FSN E-Commerce Ventures, which operates beauty and personal care (BPC) company Nykaa, reported a net profit of Rs 17.5 crore in the December quarter, up 106 percent from the year-ago period, driven by strong demand during the festival and wedding seasons.
Nykaa had reported a net profit of Rs 8.5 crore in Q3FY23.
The doubling of net profit was coupled with a 22 percent increase in revenue, which came in at Rs 1,788.8 crore, up from Rs 1,462.83 crore last year, the company said on February 6.
The results are largely in line with what Nykaa had forecast last month.
"We continue to drive improvement in profitability. EBITDA margin expanded to 5.5 percent for the quarter," the company said in a prepared statement. The Mumbai-based company's EBITDA, or earnings before interest, taxes, depreciation and amortisation, margin was 5.3 percent in the same quarter last year.
Nykaa had posted a net profit of Rs 7.8 crore in Q2FY24, a 50 percent jump from the year-ago period. Its revenue grew 22 percent to Rs 1,507 crore.
Nykaa's gross merchandise value (GMV) grew 29 percent year-on-year (YoY) to Rs 3,619.4 crore in the three months to December, with all divisions contributing to the company's growth.
Its mainstay business, the beauty and personal care (BPC) division, saw GMV increasing 25 percent to Rs 2,369.7 crore from Rs 1,901.4 crore YoY.
Nykaa Fashion, which is a relatively young business, registered a GMV growth of 40 percent to Rs 1,012.5 crore from Rs 7,24.4 crore in Q3FY23. The remaining business came from other divisions like Super Store and others.
Key operating metrics
The average order value (AOV) across Nykaa's businesses registered a strong growth YoY. The AOV for its BPC business stood at Rs 2,024, up 3 percent YoY. Nykaa Fashion, which caters to a more premium user base, saw its AOV increasing 18 percent YoY to Rs 4,681.
Nykaa's 'other' division had an AOV of Rs 4,027 in the December quarter, up 9 percent from 3,709.
"The rise of disposable incomes driving premiumization is evidenced strongly by the demand for luxury products witnessed during this Pink Friday. Premium and Luxury brands outperformed contributing 1/3rd to overall GMV and growing at 32 percent YoY," the company said in its statement.
Rights issue
FSN E-commerce will be investing Rs 150 crore into Nykaa Fashion through a rights issue. The amount will be used for repayment of debt given by the parent company. "In a sense, it is the conversion of loan into equity. We are capitalising on the business," Ganesh P, CFO of Nykaa said in the analyst call.
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