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FSN E-commerce, the parent company of beauty ecommerce platform Nykaa, on Friday (August 5) reported a 42% year-on-year (YoY) increase in its consolidated net profit at INR 5 Cr in the first quarter of financial year 2022-23 (FY23). However, net profit declined 33% on a quarter-on-quarter (QoQ) basis from INR 7.6 Cr reported in the preceding March quarter.

Revenue from operations surged 41% YoY to INR 1,148.4 Cr in Q1 FY23, while it grew 18% on a QoQ basis. 

The beauty and personal care platform’s total expenses grew more than 40% YoY to INR 1,148.4 Cr. Employee costs surged 58% to INR 114.7 Cr from INR 72.6 Cr in the year-ago quarter.

Marketing expenses also grew close to 50% YoY to INR 128.8 Cr in Q1 FY23.

“The beauty vertical, online and offline, is witnessing growth momentum while building efficiencies across the value chain. As a result of the significant discipline that we ensured in our retail store business during the COVID affected periods, we are now witnessing the positive effect of scale on our unit economics, especially with the return of offline shopping behaviour,” Nykaa MD and CEO Falguni Nayar said.

The listed unicorn also reported a 47% YoY growth in gross merchandise value (GMV) to INR 2,155.8 Cr, while earnings before interest, tax, depreciation and amortisation (EBITDA) soared 71% on a yearly basis to INR 46.1 Cr in Q1 FY23.

Nykaa’s growth story was largely headlined by its beauty and personal care which accounted for 69% of its total GMV, while the fashion segment contributed nearly 27% to the total. 

The beauty segment also registered 8.1 Mn orders in Q1 FY23, registering a 40% yearly increase. However, the average order value (AOV) declined to INR 1,780 from INR 1,832 in Q1 FY22. 

Nykaa’s fashion vertical registered 1.5 Mn orders during the quarter under review, a growth of 28% compared to the corresponding fiscal last year. The AOV for the fashion segment grew to INR 4,357 from INR 3,967 in Q1 FY22.

Nykaa highlighted rising inflation, high interest rate and reduction in discretionary spending, as the major challenges before it in the next quarter. 

Nykaa said it opened 8 new stores during the quarter, taking its total stores count to 113 across 52 cities as of June 30, 2022.

The startup declared the results after market hours. Shares of Nykaa ended 1.99% lower at INR 1,412.60 on the BSE on Friday.