Purple Style Labs FY26 revenue rose but margins and loss worsened

Purple Style Labs increased revenue from operations by 14% to Rs 557.838 crore in FY26, but its EBITDA margin fell to 5.44% from 8.57% and loss after tax widened to Rs 285.399 crore. The restated consolidated financial information shows lower gross margin, lower EBITDA and higher finance and depreciation costs.

Did Purple Style Labs' FY26 revenue growth improve profitability?

No, Purple Style Labs' FY26 revenue growth did not improve profitability because operating and loss measures deteriorated despite the increase in revenue. Revenue from operations rose from Rs 489.909 crore in FY25 to Rs 557.838 crore in FY26, following Rs 504.373 crore in FY24. EBITDA, or earnings before interest, taxes, depreciation and amortisation, declined to Rs 30.365 crore in FY26 from Rs 41.988 crore in FY25.

The margin comparison shows why the higher revenue did not produce higher EBITDA. Purple Style Labs' EBITDA margin, calculated as EBITDA divided by revenue from operations, declined by 3.13 percentage points to 5.44% in FY26 from 8.57% in FY25; the margin was 6.27% in FY24. For revenue growth to translate into higher EBITDA, the reported gross margin and cost structure would need to move differently in subsequent periods.

Why did Purple Style Labs' gross and EBITDA margins decline?

Purple Style Labs' gross margin declined because gross profit increased modestly while revenue and merchandise purchases increased more sharply in FY26. Gross profit was Rs 209.440 crore in FY26, Rs 3.404 crore above FY25 gross profit of Rs 206.036 crore, while revenue increased by Rs 67.929 crore. Gross profit margin consequently fell to 37.54% in FY26 from 42.06% in FY25, reversing the improvement from 41.02% in FY24.

The gross-profit reconciliation records purchases of stock-in-trade of Rs 349.827 crore in FY26, compared with Rs 302.587 crore in FY25. Changes in inventories of finished goods, stock-in-trade and work-in-progress were negative Rs 3.523 crore in FY26, compared with negative Rs 20.004 crore in FY25, while cost of materials consumed rose to Rs 2.094 crore from Rs 1.290 crore. These inputs explain the reported gross-profit calculation, but the financial information does not attribute the margin change to particular products, designer brands or Experience Centers.

How did Purple Style Labs' loss and operating costs change?

Purple Style Labs' loss after tax widened by Rs 97.016 crore in FY26 as finance costs and depreciation and amortisation increased while EBITDA declined. Loss after tax reached Rs 285.399 crore in FY26, compared with Rs 188.383 crore in FY25 and Rs 47.710 crore in FY24. The reported tax expense or credit was nil in each of the three fiscal years, so loss before tax and loss after tax were identical in FY26.

Finance costs increased to Rs 97.087 crore in FY26 from Rs 52.973 crore in FY25, while depreciation and amortisation rose to Rs 100.749 crore from Rs 54.630 crore. Purple Style Labs reported exceptional-item expense of Rs 117.928 crore in FY26, below Rs 122.768 crore in FY25. Before exceptional items and tax, however, loss widened to Rs 167.471 crore from Rs 65.615 crore, and the pre-exceptional profit-before-tax margin moved to negative 30.02% from negative 13.39%.

Purple Style Labs reported earnings before interest and tax, or EBIT, of negative Rs 70.384 crore in FY26, compared with negative Rs 12.642 crore in FY25. EBIT in the company's reconciliation adds back finance costs and exceptional items to loss before tax, but does not add back depreciation and amortisation. The EBIT margin fell to negative 12.62% in FY26 from negative 2.58% in FY25, reflecting the lower EBITDA and higher depreciation charge.

Did store expansion and customer activity offset the pressure?

No, the disclosed FY26 measures show higher customer activity and physical expansion, but not an offset in reported EBITDA margin or loss after tax. Purple Style Labs had 14 Experience Centers globally as of the prospectus date, comprising 12 in India, one in London and one in New York. It also opened four Large Format Experience Centers, defined as stores with 20,000 to 60,000 square feet of built-up area, from June 2025 to March 2026.

The four disclosed larger stores were opened in South Extension, Delhi, in June 2025; Fort, Mumbai, in July 2025; Madison Avenue, New York, in February 2026; and Linking Road, Mumbai, in March 2026. Purple Style Labs served 66,713 customers and recorded 95,565 orders in FY26. Its average order value was Rs 75,504.88, up 34.57% from Rs 56,106.44 in FY25, while total PPUS gross merchandise value, or GMV, rose 22.65% to Rs 721.562 crore.

The commercial measures coincided with revenue rising to Rs 557.838 crore, but the financial information does not provide store-level profitability or state that the new large-format locations caused margin compression. It establishes that the June 2025 to March 2026 openings occurred during the FY26 period in which gross margin fell 4.52 percentage points and EBITDA margin fell 3.13 percentage points. Future reports would need to show higher margins alongside the expanded footprint to demonstrate an operating offset.

What do Purple Style Labs' cash flow and capital measures show?

Purple Style Labs' FY26 cash flow remained reliant on financing inflows, although cash used in operating activities decreased from FY25. Operating activities used Rs 34.895 crore in FY26, compared with an outflow of Rs 45.185 crore in FY25. Investing activities used Rs 52.454 crore, compared with Rs 12.113 crore, while financing activities provided Rs 92.544 crore and produced a net increase in cash and cash equivalents of Rs 5.195 crore.

Total equity became negative Rs 52.278 crore as at March 31, 2026, compared with positive Rs 117.497 crore as at March 31, 2025. Purple Style Labs therefore reported return on equity as not applicable for FY26 because both total equity and loss after tax were negative. Net asset value per equity share declined to Rs 7.69 from Rs 18.09, and basic and diluted loss per equity share widened to Rs 41.98 from Rs 29.00.

Purple Style Labs reported total assets of Rs 829.603 crore and total current liabilities of Rs 530.914 crore as at March 31, 2026, resulting in capital employed of Rs 298.689 crore. Return on capital employed, calculated as EBIT divided by capital employed, was negative 23.56% in FY26, compared with negative 4.75% in FY25. This measure uses the reported negative EBIT of Rs 70.384 crore and differs from EBITDA because EBITDA excludes depreciation and amortisation.

Conclusion

Purple Style Labs' FY26 revenue increase, higher order activity and four large-format store openings did not translate into better reported operating economics. Gross profit rose to Rs 209.440 crore as revenue reached Rs 557.838 crore, but gross margin fell to 37.54%, EBITDA declined to Rs 30.365 crore and loss after tax widened to Rs 285.399 crore.

The next reported financial period will show whether the larger footprint supports a recovery in gross and EBITDA margins while finance costs of Rs 97.087 crore and depreciation and amortisation of Rs 100.749 crore are managed. Purple Style Labs disclosed the March 2026 Linking Road, Mumbai opening as its latest stated expansion, but it did not disclose a future profitability target, store-level earnings forecast or timetable for restoring positive equity.