Nykaa Q3 results preview: PAT may jump multifold, margins seen expanding

FSN E-Commerce Ventures, the parent company of the omni-commerce lifestyle platform Nykaa, shall announce its results for the period ended on December 31, 2024 later today. The brokerage firms tracking the new-age internet player are expecting it to report a strong set of performance in the December 2024 quarter (Q3FY25).

Analysts are expecting Nykaa to report a double digit growth in the revenue on both year-on-year (YoY) and quarter-on-quarter (QoQ) basis. Net profit is seen to jump manifold on both yearly and sequential basis, with Ebitda margins may expand in the range 130-170 basis points (bps). Beauty and personal care (BPC) segment, new customer addition and fashion shall be key things to watch.

Kotak Institutional Equities pencils Nykaa's net sales at Rs 2,278.1 crore, 27.4 per cent and 21.5 per cent in Q3FY25. Ebitda is expected to come in at Rs 156.9 crore, up 58.8 per cent YoY and 51.3 per cent QoQ, with Ebitda margins to come in at 6.9 per cent, up more than 130 bps. Adjusted PAT is seen at Rs 42.9 crore, 164.5 per cent YoY and 327 per cent QoQ.

"We model overall GMV and revenue growth of 27 per cent YoY, primarily driven by BPC GMV/revenue growth of 32 per cent and 28 per cent YoY and fashion business GMV and revenue growth of 1 per cent and 21 per cent YoY. Fashion business GMV growth is impacted by the weakness in premium-wear demand. BPC, however, should post strong performance," Kotak added.

Nuvama Institutional Equities pegs Nykaa's revenue at Rs 2,271.8 crore, up 27 per cent YoY and 21 per cent QoQ. Ebitda is likely to come in at Rs 127.2 crore, up 29 per cent YoY and 23 per cent QoQ. Nuvma sees core PAT at Rs 24.1 crore, up 79 per cent QoQ. Nuvama expects 31 per cent and 20 per cent YoY growth in BPC and Fashion GMV respectively, with slight improvement in Ebitda margin.

Shares of FSN E-Commerce Ventures dropped about a per cent to Rs 172.40 on Monday compared to its close at Rs 173.50 on Friday, The total market capitalization of the company stood below Rs 50,000 crore. The stock had corrected nearly 25 per cent from its 52-week high at Rs 229.90 hit in August 2024.

Equirus Securities is expecting net sales at Rs 2,233.1 crore in the December 2024 quarter, up 19 per cent QoQ and 25 per cent YoY. Ebitda is seen to come in at Rs 162.6 crore, up 57 per cent QoQ and 65 per cent YoY, with Ebitda margins expanding 175 bps sequentially. Net profit is penciled at Rs 63.5 crore, zooming 532 per cent QoQ and 292 per cent YoY.

Nykaa would post strong revenue growth with sequential improvement in Ebitda margin by 175 bps compared to 2 bps in 2QFY25, said Equirus, which has an add rating with a target price of Rs 190. BPC - advertising revenue and Ebitda margin improvement, new customer addition and fashion - NSV growth and loss reduction shall be key things to watch, it added.

"In-line with the quarterly operational update released by the company, we expect overall GMV to grow by 25.4 per cent YoY, with BPC at 27.1 per cent YoY, eB2B + NM at 66 per cent YoY and Fashion at 13 per cent YoY. We anticipate revenue to growth of 27.4 per cent YoY. We expect Ebitda margins to improve by 93 bps YoY and 92 bps QoQ.. We expect PAT to grow 2.3 times YoY," said JM Financial.