Nykaa, India’s beauty and personal care retailer, has declared a solid 72% surge in profits for the second quarter. According to reports, this marked steady demand in the core beauty business. Growth of this stature comes just before India’s all-important festive season, further consolidating Nykaa’s position in India’s rapidly expanding beauty market.
This includes Nykaa’s beauty segment, comprising premium brands Estée Lauder, Bobbi Brown, and more, where revenue surged 24% year over year. The booming Indian beauty and personal care market, estimated at US$28 billion and projected to touch US$45 billion by 2030, has also driven the growth. Total gross merchandise value for Q2 reached 36.53 billion rupees in the company, a 29% increase year over year. It, however, reported a slowdown in its fashion segment with GMV growth decelerating to 10%. The high inflation pressure on the broader retail market has exacerbated this situation.
Despite the increasing cost in advertising and marketing, now an enormous chunk of the overall business strategy for Nykaa, the company was able to maintain stable EBITDA margins at 5.5%. These stable profitability percentages show the company’s robust ability to keep on increasing top-line growth despite rising operational costs.
Strength in the beauty segment has been impressive for Nykaa, as the demand for all beauty and personal care products is witnessing a rise with the growing middle class in India and the upcoming festive season. The significant growth within India’s beauty market thus places Nykaa in the driver’s seat to maintain a strong performance despite challenges in the fashion category.
This impressive financial performance is indicative of the rising tide of consumer preferences shifting toward premium beauty products and of Nykaa’s strategic focus on expansion and further consolidating its market during a critical period of sales.
