Vineeta Singh's Sugar Cosmetics revenue climbs 89% to Rs 420Cr; losses remain flat

Vineeta Singh-led Sugar Cosmetics, an omnichannel beauty brand, has witnessed a remarkable 89% growth in revenue during the fiscal year ending March 2023. The startup's revenue from operations surged to Rs 420 crore in FY23, up from Rs 222 crore in FY22. 

The growth comes on the back of the brand's presence across 40,000 retail stores and various e-commerce platforms like Amazon, Nykaa, Flipkart, and Myntra.

What about the losses?

Despite the significant increase in revenue, Sugar Cosmetics managed to keep its losses flat at Rs 76 crore. This stability in losses, alongside the revenue growth, indicates an improvement in the company's financial health.

The firm's Return on Capital Employed (ROCE) and EBITDA margin also showed positive signs, improving to -29% and -14%, respectively.

Major expenditure areas

A substantial portion of Sugar Cosmetics' expenditure was on advertising and promotion, which accounted for 32% of the total expenses, amounting to Rs 162 crore in FY23. This represents a 67% increase from the previous fiscal year.

The company also saw significant spending on employee benefits and procurement, with increases of 74.3% and 81%, respectively.

Strategic brand endorsements and expansion

The brand strategically roped in film actors Ranveer Singh and Tamannah Bhatia as brand ambassadors, contributing to its promotional efforts. Sugar Cosmetics also expanded its offline presence, nearly doubling its store count to approximately 200 by June 2023. This expansion is part of the company's broader strategy to establish a strong omnichannel presence.

Funding and current market position

Sugar Cosmetics has raised over $80 million to date, including a $50 million Series D round led by L Catterton's Asia fund. The largest external stakeholders in the company are A91 partner, with 20.11%, followed by India Quotient and RB Investments.

Co-founders Kaushik Mukherjee and Vineeta Singh hold a 24.76% stake in the company. It competes with other brands like Honasa Consumer, Purplle, and Wow Skin Science.

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