InvestorQ : Is it true that the losses of Nykaa widened in the Dec-21 quarter?
Anjana Aiyar made post

Is it true that the losses of Nykaa widened in the Dec-21 quarter?

Khushi Patel answered.
1 year ago

You are right that the Dec-21 quarter did see widening of losses but at the same time it also witnessed better traction on the top line. In fact, for the online portals, what really matters in the medium term is how the top line grows. FSN E-Commerce, the owner of Nykaa brand, made a big splash in the IPO last year. However, the stock has taken a fair bit of beating from higher levels. Here is a financial summary of Nykaa for Dec-21 quarter.


Rs in Crore






Total Income (Rs cr)

₹ 1,098.36

₹ 807.97


₹ 885.26


Operating Profit (Rs cr)

₹ 43.86

₹ 88.57


₹ 7.52


Net Profit (Rs cr)

₹ 27.93

₹ 68.97


₹ 1.22


Diluted EPS (Rs)

₹ 0.60

₹ 1.50

₹ 0.03

Operating Margins




Net Margins




FSN E-Commerce (Nykaa) reported 35.9% growth in sales at Rs.1,098.36 crore in the Dec-21 quarter on a yoy consolidated basis. GMV (gross merchandize value) grew 26% sequentially and 49% yoy at Rs.2,044 crore for Nykaa. There was 32% growth in the GMV of the beauty and personal care vertical at Rs.1,533 crore. GMV of Fashion vertical grew 137% to Rs.510 crore, racking up nearly one-fourth of the overall GMV in quarter. Unique transacting customers (UTC) was up 44% at 79 lakh in Q3 while order volumes grew to 7.6 million in Q3. Overall, the summary of the top line was that it was undoubtedly a robust performance.

How did the operating performance pan out for Nykaa? Operating profits were lower -51% at Rs.43.86 crore. However, the gross profits grew 51% at Rs.509 crore while gross margins came in at a healthy 46% of sales. Gross margins improved 3.6 percentage points yoy. Operating margins tapered from 10.96% in the Dec-20 quarter to 3.99% in the Dec-21 quarter. This was largely an outcome of sharply higher marketing costs and fulfilment costs with both up by over 30% yoy, that Nykaa incurred during the Dec-21 quarter.

Net profits were lower by -59.5% at Rs.27.93 crore with the fall largely accounted for by higher marketing costs and a spike in fulfilment expenses. However, both these variables are likely to be sales accretive in the medium to long run. PAT margins in the Dec-21 quarter tapered from 8.54% in Dec-20 quarter to 2.54% in the Dec-21 quarter. However, PAT margins were sharply higher on a sequential basis compared to the Sep-21 quarter. Clearly, the benefits of higher marketing spend is likely to kick in the medium term.