Nykaa, a major player in the beauty and fashion e-commerce industry, witnessed a significant uptick on Friday. The company’s shares surged by more than 3% to reach INR 151.55 during the early trading hours on the BSE. This remarkable performance was driven by Nykaa’s strong update for Q2 FY24.
In a filing with the stock exchange today, the company announced that it anticipates a year-on-year (YoY) growth of approximately 20% in the net sales value (NSV) for its beauty and personal care (BPC) business during the current quarter.
“The beauty vertical continues to expand through the ecommerce business, physical store expansion and growth of our owned brands,” said Nykaa, adding that the growth was supported by the success of its flagship event ‘Hot Pink Sale’ that took place in July this year.
In fact, the company asserts its strong performance in all its verticals, defying industry expectations of slightly reduced discretionary spending in Q2. This shift is largely attributed to a delayed festive season this year.
The company’s decision to move the festive season sales from September last year to October this year has had a certain influence on the Q2 FY24 growth. Nevertheless, the company has refrained from providing additional details regarding this impact.
In the meantime, the fashion division of the company has experienced significant momentum during Q2 FY24, a notable contrast to the overall apparel industry, which has continued to face sluggish demand in this quarter.
“Within the quarter, Nykaa Fashion has optimised the core category mix along with improvement in order volumes. Fashion net sales for the quarter is expected to grow in early thirties on YoY basis,” it said.
In Q2 FY23, the NSV for its Beauty and Personal Care (BPC) and fashion businesses amounted to INR 981.5 Cr and INR 175.3 Cr, respectively. Nykaa’s total NSV during the same period stood at 1,204.9 Cr.
Nykaa anticipates that its consolidated Net Sales Value (NSV) will experience mid-twenties growth, while its revenue is expected to see early twenties growth on a year-over-year basis for the quarter, mirroring the levels seen in the previous quarter, Q1 FY24.
In the preceding quarter, Nykaa witnessed an 8.2% year-on-year increase in its net profit, reaching INR 5.4 Cr, while its operating revenue surged to INR 1,421.8 Cr.
During the second quarter of FY23, the beauty e-commerce giant disclosed a net profit of INR 5.2 Cr and an operating revenue of INR 1,230.8 Cr.
Nykaa has stated that its overall performance in the first half of FY24 positions the company favorably for the rest of the year, as historically, the second half tends to see stronger consumer demand.
The stock on the BSE had gained 1.6% and was trading at INR 149.25 by 12 PM IST today.