Chaayos makes strong comeback with 145% revenue growth in FY22


Tea cafe chain Chaayos demonstrated strong financial results post-Covid. The Tiger Global-backed firm scaled 2.45X to Rs 135 crore in FY22 while the company’s losses spiked by 36.5% to Rs 71 crore in the same period.

This is a swift recovery after a 44.8% slump in revenue to Rs 54.85 crore in FY21 from Rs 99.4 crore in FY20, mainly due to the covid induced lockdowns across all its markets.

The 10-year-old company sells a variety of teas with dine-in, takeaways, and online ordering facilities. The company scooped up $53 million in June this year with a rapid expansion plan by the year end.


Revenue from the sale of products such as chai and instant tea premix was the only source of operating income for Chaayos which increased 2.45X to Rs 135 crore in FY22 from Rs 55 crore during the previous fiscal year (FY21).

The company also has non-operating income mainly from interest and gain of current investment which shrank 19% to Rs 5.21 crore in FY22.

Moving over to the expenses sheet, the cost of material consumed for the core business is the largest cost center for the company accounting for 25% of the total cost which increased 2.52X to Rs 53 crore in FY22.

Post covid, the company hired more employees, resulting in a rise in employee benefit costs which surged 64% to Rs 51 crore in FY22 from Rs 31 crore in the previous fiscal year (FY21). This also includes Rs 6.1 crore worth ESOP expenses.


With over 150 outlets across Delhi-NCR, Mumbai, and Bengaluru (during FY22), the cost of rent for Chaayos increased 40% to Rs 28 crore in FY22.

Advertising cost and commission paid to selling agents grew 2.85X and 2.83X to Rs 20 crore and 17 crores respectively in FY22 pushing the overall cost for the company by 86% to Rs 211 crore in FY22 from Rs 113 crore during the previous fiscal year (FY21).

As the scale grew, the losses of the company spiked to the tune of 36.5% to Rs 71 crore in FY22 from Rs 52 crore in FY21. With an 86% increased cost, cash outflow from operations also grew 48% to Rs 68 crore in FY22.

Coming to the ratios, ROCE and EBITDA margins were recorded at -75.28% and -41.43% in FY22. On a unit level, the company spent Rs 1.56 to earn a single unit of operating revenue.


Expenses are likely to increase in the ongoing fiscal year as the Nitin Saluja and Raghav Verma-led company has plans to hire more talent after the fundraising and add 100 stores by the end of the year and 300 by 2022-23.

While Chaayos deserves credit for building a brand and enough traction, it also has enough of an opportunity with the slump among competitors, notably Cafe Coffee Day.  However, the business will continue to demand capital, and raising that capital at the right valuation might not be an easy task in the current funding environment.

About Author

Send Suggestions or Tips