Nykaa posts Q2 profit jump on firm demand for beauty products

Indian retailer Nykaa reported a 72% rise in its second-quarter profit on Tuesday as its mainstay beauty products segment continued to drive growth ahead of the festive season.

The company, listed as FSN E-Commerce Ventures said its consolidated net profit rose to 100.4 million rupees ($1.19 million) for the quarter ended Sept. 30 from 58.9 million rupees a year ago.

India’s $28 billion beauty and personal care (BPC) market, which is expected to reach around $45 billion by 2030, is growing rapidly, mainly fuelled by demand from the growing middle class.

Nykaa’s BPC segment, which also includes luxury brands such as Estee Lauder and Bobbi Brown and contributes 90% to the total revenue, reported a 24% jump in revenue.

The beauty products segment reported robust performance ahead of the festive season, Nykaa said in a quarterly update, opens new tab last month.

Its overall gross merchandise value (GMV) – the monetary value of all its orders, rose 29% to 36.53 billion rupees.

GMV from Nykaa’s Fashion segment, which sells clothing, footwear and handbags, contracted to 10% from 27% a year ago.

India’s apparel and cloth retailers reported subdued demand in the second quarter as consumers made fewer purchases amid high inflation.

Rival Shoppers Stop reported a loss for the second straight quarter, while Tata Group-owned Trent posted its slowest revenue growth in 14 quarters.

Nykaa’s total revenue rose 24% to 18.75 billion rupees during the quarter, while total expenses also rose 24% as it spent more on advertisement and marketing.

Nykaa’s earnings before interest, tax, depreciation and amortization margin stayed largely flat at 5.5% compared to 5.4% a year ago.