Nykaa's Q2 net profit jumps 50% to nearly Rs. 8cr
What's the story
Nykaa, a beauty and personal care (BPC) company run by FSN E-Commerce Ventures, saw a 50% net profit increase in Q2 FY24.
The net profit rose from Rs. 5.2 crore in Q2 FY23 to Rs. 7.8 crore in Q2 FY24. This growth was fueled by strong BPC demand during a flagship sale event in July.
Additionally, revenue from operations grew by 22%, reaching Rs. 1,507 crore in the quarter, compared to Rs. 1,230.8 crore last year.
Details
Improved EBITDA margin and increased discounting
The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) margin improved from 5% to 5.4% in Q2 FY24.
The increase was attributed to higher discounting in the BPC category. This was due to the rise of homegrown and international brands prioritizing the Indian market.
Despite a sales delay compared to last year, Nykaa remains optimistic about the second half of FY24, which typically sees higher consumer demand.
What Next?
Total expenses and Q1FY24 performance
Total expenses for Q2 FY24 were Rs. 1,502 crore, a 22% increase from Rs. 1,229 crore last year.
In Q1 FY24, Nykaa recorded a net profit of Rs 5.4 crore and revenues of Rs. 1,422 crore.
The festive season is crucial for e-commerce companies like Nykaa, as they usually run a series of sales leading up to Diwali.
Insights
Nykaa's outlook for FY24 and growing demand
Although sales timing shifted slightly this year, Nykaa expects strong full-year performance based on solid first-half results.
With the growth of both homegrown and international brands in India's BPC market, Nykaa is well-positioned to capitalize on increasing demand.
The company's optimism for the second half of FY24, which historically experiences higher consumer demand, indicates a positive outlook for continued success in the Indian market.