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India's Nykaa expects festival season to boost demand

Indian beauty firm Nykaa's profit jumps on strong fashion demand
Indian beauty firm Nykaa's profit jumps on strong fashion demand   -   Copyright  Thomson Reuters 2022
By Reuters

By Tanvi Mehta and Anuran Sadhu

BENGALURU -Indian cosmetics-to-fashion retailer Nykaa said on Friday it expects stronger demand for its products in the current quarter after a ‘subdued season’ where inflationary pressures dented consumer spending.

The upcoming festival season, which extends till the end of the year, would further boost consumer demand for beauty, personal care and wellness products, that Nykaa said was already showing early signs of recovery.

“We remain cautiously optimistic and believe the season may be good and hopeful of strong demand,” Nykaa CEO and Managing Director Falguni Nayar said on a post earnings call, after the last quarter that she defined as a “subdued season”.

Nayar had said in May that inflationary pressures had begun to build in the first quarter, but noted that higher food and fuel prices did not dissuade the company’s high-end shoppers.

Gross merchandise value (GMV) jumped 47% to 21.56 billion rupees in the quarter ended June. GMV from its fashion business jumped 59%, while that from the beauty and personal care business rose 39%.

Revenue rose 40.6% to 11.48 billion rupees.

The company in November 2021 made a strong market debut, fetching the country’s first women-led unicorn a valuation of nearly $14 billion.

The TGP-backed company, which dominates the domestic online beauty and personal care space with nearly 30% market share, has been on an acquisition spree and recently ventured into men’s innerwear and athleisure category with a new brand.

Nykaa-parent FSN E-Commerce Ventures Ltd posted a 33.2% jump in quarterly consolidated net profit at 45.5 million rupees ($574,582.01).

($1 = 79.1880 Indian rupees)