Nykaa Q2 profit zooms 333% YoY to ₹5.2 cr; revenue climbs 39%

Beauty and fashion e-tailer FSN E-Commerce Ventures, the parent company of Nykaa, has registered strong growth in both top and bottom line for the second quarter ended September 2022. Boosted by robust Q2 earnings, shares of Nykaa gained 6.5% to hit an intraday high of ₹1,233 on the BSE on Tuesday. In the last two sessions, the share price of e-commerce company has rallied as much as 25%, rebounding from its 52-week low of ₹975.50 touched on October 28, 2022.

The cosmetics-to-fashion retailer has reported a 333% year-on-year (YoY) jump in its consolidated net profit at ₹5.19 crore for Q2 FY23, compared with ₹1.17 crore in the same period last year. However, on a quarter-on-quarter basis, the net profit rose marginally by 3.6% from ₹5.01 crore in June quarter of the current fiscal.

The consolidated revenue from operations grew 39% YoY to ₹1,230.8 crore in Q2 FY23, against ₹885.26 crore in the year-ago period. On a sequential basis, the revenue climbed 7% from ₹1,148.4 crore in the June quarter of the current fiscal (Q1 FY23).

The earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 112% YoY to ₹61.1 crore, while EBITDA margin improved to 5% from 3.3% in Q2 FY22.

“Our business has delivered sustainable, strong growth, while investing in capabilities for the future. Our online and offline presence in Beauty has delivered strong growth with improving margins. There has been structural improvement in fulfilment costs as we move to regional warehouses. Post covid, our accelerated investments in new store rollouts as well as store upgradation has resulted in improved footfalls and higher same store sales. Consumer demand for premium beauty, personal care and wellness is showing signs of buoyancy as we gear up for a promising H2 FY23,” says Falguni Nayar, executive chairperson, MD, and CEO.

“We are investing in growth engines of the future, particularly SuperStore by Nykaa. The International business which includes the venture we have with the Apparel Group in the GCC, is promising. True to the Nykaa way, each of these efforts is towards building the business model in a sustainable manner,” she added.

During the quarter under review, Nykaa, in partnership with Estee Lauder Group of Companies launched Beauty & You India, a first of its kind partnership to identify and support the next generation of beauty entrepreneurs in India with a non-equity grant and mentorship. It teamed up with HUL to launch HUL’s new science-based skin care brand 'Acne Squad’ at Nykaa. It has also partnered with the Apparel Group to undertake an omnichannel, multi branded retail operation business in Gulf Cooperation Council (GCC) on October 6, 2022.

As of September 30, 2022, Nykaa had a physical store count of 124 stores, including two new fashion stores, with a total area of 1.2 lakh square feet across 53 cities. It expanded its fulfilment centres to 14 cities, with a total area of 11.5 lakh sq. ft.