Kaya Ltd — Q4 FY25 earnings call

Call held 29 May 2025

Management summary

Kaya Limited reported a 15% collection growth in its India clinics for Q4 FY25, driven by strong performance in services like Anti-Ageing (40% growth) and Body contouring (38% growth). Revenue from operations increased 3% YoY to INR 54.7 crores, though the company posted a standalone loss after tax of INR 7.1 crores. Management outlined plans for a rights issue to retire debt and accelerate expansion, with 7 new clinics already signed for FY26, aiming for net worth positivity and improved profitability.

Highlights

  • Kaya India Clinics registered a 15% collection growth over Q4 FY24.

  • Services business collection growth was 16% over Q4 FY24, with Anti-Ageing growing 40% and Body category growing 38%.

  • Hair Care services aided by advanced diagnostic tools witnessed a 14% growth.

  • NPS scores continue to trend higher at 89 in Q4 FY25, reflecting great customer experience.

  • Revenue from operations at a standalone level was INR 54.7 crores for Q4 FY25, a growth of 3% over Q4 FY24.

Concerns

  • Standalone loss after tax and other comprehensive income for Q4 FY25 was negative INR 7.1 crores.

  • Analyst noted a 6% quarter-on-quarter decline in net revenues, though management attributed this to timing of package consumption.

Key financials

2 periods

Headline

  • Revenue from Operations
    ₹54.7 Cr
    YoY +3%
  • Standalone Loss After Tax
    ₹-7.1 Cr
  • One-time Gain (Noncurrent Inv.)
    ₹2.4 Cr
  • One-time Gain (IP Rights)
    ₹3 Cr
  • Clinic EBITDA
    25%
  • Marketing Spend
    10%
  • Corporate Cost
    18%
  • Marico Product Sales (Half-year)
    ₹6 Cr
  • Marico Royalty
    ₹0.13 Cr

Q4 FY25

  • Marico Product Sales
    ₹2.8 Cr

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.

Segment breakdown

  • Clinic Business
    15% Collection Growth
  • Clinic Product Business
    9% Growth
  • Services Business
    16% Collection Growth
  • Anti-Ageing Services
    40% Growth
  • Body Category Services
    38% Growth
  • Hair Care Services
    14% Growth
  • Innovation/New Product Dev.
    6% Contribution to Collections
  • New Service Dev.
    6% Contribution to Clinic Collections
  • Loyalty Program (Kaya Smiles)
    80% Contribution to Clinic Collections

Capital allocation

high confidence
  • Capex Capex disclosed
    • New clinic in Sarjapur, Bangalore (4 clinics in FY25)
    • Renovated 13 clinics in FY25
    • Relocated 7 clinics in FY25
    • Invested in 9 new dermatology machines in Q4 FY25
    A quick update on other initiatives. Kaya soft launched new clinic in quarter 4 in Sarjapur, Bangalore. ... This makes it 4 clinics in FY '25, and we will be accelerating the expansion further in FY '26. On our Brand Refresh, we renovated 13 clinics in FY '25. We relocated 7 clinics in FY '25. And on service technology to uplift customer experience and outcome, we invested in 9 new dermatology machines, including brightening and pigmentation, Acne, Hair Care, Laser Hair Reduction in quarter 4 FY '25.
  • Debt Debt disclosed
    • Repayment Current loans to be retired post rights issue, improving profitability by INR 18 crores annually (interest savings).
    Once the rights issue or the fundraising is completed, we expect the current loans to be retired, which will improve the profitability by INR18 crores because that is the interest on an annual basis, which we are paying.

Guidance & targets

Profitability

  • Annual Profitability Improvement Profitability · Annually (post rights issue) · High confidence INR 18 crores
    Once the rights issue or the fundraising is completed, we expect the current loans to be retired, which will improve the profitability by INR18 crores because that is the interest on an annual basis, which we are paying.

    — Rajiv Suri

Expansion

  • New Clinic Additions Expansion · FY26 · High confidence 7 clinics signed
    In FY '26, we have already signed 7 clinics, and we are looking for more locations.

    — Rajiv Suri

Marketing

  • Marketing Investment Marketing · Ongoing · Medium confidence Higher investments
    We are going to be doing higher investments in marketing for customer acquisition.

    — Rajiv Suri

Brand Refresh

  • Clinic Renovation Program Brand Refresh · FY26 · High confidence Continue
    The program will continue into FY '26.

    — Arihant Dhariwal

Market context

  • Net Worth Status Balance Sheet · Post rights issue · High confidence Positive
    It will make the company net worth positive.

    — Rajiv Suri

What to watch in Q1 FY26

Rights issue completion and debt retirement

Next quarter
Current Rights issue planned for 'not-too-distant future'
Target Announcement of rights issue completion and debt retirement

Why it matters

This is fundamental to the company's financial health, path to profitability, and achieving net worth positivity.

So I'll answer the first one. As regards to the path to profitability and the current state of the business, we are going to be raising funds in the imminent -- not-too-distant future through rights issue.

Q&A highlights

4 direct, 1 evasive
Debt repayment and fundraise plans Partial
So I'll answer the first one. As regards to the path to profitability and the current state of the business, we are going to be raising funds in the imminent -- not-too-distant future through rights issue.

Analyst questioned the company's ability to repay debt given its balance sheet, and management confirmed a rights issue is planned to address this.

Asked by Prateek Giri

Timeline for rights issue completion Evasive
So, we can't give you see the amendment has recently been updated, and we are currently evaluating its implications. ... So we kindly request your patience and assure you that further communication on this matter will be provided in the not-too-distant future.

Investors are seeking clarity on the timing of the critical fundraising event, but management could not provide a specific timeline.

Asked by Prateek Giri

Discrepancy between net revenue decline and strong collections Direct
So typically, in the business, you first get collections and net revenue follows. We had a very strong March, where we had a growth of 26% and consumption of that collection will take place in the following months because the business typically, people buy packages and then the packages are consumed over a period of time. So I think this will roll back up in the next few months because people pay, they will obviously come to consume.

Management explained that strong collections are a leading indicator and revenue realization follows as packages are consumed, clarifying the timing difference.

Asked by Eshit Sheth

Revenue level required for profitability Partial
See it's more of a forward-looking statement. But as Rajiv mentioned in the first -- to answer the first question that there is a part to profitability when we'll expand, we'll leverage the head office cost. I think at that point, we will be able to achieve the operating margins and operating profitability.

Analyst probed for a specific revenue target for profitability, and management provided a directional answer linking it to expansion and cost leverage.

Asked by Eshit Sheth

Competitive landscape and market share Direct
Aesthetics market is growing -- is estimated to be growing at 17% per year. And as it's growing at 17% per year, there is a lot of interest from local competition in order to try to open. But however, as a brand, we are probably one of the top brands and are able to attract the customer base.

Addresses concerns about increasing competition in a fast-growing market and Kaya's strategy to maintain its position.

Asked by Mayank Gupta

Kaya's growth rate (15%) vs. market growth rate (17%) Direct
Yes. So last quarter, we grew at 15%. And therefore, our strategy for expansion is going to play out in the next few months, and that will help us accelerate further. So for example, we are we've already got 7 clinics signed for FY '26, and there are more which are under search right now, and we will conclude them.

Management explained how accelerated expansion and new clinic additions will help Kaya's growth surpass market growth.

Asked by Mayank Gupta

Dermatologist operating model (full-time vs. part-time split) Partial
So we have total 117 dermats, put together. Both full time and part time, it's total 117 dermats. ... That number, we don't have handy right now. We'll come back to you maybe on that.

Analyst sought details on the composition of medical staff, which impacts operational flexibility and costs, but a specific split was not available.

Asked by Mayank Gupta

Total clinic renovations and old format clinics Direct
So total 24 renovations till date and 13 relocations till date, to answer your question precisely. The program will continue into FY '26.

Provides a clear update on the progress of the brand refresh and clinic modernization program.

Asked by Shriram R

2 min read 6 chapters

Detailed narrative

Q4 FY25 Performance Overview

Kaya Limited reported a 15% collection growth in its India clinics for Q4 FY25, with the product business growing 9%. The services segment saw a 16% collection growth, notably driven by Anti-Ageing (40% growth) and Body contouring (38% growth). Revenue from operations stood at INR 54.7 crores, marking a 3% increase over Q4 FY24, despite the company recording a standalone loss after tax of INR 7.1 crores, which included one-time gains of INR 2.4 crores from noncurrent investment sale and INR 3 crores from IP rights sale.

Strategic Initiatives and Expansion Plans

The company is accelerating its expansion strategy, having opened 4 new clinics in FY25 and already signing 7 for FY26, with plans for more locations. A brand refresh program saw 13 clinics renovated and 7 relocated in FY25, and this program is set to continue into FY26. Additionally, Kaya invested in 9 new dermatology machines in Q4 FY25 to enhance service technology and customer experience, aiming for an NPS score of 89.

Path to Profitability and Fundraising

Management outlined a clear path to profitability, contingent on a forthcoming rights issue to raise funds in the 'not-too-distant future'. This fundraising is expected to enable the retirement of current loans, which would improve profitability by INR 18 crores annually due to reduced interest costs. The company aims to become net worth positive post-fundraising and leverage its existing head office infrastructure to achieve operating profitability with accelerated growth.

Revenue Dynamics and Customer Engagement

While net revenues saw a 6% QoQ decline, management clarified that collections are a lead indicator, and strong March collections (26% growth) are expected to translate into revenue in subsequent months as customers consume pre-purchased packages. The Kaya Smiles loyalty program contributed over 80% of clinic collections in Q4 FY25, demonstrating strong customer retention and engagement through experiential marketing for its Platinum and Gold Elite base.

Market Competition and Growth Outlook

The aesthetics market is growing at an estimated 17% annually, attracting significant local competition. Despite Kaya's Q4 growth of 15%, management expressed confidence in its brand strength and top-tier doctors to attract and retain customers. The accelerated expansion plan, combined with like-for-like growth, is expected to position Kaya ahead of the overall market growth in the near future.

Business Mix and Cost Structure

The clinic business is primarily service-driven, with services accounting for 85% of collections and products making up 15%. Within services, skin treatments constitute the majority, followed by hair (5-6%) and body (around 7%). Clinic-level EBITDA is reported at 25-26%, with marketing spend at 10-11% of revenue and corporate costs at 18-20%, bringing overall EBITDA to near breakeven.

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