Nykaa Share Price Overcomes Early Jitters To Trade Higher On Strong Q1 Update

Shares of FSN E-Commerce Ventures, the parent company of Nykaa, were gaining on Monday after a shaky start as the company said it would log solid growth for the first quarter despite softness in some verticals.

What Happened: Nykaa's consolidated gross merchandise value (GMV), the total value of merchandise sold within a certain period, is projected to grow in the mid-20s year-on-year, the company said.

Starting this quarter, Nykaa will begin vertical-wise segmental reporting. The beauty segment will include the online beauty platform Nykaa, beauty-owned brands and physical stores, among others. The fashion segment will encompass the Nykaa Fashion platform, fashion-owned brands, content platform LBB and the Nykaa Man lifestyle business.

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Growth Across The Board: According to Nykaa’s Q1FY25 business update, the beauty vertical is expected to post revenue growth of around 22-23% year on year, matching the consolidated entity’s growth. GMV growth for the beauty segment is expected to be higher, in the high-20s, despite slower growth in its physical retail business due to elections and heat waves across North India.

Despite a soft demand environment in the fashion industry and a seasonally weak quarter due to limited weddings and festivities, Nykaa's Fashion vertical is expected to post a revenue growth of around 20% year on year. GMV growth for this segment is expected to be in the mid-teens.

In May, Nykaa clocked a net profit of ₹9.07 crore for Q4FY24, a massive 297.8% jump. Revenue from operations was ₹1,667.98 crore, up 28.1%. The consolidated GMV grew 32% to ₹3,217.20 crore, with all businesses delivering strong performance.

Price Action: Nykaa’s shares were trading 1.09% higher at ₹179.14 after starting out in the black and taking a brief dip into the red on Monday morning.

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