Nykaa reports Q3 FY25 profit surge amid premium beauty demand
INDIA – Indian e-commerce platform Nykaa has reported a 61% increase in profit for the quarter ending December 31, 2024, achieving 261.2 million rupees ($2.99 million).
The growth has been driven by higher demand for premium beauty products and effective marketing investments that helped attract more customers to its platform.
Anchit Nayar, CEO of Nykaa’s beauty business, said, “A lot of the growth has been driven by the big investments we’ve made over the past several quarters in customer acquisition.”
Nykaa has been heavily investing in marketing efforts and collaborating with Bollywood actor Katrina Kaif on a celebrity brand, Kay Beauty, to tap into the $28 billion Indian beauty and personal care industry.
Nykaa’s beauty segment, which contributes over 90% to the company’s revenue, saw a 27% increase in sales, reaching 20.6 billion rupees( $ 235.52 million) for the quarter. This segment offers products from various domestic and international premium brands, including Estee Lauder and Rihanna’s Fenty Beauty.
Financial highlight
Total revenue increased by 27% to 22.67 billion rupees( $ 259.30 million), contributing over 90% of total revenue.
Marketing and advertisement expenses grew by 29% to 2.93 billion rupees( $ 33.51 million), leading to a 26% rise in overall costs.
Gross margin improved by 119 basis points in the reported quarter, driven by higher sales of premium products that generally yield higher margins.
Nykaa’s fashion segment, which focuses on apparel and contributes around 10% of its total revenue, grew by 21% to reach 1.99 billion rupees($22.76 million).
However, Nykaa’s stock price dropped by 2.3%, settling at 169.44 rupees($1.94) per share before the company announced its quarterly results.
The decrease was attributed to investor concerns over rising expenses, particularly the 29% increase in marketing and advertising costs, which led to a 26% rise in overall expenses.
The company’s strong financial position underscores its commitment to maintaining stability while navigating macroeconomic challenges.
