After a stretched period of losses in Nykaa’s stock, there is finally some good news for the company

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After a stretched period of losses in Nykaa’s stock, there is finally some good news for the company
  • Nykaa finally settled a long pending lawsuit with L’Oreal S.A, which involved a legal fees of ₹2.87 million.
  • Investors saw this as good news and bought shares of the company that have crashed over 40% since listing.
  • Nykaa in the past has been accused of infringement in product design, product packaging, copyright and trademark infringement for our marketing content.
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Investors of beauty and fashion ecommerce platform Nykaa might have a reason to cheer after a very long time. After its bumper listing on November 10, 2021 on exchanges, there was nothing much for investors to be happy about.

The e-commerce beauty brand on February 22 said that it has settled a long pending litigation with L'Oreal S.A, which involved a legal fees of ₹2.87 million. L’Oreal is one of the largest cosmetics companies based in France that sells its products offline and on e-commerce platforms including Nykaa.

In November 2019, L’Oréal S.A filed a civil suit in Delhi High Court alleging similarity in certain packaging leading to an alleged infringement of intellectual property rights and obtained a restraining order, which restrained Nykaa from using the packaging on its own brands.

Nykaa in the past has been accused of infringement in product design, product packaging, copyright and trademark infringement for our marketing content.

The end to the long lawsuit is perceived as good news by investors as shares of the company ran up 3% on February 23.
After a stretched period of losses in Nykaa’s stock, there is finally some good news for the company

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After a bumper listing, the stock crashed more than 40% so far thereby only disappointing investors. Nykaa’s market capitalisation slumped down to ₹65,202 crore from ₹1 lakh crore on the listing day.

The company still has a long way to go as its financial performance is still not steady. In the latest December quarter earnings, it reported 59.5% slump in net profit, compared to a year ago, led by steep increase in marketing expenses.

The company has more than doubled its spend on marketing and advertising in the last one year.

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