Transcript of Earnings Call held on 03rd June, 2026 at 04:00 PM (IST)
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Recode Studios held its first post-IPO earnings call covering FY26 (year ended March 2026). The company is in the affordable beauty and personal care space with around 350 SKUs sold via an omni-channel mix (online D2C, marketplaces like Nykaa/Amazon, 22 stores and 6 warehouses). FY26 revenue grew 67% YoY to ₹80 crore, EBITDA tripled to ₹16 crore (margin 20% vs 13%), and PAT jumped 260% to ₹11.22 crore (margin 14% vs 6.5%). ROE and ROCE were 78% and 59% respectively. H2 FY26 alone delivered ₹43 crore revenue at a 24% EBITDA margin. Management guided for at least 50% revenue growth in FY27 with similar margins, citing deeper penetration in South/Central/Northeast India, quick commerce entry in 1-2 months, modern trade rollout, and a new Ludhiana warehouse by April 2027. They have stopped the FOFO franchise model and are moving to dark stores run by partners. Marketing spend will stay at around 20% of revenue and no brand ambassador is planned currently.
Strong FY26 print with sharp margin expansion and high ROE/ROCE should support positive sentiment, but management's guidance of 'flat margins going forward' because of heavy marketing reinvestment caps near-term margin upside. The 50% growth target is aggressive for a beauty brand in a 6-8% industry, so investors should watch quarterly execution, quick-commerce contribution, and whether the Ludhiana capex and dark store pivot pay off.