The Insight Labs Daily

★ Lead Story

2 days ago · 2 min read

SUGAR Cosmetics was worth Rs 2,700 crore. It just raised money at Rs 600 crore.

On September 1, SUGAR Cosmetics' board approved a fresh equity round. Filings with the Registrar of Companies, reported by Inc42 on September 4, show A91 Partners put in Rs 144.5 crore for Series D preference shares at Rs 12,871 apiece. The number that matters is the post-money valuation: Rs 550 to 600 crore, against Rs 2,600 to 2,700 crore when the company last raised in November 2024, and a peak of about Rs 3,000 crore in 2022.

That is a cut of 75 to 80%. The pre-money valuation was Rs 433.6 crore, close to one year of revenue. A registered valuer's report attached to the filing, dated June 30, describes a sustained and worsening pattern of financial deterioration over the past two financial years.

The operating numbers explain the price. Revenue from operations fell about 20% to Rs 404.4 crore in FY25 from Rs 505.1 crore in FY24. The net loss nearly doubled to Rs 135 crore from Rs 68.4 crore. The company had to close 30 to 40% of the physical stores it opened because each one lost money.

SUGAR runs four brands, SUGAR, POP, ENN and Quench Botanics, and has raised about $90 million to date from Elevation Capital, A91, Anicut and IndiaQuotient. Its competitors are Nykaa and Mamaearth, both listed, and a long tail of newer labels.

This is the third consumer down-round or shutdown in a week: a Rs 125 crore beauty brand was wound up on Thursday, and slice is raising at $450 million against $1.2 billion. The cheap capital of 2021 and 2022 is being repriced brand by brand.

The store problem is the structural one. Colour cosmetics sells on trial, so SUGAR pushed into physical retail faster than most digital-first brands. But a make-up store in a mall carries rent, staff and inventory across hundreds of shades, and the sales per square foot of a single-brand cosmetics outlet rarely covers that unless the brand has the pull of a MAC or a Nykaa Luxe. Shutting a third of the estate is the admission that the format did not pay.

Who gains: Nykaa, which reported Rs 80 crore profit in the June quarter and sells SUGAR alongside two hundred other brands without carrying their store rent. Who loses: the 2024 investors, whose shares now sit under a new preference layer at a fifth of their entry price. A91's Rs 145 crore buys a large slice of a business with a Rs 400 crore top line and real shelf presence, which is a reasonable bet if the losses can be cut faster than the revenue.

The question for every D2C beauty brand still private is simple: would you raise at today's price, or wait? Waiting costs cash, and SUGAR's numbers show what waiting too long looks like.

Today's Top 5

5 stories

Aditya Birla · 2 days ago

Aditya Birla's fourth consumer bet is wires, and the incumbents fell 8% on the news

On September 3, the Aditya Birla Group launched Ultravolt, a wires and cables brand housed under UltraTech Cement, with a stated investment of Rs 1,800 crore. On Friday, September 4, KEI Industries fell 8% to Rs 4,848, Polycab dropped over 5%, and RR Kabel, Havells and Finolex slid 2 to 3.5%.

The launch is national from day one: more than 500 districts and 6,000 pin codes, installed capacity of about 1 million km to be scaled to 3.5 to 4 million km, and a plan to reach 100,000 retailers using the 5,000 UltraTech Building Solutions outlets already selling cement. That makes it the second-largest wires player by capacity at launch.

This is the group's fourth new consumer business in three years, after Birla Opus in paints, Birla Pivot in B2B building materials and Indriya in jewellery. Each one enters a category with a few profitable incumbents and a large distribution network to borrow.

The logic is the construction cycle. UltraTech cement goes into roughly one in three homes built in India, so the brand meets the builder months before wiring is bought. Nuvama now expects a 150 to 250 basis point hit to incumbents' gross margins, up from 100 to 150 earlier, as pricing and channel spending rise.

The pattern from paints is the caution. Birla Opus took share fast but pulled the whole category's margins down with it, including its own. Copper and aluminium are about 80% of a cable's cost, and Hindalco is a sister company, so Ultravolt has a cost edge the paint business never had. Whether that turns into profit or a longer price war is the thing to watch through FY27.

FMCG · 3 days ago

Sugar is up 19% and palm oil 21%, and the FMCG cost relief is fading

In an industry update dated September 1, reported by Business Today on September 3, Equirus Securities said the raw-material environment for FMCG had rotated rather than eased in the second quarter of FY27. Crude-linked inputs fell about 10% quarter on quarter, but sugar rose 19% year on year and 20% in a single quarter, palm oil is up 21% on the year, and menthol is up 33%.

The exposure is uneven. Sugar hits biscuits, confectionery, malted drinks and soft-drink bottlers, so Britannia and Mrs Bectors sit in the line of fire. Palm oil affects soaps and snacks, Jyothy Labs and Bikaji among them. Menthol lands on Procter & Gamble Hygiene. Tea, coffee and cocoa are rising again for Tata Consumer.

Equirus kept a long rating on all 13 names it covers, with Britannia at a target of Rs 6,477, Marico at Rs 954 and Godrej Consumer at Rs 1,293, arguing that cereal-heavy portfolios are best placed.

The relief that came in 2025 was broad: crude, packaging and edible oils all fell together, and margins expanded across the sector. What Equirus is describing is the end of that phase. Crude is still 38% higher than a year ago even after the quarterly dip, HDPE for packaging is up 30% on the year, and the agri inputs are now rising on their own cycle.

For the shopper, this decides which pack shrinks next. The GST Council meets on September 12, a year after it cut rates on essentials; if sugar and palm oil stay here, the price cuts of last October start being eaten from the inside. Which company passes cost on, and which one takes the margin hit to hold volume, is the second-quarter story to read in October.

WhatsApp · 2 days ago

WhatsApp now pays your electricity bill, and it is coming from eighth place in UPI

On September 4, WhatsApp launched bill payments in India. A rupee icon at the top of the home screen opens 22,722 billers across 30 categories on the Bharat Connect network: electricity, gas, water, FASTag, insurance, credit cards and loan repayments. Payment runs on UPI, debit or credit card, and the rollout reaches all Android and iOS users over the coming weeks.

The distance to cover is large. In July 2026, WhatsApp Pay processed 16.78 crore UPI transactions worth Rs 12,957 crore, eighth among UPI apps, far behind PhonePe, Google Pay and Paytm. The NPCI only lifted its user cap on WhatsApp Pay in December 2024.

Bills are the most habitual payment a household makes, and WhatsApp already lets users do UPI transfers, recharges and metro tickets. The bet is that a due date reminder inside the app people open forty times a day beats a dedicated payments app.

The June leadership change is the context: CRED's Kunal Shah took over as global head of WhatsApp, and Meta led a Rs 8,550 crore round in CRED at the same time. Bill pay is exactly the CRED playbook, recurring, high-trust, and a hook for credit later.

For PhonePe and Google Pay the near-term share loss will be small. The larger risk is that the biller category, which they use to keep the app open between transfers, gets commoditised by a rival with 500 million Indian users who never had to be acquired. Watch the September and October NPCI tables for whether WhatsApp moves out of eighth.

Ola Electric · 2 days ago

Ola Electric's first dealer stores are open, five years after it said it would never need them

On Friday, September 4, Ola Electric announced its first cohort of dealer-operated stores, live in Rajasthan, Tamil Nadu, Maharashtra, Bihar, Telangana, Uttar Pradesh and Madhya Pradesh. The company opened its network to partners on August 6; the first stores were trading within a month.

The target is a 500-plus dealership footprint over the next two quarters. Existing company-owned stores become brand experience centres. The pitch to dealers is the S1Z range starting at Rs 79,999 and a base of over 10 lakh riders built through the company-owned model.

This is the reversal of Ola's founding retail idea, which was that direct-to-consumer would cut dealer margin out of the price. The August EV registration data, down 10% with share lost in two-wheelers, shows why that idea ran out of road in towns where a service centre is what sells the scooter.

The economics of the switch: a dealer carries the working capital, the rent and the service staff, and takes a margin of roughly 5 to 8% on a two-wheeler. Ola gives up that margin and gains 500 points of presence it does not have to fund from a balance sheet that is still burning cash, PLI boosts notwithstanding.

The people to watch are Bajaj and TVS, who have run dealer networks for decades and now hold the two largest electric two-wheeler shares. Ola arrives in their model with a cheaper scooter and a thinner brand. The Diwali quarter, when the full footprint is meant to be live, is the first real test.

Flipkart Minutes · 2 days ago

Flipkart Minutes has 1,000 dark stores and a broker says 1,000 more are coming

A UBS report, published September 4 and citing an industry expert, says Flipkart Minutes could add another 1,000 dark stores by mid-2027 or the next Big Billion Days, doubling the network to about 2,000. The current 1,000-plus stores cover 120 to 130 cities and average 800 to 1,000 orders a day; mature ones reach 1,200 to 1,500 within five to six months.

The basket has caught up. Minutes' net order value excluding phones is Rs 500 to 530, against Blinkit's Rs 518 in the June quarter. Where Minutes is available, 40 to 45% of Flipkart visitors also use it. Metros are 60 to 65% of demand, with eastern and southern India scaling fast.

The same report puts Amazon Now at 500 to 600 stores and 4 to 5 lakh daily orders, heading for 1,000 stores by year-end and 300 cities. Zepto's IPO is on hold. The two largest e-commerce companies in the country are now building the quick-commerce networks the startups pioneered.

The cost picture is where the gap remains. UBS says Minutes' gross margin is improving but still below Blinkit's, and cost per order has moved close to Blinkit and Instamart without matching Blinkit's efficiency. Flipkart runs most stores itself and uses franchisees for a small part, keeping control of inventory and assortment.

In August, Minutes launched Pykd, a private label for premium grocery, and is piloting third-party premium brands in Bengaluru against Blinkit Gourmet and Instamart's Noice. The question for Eternal shareholders, after two funds sold Rs 3,265 crore of stock this week, is how much of Blinkit's lead survives two deep-pocketed rivals each doubling their network in the next twelve months.

⚡ 30-Second Scan

Maruti Suzuki's entry-level car sales doubled in the first four months of FY27: the company credits the GST cut on small cars, reviving a segment that had shrunk for years as regulatory costs priced out first-time buyers (Business Today).

NoPaperForms, the parent of Meritto, filed an updated draft prospectus for a Rs 375 crore-plus IPO: the education-CRM company joins 29 startups with DRHPs on file this year, in a market that has already seen 173 IPOs against 358 in all of 2025 (Inc42).

KRAFTON will invest a further $250 million in Indian startups over three to four years: the BGMI maker's total India commitment reaches $500 million, with the new money aimed at AI, robotics and deeptech rather than gaming after the real-money gaming ban (Inc42).

Sourced from public reporting; analysis by The Insight Labs.

Sources: Inc42 (MCA filings), Economic Times, Business Standard, Nuvama, Jefferies, Business Today, Equirus Securities, Inc42, NPCI data, PTI, UBS.

Want the Tuesday deep-dive?

The Insight Labs newsletter · every Tuesday · one full FMCG case-study from inside the P&L. Free.

Subscribe →

Add Insight Labs to your home screen

The Insight Labs Daily.