Fitness firm Cult.fit aims to expand its network to 100 cities as it progresses toward a public listing. While the company turned adjusted EBITDA positive in FY26, investors are analyzing its net losses and the strategy behind its aggressive network growth.
Cult.fit has announced plans to expand its physical fitness footprint to 100 cities over the next few years. This growth strategy comes as the company continues to work through the IPO process, having filed its Draft Red Herring Prospectus (DRHP) with market regulator SEBI in July 2026.
The fitness chain is looking to raise funds for this network expansion, lease payments, and debt repayment. According to the DRHP, the company plans a fresh issue of shares worth ₹950 crore, alongside an Offer for Sale (OFS) of up to 17.86 crore equity shares. As of late August 2026, the company is not listed on any stock exchange, and the specific timeline, pricing, and final structure of the IPO are yet to be decided.
Financial Performance and Business Model
The company’s recent financial results show a shift toward operational efficiency. In fiscal year 2026, Cult.fit reported an operating revenue of ₹1,720.60 crore. Notably, the firm turned adjusted EBITDA positive, recording a profit of ₹144.78 crore, which represents an 8.41 percent margin. This is a significant change compared to the losses recorded in previous years. However, despite this improvement in operating performance, the company remains net loss-making, reporting a net loss of ₹251.85 crore for the same period.
To manage its expansion while controlling costs, Cult.fit is relying on a Franchise-Owned, Company-Operated (FOCO) model. Under this arrangement, franchise partners provide the capital for new centers, while Cult.fit maintains control over operations, quality, and location selection. This approach is designed to help the brand scale rapidly without the heavy burden of capital expenditure on the company’s own balance sheet.
Investor Monitorables and Risks
For potential investors, the primary area of focus will be how the company balances its aggressive growth plans with the need to reach bottom-line profitability. While the adjusted EBITDA figures highlight operational progress, the persistent net losses mean that future success will depend on managing operating costs as the firm enters new markets.
There are also specific operational risks to watch. The company’s recent filings included auditor observations regarding the lack of daily sales data backups at some of its premium fitness centers. Ensuring robust data management and consistent service quality across a much larger network will be a challenge as the firm enters new cities.
Furthermore, the fitness industry is highly dependent on discretionary consumer spending. As Cult.fit moves from its current concentration in major urban centers to a broader nationwide presence, it will face increased competition and the pressure to maintain high customer retention rates in varied markets. Investors will be keeping an eye on upcoming regulatory updates, the finalization of the IPO schedule, and the company's ability to demonstrate a sustainable path to net profitability.