The Indian beauty and cosmetics market is booming. It is projected to grow from $15.2 billion in 2024 to $27.8 billion by 2034. Sitting right at the intersection of this growth is Recode Studios Limited, a brand you might remember from its viral appearance on Shark Tank India Season 2.
With its IPO hitting the BSE SME platform, the company opened its anchor book on May 4, 2026, and the main public issue runs from May 5 to May 7, 2026. The price band is set at ₹150 to ₹158 per share to raise ₹44.59 Crores
Recode started in 2018 in Ludhiana. Today, it has scaled into a diversified beauty player with a portfolio of 350+ SKUs across 5 major categories:
Face Make-Up: Foundation, primer, compact, highlighter, and setting sprays.
Eye Make-Up: Eyeliner, mascara, kajal, and eyeshadow.
Lip Make-Up: Lipsticks, glosses, and lip crayons.
Body Care: Skincare products like face wash, serums, and sunscreens.
Accessories: Makeup brushes, sponges, and tools
The Omnichannel Distribution Engine
Recode doesn't rely on just one way to sell. They deploy a balanced omnichannel model combining 22 physical retail stores (3 Company-Owned Company-Operated [COCO] and 19 Franchisee-Owned Franchisee-Operated [FOFO]) alongside robust digital channels.
The Digital Secret Weapon
Online sales make up the largest chunk at 44.80%. Crucially, more than 72% of these online sales come directly from Recode's own proprietary website and mobile application, rather than third-party marketplaces like Amazon or Nykaa. This direct connection cuts out heavy marketplace commissions and lets them keep customer data to drive repeat purchases
Shifting Geographical Mix
Historically, Recode was purely a Northern India brand. While the North remains its largest hub, the regional mix is diversifying beautifully, making them a true pan-India player.
North Zone: Dropped from 59.02% in FY23 to 33.50% in 9MFY26.
East Zone: The explosive breakout star, skyrocketing from 5.69% in FY23 to 26.59% in 9MFY26.
West Zone: Steady contributor at 22.71%.
South Zone: Growing steadily from 4.31% to 10.84%
A beauty product doesn't sell itself just by sitting on a shelf. Recode has built an ingenious customer acquisition engine fueled by Masterclasses and Workshops
By December 31, 2025, the company had conducted over 500+ institutional masterclasses and workshops
How it Works
Educating the Professionals: Recode invites makeup artists, salon owners, and micro-influencers to these deep-dive educational sessions
High-Volume B2B Pipelines: These professional artists learn to trust the product quality during the workshop. When they graduate, they don't just buy one lipstick they order bulk kits for their commercial operations, feeding directly into Recode's institutional B2B revenue (which stands at a solid 30.40% of sales)
The Influencer Ripple Effect: These institutional customers use Recode on their own daily retail clients, creating an organic, word-of-mouth marketing loop that feeds back into retail website sales
This high-engagement strategy is backstopped by a major anchor book profile, where institutional investors got their first formal crack at bidding on May 4, 2026, taking up to 60% of the allocated Qualified Institutional Buyer (QIB) bucket
Recode operates on an intentional Asset-Light Business Model.
The Strategy
Instead of sinking massive capital into setting up heavy manufacturing plants, complex machinery, and direct factory real estate, Recode focuses its capital precisely where value is created: Brand Building, Marketing, Product Curation, and Distribution Logistics.
They outsource production to trusted manufacturing partners under strict quality specifications. This enables them to launch new SKUs incredibly fast and scale up or down based on consumer demand without worrying about idle factory capacity
Operational Core Strengths
High Capital Scalability: Because capital isn't tied up in heavy infrastructure, they keep a lean balance sheet.
Logistical Backbone: They anchor their asset-light distribution with 6 strategically placed warehouses across India to smoothly pack and dispatch orders to retail stores and online buyers.
Massive Digital Footprint: An organic social media community, including 4.57 Lakh Instagram followers, gives them an immediate channel to launch products with very low customer acquisition costs
If you look past the branding, the financial execution over the last three financial years shows a business hitting its operational stride
Compounding Growth Rates (FY23-FY25):
Revenue CAGR: 46.1%
EBITDA CAGR: 106.3%
PAT CAGR: 118.4%
Explosive 9M FY26 Margins: Revenue from operations reached ₹5,739.29 Lakhs for the 9 months ending December 2025, already surpassing the total for FY25, which was ₹4,779.81 Lakhs. Over the same period, PAT margins expanded radically from 6.91% in FY25 to 15.79%
Exceptional Return Ratios: For the 9 months ending Dec 25, Return on Equity (RoE) hit an outstanding 68.11%, while Return on Capital Employed (ROCE) reached 59.85%
Operating Cash Flow: The business has achieved operational maturity, generating consistently positive cash flow from operating activities since FY25
Out of the ₹44.59 Crore issue size, the company is allocating capital to operational growth levers:
₹1,950.00 Lakhs for working capital needs.
₹574.20 Lakhs to set up a brand-new, modern warehouse facility in Ludhiana.
₹540.90 Lakhs for targeted brand awareness and marketing campaigns.
To evaluate if the IPO price band of ₹150 - ₹158 is fair, we must look at the audited landscape of Indian beauty players
Valuation Takeaways
Efficiency Leader: Giant players like Nykaa and Honasa enjoy massive absolute scale but operate on thin margins (0.90% and 3.50% PAT margins, respectively). Recode’s asset-light setup allows it to extract a 15.79% PAT margin and a phenomenal 68.11% RoE, closely trailing niche operator Ravelcare.
Comparatively, Recode Studios’ IPO is priced at cheaper valuations
The company is building a warehouse that will help it expand into modern trade and quick commerce. Now, both sales channels are interesting, while modern trade gives them an edge in selling more premium and high-margin products. Quick commerce will give them accelerated volume growth.
Based on the company’s working capital projections given in the RHP and its existing WC turnover, they give some hint about the potential growth of the company of close to 50-60% in the coming years
Conclusion: Why Recode?
Efficient BPC brand at comfortable valuation with multiple growth lever
Disclaimer: The content shared is for educational purposes only and should not be construed as a recommendation.
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