Nykaa says it continued to display healthy revenue growth trend in Jan-March quarter

India’s largest beauty e-retailer Nykaa, in its revenue update for the January-March quarter of FY2023, said that the Tier 1 consumers have demonstrated sustained consumption, which led to stronger revenue growth across the Nykaa platforms. 

In a filing to BSE, the beauty e-retailer said its Beauty & Personal Care (BPC) categories have seen sustained strong demand in the fourth quarter of last fiscal, partly due to the ‘Pink Love’ sale introduced during the quarter.  

BPC business has seen higher year-on-year growth rates in Q4 FY23 as compared to the year-on-year growth rates seen in Q3 FY23.  

The operating parameters for the BPC business, such as average order values and conversion rates, have been robust growth, which has further aided growth in revenue.  

For FY23, the company expects its percentage revenue growth rates to be in the early 30s, in line with the ones seen in the nine months of FY23.

“Consumer pullback in discretionary spends has had some impact on our fashion business, leading to subdued growth in NSV this quarter,” the company said on Wednesday. 

It added: “For Q4 FY23, we expect our percentage revenue growth rates in the Fashion business to come through in the late teens. This comes on the back of our focus on business efficiency and unit economics. Our average order values and conversion rates have improved steadily.” 

Earlier on Wednesday, shares of FSN E-Commerce Ventures Ltd gained 8.5 percent in intraday trade to reach a high of Rs 138.85.  

The stock jumped 9.68 per cent to hit an intraday high of Rs 138.85 over its previous close of Rs 126.60. It finally settled 7.86 per cent higher at Rs 136.55. Considering today's closing, the stock has climbed 13.32 per cent from its one-year low of Rs 120.50, hit on March 31, 2023. However, the scrip has plunged 56.77 per cent from its 52-week high of Rs 315.86, a level seen on April 11 last year. 

Commenting on FSN E-Commerce Ventures’ Q4 results, ICICI Securities said that March is historically a weak quarter for FSN E-Commerce Ventures, the parent company of Nykaa.  

ICICI Securities said the fourth quarter could see online consumption fatigue. In its view, the management’s decision to activate a new sale event in the March quarter was to counter the ongoing headwinds.  

The brokerage estimates overall gross merchandise value (GMV) to grow 38 per cent YoY (down 11.3 per cent QoQ) led by 30 per cent YoY GMV growth (down 13.8 per cent QoQ) in BPC segment and 43 per cent YoY growth (down 5 per cent QoQ) in fashion segment. Overall, it estimates revenue growth of 31.3 per cent YoY in Q4FY23. 

"We believe cost control measures are likely to aid EBITDA margin expansion of 120bps YoY (flat QoQ). We estimate Ebitda to grow 73 per cent YoY and PAT to grow 4 per cent YoY," the brokerage said on Wednesday. 

Nykaa competes with Tata Group and Reliance, both of which have interests in the beauty sector, which is worth $16 billion, as different estimates.

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