Bengaluru-based beverage firm Paper Boat has secured revenue of ₹585 crore for the fiscal year ending March 2024, as against ₹504 crore in FY23, a 16% year-on-year growth that will come at a time when the markets have been undergoing significant challenges. The company also managed to reduce losses by 48%, cutting the net loss to ₹47 crore from ₹90.5 crore in the previous fiscal.
PC: IndiaMART
Revenue Breakdown
Revenue growth will come from various components of the diversified product basket of Paper Boat. The company, launched by former Coca-Cola executives Neeraj Kakkar and Niraj Biyani, is selling a range of drinks—packaged juices and coconut water, apart from traditional Indian snacks. Notably, trade sales – products manufactured by third parties – formed 52% of the total revenue, at ₹304.3 crore, a 16% increase from ₹261.8 crore in FY23.
Company-owned manufactured products comprised the rest 48% of the operating revenue, which had grown at an impressive 15.7% to ₹278 crore. Interest income from Paper Boat was at ₹10 crore, taking the total revenue of the company during FY24 to ₹595 crore.
Expense Summary
While the revenue growth in Paper Boat came in positive, the company still faced increasing cost lines that negatively affected its financials. Cost of materials-accounting for a significant portion of the company’s expenditure-rose 6.4% to ₹404 crore. Employee benefit expenses rose by 22% to ₹66.70 crore, indicating the company’s cost incurred in scaling up its operations. Other expense-including advertising and finance costs-added another ₹171 crore to total expenditure, which stood at ₹642 crore-the highest in five years-up 7.2% from ₹598 crore in FY23.
Financial Performance and Metrics
This strategic emphasis on efficiency has helped Paper Boat improve its bottom line significantly. The 48% reduction in losses underlines the operational and cost disciplines it is increasingly adopting. Still, the company returns with a negative ROCE of -15.45% as well as EBITDA margin at -5.63%. In FY24, Paper Boat spent ₹1.1 on a unit basis to reap each rupee of operating revenue; thereby, the company continues to face challenges with regard to sustainable profitability.
Market Position and Future Outlook
Paper Boat has received around ₹1,030 crore ($143 million) in funding up until now. Key investors include GIC (Lathe), Peak XV, Sofina Ventures, and A91 Partners. GIC has a significant stake of over 25%, while Sofina and Peak XV have control in excess of 18% each.
As the company adapts to a changing beverage market, it is threatened by emerging trends like quick commerce and e-commerce, which could impact the profit margin going forward. Until Paper Boat has demonstrated resilience and innovation since its inception 11 years ago, profitability remains a pressing concern. With increased competition, many startups in the sector face issues or get acquired, making Paper Boat’s performance noteworthy.
So, in a nutshell, Paper Boat revenue stands at ₹585 crore for FY24 and has significantly reduced the losses; going forward, it has serious value in the beverage industry. But it has challenges in terms of achieving growth in multiple verticals while balancing the requirement of profitability. With a strong financial foundation and an established brand presence, Paper Boat is well-positioned to capitalize on future opportunities, although the path to sustained profitability remains a challenge. Investors and market observers will be closely watching how the company navigates these complexities in the coming years.
