Nykaa Reports Profit Jump, Boosted by Strong Demand for Fashion Products

Indian cosmetics-to-fashion retailer Nykaa’s parent company reported a 33.2 percent rise in first-quarter net profit on Friday, boosted by strong demand for its fashion products. The TGP-backed company, which dominates the domestic online beauty and personal care space with nearly 30 percent market share, has been on an acquisition spree and recently ventured into men’s innerwear and athleisure category with a new brand.

Nykaa in November 2021 made a strong market debut, fetching the country’s first women-led unicorn a valuation of nearly $14 billion (roughly Rs. 1,11,200 crore).

The company said its gross merchandise value (GMV) jumped 47 percent to Rs. 2,156 crore in the quarter. GMV from its fashion business jumped 59 percent, while that from the beauty and personal care business rose 39 percent.

“The consumer demand for beauty, personal care and wellness is also showing early signs of recovery and we are gearing up for a promising festive season this year,” said Nykaa CEO and Managing Director Falguni Nayar.

Consolidated net profit for Nykaa-parent FSN E-Commerce Ventures Ltd stood at Rs. 4.55 crore for the quarter ended June 30, compared with Rs. 3.42 crore a year earlier.

Revenue rose 40.6 percent to Rs. 1,148 crore.

Last November, Nykaa surged to nearly Rs. 1 lakh crore valuation following a blockbuster IPO debut. The debut price was at a 79.4 percent premium to the initial public offering (IPO) price of Rs. 1,125, giving the company a valuation of Rs. 95,437 crore.

The company’s offering last year drew bids worth $32.55 billion (roughly Rs. 2,42,119 crore) as it was oversubscribed by nearly 82 times, signalling strong investor demand for a startup that, unlike many others, has already achieved profitability.

Nykaa, which functions in two broad segments, namely beauty and personal care and apparel and accessories, was incorporated in 2012 and swiftly became a popular name among Indian consumers.

The company, whose investors include private-equity firm TPG, Fidelity and Indian celebrities Alia Bhatt and Katrina Kaif, runs its online operations through mobile applications and websites along with 80 brick-and-mortar stores across the country, as of August 31.

© Thomson Reuters 2022