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Nykaa's Phenomenal Q2 Performance, Net Profit Soars by 50 Percent

Nykaa's Revenue Surge, Q2 FY24 Brings 22.4% Growth

6 November 2023

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Kunal Tyagi

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  • Nykaa's consolidated net profit in Q2 FY24 grew by an impressive 50% to INR 7.8 Crores compared to INR 5.2 Crores in the previous year's quarter.

  • The company's operating revenue also exhibited strong growth, increasing by 22.4% to INR 1,507 Crores in Q2 FY24, indicating a robust growth trajectory.

  • Nykaa's focus on cost control and operational efficiency was evident in its EBITDA margin expansion to 5.4% in Q2 FY24, driven by both direct and indirect cost efficiencies.

Nykaa, the beauty and fashion e-commerce giant, has reported a remarkable financial performance in the September quarter (Q2) of the financial year 2023-24 (FY24). The company's consolidated net profit surged by 50%, reaching INR 7.8 Crores, compared to INR 5.2 Crores in the same quarter the previous year. This significant jump can be attributed to the company's growth across various business verticals and effective cost control measures.


Even on a sequential basis, Nykaa's net profit showed a remarkable growth of 44.4%, rising from INR 5.4 Crores in the first quarter (Q1) of FY24. This demonstrates Nykaa's strong momentum and consistent financial performance.


Operating revenue also witnessed substantial growth, increasing by 22.4% to INR 1,507 Crores in Q2 FY24, compared to INR 1,230.8 Crores in the same period of the previous year. Moreover, the revenue showed a quarter-on-quarter increase from INR 1,421.8 Crores, further emphasizing Nykaa's growth trajectory.


In a statement, Nykaa emphasized that the overall quality of its business has been consistently improving. The EBITDA margin expanded to 5.4% in Q2 FY24, driven by both direct and indirect cost efficiencies. This demonstrates Nykaa's commitment to optimizing its operational performance.


However, it's worth noting that Nykaa's gross margin as a percentage of revenue from operations contracted by 221 basis points year-on-year (YoY), although it remained stable on a sequential basis. Despite this contraction, Nykaa continues to focus on efficiency and cost control in its operations.


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Nykaa's overall gross merchandise value (GMV) saw a notable increase, growing by 25% YoY to INR 2,943.5 Crores in Q2 FY24. This also marked a 10.3% increase compared to the previous quarter's INR 2,667.8 Crores.


The beauty and personal care (BPC) category, in particular, experienced impressive growth, with a 23% YoY increase in GMV to INR 2,001.6 Crores during the quarter under review. This is a significant growth compared to the INR 1,850.8 Crores GMV reported in Q1 FY24.


The festive season plays a substantial role in driving consumption in the beauty category. However, Nykaa noted that a shift of approximately 20 days in the festive calendar impacted some growth in the BPC category in Q2. Additionally, discounting in this vertical increased during the quarter, driven by the growing presence of home-grown and international brands.


Nykaa's net sales value (NSV) for its BPC vertical also showed strong growth, increasing by 19% YoY to INR 1,167.5 Crores in Q2 FY24. This highlights the company's continued success and strong demand in the beauty and personal care sector.


In summary, Nykaa's impressive financial performance in Q2 FY24, marked by substantial profit and revenue growth, underscores the company's robust position in the beauty and fashion e-commerce industry. Despite certain challenges and shifts in the market, Nykaa continues to demonstrate its ability to adapt, thrive, and deliver value to its customers and stakeholders.

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