Strong sales growth in both beauty and personal care products and fashion business is expected to have helped e-retailer FSN E-Commerce Ventures put up a good show for the quarter ended December.
Analysts expect the company to report a 29-40% year-on-year (YoY) growth in consolidated revenue from Rs 1,098 crore. Net profit is likely to have grown 19-57% YoY from Rs 28 crore.
The popular “Nykaa” brand owner will release its third quarter earnings on Monday.
While the earnings have been improving, the stock performance is yet to reflect it. In the last one year, the stock has been the worst-performing new-age tech firm, having given 51% negative returns.
Here’s a summary of analysts’ expectations from the company:
It expects sales to grow by 40% YoY, driven by a 35% growth in beauty and personal care (BPC) category and a 41% growth in fashion gross merchandise value (GMV). EBITDA margin is expected to contract 77 basis points sequentially to 5.5%, but on a YoY basis, it is seen expanding by 55 bps.
Nuvama Institutional Equities
For FSN E-Commerce’s BPC segment, the brokerage expects a 33% YoY growth in orders. It expects average order value (AOV) for the segment to be down 3% YoY, which translates into a 26% YoY growth in GMV (up 16% QoQ).
In the fashion segment, which saw a muted quarter in Q2FY23, the brokerage expects some revival and is building in a 10% QoQ and 19% YoY growth in orders. For the segment, it expects AOV to increase 12% YoY and 2% QoQ looking at the historical trends. Overall, this will translate into a GMV growth of 28% YoY and 3% QoQ.
For the new business segment, it is building in a GMV of Rs 140 crore (Q2FY23: Rs 120 crore). This translates into a company level GMV growth of 30% YoY and 13% QoQ.
Overall, it expects EBITDA margins to come in at 6.7% versus 6.3% a year ago, driven by higher gross margins, which compensates for increase in other costs.
Kotak Institutional Equities
It expects revenue growth of 39% YoY and 24% QoQ, primarily on account of festive season, flagship sales and continued growth in BPC (35% YoY) and fashion business (27% YoY).
It expects sequentially higher ad-spends on account of festive season and higher brand-building activity.
It expects sequentially higher gross margins on account of higher fashion in the mix; this coupled with operating leverage will lead to sequential EBITDA margin expansion of 230 bps.
(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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