Indian beauty products retailer Nykaa nearly doubles Q3 profit on festive demand

Fsn E-Commerce Ventures

06/02/2024 11:29

BENGALURU, Feb 6 (Reuters) - India's FSN E-Commerce
Ventures  FSNE.NS , parent of online beauty products seller
Nykaa, reported a nearly two-fold jump in quarterly profit on
Tuesday on festive demand and said that its board approved the
demerger of its business-to-business (B2B) segment. 
    The company's consolidated net profit rose 97% to 161.9
million rupees ($1.95 million) in the third quarter ended Dec.
31. It had posted a drop in net profit in three of its previous
five quarters.
    E-commerce companies rolled out multiple sales events in the
quarter thanks to a delayed festive season that included
festivals such as Dussehra and Diwali beginning in October.
    The festive season in India brings in the lion's share of
annual sales for retailers like Nykaa, which counts Tata Sons'
Tata Cliq and Reliance's Tira among its competition.
    Nykaa's earnings before interest, tax, depreciation and
amortization margin grew to 5.5% from 5.3% a year ago while its
overall gross merchandise value (GMV) - the monetary value of
all its orders - grew 29% to 36.19 billion rupees.
    The company's beauty and personal care (BPC) segment, the
biggest in terms of revenue contribution, recorded a 25% uptick
in GMV.
    India's wedding season, which begins in December, also
buoyed demand. Last quarter, the BPC segment dragged Nykaa's
revenue to its slowest growth since listing.
    Overall revenue for the retailer, which houses luxury brands
such as Estee Lauder, Bobbi Brown and Dior, rose around 22%
year-on-year, but stayed flat sequentially.
    Its electronic B2B segment, Superstore by Nykaa, recorded a
68% year-on-year growth in GMV, the company said.
    The business received board approval to be spun out into a
separate unit called Nykaa E-Retail, to be housed under parent
FSN E-Commerce, it added. It was not immediately clear how much
the B2B segment contributed to Nykaa's total revenue.
    Additionally, the company approved further investment in
unit Nykaa Fashion via a rights issue worth 1.5 billion rupees.
It also approved FSN's acquisition of the unit's lingerie and
athleisure business on a slump-sale basis for 2.29 billion
rupees.


($1 = 83.0551 Indian rupees)

 (Reporting by Ashna Teresa Britto in Bengaluru; Editing by
Janane Venkatraman
)
 ((AshnaTeresa.Britto@thomsonreuters.com;))