Colorectal cancer is the second most prevalent type of cancer in the world. Surgical complications occur in up to 50% of patients which results in increased morbidity, mortality, and poor health-related quality of life. The negative impact on survival and physical function is exacerbated in those receiving neoadjuvant treatment. Prehabilitation offers a more effective approach to ameliorate both the physical and psychological factors important for recuperation and to address sarcopenia. Our study aimed to assess the effect of multimodal prehabilitation on muscle mass in rectal cancer patients receiving neoadjuvant treatment. This is a prospective observational study conducted in a tertiary care gastrointestinal surgical unit. All consecutive patients with locally advanced resectable rectal cancer who received standard long-course neoadjuvant therapy were given a multimodal home-based prehabilitation protocol, and their muscle mass calculated on imaging before surgery was compared with a historical cohort which comprised patients who had not received prehabilitation. A total of 100 patients were enrolled in the study—44 intervention and 56 historical cohort. There was a mean percentage increase in muscle mass in the intervention group, while there was a mean percentage decrease in the historical cohort group. Improved muscle mass was significantly associated with earlier functioning of stoma, earlier tolerance to soft diet, and less surgical site infections. The overall complications, 30-day readmissions, and 30-day emergency visits were less in the prehabilitation group. Prehabilitation has a definite role in improving the physiological status of patients and potentially correlates into better postoperative outcomes. Prehabilitation must be included in management guidelines and be started from the first outpatient visit itself.