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Informist, Tuesday, May 27, 2025

By Akash Mandal

MUMBAI – FSN E-Commerce Ventures Ltd.'s top line for the March quarter is seen rising on year on the back of robust growth in its beauty and personal care and fashion segments, analysts said. Its bottom line for the quarter is seen nearly tripling on year due to increased margins. However, the company's top line and bottom line for the reporting quarter are both expected to decline sequentially, while margins are expected to be steady.

The company, which operates the retail platform Nykaa, is expected to post a consolidated net profit of INR 203.25 million for the March quarter compared with INR 69.30 million in the year-ago quarter, according to the average of estimates from eight brokerages. Sequentially, its consolidated net profit is expected to fall over 22%. The company's consolidated revenue for the quarter is seen at INR 20.72 billion, up over 24% on year but down 9% sequentially.

The highest estimate for net profit was INR 296 million from Elara Securities (India), while the lowest was INR 98 million from ICICI Securities. The highest estimate for revenue was INR 21.43 billion from Kotak Institutional Equities and the lowest was INR 20.12 billion from Equirus Securities.

"We triangulate core BPC (beauty and personal care) GMV (gross merchandise value) growth at 28% YoY, assuming eB2B + Nykaa Man GMV growth at 55%," JM Financial Institutional Securities said in its report. This robust growth is on the back of order growth due to investments in customer acquisition in 2024-25 (Apr-Mar), strong retail performance, and strong performance of brands owned by the company. "Core BPC gross margin is expected to improve 120bps YoY to reach 42.7% due to rising owned brands salience and lower discounting," the brokerage said.

Nuvama Wealth Management expects the company's gross merchandise value for its beauty and personal care and fashion segments to grow 29% and 10% on year, respectively, during the quarter. Nomura Equity Research and Kotak Institutional Equities see the company's overall gross merchandise value growing 26% and 24% on year, respectively.

The company is expected to report earnings before interest, tax, depreciation, and amortisation of INR 1.27 billion for the March quarter, compared with INR 933 million a year ago. The EBITDA estimates range between INR 1.18 billion by JM Financial and INR 1.35 billion by Elara Securities. 

The company's EBITDA margin is likely to remain flat on quarter in Jan-Mar but increase on year, according to a consensus of estimates. Five brokerages expect the company's EBITDA margin for the quarter to be between 6.1 and 6.3%, while JM Financial expects it to be a tad lower at 5.9%. Elara Securities expects the company's margins to expand but did not provide an absolute figure. "Expect margin improvement to continue for FSN E-Commerce Ventures on better take rate (with ad revenue) and reduced losses in Fashion," Elara Securities said. The company had reported an EBITDA margin of 5.6% in the year-ago quarter and a margin of 6.2% in the December quarter. Other brokerages were also on the same page with Elara Securities regarding the rationale for improved margins.

FSN E-Commerce will disclose its March quarter earnings on Friday. "Management's commentary on industry trends in BPC/Fashion, competitive landscape, continued supply chain investments, and international expansion plans should be keenly watched," JM Financial said. On Tuesday, shares of the company closed at INR 201.13 on the National Stock Exchange, up 0.4%. It is up nearly 19% from its closing price on Feb. 10, when the company reported its results for the December quarter. 

Following are the Jan-Mar earnings estimates for FSN E-Commerce Ventures Ltd. in INR million, based on reports from eight broking firms in descending order of net profit:

End

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

Edited by Akul Nishant Akhoury

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