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Earth Rhythm
Key Financials Highlights
June 2023 highlights
Net Revenue at Rs. 2.7 cr, EBITDA at Rs. -1.2 cr, while it continues to trend in the red, there’s focus on restricting the bleed
Several interventions taken
Q1FY22 highlights
Jun 23 Q1'24
Particulars Jun-22 Apr-23 May-23 Jun-23 % Ach % YoY Q1'23 Q4'23 Q1'24 % Ach % YoY
AOP AOP
GMV (MRP Sales) 3.7 5.4 5.5 4.9 5.7 86.1% 32.3% 10.9 14.4 15.8 18.0 87.8% 45.5%
Net Revenue 1.5 2.5 2.4 2.7 3.0 88.2% 80.9% 4.7 6.6 7.6 9.7 78.5% 59.9%
EBITDA -1.8 -1.2 -1.5 -1.2 -0.8 -4.4 -6.0 -3.9 -2.4
EBITDA Margins -121.5% -47.7% -61.4% -44.8% -25.6% -93.8% -90.0% -51.0% -24.4%
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Performance Analysis – June 2023/ Q1FY24
All values in INR Cr
June 23 Q1'24
S. no Particulars Jun-22 Apr-23 May-23 Jun-23 % Ach % YoY Q1'23 Q4'23 Q1'24 % Ach % YoY
AOP AOP
Q1FY24 performance miss vs AOP
1 GMV (MRP Sales) 3.69 5.42 5.54 4.88 5.68 90% 50% 10.89 14.39 15.84 18.04 88% 46% across GMV/Net Revenue/ EBITDA
2 Product Level Discount 1.71 2.27 2.69 1.69 1.54 162% 57% 4.82 6.25 6.65 4.87 136% 38%
3 % to GMV 46% 42% 48% 35% 27% 44% 43% 42% 27% While Q1 GMV grew 46% YoY by D2C
4 Returns 0.17 0.18 0.15 0.19 0.10 141% -10% 0.38 0.40 0.52 0.33 157% 38% declined 9% YoY while Nykaa down 14%
5 % to GMV 5% 3% 3% 4% 2% 3% 3% 3% 2% YoY. Other 3Ps have witnessed healthy
6 Taxes 0.35 0.48 0.39 0.36 1.05 34% 12% 0.99 1.25 1.22 3.31 37% 23%
traction.
7 % to GMV 9% 9% 7% 7% 19% 9% 9% 8% 18%
8 Net Revenue 1.48 2.54 2.38 2.67 3.02 72% 61% 4.74 6.64 7.58 9.66 79% 60% Gross Profit continues to improve on
9 NR to GMV Ratio 0.40 0.47 0.43 0.55 0.53 0.44 0.46 0.48 0.54 account of some recent investments in
10 COGS 0.78 0.95 0.90 0.86 0.96 87% 15% 2.62 2.68 2.71 3.06 88% 3%
11 Gross Profit 0.69 1.59 1.48 1.81 2.06 66% 113% 2.12 3.95 4.88 6.59 74% 130%
packing/filling machines
12 % to NR 47% 63% 62% 68% 68% 45% 60% 64% 68% EBITDA – Reduction in burn rate QoQ
13 Fulfilment Cost 0.23 0.31 0.27 0.25 0.27 91% 17% 0.69 1.02 0.83 0.87 96% 21% as well as YoY. Focus on reducing the
14 % to NR 16% 12% 11% 9% 9% 14% 15% 11% 9%
15 Commission 0.06 0.14 0.13 0.10 0.34 37% 129% 0.14 0.33 0.36 1.02 36% 153%
burn rate
16 % to NR 4% 5% 5% 4% 11% 3% 5% 5% 11%
17 Marketing Cost 1.46 1.38 1.59 1.59 1.32 105% 9% 3.60 5.27 4.56 4.39 104% 27%
18 % to NR 99% 55% 67% 60% 44% 76% 79% 60% 45%
19 Employee cost 0.39 0.49 0.51 0.53 0.52 102% 31% 1.00 1.70 1.54 1.52 101% 53%
20 % to NR 26% 19% 21% 20% 17% 21% 26% 20% 16%
21 Other Expenses 0.35 0.47 0.45 0.53 0.38 116% 28% 1.14 1.61 1.45 1.16 125% 27%
22 % to NR 24% 19% 19% 20% 13% 24% 24% 19% 12%
23 EBITDA -1.79 -1.21 -1.46 -1.19 -0.77 -18% -4.45 -5.98 -3.87 -2.36
24 % to NR -121% -48% -61% -45% -26% -94% -90% -51% -24%
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Channel Mix
4
Channel-wise Performance – Q1FY24
All values in INR Cr
# Particulars Overall D2C Nykaa Amazon Myntra Flipkart Purplle Blinkit Others Unallocable
Several interventions on
1 GMV (MRP Sales) 15.84 5.32 2.36 2.78 0.46 0.87 0.27 0.38 3.43 - pricing have been taken
2 Product Level Discount 6.65 2.62 1.24 0.78 0.16 0.32 0.19 0.19 1.14 - – reducing MRP and
3 % to GMV 42% 49% 53% 28% 36% 37% 70% 51% 33% discounts effective July
4 Returns 0.52 0.12 0.05 0.10 0.03 0.06 0.07 0.02 0.06 - 2024
5 % to GMV 3% 2% 2% 4% 7% 7% 27% 7% 2%
6 Taxes 1.22 0.42 0.24 0.29 0.04 0.08 0.03 0.04 0.08 - Focus in June to liquidate
7 % to GMV 8% 8% 10% 10% 9% 9% 11% 10% 2% stock at old MRP – new
8 Net Revenue 7.58 2.25 0.82 1.63 0.22 0.43 -0.02 0.12 2.14 - POs of Nykaa were halted
9 NR to GMV Ratio 0.48 0.42 0.35 0.59 0.48 0.50 -0.08 0.32 0.62
Brand marketing is
10 COGS 2.71 0.90 0.41 0.47 0.08 0.15 0.05 0.06 0.59 -
11 Gross Profit 4.88 1.35 0.42 1.15 0.14 0.28 -0.07 0.06 1.54 -
proportionately allocated
12 % to NR 64% 60% 50% 71% 64% 66% 315% 48% 72%
across the channels
13 Fulfilment Cost 0.83 0.21 0.06 0.31 0.06 0.07 0.01 0.01 0.09 - Nykaa, Blinkit and
14 % to NR 11% 9% 7% 19% 26% 17% -32% 8% 4% Purplle discount includes
15 Commission 0.36 0.00 0.00 0.23 0.05 0.06 0.00 0.00 0.02 - commission
16 % to NR 5% 0% 0% 14% 22% 15% 0% 0% 1%
17 Marketing Cost 4.56 3.08 0.26 0.65 0.09 0.15 0.04 0.07 0.22 - Myntra – fulfilment costs
18 % to NR 60% 137% 31% 40% 39% 35% -188% 60% 10% require deep dive
19 Employee cost 1.54 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.54
Purplle – includes prior
20 % to NR 20% 0% 0% 0% 0% 0% 0% 0% 0%
21 Other Expenses 1.45 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.45
period returns
22 % to NR 19% 0% 0% 0% 0% 0% 0% 0% 0%
23 EBITDA -3.87 -1.95 0.10 -0.05 -0.05 -0.01 -0.11 -0.02 1.22 -2.99
24 % to NR -51% -87% 12% -3% -23% -2% - -21% 57%
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Nykaa Initiatives
Earth Rhythm manufacturing Facility visit by Dr. Mhaskar – shared insights to improve quality and incorporate GMP
Detailed product assessment shared by Dr. Mhaskar – Regular calls to share product feedback
Detailed workshops arranged
2 Sessions done on innovation process with R&D team by Dr. Mhaskar
Nykaa Fashion team shared insights to grow 3P channels like Amazon
Performance marketing with Nykaa’s private label teams
Weekly discussions with Nykaa category team, Earth Rhythm and PMI team on way forward
50% Discounted rate card unlocked
Help with Analytics, Category/Brand Insights to improve conversions
Working on comprehensive marketing strategy – offline events like Beauty Bar, influencer marketing through Nappers, sampling to Prive
customers
Evaluating expansion in Nykaa stores : Currently present in 10 stores with focus on increasing presence across all Nykaa on-trend stores
Several new marketing initiatives taken on improvement of traction on Nykaa.com
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Nykaa Initiatives
Competitive Pricing . It was observed that ASP of Revision in pricing/ liquidation discounts An uptake in overall DRR has been observed across
Earth Rhythm was higher than most competitors all categories. From an average DRR of 2.44 in April,
we observed uptake in DRR to 3.19 in June FY”24
Hygiene like adding A+ content and keyword Addition of A+ content & right keyword tagging Overall product views increased by 11% and clicks
mapping increased by 7% post interventions
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Key Focus Areas - Summary