Result Analysis:  Nykaa (FSN E-Commerce Ventures Ltd.) (CMP: Rs.149.65) Result Update: Q3FY23

Nykaa (FSN E-Commerce) was founded in 2012 by Indian entrepreneur Falguni Nayar. Since its launch, Nykaa expanded its product categories by introducing online platforms Nykaa Fashion, Nykaa Man, and Superstore. Nykaa offers over 4,500 brands and over 4.6 million product SKUs through its website and mobile applications. Through engaging and educational content, digital marketing, social media influence, robust CRM strategies, and the Nykaa Network community platform, Nykaa has built a loyal community of millions of beauty and fashion enthusiasts.

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    Stock Details
    Market Cap. (Cr.) 42667
    Equity (Cr.) 285.11
    Face Value 1
    52 Wk. high/low 315 / 121
    BSE Code 543384
    NSE Code NYKAA
    Book Value (Rs.) 5.57
    Sector E-Commerce
    Key Ratios
    Debt-equity: 0.05
    ROCE (%): 11.28
    ROE (%): 9.68
    TTM EPS: 0.3
    P/BV: 26.87
    TTM P/E: 498.83

    Result Highlights:

    • Nykaa reported robust growth in revenue with an increase of 33.18% YoY basis and 18.85% on QoQ basis to Rs.1462.83 cr. in Q3FY23. Whereas company has clocked PAT of Rs.22 cr. in the Dec. quarter, a growth of 62.9% QoQ and de-growth of 68.22% YoY.

    • EBITDA margin of the company has increased sequentially by 24 bps and showed a decline of 109 bps on YoY basis to 5.73%.

    • Nykaa has increased its own physical store count to 141 stores, including three new owned fashion stores, with a total area of 1.4 Lacs sq. ft. across 56 cities, and 40 fulfilment centres with a total area of 1.3 million sq. ft, as on December 31, 2022.

    • On segment front, Beauty and Personal Care (BPC), Fashion, and others reported growth in GMV of 26%, 50%, and 254% respectively on YoY basis.

    • Nykaa reported highest ever conversions of 3.8% in BPC, and 1.2% for Fashion in Q3FY23.

    • Fashion now contributes to 25.9% of GMV, and 14.6% at NSV level. Other business led by the SuperStore, a e-B2B initiative now contributes to 6.1% of the GMV from 2.4% in Q3FY22

    Financial Performance:

    Shareholding Pattern:

    Particulars %
    Promoters & Promoter Group 52.34%
    FIIs 26.45%
    DIIs 6.36%
    Public 13.20%
    Others 6.33%

    Managerial commentary:

    Falguni Nayar, Executive Chairperson, MD, and CEO, said: The business has delivered consistent strong GMV and revenue growth at 37% YoY and 33% YoY respectively. The performance has been especially good given the backdrop of eight fewer festive days in Q3FY23, compared to Q3FY22. Especially heartening is the rebound of Nykaa Fashion, that has delivered a GMV and revenue growth of 50% YoY and 43% YoY respectively. Our EBITDA delivery has been strong, with scale efficiencies in fulfilment and marketing expense. There’s been a structural improvement in fulfilment expense as we move to regional warehouses. Our employee benefit expense has been kept in check post 1HFY23, as we have secured the talent we needed, and look towards enhanced productivity. Our accelerated investments in new beauty store roll-out this year has seen us add 14 stores in Q3 FY23, taking the total store count to 135 stores and making us the largest beauty specialist retailer in India.”


    Nykaa reported inline Q3FY23 results with growth in revenue of 33.18% despite the weak consumption sentiment, and shift in Navratri to Q2FY23. Lower gross profits were seen due to change in mix and consumer downgrade which impacted the EBITDA, the increase in D&A and finance costs on new stores, warehouses dragged the PAT of the company. For the 9MFY23 Nykaa has reported the earnings of Rs.0.06 and we expect the company to close the FY23 at the eEPS of Rs.0.08.


    Particulars (In Rs. Cr.) Q3FY23 Q2FY23 Q3FY22 QoQ% YoY% 9MFY23 9MFY22 YoY%
    Revenue from Operations 1,462.83 1,230.83 1,098.36 18.85% 33.18% 3,842.08 2,800.62 37.19%
    Other Income 5.64 6.48 5.91 -12.96% -4.57% 20.48 15.83 29.37%
    Total Income 1,468.47 1,237.31 1,104.27 18.68% 32.98% 3,862.56 2,816.45 37.14%
    Cost of Materials Consumed 16.61 22.25 17.66 -25.35% -5.95% 62.16 58.53 6.20%
    Trade Purchases 918.89 585.80 690.22 56.86% 33.13% 2,246.25 1,743.47 28.84%
    Changes in Inventories -107.35 65.04 -118.27 -265.05% -9.23% -168.61 -220.04 -23.37%
    Employee benefits expense 127.92 121.76 93.54 5.06% 36.75% 364.39 235.54 54.70%
    Other Expenses 428.59 374.84 346.24 14.34% 23.78% 1,152.55 858.38 34.27%
    EBITDA 83.81 67.62 74.88 23.94% 11.93% 205.82 140.57 46.42%
    EBITDA Margin (%) 5.73% 5.49% 6.82% 24 bps -109 bps 5.36% 5.02% 34 bps
    Finance Cost 20.42 20.36 12.79 0.29% 59.66% 55.84 33.15 68.45%
    Depreciation & Amortisation expense 50.70 38.50 25.12 31.69% 101.83% 120.21 65.92 82.36%
    Profit Before Tax 12.69 8.76 36.97 44.86% -65.67% 29.77 41.50 -28.27%
    Tax 3.47 3.10 7.96 11.94% -56.41% 9.22 7.78 18.51%
    Profit After Tax 9.22 5.66 29.01 62.90% -68.22% 20.55 33.72 -39.06%
    PAT Margin (%) 0.63% 0.46% 2.64% 17 bps -201 bps 0.53% 1.20% -67 bps
    EPS (in Rs.) 0.03 0.01 0.10 200.00% -70.00% 0.06 0.12 -50.00%
    Source: Company website, EWL Research

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