Nykaa Q4 Update: Beauty And Personal Care Segment Aid Revenue Growth

Beauty and fashion firm FSN E-Commerce Ventures Ltd., parent of cosmetics-to-fashion retailer Nykaa, is expected to report "stronger" revenue growth, buoyed by the beauty and personal care segment.

During the quarter, Nykaa's beauty and personal care categories saw sustained demand, partly aided by the ‘Pink Love’ sale introduced during the quarter, the company said in its quarterly update filed with the bourses.

"The BPC business has seen higher year-on-year growth rates in Q4 as compared to the year-on-year growth rates seen in Q3 FY23," the company said.

The operating parameters for the beauty and personal care business—average order values and conversion rates—have been "robust", which has aided revenue growth. "For FY23, we expect our percentage revenue growth rates to be in line with the ones seen in 9M FY23, early thirties."

In Q4, the tier-one consumers have demonstrated sustained consumption against the backdrop of subdued industry growth, according to the company.

However, sales at Nykaa's fashion business were impacted as inflation-weary consumers curbed discretionary spending. The retailer expects to report "subdued growth" in net sales value in the January-March quarter.

For Q4 FY23, the company expects its percentage revenue growth rates in the fashion business to come through in the late teens. "This comes on the heels of our focusing on business efficiency and unit economics. Our average order values and conversion rates have improved steadily," it said.

At the consolidated level, Nykaa expects to sustain its percentage growth rate in line with the first nine months of FY23.

The company's Q1 revenue surged 41% year-on-year to Rs 1,148.4 crore. In Q2, its revenue recorded an increase of 39% over the previous year to Rs 1,230 crore. In the third quarter, Nykaa's revenues rose to Rs 1,462 crore, up 33%.

Shares of FSN E-Commerce Ventures Ltd. closed 7.57% higher on Wednesday, compared to the 0.9% gain of the benchmark Nifty 50.