Nykaa Q4 Results: Net profits plunged 72%, revenues jumped

Online beauty and fashion retailer Nykaa recently announced its results for the Jan - Mar ‘23 period. The e-commerce player reported a significant fall in net profits but revenues witnessed a jump from the previous year.

In terms of share price performance, Nykaa has been on a downward spiral in recent times. In 2023 so far the Nykaa share price has declined by close to 19% while over the past year it has eased by more than 45%.

So, will the results lead to an improvement in the Nykaa share price performance? How did it perform in the Jan - Mar ‘23 period? What were the Nykaa revenues in the same period? How much profits did Nykaa report? Did Nykaa declare any dividend during the quarter? Let’s try and decode!

Decoding Nykaa Q4 Earnings:

Nykaa revenues:

• Nykaa reported consolidated revenues of Rs 1,301.7 crores for the Jan - Mar ‘23 period. This denotes a growth of 34% from the previous year. Growth in all the key segments contributed to the overall growth in revenues.
   
• The bulk of the revenues were generated by the company’s beauty and personal care segment at Rs 1,120 crores, up 30% from the previous year. Moreover, it made up more than 86% of the total revenues of the company.
   
• Revenues from the fashion segment came in at Rs 105 crores for the Jan - Mar ‘23 period. Although it witnessed a growth of 19% from the previous year, the growth was slower than the beauty segment. Notably, it made up 8.1% of the total revenues of the company.
   
• The company generated revenues of Rs 76.8 crores from other sources in the March quarter. This denotes a massive yearly leap of 258%.

Nykaa gross merchandise value (GMV):

• GMV for the March quarter stood at Rs 2,445.4 crores. This denotes a growth of 36% from the previous year.
   
• The Beauty and Personal Care segment reported a GMV of Rs 1,628.9 crores in the Jan - Mar ‘23 period, up 29% from the previous year.
   
• The GMV for the Fashion segment came in at Rs 664.1 crores for the Jan - Mar ‘23 period. This denotes a growth of 38% from the previous year.

Nykaa average order value: Average order value improved by 5.1% from the previous year to Rs 1,803. This can be attributed to the 22% yearly rise witnessed in the total number of orders to 8.8 million.

Further, the number of website visits also increased by 14% from the previous year to 231 million which may have contributed to a rise in average order value.

Nykaa users: Nykaa’s monthly active users for the Jan - Mar ‘23 period came in at 22.5 million, up 22% from the prior year.

Nykaa margins: Nykaa’s operating margins saw an improvement from the previous year. Operating margins for the March quarter came in at 5.4%. This compares favorably to the previous year’s figure of 3.93%.

Nykaa dividend: Nykaa did not declare any dividend during the quarter.

Nykaa net profits: Nykaa’s net profits plunged by 70% from the previous year to Rs 2.3 crores.

Nykaa Q4 results: Analyst target price

Kotak Institutional Equities: The leading domestic brokerage has a “Buy” rating on the stock with a price target of Rs 210. The firm believes that the company's core BPC business will continue to display strength marked by a consistent rise in profitability. This in turn can lead to Nykaa share price growth in the near term.

Nuvama: The renowned brokerage has a “Buy” rating on the stock with a price target of Rs 186. The firm highlighted the company's focus on the stable profit growth can drive the Nykaa share price growth.

Goldman Sachs: The renowned global brokerage has a “Neutral” rating on the stock with a price target of Rs 175. The firm believes that the company is conducting its operations in such a manner that there is a constant tussle between growth and profitability which can hurt the Nykaa share price growth.

HDFC Securities: The top domestic brokerage has a “Sell” rating on the stock with a price target of Rs 120. The firm remains unconvinced of the company's thrust on the fashion segment.

This is not investment advice. Investments in the securities market are subject to market risk, read all the related documents carefully before investing. Past performance is not indicative of future returns.