Nykaa profit jumps on strong beauty demand

Highlights

• Quarterly profit surged to 344.4 m rupees from 100.4 m rupees year-on-year.
• Revenue grew 25 per cent to 23.56 bn rupees on premium brand partnerships.
• Company expands internationally with Kay Beauty launching in UK stores.

Indian beauty retailer Nykaa has posted a more than three-fold increase in quarterly profit, driven by steady demand for makeup and skincare products and strategic partnerships with global brands.

FSN E-Commerce Ventures, which operates the Nykaa platform, reported a profit of 344.4 million rupees (£3.9 m) for the quarter ended 30 September, up from 100.4 m rupees a year earlier.

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The Mumbai-based company's revenue rose 25 per cent to 23.56 bn rupees, fuelled by its beauty business which grew 25 per cent to 21.32 bn rupees. The fashion vertical, which includes brands like Victoria's Secret and Titan's Mia, recorded 21 per cent growth.

Nykaa has sharpened its focus on profitability through strategic partnerships including the global rollout of Katrina Kaif's Kay Beauty and Rihanna's Fenty Beauty.

The company added premium brands such as Chanel, Korean skincare label Aesura, and sunscreen maker Supergoop during the quarter.

Global growth

The retailer has expanded overseas operations to compete with global cosmetics giants. Kay Beauty launched in the UK on September through Space NK. The brand could expand to "the US, Middle East and certain markets in Asia", co-founder Adwaita Nayar said in an interview with Bloomberg

Nykaa's in-house brand portfolio, including Dot & Key and Nykaa Cosmetics, recorded impressive 54 per cent year-on-year GMV growth. The company aims to nearly triple its gross merchandise value for in-house cosmetics brands to 60 bn rupees by March 2030, from 21 bn rupees in the last financial year.
The company added 19 beauty stores during the quarter, bringing its total to 265. Gross margins expanded to 44.9 per cent from 43.8 per cent a year earlier.

According to PTI, Founder and CEO Falguni Nayar pointed the company is focused on delivering unparalleled convenience to consumers through its rapid delivery model Nykaa Now, while maintaining strong assortment. The fashion business delivered 37 per cent year-on-year GMV growth, with new brands including GAP, Guess, and H&M added this year.

Nykaa shares have gained almost 40 per cent this year, significantly outperforming India's benchmark Nifty 50 Index's near 4per cent gain.