Nykaa, the renowned beauty retailer owned by FSN E-commerce ventures, has reported impressive financial results for the second quarter. The company witnessed a 6% sequential growth in its revenue from operations, reaching ₹1,507 crore, and a staggering 22% year-on-year growth. Despite a delayed festival season, Nykaa’s profit margin for the quarter increased by 10 basis points to 0.5%.
In terms of profitability, Nykaa’s net profit for the second quarter grew by 44% sequentially, reaching ₹7.8 crore compared to ₹5.4 crore in Q1. This remarkable growth can be attributed to the successful performance of its beauty and personal care business, which experienced a noteworthy 23% year-on-year growth. The net sales value also saw a significant increase of 19% year-on-year.
The expansion of Nykaa’s retail presence is also worth noting. In the second quarter, the company added 13 new stores, bringing the total number of stores to 165. This move aligns with Nykaa’s strategy to establish a stronger offline presence and diversify its customer touchpoints.
Additionally, Nykaa’s fashion business showcased promising growth with consolidated revenue from operations amounting to ₹130 crore, reflecting a YoY growth of 28% on a low base. However, it is important to highlight that the fashion business constitutes only 8% of the overall BPC gross merchandise value.
Evidently, Nykaa has demonstrated consistent improvements in its business quality and cost efficiencies. The company’s EBITDA margin expanded to 5.4% for the second quarter, reflecting a remarkable 32% year-on-year growth. Fulfillment cost as a percentage of revenue decreased to 9.7%, compared to 11.8% in the same quarter of the previous fiscal year. Similarly, employee expenses as a percentage of revenue decreased to 9% from 9.9% in Q2 FY23.
The success of Nykaa can be attributed to a variety of factors. The growing prevalence of home-grown brands, as well as international brands prioritizing the Indian market, has led to increased discounting in the beauty and personal care category. Nykaa has successfully adapted to this trend and leveraged it for growth.
As Nykaa continues to solidify its position in the market, its gross merchandise value (GMV) escalated by 25% year on year to ₹2,943 crore. These impressive financial results, combined with the strategic expansion of its retail footprint, reflect Nykaa’s commitment to delivering exceptional products and experiences to its customers.
In conclusion, Nykaa’s remarkable financial performance for the second quarter highlights its resilience and growth in the highly competitive e-commerce landscape. With its ongoing expansion and diverse range of products, Nykaa is poised to dominate the beauty and personal care industry in India.
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