- Date : 25/05/2023
- Read: 3 mins
Nykaa released its Q4 2023 numbers with a decline in net profit but an increase in sales and margins. Here is a look at the Q4 performance, along with expert opinions.
FSN E-Commerce Ventures, the parent company of cosmetics and fashion brand Nykaa, declared its quarterly results on 24 May 2023. The brand reported declines in net profit in quarterly and annual comparisons.
Also Read: Nykaa’s Q3 earnings: What went wrong and how analysts see the future
A Snapshot of Nykaa Quarter 4, FY 2022-23 Results
Here is a snapshot of the key numbers behind Nykaa’s Q4 results:
- The company posted a profit of Rs 2.41 crore in quarter 4. With this, the quarterly profit of the company saw a decline of 71.8% in comparison to Q4, FY2021-22. The profit in Q4 last year was Rs 8.56 crore
- The fashion and beauty brand posted an annual profit of 19.26 crore for the previous fiscal year. In FY 2021-22, the net profit was Rs 41.07 crores. This is a 53.10% decline in annual net profit
- The revenue from operations during the quarter was Rs 1301.72 crore, compared to Rs 973.32 crore in the previous Q4. This is an increase of 33.7%
- The annual revenue from operations was Rs 5143.80 crore, which is 36.2% more than the revenue in FY 2021-22. The annual revenue in FY 2021-22 was Rs 3773.93 crores
- In the reported quarter, the company’s EBITDA margin increased by 147 basis points to 5.4%
- The company’s Gross Merchandise Value (GMV) rose to Rs 2445.40 crore, a year-on-year increase of 36%. GMV is an important metric indicating the retailer's goods sold value on a platform
Also Read: Share prices of Nykaa are in freefall: What do experts say?
What should investors do?
The Nykaa share price recovered the result day losses with a good opening on 25 May 2023. While its profit numbers are underwhelming, encouraging signs can be seen in its revenue, EBITDA margin and GMV numbers.
- Kotak Securities expects the employee costs and lease rentals to reduce in the coming days and has set a target price of Rs 210
- HDFC Securities is not impressed with the underwhelming display of Nykaa’s fashion venture. It has a reduced rating with a target price of Rs 120
- Nuvama maintains a buy rating on Nykaa but reduces the target price from Rs 195 to Rs 186
- Goldman Sachs has noted that Nykaa’s strong cosmetics sale is foiled by its fashion division’s receding growth. As the brand continues to balance profitability and growth, the firm maintains a neutral rating and Rs 175 target price
Also Read: Crayons Advertising IPO: The hidden gem or a risky gamble? Discover the truth now
Conclusion
Reacting to the Q4 results, Nykaa shares ended the day at Rs 125.05, a decline from the previous day’s closing of Rs 128.40. However, it opened strongly on 25 May 2023 with a 1.6% increase in share prices. Readers might recall that Nykaa shares have underperformed for long spells since its listing. Investors may benefit by observing how the results settle down with the market and then planning their next move.
Source:
FSN E-Commerce Ventures, the parent company of cosmetics and fashion brand Nykaa, declared its quarterly results on 24 May 2023. The brand reported declines in net profit in quarterly and annual comparisons.
Also Read: Nykaa’s Q3 earnings: What went wrong and how analysts see the future
A Snapshot of Nykaa Quarter 4, FY 2022-23 Results
Here is a snapshot of the key numbers behind Nykaa’s Q4 results:
- The company posted a profit of Rs 2.41 crore in quarter 4. With this, the quarterly profit of the company saw a decline of 71.8% in comparison to Q4, FY2021-22. The profit in Q4 last year was Rs 8.56 crore
- The fashion and beauty brand posted an annual profit of 19.26 crore for the previous fiscal year. In FY 2021-22, the net profit was Rs 41.07 crores. This is a 53.10% decline in annual net profit
- The revenue from operations during the quarter was Rs 1301.72 crore, compared to Rs 973.32 crore in the previous Q4. This is an increase of 33.7%
- The annual revenue from operations was Rs 5143.80 crore, which is 36.2% more than the revenue in FY 2021-22. The annual revenue in FY 2021-22 was Rs 3773.93 crores
- In the reported quarter, the company’s EBITDA margin increased by 147 basis points to 5.4%
- The company’s Gross Merchandise Value (GMV) rose to Rs 2445.40 crore, a year-on-year increase of 36%. GMV is an important metric indicating the retailer's goods sold value on a platform
Also Read: Share prices of Nykaa are in freefall: What do experts say?
What should investors do?
The Nykaa share price recovered the result day losses with a good opening on 25 May 2023. While its profit numbers are underwhelming, encouraging signs can be seen in its revenue, EBITDA margin and GMV numbers.
- Kotak Securities expects the employee costs and lease rentals to reduce in the coming days and has set a target price of Rs 210
- HDFC Securities is not impressed with the underwhelming display of Nykaa’s fashion venture. It has a reduced rating with a target price of Rs 120
- Nuvama maintains a buy rating on Nykaa but reduces the target price from Rs 195 to Rs 186
- Goldman Sachs has noted that Nykaa’s strong cosmetics sale is foiled by its fashion division’s receding growth. As the brand continues to balance profitability and growth, the firm maintains a neutral rating and Rs 175 target price
Also Read: Crayons Advertising IPO: The hidden gem or a risky gamble? Discover the truth now
Conclusion
Reacting to the Q4 results, Nykaa shares ended the day at Rs 125.05, a decline from the previous day’s closing of Rs 128.40. However, it opened strongly on 25 May 2023 with a 1.6% increase in share prices. Readers might recall that Nykaa shares have underperformed for long spells since its listing. Investors may benefit by observing how the results settle down with the market and then planning their next move.
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