Nykaa Q3 Highlights: Fashion Segment Registers Highest GMV Growth, Margin Expands

FSN Ecommerce Private Limited, the parent company of Nykaa, on Tuesday (February 6) released its financial results for Q3 of the financial year 2023-24 (FY24). Here are the key highlights:

Headline Numbers: The ecommerce startup’s consolidated net profit more than doubled to INR 17.4 Cr in the December quarter (Q3) of the financial year 2023-24 (FY24) from INR 8.5 Cr in the year-ago quarter, on the back of a sharp growth in its fashion business and margin expansion.

Net profit jumped 123.7% on a quarter-on-quarter (QoQ) basis from INR 7.8 Cr in the prior fiscal – Q2 FY24.

Nykaa’s operating revenue increased over 22% to INR 1,788.8 Cr from INR 1,462.8 Cr in corresponding quarter of last year. 

In terms of gross merchandise value (GMV), the business grew 29% year-on-year (YoY) to INR 3,619.4 Cr in Q3 FY2024. EBITDA margin expanded 18 basis points (bps) YoY and 17 bps QoQ to 5.5% during the quarter under review.

Fashion Drives Growth: Nykaa’s fashion vertical continued the momentum of the previous quarter and posted a 40% YoY increase in GMV to INR 1,012.5 Cr in Q3 FY24. The segment contributed an operating revenue of INR 152.6 Cr during the quarter, an increase of 20% from INR 127.5 Cr in the same period last year. 

The fashion segment’s average order value (AOV) stood at INR 4,681, an increase of 18% YoY from INR 3,959. The annual unique transacting customers increased 23% YoY 2.9 Mn in the December quarter of 2023. 

BPC Segment Sees Steady Growth: The beauty and personal care (BPC) category continued to be the biggest contributor to Nykaa’s overall sales and accounted for 84% of the total operating revenue. The sales of the startup’s BPC segment rose 19% to INR 1,504.5 Cr in Q3 FY24 from INR 1,263.4 Cr in the year-ago quarter.

The segment’s GMV increased 25% YoY to INR 2,369.7 Cr, while AOV grew 3% to INR 2,024 in Q3 FY24 from INR 1,958 in the same quarter of last year. 

Others Segment Sees Impressive Growth: The others segment, which comprises eB2B business ‘Superstore by Nykaa’, saw its GMV increase 39% YoY to INR 237.3 Cr during the quarter under review. Operating revenue increased 83% to INR 131.8 Cr from INR 71.9 Cr in Q3 FY23. The AOV of this segment grew 9% to INR 4,027 from INR 3,709 in the corresponding quarter of last year. 

Nykaa To Invest In Nykaa Fashion: FSN Ecommerce Private Limited said it will invest INR 150 Cr in its fashion subsidiary Nykaa Fashion Private Limited. FSN Ecommerce Pvt Ltd will be acquiring 15 Cr equity shares of the fashion arm. 

Besides this, it will also acquire the lingerie and athleisure business of Nykaa Fashion for INR 229 Cr. Additionally, eB2B business – Superstore by Nykaa – will be demerged from FSN Distribution Limited to Nykaa E-Retail Ltd. The company said this will help consolidate its online beauty business in a single entity.

Offline Presence Grows: Nykaa said it continued to expand its physical retail footprint during the quarter under review. Overall, the company said it launched 39 new stores in the first nine months of FY24 and the total number of stores stood at 174 at the end of the December quarter. 

The company said that the retail business now contributes over 9% of the overall BPC GMV while also continuing to improve profitability.