Purple Style Labs’ annual loss rose sixfold in two years

Purple Style Labs Limited, referred to as Purple Style Labs, reported a loss after tax of Rs 285.40 crore in Fiscal 2026, nearly six times its Rs 47.71 crore loss in Fiscal 2024. The company linked the increase to employee stock-option expenses and higher depreciation and finance costs associated with Large Format Experience Center expansion.

Why did Purple Style Labs’ annual loss rise sixfold in two years?

Purple Style Labs’ loss after tax rose from Rs 47.71 crore in Fiscal 2024 to Rs 188.38 crore in Fiscal 2025 and Rs 285.40 crore in Fiscal 2026. Fiscal 2026 loss was nearly six times the Fiscal 2024 amount, while it was 51.3% higher than the Fiscal 2025 loss. The company reported negative retained earnings of Rs 710.29 crore as of March 31, 2026.

The filing identifies exceptional employee share-based payment expense of Rs 117.93 crore in Fiscal 2026 as one cause of the loss. Total expenses increased 31.26% during Fiscal 2026, while depreciation and amortisation rose 84.42% to Rs 100.75 crore and finance costs rose 83.28% to Rs 97.09 crore. Purple Style Labs attributed these cost increases to expansion into Large Format Experience Centers.

Purple Style Labs’ Fiscal 2025 loss also included Rs 122.77 crore of exceptional employee share-based payment expense. Finance costs rose 29.97% to Rs 52.97 crore in that year, primarily because of interest on non-convertible debentures and lease liabilities following higher borrowings and leased Experience Center space. Non-convertible debentures are debt instruments that cannot be converted into equity shares.

Depreciation and amortisation increased 41.60% in Fiscal 2025 to Rs 54.63 crore. Purple Style Labs cited accelerated depreciation after a change in the useful life of certain asset classes and greater depreciation of right-of-use assets, which represent leased assets recognised in the accounts. Total income also declined 3.14% in Fiscal 2025 as the company shifted away from lower-value products and reduced ancillary services.

How did Experience Center expansion increase costs?

Experience Center expansion increased Purple Style Labs’ rent-linked, financing and depreciation costs before all newer locations completed a full year of operations. The company said some Large Format Experience Centers that began operating in Fiscal 2026 did not generate enough revenue during the partial year to fully offset the associated costs.

Purple Style Labs operated 14 Experience Centers as of the prospectus date, comprising 12 in India, one in the United Kingdom and one in New York, United States. Indian Experience Centers accounted for 74.72% of total PPUS GMV in Fiscal 2026, compared with 66.41% in Fiscal 2025 and 56.20% in Fiscal 2024. PPUS GMV is the company’s reported gross merchandise value measure for Pernia’s Pop-Up Shop.

Mumbai and Delhi represented a substantial concentration within the store network. Mumbai generated Rs 205.04 crore, or 28.42%, of Fiscal 2026 total PPUS GMV, while Delhi generated Rs 165.51 crore, or 22.94%. Together, the two cities generated Rs 370.55 crore, or 51.36%, of Fiscal 2026 total PPUS GMV of Rs 721.56 crore.

Purple Style Labs said newly opened Large Format Experience Centers in Mumbai and Delhi, as well as the New York Experience Center opened in February 2026, may increase rent costs. The company did not state that these locations would achieve a particular revenue level, and disclosed that it cannot assure that sales generated by new Experience Centers will offset their costs. Lease renewals, real-estate prices, staffing and local regulatory requirements can also affect store economics.

What does three years of negative operating cash flow show?

Purple Style Labs used cash in operating activities in each of Fiscal 2024, Fiscal 2025 and Fiscal 2026, even though operating profit before working-capital changes was positive in all three years. Net cash used in operating activities was Rs 31.34 crore in Fiscal 2024, Rs 45.19 crore in Fiscal 2025 and Rs 34.90 crore in Fiscal 2026.

The company attributed the outflows to upfront working-capital requirements of its Large Format Experience Center strategy. These included security deposits, goods and services tax input credit and inventory. Goods and services tax input credit is credit available for tax paid on eligible business inputs, while the related sales from some new stores had not been fully realised during the relevant fiscal periods.

Fiscal 2026 operating cash use was Rs 10.29 crore lower than Fiscal 2025, but Rs 3.56 crore above Fiscal 2024. The difference between positive operating profit before working-capital changes and negative operating cash flow reflects the cash tied up in deposits, tax credits and inventory. For cash use to decline further, the revenue from new Experience Centers would need to develop sufficiently to absorb recurring costs and reduce these working-capital demands.

Purple Style Labs stated that negative operating cash flow over extended periods, or substantial short-term cash outflow, could affect its ability to operate the business and implement growth plans. The filing does not provide a date by which operating cash flow is expected to become positive. It instead identifies the timing of revenue generation from newer Experience Centers as a relevant uncertainty.

Which business dependencies could extend Purple Style Labs’ losses?

Purple Style Labs remains dependent on womenswear and physical retail locations for a significant share of PPUS GMV. Womenswear generated Rs 560.65 crore, or 77.70%, of Fiscal 2026 total PPUS GMV, compared with 75.66% in Fiscal 2025 and 77.88% in Fiscal 2024. A change in consumer demand or preferences in this category could therefore affect sales volumes.

The company also disclosed risks linked to its overseas subsidiaries. Purple Style Labs has recognised impairment losses on its investment in Purple Style Labs UK Limited. An impairment loss is an accounting reduction in the carrying value of an investment or asset when its expected recovery is lower than the recorded value.

In Fiscal 2024, Purple Style Labs reported total expenses of Rs 557.74 crore against total income of Rs 510.03 crore. Other expenses were Rs 122.22 crore, including sales and marketing expenses of Rs 54.11 crore, incurred for Experience Centers subsequently opened. The Fiscal 2024 cost base illustrates that store-related spending had begun before the larger increases in depreciation and finance costs reported in Fiscal 2025 and Fiscal 2026.

Purple Style Labs said future expenses could increase through expansion, additional employees, marketing initiatives and upgrades to operational and financial systems. The company also identified foreign-exchange fluctuations and local restrictions affecting overseas subsidiaries as possible limits on its ability to restructure, monetise or support those entities. These conditions, alongside store revenue and lease costs, affect whether losses narrow.

Conclusion

Purple Style Labs’ Fiscal 2026 loss of Rs 285.40 crore reflects both exceptional employee stock-option expenses and a store-expansion model that raised depreciation, finance costs and working-capital use. Three consecutive years of negative operating cash flow, negative retained earnings of Rs 710.29 crore and the increasing share of PPUS GMV from Indian Experience Centers show that the financial outcome is closely linked to the performance of the physical network.

The next results will show whether newer Large Format Experience Centers generate sufficient revenue after a full operating period to cover higher rent, financing, inventory and deposit requirements. Purple Style Labs specifically disclosed new locations in Mumbai, Delhi and New York, with the New York Experience Center opened in February 2026, but left unresolved whether their sales will offset the additional costs and support positive operating cash flow.