Synopsis: Cult.fit has built what the company describes as India’s largest fitness-centre network, expanded memberships and moved from negative to positive adjusted EBITDA. However, it still reports net losses, its products business remains unprofitable and net worth has declined. Will this IPO become a strong consumer story or an expensive bet?
India’s fitness industry is moving beyond neighbourhood gyms. Rising health awareness and disposable incomes are encouraging more spending on memberships, personal training, activewear and home-fitness equipment. However, building a nationwide fitness business remains difficult because companies must manage leases, trainers, equipment and customer retention.
Cult.fit is preparing to enter the stock market after building a large presence across fitness services and products. The company had 708 fitness centres across 77 cities and 9.87 lakh paid members as of March 31, 2026. Its revenue has nearly doubled in two years, losses have reduced sharply and adjusted EBITDA turned positive in FY26. However, it still reported a net loss of nearly Rs. 252 crore, making profitability the central question for investors.
What Does Cult.fit Actually Do?
Cult.fit is not only a gym operator. Its platform covers gym memberships, group classes, personal training, sports facilities, online workouts and fitness products. Members access different formats through the Cult.fit app and CultPass, while products include apparel, footwear, treadmills, cycles, recovery products and accessories.
The company earns services revenue from memberships, personal training, corporate customers, centre setup fees, royalties and advertising. Products are sold through its app, CultStore, exclusive brand outlets, quick-commerce platforms, e-commerce marketplaces and retail partners. It operated 29 exclusive brand outlets at the end of FY26.
Services remain the larger business. In FY26, they contributed Rs. 1,197.83 crore, or 69.62 percent of revenue. Products contributed Rs. 522.77 crore, accounting for 30.38 percent. This creates two growth engines, but also adds complexity because operating fitness centres and selling consumer products require different capabilities.
According to the Redseer report in the DRHP, Cult.fit had more than four times the centres of the second-largest player and was 14 to 18 times larger by fitness-services revenue in FY25.
An Asset-Light Network With Improving Engagement
Out of 708 centres, 218 were company-owned, 174 were franchise-owned and on the app, 202 operated under the marketplace model and 114 were mainly off-app Gold’s Gym centres. Thus, a large part of the network is supported by partners rather than being fully funded by Cult.fit.
This can help expansion while limiting capital needs. In FY26, 75.86 percent of new on-app centres were added through asset-light models, compared with 66.47 percent in FY25 and 62.12 percent in FY24. Cult.fit also gives franchisees a “gym-in-a-box” solution covering location selection, centre design, equipment installation and operating support.
Paid memberships increased from 6.91 lakh in FY24 to 8.33 lakh in FY25 and 9.87 lakh in FY26. Monthly sessions rose from 2.80 million to 4.31 million, while retention improved from 40.85 percent to 50.88 percent. Around 38.68 percent of new members came through referrals in FY26, which can lower customer-acquisition costs.
Another positive is that 85.30 percent of CultPass memberships sold in FY26 were 12-month plans. Since fees are collected upfront and recognised over the plan period, longer memberships improve revenue visibility. Personal-training revenue also grew 73.32 percent to Rs. 122.11 crore, showing better monetisation of existing centres and members.
Fast Growth, But Net Profit Is Still Missing
Revenue from operations increased from Rs. 926.66 crore in FY24 to Rs. 1,215.54 crore in FY25 and Rs. 1,720.61 crore in FY26, representing a two-year CAGR of 36.26 percent. Growth accelerated to 41.55 percent in FY26 from 31.17 percent in FY25.
Adjusted EBITDA improved from a loss of Rs. 140.19 crore in FY24 and Rs. 33.53 crore in FY25 to a profit of Rs. 144.78 crore in FY26. The margin moved from negative 15.13 percent to positive 8.41 percent. Operating cash flow also improved from negative Rs. 230.73 crore in FY24 to positive Rs. 94.12 crore in FY26. However, the company spent Rs. 117.08 crore on property, equipment and intangible assets during FY26, meaning operating cash generation did not fully cover this capital expenditure.
The services segment is driving the turnaround. Its segment result rose from a loss of Rs. 7.56 crore in FY24 to profits of Rs. 54.83 crore in FY25 and Rs. 210.08 crore in FY26, when its margin reached 17.54 percent. In contrast, products lost Rs. 57.37 crore in FY26, although this improved from Rs. 122.27 crore in FY24.
Product revenue grew 60.14 percent in FY26 and volumes increased from 3.04 million to 4.24 million units. Its direct product-cost ratio improved to 69.38 percent from 78.39 percent. Yet the segment remained loss-making, indicating that distribution, marketing and other operating costs are still heavy.
The cross-selling opportunity is visible because 31.75 percent of FY26 product revenue came from existing or past fitness-services members through Cult.fit’s own channels. The challenge is turning this built-in customer base into profitable sales.
At the company level, the net loss reduced from Rs. 888.49 crore in FY24 to Rs. 480.83 crore in FY25 and Rs. 251.86 crore in FY26. Adjusted EBITDA excludes finance costs, depreciation, exceptional items and share-based payments, among other items. Therefore, it should not be confused with net profitability.
The balance sheet also needs attention. Net worth declined from Rs. 1,276.87 crore in FY24 to Rs. 669.87 crore in FY26, while accumulated retained losses were Rs. 4,441.29 crore. Goodwill and other intangible assets together were around Rs. 916.82 crore, exceeding net worth and creating impairment risk if acquired businesses underperform.
How Will The IPO Money Be Used?
The IPO includes a fresh issue of up to Rs. 950 crore and an offer for sale of up to 17.86 crore shares. Cult.fit will not receive the OFS proceeds because they will go to selling shareholders, including MacRitchie Investments, Fitness First Luxembourg, IDG Ventures, Tata Digital and Mukesh Bansal.
The company plans to use Rs. 276.60 crore for new Cult centres, Rs. 217.50 crore for lease and rental payments at existing centres, Rs. 120 crore to repay borrowings, Rs. 75 crore for marketing and Rs. 23.40 crore for new Cultsport outlets. The balance will fund general corporate purposes.
The spending can support expansion and debt repayment may reduce finance costs. However, the allocation for existing lease payments shows that the physical network carries meaningful fixed obligations. Cult.fit paid around Rs. 179.72 crore towards lease principal, interest and short-term leases in FY26.
Multibagger Potential Or Another Loss-Making Consumer IPO?
According to the Redseer report, India’s fitness-services market could grow from Rs. 25,600 crore in CY2025 to Rs. 48,700-53,100 crore by CY2030. Cult.fit already has a recognised brand, the largest network, rising memberships, improving retention and a profitable services segment. Asset-light expansion and product cross-selling could create further operating leverage.
However, products are still loss-making, 90.44 percent of services revenue came from four large cities and 38.90 percent of product revenue came through third-party online marketplaces. Direct imports from China equalled 38.59 percent of product revenue in FY26, creating currency and supply-chain risks.
Expansion outside major metros may also take longer because customers can be more price-sensitive and centre economics may differ. Maintaining service quality across owned, franchised and marketplace centres while retaining skilled trainers is another challenge.
Cult.fit has moved closer to a sustainable business. Growth is strong, operating cash flow is positive, losses are narrowing and the core services segment is profitable. But the turnaround is incomplete because products remain a drag, net worth is declining, lease obligations are substantial and net profit is still absent.
The final judgement will depend heavily on the IPO price band, which is not disclosed yet. A strong business can become a weak investment when offered at an excessive valuation. Cult.fit may become a large listed consumer platform, but investors must see whether the valuation leaves room for growth and whether improving operations eventually produce consistent net profits.
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