FSN E-Commerce Ventures Ltd, which runs online fashion retailer Nykaa, on Tuesday reported a 350% jump in quarterly profit buoyed by strong demand for its products ahead of the festive season in India.
Consolidated net profit stood at Rs 5.2 crore for the quarter ended Sept 30, 2022, compared with Rs 1.17 crore in the same quarter a year earlier. The company’s quarterly revenue from operations recorded a 39% year-on-year increase to Rs 1,230.8 crore.
“Consumer demand for premium beauty, personal care, and wellness products is showing signs of buoyancy as we gear up for a promising H2 FY23,” Falguni Nayar, Executive Chairperson, MD, and CEO, said in a statement.
“During the quarter, we continued to demonstrate strong GMV growth, with improvement in gross margin and efficiency in fulfilment and marketing costs leading to an improvement in EBITDA margin YoY,” Nayar said.
The company’s gross merchandise value, or GMV, rose 45% YoY to Rs 2,345.7 crore during the quarter while the gross margin improved to 45.3% in Q2 vs 42.7% in the year-ago period.
Nykaa shares rose more than 4% to Rs 1,208 per share on the Indian stock market on Tuesday afternoon. The Nykaa stock was listed in November last year and has declined more than 40% since its debut.
India’s beauty and personal care industry has witnessed strong traction on the back of nifty social media marketing, growth of e-commerce and segment-focused platforms, and consumer bias towards organic and ethical brands. According to data from ResearchAndMarket, India’s beauty and personal care market is estimated to touch $24.53 billion in 2022 and $33.33 billion by 2027, growing at a CAGR of 6.32%.
Last year, Nykaa’s public listing and Amazon-backed MyGlamm’s entry into the unicorn club signaled a new phase in the direct-to-consumer (D2C) beauty segment, a space also crowded by smaller players such as Mamaearth, Plum, WOW Skin Science, and others.
Nykaa has acquired skincare startups such as Dot & Key and Earth Rhythm and fashion brands such as Kica and Pipa Bella to strengthen its presence in the market.
Its pre-IPO lock-in period shall expire on November 9. Around 67%, or 31.9 crore, shares of Nykaa are likely to open for trade on the lock-in expiry day. Nykaa shares started trading at a premium of over 82% at Rs 2,054 per share on debut.