Beauty retailer Nykaa said the growth of its beauty and personal care segment was ahead of the industry estimates in the third quarter of FY24, helped by the modest performance in the vertical in terms of gross merchandise value (GMV) and net sales value (NSV).
The Mumbai-based listed entity expects GMV growth in the segment to stand in the mid-20s range, while NSV is likely to be around 20% in the third quarter on a year-over-year basis, Nykaa said in a filing with the stock exchanges on late Sunday evening.
The difference in GMV and NSV growth is primarily due to brand-led pricing and discounting, mainly in mass and masstige categories, according to the company. It added that the underlying order volume growth is “healthy and consistent” and reflects strong customer demand.
For context, posted a 50% rise in net profit to Rs 7.8 crore in the July to September quarter of FY24. Revenue from operations surged 22% to Rs 1,507 crore in Q2 FY24 against Rs 1,230 crore earned in the comparable period last year.
BPC—Nykaa’s largest business by revenue—reported a 23% YoY growth in GMV to Rs 2,001 crore in the second quarter of FY24 across its ecommerce, physical retail, and consumer brands portfolios.
The Falguni Nayar-led company said it continues to invest and expand the beauty and personal care category and generate demand through initiatives like Nykaaland—Nykaa’s beauty and lifestyle festival—hosted in Mumbai this year and saw over more than 15,000 ticketed visitors.
“We believe Nykaa’s BPC growth for the quarter is ahead of industry growth. However, we believe current industry growth is below long-term trajectory and should revert to the median in the near to mid-term, given the strong macroeconomic and demographic outlook,” the firm said on Sunday.
Nykaa’s BPC segment was also fuelled by early success in newer businesses, including Superstore by Nykaa, it added.
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Nykaa Fashion—the second-largest business by revenue—is likely to see a GMV growth at around 40%, while NSV growth is expected in the low-30s on a YoY basis. This comes against the backdrop of muted industry-level consumption and lacklustre festive season demand.
Nykaa Fashion witnessed marginal improvement in the second quarter with revenue from operations rising 28% to Rs 130.5 crore compared to the previous year.
For Q3 FY24, at a consolidated level, Nykaa expects its NSV to grow in the mid-twenties and revenue to grow in the low twenties on a YoY basis.
“Long-term macro indicators continue to improve with strong GDP growth, stable interest rates, and growing GST collections, reflecting India’s strong consumption growth story. However, there has been some impact on discretionary consumption due to short-term pressures,” Nykaa said in context to the larger macroeconomic conditions.
Edited by Megha Reddy
