Cult.fit’s EBITDA margin improved to about 8.5 per cent in FY26 from a negative 3 per cent in the previous year
Cult.fit is looking to expand its footprint to as many as 100 cities over the next four-five years as the fitness services and products company prepares for its proposed initial public offering (IPO), Chief Executive Officer Naresh Krishnaswamy said.
The company, which filed its draft red herring prospectus (DRHP) in July, is still in the early stages of the IPO process and has not yet receive meaningful market feedback, Krishnaswamy said. It is currently working with regulators on their questions and comments on the filing and will decide the timing of the issue after meeting investors.
“We do not think of ourselves as timing the market just yet,” Krishnaswamy said, adding that the company would assess investor reception before deciding when to launch the issue.
Cult.fit’s EBITDA margin improved to about 8.5 per cent in FY26 from a negative 3 per cent in the previous year. Krishnaswamy attributed the improvement to structural operating leverage across both its fitness services and fitness products businesses, rather than one-off factors.
“All of it is structural, all of it is fundamental to the business and highly repeatable,” he said.
Faster growth
The fitness services business, which has been operating for around a decade, is now a mature and profitable segment, while the fitness products business, launched about five to six years ago, remains the faster-growing business. Cult.fit expects profitability in its gym business to improve as utilisation rises on an existing fixed-cost base. In products, the company expects scale to improve gross margins while marketing and corporate expenses decline relative to revenue.
The expansion strategy will not be restricted to India’s largest cities. Cult.fit currently has a high concentration in the top four cities, a strategy Krishnaswamy said was deliberate to establish depth and prove profitability. The company now plans to add more cities while continuing to expand in its existing markets.
“We believe ultimately 100 cities can be the market for cult over the next four-five,” he said.
The company is also increasingly using a franchise-owned, company-operated model for new centres. Franchisees fund the centre, while Cult.fit handles location selection, setup and operations. All centres launched under the model in FY26 followed this structure, allowing the company to expand with lower capital requirements while retaining operational control and service standards.
Customer retention has also improved, with retention at 51 per cent, up from the early 40 per cent range two years ago. About 85 per cent of members are on 12-month memberships, while revenue growth has outpaced membership growth, indicating an increase in revenue per customer.
Published on August 27, 2026
