Beauty and personal care firm Nykaa has pointed out “anomalies” in an analyst report by Kotak Institutional Equities, saying the report had downplayed its user numbers.

What Happened: Nykaa’s said recently published monthly active user numbers, a combined total for both app and website visitors, stood at 25.4 million for the quarter ended June 30. This figure differs significantly from the monthly MAU numbers for April, May, and June cited in Kotak’s report, the Falguni Nayar-led company said in an exchange filing.

The report had raised concerns over Nykaa’s monthly active user performance, noting a decline of over 20% year-on-year in August, with 6.7 million monthly active users. Analysts at Kotak said that in contrast, competitor Purplle had a 60% increase in monthly active users to 4.8 million.

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Based on these numbers and monthly site visits, the report concluded that Purplle had captured nearly one-third of Nykaa’s monthly website traffic. It noted that new entrants, Tata Cliq Palette and Tira Beauty, were gaining traction using paid search channels.

Nykaa highlighted the discrepancies with its own numbers and said it would release the latest monthly active user numbers as part of its earnings disclosure for the quarter ending September 30, 2023.

"Offline BPC retail is also witnessing heightened competition, with Tira and Palette entering the fray and Trent (Misbu) as well as Shoppers Stop planning to increase their footprint. Nykaa may have to keep up ad-spends to retain market share," the analysts added.

Price Action: Nykaa’s share price tumbled 1.87% to ₹147.10 in afternoon trading on Friday.

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