Nykaa, the beauty and fashion giant run by FSN E-Commerce Ventures, is betting big on artificial intelligence (AI) and sustainability to power its next phase of growth. The company outlined these plans during its 13th Annual General Meeting (AGM) on August 25, 2025, and in its recent Q1 FY26 earnings call.
From Digital Native to AI Native
Nykaa says it is moving from being just a digital-first platform to becoming AI-native. This shift will make AI central to customer experiences, partner interactions, and even back-end operations.
“AI will be at the core of every experience. Our models will be self-learning and get better with each customer interaction, creating long-term moats,” the company said in its AGM presentation.
Among its FY26 goals, Nykaa plans for 40% of its code to be AI-generated, while 50% of customer service load will be managed by AI bots. The company is targeting 70% productivity gains across departments by embedding AI into areas like finance, HR, marketing, warehousing, and customer service.
AI for Shoppers
Nykaa is introducing AI-led tools to make shopping more personal. For beauty, it is building systems that use customer data and authentic reviews to suggest products and speed up decision-making.
On the fashion side, it has launched Nykaa Muse, an AI stylist. Muse works like a digital shopping assistant that curates looks based on a customer’s vibe, preferences, and occasions. “Muse turns fashion discovery from a chore into a curated moment. It doesn’t just recommend outfits – it inspires them,” Nykaa explained.
Strong Business Performance
These tech investments come on the back of solid business growth. In Q1 FY26, Nykaa reported ₹4,182 crore in GMV, up 26% year-on-year, and ₹2,155 crore in net revenue, a 23% jump. Profit after tax (PAT) grew 79% year-on-year, reaching ₹24 crore.
Falguni Nayar, Founder and CEO, said, “The strong growth momentum continues with both Beauty and Fashion delivering above-market growth. We are really proud of what we have built and created.”
Sustainability at the Core
Nykaa is also strengthening its ESG (Environmental, Social, and Governance) agenda. In FY25, 96% of all orders were delivered in sustainable packaging. The company also recycled 2,003 metric tonnes of carton waste and 160 metric tonnes of plastic waste, while reusing 1.5 million brand boxes.
It has introduced a “10×10 sustainability plan” that focuses on recycling, reducing waste, and shifting fully to sustainable packaging. “Zero paper utilization for order processing” is already in place across its warehouses.
Empowering Women and Communities
Through the Nykaa Foundation, the company has empowered over 11,500 women by supporting vocational training centres for underserved communities. It has also invested in education, reaching more than 25,000 students from low-income groups through STEM and digital learning programs.
Nykaa also partnered with NGOs to tackle hunger and malnutrition, distributing 90,000 nutritious meal packs, and backed sports initiatives like Slum Soccer, which helped underprivileged youth represent India at the Homeless World Cup in the USA.
The Road Ahead
With AI-led personalization, sustainable operations, and strong financial growth, Nykaa is aiming to stay ahead in India’s booming beauty and fashion market. As Nayar summed up, “We will continue to champion premiumization, customer experience, and sustainable growth. AI and ESG will be at the heart of this journey.”
