Nykaa Q2 results: Net profit declines to Rs 1.2 crore

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FSN E-Commerce Ventures Ltd, which operates online beauty e-commerce platform Nykaa, on Sunday reported over 95 per cent year-on-year (YoY) decline in consolidated net profit at Rs 1.2 crore for July-September quarter as its expenses shot up. It had posted a profit of Rs 27 crore in the year-ago period.

The company’s revenue from operations rose 47 per cent year-on-year (YoY) to Rs 885.3 crore from Rs 603.8 crore in the corresponding quarter of last year. The earnings before interest, tax, depreciation and amortisation (EBITDA) declined 48 per cent to Rs 28.8 crore, while EBITDA margin contracted 585 basis points to 3.3 per cent.

Nykaa’s operating expenses grew 92 per cent to Rs 349.4 crore, led by a 286 per cent increase in marketing and advertisement expense to Rs 121.4 crore.

The company said its gross merchandise value (GMV) grew 63 per cent to Rs 1,622.9 crore, with beauty and personal care GMV increasing 38 per cent to Rs 1,185.9 crore and fashion GMV zooming 215 per cent to Rs 437 crore. “Monthly Average Unique Visitors increased to 2.1 crore with YoY growth of 62 per cent in beauty and personal care vertical and to 1.6 crore with YoY growth of 328 per cent in fashion vertical,” Nykaa said in a release.

The company said that the annual unique transacting customers reached 72 lakh for beauty and personal care vertical with a growth of 40 per cent, while that for fashion reached 13 lakh with a growth of 417 per cent.

Nykaa said it accelerated store expansion during the quarter with eight new physical retail stores across the country including in Gwalior, Kochi, Mysore and Ranchi. Its total operational physical stores stood at 84 as of September 30, 2021.

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“Nykaa continues to ensure access and timely delivery for customers across the length and breadth of the country. It expanded warehouse storage space by 0.37 lakh square feet during Q2 FY22 which resulted in total warehouse space of 6.65 lakh square feet as of September 30, 2021,” the release said.

The company continues to invest in expansion of retail stores and fulfilment capacity ahead of the festive season, said Falguni Nayar, Nykaa’s Executive Chairperson, MD and CEO.

“We have maintained growth momentum in our beauty business, accelerated our fashion business and focused on building the brand Nykaa with strong marketing campaigns both digitally and mass media. Increased marketing spends has led to acceleration of customer acquisition, also evident in the unique visitor and transacting customer metrics,” she added.

Nayar said the recently-listed company also launched Nykaa eB2B app — Nykaa Superstore — during the quarter, which will be an area of focus for the quarters to come.

FSN E-commerce Ventures made its debut on the bourses on Wednesday and saw its shares nearly double on the first day to close at Rs 2,207 from its issue price of Rs 1,125. On Friday, the company’s shares closed 6.44 per cent higher at Rs 2,358.90 on the BSE.