FSN E-Commerce Ventures (Nykaa) rose over 4% to Rs 1,392.00 on the BSE in Wednesday’s intra-day trade on informing that its litigation with L’Oreal S.A. has been settled. It had disclosed the details of pending litigation with L’Oreal S.A. in its IPO prospectus.

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”In the course of Initial Public Offering by the Company, the details of the pending litigation (civil proceeding) with L’Oreal S.A. were disclosed in the Prospectus dated November 02, 2021, The Company hereby informs that the aforesaid litigation with L’Oreal S.A. has been settled,” Nykaa said in a regulatory filing.

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The shares of the cosmetics-to-fashion retailer have dropped nearly 36% in the last 11 trading days after the company disclosed poor financial results. Its net profit fell 58% year on year (YoY) to Rs 29 crore in the December quarter (Q3FY22), owing to an increase in costs and lower demand for personal care and fashion items. Employee costs grew by 56% year on year in the third quarter. On a low base of FY21, where marketing spending was reduced owing to Covid, marketing expenses surged by 155% year on year.

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The company’s revenue from operations increased 36% year on year to Rs 1,098 crore. Earnings before interest, taxes, depreciation, and amortization (EBITDA) margin fell 697 basis points to 6.3% in Q3FY21, from 13.2%. The EBITDA margin expanded 302 basis points sequentially from 3.3% in Q2FY22.

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Nykaa reported a 23% YoY decrease in PAT at Rs 33.7 crore for the first nine months of FY22 (April-December). EBITDA margin fell 213 basis points to 4.5%, down from 6.6% in the same quarter of FY21. However, revenue from operations increased by 65% year on year to Rs 2,801 crore.