India's Nykaa posts slowest revenue growth since listing amid stiff competition

Fsn E-Commerce Ventures

06/11/2023 12:38

BENGALURU, Nov 6 (Reuters) - FSN E-Commerce Ventures
 FSNE.NS , parent of cosmetics-to-fashion retailer Nykaa, on
Monday reported its slowest quarterly revenue growth since
listing, hurt by stiff competition in its mainstay beauty and
personal care (BPC) segment.
    Consolidated revenue from operations grew 22.4% to 15.07
billion rupees ($181.17 million) in July-September, its slowest
year-on-year percentage growth since the company went public in
November 2021.
    Revenue growth was also muted due to a delay in the festive
season, which started in October this year in India as opposed
to September a year ago, pushing sales and traffic to the
current quarter for a number of retailers. 
        The festive season in India brings in the lion's share
of annual sales for retailers like Nykaa. It counts Tata Son's
app-based store Tata Cliq, Reliance's  Tira among its
competitions.   
    "Shift of around 20 days in the festive calendar has
resulted in some growth being impacted for the quarter," the
company, which sells makeup, personal care items, as well as
clothes and other accessories through its app and
brick-and-mortar stores, said. 
    The BPC business's gross merchandise value (GMV)- the
monetary value of all its orders - grew 23%, amid rising
competition in the segment. It had risen 24% in previous quarter
and 39% in the year-ago quarter. 
    "Discounting has increased in this category due to
proliferation of a number of home-grown brands as well as
increasing number of international brands making India a
priority market," Nykaa said.
    Analysts at Elara capital had said  they did not see any
negative impact of increased competition in online BPC. 
    The company's overall gross merchandise value (GMV) rose 25%
to 29.44 billion rupees, aided by company's flagship sale event
in July. 
    Profit attributable to shareholders grew over 42% to 58.5
million rupees, while profit for non-controlling interests
jumped over 80%.   
    Shares of the company ended 5% higher ahead of the results. 
  

($1 = 83.1800 Indian rupees)

 (Reporting by Nishit Navin in Bengaluru; Editing by Nivedita
Bhattacharjee)
 ((Nishit.Navin@thomsonreuters.com;))