Nykaa Q2 Results: Profit Surges Over 300% YoY To INR 5.2 Cr, Operating Revenue Up 39%

Beauty ecommerce platform Nykaa reported a 344% year-on-year (YoY) jump in its net profit to  INR 5.2 Cr in the September quarter of financial year 2022-23 (FY23), helped by strong demand for its beauty, personal care, and fashion products.

The startup had reported a net profit of INR 1.2 Cr in the corresponding quarter of the prior fiscal year. However, on a sequential basis, Nykaa’s profit grew only marginally from INR 5 Cr in Q1 FY23.

Meanwhile, operating revenue witnessed a 39% YoY growth to INR 1,230.8 Cr in Q2 FY23 from INR 885.3 Cr in Q2 FY22.

“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,” said Falguni Nayar, executive chairperson, MD, and CEO of Nykaa. 

“Post Covid, our accelerated investments in new store rollouts as well as store upgradation has resulted in improved footfalls and higher same store sales,” she added.

Nykaa’s total gross merchandise value (GMV) rose 45% YoY to INR 2,345.7 Cr in Q2 FY23, with the beauty and personal care (BPC) segment contributing the highest to the total GMV.

The GMV of the BPC segment rose 39% YoY to INR 1,630.1 Cr during the quarter, while the fashion segment saw a 43% YoY increase in GMV to INR 599.1 Cr.

“Our focus on curation and discovery in fashion is evident, as new season merchandise accounted for 24% of Nykaa Fashion GMV; international brands are at 13% of western wear category GMV in Q2 FY23,” Nayar said. “Repeat buyers in fashion now contribute 66% of Q2 FY23 GMV, giving us confidence in our product proposition.” 

However, she also noted that Nykaa’s digital marketing costs for the fashion business have gone slightly higher than it was during the pandemic period, which has resulted in its marketing costs sustaining at Q2 FY22 levels. 

Nykaa’s total expenses increased 38% to INR 1,228.5 Cr in the quarter from INR 889 Cr reported in the corresponding quarter of FY22. This was also almost a 7% rise sequentially from INR 1,148.4 Cr reported in the preceding June quarter.

Its earnings before interest, tax, depreciation and amortisation (EBITDA) more than doubled to INR 61.1 Cr during the quarter under review from INR 28.8 Cr in the corresponding quarter of previous fiscal. Sequentially, EBITDA rose 33% from INR 46.1 Cr.

Meanwhile, EBITDA margin expanded 171 basis points (bps) YoY to 5%. It expanded 96 bps compared to 4% in the previous quarter.

Nykaa, which has been trying to aggressively grow its offline presence along with its online ecommerce market, said that it increased its own physical store count to 124 across 53 cities. As of September 30, 2022, it expanded its fulfilment centres to 14 cities, with a total area of 11.5 Lakh sq ft.

The B2B platform, SuperStore, which was launched in April this year, has also scaled to over 73,000 transacting retailers across more than 650 cities with 182 brands currently listed, the startup said.

Shares of Nykaa were trading 4% higher at INR 1,202 on the BSE on Tuesday after the startup published its Q2 results.