Nykaa's Profit Tanks 58%, Revenue Jumps To INR 1,098 Cr In Q3 FY22

SUMMARY

Nykaa posted profit after tax of INR 29 Cr, a 58% drop from INR 68.9 Cr it posted in Q3 of FY21

Nykaa’s revenue from sales rose by 36% to INR 1,098.4 Cr in Q3 of FY22

The ecommerce platform’s operating expense rose to 91% to INR 439.8 Cr in Q3 of FY22

FSN E-commerce which operates fashion ecommerce marketplace Nykaa saw a weak profit in Q3 of FY22 on a year-on-year basis. The Falguni Nayar led ecommerce startup posted a net profit after tax worth INR 29 Cr, a 58% drop from INR 68.9 Cr it posted in Q3 of FY21. However, this is a 24X jump from INR 1.2 Cr it recorded in Q2 of FY22.

Nykaa has earned INR 1,098.4 Cr from its operations in Q3 of FY22, a 36% rise from INR 808 Cr it earned during the same period in FY21. This is also a 24% rise as the startup posted INR 885.3 Cr in Q2 of FY22.

It saw its total operating expense rise by 91% on a year-on-year basis. In Q3 of FY22 Nykaa operating expenses shot to INR 439.8 Cr. In Q3 of FY21, Nykaa expense from operation was INR 230.8 Cr. In Q2 of FY22, its operating expenses stood at INR 349.4 Cr, a 26% year-on-year increase.

The startup’s advertisement expense shot up by 155% to INR 153.6 Cr in Q3 of FY22 from INR 60 Cr in Q3 of FY21. Employee benefit expense which comprises salaries of employees, gratuity, PF fund, among others cost INR 115.9 Cr for Nykaa in Q3 of FY22, a 56% rise.

The startup’s earnings before interest, tax, depreciation, and amortisation (EBITDA) dropped by 36% to INR 69 Cr on a year-on-year basis. EBITDA margin in Q3 of FY22 dropped to 6.3% from 13.2% in Q3 of FY21.

During Q3 of FY22, gross merchandise value (GMV) for its beauty and personal care stood at INR 1,533 Cr, a 32% rise from INR 1,158.7 Cr in Q3 of FY21. GMV of its fashion business stood at INR 510 Cr in Q3 of FY22, a 137% from INR 215.4 Cr in Q3 of FY21.

Founded by former investment banker Nayar in 2012, Nykaa has managed to emerge as a go-to-ecommerce platform for fashion products. The company competes against the likes of heavily invested companies such as Amazon, Myntra, Flipkart, Big Basket, among others.

The startup which went for a public listing to raise close to INR 4,000 Cr in October, received a strong response from the market. However, recently, the share price has gone downhill in tandem with the broader markets amid concerns over the Omicron variant of Covid-19.

Nykaa was one of the few startups which was profitable and went public with the promoters owning 51% stake in the company.

On February 8, FSN E-Commerce shares traded at INR 1,849.85 when the markets closed.