Nykaa doubles quarterly profit, increases investment in Dot&Key and Earth Rhythm

Cosmetics and fashion marketplace Nykaa has posted a 120% rise in quarterly profit after tax, helped by strong performance of its beauty and international segment.

FSN E-Commerce Venture, the  parent company of Nykaa, clocked a profit after tax of Rs 14.24 crore during the first quarter, compared Rs 6.45 crore in 2023, according to regulatory filings made with the BSE. 

The Falguni Nayar-led company posted a 23% growth in operating revenue to Rs 1,746 crore from Rs 1,422 crore reported in the comparable period a year ago.

 This is in line with the company’s expectation of 22%-23% revenue growth in the April-June quarter as mentioned in a previous filing with the exchange. 

Shares of the company fell 3.39% to Rs 188 apiece on NSE.

Operating revenue for its beauty and personal care segment rose 22% YoY to Rs 1,593.51 crore while revenue from its international beauty arm more than tripled to Rs 4 crore.

In a separate filing, Nykaa also informed about the acquisition of an additional 39% stake in Dot & Key Wellness Private Limited from existing shareholders for a consideration of up to Rs 265.3 crore. It also announced additional investment in Earth Rhythm Private Limited for a consideration of up to Rs 44.5 crore.

Nykaa will purchase 5.29 lakh shares and post investment, it will hold a 90% equity interest in Dot & Key. Dot & Key, which manufactures and sells skincare products and sunscreens clocked a revenue of Rs 198.3 crore in FY23-24. 

The beauty e-tailer said it was acquiring a majority stake in Earth Rhythm Private Limited through a combination of primary and secondary transactions for a consideration of up to Rs 44.5 crore. Earth Rhythm, which sells non-toxic and sustainable beauty products, will be incorporated as a unit under Nykaa. Earth Rhythm posted a revenue of Rs 30.7 crore in FY23-24. 

Nykaa expects to close both the acquisitions by the end of September 2024.