Fashion ecommerce major Nykaa's Q4FY24 net profit rises to Rs 9 crore, revenue up 28%

Beauty and fashion company FSN E-Commerce Ventures has reported a significant jump in its fiscal fourth-quarter profit. Nykaa's profit for Q4 FY2024 stood at Rs 9.07 crore, marking a 297.8% increase from Rs 2.28 crore in the same period last year.

Revenue from operations also saw a notable rise, reaching Rs 1,667.98 crore, up 28.1% compared to Rs 1,301.72 crore in the corresponding quarter of the previous fiscal year.

What drove Nykaa's revenue and profit growth?

Nykaa's impressive performance in Q4 was driven by several factors. The company's consolidated gross merchandise value (GMV) grew by 32% year-on-year to Rs 3,217.20 crore.

The EBITDA for the quarter was Rs 93.2 crore, up 32% on-year, with an EBITDA margin of 5.6%. When adjusted for ESOP expenses, new business (GCC operations), and corporate restructuring expenses, the EBITDA margin expanded to 6.7%, reflecting a 56% year-on-year growth.

The company's beauty business crossed a significant milestone, achieving a GMV of over $1 billion (Rs 8,340.90 crore) in FY2024, up 25% year-on-year. Nykaa's physical retail footprint also expanded, with 187 stores across 68 cities by March 31, 2024, adding 42 stores during the year.

Segment wise growth

Nykaa's beauty and personal care (BPC) segment showed strong performance with a revenue growth of 24% year-on-year to Rs 1,389 crore.

The segment's GMV surged by 30% year-on-year to Rs 2,120 crore. The fashion business also experienced robust growth, with revenue up 27% year-on-year to Rs 1,334 crore and a GMV increase of 27% year-on-year to Rs 842 crore.

Other business segments recorded even more significant growth, with revenue jumping by 90% year-on-year to Rs 146 crore and GMV growing by 68% year-on-year to Rs 255 crore.

Nykaa’s owned brands also saw remarkable growth, with Dot & Key achieving a GMV run rate of approximately Rs 600 crore, scaling 10 times since its acquisition.

How did Nykaa handle increased competition?

Nykaa faced increased competition from new entrants like Reliance Retail's Tira and Walmart-owned Myntra.

Despite this, Nykaa's customer acquisition efforts and higher platform conversions helped maintain its market position.

According to a Bank of America note, while Nykaa remained a preferred platform, new competitors like Tira and Myntra have been gaining market share due to better discounts and alternative offerings.

In response, Nykaa continued to innovate and expand, launching an omnichannel beauty platform, Nysaa, in the GCC region through its subsidiary FSN International, which is making an investment of up to $1.9 million into Nysaa.

Focused on international expansion

Looking ahead, Nykaa's board has approved an investment of Rs 20 crore in its wholly-owned subsidiary, FSN International, to support further international expansion. The company is focusing on strategic investments to strengthen its global presence and enhance its product offerings.