- GMV: INR3,321 crores, 25% year-on-year growth.
- Revenue from Operations: INR1,746 crores, 23% year-on-year growth.
- Gross Profit: INR756 crores.
- EBITDA: INR96 crores, 31% year-on-year growth, 5.5% EBITDA margin.
- Adjusted EBITDA: INR109 crores, 44% year-on-year growth, 6.2% EBITDA margin.
- PBT: INR22 crores, 127% year-on-year growth, 1.3% PBT margin.
- PAT: INR13.6 crores, 150% year-on-year improvement.
- Beauty Business GMV Growth: 28% year-on-year.
- Beauty Business Net Revenue Growth: 23% year-on-year.
- Fashion Business GMV Growth: 15% year-on-year.
- Fashion Business Net Revenue Growth: 21% year-on-year, INR148 crores.
- Cumulative Customer Base: 35 million, 33% year-on-year growth.
- Brand Partners: 6,700+ brands, added 1,500 brands in the last year.
- Beauty Store Network: 200 stores.
- Warehouses: 44 warehouses servicing 98% of pin codes.
- Annual Unique Transacting Customers: 13.1 million, 21% year-on-year growth.
- Number of Orders: 12.4 million, 26% year-on-year growth.
- Prestige Fragrance Category Growth: 74% year-on-year.
- Market Share in Prestige Fragrance: 13%, 300 basis point improvement.
- Physical Retail Stores: 200 stores across 72 cities, 1.9 lakh square feet retail area.
- Physical Retail Revenue Growth: 70% over the last three years, 8% of omnichannel beauty GMV.
- Warehouse Capacity: 1.5 billion square feet, 2.5x increase.
- Order to Delivery Time: Reduced to 2.2 days, 45% reduction.
- Fashion GMV Growth: 15% year-on-year.
- Fashion Revenue Growth: 21% year-on-year.
- Women's Western Wear Growth: 34% year-on-year.
- Women's Athleisure Growth: 100%+ year-on-year.
- Gross Margin Improvement: 500 basis points.
- eB2B Business Growth: 72% year-on-year.
- Transacting Retailers: 2,10,000, 65% year-on-year growth.
- Gross Margin Improvement in eB2B: 274 basis points.
- Beauty House of Brands Growth: 47% year-on-year.
- Dot & Key GMV Run Rate: INR750 crores.
- Earth Rhythm GMV Run Rate: INR55 crores.
Release Date: August 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- FSN E-Commerce Ventures Ltd (BOM:543384, Financial) reported a 25% year-on-year growth in GMV, reaching INR3,321 crores.
- Revenue from operations grew by 23% year-on-year to INR1,746 crores.
- EBITDA improved by 31% year-on-year, reaching INR96 crores with a margin of 5.5%.
- The company achieved a significant milestone with 200 physical beauty stores across 72 cities.
- The beauty business saw a 28% year-on-year growth in GMV and a 23% growth in net revenue.
Negative Points
- The fashion segment experienced a slower growth rate of 15% in GMV year-on-year.
- There was a notable gap between GMV and net revenue growth in the beauty segment due to higher discounts.
- The fashion business faced challenges due to seasonality and lower growth in the Indian wear category.
- Despite improvements, the EBITDA margin for the fashion segment remains a concern.
- The overall market conditions for the fashion segment were described as 'dull' for the quarter.
Q & A Highlights
Q: Falguni and team, congrats on a decent set of results. I think we are on track to a bunch of things that we did highlight in this period presented in June. Just one thing that I wanted to understand, particularly on fashion side, I do understand that this was a really tough quarter for fashion businesses, especially on many businesses in particular. But the 20% odd growth that we have achieved compared to the ambition that we guided just made 20 days back before we published a quarterly update, those numbers are quite off right. If you look at the 2x to 3x NSV growth in three years implies close to 30%, 35% growth while we delivered 20%.
A: I think I had pointed out at that time also. And I would like to point out that very often the growth also happens in step function rather than sided. It's still early days of the business and the growth sometimes happens in step function. So you are aware that we've announced. footlocker association where are the ethanol represent all the foot lockers e-commerce demand in the country. And that launch is going to happen in October of this year. And so at this early stage of business, we had cautioned that there is seasonality to the business. And also there is some, you know, there is a step function improvement in business that happens due to initiatives that are being taken periodically. So I mean, I had question that this is not mature enough to assume that that is what it will translate, whether every quarter growth.
Q: My second question is quickly on Nykaa Man. I do understand that we have merged the pieces of it Indian fashion and beauty. Is it really gaining any traction? Are we seeing sustainable business being achieved there?
A: We are happy with the progress on Nykaa Man. We are always wanted to grow it in the right manner in terms of, you know, we do believe that if platforms are patient about the group to get the right customer acquisition and continue to grow. But yes, we've seen good traction in the Nykaa Man growth.
Q: I was just noticing the trend of margins, and we are seeing good improvement in margins across verticals like fashion and also the superstore segment and the Beauty segment has been operating more in a range. So how should we think about it going forward? Will it be that beauty will operate more in a range with a modest improvement and bulk of the margin improvement has to come from fashion and other segments starting to turn around is that the way to think about it, what will be the drivers or beauty business margins?
A: I think because it's a new way of reporting because of I think one of the expectation everybody had was on EBITDA and we can't give a lot of segments in the EBITDA reporting. So it is a new way of reporting to let it settle down and rather than read too much into what the margin improvement or this on improvement is. I would just like to caution that this session, my gross margin profit margin look very good, but there are quarter on quarter differences. And I would say that some of it is definitely known for, so I wouldn't read too much into it. Similarly on the beauty side, also on -- it's been at a good level. And I think in the presentation you saw that in a country, I think they're consciously trying to improve the gross profit margin based on selection of the right brands and right, right choices being made with them. We are conscious to improve the net retention margin. So I wouldn't read too much into it. I think margins are not a problem, but I would also read into a huge amount of improvement. But yes, there is some improvement in fashion margins with this improvement reflects more some core and some not core.
Q: Can you talk about what can be the margin drivers for particularly beauty business from here?
A: As we have mentioned earlier, the beauty business now and from a vertical reporting perspective, consists of three very different types -- four different types of businesses. One is beauty.com, the second is beauty retail, the Nykaa's B2B superstore business and the fourth is own brands, right? So each business has its own respective of drivers for improvement in margins. If I look at the beauty.com business, which is at least in terms of share of revenue mix, this vertical is the most significant. That business, as we said in the past, is already in a very, very healthy place from a margin profile perspective, both are both at the gross margin level, but even are all the way down to contribution margin and EBITDA margin. So that business is at a very healthy place that of that, what are some potential levers to improve? The margin profile on that side is, as we said in the past, if our own brands continue to do well. And if they grow faster, then the growth of the platform and they take a larger share of total business, then that should have a positive impact on the gross margin profile. Secondly, we've been working on a lot of ad formats for our ad platform. As you know, we collect services income and we're working on multiple new ad format initiatives so there is a potential for that also to improve the services income and therefore the gross margin. Finally, there is the operating leverage that that will kick in because a lot of the cost split, especially on employees, is fixed. And also marketing is this a we feel our marketing expenses are in a good place. So I think it depends on the business within the vertical. So beauty.com I spoke about, if I look at own brands, of course, that business is a strong business from a gross margin perspective. So it just needs to keep growing and growing faster than the overall platform. And finally, the biggest lever, of course, will be Nykaa superstore business , which is NykaaD which now sits within the beauty vertical, and that's where we see the potential for the largest improvement in margins, which Vishal covered in his presentation. Yes. So the most meaningful improvement in margins is most likely to come from the youngest business, which is still in growth phase, which is the B2B business. However, since currently it creates a small percentage of total revenue to the beauty vertical, the most outsized impact on the beauty vertical in terms of margin will continue to come from the beauty.com and beauty retail businesses.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
