Nykaa Q2 Results FY2023, Net Profit at Rs. 52 million

On 1st November 2022, Nykaa announced its quarterly results for the second quarter of FY2023.

Q2FY23 Performance updates:

- GMV grew 45% YoY to Rs. 23,457 million in Q2 FY2023 
-  Revenue from Operations grew 39% YoY to Rs. 12,308 million in Q2 FY2023 
- Gross margin increased to 45.3% in Q2 FY2023
- EBITDA grew 112% YoY to Rs. 611 million in Q2 FY2023. 
- EBITDA margin improved to 5.0% in Q2 FY2023 
- Profit before Tax grew 542% YoY to Rs. 88 million in Q2 FY2023 
- Net Profit for the Period grew 344% YoY to Rs. 52 million in Q2 FY2023

Nykaa Q2FY2023 Result video:

Business Highlights:

- Beauty and Personal Care (BPC) reported strong performance continued with Contribution margin expansion of 630 bps YoY. GMV grew 39% YoY to Rs. 16,301 million in Q2 FY2023. Orders grew 39% YoY to 8.4 million in Q2 FY2023
- Fashion segment reported contribution margin has been positive and grew by 138 bps YoY in Q2 FY2023, GMV grew 43% YoY to Rs. 5,991 million.
- Other businesses like NykaaMan, eB2B platform SuperStore by Nykaa, International, LBB and Nudge GMV grew 240% YoY to Rs. 1,165 million, contributing to 5.0% of the Consolidated GMV in Q2 FY2023 
- SuperStore by Nykaa has scaled to 73,000+ transacting retailers across 650+ cities with 182 brands listed as at September 30, 2022
- Hot Pink Sale delivered strong omnichannel performance with 47% YoY GMV growth, with highest ever monthly unique visitor count of 25 million on the platform.
-  Nykaa has increased its own physical store count to 124 stores, including two new Fashion stores, with a total area of 1.2 Lacs sq. ft. across 53 cities, as of September 30, 2022 
- Nykaa has expanded its fulfillment centres to 14 cities, with a total area of 11.5 Lacs sq. ft, as of September 30, 2022 

Deals and Partnerships:

- Nykaa, in partnership with Estee Lauder Group of Companies launched Beauty & You India, a first of its kind partnership to identify and support the next generation of beauty entrepreneurs in India with a non-equity grant and mentorship
- Nykaa partnered with Priyanka Chopra Jonas to bring Anomaly, her own hair care brand to India across Nykaa.com and Nykaa stores
- Nykaa partnered with HUL to launch HUL’s new science-based skin care brand 'Acne Squad’ only at Nykaa
- Nykaa Fashion partnered with world-renowned fashion e-tailer “Revolve” to provide access to 400+ international brands
-  Nykaa partnered with the Apparel Group to undertake an omnichannel, multi branded retail operation business in Gulf Cooperation Council (GCC) on October 6, 2022

Commenting on the results, Falguni Nayar, Executive Chairperson, MD, and CEO, said: “Our business has delivered sustainable, strong growth, while investing in capabilities for the future. Our online and offline presence in Beauty has delivered strong growth with improving margins. There has been structural improvement in fulfilment costs as we move to regional warehouses. 

Post covid, our accelerated investments in new store rollouts as well as store upgradation has resulted in improved footfalls and higher same store sales. Consumer demand for premium beauty, personal care and wellness is showing signs of buoyancy as we gear up for a promising H2 FY23.

 We're committed to building a unique customer proposition in Fashion; aided by investments in a differentiated product, collaborations with global brands and expansion in the breadth & depth of our owned brand portfolio. Our merchandise partnership with ‘Revolve’ provides us access to a successful ecosystem that has proven capabilities. Our focus on curation and discovery in Fashion is evident, as new season merchandise accounted for 24% of Nykaa Fashion GMV; international brands are at 13% of western wear category GMV in Q2 FY23. Repeat buyers in Fashion now contribute 66% of Q2 FY23 GMV, giving us confidence in our product proposition. Digital marketing costs for the fashion business are slightly higher than during covid period, resulting in marketing costs sustaining at Q2 FY22 levels.

 We are investing in growth engines of the future, particularly SuperStore by Nykaa. The International business which includes the venture we have with the Apparel Group in the GCC, is promising. True to the Nykaa way, each of these efforts is towards building the business model in a sustainable manner.”

Nykaa's share price dropped by 2.72%.