Nykaa Surpasses Q3 FY24 Growth Projections in Beauty Industry

By siliconindia  |  Tuesday, 09 January 2024, 11:10 IST

Nykaa Surpasses Q3 FY24 Growth Projections in Beauty Industry
Beauty and personal care leader Nykaa has reported impressive growth in its third-quarter FY24 performance, surpassing industry expectations. The company anticipates substantial growth in both gross merchandise value (GMV) and net sales value (NSV), reaching the mid-20s range for the beauty and personal care segment. This forecast represents a significant leap, as detailed in the company's filing with stock exchanges. Nykaa attributes the divergence between GMV and NSV growth to brand-oriented pricing and discount strategies, especially in mass and masstige categories. Nevertheless, the company highlights that despite this disparity, the fundamental order volume growth remains robust and steady, indicating sustained customer demand.
In the prior quarter, Nykaa saw a 50% surge in net profit to Rs 7.8 crore and a 22% increase in revenue to Rs 1,507 crore during Q2 FY24. Its key revenue driver, the beauty and personal care (BPC) segment, exhibited significant growth, with a 23% year-over-year rise in gross merchandise value (GMV) to Rs 2,001 crore. Nykaa is confident in the BPC segment's performance, expecting it to outpace industry growth, although acknowledging that the current industry growth rate falls below long-term projections. The company remains positive about the sector's potential to return to a more typical growth pattern in the near to mid-term, driven by favorable macroeconomic and demographic indicators.
Nykaa emphasized its commitment to expanding the BPC category by investing in initiatives such as Nykaaland, a successful beauty and lifestyle festival in Mumbai that attracted over 15,000 ticketed visitors. Aside from BPC, Nykaa Fashion, another significant revenue source, foresees substantial growth, anticipating around 40% growth in GMV and low-30s growth in net sales value (NSV) year-over-year. This growth outlook comes amid subdued industry-level consumption and weaker demand during the festive season, where Nykaa Fashion observed a modest 28% increase in revenue from operations in the second quarter.

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