Nykaa hits all-time low; slips 19% in one week on weak Q3 results

Shares of FSN E-Commerce Ventures, the parent company of beauty e-tailer Nykaa, hit an all-time low of Rs 1,536, down nearly 7 per cent on the BSE in Monday’s intra-day trade. It has fallen below its previous low of Rs 1,571.30 touched on January 27, 2022. In comparison, the S&P BSE Sensex was down 1.8 per cent at 57,138 points at 10:53 am.

The stock of the cosmetics-to-fashion retailer has slipped 19 per cent in the past one week after the company reported a weak set of numbers for the October-December quarter (Q3FY22).

With the past one week’s decline, the stock price of Nykaa has slumped 40 per cent from its record high of Rs 2,574 touched on November 26, 2021. The company had issued shares at a price of Rs 1,125 per share in its initial public offer (IPO). The stock had made a market debut on November 10, 2021.

Nykaa on February 9, 2022 reported a 59 per cent year-on-year (YoY) decline in its Q3 net profit at Rs 29 crore, hit by a jump in expenses and subdued demand for personal care and fashion products. Earnings before interest tax and depreciation and amortization (EBITDA) margin contracted 697 bps at 6.3 per cent from 13.2 per cent in Q3FY21. On a sequential basis, EBITDA margin improved 302 bps from 3.3 per cent in Q2FY22.

Revenue from operations of the company grew 36 per cent YoY at Rs 1,098 crore. It said growth in beauty business accelerated in a relatively normalized Covid environment, with a strong revival in the cosmetics category. Nykaa’s gross merchandise value (GMV) grew 49 per cent YoY driven by 32 per cent and 137 per cent YoY growth in beauty and personal care (BPC) and Fashion segments, respectively.

“Marketing and Advertisement Expense was 14.0 per cent of revenue from operations in Q3FY22 as against 7.5 per cent in Q3FY21 due to continued focus on building brand awareness and higher acquisition of new customers,” the company said.

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