Nykaa Q3 Results: Profit down 58% on-year, misses estimates

Nykaa Q3 FY22 Results
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Profit misses estimates - The company reported a net profit of Rs 29.01 crore, a fall of 57.87% from Rs 68.88 crore in the same quarter last year.  Analysts had earlier estimated net profit of about Rs 36.2 crore. However, sequentially, the profits were up from . The decline in the company's profits on a year-on-year basis was led by higher staff costs and finance costs. The company's employee costs jumped 56% YoY, while finance costs increased by 71.5%.

Revenue rise - The revenue from operation increased 35.94% YoY and stood at Rs 1,098.36 crore in Q3FY22 from Rs 807.96 crore in Q3FY21. Revenue was up by 24% sequentially. Analysts had earlier expected revenues of Rs 1,075 crore. 

Nykaa results: Highlights

 

EBITDA - The company reported an EBITDA of Rs 69 crore at a margin of 6.3%, a rise of 300 basis points from 3.3% in the September quarter. However, YoY the margins were down by 697 basis points.

Monthly Unique Visitors - The company reported a sharp surge in average monthly unique visitors in the quarter, which grew 39% on-year for the beauty and personal care segment and 120% in the fashion vertical.

Unique Transacting customers - The company's annual unique transacting customers reached 79 lakh with a growth of 9% QoQ and 44% YoY, the fashion segment reached 16 lakh with a growth of 23% QoQ, and 278% YoY.

Store expansion - The company has accelerated store expansion during the December quarter by opening 12 new physical retail stores across the country including cities like Jodhpur, Rajkot, Trivandrum. Nykaa's total operational physical stores count is 96 as of December 31, 2021, across 45 cities.

Other updates - Nykaa's Gross Merchandise Value (GMV) increased 26% sequentially and 49% YoY to Rs 2,043.5 crore in the December quarter. Beauty and personal care (BPC) GMV grew 29% QoQ and 32% YoY, while fashion GMV grew 17% QoQ and 137% YoY. 

Marketing and advertisement expense was 14% of revenue from operations in Q3FY22 versus 7.5% in Q3FY21 due to continued focus on building brand awareness and higher acquisition of new customers.

Nykaa Q3 results FY22: Review

Sequentially, the company has done well in the December quarter both in topline and bottomline numbers. However, the YoY bottomline has taken a hit because of higher staff and finance costs. Other expenses (mainly marketing) for the quarter also bought down the profitability as it increased by 107% YoY to Rs 323.9 crore. The MD and CEO said, "Growth in beauty business accelerated in a relatively normalized Covid environment, with a strong revival in the cosmetics category."

Recently, on Jan. 24, Nykaa shares hit its all-time low of Rs 1,571 amid weak sentiment for new-age tech companies. The market cap of the company, which had breached Rs 1 lakh-crore mark on its listing day, has slipped to Rs 87,000 crore. The share price closed at 1,848.90, down by 0.70% on Wednesday afternoon.

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