Nykaa, a leading player in the beauty and fashion e-commerce landscape, unveiled ambitious growth projections during its recent ‘Annual Investor Day’, forecasting a compounded annual growth rate (CAGR) of mid-to-late 20% for its beauty business until FY28. The company, with over 30% market share in India, outlined its strategic roadmap for achieving this growth, emphasizing robust customer acquisition, category expansion, premiumization strategies, and enhanced customer experiences.
Expansion Plans
Nykaa’s growth strategy encompasses a multi-pronged approach, including plans to double its store count to approximately 400 by 2027, up from 187 at the end of FY24. Additionally, the company aims to significantly scale up its fashion vertical, targeting a growth of 2.5-3X over the next three years. While Nykaa Fashion eyes breakeven in FY26, it anticipates turning EBITDA positive in the near future.
Performance Metrics
The company’s performance in FY24 underscored its resilience and market leadership. Despite challenging market conditions, Nykaa’s beauty and personal care (BPC) business witnessed a 25% year-on-year (YoY) growth in Gross Merchandise Value (GMV) to INR 8,340.9 Cr, while its fashion business recorded a commendable 27% YoY growth, reaching INR 3,270 Cr in GMV. This robust performance reflects Nykaa’s adeptness in navigating dynamic market landscapes and capitalizing on emerging opportunities.
Focus on Operational Excellence
Nykaa remains committed to enhancing operational efficiency, particularly in delivery timelines. The company aims to introduce express delivery services in metro cities, further enhancing customer satisfaction and driving business growth. Additionally, Nykaa is eyeing global expansion opportunities, with plans to extend its Nysaa brand into the Gulf Cooperation Council (GCC) market, aiming for a 7% share in the prestige beauty segment within the next five years.
Leveraging Technology for Growth
Nykaa’s strategic investments in data analytics, machine learning (ML), and artificial intelligence (AI) technologies are yielding tangible benefits, enabling personalized customer experiences and optimizing advertising strategies. These technological advancements not only enhance customer engagement but also empower Nykaa’s brand partners to scale their online businesses effectively.
Financial Performance and Market Response
Nykaa’s stellar financial performance in FY24, marked by an 80% year-on-year jump in net profit to INR 69 Cr and a 24% YoY growth in operating revenue to INR 6,385.6 Cr, underscores its robust business fundamentals and growth potential. Market sentiment remains bullish, with Nykaa shares closing 2.4% higher at INR 170.95 on the BSE following the investor day announcements.
