FSN E-Commerce Ventures, the operator of online beauty and fashion retailer Nykaa, on Monday posted a profit of Rs 7.80 crore during the fiscal second quarter, up 50.3 per cent in comparison to Rs 5.19 crore during the corresponding quarter of last year. It posted revenue from operations at Rs 1507.02 crore, up 22.4 per cent as against Rs 1230.83 crore during the second quarter of FY23. This, the company said, was despite the festive season witnessing a delay this year, moving into October versus commencing in September last year.
“The quality of the business continues to witness improvements. EBITDA margin expanded to 5.4 per cent for the quarter, a growth of 32 per cent YoY on the back of both direct and indirect cost efficiencies,” it said.
While the fulfillment cost as a percentage to revenue stood at 9.7 per cent for the quarter, compared to 11.8 per cent in Q2 FY23, employee expense as a % to revenue stood at 9.0 per cent for the quarter, compared to 9.9 per cent in Q2FY23, witnessing improvements through the last few quarters.
Nykaa’s Q2 performance across business verticals
Nykaa’s Beauty & Personal Care (BPC) segment recorded GMV growth of 23 per cent on-year, with an NSV growth of 19 per cent YoY. The company said that the category has seen an increase in discounting due to proliferation of a number of home-grown brands as well as increasing number of international brands making India a priority market. “Physical retail business continued to expand in post-covid world on the back of 13 new stores launched in the quarter, totalling 165 stores as of September 30, 2023. The retail business now constitutes 8 per cent of the overall BPC GMV. Our owned brands in beauty experienced NSV growth of close to 21 per cent YoY,” it said.
Nykaa’s fashion segment recorded consolidated revenue from operations at Rs 130.50 crore, up 28 per cent on a YoY basis. This was on the back of strong growth of 32 per cent YoY in NSV in Q2FY2024, led by an increase in annual unique transacting customer (AUTC) which grew at 30 per cent YoY to 2.8 million as on September 30, 2023. “Our fashion business continues to scale with improving profitability. Contribution margin as a percentage to NSV for Nykaa Fashion was at 4.7 per cent in Q2FY2024 vs 2.3 per cent in Q2FY2023, supported by improvement in our pre delivery leakages and marketing expenses,” it said. Fashion owned brands continued to grow with NSV of Rs 44.60 crore for the quarter, a growth of 44 per cent YoY. The key brands include Nykd (Lingerie), Twenty Dresses and RSVP (Western wear), Gajra Gang and Likha (Indian wear) and Pipa Bella and IYKYK (Accessories).
In terms of other/new businesses, the company’s Superstore by Nykaa witnessed NSV of Rs 98.60 crore for the quarter, growing at 105 pr cent on a YoY basis. Superstore business has scaled up to serving almost 1.3 lakh transacting retailers across 770 cities as on September 30, 2023. The new business vertical also saw significant YoY improvement in contribution margin as a percentage of NSV – improving from -33.4 per cent in Q2FY23 to -14.8 per cent in Q2FY24. This, Nykaa said, is supported by operational improvements in this vertical – with key cost levers of fulfillment expenses, marketing and advertising expenses, and selling and distribution expenses, all witnessing significant improvements. Others include the company’s new businesses eB2B platform Superstore by Nykaa, Nykaa Man, International, content led platform LBB and our wellness brand Nudge.
