Last Update: February 14, 2023, 08:06 IST
Beauty and fashion firm FSN E-commerce Ventures, which operates under the Nykaa brand, reported a 70.75 per cent decline in consolidated profit to Rs 8.48 crore for the third quarter ended December, mainly due to investment in retail stores. Cause
The company had reported a net profit of Rs 29 crore in the same period a year ago.
However, revenue from operations grew by nearly 33 per cent to Rs 1,462.82 crore from Rs 1,098.3 crore in the December 2021 quarter.
Nykaa Executive Chairperson, MD and CEO Falguni Nair said that the company is focusing on improving EBITDA (operating profit) margin.
“Beyond EBITDA we call it investment that we are making for the future. One of the big costs is lease and rental. We are investing and rolling out physical stores. This is taken by us as operating cost. We are also looking to acquire 7 million (70 lakh) new customers. All this is being funded from operational costs,” said Nair.
The company grew its superstore to 92,415 transactional retailers in over 650 cities with 180 brands listed by December 31, 2022.
Nair said the company’s investments are being made in such a way that it remains profitable but it would be wrong to leave investments for the future.
The company said in a statement that the gross merchandise value (GMV) of the company grew by 37 per cent year-on-year to Rs 2,796.5 crore.
Beauty and personal care GMV grew 26 per cent on a year-on-year (YoY) basis to Rs 1,901.4 crore, with annual unique transaction customers growing 27 per cent to 96 lakh.
On a year-on-year basis, the fashion vertical GMV grew by 50 percent to Rs 724.4 crore during the reported quarter, and annual unique transactional customers grew by 50 percent to 2.4 million.
“The business has consistently delivered strong GMV and revenue growth of 37 per cent YoY and (revenue) 33 per cent YoY respectively. The performance has been particularly good against the backdrop of eight fewer festival days in Q3 FY23 as compared to Q3 FY22.”
He further added that the fashion vertical made a comeback during the quarter. Nykaa Fashion delivered GMV and revenue growth of 50 percent and 43 percent, respectively.
The fashion vertical now accounts for 25.9 per cent of Nykaa’s GMV.
Nair also clarified on the bonus issue that its board has approved the ratio of five shares for every one held.
He said that nearly 90 per cent of the shareholders participated in the voting and 100 per cent voted in favor of the resolution.
Nair said the only area where the company went wrong was that allotments were delayed by 4-5 days due to the cooling-off period required as per rules.
“So it is a myth that the shareholders were not happy with the bonus issue,” Nair said.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)