Despite current inflationary pressures, Nykaa’s long-term growth trajectory remains intact: Nykaa MD & CEO

• ByStartupStory     |    July 19, 2022

Falguni Nayar, MD, and CEO of Nykaa told shareholders that India is primed to experience significant positive transformations in the lifestyle category in the mid-to-long term. Despite short-term hurdles such as present high inflation that continue to influence customers’ discretionary spending, the company is poised to profit from long-term positive market dynamics. “Long-term retail consumption dynamics in India create an enormous potential for use in the coming year and beyond – growing per capita incomes, urbanization, unprecedented adoption & usage of internet and electronic platforms,” Nayar said in a letter to stakeholders.

Nayar also mentioned how the second wave of the Covid-19 outbreak affected the business last year, and how, despite a difficult operating environment, Nykaa produced a consolidated GMV rise of more than 71% to INR 6,933 Cr. Nykaa’s consolidated net profit fell 33% to ₹ 41.3 Cr in FY22, while its operating revenue increased 55% to ₹ 3,773.93 Cr. Its operational expenditures increased by 87% to ₹ 1,480.7 Cr.

It is worth noting that Nykaa is on an acquisition binge to increase its product line. It announced that it acquired a 51 percent share in Dot & Key in October 2021, expanding its skincare services. Nykaa purchased the online jewelry business Pipa Bella in April of last year to tap into the country’s burgeoning market for modern fashion jewelry. The business increased its consumer brand portfolio in April of this year with stakes in Earth Rhythm, Kica, & Nudge Wellness. Nykaa also established new companies in FY22, such as the online B2B portal ‘SuperStore by Nykaa.’ When asked regarding SuperStore by Nykaa, Nayar stated that the company has a tremendous possibility due to its enormous addressable market.

“The early results have been good in the business, and we are expanding this business sustainably,” she continued. Nykaa Fashion has announced its entry into the new area of men’s innerwear and athleisure items under the name GLOOT. According to a research report published last week by brokerage JM Financial, Nykaa’s expansion into new areas and incursion into new categories will be the major drivers of growth in Q1 FY23, although price inflation will keep consumer mood depressed. On the BSE, Nykaa shares finished 0.56 percent down at INR 1,401.4.

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