Nykaa says quick delivery isnât hurting margins as Q1 profit jumps 226%
Bengaluru: Nykaa said on Tuesday its rapid-delivery beauty offering Nykaa Now has achieved sufficient scale without hurting profitability, with higher purchase frequency and steady basket
Bengaluru: Nykaa said on Tuesday its rapid-delivery beauty offering Nykaa Now has achieved sufficient scale without hurting profitability, with higher purchase frequency and steady basket sizes offsetting the higher costs of quick commerce, as the company looked to ease investorsâ concerns around the economics of the format. The service has expanded to 13 cities from just 3 a year earlier and is expected to reach 25 cities by the end of fiscal year 2027 (FY27), supported by Nykaa's network of 324 stores across 105 cities that serve as hyperlocal fulfilment hubs. Nykaa Now currently offers more than 1,000 beauty and personal care brands, according to the companyâs investor presentation. âWe donât think this will be dilutive. The increase in purchase frequency and average order values staying consistent are offsetting the increase in fulfillment costs,â Anchit Nayar, chief executive of Nykaa Beauty, told analysts on Tuesday. âDespite Nykaa Now having become meaningful over the past several quarters, weâve still shown improvement this quarter.â Also Read | Nykaa shares jump 7% as FY30 roadmap impresses Street June quarter results The comments came as FSN E-Commerce Ventures Ltd, Nykaa's parent, reported a 226% year-on-year jump in consolidated net profit to âš80 crore in the June quarter, driven by accelerating growth across its beauty and fashion businesses as years of investment in assortment expansion and omnichannel retail began translating into stronger profitability.
Revenue from operations rose 29% year-on-year to âš2,782 crore in the quarter ended 30 June, while gross merchandise value (GMV) grew 34% to âš5,590 crore. Ebidta (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased 68% to âš236 crore, with Ebitda margin expanding to 8.5% from 6.5% a year earlier. Nykaaâs beauty business posted 29% year-on-year growth in net sales value (NSV) to âš2,371 crore, while fashion grew 54% to âš451 crore, aided by customer additions, a broader brand portfolio and its partnership with Nike. Fashion also reported positive Ebitda of âš40 lakh, compared with a loss of âš18 crore a year earlier, marking its first Ebitda-positive quarter. Beauty Ebitda rose 48% to âš244 crore, with margin improving to 10.3% from 9%. Management attributed the broad-based growth to a combination of stronger consumer demand and sustained execution. âThereâs no single reason. Itâs a combination of a good market, strong execution and continuing to build the right platform, marketing and technology,â Nykaaâs founder, executive chairperson and chief executive Falguni Nayar said. Also Read | Why Nykaa Fashion wants a premium fit Executives said continued customer acquisition, premiumisation, brand partnerships and technology-led improvements in merchandising and personalisation helped Nykaa outpace the broader market.
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