KAYA - Kaya Ltd

📊 NSE: KAYA 🏢 Miscellaneous 📅 Last Updated: 12/14/2025 8:51

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue from operations for H1 FY26 reached INR 106.64 Cr, representing a 2.18% growth compared to INR 104.36 Cr in H1 FY25. Standalone revenue for Q2 FY26 was INR 53.85 Cr, showing a marginal 2.5% increase over the previous quarter's INR 52.52 Cr.

Geographic Revenue Split

The company has transitioned its geographic focus by classifying Middle East operations (Kaya Middle East FZE and DMCC) as discontinued operations following a sale agreement. India now represents the primary revenue driver with 121 clinics across 26 cities, while the Middle East business was sold for an enterprise value of approximately INR 73.70 Cr (AED 33 Million).

Profitability Margins

Profitability remains under significant pressure; the consolidated loss before tax for H1 FY26 was INR 32.85 Cr, compared to a loss of INR 10.82 Cr in H1 FY25. Historical operating margins showed improvement to 14.49% in FY20 from 5.85% in FY19, but high overheads from rentals and manpower continue to suppress net margins.

EBITDA Margin

EBITDA is impacted by high fixed costs; depreciation and amortization for H1 FY26 stood at INR 20.83 Cr (approx. 19.5% of revenue). Operating income has remained stagnant in the INR 400 Cr to INR 420 Cr range over a three-year period, indicating a lack of core profitability scaling.

Capital Expenditure

The company is rationalizing its footprint by closing or relocating loss-making centers. While specific future CAPEX figures are not disclosed, the relocation of the Barsha clinic involved a cost of AED 1.35 Million (INR 3.26 Cr) which was recognized as other income via buyer reimbursement.

Credit Rating & Borrowing

The company previously held an ACUITE A- rating with a Stable outlook, which was withdrawn in August 2020 at the company's request. Standalone borrowings as of September 30, 2025, were INR 160.93 Cr, with additional lease liabilities of INR 91.29 Cr.

⚙️ Operational Drivers

Raw Materials

Consumables and materials used in skin and hair care treatments (e.g., specialized dermatological chemicals, serums, and clinical supplies) represent the primary raw material costs, totaling INR 3.58 Cr for H1 FY26 (3.3% of revenue).

Import Sources

Not specifically disclosed, though the company notes exposure to global technological advancements in skin care, suggesting some specialized equipment or consumables may be imported.

Capacity Expansion

Current capacity consists of 121 Kaya clinics across 26 cities. Expansion strategy has shifted toward 'rationalizing cost structures' and 'relocating loss-making centers' rather than aggressive new clinic additions.

Raw Material Costs

Cost of materials consumed decreased by 23% YoY from INR 4.65 Cr in H1 FY25 to INR 3.58 Cr in H1 FY26, reflecting either lower procurement costs or a shift in service mix toward less material-intensive treatments.

Manufacturing Efficiency

Not applicable as a service-oriented clinic business; efficiency is measured by clinic-level profitability and the closure of non-performing units.

Logistics & Distribution

Not disclosed as a percentage of revenue; however, the business model relies on clinic-based service delivery rather than heavy physical product distribution.

📈 Strategic Growth

Expected Growth Rate

2-5%

Growth Strategy

Growth is targeted through the sale of the Middle East business to Humania GCC Holding Limited to de-leverage the balance sheet, focusing on the Indian market, and enhancing the revenue mix through new customer addition and high-margin skin/hair care services.

Products & Services

Specialized skin care treatments, hair care solutions, and dermatological products sold through 121 clinics and e-commerce platforms.

Brand Portfolio

Kaya, Kaya Skin Clinic.

New Products/Services

The company constantly reviews technological innovations to bring global skin-care technologies to the Indian market, though specific revenue contribution % for new launches is not disclosed.

Market Expansion

Focus is currently on consolidating the Indian footprint across 26 cities rather than entering new international markets following the Middle East divestment.

Market Share & Ranking

Not disclosed, but identified as a major organized player alongside VLCC and Lakme.

Strategic Alliances

Divestment of Middle East business to Humania GCC Holding Limited; the company also maintains a strong association with the Marico Group (promoter Harsh Mariwala).

🌍 External Factors

Industry Trends

The wellness and beauty industry is seeing a shift toward premium segments and e-commerce competition. Kaya is positioning itself by adopting global technologies and rationalizing its physical clinic footprint to improve efficiency.

Competitive Landscape

Intense competition from large organized players like VLCC, Lakme, and Loreal, as well as fragmented local dermatologists and aggressive e-commerce product sellers.

Competitive Moat

The primary moat is the 'Kaya' brand equity and its association with Mr. Harsh Mariwala (Marico Group), providing financial credibility and management expertise. However, this moat is challenged by low switching costs for customers.

Macro Economic Sensitivity

Highly sensitive to discretionary spending trends; economic slowdowns directly impact the wellness and beauty industry demand.

Consumer Behavior

Shift toward seeking advanced technological solutions for skin and hair, requiring constant investment in new clinical equipment.

Geopolitical Risks

The divestment of the Middle East business reduces direct exposure to geopolitical instability in that region.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with healthcare and clinical establishment norms across various Indian states; subject to consumer protection laws regarding service efficacy.

Environmental Compliance

Focus on reducing power, water usage, and eliminating excess paper use as part of environmental responsibility.

Taxation Policy Impact

The company reports significant deferred tax assets and losses; current tax expenses are minimal due to ongoing losses.

Legal Contingencies

The company reported no instances of fraud by auditors. It maintains a Secretarial Audit with no qualifications or adverse remarks for FY25.

⚠️ Risk Analysis

Key Uncertainties

The ability to turn profitable in the Indian market post-Middle East divestment is the primary uncertainty, with a potential 20-30% impact on valuation if losses persist.