Nykaa share price overcomes early nerves, trades higher after strong Q1 update

Shares FSN e-commerce venturesparent company Nykaagained on Monday after a shaky start as the company said it would post solid growth in the first quarter despite weakness in some verticals.

What happened: Nykaa said its consolidated gross merchandise value (GMV), or the total value of goods sold during a given period, is forecast to grow at a rate of around 25% year-on-year.

Nykaa will start vertical segment reporting from this quarter. The beauty segment will include Nykaa’s online beauty platform, beauty brands and offline stores, among others. The fashion segment will include Nykaa Fashion platform, fashion brands, LBB content platform and Nykaa Man lifestyle business.

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Growth across the board: As per Nykaa’s Q1 FY25 business update, the beauty vertical is expected to post revenue growth of around 22-23% year-on-year, which would be in line with the growth of the consolidated entity. GMV growth for the beauty segment is expected to be higher, in the high 20s, despite slower growth in its physical retail business due to elections and heatwaves in north India.

Despite weak demand in the fashion industry and a seasonally weak quarter due to reduced weddings and functions, Nykaa’s fashion vertical is expected to post revenue growth of around 20% year-on-year. GMV growth for the segment is expected to be around 15%.

Nykaa reported a net profit of ₹9.07 crore for Q4FY24 in May, up a massive 297.8%. Operating revenue stood at ₹1,667.98 crore, up 28.1%. Consolidated GMV rose 32% to ₹3,217.20 crore, with all businesses posting strong performances.

Reduction: Nykaa shares were trading 1.09 per cent higher at ₹179.14 after being in the red in the early session and briefly dipping into the red on Monday morning.

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