Beauty firm Nykaa eyes profitability in FY19

By

Maverick Martins

Published
May 18, 2018

Indian beauty retailer Nykaa is optimisitic that the company will turn profitable by the end of the current financial year as a result of reduction in losses and increase in revenue.

The company has already cut down on its marketing spend, which was used earlier to expand its customer base and now planning to expand its physical network across India. Nykaa recently managed to raise Rs165 crore (approx $24.8 million) after strong growth in fiscal 2017-18.

For the 2017/ 2018 financial year, Nykaa witnessed 166 percent gorwth in its sales revenue to Rs 570 crore (approx $85.7 million) from Rs 214 crore (approx $32.2 million) it had posted in the year ago period.

Currently, Nykaa generates most of its revenue from its online business which contributes 95 percent to the total revenue with offline adding a meagre 5 percent. To change that, Nykaa will be investing heavily from the new funds to open more brick and mortar stores.

“We are very close to being Ebitda-positive and have very less loss. Therefore, we believe that in FY19, the business would turn profitable,” Falguni Nayar, founder and CEO told the Financial Express. 

“We are structured in a manner as per which we have only had domestic investors because the aim was to become a multi-brand retailer. Also, we have been able to reduce our marketing cost, including cost of customer acquisition, which is a key reason behind less loss,” Nayar added.

Nykaa, currently has 17 brick and mortar outlets across India and aims to add more 38 stores by March 2019. Nykaa was launched online by Falguni Nayar in 2012. The business now sells over 850 brands and 100,000 products and has launched a number of international brands in India.