FSN E-Commerce Ventures, which operates the beauty and personal care (BPC) company Nykaa, reported a net profit of INR 9 crore in the quarter that ended 31 March 2024, up more than 4X from INR 2 crore in the year-ago period, driven by better customer acquisition efforts and higher platform conversions.

The Falguni Nayar-led company reported a revenue of INR 1,668 crore, up 28% from INR 1,302 crore in the same period last year. On a sequential basis, the company recorded a revenue of INR 1,789 crore and a profit of INR 17 crore in Q3FY24.

During the quarter, Nykaa said that the consolidated GMV grew 32% YoY to INR 3217.20 crore, as all the businesses continue to deliver superior performance. Q4 FY2024 EBITDA stood at INR 93.2 crore with EBITDA margin at 5.6%.

EBITDA margin adjusted for ESOP expenses, new business (GCC operations) and corporate restructuring expenses expanded to 6.7% for the quarter vs 5.5% a year ago. This adjusted EBITDA growth of 56% YoY was driven by direct and indirect cost efficiencies with fulfilment expense and employee expenses witnessing improvement from the last few quarters.

During the quarter, the company exclusively launched Fenty Beauty, founded by Rihanna via Global store. Nykaa’s physical retail footprint as of 31 March 2024 was 187 stores across 68 cities, an addition of 42 stores during the year.

The company’s Fashion business GMV witnessed a growth of 27% YoY in FY2024 and a growth of 27% YoY in Q4 FY2024, on growth across core categories of women’s Indian wear and western wear as well as ramping up of emerging categories like lingerie and activewear. The annual unique transacting customer (AUTC) grew at 20% YoY to 3.0 million, while order growth stood at 16% YoY for the full year.

The company, in an update released in April, said its BPC division was growing well ahead of the industry. The comments came as the company faced increased competition from Reliance Retail’s Tira and Walmart-owned Myntra, among others, as per analysts.

“...Myntra recently started selling BPC products in a meaningful way and the same is visible in survey results, where 19% of users indicated preference from buying on Myntra,” a Bank of America (BofA) note from May 21 said, adding new entrants are eating into Nykaa’s share.

Latest entrants like Myntra also increased their share in BPC because fewer customers now shop on platforms like Flipkart and Amazon. They instead want to try newer companies, which offer better discounts and are an alternative to Nykaa, for now, at least.

“While Nykaa remained the preferred platform, we note that 37% of the surveyed users indicated that they like Reliance Industry Limited’s Tira and started to shop more on Tira. An additional 31% indicated that they have visited Tira and sometimes shop on Tira based on discounts/prices,” the BofA note added.

In the entire FY24, revenue from operations grew 24% year-on-year (YoY) to Rs 6,386 crore and net profit jumped 90% to INR 40 crore during the same period.

FSN E-commerce’s shares ended the day at INR 179.35 on May 22 on the BSE, up 1.2% from the previous close.

Article Sources – Nykaa, MoneyControl

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