Nykaa Q2 Earnings Soar 333% on Festive Demand, Revenue Up 39%; Rise in stocks


Nykaa Q2 results: FSN E-Commerce Ventures Ltd, which runs online fashion retailer Nykaa, reported a 333% rise in net profit in the September quarter on Tuesday, boosted by strong demand for its products ahead of the festive season.

Its quarterly operating revenue recorded a 39% year-on-year increase to Rs 1,230.8 crore.

In an exchange filing, Nykaa said its EBITDA improved to Rs 61 crore from Rs 28.8 crore in the prior year period. Its consolidated margin also improved to 4.9% from 3.3% on an annual basis.

Additionally, Nykaa has increased its own physical store count to 124 stores, including two new fashion stores, with a total store area of ​​1.2 square feet in 53 cities, as of September 30, 2022.

“Our online and offline presence in Beauty has generated strong growth with improving margins. Consumer demand for high-end beauty, personal care and wellness is showing signs of momentum as we prepare for a promising H2 FY23. Our focus on curation and discovery in fashion is evident, as new season merchandise accounted for 24% of Nykaa Fashion’s GMV; international brands account for 13% of GMV in the western apparel category in the second quarter of FY23. Digital marketing costs for the fashion industry are slightly higher than during the covid period, which translates into marketing costs holding steady at Q2 FY22 levels,” said Falguni Nayar, Executive Chairman, MD and CEO.

Earlier this month, Nykaa announced that its board had approved the company’s free share issue in a ratio of 1:5, i.e. the company will issue a bonus of 5 shares for each share held on the record date. The company has revised its record date for the purposes of determining members eligible for free capital shares to November 11, 2022.

“We refer to our letter dated 03 October 2022 regarding the issuance of bonus capital shares of the company in the ratio of 5 (five) fully paid capital shares of Rs 1/- each for 1 (one) fully paid up Equity Share of Rs 1/- each, subject to shareholder approval by postal ballot and advising that under Regulation 42 of the SEBI Registration Regulation, the Board of Directors of the Company has set Friday, November 11, 2022 as the ‘record date’ for the purposes of determining members eligible for Free Equity Shares,” the company advised the exchanges.

After falling more than 52% from its 52-week high at Rs 2,574, shares of Nykaa were trading 4.5% higher on the exchange in intraday trading after the earnings announcement.

Nykaa’s pre-IPO lock-up period will expire on November 9. About 67% or 31.9 crores of Nykaa shares are likely to be open for trading on the day the lockout expires.

Nykaa was founded by Falguni Nayar in 2012. Shares of the Mumbai-based company were listed on NSE and BSE on November 10 last year at Rs 2001, a premium of 77.87%. Nykaa Initial Public Offering was subscribed 81.78 times and the price range was set at Rs 1,085-1,125 per share.

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