Country Delight revenue crosses Rs 320 Cr in FY21; losses shrink 58%

D2C dairy brand Country Delight managed to scale its valuation 3X within 15 months to over $580 million after raising $65 million in its Series D round led by Venturi Partners last month. While the impact of the new funding will be ascertained when the company files its annual reports for FY22 and FY23, it has managed to cross Rs 320 crore in revenues during the fiscal year ending March 2021.

Country Delight saw a surge in demand during the year marred by Covid-19 and its revenue from operations grew 83.3% to Rs 320.8 crore in FY21 from Rs 175.05 crore earned in FY20, as per its annual statements filed with the Registrar of Companies (RoC).

Operational in 15 cities across India, Country Delight offers a range of dairy products, bakery goods, poultry and farm produce to its customers.

While the sale of fresh milk remains the mainstay of collections for the Orios Venture Partners-backed company, the sale of other dairy products and grocery products surged during the previous fiscal. Around 78.5% of the operating revenue is generated from the sale of fresh milk during FY21 as compared to over 91.1% during FY20.

The surge in demand for fresh milk took its sales up by 57.8% YoY to Rs 251.82 crore whereas sales of other dairy products and groceries shot up by 346.6% YoY to around Rs 69 crore during FY21.

The company procures fresh milk and produce from a network of farmers within a 200 km radius of its collection hubs and its cost of raw inputs is the single largest expense incurred by the company, making up 46.7% of the annual costs.

These expenses grew in line with demand, growing 38% to Rs 168.6 crore in FY21 from Rs 122.2 crore in FY20. Country delight also spent another Rs 21.1 crore on the finished stock in trade during the same period.

The D2C startup’s expenditure on freight and packaging also grew by 48.1% to Rs 21.85 crore in FY21 from Rs 14.75 crore booked during the previous fiscal.

As the order volume grew, the company increased its team size significantly and employee benefit payments surged by 70.3% to Rs 37.7 crore during FY21 from Rs 22.2 crore paid out in FY20.

Country Delight hires external contract labour for the operation of its plants and supply chain and paid Rs 36.7 crore for the same during FY21, 25.5% more as compared to Rs 29.2 crore paid in FY20.

Advertising and promotional costs remained fairly stable at Rs 25.34 crore, pushing the annual expenditure to Rs 354 crore for the fiscal ending March 2021. This marked a 44% surge in annual costs which stood at Rs 246 crore in FY20.

Country Delight spent Rs 1.1 to earn a single rupee of operating revenue during the fiscal year ended in March 2021.

The Gurugram-based company benefited massively from greater economies of scale and saw its EBITDA margins improve from -33.4% in FY20 to -5% in FY21. Improved margins coupled with an over 80% increase in collections helped the company cut back annual losses by 58.7% to Rs 28.26 crore in FY21 as opposed to Rs 68.5 crore lost during FY20.

Both the growth momentum and the rising share of non-milk products instead of the relatively commodified milk business augurs well for the firm to complete the journey to profitability in 2022-23, unless impacted by further investments into expansion and more competitive pressure.