Nykaa Q1 revenue may rise 33% YoY, profit could jump on low base: Analysts

Nykaa Q1 results preview: Brokerages have broadly estimated the Ebitda margins to rise to 4.5-4.8 per cent. In the year-ago period and the March quarter, the Ebitda margins stood at 3.3 and 4 per cent

Analysts expect Nykaa parent FSN E-Commerce Ventures to report a 31-33 per cent yearly rise in consolidated revenues to around Rs 1,077 crore in the April-June quarter (Q1FY23). On a sequential basis, the revenue growth could be between 10-11 per cent.

The beauty and fashion e-commerce retailer will release its Q1FY23 numbers on Friday, July 5.

Notwithstanding the grim consumer sentiment due to inflation, the company’s revenue growth would be led by penetration in new geographies, foray in newer segments and due to a low base of last year, said JM Financial.

During the quarter, the company acquired and picked up stakes in several brands across wellness, nutraceuticals and sustainable beauty space such as Earth Rhythm, Nudge Wellness and KICA. More recently, it announced a foray into men’s innerwear and athleisure category with brand Gloot.

On the profitability front, Kotak Institutional Equities expects the company to post a 140 per cent yearly rise in net profits to Rs 8.2 crore. However, this would decline 4 per cent from the previous quarter due to elevated marketing spends.

The company‘s net profit in Q1FY22 and Q4FY22 stood at Rs 3.4 crore, and Rs 8.6 crore, respectively.

“We bake in sequentially higher ad-spends on account of higher national brand-building spends. We model in sequentially higher gross margins due to higher fashion in the overall mix. This coupled with lower fulfilment cost will lead to quarterly expansion of 70 bps in earnings before interest, tax, depreciation and amorisation margins (Ebitda),” it said.

Brokerages have broadly estimated the Ebitda margins to rise to 4.5-4.8 per cent. In the year-ago period and the March quarter, the Ebitda margins stood at 3.3 and 4 per cent, respectively.  

Edelweiss Securities, meanwhile, has pegged the company’s core net profit for the quarter at Rs 14 crore vs Rs 7.6 crore in Q4FY22.

“We expect the company’s growth momentum to sustain with a 51 per cent year-on-year and 20 per cent quarterly growth in gross merchandise value. We would watch out for improvement in top-of-funnel metrics (marketing spends)”, it said.

It estimates the company’s beauty and personal care (BPC) segment to record 5 per cent quarterly rise in orders. The average order value (AOV) here could be up 1 per cent sequentially, which translates to a 8 per cent sequential improvement in gross merchandise value of the segment.

For the relatively new fashion business, it foresees a 22 per cent sequential improvement in orders with the average order value likely to remain flat based on past trends.

JM Financial, on the other hand, has projected the company’s overall gross merchandise value to grow 44 per cent from last year. 

Shares of Nykaa have tanked 17 per cent on the BSE from April 1. The scrip has lost 28 per cent from its listing price and is now around Rs 1,450 levels.