Earnings Outlook
FSN E-Commerce consol net profit may spike 390% YoY
This story was originally published at 12:56 IST on 22 July 2024
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By Avishek Rakshit
KOLKATA – Fashion and beauty products seller FSN E-Commerce Ventures Ltd is expected to report an enormous 389.7% year-on-year surge in its consolidated net profit at 161.8 mln rupees for Apr-Jun, according to the average of estimates of four brokerage firms. The company’s consolidated revenue is seen at 17.5 bln rupees, according to the estimates.
Sequentially, the net profit may rise 133.8%, and revenue may grow 5.2%. In Jan-Mar, the company's net profit was 69.3 mln rupees, and revenue was 16.7 bln rupees. FSN E-Commerce Ventures reported a net profit of a little over 33 mln rupees in the year-ago period on revenue of 14.2 bln rupees.
Among the brokerages, Nuvama Wealth Management Ltd estimated the company’s revenue and net profit to be the lowest at 17.3 bln rupees, and 131 mln rupees, respectively. Kotak Institutional Equities estimated the revenue to be the highest at 18.1 bln rupees, and HDFC Securities Ltd estimated the net profit to be the highest at 200 mln rupees. FSN E-Commerce Ventures is yet to declare the date of announcing its financial performance for the June quarter.
In a performance update earlier this month, the company, which retails products under the Nykaa brand name, said that it expects revenue growth to be around 22-23% on year during Apr-Jun. The gross merchandise value growth for the quarter is expected to be in mid-twenties.
It said that in line with the overall revenue growth, the beauty products vertical is expected to register a revenue growth of around 22-23%, but the gross merchandise value growth is expected to be higher in high twenties. This is despite the company’s relatively slower growth in physical retail business, which was impacted by the General Election as well as heatwaves.
The overall fashion industry in the country continues to face challenges with a muted demand environment, and the growth was further impacted due to seasonality as weddings and festivities are fewer in Apr-Jun, FSN E-Commerce Ventures said. However, the company is expecting the revenue from the fashion products vertical to grow by around 20%, while the gross merchandise value growth is expected to be lower in mid-teens.
From Apr-Jun onwards, FSN E-Commerce Ventures will start vertical-wise segmental reporting of its financials.
Brokerage firm Kotak Institutional Equities said in a report that FSN E-Commerce Ventures’ revenue could grow 27% on year, which is higher than the company’s own estimates. The brokerage said that gross merchandise value growth would be 30%. The brokerage’s estimates for revenue and gross merchandise value growth for the beauty and fashion products segments, respectively, are different from the company’s own estimates.
Nuvama Wealth Management Ltd expects revenue growth to be 21% in both beauty products and fashion products segments.
FSN E-Commerce Ventures is likely to report an earnings before interest, taxes, depreciation, and amortisation of 1 bln rupees, according to the average of estimates by four brokerage houses. The EBITDA is estimated to be in a range of 945 mln rupees-1.1 bln rupees.
According to Nuvama Wealth Management, margins are likely to inch down a notch owing to higher marketing spends. HDFC Securities Ltd said that it is expecting an EBITDA margin of 6.1% in Apr-Jun as compared to 5.2% in the year-ago period.
HDFC Securities said that the company’s commentary on fashion segment, unwinding on working capital, and competitive landscape shift are the key things to watch out for.
At 1142 IST, shares of FSN E-Commerce Ventures were trading 0.4% lower at 176.76 rupees on the National Stock Exchange.
Following are the Apr-Jun earnings estimates of FSN E-Commerce Ventures based on reports compiled by Informist from four brokerage houses:
Broker Name | Net Sales (in million rupees) | Net Profit (in million rupees) | EBITDA (in million rupees) |
HDFC Securities Ltd | 17,400.00 | 200.00 | 1,100.00 |
Kotak Institutional Equities | 18,058.00 | 143.00 | 980.00 |
Nomura Equity Research | 17,416.00 | 173.00 | 998.00 |
Nuvama Wealth Management Ltd | 17,282.00 | 131.00 | 945.00 |
Average | 17,539.00 | 161.75 | 1,005.75 |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Deepshikha Bhardwaj
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