FSN E-Commerce Ventures Limited analyst Q&A

Thank you, sir. We will now begin the question and answer session. The first question is from Kapil Singh. Please introduce yourself and proceed with your question.

Okay. This is Kapil from Nomura. Congratulations on a very strong performance for the quarter as well as for the year. As we are starting a new financial year so I thought that it would be appropriate to ask your outlook for the next year and all the key s egments, what are your thoughts, both in terms of growth and margins? We are seeing some signs of inflation as well. So any thoughts there? How does it impact demand and margins?

I think it's really hard to make forward -looking statements, but I have to admit that April and May have been good overall for the business in terms of the growth momentum. However, you are right that the global concerns, which are being translated to high currency and oil prices, I mean, high oil prices and depreciating currency and its impact on inflation and through that consumption makes us cautious for the next year. But I have to admit that we are definitely seeing benefits of AI -led growth in our business for sure. So, it will be a combination of the two . There will be some general global concerns, but we also do see opportunities for businesses like us to benefit from current developments on AI. And the benefit is both on top line as well as costs.

Sure. So broadly, we can sustain somewhere in the same growth zone we have been for last few quarters?

Except for the general environmental concerns, we are not seeing any specific concerns yet, but it is hard to assume that they won't emerge as you go forward because inflationary pressures may be there, not necessarily for our industry, but for all consump tion in general. But there, I would like to remind everyone of our consumption categories are small luxuries. And as a result, their consumption is not as impacted during tougher times.

Sure. And second, I had also asked about the margins. In particular, what I would like to know is that we've seen a kind of uptick in the new visitors, the top of the funnel, which I think Anchit also referred to and marketing efficiency, we are seeing that marketing spends have come down on a quarter-on-quarter basis and that has also driven our profitability. So how are you achieving this drive up in new visitors but marketing spends well under control? Any insights here would be really helpful. And you also referred to AI-driven growth so would like to know a little bit more about that as well?

Yes. So I think best to say that we are seeing improvement in marketing funnel at all levels on visits or cost per visit to conversions to more engaged users. So I think across the board there are benefits.

Any comments from Anchit, you want to elaborate on why?

Sure, Kapil. I can add a bit of colour there. So look, I think a couple of things. One is we've been talking about our focus on new customer acquisition with you now for the past at least 4 to 6 quarters, right? So that should not come as a surprise. So I think there's been a lot of work we have done to improve the new customer experience on the app. And that has led to of course, I would say there's also efficiency that we have found on customer acquisition through digital platforms like Meta and Google. And I think FN was alluding to some of the benefits that AI has allowed us to drive in terms of efficiency on marketing, on third-party platforms for customer acquisition. But it's been a focus of ours, and we've done a lot of good work off platform as well as on platform to really continue to invest behind what we see as a big driver of growth for the coming years. And AI has only allowed us to be more efficient in terms of how we spend that additional dollar on some of these other platforms. And the other thing where we're using AI in a big way is on app experience, personalization. And what that means is that for existing buyers, it's easy to personalize the shopping experience based on the various signals that we have from them with regards to their previous purchase and browse history on the platform. But AI has now allowed us to also infer signals about new customers where we don't have too much previous browse and purchase history data on them. But AI allows us to personalize the experience for them to an extent that was earlier not possible. And I think that's also allowing us to drive further efficiency in customer acquisition spends, which we make off platform to convert them better on the platform. So I hope that answers your questions around the traffic, the acquisition as well as the AI impact, both on top line and to an extent on efficiency on marketing.

Yes, it does. Thank you, so much and best wishes, for next year.

Thank you.

This is Sachin Salgaonkar from Bank of America. Congrats on a great set of numbers. I have 2 questions. First question, more a follow-up on margins. I would love to understand where should we see steady state margins of BPC coming up to ? We have seen consistent improvement on margins. I understand as a percentage of revenue continues to increase, but we would love to get a sense and same on fashion. We already had breakeven. So should we expect continued improvement in margins actually going ahead? And any thoughts on where are we from a steady state? A relative question out here is, how should we look at the inference cost, adding some pressures to the margins? And my second question is on impact of a higher fuel price we should see on raw materials and should we see procurement cost increasing and hence an impact on margins out there?

Maybe I'll kick it off on Beauty. And then Abhijeet you can comment on Fashion. Look, again, as I always say on these calls, the Beauty vertical comprises 3 very different businesses. One is obviously the multi -brand retail business. Second is our house of brands and third is the B2B Superstore business. So all 3 have very different margin profiles. But what I can tell you is, and based on the commentary you heard from the various business leaders, each business is independently seeing improvement in their margin profile. So ultimately, how that shakes out at a consolidated vertical reporting level is also an outcome of how fast each of those businesses grow. So if B2B and own brands continue, if own brands continues to grow, outpace the growth of the other businesses within the vertical, then that can be accretive. B2B of course, currently is improving its margin profile, but at the aggregate vertical level, i f it grows faster, that can be diluted. So each of the businesses are independently improving their margin profile and there are efficiencies on the core multi-brand retail business as well, as you noted, on both marketing as well as on fulfilment. But on the beauty retail business, there is a degree of confidence that there is growth to be had. And so reinvesting some of those, reinvesting some of that efficiency back into funding growth, I think will be the priority. So I think in terms of guidance, what I can say is each of the businesses will continue to improve their respective margin profile and some of that could accrue at a consolidated level. But there is also a plan for the core beauty retail business to continue to reinvest in growth, as we have been doing. So, I think the outcome you're seeing year -over-year improvement in margin is despite us reinvesting aggressively for growth. So yes, I think you could assume that all else remaining constant, you can see similar trajectory in the coming years. But yes, some of it is a result of the weight age of each of the respective businesses within the vertical and on inflation and procurement cost, it is a risk in the sense that I think freight cost and obviously, with the currency issues that we are facing, there is some pressure probably on brands to take a price increase. It hasn't happened yet. And from my conversations, it seems brands are trying their best to not pass that price increase on to the consumer, but it can happen. I would say it's not likely in the near term, but yes, it can happen. And how will the consumer react to that, I think that is yet to be seen. But as FN also alluded to earlier on the call, beauty is a small luxury of life. The ticket size is not large. It is becoming a lot more core to people's lives. It is part of daily consumption. It is becoming habituated in terms of usage, and it's a low ticket purchase. So we're confident that even with inflationary pressures, hopefull y, our category remains more immune than others. But we have to see how things progress in terms of some of the macro conditions, which we're currently seeing.

And maybe I could just follow up before we go on to the fashion margin thought pr ocess. You mentioned about the three different subcategories in beauty. Any thoughts on where the margins would stabilize at steady state for all the three separate businesses?

Three all three businesses have a very different steady-state margin profile, right. I think you're aware of that. And we've mentioned in the past that B2B is probably a single -digit margin type business. Beauty owned brands could have even better margin profile than the multi-brand retail business given that they have a higher gross margin. And that is accretive and selling more of our owned brands on our platform itself is also accretive to the retailer margin. So I don't know if we've given the exact numbers in terms of guidance. But the better own ed brands do, the more accretive it is to the vertical, the better B2B does in the short term that might be slightly dilutive, which is kind of counterintuitive, but you understand, I'm sure. But as I said, again, generally, over time, both the own brands business and the multibrand retail business have opportunity to improve an already healthy margin profile. And I think that's anyway, what accounts for a majority of the weightage to the revenue mix in this vertical.

Yes, I'll just add on to what Anchit said. On the Fashion side, firstly, again, it's a combination of several businesses. The largest one is the fashion.com platform - Nykaafashion.com platform. But then there is also the owned brands business. And more recently, there is an addition of a very different business model with Nike. On the largest business, which is Nykaafashion.com, which more or less makes up for a bulk of the numbers in the vertical, we've been talking about intrinsics of the business, which we've been successively focusing on over the last year, and that is resulting in both higher growth and improved profitability. We remain confident that the intrinsics will continue to improve. Any retail platform depends on a flywheel of the right kind of customer acquisition happening over a period of time. The retention of those customers, good quality customers taking shape, which leads to marketing efficiencies, successively improve and the retention improves when the reasons for customers to come back to the platform are more than what they were previously, the service levels are good. Assortment addition plays a very big role in that. So as you increase the assortment, you create more hooks for customers to want to come back to the platform. And those are the very same inputs that I very briefly spoke about in the slides, which we prese nted some time ago. So we feel confident that the intrinsics and the sort of tailwinds on each of those intrinsics are in place. So we feel confident that the trajectory should be positive on margins for the fashion business from here on. Owned brands, again, I think during the year, we've made gains in the health of overall the portfolio Nykd as Adwaita said most particularly, but overall for that business. And early days on the Nike partnership. But again, we are seeing good signs in the first few months. So overall, we remain confident about the trajectory continuing to be positive from here on in. I'll not speculate on long-term numbers just yet. But yes, very much the trajectory is expected to be positive and we are optimistic.

Got it. Thank you and all the best.

Thank you. The next question is from Nihal Mahesh Jham. Please introduce yourself and proceed sir.

Yes, good evening. This is Nihal Jham from HSBC. Congratulations on the strong performance. I have 3 questions. The first was that what has driven the improvement in the fashion growth in '26? We've seen that the 15 has sort of jumped to more than 30 in this year. And this w e've managed while reducing marketing also. So if you could just give a landscape of both these elements?

Sure. Thanks for the question, Nihal. Like I said, I think growth is firstly dependent on just customers transacting more frequently, more customers transacting more frequently. We have remained focused and we have called out in pretty much every quarterly update that we have remained focused on customer acquisition throughout. A bulk of our marketing investments actually go towards brand building for the platform as well as acquiring customers. And then we have been very focused on assortment addition through the last year, particularly adding very strong brands like an H&M, like Nike. Those have very simply put, those have led to the growth revival that we have seen. And as we focus more of our traffic towards the better brands, as we acquire the right quality of customers, marketing efficiency de facto looks better. So it's a very targeted and very deliberate effort to onboard the right kind of customers, to onboard the right kind of brands and to work deeply with partners. Both on the brand side as well as marketing channel side to show the right brands to the right traffic to the right customers so that they convert efficiently. That's what results in marketing efficiency looks better. And those are structural changes, very deliberate structural changes we've made in the business. And that's why we remain confident that we should continue to see positive trajectory.

Sure. Has competitive intensity also from certain platforms who are sort of similarly positioned abated this year in any way?

I wouldn't say it has abated. I think there is always competitive intensity. Although I would say to your point, other platforms, every platform is positioned slightly differently. We are uniquely positioned. Nykaa Fashion is positioned differently compared to others in the market in that we have been very clear that we focus on the premium fashion online market. We don't so much play the mass market categories. And therefore, we go after certain kind of brands. We go after a certain kind of customers. So in that sense, we play in a different space compared to most others. It's also worth mentioning that we are a much younger business compared to BPC, and the headroom for growth is just much higher for fashion as a business compared to how large the category is. If you recall the slide on TAM, the TAM is $55 billion, and we have a very small percentage of the market. So irrespective of competitive intensity, which will always be there. We have a lot of headroom for growth, and we, therefore, just remain focused on intrinsics.

Sure. My second and third question is to Anchit, that inflation overall, we've seen with, say, traditional media players ends up leading to a cut in advertising or marketing spend. So from our perspective, have you historically seen that when inflation pla ys out and if say, FMCG companies is a reasonably large size of our market budget that they sort of step back? And another question was that on private labels, in BPC, we already had 20% kind of a contribution. Is there a possibility that Nykaa as a platform can say even touch a 30% without sort of impacting the health or the way other independent brands look at our platform?

Yes. So, to answer your first question, it is a possibility that certain brands pull back on ad spends or on marketing on digital platforms, including ours, that is a possibility. The good news for us, however, is that, as you are aware, no single brand or even brand company accounts for double- digit revenue to our platform. So we have very low revenue concentration. And as a result, even our ad dollars are not as concentrated to where that risk is meaningful for us. So there are thousands of brands on the platform. We have spent the last several years making the platform more inclusive in the sense that allowing more brands to be able to participate in advertising on the platform by creating more opportunities for them to participate. And as a result, we have diversified our base on advertisers. And so we're not overly reliant on FMCG nor on international brands, neither on luxury brands nor on mass brands. So I think it's well diversified, and we continue to launch new advertising properties that are of interest to all of our brand partners. We're also now providing a lot more consumer insights. And again, here's where AI is helping, but our ability to share real-time insights on performance of marketing campaigns on the platform has been seen as very helpful by brands as well. So I think given the strong and high-quality customer base, we have very specialized platform, very high-quality consumer, very high- quality conversations and now a much higher level of consumer insighting and more advertising opportunities on the platform. There are a lot of things that we now have going for us that could counter the desire for brands to possibly pull back on advertising if the inflation and the currency issues continue to persist. So that, I hope, answers your first question. On your second question regarding own brands, they don't account for 20% of our retail revenue yet. I don't know where you got that number, but we can confirm what that exact number is, if it's disclosed.

I can jump in there. First of all, obviously, our brands sell on multiple platforms like offline and other platforms and so forth. So that's just putting the number in context. And in terms of how we think about the strategy, it's not about getting a particular share of Nykaa as a platform. We're truly trying to build an independent unit within Nykaa which is truly a house of brands. It's a brand's business, and we want to have a beautiful portfolio of brands, which extend across many different categories, many different positionings a nd we want to make sure every brand hits its own correct potential and its own correct distribution strategy and whatever that nets out to in terms of the revenue and top line is where we're headed. But I would say as we're getting increasingly focused on this business, it's not about just penetrating Nykaa as a retailer, but it's truly about building standout brands in the country. And we think it's a really incredible time to be building brands in India today because there's a lot of appetite from consumers to try Indian brands that are being built on Indian insight.

And it's a very large revenue and profitability pool, which we can tap into for the future. We are building towards being a big player there.

Yes, sure. So I'll just complete the answer. So I think as Adwaita mentioned they're building brands that can stand on their own 2 feet in a broader consumer context. And similarly, we're building a retail platform that caters fairly and equally to all of our brand partners. And this is something I've spoken about, and I'm very passionate about and I've spoken about this with all of you over many, many years that as a retail platform. Our multi-brand retail relationships and commitments come first. So we're very, very committed to creating a very fair and balanced playing field for all of the partners who retail on our platform. And as I say, every brand has as much of a right to win and as much of a right to lose on the platform as our owned brands. So, the fact that our owned brands are growing well on the platform and that they are gaining market share is great, that's good. But we are not solving for any market share increase or any market share for our owned brands. So they have to grow on their own merit. They have to have a consumer connect. They have to have a unique value prop and I think they are doing that. And as a result, they're seeing success not just on our platform, but across multiple platforms.

Sure. Thank you so much.

Thank you. The next question is from Percy Panthaki. Please introduce yourself and proceed.

Am I audible?

Yes, you are.

This is Percy Panthaki from IIFL. Maybe just had a question on your owned brands in beauty. You've done exceedingly well in this portfolio. There's been a 65% growth Y -o-Y. Dot & Key must be probably close to INR 1,000 crores in NSV terms. How do you see this portfolio growing now? I mean, on this base, which is a pretty high base now, do you think that this growth rate maintains or it slows down a little bit given that it has already scaled up to a meaningful size now? And it would be unrealistic of us to expect the same kind of growth. And I'm sure that, as you said, these businesses are at higher margin. That is probably one of t he reasons contributing to the margin expansion in the Beauty segment this year. If the growth of that portfolio slows down, do we see that lever to push u p margins in the coming 1 or 2 years being a little weaker than what it was?

Yes. I can comment there first to address, the first part of that question. The way I would position it is more about I think Nykaa has become very excited about the opportunity to build a really compelling house of brands in India. And I think that strategy will come down to having the right portfolio of brands. We have three big brands at the moment. I would say we probably have 4 really meaningful brands at the moment, Dot & Key, Nykaa Cosmetics, Kay Beauty and Nykd. And I would say there are a couple of brands further that are looking very high potential that will sort of break out this next year. So I think the strategy is really probably three pronged. The first is making sure that the big brands continue to hit the right potential within each of their categories. So continuing to take market share in each of the categories they play in, continue to take the right distribution calls and making sure that we're as ambitious as possible for these 4 brands that have already sort of broken out. I think the second prong of the strategy is these incubating brands that are just starting to take off, making sure again, they get through to that INR 150 crores plus thresholds such that they can definitely exist and have a life of their own. And I would say the last bucket is to do acquisitions and look for either brands to acquire or brands to build in- house that sort of supplement our category. So I think when you put all those three things together, I think the potential of how big this business can be is really exciting. But it will be on the back of the right portfolio strategy, picking the right brands, the right categories and then making sure that you structure the organization to be able to deliver each of those with the right ambition. So I'm not answering your question exactly of like will the growth continue to be 50% plus next year. I think the way I'm more saying it is I think we're getting really focused and ambitious about the strategy here. So it's about having the right breakthrough growth in each of those three pockets and then we'll see where the growth pans out. But I think it's going to be a really exciting business from here on out.

Okay. Second question is on, again, the beauty B2C retail platform that you have. And the kind of growth that you're clocking there probably in the high 20s on both GMV and NSV. Just wanted to understand the contours of the growth, do we see that changing like currently we see a lot of growth coming from unique annual customers sort of increasing? And the AOV growth is probably not a big material contributor in the overall GMV and NSV growth. Over the next, let's say, 2 to 3 years horizon, do you feel that you can keep adding new users at the same pace as you have been? Or do you think the new user growth is likely to taper down a little bit and the slack will be picked up by the AOV going up?

Is this a question for the B2B business?

B2C.

It's the B2C retail platform, B2C business, which includes , I mean, which is your overall retail platform, own brands plus third-party?

Yes. You mean that Nykaa.com and Nykaa retail stores.

Yes, absolutely.

Okay. So first, I also just want to answer your earlier question regarding, because the sense I get is you're implying that a lot of the margin improvement we're seeing in the Beauty vertical is on the back of the owned brands growth, right? So firstly, let me say that in theory, the owned brands business should and it can be accretive to the overall margin profile for the Beauty vertical going forward. But currently, the retailer business that we have is the business with the highest margin profile, right? So the margin improvement is not solely on the back of the own brands business growing faster than the platforms. It's also the core retailing business itself has a very, very healthy margin and continues to improve on the back of marketing efficiencies as well as certain improvements on fulfilment cost and repeat customer behaviour on the platform. So even if the owned brands business does slow down, I don't think you're going to see an impact on the overall margin profile for the Beauty vertical. So I hope that helps answer your first question. Now that being said, I think the other way to look at it is there is tremendous opportunity for the owned brands business to not only continue to grow fast. But also improve its own margin profile, which will be accretive to the overall vertical going forward. Now coming to your second question around growth and how much of that is going to come from AUTC versus AOVs going forward. Yes, I think we have invested behind customer acquisition because a customer acquired today is a repeat customer tomorrow. And I think one thing Nykaa does very well is to convert new customers into repeat customers and over time, we've seen that the annual consumption value and the average order values of repeat customers tends to grow and be great er than that of a new customer and that is in large part due to all of the education, all the personalization, which we do on the app to get the consumer to shop more frequently, to shop at higher price points and generally increase their consumption and our wallet share of that customer over time. So yes, I would say growth for us, growth comes from not just new customers but also from existing customers and how their basket evolves with every subsequent purchase. That being said, we have not seen too much growth in AOV in the past several quarters. And the reason is twofold. One is you have to remember that because new customer AOVs are lower than repeat customer AOVs, any quarter in which we have very strong customer acquisition, at the aggregate level, the AOV can look muted. The AOV growth can look muted because we have a l arger percent of our transacting customers are coming from the new customer bucket. And the second is that we have been trying to focus on driving a lot more frequency of purchase as opposed to just focused on average order value because ultimately, our goal is not just average order value, but more importantly, annual consumption value. And so that's why you've not seen as much AOV growth. That being said, I think as, there are some, we have some initiatives in place to improve annual consumption value and also improve AOV for our existing buyers, our repeat shoppers in the coming quarters. And again, personalization, making the right, showing the right products to the right user, which is ultimately what personalization is, we believe, can help to improve AOVs and ACV over time. And, of course, premiumization, relative premiumization of our consumers, given the assortment that we have can also help. So the objective is definitely to get incremental growth from AOV as well as from annual consumption value growth in the coming quarters and coming years. And I think as the Indian consumer evolves, as they embrace premium and prestige beauty as their shopping behavior becomes more sophisticated, you'll start to see those improvements over time. But that being said, there is still tremendous runway for us on customer acquisition. You know what our annual unique transacting customer number is. It's still long way to go. And so we're quite excited about the millions of consumers who are s till yet to experience the Nykaa universe and also engage with beauty in a meaningful way. And I think our job is to bring those consumers into the beauty ecosystem over the coming years, and we'll continue to invest behind that.

Got it. So just to summarize, if I understand you correctly, you think that the AUTC growth can more or less continue at the current growth rate in the next 2 to 3 years as well?

Yes. As I said, I think there is headroom for growth on customer acquisition for sure.

Great. Those are my questions. Thank you so much.

Thank you. The next question is from Latika Chopra. Please introduce yourself and proceed.

Sure. Hi, this is Latika from JP Morgan. You answered a lot of the questions that I had, but just a few more things from my side. The first is given the way the rupee is depreciating, I just wanted to get a sense of what's the salience of imported brands in your beauty business? And have you started to see some of those translations led realization increases already? Is it even meaningful to think about?

Yes. So the imports for us, direct imports form a relatively small portion of our business. So in that sense, it limits our exposure both from a for ex volatility perspective as well as from a potential supply chain challenge. Having said that, from a f orex perspective, we operate on a fully hedged basis and at any point in time, the next 2 to 3 months, exposures continue to remain hedged. So that also gives us a level of protection from near-term volatility as far as currency is concerned.

Sure. The second question I had was just an extension of the discussion you had on owned brands. Clearly, FY '26 saw massive 65% increase in GMV growth and almost 2/3 of that business is Dot & Key. And you talked about how distribution expansion, portfolio expansion actually led to that growth. What I want to understand is there's a wide difference between a INR 1,800 crores GMV brand and the next one is INR 400-odd crores. To sustain this kind of 50%-60% growth, do we then need another new brand in this portfolio? I'm just trying to gauge how should one think about the growth of this portfolio in FY '27 considering it did really well in FY '26. So any more thoughts there?

Okay, Adwaita, you go first.

Like I stated before, I think the growth has to be on the back of both the existing brands accelerating. And I think there's still considerable growth for Dot & Key to be had. But there's also a lot of potential in those next two makeup brands that I mentioned, where there's a larger market share gain that is possible. And so there's a big acceleration there possible as well. And then I think the second part of it is making sure that we have new engines that also come in place which start to fire. So it is also about laying the right portfolio that delivers consistent gr owth over the next 5 years, 10 years. rather than just year-on-year as well.

Yes, I just wanted to add to that, that actually, the weightage of Dot & Key may not be as high, I mean, that high as you spelt it out. But it's significant. But I think like Adwaita has been saying, it's a portfolio approach. And if you have 3 -4 brands who are at 1/3 the turnover but growing 65% or 100% is very much possible. So I think on a portfolio basis, we remain confident that we can deliver high growth. Nowhere are we claiming that we will deliver 65% year -on-year growth forever for the next 5 years. I think you've been good at guiding over a 3-year or a 5-year growth. And I think like we said, we see a very big opportunity in building a house of brands and we have a big ambition. I think we have an annual day coming up soon in about month and ahalf. And at that time, we'll make an effort to explain the entire plan more in detail. But in many brands like that also Adwaita has been saying, in different brands, there are different opportunities. Dot & Key of this size and scale based on more e-commerce success and a lot can be done on physical and GT MT rollout and even international forays can be considered for many brands. So , and skin is a different space than makeup, so the two can't be compared. So I think everything has to be seen in the context of size of the TAM that they play in and what do they do well and what are their assets and how can they take them and lever them forward further.

Okay. Okay. Understood. All right. So, I just looked at INR 1,800 crores GMV versus INR 2,788 crores. Just last two questions. What's the salience sales of Nykaa Now for you in FY '26 or as you exited the year? And any specific call-outs on offline store expansion targets for FY '27?

So yes, on the second question around retail brick-and -mortar expansion, at this point in time, it's, we're thinking it will be similar to what it was in FY '26. So similar 50 to 60 or 70 doors and we're already now covering the top 99 cities. So it's more about now increasing the density of our store network in Tier 2, Tier 3 towns to get to maybe anywhere from 2 to 5 stores per city in these Tier 2, Tier 3 towns. So we have said in the past that the plan was to get to about 500 stores over the next 3 to 4 years, and we said this about 2 years ago. So we're on track towards achieving that number. So , you can say about 170 or 180 doors more over the next 2 to 3 years, averages out to about 50- 60 doors a year. So we're on track with that expansion. And sorry, what was your first question?

Around Nykaa Now, what's the salience in overall GMV, anything that you could share as you exited the year?

Yes. So what I can share, Nykaa Now is that last year was the year of really building out the network in terms of the rapid stores as we call them. And today, we're quite well covered in the top 7 metros. So we have, I think, close to 75 or 80 rapid stores in the top 7 metros that allow s us to cover 80% to 90% of the relevant pin codes in those metros with a delivery promise of about 30 minutes to 2 hours, which we think is adequate for the beauty and personal care space where we don't think the 10-minute delivery is required for our categories. And we're coupling that speed with a very unique assortment. We have the largest assortment of beauty and personal care products available on a N ykaa. Now given that , we're a vertically specialized platform, and we don't have to stock other items in the dark stores. And on top of that, we're also able to offer our prestige portfolio of brands because we're using our retail stores also to fulfil Nykaa Now orders where required. So, I would say that now there is a meaningful percentage of our orders in the top 7 metros that are being serviced through Nykaa Now. In terms of the exact number, I don't think it's disclosed but we can get back to you offline if that's something that we're comfortable to share. But this year, as I said, it was a year of building out the density, getting the assortment right. And now in FY '27, the plan is to really start to market Nykaa Now more actively to our consumers, given that we have the assortment and the speed buttoned up. So you'll see us marketing a lot more aggressively and hopefully start to see even better consumer traction. But so far, the consumer appreciation, obviously, for Nykaa. Now has been huge because it's not something that they were expecting and I think they have been pleasantly surprised with the speed which we're able to deliver. So now that we've got the product market fit, we're going to market it, and you start to see it contribute to a much more meaningful percentage of our overall orders in the coming quarters.

I completely agree with that for sure, the customer experience. Thank you so much team and wish you all the best.

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

Thank you very much, everyone, for being on the call with us and we look forward to seeing you again later in the year.

Thank you, members of the management. On behalf of FSN E -Commerce Ventures Limited, that concludes this conference. We thank you for joining us and you may exit the meeting now. Thank you.

Thank you.

Thank you.