Recode Studios IPO

Company History Timeline

Registered Office

R-89, Phase V, Focal Point, Ludhiana, Punjab – 141010

Core Business

The company operates in beauty and personal care through products such as:

• Lipsticks

• Foundations

• Eyeliners

• Kajal

• Compact powders

• Skin products

• Beauty accessories

• Other cosmetic SKUs

Strategic Positioning

Recode Studios targets:

• Young consumers

• Urban and semi-urban women

• Value-conscious beauty buyers

• Online shoppers

• Influencer-led beauty audiences

Basic Details

What Company Does

Recode Studios is a cosmetics and beauty products company operating through branded consumer products. It caters to Indian mass-premium customers looking for affordable cosmetics.

Product Categories

Likely offerings include:

Investor Meaning

This is not an industrial business. It is a brand business, where success depends on repeat customers, marketing efficiency, and product quality.

Indian Beauty & Personal Care Industry

India’s Beauty & Personal Care (BPC) market is among the fastest growing consumer segments.

Growth Drivers

1. Rising Disposable Income

Consumers increasingly spend on grooming and branded cosmetics.

2. Social Media Influence

Instagram, YouTube and short-video platforms have accelerated beauty product discovery.

3. Tier-2 / Tier-3 Penetration

Smaller cities are becoming major demand centers.

4. Women Workforce Participation

Higher economic participation boosts self-care spending.

5. Premiumization Trend

Consumers shift from unorganized local products to branded labels.

Key Competitors

Future Outlook

India’s beauty market is expected to remain structurally strong due to demographics, digital adoption and rising aspiration spending.

Recode Studios functions as a cosmetics brand-led business. Instead of only being a manufacturer, it likely captures higher value through branding, packaging, product design, customer acquisition, and omni-channel distribution.

Value Chain Position

Revenue Channels

• Website sales

• E-commerce marketplaces

• Retail stores

• Distributors

• Beauty resellers

Why This Matters

Brand-led cosmetic companies often command stronger margins than plain manufacturers if customer loyalty develops.

Recode Studios operates in a regulated consumer products category.

Major Applicable Laws

Key Compliance Needs

• Ingredient disclosure

• MRP labeling

• Expiry dates

• Manufacturing batch traceability

• Safe packaging norms

• Tax filings

• Marketplace compliance

Investors should understand the real business risks.

Key Risks

Promoters

• Dheeraj Bansal

• Rahul Sachdeva

• Shelly Bansal

• Shalini Trehan

• Preeti Trehan

• Karan Bansal

Interpretation

This appears to be a closely held promoter/family-led business structure, common in Indian consumer brands.

Promoter Role in Growth

Likely responsibilities include:

Founder-led companies can be agile, but governance discipline becomes critical post listing.

investors should assess:

• Shared transactions with promoter-linked entities

• Rent arrangements

• Vendor/customer overlap

• Trademark ownership

• Loans/advances

Why It Matters

If promoter entities transact heavily with the listed company, investors should track arm’s-length pricing and transparency.

Typical Red Flags to Monitor

Leadership Importance

For an SME beauty company, execution matters more than size. Key management must handle:

• New launches

• Supply chain reliability

• Cash discipline

• Online growth

• Retail expansion

• Governance after IPO

Mentioned Committees

Governance Checklist for Investors

• Independent directors strength

• Internal audit quality

• Related party approvals

• Timely disclosures

• Quarterly transparency

No material adverse matters are highlighted in the RHP provided by the company.

Profit & Loss Statement (₹ Crore)

Balance Sheet (₹ Crore)

Growth Analysis

Revenue CAGR (FY23–FY25)

Revenue grew from ₹22.44 Cr to ₹47.94 Cr.

2-Year CAGR = ~46%

PAT Growth

PAT rose from ₹0.69 Cr to ₹3.30 Cr.

This is a sharp earnings improvement.

Debt Trend (₹ Crore)

Interpretation

• Debt increased sharply during expansion phase in FY24

• Slight improvement in FY25

• IPO proceeds may reduce future borrowing need

Debt Risk View

Cash Flow Statement (₹ Crore)

Interpretation

Very Important Positive Signal:

Operating Cash Flow turned positive to ₹3.14 Cr in FY25

That means business profits are converting into cash.

Earlier Years Negative CFO

Likely due to:

• Inventory buildup

• Expansion

• Working capital stress

What This Means

Massive Improvement in FY25

• EBITDA margin nearly tripled vs FY24

• ROE very strong at 37.63%

• Debt/Equity improved

This suggests scaling benefits kicked in.

Current Growth Model

Public sources indicate:

• 24 physical stores

• 3 COCO stores

• 21 FOFO stores

• 6 warehouses across India

Strategic Strength

This means Recode is not only online. It has:

- Retail network
-Franchise model
- Warehousing backbone
-Omnichannel presence

Growth Drivers Ahead

Investor Meaning

These are growth-oriented uses, not distress repayment uses.

Confirmed Share Data

Meaning

IPO dilution is meaningful but promoters still retain control.

OFS Sellers

Interpretation

This is partial monetization, not promoter exit.

As a young growth-stage consumer company, Recode is more likely to prioritize:

For an SME growth company, retaining profits is usually better than paying dividends in early years.

Dividend Probability

Shareholder Rights

Minority Shareholder Importance

Post listing, governance and disclosures become enforceable through exchange norms.

Red Flags to Verify Before Applying