Nykaa share price falls after Q2 results: Is it right time to invest in e-commerce giant?

Days after Nykaa's parent FSN E-Commerce Ventures was listed on the National Stock Exchange (NSE) as well as Bombay Stock Exchange (BSE), shares of the e-commerce beauty giant slumped nearly 6% to Rs 2,225 apiece on the BSE in Monday's opening deals on the BSE as the newly-listed company reported its quarterly earnings on Sunday.

Nykaa's parent FSN E-Commerce Ventures reported a 95% decline in net profit at Rs 1.2 crore for the quarter ended in September as compared to Rs 27 crore in the year-ago quarter. On the other hand, its revenue from operations, witnessed a growth of 47% to Rs 885.3 crore in the quarter under review from Rs 603.8 crore in September 2020 tranche.

Nykaa's monthly average visitors surge to 21 million with yearly growth of 62%

As per the filing, Nykaa's Beauty and Personal Care GMV (gross merchandise value) grew by 38% year-on-year (YoY) to reach Rs 1,186 crore, while Fashion GMV grew by 215% to arrive at Rs 437 crore. While the monthly average unique visitors increased to 21 million with YoY growth of 62% in the Beauty and Personal Care vertical and 16 million with a growth of 328% from the year-ago quarter in the Fashion retail. 

"We have maintained growth momentum in our beauty business, accelerated our fashion business and focused on building the brand Nykaa with strong marketing campaigns both digitally and mass media," Nykaa Executive Chairperson, MD and CEO Falguni Nayar had told PTI.

She added that increased marketing spends has led to an acceleration of customer acquisition, which is also evident in the unique visitor and transacting customer metrics. 

"The company continues to invest in the expansion of retail stores and fulfilment capacity ahead of the festive season," she said, adding that the acquisition of the skincare brand, Dot & Key marks a significant step towards Nykaa's owned brands strategy, PTI reported. "The business will be an area of focus for the quarters to come. On the fashion side, we have launched a brand, Gajra Gang, in the large and promising Indian wear space," she added.

The monthly average unique visitors increased to 21 million with y-o-y growth of 62 per cent in the Beauty and Personal Care vertical and to 16 million with y-o-y growth of 328 per cent in the fashion line.

Image: Hemaganj Twitter/ PTI