Nykaa forecasts strong revenue growth of 22-23% in Q1 FY25

The cosmetics division is expected to grow its revenue this quarter by around 22-23% year-on-year, similar to the consolidated entity’s revenue growth

The company also projects its gross merchandise value (GMV) to grow by about twenty percent year-over-year

The e-commerce startup’s net profit rose to Rs 17.4 billion in Q3 FY24, double the previous year’s Rs 8.5 billion, driven by strong growth in the fashion industry

FSN ecommerce, which owns fashion and beauty e-commerce giant Nykaa, is forecasting strong revenue growth of around 22-23% year-on-year in Q1 FY25.

The company said in a statement that it also expects gross sales value (GMV) to increase by about twenty percent year-over-year.

“Our beauty business is expected to grow around 22-23% YoY in the quarter, in line with the consolidated entity’s revenue growth. GMV growth is expected to be higher, in the high 20s YoY, in line with the long-term growth trajectory of the BPC (Beauty & Personal Care) business. This is despite relatively slower growth in our physical retail business, which was impacted by the elections as well as the heatwaves in northern India,” the statement added.

The report further stated that the entire fashion industry in India is struggling due to reduced demand.

It said growth was further hit by a weak seasonal quarter due to reduced weddings and functions. “Against this backdrop, our fashion revenues are expected to perform well, with revenue growth of around twenty percent year-on-year. GMV growth for the quarter is expected to be lower, in the mid-teens year-on-year.”

Consolidated e-commerce startups Net profit more than doubled to INR 17.4 Cr in the December quarter (Q3) of fiscal year 2023-2024 (FY24) from INR 8.5 Cr in the corresponding quarter a year earlier, driven by the rapid growth in the fashion business and margin expansion.

Nykaa reported an increase in operating income by over 22% to INR 1,788.8 Cr from INR 1,462.8 Cr in the same quarter last year. The Beauty & Personal Care (BPC) category remained the key sales driver for Nykaa, accounting for 84% of its total operating income.

Meanwhile, the fashion segment generated operating revenues of Rs152.6 billion during the quarter, up 20% from Rs127.5 billion in the same period last year.

This comes days after Nykaa announced that Expansion into the Middle East plans, and its subsidiary Nessa International Holdings officially established a wholly owned subsidiary in Qatar called “Nysaa Cosmetics Trading”.

Nysaa Cosmetics Trading was established with the aim of international export and online and offline retail of Cosmetics and Personal Care Products (BPC) and other related activities.