Sugar Cosmetics’ parent company, Sugar Brands, reduced its expenses and narrowed losses in FY26. However, declining revenue and intensifying competition continue to challenge the beauty brand’s growth momentum.
Sugar Brands, the parent company of Sugar Cosmetics, reported revenue from operations of Rs 361 crore in FY26, down 10.7% from Rs 404.4 crore in FY25. Including other income of Rs 2.85 crore, its total income stood at Rs 364 crore, compared with Rs 411.7 crore in the previous fiscal year.
Despite the revenue decline, the company made progress in controlling costs. Its total expenses fell 18.9% to Rs 443 crore in FY26 from Rs 546.5 crore a year earlier.
Advertising and sales promotion remained its largest expense category, but expenditure in this segment declined 28.9% to Rs 119.4 crore from Rs 168 crore. Employee benefit expenses decreased 21.2% to Rs 58.7 crore, while outsourced support services costs fell to Rs 61.4 crore from Rs 76 crore. Finance costs also declined 34.8% to Rs 5.6 crore.
The lower expense base helped Sugar Brands reduce its net loss by 41% to Rs 79.3 crore in FY26, against Rs 134.3 crore in FY25.
Its unit economics also showed improvement. The company spent Rs 1.23 for every rupee of operating revenue, compared with Rs 1.35 in the previous fiscal. Its EBITDA margin improved to -20.02% from -30.56%, while return on capital employed (ROCE) stood at -129.51%. Cash and bank balances declined to Rs 10.30 crore from Rs 23 crore.
Competition and the Road Ahead
Sugar’s financial reset comes amid growing competition in India’s beauty and personal care market. Rival Renee Cosmetics recorded 37% growth in operating revenue to Rs 440 crore in FY26 while reducing its losses by 45%.
Sugar also recently raised fresh capital at a reportedly steep discount to its peak valuation, reflecting a reset in investor expectations. The funding could provide room to strengthen distribution and improve core business economics.
While lower expenses and narrowing losses offer some relief, declining revenue remains a concern. Sugar’s next challenge will be to restore growth, defend its market position and improve unit economics without rebuilding its earlier cost structure.
Source: Based on publicly available reporting, with additional editorial adaptation and analysis
