While ready-to-cook food brand iD Fresh Food is eyeing around a two-fold growth in its revenue in the ongoing fiscal (FY23), that will come on the back of some strong build up in FY22.
iD Fresh Food’s operating scale grew 36% and stood at Rs 381.6 crore in the fiscal year ending March 2022, according to the company’s annual financial statement with the Registrar of Companies (RoC).
The Bengaluru-based company generated most of the revenue from the sale of finished goods such as parotas and batters which contributed 35.6% and 33.5% respectively of its total operating income. The remaining collections came via the sale of traded goods including dairy products, chapatis, beverages, coconut, noodles, and bread loaf.
While the company recorded a total gross revenue of Rs 415.4 crore during the last fiscal year, its net revenue from operations stood at Rs 381.6 crore as discounts ate away Rs 33.8 crore on. Importantly, over 71% of its operating scale came from India, with the overseas markets (mainly the UAE and the US) contributing the remaining collection.
Founded in 2005, iD Fresh Food sells natural and organic homemade instant food items including idly and dosa batter, malabar parota, wheat parota, wheat chapati, soft and creamy paneer et al. It reaches around 30k retail stores across over 45 cities including Bengaluru, Hyderabad, Mumbai, Kolkata, Dubai, New York, Atlanta, et al.
iD Fresh Food’s expense book reflects that the cost of goods sold was the largest cost center contributing nearly 52% of the overall expenses. This cost spiked 47.7% to Rs 235.72 crore in FY22 from Rs 159.56 crore in FY21. Moreover, the company has Rs 5.75 crore worth of inventory at the end of the year.
Meanwhile, its employee benefits expense surged 27.2% to Rs 92 crore which also includes expenses on its employee stock option scheme and employee stock purchase plan of Rs 3.97 crore during FY22.
Spends on transportation (including packing, freight, and forwarding) and legal costs soared 165% and 50.7% respectively to Rs 18.86 crore and Rs 8.2 crore during FY22. iD Fresh Food also incurred Rs 27.64 crore on utility costs such as rent, power, fuel, safety, and security expenses.
Outpacing its revenue growth, the annual expenses of the company inclined around 47% to Rs 454 crore in FY22 as compared to Rs 309 crore in FY21. With the rising expenses, iD Fresh Food’s losses ballooned 2.5X to Rs 70.4 crore during FY22 against Rs 27.7 crore in FY21.
Cash outflows from operating activities also went up about 59% to Rs 38.6 crore during the last fiscal year.
As per Fintrackr’s analysis, the firm’s EBITDA margin and ROCE depressed to -13.35% and -37.80% during the year which could be ascribed to a surge in expenses. On a unit level, iD Fresh Food spent Rs 1.19 to earn a rupee of operating revenue in FY22.
The firm operates in a very tough ready-to-eat food processing segment, where, besides competition, it also has to overcome strong perceptions around processed food. A solid cold chain, along with product quality at all times is critical to success too. The firm has been at the forefront with its initiatives to demonstrate the same, like the transparenSee campaign it ran where it focused streaming cameras on its production process for 5 days. With consumer habits evolving, and many segments that offer strong growth, the firm is well placed to script a success story, by most accounts.
iD Fresh Food has raised around $110 million to date including a Series D round of Rs 506 crore in January this year. According to a media report, the company is in talks to raise $100 million from private equity investors at a valuation of $486 million.