Sequentially, profit grew 35% from INR 24.5 Cr in the preceding June quarter.

Operating revenue surged 25% YoY and 9% QoQ to INR 2,346 Cr during the quarter under review. Including other income of INR 8 Cr, total income for the quarter stood at INR 2,354 Cr.

Meanwhile, expenses rose 24% YoY to INR 2,297.6 Cr. The company's tax outgo also jumped nearly 3X YoY INR 22.4 Cr.

EBITDA grew 53% YoY to INR 159 Cr, while EBITDA margin expanded 130 basis point (bps) to 6.8%. Nykaa said that it recorded its highest EBITDA margin expansion during the quarter since its IPO in November 2021.

Notably, the company recorded an exceptional loss of INR 1 Cr during the quarter under review. It incurred INR 10.4 Cr loss pertaining to misappropriation of inventory at one of the warehouses of its subsidiary. "The subsidiary has taken necessary steps to recoup the loss including registering the claim with the insurance company," Nykaa said.

However, it also received INR 9.3 representing receipt of an arbitration award pertaining to a legal dispute the company initiated over breach of employment contract obligations of confidentiality and non-solicitation of one of its subsidiaries. The award was received on August 5.

On the business front, Nykaa's consolidated gross merchandise value (GMV) grew 30% YoY to INR 4,744 Cr. Nykaa categorises its businesses into three verticals - beauty, fashion, and others. The 'others' segment includes its general trade, modern trade (including Nykaa Superstore) and other online marketplaces.

All three verticals delivered strong performance during the quarter.

"… even our customer acquisition has accelerated now with a 49 Mn cumulative customer base across beauty & fashion. Strategically, this has been a pivotal quarter, one where our long-term growth pillars have translated into near-term acceleration, underscoring the strength and scalability of the Nykaa ecosystem," CEO and MD Falguni Nayar said.

Important to note that Nykaa has also proposed extending Nayar's tenure as MD and CEO for five years. The reappointment is subject to shareholders' approval.

Now, let's take a deeper look at Nykaa's business in the quarter.

Nykaa Beauty Gets Quick Commerce & Offline Expansion Boost

Nykaa's bread-and-butter vertical's revenue surged 25% YoY to INR 2,131.9 Cr, while its profit jumped 24% YoY to INR 95 Cr during the quarter under review.

The bottom line was impacted by the aforementioned INR 10 Cr inventory misappropriation.

While the GMV for the vertical spiked 28% YoY to INR 3,551 Cr, total customer base grew 31% YoY to 4 Cr.

The beauty vertical's growth got a boost as the company doubled down on its offline play and recently set up quick commerce arm, Nykaa Now.

Nykaa added 19 new stores in eight new cities during the quarter, taking its total store count to 265. Nykaa Now has now expanded to seven cities through 53 rapid delivery hubs. The arm has fulfilled over 2 Mn orders since inception. "All our existing Beauty stores are tech enabled for hyperlocal delivery, and are being leveraged to service Nykaa Now deliveries," the company informed.

Nykaa Fashion's Revenue Crosses INR 200 Cr Mark

The company's fashion arm saw its revenue grow 21% YoY to INR 201 Cr. However, it continued to be a loss making entity, reporting a loss of INR 12 Cr. The vertical's loss was down 63% YoY.

Important to note that the vertical's loss would have stood at INR 21.4 Cr if not for the exceptional gain of INR 9.3 Cr from the aforementioned arbitration award.

Nykaa Fashion's GMV grew 37% YoY to INR 1,180 Cr, while store visits rose 30% YoY to 19.1 Cr.

"In the last 2 quarters, Nykaa Fashion strengthened its assortment with strategic brand additions including GAP, Guess, Rare Rabbit, Mufti, Bonkers, The Souled Store, and Underneat, capped by the landmark debut of H&M Fashion in November - bringing one of the world's largest and most trend-setting fashion retailers to Nykaa's platform," the company said.

House Of Nykaa's Annualised GMV Crosses INR 2,900 Cr Mark

The company's rollup subsidiary's GMV run rate surged 55% YoY to INR 2,900 Cr in the quarter, while EBITDA margin as percentage of net sales value was in the high teens.

House of Nykaa features brands like Dot & Key, Kay Beauty, Earth Rhythm, Nykd, among others. The biggest GMV contribution for House of Nykaa came from Dot & Key, which raked in a GMV of INR 1,500 Cr. Kay Beauty and Nykaa Cosmetics' GMV grew to INR 350 Cr and INR 400 Cr, respectively.

Meanwhile, the company's eB2B arm Superstore's GMV improved 25% YoY to INR 285 Cr. The company said that it added about 1 Lakh retailers to this arm in one year, with total transacting retailers for Superstore at the end of the quarter standing at 3.32 Lakh.

Shares of Nykaa ended today's trading session 0.20% higher at INR 245.95 on the BSE.