Nykaa Q2 net profit jumps 72% to Rs 10 crore on strong revenue growth, but misses Street estimate

Nykaa Q2 FY25 Results

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Nykaa's Q2 FY25 net profit rose 72 percent on-year to Rs 10 crore, helped by robust revenue growth across its beauty and fashion segments. However, this profit fell significantly below Street expectations, with analysts polled by IBES anticipating a net profit of Rs 28.7 crore for the quarter.

The company’s revenue from operations for the July-September quarter surged 24 percent on-year to Rs 1,875 crore, according to the stock exchange filing. This was driven by strong growth in gross merchandise value (GMV), which also grew 24 percent to Rs 3,652.5 crore. Gross profit rose 26 percent to Rs 821 crore, with gross margin improving by 69 basis points to 43.8 percent.

Nykaa’s Q2 results: Segment-wise performance

Nykaa’s beauty vertical reported a 29 percent growth in GMV, bolstered by premium fragrance sales. This growth was further fuelled by Nykaa’s Hot Pink Sale event, which attracted 23 million unique visitors. The company’s owned beauty brands also performed well, posting a 48 percent increase in GMV.

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The company’s fashion vertical saw a GMV increase of 10 percent. The gross margin in the fashion segment expanded by 567 basis points, reaching 49.7 percent.

Where did Nykaa expand business in Q2?

Nykaa said in an investor presentation that it continues to expand its footprint across India, adding two new flagship beauty stores in Q2, bringing its total store count to 210. In the e-commerce segment, Nykaa launched 170 new beauty brands and 260 fashion brands. Additionally, the 'Superstore by Nykaa' (its eB2B platform) recorded an 80 percent year-on-year growth in GMV, extending its retailer network to over 1,060 cities and achieving a 60 percent increase in orders.

The company’s cumulative customer base grew by 31 percent to 37 million, supported by investments in customer acquisition and retention efforts.

Nykaa’s Q2 results: Financial details

Nykaa's EBITDA rose 29 percent year-on-year to Rs 103.7 crore, with the EBITDA margin inching up to 5.5 percent (an improvement of 18 basis points). Adjusted EBITDA, excluding ESOP expenses and other costs, grew 39 percent to Rs 115.5 crore, with a margin of 6.2 percent, up 66 basis points.

Profit before tax (PBT) surged 60 percent to Rs 21.3 crore, and the company’s net profit margin improved by 17 basis points, though marketing and sales expenses climbed to Rs 286 crore, up 40 percent. This increase reflects Nykaa's aggressive branding initiatives and new customer acquisition efforts.

Share price subdued

Ahead of the results, Nykaa’s share price dipped by over 2 percent to close at Rs 179. The stock has gained over 18 percent in the last year, though it has underperformed the Nifty 50 index. Nykaa’s market capitalisation currently stands at more than Rs 51,000 crore.

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