Kaya Ltd — Q1 FY26 earnings call

Call held 6 Aug 2025

Management summary

Kaya Limited reported a mixed Q1 FY26, with standalone revenue growing 1% to ₹52.8 crores, supported by 7% growth in clinic collections and 6% in services. However, the company posted a standalone loss of ₹14.2 crores, a significant decline from a profit in the prior year which included a one-time gain. Increased employee benefits and consumable costs impacted profitability, while Kaya continues its strategic expansion with two new clinics launched and a focus on customer experience and loyalty programs.

Highlights

  • Clinic business registered a 7% collection growth over Q1 FY25.

  • Clinic product business witnessed an 11% growth versus Q1 FY25.

  • Services business registered a collection growth of 6% over Q1 FY25.

  • Hair Care and Brightening & Pigmentation maintained healthy growth of 20% and 13% respectively.

  • NPS scores continue to trend higher at 90, reflecting Kaya's great customer experience.

Concerns

  • Standalone loss after tax and other comprehensive income was negative ₹14.2 crores in Q1 FY26, compared to a profit of ₹6.4 crores in Q1 FY25 (which included a one-time gain of ₹15.8 crores).

  • Employee benefit cost rose to over ₹16.24 lakhs this quarter, driven by increments, productivity incentives, and new clinic contests.

  • Standalone business consumable cost remained high at ₹8.28 lakhs, attributed to a shift in market mix towards higher-consumable categories.

Key financials

  1. Revenue from Operations (Standalone) ₹52.8 Cr +1%YoY
  2. Profit/Loss After Tax (Standalone) ₹-14.2 Cr
  3. Clinic Business Collection Growth 7% +7%YoY
  4. Clinic Product Business Growth 11% +11%YoY
  5. Services Business Collection Growth 6% +6%YoY

What they filed

Q4 FY26: revenue up 1.8%, net profit down 300.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ1 FY25Q2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26
Revenue52 53 58 55 53 +2%54 +2%60 +3%56 +2%
EBITDA6 6 5 2 4 −33%-3 −150%-11 −320%-13 −750%
Net profit103 -16 4 -7 -14 −114%-19 −19%-36 −1000%-28 −300%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

medium confidence
  • Capex Capex disclosed
    • Investment in 31 new dermatology machines for Anti-Aging, Brightening & Pigmentation, Acne, Hair Care, Body and Laser Hair Reduction
    We invested in 31 new dermatology machines in Anti-Aging, Brightening & Pigmentation, Acne, Hair Care, Body and Laser Hair Reduction in Quarter 1 FY '26.

Guidance & targets

Capacity

  • New clinics opened Capacity · by September/October 2025 · Medium confidence 8 clinics
    So, by September, I think it will be around eight, September, October, it will be around eight clinics.

    — Rajiv Suri

What to watch in Q2 FY26

New clinics operational

by September/October 2025
Current 2 new clinics in Q1, 1 in Q2, 5 signed
Target 8 clinics operational

Why it matters

Clinic expansion is a key driver for revenue growth and market presence, directly impacting future performance.

So, by September, I think it will be around eight, September, October, it will be around eight clinics.

Risks & concerns

  • Standalone Net Loss

    high

    Kaya reported a standalone loss of ₹14.2 crores in Q1 FY26, a significant reversal from a profit in the prior year which included a one-time gain.

    Management acknowledged

  • Rising Operating Costs

    medium

    Employee benefit costs increased to over ₹16.24 lakhs and consumable costs remained high at ₹8.28 lakhs, impacting profitability.

    Analyst acknowledged

  • Growth Rate Below Industry Average

    medium

    Kaya's Q1 FY26 growth of 7-8% lags the industry's projected 13-14% growth over the next five years.

    Analyst acknowledged

Q&A highlights

6 direct
Employee Benefit Cost Increase Direct
One is there is a factor of increment as compared to last year. And also, Yes, a bit of productivity has increased. There was some contest which was being run along with the new clinics, which have been part of the employee benefit cost. That is the reason why the employee benefit cost has increased as compared to last year.

Clarifies the specific drivers behind the increase in employee benefit costs, which contributed to the quarterly loss.

Asked by Rehan Syed

Consumable Cost and Procurement Efficiency Direct
With respect to consumables, our market mix has changed a bit. Our Body Contouring, our Acne Scars, Anti-Aging, categories have grown a bit as compared to last year, where the consumables are a bit higher. And that is the reason of increase in consumable cost.

Explains the reason for high consumable costs, linking it to a shift in service mix rather than procurement inefficiency.

Asked by Rehan Syed

Clinic Utilization Level Partial
We do not disclose that information in public domain. Should you like to have a person-to-person call, we can have that later on. Because it also varies significantly from clinic-to-clinic.

Management declined to provide specific utilization numbers, indicating it's a sensitive metric or varies too much to generalize, but acknowledged it's an area for improvement.

Asked by Madhur Rathi

Growth Rate vs. Industry Partial
The management will be doing its best in order to improve the percentage of growth from what our current growth is of 7% - 8% in Quarter 1. And we are taking several initiatives, like I mentioned, we are making extra investment in marketing and contributions.

Addresses the concern about Kaya's growth lagging the industry average, outlining efforts to accelerate growth through marketing and new clinics without providing a specific target.

Asked by Madhur Rathi

Change in Fundraising Plan Direct
So, as we have started our expansion program, we felt that the route to preferential allotment is simpler and quicker. So, we have taken a strategic investor to come into the business, with a high pedigree of performance and background that will support our growth.

Clarifies the strategic rationale behind opting for a preferential allotment over a rights issue for quicker capital infusion and bringing in a strategic partner.

Asked by Gaurang Ved

Strategic Investor Board Seat Direct
There is no decision on that yet. Yes.

Indicates that the terms of the strategic investment, particularly regarding board representation, are still being finalized or have not been decided.

Asked by Gaurang Ved

Preference for Existing Investors (Rights Issue) Direct
We are in the process of completing the preferential allotment. And post that, the board will decide on the way ahead on the rights issue. And like I mentioned, it is on the cards and we will come back to you as soon as we are able to reach a decision.

Reiterates that a rights issue is still under consideration for existing investors, but contingent on the completion of the preferential allotment.

Asked by Ishit

Revenue Split (Product vs. Services) Direct
So, the services is 85% of the business and product is 15%.

Provides a clear breakdown of the company's revenue streams, highlighting the dominant contribution of services.

Asked by Jitaksh Gupta

2 min read 5 chapters

Detailed narrative

Q1 FY26 Financial Performance Overview

Kaya Limited reported standalone revenue from operations of ₹52.8 crores for Q1 FY26, marking a 1% growth over the corresponding quarter of FY25. Despite this growth, the company recorded a standalone loss after tax and other comprehensive income of negative ₹14.2 crores. This contrasts sharply with a profit of ₹6.4 crores in Q1 FY25, which notably included a one-time gain of ₹15.8 crores from reversal of impairment and sale of intellectual property, indicating an underlying operational loss in the previous year as well.

Business Segment Performance

The clinic business demonstrated a 7% collection growth over Q1 FY25. Within this, the clinic product business grew by 11% YoY, primarily driven by categories such as Bath and Body, Nutraceuticals, and Sun Care. The services business also saw a 6% collection growth, with strong contributions from Hair Care (20% growth) and Brightening & Pigmentation (13% growth). Kaya's customer experience remains high, reflected in an NPS score of 90.

Strategic Initiatives and Expansion

Kaya continues its expansion strategy, having launched two new clinics in Q1 FY26 in Yelahanka (Bangalore) and Starling Mall (Noida), both achieving 5-star Google ratings. The company invested in 31 new dermatology machines across various categories like Anti-Aging and Hair Reduction to enhance customer experience. Innovation remains a core focus, with new product development contributing 5% and new service development contributing 6% to India clinic collections. The Kaya Smiles loyalty program is highly effective, contributing over 90% of clinic collections.

Cost Structure and Profitability Challenges

Profitability was impacted by increased operating costs. Employee benefit costs rose to over ₹16.24 lakhs in Q1 FY26, attributed to increments, productivity incentives, and new clinic-related contests. Consumable costs also remained high at ₹8.28 lakhs, primarily due to a shift in market mix towards higher-consumable services like Body Contouring, Acne Scars, and Anti-Aging. Management acknowledged these cost pressures and is working on improving utilization and customer acquisition to drive profitability.

Capital Raising and Future Plans

The company is in the process of completing a preferential allotment, which management expects by the end of August 2025, to bring in a strategic investor. This route was chosen for its simplicity and speed compared to a rights issue. Post the preferential allotment, the board will decide on the future course for a rights issue, which is still on the cards. Kaya aims to leverage better utilization of existing infrastructure and new clinics to improve its growth percentage, targeting approximately 8 clinics to be operational by September/October 2025.

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