maybe this is a Investor Day will be a better time to talk about it.
Sachin Salgaunkar
Got it. But you guys are reiterating your guidance of breakeven of fashion by FY ’26, right?
Abhijeet Dabas
We’ll share more in the — during the Investor Day, which is just in a few weeks from now.
Sachin Salgaunkar
Okay. Thank you.
Abhijeet Dabas
Thanks.
Operator
Thank you. The next question is from Kapil Singh from Nomura. Please accept the prompt on your screen, unmute your audio-video and proceed with the question sir,
Kapil Singh
Hi, good evening and congratulations on a good performance for the quarter. My question is on the fashion business. I just wanted to understand whether you feel that looking at what’s been happening in the beauty business on the offline retail, do you think this is a business which requires a stronger presence in the offline, given the category might require more touch and feel from the consumers. So just some thoughts around that. And secondly, are there any new categories of for example, things like wellness, etc., which could be relevant for
Falguni Nayar
Yes, I’ll answer both. So I think on physical retail, we must remember that most physical retail multi-brand retail stores have at best 60 to 80 brands and what sells online is too many number of brands. And as a result, you know the role that the physical retail has in a large geographically diverse market like India is meaningful, but limited and both will have to go hand-in-hand so and is definitely going for representation in top 100 cities of what we call as destination stores in top cities and also we are trying to do more through kiosks for own brands. So I think there’s a fair amount of physical retail representation. But I think India will have a very reasonably large importance of e-commerce because of the number of brands and the reach that they can provide to cities beyond top 100.
So I think the structure of Indian economy and consumption is such that e-commerce will remain very, very relevant. But is doing a lot of investment in physical retail and we think we are far ahead of anybody else on this kind of network rollout. On your question about the wellness, yes, that remains an interesting category, which has in the past overall are not taken consumer fancy, but I think globally and also in India, we do believe that increasingly wellness and wellness both through products and also sometimes through services will be something that the beauty consumers also will embrace and clearly would — is watching and would have meaningful role. We already retail wellness on our platform and it’s growing rapidly and we will continue to grow that rapidly. We have a social media and we focus on wellness and we support a number of brands and there’ll be a further increase in that.
But yes, not I don’t mean health, but wellness, which is more like long-term sustainable beauty is what remains interesting area for. Thank you and you can see wellness week here that we had done
Operator
Thank you, ma’am. We’ll take the next question from Sachin Dixit from JM Financial. Please accept the prompt on your screen, unmute your audio-video and proceed with the question, sir.
Sachin Dixit
Hi, congrats on a great set of results. My first question is with regards to beauty business largely. So — and considering we have now decently broad-base of offline distribution in beauty, right? Is there any color that you’re able to share on the customer overlap or consumer behavior between online and offline that you have seen so-far?
Vishal Gupta
Yeah, sure. Maybe I’ll kick it off. Yeah, we’ve always said that in India, you know there is nothing like an exclusively online consumer nor an exclusively offline consumer. I think especially in this millennial generation and beyond, consumers have different use cases for different based on the journey, right? So online lends itself very well to replenishment and convenience and things like that, whereas in-store experiences lend themselves well to education and learning more about products and how to apply them and how to incorporate beauty into your everyday routine. So there are different use cases for different channels and we see a lot of overlap between our consumers where consumers who shop in our stores then tend to come and purchase online and vice-versa, consumers are shopping in online, we also do actively send them into stores where they can possibly premiumize themselves in terms of the kind of products they’re buying and also the ASP at which they’re buying.
So we see a lot of overlap. We think consumer is actually one and the same by and large for the most — majority of consumer is very, I would say, channel agnostic or open to experimenting and transacting in both channels. And that’s why I think it’s so important actually for every retail — for most retailers to have, especially in the beauty industry to have the — give consumers the opportunity to transact in either channel and not just be e-com only or offline only. And that’s something — that’s a call we took, as you know, many, many years ago, almost 10 years ago. And we have steadily continued to expand that offline footprint. So we see a lot of synergies and a lot of benefits to our business because of the fact that we are able to offer both online and offline at-scale, which is something that currently doesn’t — we don’t see anybody doing it at the scale, which we are in India.
Sachin Dixit
Anything on number overlap, Anchit, like how many customers are projecting on both channels?
Anchit Nayar
And I don’t know if we’ve disclosed it in the past, so I don’t want to — I don’t want to say anything right now. But what I can say is that it’s a very, very significant percentage of our customer-base. It’s a meaningful percentage of our customer-base is transacting across both online and offline.
Sachin Dixit
Got it. Thanks a lot.
Falguni Nayar
I think — no, no, I think the one has to understand it. So I think there are — it basically it all depends on the pin code also. So a lot of our customers are from pin codes where there is no stores. So obviously, those are on e-commerce customers. So the weight of physical retail in the total customers and total customer engagement has to be seen in that light. So there are many brands also on a similar basis. But yes, for the brands that do omnichannel, both channels are very important.
Adwaita Nayar
Yeah, I think that’s a very, very important caveat, which is for the PIN codes and for the brands where both is an option, then you see a very strong overlap. But again, as we say, e-commerce, we’re able to ship to over 20,000 PIN codes in India across the length and breadth of the country, whereas our stores, even at 237 stores, we’re only touching 79, 80 cities and it seems it’s obviously a very large number. But if you look at it in a country like India, it’s still — there’s still a lot of space that is unaddressed and that’s better addressed through e-commerce because just reminding you, we are not a local store type format. We’re not a local pharmacy type format. Our stores are destination stores. They are large-format, you know, they’re large plate, large-format experiential stores, right?
And that’s because we believe this category is high on experience, high on aspiration. And so we have tried to maintain that positioning for our stores as you can see from this imagery. So, yeah, I think as mentioned, I think for the relevant and the relevant brands, it’s a very meaningful mix. I think I want to just say that having stores is asset for a strong commerce player, but only store network cannot — replace the e-commerce. I think global data also supports and I think it’s similar in India that the number of times the customers buy on e-commerce is far more engaging than in physical retail. So I think the two used in together is the best way to build rather than the only reliance on physical retail will not get you to the right dominance in beauty. And I think e-commerce is the first step along with our physical retail, which ends up being valuable only for the premium brands.
Sachin Dixit
Fair enough. Thanks so much. My second question is for Ganesh. On the operating cash-flow side, Ganesh, obviously, we see a very, very sharp improvement Y-o-Y and looks like there was very strong control on receivables as well as improvement on payables. Can you qualify what has gone through? What have you really done to ensure that these improvements happen because there is a very remarkable improvement there?
Ganesh
Yeah, thanks. Thanks for the question. So needless to mention, it’s a greater focus, greater cross-functional alignment, which has actually resulted in a we being able to manage working capital far more tightly than we have done in the past, not that it was not happening in the past. What has really changed is that is far greater focus which has come through and which is why you’re seeing the benefit flowing through across inventory, Across receivables, across payables. It’s actually tightly — tightly controlling that. That’s really what’s happened.
Sachin Dixit
Got it. All right. Thank you.
Operator
Thank you. We’ll take the next question from Vidi Shah from Ambit Capital. Please accept the prompt on your screen and mute your audio-video and proceed with your question mam
Unidentified Participant
Yes, hi. Thank you for the opportunity. So my first question — actually both of my questions were on the fashion business. The first one was what explains the improved GMV growth momentum in this segment? Because even the order growth has been ahead of the EUTC growth for the quarter. So if you could elaborate on the initiatives undertaken, which have gone right because the proposition has not really changed. Even earlier, the focus was on differentiated and premium assortment. So that would be my first question
Anchit Nayar
I’ll take that. I think you’re right, the proposition has not fundamentally changed, but I think it’s just a function of onboarding, first of all, the right set of brands and just continuing to do deeper engagement with the brands. And we spoke a little bit about what new brands we have onboarded during the quarter. So the likes of Victoria’s Secret or a Rare Rabbit or HopScotch always the online platforms, our experience has been that when we add strong brands, business tend to be incremental in nature. It doesn’t cannibalize existing business because we are always able to unlock new use cases from sometimes the same customers as well as acquire new customers on the back of great brands.
So that’s one. And secondly, this is the reason why I mentioned that this being a young business, what we have not slowed down during the year is new customer acquisition, including in this quarter and all the new customers acquired in previous quarters, in more recent quarters actually lead to the tailwinds as we head into subsequent quarters. So it’s a combination of continuing to acquire new customers and just continuing to build better assortment and just strengthening the assortment, which has led to better growth during the last quarter.
Unidentified Participant
Got it. And the second question was, when I look at your segment-wise performance in the filing, I that the capital employed for the fashion segment has decreased — sorry, the asset for the fashion segment a particular reason for the same?
Falguni Nayar
Fashion business is not very asset-heavy because we are focusing on building more-and-more brands through marketplace than inventory-led. And the inventory-led business is mostly restricted to fashion’s own labels. Okay. So that’s why we’ve seen decrease in capital.
Unidentified Participant
Got it. Got it. Thank you.
Operator
Thank you. The next question is from Abhishek Benerjee from ICICI Securities. Please accept the prompt on your screen, unmute your audio-video and proceed with the question, sir
Abhishek Benerjee
Hi, my first question is to Vinesh. Sir, on the working capital, sir, on the working capital bit, right, is there any impact of mix improvement given where the mix has changed from fashion to beauty in the last one year?
Unidentified Speaker
Okay. Overall, if you look at it, the change which has come about, which is not very pronounced, but a change all the same is the increased salience in the superstore — superstore business, which is within the beauty vertical. But overall, overall, as I mentioned a while back, it’s far greater and tighter control, which has resulted in reduction in working capital
Abhishek Benerjee
So any guidance on where this number can go over the next couple of years?
Unidentified Speaker
Yeah. So we are currently very close to a month-in terms of net working capital. So I would say — I would say from here, yes, obviously, there would be a more-and-more improvement opportunities, but unlikely to be as steep as what you have seen in the current year.
Abhishek Benerjee
Understood. And one more question to Anchit, if you could. So when you are asking about margin improvement in beauty business, you are actually kind of indicating that we are at a high-margin already, which I’m not denying, but given the kind of value-add you give for the brand, do you not think that you are probably giving some margin on the table?
Anchit Nayar
I think I think it’s like an age-old debate between retailers and brands. So yes, of course, I’ll — there’s always scope for more. No, look, I think — again, I’ll just reiterate. I think each of the three businesses that sit within the beauty vertical have scope to improve their margin profile, right? So even if I look at the main business, which is the beauty multi-brand retailing business, there is scope to continue to improve marketing income by creating more advertising opportunities on our platform, which we have been doing over the past several quarters. And I think we might have spoken about it in the past, but we are creating a lot more advertising opportunities, middle of funnel as well as lower funnel on a platform that historically used to be a top of funnel advertising platform.
So now we’re creating across the funnel opportunities. We’ve built a campaign manager that now allows brands to bid for and manage their own ad inventory on our platform and they are therefore able to take real-time decisions and invest much more frequently in advertising. So there is — and also we are now with personalization, we’re also enabling for smaller brands who earlier were not able to afford to advertise on our platform to be able to now advertise on the platform. So I think there is a lot of initiatives behind our ad — our ads business that I think can have a positive impact on advertising income or services income as we Call-IT. That’s one opportunity. Second is, you know, as mentioned, if our own brands continue to outperform the way they have done over the past several quarters, that can also be margin-accretive.
And thirdly, there is obviously operating leverage and benefits of scale. If we continue to grow our GMV at the clip at which we are, a lot of the costs like employee and G&A that will obviously not scale at the same level. So there is there is room for improvement there. So even in an established business like the beauty retailing business, which is already at very healthy margins, there is scope for improvement. And then when I look at our own brands as well as our B2B, eB2B business there, as we’ve said in the past, we’re still not where we want to be in terms of margin and that will come as those businesses get a bit more mature and as they get to a better mix in terms of repeat versus new customers and they continue to bring, as you can see on this slide, EB2B is continuing every year to bring its fulfillment cost-down, its S&D cost-down and improving its gross margin as well.
So again, as I said, all three businesses will, you know, will improve their margin profiles. And ultimately, how much of that is seen at the consolidated level is going to be an impact of mix, right? So you know, know that’s the best I can really explain it to you I hope that’s helpful.
Abhishek Benerjee
So those are my questions thank you.
Operator
The next question is from Tejas Rane from Bernstein. Please accept the prompt, unmute your audio-video and proceed with your question, sirMr Rane, please accept the prompt on your screen Mr Rane, please accept the prompt and unmute yourself and speak as the current participant is not answering, we’ll take the next question from Abhinav Yaddar from Fort Lion Capital. Please accept the prompt, unmute your audio and proceed with your question, sir Mr Abina, please accept the prompt on your screen, unmute your audio-video and proceed with the question sir we’ll Take the next question from Avi Mehta from Macquarie, please accept the prompt on your screen. Unmute your audio, we don’t proceed with the Mr Mehta please accept the prompt on your screen, unmute your audio and video and proceed with the question sir
Unidentified Participant
Hello. Am I audible?
Operator
Yes, sir.
Unidentified Participant
Yeah, hi. Hi, team, I just wanted to kind of ask on the fashion rate. We’ve — for the last few quarters, we’ve gone on this journey to reduce losses and that has been in the period of a weak — weaker growth environment as well. You pointed towards expectations of a recovery or some sort of a change in that momentum, does that in any way require us to start putting investments back-in the front versus margins? How should I kind of look at that is something that I would love to understand from you. Second bit, if I may just kind of conclude is on the gross margin side. We’ve seen in the beauty side a very good improvement in the gross margin profile and congratulations on that. Would it be possible for you to give us some qualitative understanding of how does this flow-through in each of the sub-segments? Is this more a mix thing or is that the MBO or the multi-brand retail is also seeing — or each of the segments are seeing a diverse gross margin performance? That those are the two questions. Thank you
Anchit Nayar
I’ll take the fashion question first. So like you rightly observed, we are seeing the growth momentum coming back. I think by our estimates, industry growth is still slower or has not recovered back to the same levels as it was a year-ago. It is still in the 10%, 11% range. But we know as a combination of various initiatives, we have taken a growth in our case is definitely coming back and we are also seeing green shoots as we head into — as we are in the first few months of this new financial year. So that we think is sustainably going to be there. And if you recall the margin numbers that we shared a while ago, unit economics even for the fashion business has significantly improved over the last year. So with higher scale, I think we are looking at overall just more controlled burn.
So we’ll just continue to move faster towards profitability with better growth coming on-board. On the gross margin side, flowing down to the contribution margin side, you know you’ve seen a significant improvement. Marketing expenses also will get better because the way this works is that the more new customers we acquired today, the more within the repeat customer-base, we have more recently-acquired customers, which in general tend to get activated with a lot better marketing efficiencies. So this just becomes a virtuous cycle where new customer acquisition cannot be slowed down for a new business because that feeds into the customer-base that we target tomorrow and the ROI on targeting those customers is significantly better. So you will also see in the quarters to come, marketing efficiency improved significantly because we kept on investing into new customer acquisition throughout a year when acquisition or business in general was slow.So healthy unit economics. In summary will mean that we will continue to get better on EBITDA successively for the fashion business.
Unidentified Participant
Okay. Just a follow-up. I mean, the reason why I was asking is if I look at 4th-quarter versus the last few quarters, while I do acknowledge the full-year, it’s encouraging to see the 4th-quarter versus the last few quarters, there has been a change in the profitability profile. So I was just trying to appreciate this better or how should we kind of build it going-forward between growth. So is the 4th-quarter having some one-off, which is why there was a loss there?
Abhijeet Dabas
No. So I think the 4th-quarter, if you look at the overall fashion vertical, like we mentioned before, the private-label portfolio grew slower than the platform business overall. The largest part of the business is still the fashion platform on which structurally as well as sequentially have been — it has been very healthy on the gross margin front. But when we include everything else, including the private-label portfolio, particularly where we have chosen to go, as mentioned in the House of Brands section, we’ve chosen to go much lower on certain third-party channels consciously in this year, including that, it may seem like the margins — the margin growth is not as much as you would expect on a sequential basis.
Unidentified Participant
And on the other part the beauty side?
Anchit Nayar
Sorry, would you mind repeating the question on beauty?
Unidentified Participant
Sure. Sure, Ranjay. So if I look at the beauty performance, whether it’s on this in a 4th-quarter basis or even for full-year basis, we’ve seen gross margins continue to perform well. Just wanted to appreciate whether this is — how much of it would you kind of — if you could give us some qualitative comments on whether each of the individual segments, how is this behaving and whether the competitive concerns that we had on the private side, our private — our own brand side is now behind us.
Anchit Nayar
Yeah. So I think qualitatively, obviously, as I said to the previous questions around the margin profile is that each business continues to improve the gross margin, you know, they just have different degrees of improvement that are possible given the stage of the business, right? So EB2B probably has meaningful scope to improve relative to where it is today. Our own brands definitely has a healthier gross margin because like any — any consumer brands business, the gross margin does tend to be can be — is higher relatively than the retailers, but there’s still room for them to improve there and they have made some improvement. And as I mentioned in my remarks regarding the ad income, there is also opportunity for gross margin improvement in the multi-brand beauty retail business, not only through ad income, but also through a mix of what we sell on the platform. So if premiumization and the sale of more prestige and luxury-goods continues to play-out the way it has, then that should also be a net positive.
Unidentified Participant
Okay. So across — and competition is no longer an issue, right? The price-based competition that you had earlier alluded to, that’s now no longer a concern?
Anchit Nayar
I think that comes and goes. It’s very difficult to understand the thinking sometimes for us, we are — we really think long-term, we think about we need to build this category the right way for ourselves, for our brand partners and for our consumers to really engage with beauty in the right way, which means making the decisions for the right reasons, right, buying for the right reasons, which is not necessarily price. We do want to offer value and we want to offer the right price for the right product, but we think well beyond that. And I think there are some — some players in the market who are maybe a bit more short-term thinking in their approach to how they play this segment. And so maybe at times when other categories are weaker, they tend to try to generate some acceleration in beauty to offset that weakness in other categories.
So it’s difficult to give you a definitive answer whether this is behind us. It seems to be for now, but you never know, it can come — it can come up at any time. It’s not the right way to do — to build this category and our brand partners generally do not like it because it dilutes their equity. And hopefully, this is not going to — this is not going to be a big issue in the coming months and quarters, but I can’t give you any guarantee on that.
Unidentified Participant
No, fair enough. Thanks a lot for this and hope to see you in the physically now. Thank you very much again
Operator
Thank you. The next question is from Sheila Rathi from Morgan Stanley. Please accept the prompt, unmute your audio-video and proceed with the question ma’am
Sheila Rathi
Hi, can you hear me?
Operator
Yes, ma’am, you’re audible. Please proceed.
Sheila Rathi
Yeah, thanks for taking my questions. My first question was actually on the business. I just wanted to get a sense on what is — what is really driving the growth and profitability for this business? Is it expansion into new markets? Is it a result of repeat behavior? And is it the expansion of the portfolio which we are distributing? And also some sense on what is the mix of owned brands in this distribution? So that was my first question.
Falguni Nayar
May I just say that all of that answer is yes, but it’s a — at this call, it’s now towards the end-of-the questions. It’s going to be very hard. If you can just wait for the annual meeting that we’re going to have very soon, you will get answers to it all because what the way we are growing is all, it’s not just expansion of geography True Style, it’s trying to improve margins, it’s trying to get more brands, it’s trying to get high-quality retailers, repeat customer behavior, all of that. So I think it’s better we discussed it in the Annual Day.
Sheila Rathi
Any sense,, if I could get on how we should think about the F ’26 outlook for that business? Any broad
Falguni Nayar
Have to invest for few more years before it gets to profitability. We’ve given that long-term guidance last year and we’ll update that again this year. We also do a lot of work on longer-term guidance before the annual meeting, so it’s better answered then rather than off the cuff, but I just wanted you to know that it’s all going-in the right direction, but we’d share them. But nothing, it’s all you’re building a solid business for the long-term, not that long-term, but it needs work. It’s not — nothing is going to change overnight. And but it’s a solid capability that we’re building and I already see a lot of our great — I mean large brand partners recognize and value this capability. But still one is path to profitability and other is margin improvement eventually in this business is — it’s a — it’s a business that is unique and it will need work on to get to the right levels. But as Naka does more for the brand partners and beauty is a large business with lot of brands, I think one can get to better margin structures so that pays for the business.
Sheila Rathi
Got it. And a quick one on now. Are we really using any of our physical store network for the fulfillment?
Falguni Nayar
No, we are not. No, that’s not the model. It’s,
Abhijeet Dabas
No, no, I think maybe I’ll just caveat that. So, yes, I think to FN’s point, Nika now is being done in a more traditional rapid delivery quick commerce type model, which is to leverage the dark store concept or as we Call-IT the micro fulfillment centers. But that being said, we have the capability, which we have built actually during the pandemic, during COVID, which is to service what we call as hyper-local deliveries. So using our physical stores to service e-commerce orders in that relevant PIN code. So that capability exists. We do use it and it is — it is used predominantly for luxury products. But you know, as we’ve always said, our stores are destination stores, they are in relatively expensive real-estate because we like to be a destination — aspirational store. And so it’s not — it doesn’t make the most fiscal sense to use them as warehouses.
But yes, we do have the technology is built and we do use it to dispatch certain products and certain assortment to consumers from the stores. Understood. Hopefully hear more details about now at the Analyst meeting.
Operator
Thank you. Thank you. Ladies and gentlemen, that was the last question we can take today. You may reach-out to 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.
Falguni Nayar
Okay. Thank you. Thank you, everybody. Thank you for being with us and we really appreciate your time you spend with us.
Anchit Nayar
Thank you. Thanks, everyone.
Abhijeet Dabas
Thank you. Bye-bye.
Operator
Thank you. Thank you, members of the management. On behalf of FSN E-commerce Ventures Limited, we conclude the conference now. Thank you for your participation and you may exit the meeting. Thank you