FSN E-Commerce Ventures, the company that runs beauty and fashion platform Nykaa, will buy an 82% stake in makeup brand Simply Nam for up to ₹33 crore. The board approved the deal alongside the September quarter results, according to Inc42.
The deal is small for Nykaa. But it adds a new name to House of Nykaa, the group of brands Nykaa owns. These owned brands helped lift the company's margin this quarter.
What Nykaa is buying
Celebrity makeup artist Namrata Soni started Simply Nam in 2020 with Bozzil, according to Economic Times. Bozzil is a venture studio founded and led by Hanna Strömgren Khan. A venture studio is a firm that helps build new brands.
Inc42 said the brand sells premium makeup made for Indian skin tones, Indian weather and everyday routines.
Nykaa will buy the stake on a fully diluted basis. This means the count includes shares that could be created later, such as employee stock options. Soni will keep an 18% stake. She will stay on as Co-Founder and Chief Product Officer (CPO) and work on product development, marketing and brand strategy.
Inc42 said the deal is expected to close by 31 December. Simply Nam will join Nykaa Cosmetics and Kay Beauty in Nykaa's colour cosmetics range.
How big the deal is
Inc42 gave Simply Nam's turnover for two years. The table puts it next to the deal price.
| Item | Amount |
|---|---|
| Simply Nam turnover, FY25 | ₹9.6 crore |
| Simply Nam turnover, FY26 | ₹17 crore |
| Growth in FY26 | About 77% |
| Price for 82% stake | Up to ₹33 crore |
| Rough value of the whole company (our calculation) | About ₹40 crore |
We got the last row by dividing ₹33 crore by 0.82. It is only a rough guide, because the final price may be lower than ₹33 crore.
On that rough basis, the deal values Simply Nam at about 2.4 times its FY26 turnover (our calculation). Its full-year turnover of ₹17 crore is less than 1% of the ₹3,006 crore revenue Nykaa earned in one quarter (our calculation). So the deal will not change Nykaa's results much in the near term.
Why owned brands matter to Nykaa
A seller usually keeps more from each sale of its own brand than from a sale of someone else's brand. For example, a kirana store earns more per kilo on rice packed under its own label than on a big-brand pack.
Nykaa's numbers fit this idea. Economic Times said gross margin rose 106 basis points to 46%, from 44.9% a year ago. It said a bigger share of House of Nykaa sales and higher marketing income helped.
According to Inc42, House of Nykaa crossed an annualised gross merchandise value (GMV) run rate of ₹4,000 crore, up 40%. Its annualised net sales value (NSV) passed ₹2,300 crore, up 36%. Economic Times said these brands have served more than 19 million customers so far.
In the quarter, Kay Beauty moved into skincare. Dot & Key added new sunscreen shades, and Nykaa Cosmetics worked with Sara Tendulkar on new lipsticks, Economic Times reported. In September, Nykaa also teamed up with BOLD, the corporate venture capital fund of L'Oreal, to invest in Indian beauty and personal care brands, Inc42 said.
The quarter behind the deal
The Hindu BusinessLine listed Nykaa among the companies that reported higher Q2 profit. The table compares the September quarter of FY27 (Q2 FY27) with the same quarter a year earlier, using Economic Times figures.
| Measure | Q2 FY26 | Q2 FY27 | Change |
|---|---|---|---|
| Net profit | ₹33 crore | ₹101 crore | 207% |
| Revenue from operations | ₹2,346 crore | ₹3,006 crore | 28% |
| EBITDA | ₹159 crore | ₹263 crore | 65% |
| EBITDA margin | 6.8% | 8.7% | Up 196 bps |
| Gross margin | 44.9% | 46% | Up 106 bps |
Profit grew much faster than revenue, so Nykaa kept more from each rupee of sales. EBITDA is earnings before interest, taxes, depreciation and amortisation, and EBITDA margin is EBITDA as a share of revenue.
Beauty NSV rose 28% to ₹2,536 crore, and beauty EBITDA rose 51% to ₹267 crore, Inc42 said. Fashion NSV grew 47% to ₹509 crore. Fashion EBITDA was ₹1 crore, against a ₹12 crore loss a year ago. Our full review of Nykaa's Q2 FY27 results has more detail.
The sources differ slightly on some numbers. Inc42 put net profit at ₹101.2 crore, up 206.8%. Economic Times said ₹101 crore, up 207%. Economic Times and Inc42 said EBITDA rose 65%, while NDTV Profit said 65.6%. We could not confirm which figure is exact. Readers can check the company filing on the BSE or NSE website.
Risks to keep in mind
For a small investor, the Simply Nam deal is a step to build the brand range. It is not a big event for Nykaa's earnings. Keep these points in mind:
- Past growth is no promise. Simply Nam's turnover rose about 77% in FY26, but small brands can slow down.
- The deal is not done yet. It is expected to close by 31 December, and the price is "up to" ₹33 crore.
- Margins are thin. An 8.7% EBITDA margin means about ₹8.70 of EBITDA on every ₹100 of revenue, so higher costs can hurt.
- Fashion has only just turned EBITDA-positive, with a 0.2% margin on NSV, according to Economic Times.
- None of these reports said how Nykaa's share price moved. Good results do not always lift a share price.
What to watch next
- Whether the Simply Nam deal closes by 31 December.
- Whether gross margin stays near 46% as House of Nykaa grows.
- Nykaa Now, the company's quick delivery service. It is in 15 cities and aims for more than 25 by the end of FY27, Economic Times said.
- Fashion profit, which was just ₹1 crore of EBITDA this quarter.
For more company deals, see our business section. For other quarterly numbers, visit our results page.
Words explained
- GMV: The total value of all orders placed on a platform, before returns and cancellations.
- NSV: The value of sales after returns, cancellations and discounts are removed. It is closer to what a company really sells.
- Annualised run rate: A recent period's sales stretched to a full year. If a shop sells ₹10 a month, its annual run rate is ₹120.
- EBITDA: Earnings before interest, taxes, depreciation and amortisation. It shows profit from the main business.
- EBITDA margin: EBITDA as a share of revenue. A 10% margin means ₹10 of EBITDA on ₹100 of sales.
- Gross margin: The share of sales left after paying for the goods sold.
- Basis point (bps): One-hundredth of a percentage point. 100 basis points equal 1 percentage point.
- Fully diluted basis: Counting all shares, including shares that may be issued later, such as employee stock options.
- Corporate venture capital fund: Money a big company sets aside to invest in young businesses.
Sources: Economic Times, Inc42, NDTV Profit, The Hindu BusinessLine.
This article is for information and education only. It is not investment advice. MarketUpDown is not registered with SEBI as an investment adviser or research analyst. Read our disclaimer.