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Informist, Tuesday, Aug 13, 2024

 

--FSN E-Commerce share in Dot & Key to rise to 90% post stake purchase

--FSN E-Commerce: To buy 39% stake in Dot & Key for 2.65 bln rupees

--FSN E-Commerce: To buy 39% stake more  in Dot & Key Wellness

--FSN E Commerce Apr-Jun consol revenue 17.46 bln rupees vs 14.22 bln

--FSN E-Commerce Apr-Jun consol net profit 96.4 mln rupees vs 33 mln

--Analysts saw FSN E-Commerce Apr-Jun consol PAT 161.75 mln rupees

--FSN E-Commerce Apr-Jun consol net profit 96.4 mln rupees

 

By Avishek Rakshit

 

KOLKATA – Mounting costs towards purchase of finished goods and a spike in taxes during Apr-Jun led FSN E-Commerce Ventures Ltd, which sells products under the Nykaa brand, to miss the Street’s consolidated net profit projections by an extremely wide margin. Nevertheless, the company reported a near threefold jump in its consolidated net profit at 96.4 mln rupees.

 

The revenue, however, came in line with the Street's estimates at 17.5 bln rupees, registering a 22.8% growth year on year. Sector analysts had pegged the company's net profit at 161.8 mln rupees.

 

It had reported a net profit of 33 mln rupees in the year-ago period on revenues of 14.2 bln rupees. During Jan-Mar, the net profit was 69.3 mln rupees and revenue 16.7 mln rupees.

 

The company’s earnings before interest, tax, depreciation, and amortisation rose by 31% at 961 mln rupees and the EBITDA margin rose by 34 basis points to 5.5%.

 

Its revenue from sales of beauty products, which accounts for 91% of the company's annual sales, surged 23% to 15.9 bln rupees. The gross merchandise value of beauty products, or total value of the beauty products sold, rose by 28% to 25.4 bln rupees.

 

The fashion products portfolio, a relatively minor contributor to its consolidated sales, registered a 21% jump in revenues at 1.5 bln rupees, and its gross merchandise value rose 15% to 7.7 bln rupees.

 

The pre-tax profit from sales of beauty products rose by 24.8% at 729.9 mln rupees, but the fashion portfolio continued to post losses. However, the loss from the fashion segment declined by 16.7% at 302.9 mln rupees.

 

In an investors' presentation after declaring the financial results, FSN E-Commerce Ventures said that new customer additions are driving the company's growth. The number of orders placed by customers increased by 26% at 12.4 mln and the number of annual unique transacting customers increased by 21% at 13.1 mln. The latter is important as it reflects the actual number of customers who purchase products from the platform or stores.

 

However, the purchase of traded goods surged 19.8% creating cost pressures on the company. Its total expenses surged 22% at 17.3 bln rupees. The tax outgo also increased sharply by 140.5% at 78.4 mln rupees, thus impacting the net profit negatively.

 

Acquisitions

The company said that it was increasing its existing majority stake of 51% in Dot & Key to 90% by acquiring the additional stake of 39% for a consideration of 2.7 bln rupees.

 

FSN E-Commerce Ventures had made its initial investment in Dot & Key in 2021 and since then the brand has grown multifold, while also achieving profitability since early 2023, the company said in another statement. With an annualised gross merchandise value run rate of over 7.5 bln rupees as of Apr-Jun, Dot & Key has significantly outperformed the industry growth and its rankings on marketplace platforms, it said.

 

Additionally, FSN E-Commerce Ventures is also acquiring upto 57,302 shares and 12,226 warrants of Earth Rhythm Pvt Ltd for a consideration of up to 445 mln rupees. The latter, after the acquisition will become a subsidiary of FSN E-Commerce Ventures.

 

Shares of FSN E-Commerce Ventures today closed 3.8% lower at 187.3 rupees on the National Stock Exchange. End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Akul Nishant Akhoury

 

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