Nykaa Shares Updates :- Shares of FSN E-Commerce Ventures Ltd, known as Nykaa, dropped over 3% in Tuesday’s trading session, falling to a low of ₹188.55 on the BSE. This decline comes as investors await the company’s results for the June quarter. Analysts are particularly interested in Nykaa’s insights into industry trends in Beauty & Personal Care (BPC) and Fashion, its competitive landscape, and plans for international expansion.
JM Financial forecasts a 25% year-on-year growth in Nykaa’s gross merchandise value (GMV) for Q1, driven by increased BPC consumption. They predict that the GMV for BPC will rise 24% year-on-year, although the offline business may face challenges due to elections and heatwaves in North India. They also expect a lower GMV-to-net sales value (NSV) conversion rate of 58% in BPC, attributed to increased customer acquisition costs.
In the fashion sector, JM Financial notes a persistent weak demand environment, exacerbated by the traditionally slow Q1 period with fewer weddings and festivities. They anticipate a modest 16% year-on-year growth in Fashion GMV but expect a stable GMV-NSV conversion rate of 31% due to reduced leakages and lower return-to-origin (RTO) rates.
Overall, the brokerage predicts a 25% increase in GMV and a 22% rise in revenue for Nykaa, along with a 9 basis point improvement in EBITDA margin. Starting from Q1 FY25, Nykaa will restructure its segment reporting: the Beauty segment will encompass the online beauty platform, owned beauty brands, physical stores, the eB2B distribution business ‘Superstore by Nykaa’, and Nykaa Man’s BPC business. The Fashion segment will include the Nykaa Fashion platform, fashion-owned brands, the content platform LBB, and Nykaa Man’s lifestyle business.
Nuvama expects Nykaa to report a significant 103% year-on-year increase in profit, reaching ₹13.10 crore compared to ₹6.5 crore in the same quarter last year. Revenue is projected to rise 21.6% year-on-year to ₹1,728.20 crore from ₹1,421.80 crore. EBITDA margin is anticipated to be around 5.5%, slightly down from 5.6% in March but up from 5.2% in the previous year. Nuvama also predicts a 21% growth in BPC GMV and a 28% increase in Fashion GMV, with overall revenue rising to ₹17.3 billion. However, they foresee a slight margin dip due to increased marketing and GCC-related expenses.
1. What caused the recent drop in Nykaa’s share price?
The drop in Nykaa’s share price, over 3% on Tuesday, was driven by investor caution ahead of the company’s June quarter results. Concerns about industry trends in Beauty & Personal Care (BPC) and Fashion, along with competitive pressures and international expansion plans, contributed to the decline.
2. What is Nykaa’s Gross Merchandise Value (GMV) and how is it performing?
Gross Merchandise Value (GMV) represents the total value of goods sold through Nykaa’s platform. Analysts predict a 25% year-on-year growth in GMV for Q1 FY25, mainly due to increased consumption in the BPC segment.
3. How is the Beauty & Personal Care (BPC) segment performing?
Nykaa’s BPC segment is expected to see a 24% year-on-year growth in GMV for Q1 FY25. However, the offline business may face challenges due to elections and heatwaves in North India. The GMV-to-NSV conversion rate in this segment is expected to be lower at 58%, due to higher customer acquisition costs.
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4. What are the expectations for Nykaa’s Fashion segment?
The Fashion segment is predicted to experience a muted 16% year-on-year growth in GMV due to a weak demand environment and fewer weddings and festivities in Q1. However, the GMV-to-NSV conversion rate is expected to remain stable at 31% due to reduced return-to-origin (RTO) rates.
5. What is Nykaa’s expected revenue growth for the June quarter?
Nykaa is expected to report a 21.6% year-on-year increase in revenue for Q1 FY25, reaching approximately ₹1,728.20 crore.
6. What is the forecast for Nykaa’s profit in the June quarter?
Analysts predict a significant 103% year-on-year rise in Nykaa’s profit, expected to reach ₹13.10 crore compared to ₹6.5 crore in the same quarter last year.
7. How is Nykaa restructuring its segment reporting?
Starting from Q1 FY25, Nykaa is restructuring its segment reporting. The Beauty segment will include the online beauty platform, owned beauty brands, physical stores, eB2B distribution business ‘Superstore by Nykaa’, and Nykaa Man’s BPC business. The Fashion segment will include the Nykaa Fashion platform, fashion-owned brands, the content platform LBB, and Nykaa Man’s lifestyle business.
8. What are the expected EBITDA margins for Nykaa in the June quarter?
The EBITDA margin for Nykaa is projected to be around 5.5% in Q1 FY25, slightly down from 5.6% in March but higher than 5.2% in the same quarter last year.
9. What factors are influencing Nykaa’s margin performance?
Nykaa’s margins are expected to see a slight dip due to increased spending on marketing and GCC (Global Capability Centers)-related expenses, despite overall revenue growth.
10. What is the outlook for Nykaa’s international expansion plans?
Analysts and investors are keenly watching Nykaa’s commentary on its international expansion plans, as these are expected to play a significant role in the company’s future growth strategy. However, specific details and forecasts for this aspect are yet to be disclosed.