Nykaa Reports Strong Financial Performance in Q2 FY24

Nykaa, the renowned beauty retailer under FSN E-commerce ventures, has showcased impressive financial growth in its second quarter, demonstrating resilience and strategic advancements in a competitive market.

Stellar Financial Figures

The company reported a substantial 44% sequential increase in net profit, reaching ₹7.8 crore from ₹5.4 crore in the previous quarter. Its revenue from operations also witnessed a commendable 6% sequential growth, climbing to ₹1,507 crore from ₹1,421 crore in the quarter ending in June.

Despite challenges such as a delayed festival season, Nykaa managed to achieve a remarkable 22% year-on-year revenue growth. Notably, its net profit surged by an impressive 50% year-on-year, showcasing robust financial health. Additionally, its EBITDA grew significantly by 32% year-on-year to ₹80.6 crore in Q2 FY24.

Improved Operational Efficiency

Nykaa highlighted notable improvements in business quality, with its EBITDA margin expanding to 5.4% for the quarter, a 32% year-on-year growth driven by efficiencies in direct and indirect costs. The company also reduced fulfillment costs as a percentage of revenue, demonstrating operational streamlining from 11.8% in Q2 FY23 to 9.7% in the current quarter.

Moreover, employee expenses as a percentage of revenue decreased to 9% from 9.9% in Q2 FY23, reflecting enhanced cost management strategies.

Strategic Initiatives and Growth

Nykaa’s gross merchandise value (GMV) soared by 25% year-on-year to ₹2,943 crore, indicating robust consumer demand and market traction. The company’s retail footprint expanded with the launch of 13 new stores in the quarter, bringing the total store count to 165. The retail segment now contributes 8% to the overall Beauty and Personal Care (BPC) GMV.

BPC Segment and Discounting Trends

In the BPC segment, Nykaa experienced a significant 23% year-on-year growth, with net sales value growing by 19% year-on-year. The company noted an increase in discounting within this category, attributed to the rise of home-grown brands and the influx of international brands prioritizing the Indian market.

Fashion Business and Revenue Growth

Nykaa’s fashion business witnessed robust performance, with consolidated revenue from operations reaching ₹130 crore and a notable 28% year-on-year growth, albeit from a low base.

In conclusion, Nykaa’s strong financial performance, coupled with strategic initiatives and market insights, positions the company as a formidable player in the beauty and e-commerce landscape, poised for continued growth and success.