India’s Beauty Boom Is Real. Can Its Brands Afford to Grow?

Deconstruct added ₹38 crore to its annual operating revenue in FY26. It also added approximately ₹29 crore to its advertising and promotional expenditure.

Those two movements capture a central question in India’s beauty business: how much must a brand spend to keep growing?

The Bengaluru-based skincare company’s operating revenue reached ₹165 crore, up from ₹127 crore. Advertising and promotions climbed 72.5% to ₹69 crore, while a ₹10-crore net profit became a ₹5.4-crore loss.

The headline achievement was substantial: revenue had multiplied 25 times in three years. The latest year, however, showed marketing expenditure expanding much faster than sales.

Calculated from the reported figures, advertising and promotions rose from approximately 31.5% of revenue to 41.8%. The question is whether that spending builds a customer relationship that becomes more valuable over time.

THE SECOND BOTTLE TEST

A first purchase can follow a recommendation, an advertisement, a discount or curiosity about an ingredient. A second purchase starts to reveal whether the product has earned a continuing place in the customer’s routine.

Repeat purchasing matters because a brand may spread the expense of winning a customer across several transactions. But repeat revenue still has to cover product costs, discounts, delivery, platform charges and any further marketing.

A returning customer who buys only with substantial incentives can remain expensive to serve.

Advertising expenditure as a share of revenue is therefore a useful signal, rather than a complete diagnosis. The expense includes brand-building and retention as well as acquisition. Dividing it by revenue does not produce customer-acquisition cost.

A stronger assessment follows groups of customers: what it cost to acquire them, how often they return, what they buy and the contribution remaining after serving them.

Deconstruct’s annual totals show investment and growth occurring together. They cannot establish how much of that investment will become profitable repeat demand.

HONASA SHOWS ANOTHER DIRECTION

Honasa Consumer, the company behind Mamaearth, The Derma Co and other brands, offers evidence that beauty growth can become less advertising-intensive.

Its FY26 investor presentation reports operating revenue of approximately ₹2,392 crore, up from ₹2,067 crore. Advertising expenditure increased from ₹743 crore to ₹788 crore—about 6%, against revenue growth of approximately 16%.

Advertising consequently fell from 36% to 32.9% of revenue. EBITDA increased from ₹69 crore to ₹231 crore, while net profit rose from approximately ₹73 crore to ₹200 crore.

Other expenses also declined, so the earnings improvement cannot be attributed entirely to advertising efficiency.

Nevertheless, the direction differs from Deconstruct’s: Honasa generated faster revenue growth than advertising growth. Its presentation also reported approximately 120,000 outlets billed directly through distributors during FY26, illustrating a business extending well beyond its original online proposition.

These are group figures, not Mamaearth’s standalone accounts. They reflect a portfolio with different products, brands and stages of development.

For a younger company, the comparison raises a practical question: which combination of repeat demand, product selection and distribution allows marketing investment to support a larger revenue base?

NYKAA HAS MORE THAN ONE WAY TO EARN

Nykaa represents a different model again.

Its FY26 presentation reports consolidated revenue of ₹10,022 crore, EBITDA of ₹752 crore and net profit of ₹204 crore. The net margin was approximately 2%, despite considerable scale. These totals include fashion as well as beauty.

The company combines retail, distribution and owned brands. Its portfolio includes Dot & Key and Kay Beauty; its presentation recorded 313 stores across 99 cities at the year-end.

That creates several possible sources of advantage: customer access, physical discovery, shared infrastructure and the ability to develop or acquire brands within an existing retail business.

It also creates a relationship worth examining. An independent beauty brand can use Nykaa to reach customers while competing with products the platform owns.

For the brand, distribution access must be assessed alongside the margin remaining after commercial charges and promotion. For Nykaa, profitable growth depends on managing the overall mix of retail, brands and services.

Its model cannot be ranked against a single skincare company using headline revenue alone. But it demonstrates that value in the beauty boom can accrue to the business organising customer access as well as to the product manufacturer.

MINIMALIST TESTS WHAT A LARGER OWNER ADDS

Minimalist provides a third route: grow a distinctive brand and then expand within an established consumer-goods group.

HUL acquired a 90.5% stake in its parent, Uprising Science, in April 2025. The transaction consideration was approximately ₹2,706 crore.

Minimalist’s FY26 operating revenue reportedly stood at ₹690.2 crore, up 36%, and net profit at ₹25.9 crore. Advertising and promotional expenditure was approximately ₹235 crore.

Those figures show continued spending on brand growth after acquisition. They also suggest a reported net margin of approximately 3.8%.

The prior-year loss needs care: it included a substantial exceptional charge linked to preference-share valuation. Comparing the two net-profit figures without that context would exaggerate the underlying operating turnaround.

A larger owner can potentially contribute distribution, procurement, research and international reach. Whether those capabilities improve returns must be demonstrated through subsequent performance.

Acquisition is, therefore, a route to scale whose economics need testing. The relevant question is what the combined business can accomplish more efficiently than the brand could have managed independently.

GLOBAL BEAUTY HAS THE SAME CHOICES

The US offers a useful parallel in e.l.f. Beauty’s purchase of Hailey Bieber’s rhode.

The May 2025 announcement valued the transaction at up to $1 billion: $800 million payable at closing and a potential $200-million earnout. Rhode had generated $212 million in net sales in the preceding 12 months, and the announcement outlined plans for its first physical retail partnership with Sephora.

The strategic logic connected an established customer following with broader retail distribution. A sale to another beauty company could support expansion rather than signal an exhausted brand.

The buyer’s own results also show why growth and earnings require separate examination. For the year ended March 2026, e.l.f. reported net sales growth of 25% to approximately $1.64 billion, statutory net income of $26.3 million and adjusted EBITDA of $335.2 million.

Its results included acquisition-related adjustments, including a $57.6-million fair-value charge linked to rhode’s contingent consideration. The acquisition also affected the group’s business mix, limiting straightforward comparisons with earlier growth.

The broader lesson is that distribution, acquisitions, operating costs and accounting adjustments all influence what remains after a successful sales year.

OFFLINE EXPANSION HAS TO EARN ITS PLACE

For an online beauty brand, physical distribution may improve availability and help customers discover products without encountering a fresh digital advertisement.

It also introduces costs: distributor and retailer margins, sales teams, inventory held across locations, merchandising and the possibility of unsold stock.

The commercial test concerns products leaving the shelf and being replenished. An initial shipment into a distributor’s network provides less information about sustained demand.

A sensible comparison therefore follows channel profitability and cash requirements. Does offline expansion generate sufficient sales per outlet? Are receivables and inventory absorbing the apparent earnings? Does wider availability improve repeat purchasing?

The same discipline applies online. Growing sales through a marketplace or rapid-delivery channel can be worthwhile, but the relevant outcome is contribution after the channel’s costs.

A brand that discovers demand digitally still needs an economical way to serve that demand as it expands.

THE BOOM CAN OUTLAST INDIVIDUAL BRANDS

The companies’ results already establish that profitable beauty businesses can be built in India. They also reveal different combinations of scale, distribution, ownership and spending.

Deconstruct’s latest figures provide an early-stage test of rising marketing intensity. Honasa shows revenue growing faster than advertising. Nykaa combines customer access with a portfolio of brands. Minimalist is expanding within a larger consumer-goods organisation.

Their experience does not establish a universal revenue threshold beyond which skincare brands struggle, or require a sale. Each business must be assessed through its own economics.

For India’s next generation of beauty companies, the decisive achievement will be converting attention into demand that can be served profitably and financed sustainably.

The first bottle establishes a sale. The second—and the money left after delivering it—offers a better indication of the business being built.