Nykaa Q2 preview: PAT to triple, revenue & margins poised for growth

Although expecting the beauty and personal care company to post robust second quarter numbers, analysts and investors will be tracking the company's growth in the fashion segment

Nykaa Q2 preview: FSN E-Commerce Ventures, parent company of Nykaa is all set to release its second quarter (Q2FY25) results on Tuesday, November 12, 2024.

 

Brokerages tracked by Business Standard estimate the revenue of Nykaa to grow by 27.06 per cent year-on-year (Y-o-Y) at an average to Rs 1,914.86 crore as compared to Rs 1,507 crore a year ago. On a quarter-on-quarter (Q-o-Q) basis, revenue is forecasted to grow 9.66 per cent.

 

The increase in revenue is likely to be driven by growth in the Beauty and Personal Care (BPC) business.

 

Further, they expect Nykaa's bottom line or profit after tax (PAT) for the quarter ended September 30, 2024, at an average of Rs 26.4 crore, an increase of 355.17 per cent as compared to Rs 5.8 crore a year ago. On a quarterly basis, the PAT is expected to grow at an average of 175 per cent.

 

Analysts and investors will keep an eye on slowing growth in fashion and management guidance.

Here's how analysts of various brokerages expect Nykaa to fare in Q2:

ICICI Securities: ICICI Securities analysts estimate Earnings before interest, tax, depreciation and amortisation (Ebitda) growth of 26.8 per cent Y-o-Y while PAT is likely to increase by 65.1 per cent quarter-on-quarter (Q-o-Q) basis and 172.2 per cent Y-o-Y to Rs 15.9 crore in Q2FY25.

 

They peg PAT for the quarter under review at Rs 15.9 crore, a jump of 172.2 per cent, as compared to Rs 5.8 crore a year ago.

 

Meanwhile, the Ebitda is estimated at Rs 102.2 crore for the second quarter as compared to Rs 80.6 a year ago which implies an increase of 26.8 per cent Y-o-Y.

 

Nuvama Institutional Equities: Analysts expect overall revenue to increase 26.2 per cent Y-o-Y to Rs 1,902.2 crore as compared to Rs 1,507 crore driven by Beauty and Personal Care (BPC) business while fashion would remain subdued.

 

They expect a slight improvement in Ebitda margin to 6.1 per cent in Q2FY25 as compared to 5.4 per cent a year ago and 5.5 per cent in Q1FY25.

 

Elara Securities: As per the brokerage, Nykaa is estimated to post strong double-digit gross merchandise value (GMV) growth of 30 per cent Y-o-Y in the online BPC segment.

 

Further, core BPC is estimated to grow 20 per cent Y-o-Y, as the demand environment is mixed. Meanwhile, analysts at Nuvama see advertisement revenue growth of 25 per cent Y-o-Y in Q2.

 

Moreover, as per them, the Fashion segment may see a 22 per cent GMV growth Y-oY and 24.1 per cent Q-o-Q, post a low base in Q1FY25.  

 

The overall revenue is estimated at Rs 1,959.7 crore as compared to Rs 1,507 crore a year ago.

 

Overall, the Ebitda margin could improve by 96 basis points (bps) Q-o-Q, supported by better advertisement revenue in the BPC segment and  lower losses in the fashion/eB2B segments.

 

Nykaa’s BPC (including eB2B and Nykaa Man) Ebitda margin may grow 50 bps Y-o-Y to 8.6 per cent.

 

The brokerage expects the Ebitda to come in at Rs 126.7 crore as compared to Rs 80.6 crore a year ago, up 57 per cent.

 

Overall, Ebitda margin is expected at 6.5 per cent as compared to 5.4 per cent a year ago.