Nykaa gains as Q1 PAT soars to Rs 14 cr

Nykaa said that its profitability continues to improve with PAT growth of 150% YoY, with impact of depreciation and lease cost impact moderating versus financial year 2023.

Revenue from operations grew at a healthy pace of 23% year on year to Rs 1,746.11 crore in Q1 FY25, in line with last 2 year CAGR.

Profit before tax soared to Rs 22.08 crore during the quarter from Rs 9.71 crore posted in Q1 FY24.

EBITDA stood at Rs 96.1 crore in Q1 FY25, registering a growth of 31% on YoY basis. EBITDA margin increased 34 bps to 5.5% in the June quarter as against 5.2% reported in Q1 FY24.

During the quarter, consolidated gross merchandise value (GMV) grew 25% YoY to Rs 3,320.9 crore on the back of strong performance in Beauty, where GMV was up 28% YoY, while Fashion performance continued to be resilient in a muted demand environment.

In Beauty segment, Beauty GMV showed a strong growth of 28% YoY in Q1 FY25, in line with long term beauty industry growth trajectory. This performance was result of accelerated customer acquisition, up 27% YoY, driving healthy order volume growth. The quarter also witnessed significant IP activations, including our flagship Pink Summer Sale.

Nykaa stated that it has achieved 200 store milestone in July 2024, further cementing its position as India’s largest specialized beauty retailer spanning 72 cities. The company has rolled out 11 stores in Q1 FY25 including 3 Luxe stores, 5 On-trend stores and 3 Owned Brand Kioks.

The firm’s Beauty owned brands had another successful quarter with strong growth of 47% YoY. Superstore by Nykaa witnessed strong GMV growth of 72% YoY in FY2024. The distribution business has achieved scale with improving profitability as contribution margin (as a % to NSV) improved 520 bps YoY, from -18.5% in Q1 FY2024 to -13.3% in Q1 FY2025. This is supported by several initiatives to improve gross margins, and optimization of fulfilment and selling & distribution expenses, it added.

Nykaa Fashion delivered a healthy GMV growth of 15% YoY. This was a result of high growth across our core categories of women’s western wear, up 34% YoY as well as ramping up of emerging categories like lingerie and athleisure, which delivered strong GMV growth of 54% YoY and 110% YoY respectively.

Fashion revenue growth was higher than GMV growth at 21% YoY, led by lower returns and cancellations and higher marketing and other services related income. Gross margins improved significantly to 49.4% as of % of NSV as against 45.8% a year ago, with increased content and other marketing income.

There is increased efficiency in Fulfilment through several optimization interventions and marketing expenses (as a % of NSV) continue to improve with increasing repeat customer mix. As a result, EBITDA margins improved by 492 bps in Q1 FY25 standing at -9.2% v/s -14.1% in Q1 FY24, said Nykaa.

Meanwhile, the company announced that its board has approved to increase its existing majority stake of 51% in Dot & Key to 90% by acquiring the additional stake of 39% for a consideration amount of Rs 265.3 crore. The company will be acquiring 5,29,286 equity shares of Dot & Key from the promoters/ existing shareholders of Dot & Key.

Further, the board has also approved to acquire additional stake in Earth Rhythm for a consideration amount of Rs 44.5 crore. The company will be acquiring up to 57,302 equity shares and 12,226 warrants of Earth Rhythm through Primary and Secondary acquisition thereby resulting in Earth Rhythm becoming subsidiary of the company.

Both the aforementioned acquisitions are expected to be completed by 30 September 2024.

Nykaa (FSN E-Commerce) is one of India's leading lifestyle-focused consumer technologies platforms. Since its launch, Nykaa expanded its product categories by introducing online platforms Nykaa Fashion, Nykaa Man, and Superstore. Delivering a comprehensive omnichannel e-commerce experience, Nykaa offers over 6,000 brands through its website and mobile applications.