Shares of FSN E-Commerce Ventures Ltd, the parent company of Nykaa, rose on July 8 after the beauty and fashion platform announced that the company and its subsidiaries are expected to achieve a revenue growth of around 22-23 percent year-on-year during the first quarter of FY25.
The consolidated Gross Merchandise Value (GMV) growth is projected to be in the mid-twenties on a YoY basis. GMV represents the total value of merchandise sold over a specific period through a customer-to-customer (C2C) exchange site.
Starting this quarter, Nykaa will implement vertical-wise segmental reporting. The Beauty segment will include the online beauty platform Nykaa, beauty-owned brands, physical stores, the eB2B distribution business ‘Superstore by Nykaa’, and the Nykaa Man BPC business. The Fashion segment will consist of the Nykaa Fashion platform, fashion-owned brands, the content platform LBB, and the Nykaa Man lifestyle business.
According to the Q1FY25 business update, Nykaa’s Beauty vertical is expected to post a revenue growth of around 22-23 percent year-on-year during the first quarter, matching the consolidated entity’s revenue growth. GMV growth for this segment is expected to be in the high-twenties on a YoY basis, despite slower growth in its physical retail business due to elections and heat waves in North India.
Despite a muted demand environment in the fashion industry and the quarter being seasonally weak due to fewer weddings and festivities, Nykaa’s Fashion vertical is projected to post a revenue growth of around 20 percent YoY, with GMV growth expected to be in the mid-teens YoY.
In May, Nykaa reported a net profit of Rs 9.07 crore for Q4FY24, a 297.8 percent increase year-on-year. Revenue from operations was Rs 1,667.98 crore, up 28.1 percent YoY. During the quarter, its consolidated GMV grew 32 percent YoY to Rs 3,217.20 crore, with all businesses performing well.
In the previous session, Nykaa shares closed 3.2 percent higher at Rs 176.93 on the National Stock Exchange (NSE). Year-to-date, the stock has gained 2.93 percent, underperforming the benchmark Nifty 50, which has rallied nearly 12 percent during the same period.
