Paper Boat crosses Rs 330 Cr revenue in FY22, losses shrink

Hector Beverages Pvt Ltd, which manufactures soft drinks and beverages under the brand Paper Boat claimed to cross Rs 600 crore revenue milestone in the fiscal year ending March 2023. This projection seems highly plausible as the Sequoia-backed company surpassed Rs 330 crore in revenue in FY22 while continuing to trim losses. 

Paper Boat’s revenue from operations surged 35.6% to Rs 330 crore in FY22 from Rs 243.3 crore in FY21, according to its annual financial statements with the Registrar of Companies.

Founded by former Coca-Cola executives Neeraj Kakkar and Niraj Biyani, Paper Boat sells packaged juices, coconut water, traditional Indian snacks, and dry fruits. The sale of juices accounted for 95% of the operating revenue and surged 35.5% to Rs 313.6 crore in FY22. The rest of the income came from food items that increased 37.8% to Rs 16.4 crore in FY22.

On the expenses side, the cost of procurement formed 62.5% of the total spends, which surged 32.8% to Rs 240.1 crore in FY22. The employee benefit expenses grew by 28.1% to Rs 41.9 crore in the same period.

Paper Boat’s advertisement cum selling cost and job work charges were up by 52.4% and 18.6% to Rs 44.2 crore and 8.3 crores, respectively, during FY22. Overall, the expenditure of the company shot up by 35% to Rs 384.1 crore in FY22.

Even as expenses grew, the company still managed to keep a tight grip on its bottom line. 

Its losses dwindled by 17% to Rs 53 crore in FY22 from Rs 63.7 crore in FY21. To put things in perspective, Paper Boat’s losses were down by 36.5% in FY21 from Rs 100.3 crore in FY20.

PaperBoat’s ROCE and EBITDA margin stood at -534.4% and -13.13%, respectively, during FY22. On a unit level, the company spent Rs 1.16 to earn a single unit of operating revenue.

The company has been around for over a decade selling its packaged juices, and in the last few financial years, PaperBoat has consistently trimmed its losses, which is a great sign for the D2C brand. With a new funding round last year, the company clearly has plans to expand its business further. Their revenue claims for the financial year that ended in March 2023 is over Rs 600 crore, but only in time shall we know if they have also continued to cut their losses alongside ambitious business plans.