FSN E-Commerce Ventures, which operates beauty and personal care (BPC) company Nykaa, reported a net profit of Rs 9 crore in the quarter ended 31 March, 2024, up more than 4X from Rs 2 crore in the year-ago period, driven by better customer acquisition efforts and higher platform conversions.
The Falguni Nayar-led company reported a revenue of Rs 1,668 crore, up 28 percent from Rs 1,302 crore in the same period last year.
On a sequential basis, the company had a recorded a revenue of Rs 1,789 crore and a profit of Rs 17 crore in Q3FY24.
The company, in an update released in April, said its BPC division was growing well ahead of the industry. The comments came as the company faced increased competition from Reliance Retail’s Tira and Walmart-owned Myntra, among others, as per analysts.
“...Myntra recently started selling BPC products in a meaningful way and the same is visible in survey results, where 19 percent of users indicated preference from buying on Myntra,” a Bank of America (BofA) note from May 21 said, adding new entrants are eating into Nykaa’s share.
Latest entrants like Myntra also increased their share in BPC because fewer customers now shop on platforms like Flipkart and Amazon. They instead want to try newer companies, which offer better discounts and are an alternative to Nykaa, for now, at least.
“While Nykaa remained the preferred platform, we note that 37 percent of the surveyed users indicated that they like Reliance Industry Limited’s Tira and started to shop more on Tira. An additional 31 percent indicated that they have visited Tira and sometimes shop on Tira based on discounts/prices,” the BofA note added.
In the entire FY24, revenue from operations grew 24 percent year-on-year (YoY) to Rs 6,386 crore and net profit jumped 90 percent to Rs 40 crore during the same period.
FSN E-commerce’s shares ended the day’s at Rs 179.35 on May 22 on the BSE, up 1.2 percent from the previous close.
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