Why Nykaa Shares Are Going Up After Q2 Results

Shares of FSN E-Commerce Ventures were gaining on Tuesday after the firm posted robust results for the second quarter.

What Happened: The company behind beauty and personal care firm Nykaa surged 50% in net profit to ₹7.8 crore in the second quarter, compared with the ₹5.2 crore it earned a year ago. The growth was largely driven by its fashion division, which experienced robust demand in the quarter.

The robust demand in Nykaa’s beauty and personal care segment during its flagship sale event in July also contributed to the positive financial outcome, the company said.

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Why It Matters: The festive season is usually important for e-commerce firms like Nykaa, as they usually conduct a series of sales leading up to Diwali. This year, these sales were delayed by a few weeks, which affected quarterly growth to some extent.

The 50% increase in net profit was accompanied by a 22% rise in revenue from operations, which reached ₹1,507 crore in the quarter, up from ₹1,230.8 crore in the previous year. The company’s EBITDA margin improved to 5.4% in the quarter from 5% last year.

Nykaa’s total expenses in Q2 FY24 amounted to ₹1,502 crore, marking a 22% increase from ₹1,229 crore in the same period the previous year.

Price Action: Nykaa’s share price was up 2.44% at ₹150.95 at around the start of trade on Tuesday.

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