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After years of prioritising expansion over profitability, Cult.fit’s pre-IPO papers and draft red herring prospectus (DRHP) suggest that the fitness startup may finally be focusing on its financial core.

The Naresh Krishnaswamy-led startup reported a 41.6% year-on-year increase in operating revenue to ₹1,720.6 Cr in FY26 whilst trimming its consolidated net loss by 48% to ₹251.9 Cr from ₹480.6 Cr in the previous fiscal. 

At the same time, EBITDA losses also narrowed, and cash generated from operations improved sharply, suggesting that the startup’s growth is beginning to translate into healthier unit economics rather than higher cash burn.

The timing is crucial. Cult.fit is preparing to tap the public markets at a moment when investors reward IPOs that demonstrate operating leverage and a clear pathway to profitability, rather than rapid top-line growth. 

According to Equentis Wealth Advisory Services, investors will assess the company’s financial performance, profitability roadmap and execution strategy rather than relying solely on brand recognition.

Operating revenue has never been Cult.fit’s problem; the startup has consistently attracted users to sign up for short-term plans. The larger challenge has been converting that top-line growth into a sustainable, profitable business.

The past fiscal year i.e FY26 marks one of the strongest indications yet that this gap is beginning to narrow. Alongside higher revenue, Cult.fit significantly reduced losses as operating expenses grew slower than the top line. 

Employee benefit expenses declined to ₹305.2 Cr in FY26 from ₹347.4 Cr a year earlier despite stronger business growth, indicating tighter cost controls. Operating cash flow rose to nearly ₹94 Cr from approximately ₹12 Cr in FY25, highlighting that the business increasingly generates cash rather than consuming it.

This improvement is particularly significant for a business model dependent on substantial physical infrastructure. The company is extracting more revenue from its existing asset base rather than relying solely on aggressive network expansion.

In an earlier interaction with Inc42, CEO Krishnaswamy highlighted this shift. After years of absorbing losses through heavy infrastructure investment, the company is now reaping those benefits. Gym memberships continue to grow from existing facilities, easing the need for further expansion. This is evident in Cult.fit’s capital allocation strategy, which now prioritises improving utilisation at existing centres over rapid nationwide expansion.

Cult.fit’s future growth increasingly appears tied not just to fitness memberships but also to Cultsport, a business that management has quietly developed over recent years.

Whilst Cult.fit’s improving profitability will likely grab investors’ attention, the DRHP also points to a structural shift: its revenue engine is becoming more diversified.

For much of its journey, the startup’s financial performance remained closely tied to fitness centre memberships. Every new facility required significant investment in leases, equipment and manpower, making expansion both capital intensive and time-consuming. Scaling revenue often meant adding fixed costs at a similar pace.

The latest performance suggests the startup is addressing this. Over recent years, it has steadily expanded its product portfolio under the Cultsport brand—sports accessories, apparel, footwear and connected fitness devices. Whilst these complement its core fitness business, they offer a markedly different economic profile.

Unlike fitness centres, fitness products allow Cult.fit to generate incremental revenue without comparable investment in physical infrastructure. 

A customer acquired through its fitness ecosystem can subsequently purchase sports equipment, apparel or wellness products, enabling the startup to monetise the same user across multiple categories and increase wallet share.

Neoma Capital notes that scalable business models with improving unit economics tend to command greater investor interest ahead of public listings.

This is reflected in Cult.fit’s retail strategy. Until recently, Cultsport products were sold largely through digital commerce channels and third-party retailers. The startup has since begun expanding exclusive Cultsport stores, allowing customers to experience products before purchasing. 

Krishnaswamy shared that Cultsport is likely to reach 50 offline stores this year from the current 29, with the IPO papers allocating ₹23.4 Cr towards store expansion.

Today, Cult.fit generates revenue across fitness memberships, sports merchandise, corporate wellness offerings, digital fitness products and offline retail. Whilst memberships remain the revenue backbone, growing contributions from adjacent categories are accelerating growth.

The broader market opportunity remains substantial. Deloitte projects India’s organised fitness market will more than double to ₹37,700 Cr by 2030, growing at a 15% CAGR, whilst fitness facility membership is expected to increase from 12.3 Mn to 23.2 Mn during the same period.

Getting Fit For The IPO Routine

Cult.fit’s improving financials undoubtedly strengthen its IPO narrative, but the public markets are unlikely to judge the company solely on one year of better numbers.

Investors will instead seek evidence that the gains reported in FY26 can be sustained as the startup enters its next phase of expansion. According to Equentis, investors will closely monitor valuation, institutional demand, expansion strategy and management’s roadmap towards sustained profitability.

The timing carries particular significance. With its DRHP, Cult.fit is set to become the first organised gym and fitness centre chain in India to tap the public markets, making its IPO a closely watched milestone for both the company and India’s broader fitness and wellness industry.

According to a 2025 Deloitte report, just 0.8% of India’s population currently holds a fitness facility membership, with penetration expected to more than double to 1.7% by 2030 as health awareness, urbanisation and disposable incomes rise.

On the one hand this provides a substantial runway for organised operators, but the true test will come in execution. 

Neoma Capital notes that investors evaluating companies approaching public markets increasingly focus on scalability, execution capability and improving unit economics alongside revenue growth—particularly in capital-intensive sectors.

Cult.fit’s approach suggests management is conscious of this responsibility. Beyond improving profitability, the company must demonstrate that its diversified business model—spanning fitness centres, digital offerings, Cultsport products and offline retail—can continue generating sustainable growth without materially increasing capital intensity.

If successful, Cult.fit’s listing could serve as an important benchmark for future consumer wellness startups seeking access to India’s public markets.

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Edited By Nikhil Subramaniam
Creatives: Varshita Srivastava

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