Nykaa said its fashion vertical continued the momentum from the previous quarter and witnessed “strong” growth in Q3 FY24
However, beauty and personal care business continued to remain under pressure and its GMV growth for Q3 FY24 is expected to be in the mid-twenties
Overall, Nykaa expects its consolidated NSV to grow in the mid-twenties and revenue to grow in the low twenties on a YoY basis
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Beauty and fashion ecommerce major Nykaa said in its Q3 FY24 performance update that the company witnessed consistent growth across its three business verticals during the quarter.
However, the Falguni Nayar-led company also said that despite improvements in long-term macro indicators, discretionary consumption was impacted during the quarter owing to short-term pressures.
Following Nykaa’s exchange filing on Sunday (January 7), its shares jumped almost 5% to INR 182 during the intraday trading hours on Monday. By 2.45 PM IST, the shares shed some of the gain to trade 2.5% higher at INR 177.7 on the BSE.
Continuing the momentum from the previous quarter, the company said Nykaa Fashion witnessed “strong” growth in the quarter.
It said the fashion vertical’s gross merchandise value (GMV) for Q3 FY24 is expected to grow at around 40%, with net sales value (NSV) growth expected in the low thirties on a year-on-year (YoY) basis.
The GMV of the fashion vertical stood at INR 724.4 Cr in the previous year’s quarter – Q3 FY23, while its NSV stood at INR 210 Cr.
While Nykaa Fashion was under pressure following Q3 FY23, the vertical has been picking up pace since the last quarter. Its GMV grew 27% YoY to INR 762.8 Cr in Q2 FY24, while NSV jumped 32% YoY to INR 232.1 Cr.
Meanwhile, Nykaa’s beauty and personal care (BPC) business continued to remain under pressure. The company said that its BPC vertical’s GMV growth for Q3 FY24 was expected to be in the mid-twenties and NSV growth at around 20% on a YoY basis.
In the year-ago period – Q3 FY23 – the BPC vertical GMV stood at INR 1,901.4 Cr and NSV at INR 1,151.3 Cr.
Amid slow growth in this segment, Nykaa’s GMV for the BPC segment stood at INR 1,850.8 Cr and NSV at INR 1,167.5 Cr in its last reported quarter – Q2 FY24.
“We believe Nykaa’s BPC growth for the quarter is ahead of industry growth. However, we believe current industry growth is below long-term trajectory and should revert to the median in the near to mid-term, given the strong macroeconomic and demographic outlook,” said Nykaa.
Besides, it also said that the difference in GMV and NSV growth in the BPC business during the quarter was primarily due to brand-led pricing and discounting, mainly in mass and masstige categories. The underlying order volume growth is healthy and consistent, reflecting strong customer demand.
It must be noted that Nykaa’s Q3 FY24 is also expected to get some boost as the festive season fell during the quarter this year.
Meanwhile, the third vertical, Superstore By Nykaa, witnessed high growth and now has a meaningful share in the company’s overall NSV, Nykaa said.
“For Q3 FY24, at a consolidated level, we expect our NSV to grow in the mid-twenties and revenue to grow in the low twenties on a YoY basis,” the company added.
Nykaa reported an overall GMV of INR 2,796.5 Cr and an operating revenue of INR 1,462.8 Cr in Q3 FY23. However, Nykaa’s consolidated net profit declined 70.7% YoY to INR 8.5 Cr in last year’s quarter.
Nykaa’s profit stood at INR 7.8 Cr in Q2 FY23.
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