Nykaa Performance Update - Q3 FY2024

This update seeks to provide an overall summary of the operating performance of the company and demand trends witnessed during the quarter ended 31st December, 2023. A detailed performance update will follow once the Board approves the financial results for Q3 FY24.

Long term macro indicators continue to improve with strong GDP growth, stable interest rates, and growing GST collections, reflecting India's strong consumption growth story. However, there has been some impact on discretionary consumption due to short-term pressures.

Within this context, Nykaa has witnessed consistent growth across its three business verticals.

Our BPC vertical GMV growth for the quarter is expected to be in the mid-twenties, and NSV growth around twenty percent on YoY basis. The difference in GMV and NSV growth is primarily due to brand led pricing and discounting, mainly in mass and masstige categories. The underlying order volume growth is healthy and consistent, reflecting strong customer demand. India has amongst the lowest per capita beauty consumption in the world. We continue to invest in expanding the category and generating demand through innovative initiatives like "Nykaaland", India's first beauty & lifestyle festival which was hosted in Mumbai this year and had over 15,000+ ticketed visitors.

We believe Nykaa's BPC growth for the quarter is ahead of industry growth. However, we believe current industry growth is below long-term trajectory and should revert to the median in the near to mid-term, given the strong macroeconomic and demographic outlook.

Our reach in the BPC industry is furthered through early success seen in our newer businesses, including Superstore By Nykaa. This vertical has witnessed high growth and is now a meaningful share of our overall NSV. The combined NSV of all BPC businesses is expected to grow at low to midtwenties on a YoY basis.

In Fashion, the industry level consumption remained muted and has not seen the uplift expected during the festive season.

Against this backdrop, Nykaa Fashion has witnessed strong growth in Q3 FY24, continuing the momentum from the previous quarter. This is a testament to the quality of the assortment, superior customer metrics along with platform strength. Fashion vertical GMV for the quarter is expected to grow at around forty percent, with NSV growth expected in the low thirties on YoY basis.

For Q3 FY24, at a consolidated level, we expect our NSV to grow in the mid-twenties and revenue to grow in the low twenties on a YoY basis.

Shares of FSN E-Commerce Ventures Ltd was last trading in BSE at Rs. 173.40 as compared to the previous close of Rs. 169.95. The total number of shares traded during the day was 441398 in over 4929 trades.

The stock hit an intraday high of Rs. 177.00 and intraday low of 169.90. The net turnover during the day was Rs. 76704487.00.

Source : Equity Bulls

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