Nykaa Q1: Net Profit Rises 8% YoY To INR 5.4 Cr

Beauty and fashion ecommerce major Nykaa’s net profit jumped 8.2% year-on-year (YoY) to INR 5.4 Cr in the first quarter of the financial year 2023-2024 (FY24), helped by strong growth in beauty vertical online platforms and physical stores. The startup posted a net profit of INR 5 Cr in the year-ago quarter.

Meanwhile, profit jumped 138% from INR 2.3 Cr in the preceding quarter – Q4 FY23.

The Falguni Nayar-led startup’s operating revenue jumped to INR 1,421.8 Cr in Q1 FY24 from INR 1,148.4 Cr in the corresponding quarter of last fiscal. On a quarter-on-quarter (QoQ) basis, it grew 9.2% from INR 1,301.7 Cr.

Nykaa said its overall gross merchandise value (GMV) grew 24% YoY to INR 2,667.8 Cr in Q1 FY24. This was also a jump from INR 2,445.4 Cr GMV the startup reported in Q4 FY23.

Beauty and personal care (BPC) vertical’s GMV grew 24% YoY to INR 1,850.8 Cr in the quarter under review. It also rose 13.6% on a QoQ basis. 

Nykaa said its BPC vertical saw a 17% YoY rise in orders to 9.5 Mn during the quarter, while its annual unique transacting customers (AUTC) stood at 10.3 Mn as of June 30, 2023, up 21% YoY.

The physical retail space of BPC also increased 43% YoY with 152 stores as of June 30, 2023. The GMV of the brands owned by the vertical jumped almost 40% YoY, the company said. 

Meanwhile, the fashion vertical, which was seeing a slow down for the last few quarters, seems to have regained some of its mojo. The GMV of Nykaa’s fashion vertical rose 12% YoY to INR 653.7 Cr in Q1 FY24. However, on a QoQ basis, it declined from INR 664.1 Cr.

AUTC for the fashion vertical grew 30% YoY to 2.6 Mn as of June 30, 2023 and orders grew 12% YoY to 1.3 Mn for the quarter, the company said.

“Our beauty vertical continues to shape into an ecosystem of its own – with steady and balanced growth across our online platforms, physical footprint as well as our consumer brands,” said Falguni Nayar, Nykaa’s executive chairperson, MD, and CEO.

Nayar said that the fashion vertical’s consumer brands also experienced steady growth, with the company’s own labels now spanning across categories – western wear, Indian wear, lingerie, menswear, accessories and much more. 

“Nykaa Fashion’s growth in the quarter was much ahead than the industry growth but below its long-term trajectory. The Nykaa ethos to grow businesses and brands with passion, but also with discipline, is again visible in the way Superstore By Nykaa and our beauty brand Dot & Key have seen significant scale quickly – all while improving the underlying unit economics,” she said. 

Nayar further said that its Dot & Key brand crossed an annualised GMV run rate milestone of INR 300 Cr, growing five-fold in two years while achieving profitability. Nykaa acquired the skincare brand Dot & Key just prior to its listing in late 2021.

Nykaa’s consolidated results include results of its wholly-owned subsidiaries, along with brands including Dot & Key, Nudge, Kay Beauty, LBB, and associate Earth Rhythm.

The GMV of the other vertical, which includes NykaaMan and eB2B platform SuperStore, surged 92% YoY to INR 163.3 Mn, contributing 6.1% of the consolidated GMV in Q1 FY24.

Nykaa’s EBITDA grew 60% YoY and 4% QoQ to INR 73.5 Cr in the quarter under review.

On the expenditure front, the beauty ecommerce major saw its total expenses jump to INR 1,418.8 Cr in the quarter ended June 2023, up 23.5% from INR 1,148.4 Cr in Q1 FY23.

The purchase of traded goods continued to be the single biggest contributor to Nykaa’s growing expenses, growing to INR 978.2 Cr in Q1 FY24 from INR 741.5 Cr in the year-ago quarter. 

On the other hand, Nykaa spent INR 138.6 Cr towards employee benefits expenses, up from INR 114.8 Cr in Q1 FY23.

Ahead of its Q1 earnings, Nykaa shares ended Friday’s trading session marginally higher at INR 146.25 on the BSE.