FSN E-commerce Ltd is slated to release its earnings for the December quarter later today, and the omnichannel retailer is expected to report strong numbers amid robust demand for beauty products in the festival and wedding season.

Analysts expect the Nykaa brand owner to report a healthy double-digit growth in revenue and a multifold growth in profits for the third quarter of the current financial year.

The mainstay Beauty and Personal Care (BPC) vertical’s gross merchandise value growth for the quarter is expected to be in the mid-twenties and net sales value growth of around 20% on a YoY basis, the company said in its provisional update.

The underlying order volume growth was healthy and consistent, reflecting strong customer demand, it said.

Also Read | Q3 results today: Britannia, Nykaa, Nazara among 160 companies to announce earnings

“We believe Nykaa’s BPC growth for the quarter is ahead of industry growth. However, we believe current industry growth is below long-term trajectory and should revert to the median in the near to mid-term, given the strong macroeconomic and demographic outlook,” Nykaa said.While the BPC vertical did well for Nykaa, growth in the fashion vertical was moderate, as the industry-level consumption remained muted and did not see an uplift as expected during the festive season.Here’s summarising the broad expectations of brokerages from the online retailer:

Kotak Institutional Equities

We model revenue growth of 21/18% YoY/QoQ, primarily driven by BPC revenue growth of 20% YoY and fashion business revenue growth of 22% YoY.

We expect EBITDA margin expansion of 130 bps QoQ and 140 bps YoY on account of favorable seasonality (both festive and wedding seasons fully in 3QFY24), loss reduction in the eB2B business, as well as fixed cost operating leverage.

Nuvama Institutional Equities

Q3 is the highest GMV quarter for FSN Ecommerce BPC business given salience to festive and weddings. Given the overall muted environment, we don’t expect significant improvement in the growth run rate. We expect Nykaa to report a 19% GMV growth (Q2FY24: 23%).

Fashion saw a trend reversal in growth in Q2 and we expect the same to sustain. We build in a 23% GMV growth (Q2FY24: 27%).

Gross margins are expected to contract looking at the trend over the last two quarters. Given the moderation in employee, fulfilment and marketing expenses, we expect EBITDA margin to improve 30 bps YoY to 5.6% with EBITDA at Rs 1 billion, up 24% YoY.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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