Following Shalini Raghavan’s resignation this year, CEO Falguni Nayar will be taking over as the new CMO.
The decline in profits for FSN E-Commerce Ventures, which runs Nykaa BPC, was attributed to a decrease of approximately 27% on YoY during Q1FY24, reaching Rs 3.3 crore, due to reduced discretionary spending.
The company achieved a profit of Rs 4.6 crore in the same quarter last year. In both cases, equity shareholders of the parent have been taken into account.
FSN E-Commerce Ventures had a net profit of Rs 5.4 crore in Q1FY24, which was approximately 8 percent higher than the Rs 5 crore recorded in FY23.
The company, which is based in Mumbai, reported on July 7 through its performance update that inflationary pressures have been milder, and urban consumption in the BPC category has remained strong. However, the apparel industry, where Nykaa Fashion is located, has been affected, particularly in small towns, as people are cutting back on their discretionary expenses.
Nykaa’s stated in the same update that revenue for the quarter of FY24 at a consolidated level is expected to increase by approximately 20% YoY.
In the first six months of Q1FY24, the company’s revenue from operations reached Rs 1,421.8 crore, which is a 24 percent rise from the previous year’S revenue of Rs 2,994.07.
Nykaa’s gross merchandise value (GMV) reached Rs 2,667.8 crore in the first quarter of FY2024, marking a 24 percent increase on YoY basis.
On August 11, Falguni Nayar, the CEO and MD, stated that our beauty industry is developing into a distinct ecosystem with consistent growth across its various online platforms, physical presence, and consumer brands.
The physical retail space of the company had 152 stores as of June 30, 2023, which is a 43 percent YoY increase.
“Our own labels are now present in various categories, including westernwear, indianwear and lingerie, menswear accessories, and more.” While Nykaa Fashion’s growth in the quarter was ahead of the industry but trailed behind it.
Nykaa’s profits were negatively impacted by higher expenses, particularly with employees. The employee benefit costs in the June quarter were Rs 138.6 crore, which was 22 percent higher than the Rs 114.8 crore spent by Nykea in September.
The employee expenses of Nykaa in Q4FY23 amounted to Rs 127.3 crore.
According to a note from JM Financial analysts, the overall EBITDA margin is expected to improve as management has prioritized lower marketing costs, driven by regional warehouses, and the business mix is shifting towards higher margin BPC.
The EBITDA margin in the first quarter of FY2024 was around 5.2 percent, which is an improvement from the previous year’s 4 percent.
The act of executing tasks in sequence is essential.
According to regulatory filings, the company’s profits increased by approximately 38 percent from Rs 2.4 crore in January-March to Rs 33.3 crore during the three months ending June.
The revenue generated from operations rose by roughly 10 percent in Q4FY24, going up from Rs 1,301.7 crore in FY23 to Rs 2,903.14.
Adwaita Nayar, the daughter of Falguni Nayake, managed to increase her GMV to Rs 653.7 crore on a YoY basis, but it only increased by 12 percent.
Nykaa Fashion’s growth in the quarter was much higher than the industry’ s progress, but it fell short of its long-term trajectory, according to Falguni Nayar.
Upper exits at Nykaa.
Nykaa’s announcement coincided with a string of high-profile departures. Six top executives, including the chief marketing officer, Shalini Raghavan, among others, have left the company since April.
The role of CMO will be assumed by CEO Falguni Nayar.
The departures of five senior executives, including Nykaa SuperStore’s CEO Vikas Gupta, Chief Business Officer Gopal Asthana and Chief Commercial Officer Manoj Gandhi, occurred in March.
While Gupta was leading VLCC as CEO, Asthana left Falguni Nayar’s company to join Tata Cliq and take over the e-commerce platform. The company is currently facing competition from Reliance, Tatak, and several other players.
Tira is being established by Reliance to compete with new players in the BPC sector, while Tata Cliq is increasing its e-commerce offerings and hiring experienced personnel to spearhead its efforts. Large traditional players with deep pockets have been able to attract talent from companies like Nykaa, which has impacted their growth trajectory.
Nykaa’s public market debut in 2o21 was met with strong demand. The share price, which had been at Rs 400 apiece before this, was now on the decline. FSN E-Commerce’ stock increased by 0.34 percent on Friday to Rs 146.25 on BSE.
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