Nykaa’s revenue in FY23 reached a new high of Rs 51.44 billion, profit declined 49% YoY

Nykaa's revenue in FY23 clocked 36.3% YoY growth, leaving the market impressed. on the flip side, the company reported a significant decline in its annual net profit during the same period.

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Nykaa‘a parent FSN E-Commerce Ventures Limited has announced its financial results for the fiscal year ending March 31, 2023. Interestingly, the online fashion and beauty e-commerce company successfully attained its objective of surpassing a 30% increase in revenue for FY23, primarily driven by the expansion of its Beauty & Personal Care (BPC) business in recent quarters. Nykaa’s revenue in fiscal 2023 reached a new high of Rs 51.44 billion, with a phenomenal 36.3% YoY growth.

Nykaa’s consistent and remarkable financial performance throughout all four quarters of the fiscal year 2023 is attracting eyeballs. The first, second and third quarters recorded an astonishing 41% YoY, 39% YoY and 33% YoY growth, respectively, in the revenue from operations. The fourth quarter was no exception to the company’s meteoric rise, with an impressive 33.7% YoY growth in revenue to Rs 13.02 billion. Nykaa’s impeccable performance quarter after quarter is nothing short of a financial spectacle that leaves competitors in the dust.

Interestingly, Nykaa’s revenue from operations for the first nine months of the fiscal year 2023 surpassed its total revenue for the entire fiscal year 2022. The impressive figure of Rs 38.42 billion generated in the nine-month period outpaced the previous year’s revenue of Rs 37.74 billion. This signifies Nykaa’s exceptional growth trajectory and underscores its ability to continually surpass its own financial milestones.

On the flip side, the company reported a significant decline in its annual net profit for the fiscal year 2023.

Nykaa’s net profit plummeted by a substantial 49.2% YoY, falling from Rs 412.9 million in FY22 to Rs 209.6 million in FY23. This yearly decline was mainly due to the substantial decreases in profit during the third and fourth quarters of the fiscal year. The net profit declined a massive 71% YoY in FYQ3 2023 and a 70% YoY in FYQ4 2023.

Nykaa’s profit decline in FY23 was primarily attributed to a significant increase in overall operating expenses. The company reported a 36.6% YoY jump in operating expenses, amounting to Rs 20.22 billion.

Nykaa’s Expenses FY23

Within operating expenses, Nykaa’s marketing and advertising expenses increased 23% YoY in FY23 to Rs 5.91 billion. This elevated investment highlights Nykaa’s commitment to promoting its brand and capturing the attention of a wider audience.

Furthermore, the company’s selling and distribution expenses demonstrated an impressive surge of 74% year-on-year, reaching Rs 2.1 billion. This remarkable growth in expenses can be attributed to the expansion of Nykaa’s eB2B businessSuperStore by Nykaa, and the offline distribution of their owned brands. This indicates the company’s expanded efforts in reaching customers and ensuring efficient delivery of their products, reinforcing their commitment to customer satisfaction.

Nykaa also prioritized its workforce by allocating considerable resources towards employee benefits. With a robust growth of 50.8% YoY, the company’s spending on employee benefits soared to an all-time high of Rs 4.92 billion in FY23.

However, it is crucial for the e-commerce company to carefully manage and optimize its expenditures to ensure a sustainable and profitable business model in the future.

Before we jump to any conclusion, it is imperative to determine the revenue sources of Nykaa and identify the segment that contributed the most to the company’s overall annual revenue during the fiscal year ending March 31, 2023.

Nykaa revenue from segments

Nykaa generates a majority of its revenue from the Beauty & Personal Care (BPC) segment. This is followed by Fashion and Other segments.

The BPC segment includes Beauty businesses from Nykaa.com, Physical stores and sales of Beauty Owned Brands through 3P online and offline channels.

Nykaa’s largest segment, BPC, attained strong growth in both quarterly and yearly gross merchandise value (GMV) figures. In Q4 FY23, the BPC segment experienced a GMV growth of 29% YoY, reaching Rs 16.29 billion. On an annual basis, the segment recorded a significant increase of 33% YoY, with a total GMV of Rs 66.49 billion in FY23.

In FY23, Nykaa BPC segment reported a notable increase in order volume, while the average order value (AOV) at MRP (Maximum Retail Price) remained flat. The order volume grew by 31% YoY, totalling 34.8 million orders. Interestingly, over one-fourth of these orders were placed during the fourth quarter. However, despite the growth in order volume, the average order value remained consistent with the previous year, standing at Rs 1,857.

The sustained growth in order volume indicates Nykaa’s success in attracting and retaining customers within the BPC segment. However, the stagnant average order value suggests that customers were not willing to spend more on each transaction during the fiscal year. There could be several factors contributing to this trend. Economic issues, such as an impending recession or rising inflation, could have influenced consumer spending behaviour, leading to cautious spending habits. Additionally, changing consumer preferences and the availability of competitive pricing (such as discounts and offers) might have contributed to the flat average order value.

Nykaa Fashion segment

The Fashion segment includes businesses from NykaaFashion.com, Nykaa.com, Physical Stores and sales of Fashion Owned Brands through 3P online and offline channels.

Nykaa’s fashion segment GMV significantly increased 47% YoY to Rs 25.7 billion in FY23, reflecting the company’s successful efforts in expanding its presence and attracting customers within the fashion segment. During the last quarter, the company reported 38% YoY growth in Fashion GMV, to Rs 6.64 billion.

The Nykaa Fashion segment reported a substantial 42% YoY growth in the total number of orders placed during the fiscal year 2023, reaching a noteworthy 4.8 million. At the same time, the average order value at MRP also increased 8.3% YoY to Rs 4,507 during the fiscal year. These figures unveil a remarkable tale of soaring trends and heightened allure in the world of fashion retail.

The Others segment includes businesses from NykaaMan, eB2B business “SuperStore by Nykaa”, and International. The segment recorded a remarkable growth of 170% YoY and 204% YoY in Gross Merchandise Value during the fourth quarter and full year ended March 31, 2023, respectively.

Other main highlights

  1. Nykaa’s EBITDA (expenses before interest, taxes, depreciation, and amortization) in Q4 FY23 increased 84% YoY, reaching Rs 707 million.
  2. For the entire fiscal year 2023, Nykaa’s EBITDA reached Rs 2.56 billion, reflecting a robust YoY growth of 57%.
  3. Nykaa’s GMV (gross merchandise value) grew 36% YoY to Rs 24.45 billion during Q4 FY23. For the entire fiscal year, Nykaa’s GMV stood at Rs 97.43 billion, reflecting a noteworthy growth of 41% YoY. This signifies the company’s ability to drive sales and attract customers, resulting in sustained growth in its business operations.
  4. On a unit level, Nykaa spent approximately Re 1 to earn a rupee of operating income in FY23. This implies a relatively efficient cost structure and the ability to generate operating income efficiently.
  5. Nykaa achieved a noteworthy achievement in managing its cash flow as it reported a substantial reduction in cash outflows from operations. In FY23, Nykaa’s cash flow used in operating activities declined an impressive 60.4% YoY, amounting to Rs 1.4 million.


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