Sugar Cosmetics posts Rs 222 Cr revenue in FY22, losses surge 3.6X


Over the past four to five years, direct-to-consumer (D2C) beauty brands have grown at a scorching pace with startups such as MamaEarth and Sugar Cosmetics dominating the market. While MamaEarth’s revenue surged 2X and touched Rs 950 crore mark in FY22, Sugar also has managed to flourish its topline by 75.6% to Rs 222 crore during the fiscal year ending March 2022.

Even though its topline grew, Sugar seems to have missed its projected revenue of Rs 300 crore for FY22 by a significant margin.


Collection from the sale of cosmetic and beauty products surged 75.6% to Rs 221.8 crore in FY22 from Rs 126.34 crore in FY21. The company collected Rs 3 lakh as export incentives. Other than this, Sugar also booked a non-operating income of Rs 2 crore which includes interest earned on current investments.


Sugar sells its products on e-commerce marketplaces including Amazon, Nykaa, and Myntra. It also retails via its own website and mobile app facilitating sales outside India. Additionally, the brand leverages social media channels to reach its target audiences via ad campaigns, paid partnerships, and influencer marketing programs. As per the company, lipsticks are a major seller for the brand, contributing about 60% of the revenue followed by face products. During FY22, it also entered the hair category through the acquisition of ENN Beauty.

On the expenses front, advertising and sales promotional costs accounted for 32.5% of the total expenditure. The cost ballooned 2.8X to Rs 97.54 crore in FY22 from Rs 34.36 crore in FY21. The cost of procurement of cosmetics products from manufacturers was another major cost and surged around 63% to Rs 66.35 crore during FY22.


Employee benefit expenses increased 85% to Rs 35.52 crore during the year from Rs 19.2 crore in FY21. Sugar also employs outsourced support and labour for its supply chain operations and spent Rs 43.61 crore on the same. This cost surged over 98% from Rs 22 crore in FY21.

The Vineeta Singh-led company incurred freight and packaging charges of Rs 13.25 crore in FY22 which increased 50.6% from Rs 8.8 crore booked in the preceding fiscal year (FY21). Outpacing the revenue, the total expenditure of the company soared to Rs 300 crore in FY22 almost doubling from Rs 149 crore in FY21.

On the lines of expenses, losses of the company jumped 3.6X to Rs 76.2 crore in FY22 against Rs 21.1 crore booked during FY21. High cash burn caused a 4X surge in operating cash outflows to Rs 84 crore during the last fiscal as compared to Rs 20.6 crore in FY21.

Coming to ratios, EBITDA margin and ROCE deteriorated to -30.19% and -78.75% during the year. On a unit level, the Mumbai-based company spent Rs 1.35 to earn a rupee of operating revenue in FY22.


In May, Sugar scooped up $50 million in a Series D round led by L Catterton with participation from existing investors like A91 Partners, Elevation Capital, and India Quotient. During the fundraise, the company claimed that its current annualised revenue run rate is around Rs 500 crore and it expects to reach Rs 2,000 crore over the next 24-36 months.

Even though the company didn’t meet its own target, it seems to have grown well in FY22 with more customers turning to homegrown D2C brands. That said, most D2C companies witness their growth plateauing at some point for reasons such as high customer acquisition costs, among others. And with rising inflation, consumers may not spend as much on non-essentials such as cosmetics, which could perhaps reflect in the financials of Sugar Cosmetics in the ongoing fiscal.

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