Earnings Review
FSN E-Comm Oct-Dec PAT, sales up but below Street view
This story was originally published at 19:36 IST on 10 February 2025
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--FSN E-Comm Oct-Dec consol net profit INR 261.20 mln
--FSN E-Comm Oct-Dec consol PAT INR 261.20 mln vs INR 161.80 mln year ago
--Analysts saw FSN E-Comm Oct-Dec consol net profit INR 379.83 mln
--FSN E-Comm Oct-Dec consol revenue INR 22.67 bln vs INR 17.89 bln year ago
--FSN E-Comm Apr-Dec consol PAT INR 457.90 mln vs INR 253.40 mln year ago
--FSN E-Comm Apr-Dec consol revenue INR 58.88 bln vs INR 47.18 bln year ago
--FSN E-Comm Oct-Dec consol beauty ops sales INR 20.60 bln vs INR 16.22 bln
--FSN E-Comm Oct-Dec consol fashion ops sales INR 1.99 bln vs INR 1.64 bln
--FSN E-Comm: Oct-Dec beauty segment revenue up 27% YoY
--FSN E-Comm: Oct-Dec fashion segment revenue up 21% YoY
--FSN E-Comm Oct-Dec consol EBITDA INR 1.41 bln, up 42% on year
--FSN E-Comm Oct-Dec gross merchandise value INR 45.28 bln, up 25% on year
--FSN E-Comm launched 12 new stores in Oct-Dec, total now 221
--FSN E-Comm: Oct-Dec beauty segment growth accelerated, fashion resilient
--FSN E-Comm Oct-Dec consol EBITDA margin 6.2% vs 5.5% year ago
--FSN E-Comm Oct-Dec spent 15.9% of sales on marketing, advt vs 14.5% year ago
By Noopur Bhandiwad
MUMBAI – Though FSN E-Commerce's consolidated net profit for the December quarter rose on year, it missed analysts' estimates and registered the slowest on-year growth in six quarters. Its consolidated revenue rose on year as well, but fell slightly short of analysts' expectations. However, this was the best sales growth so far in this financial year.
The owner of beauty and fashion retail Nykaa brand posted a consolidated net profit of INR 261.20 million for the December quarter, over 61% higher than the year-ago quarter. Analysts had expected a net profit of INR 379.83 million. It reported a consolidated revenue of INR 22.67 billion, up nearly 27% on year, but a tad lower than analysts' estimates of INR 22.96 billion. Sequentially, the company's net profit jumped 160%, the best quarterly growth in four quarters, while its revenues rose almost 21%.
The company's total expenses for the quarter were INR 22.28 billion, up nearly 26% on year. Of this, its cost of materials consumed declined the most, and was down 88% on year. In its earnings disclosure, the company did not provide an explanation about why its cost of material consumed had fallen so sharply -- from INR 235.2 million to a mere INR 27.8 million. Indeed, data for the nine months to December also showed a similar pattern – cost of materials consumed was INR 68.2 million, down almost 90% from INR 576.3 million.
The company's finance costs surged over 46% on year. The company's depreciation and amortisation expense rose 20% on year and its other expenses increased more than 31%. The company's employee benefits went up 18% on year and its purchases of stock in trade was up 4% on year. For the nine months ended December, the company reported a consolidated net profit of INR 457.90 million, over 80% up on the year-ago number. The company posted a revenue of INR 58.88 billion for the same period, up nearly 25% on year.
The company reported a consolidated earnings before interest, taxes, depreciation, and amortisation of INR 1.41 billion, up 42% from the previous year. The EBITDA margin expanded to 6.2% from 5.5% in the year ago quarter. Its gross merchandise value was INR 45.28 billion, up 25% on year.
Sales from the company's beauty segment rose 27% to INR 2.06 billion, the highest contributer to its consolidated revenues. Its gross merchandise value grew 32% on year to INR 33.89 billion for the December quarter. The stellar growth in this vertical was fuelled by customer growth, with Nykaa's cumulative beauty customer base growing to 32 million, the company said. The company's order volume for this segment grew 30% on year, the highest growth in the last nine quarters, it said. Under this segment, the company launched more than 200 new brands. However, the company's distribution business Superstore by Nykaa's contribution margin was (-)12.1% of the total sales for the quarter, down from (-)17.2% in the year ago quarter.
The company's sales from the fashion segment were up 21% on year to INR 1.99 billion. The company said the growth in the segment reflected the segment's resilience amid a subdued demand environment. Cost efficiences across several cost items helped to improve the fashion vertical's profitability, the company said. The segment's gross margins increased to 51.3%, higher than 43.9% a year ago due to increased content income from its content platform LBB.
The company's marketing and advertising costs comprised 15.9% of its sales, up from 14.5% a year ago. FSN E-Commerce launched 12 stores this quarter and expanded to three cities--Agartala, Mohali, and Belgaum--taking its total new store additions to 47 so far this year. Its total store count is now 221. Its total retail space went up by 31% year on year due to a rollout of larger stores, it said. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Deepshikha Bhardwaj
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