Bangalore, India, May 26, 2023: Nykaa today announced its financial results for the quarter and full year ended March 31, 2023. Over the last two years, Nykaa has continued to prioritize growth, profitability and creating long-term sustainable value for shareholders, customers and the larger ecosystem.
India’s BPC market today stands at $21 billion, having grown from $17 billion in 2021. This growth is indicative of the increasing consumer appetite and demand which will fuel the potential of the BPC industry. With its commitment to customer-centricity and innovation, Nykaa has played a pivotal role in building India’s BPC market through consistent education, investments in technology and bringing a diverse range of Indian and international brands on the platforms.
In FY23, Nykaa’s Revenue from Operations stood at Rs 5,143.8 Cr, demonstrating a strong growth of 36% YoY, and the company achieved EBITDA margins of 5% and EBITDA at Rs 256.0 Cr, demonstrating a 57% growth YoY. Gross Margin expanded by 73 bps YoY. EBITDA margins expanded 65bps YoY which was aided by rationalization of fulfilment expenses (164 bps) and marketing optimisation (129 bps).
Over the last two financial years, and further to the IPO, our Revenue from Operations grew from Rs 2440 Cr in FY21 to Rs 5143 Cr in FY23 and EBITDA expanded from Rs 156 Cr to Rs 256 Cr in the same period. We have balanced business growth and profitability by focusing on the right drivers.
Owing to the strength of our platforms, focused offerings and differentiated value propositions our new customer acquisition nearly doubled on a two-year basis, indicating strong post-covid customer interest. Existing customers also expanded their category choices and made repeat purchases with increased frequency.
We continue to invest in technology and marketing to improve platform capabilities and drive healthy new and repeat customer behaviour, while working towards perfecting the experience in each visit. These investments have led to the order-to-visit conversions improving over the last two years, from 2.6% to 3.7% in BPC and 0.6% to 1.0% in Fashion, reaffirming confidence in our overall long-term strategies as we build out differentiated shopping experiences.
Falguni Nayar, Executive Chairperson, MD, and CEO, Nykaa said:
“Visit conversions, as a north star metric, speak a lot towards the platform strength of our business and customer interest in Nykaa as a brand. With steady improvements of over 40% and 60% 2-year growth in beauty and fashion platform conversions, our investments towards building the right technology stack as well as customer-first shopping experiences are paying off. This strong step-function growth also comes on the back of improvements across personalization capabilities, breadth and depth of product portfolio, UI UX enhancements, marketing optimizations and quality of in-bound visit traffic. This metric is reflective of a successful experience right from one downloading the app till they open their delivery package. On a visitor conversion level, this number is even higher as customers tend to browse and explore the platform and its wide offerings before finalizing a purchase.”
To cater to widening consumer demand, we expanded our fulfilment centres to 15 cities, with a total area of almost 1.5 million sq. ft. Strategic investments in regional warehousing have led to us go closer to the customer, improve warehouse manpower productivity, reduced air shipment as well as reduced split shipments. Most importantly, it has reduced the order-to-delivery duration, leading to customer delight.
Our retail business which continues to be a strategic priority, witnessed robust growth over the last two years and has achieved profitability at a business unit level. Nykaa has doubled its own physical store count from 72 at the end of FY21 to 145 beauty stores in FY23, with a total area of more than 1.4 Lacs sq. ft. spanning across 60 cities.
Nykaa takes immense pride in offering an extensive array of beauty and personal care brands and has consistently built this offering in response to consumer demands and evolving trends. We have introduced multiple renowned domestic and international names, such as The Ordinary, Anomaly, Lancome, Acne Squad, Inde Wild, Fable & Mane, and many more. With a comprehensive portfolio of over 3,400 brands, Nykaa continues to redefine beauty retail, making it a go-to destination for all beauty and personal care needs. Our Fashion business has witnessed an impressive growth trajectory of its own, with a 293% growth in GMV over a period of two years. We now showcase over 2,850 brands, including 650 global brands such as Alo, Cider, the multi-brand fashion platform Revolve and an amazing 600+ sustainable brands. We believe in offering not just the latest trends but also choices that align with the values of our customers.
We have continued building a strong house of brands across beauty and fashion with a sharp focus on innovation and consumer delight. The portfolio includes 25 brands including Kay Beauty, Nykaa Naturals, Nykaa Cosmetics, Wanderlust in beauty and Nykd, Gajra Gang, Likha, RSVP, Pipa Bella and Mixt in fashion, that have quickly become household names, as they consistently deliver on inspiration and high performing products to the consumers. Four of these brands have crossed the Rs 100 Cr GMV mark. We recently launched two BPC owned brands in Q4 FY23 – entering the Ayurveda and Wellness space, Nyveda – a potent ayurveda brand and Nudge- a beauty nutraceuticals brand. In Q4 FY23, Nykaa Fashion launched MIXT, a unisex fashion forward brand targeted towards Gen-Z
Emboldened by the support of our partners, we forayed into the GCC market to create a distinct beauty retail experience and forged a strategic alliance with the Apparel Group to build an omnichannel presence in the emerging beauty hotspot.
Our FY23 performance has demonstrated our commitment to growing lifestyle choices for our consumers through our core beauty and fashion businesses.