Beauty giant reports 27% YoY revenue growth in Q3 FY25 alongside its latest employee stock option allocation, signaling robust expansion despite market challenges
Nykaa, the leading beauty and personal care marketplace, has allocated 90,500 equity shares under its Employee Stock Option Plan (ESOP) scheme, as announced in a recent filing with stock exchanges. The allocation, valued at approximately Rs 1.49 crore based on Monday’s opening price of Rs 165 per share on the National Stock Exchange, comes amid the company’s impressive financial performance in the third quarter of FY25.
The Falguni Nayar-led company specified that “the equity shares so allotted shall rank pari-passu with the existing equity shares of the Company in all respects,” ensuring equal treatment with current shareholdings. This allocation represents Nykaa’s continued commitment to employee retention and incentivization strategies as it maintains its growth trajectory in the competitive beauty and personal care market.
The latest ESOP allocation follows a period of substantial financial success for Nykaa. In Q3 FY25, the company reported an operating revenue of Rs 2,267 crore, marking a significant 27% year-on-year increase from Rs 1,788 crore in the corresponding quarter of the previous fiscal year. More impressively, Nykaa’s bottom line saw an over 60% improvement, with profits rising to nearly Rs 26 crore from Rs 16.16 crore in Q3 FY24.
This recent allocation is part of a consistent pattern of ESOP distributions throughout the past year. In November 2023, Nykaa allocated 1.80 lakh equity shares under its ESOP scheme, followed by an additional 3.08 lakh shares in October 2024. These allocations brought the cumulative distribution for the December quarter to approximately 4.8 lakh equity shares.
The company’s ESOP initiatives extend further back into 2024, with FSN E-commerce Ventures, Nykaa’s parent company, allocating 4.73 lakh shares in June, 1.73 lakh shares in July, and 4.05 lakh shares in May. This systematic approach to share allocation demonstrates Nykaa’s strategic use of equity-based compensation to maintain its talented workforce while aligning employee interests with company growth.
“ESOPs have been instrumental in our ability to attract and retain top talent in Tamil Nadu’s competitive tech ecosystem,” said Rajesh Kumar, HR Director at Nykaa’s Chennai operations. “By providing our team members with equity participation, we’re not just offering compensation—we’re creating partners in our growth journey who have a vested interest in Nykaa’s long-term success.”
Industry analyst Priya Venkataraman from TechVantage Consulting notes, “Nykaa’s consistent ESOP allocations, combined with their impressive financial performance, position them as one of the more attractive employers in the beauty tech space. For the Tamil Nadu startup ecosystem, having a successful company like Nykaa actively engaging talent through equity incentives sets a powerful precedent for how growth-stage companies can structure their compensation packages.”
The implications for Tamil Nadu’s startup ecosystem are significant. As one of the major tech hubs in India with a growing beauty and personal care market, Chennai and surrounding regions benefit from Nykaa’s presence and its employee-centric policies. The company’s operations in Tamil Nadu have created a talent pool experienced in e-commerce, beauty tech, and supply chain management—skills that are increasingly transferable across the broader startup ecosystem.
According to recent data from the Tamil Nadu Startup Hub, the state has seen a 32% increase in beauty and personal care startups over the past two years, with many founders and early employees coming from established players like Nykaa. The wealth creation enabled through ESOP schemes has also contributed to angel investment activity in the region, with former and current Nykaa employees increasingly participating in early-stage funding rounds for local startups.
The company’s growth metrics are particularly impressive given the current market conditions. With a gross merchandise value (GMV) growth of 29% year-on-year and a beauty and personal care GMV growth of 25% in Q3 FY25, Nykaa continues to outperform industry averages. The fashion segment has shown even stronger performance, with a 42% year-on-year growth in GMV.
As Nykaa continues its expansion in Tamil Nadu and across India, its ESOP allocations serve as both a retention tool and a wealth creation mechanism. For the broader startup ecosystem in Tamil Nadu, Nykaa’s success story provides a blueprint for growth-stage companies looking to balance aggressive expansion with employee welfare and incentivization.
The recent allocation of 90,500 equity shares reinforces Nykaa’s position as a leader not just in the beauty and personal care market, but also in progressive employment practices. As the company moves forward in 2025, its combination of strong financial performance and employee-focused initiatives suggests a sustainable approach to growth that benefits shareholders, employees, and the broader startup ecosystem alike
