Vahdam Teas’ scale surpasses Rs 200 Cr in FY22, slips into losses


Vahdam Teas’ scale has grown at a rapid clip as it posted a 2.7X surge in collections between FY20 and FY22, and that too without burning much cash. The company’s operating revenue grew past Rs 200 crore in FY22, up from Rs 73.21 crore in FY20.

In FY22, however, the company slipped into losses after posting a profit in the previous fiscal year. We will hold forth on this bit later in the analysis.

Coming back to the company’s scale, Vadham’s operating revenue grew 24.3% to Rs 200.48 crore year-on-year in FY22, according to its consolidated financial statements reviewed by Entrackr.


Founded in 2015, Vahdam is a direct-to-consumer brand which procures teas directly from plantations and manufactures and packages them in-house. The sale of tea and drinkware were the two sources of operating revenue for the company. It also had an ‘other income’ of Rs 8.42 crore from the interest and foreign exchange gains.

With a strong presence in the US, Canada, and Europe, the freight and forwarding expense was unsurprisingly Vadham’s largest cost center, which formed 26.9% of the total expenditure. This cost stood at Rs 60.4 crore in FY22, a 43.5% surge from Rs 42.1 crore in FY21.

The cost of procurement of materials grew 50.2% to Rs 39.4 crore in FY22. The company’s expenses on advertising increased to Rs 50.4 crore, which is 18.6% more than the previous year’s. Commission on sales and employee benefits also surged to Rs 19.2 crore and Rs 16.4 crore, respectively, in FY22.


Unlike FY21 where it posted Rs 1.94 crore in profit, Vahdam slipped into losses in the following fiscal year – the company posted a loss of Rs 16.3 crore in FY22.

Its ROCE and EBITDA margin also worsened to -7.73% and -5.07% respectively. On a unit level, the company spent Rs 1.12 to earn a rupee of operating revenue during FY22.


Targeting the premium end of the global market, Vahdam has done well to establish itself, helped no doubt by the background of its key founder in the tea business. It has also expanded its portfolio to include single origin spices, hoping to leverage its experience and customer base in another segment where the ‘experience’ trumps the product in many ways. The firm will be worried about the ‘uncontrollables’, in this case freight costs, as those have an outsized impact on the business and its bottomline.

With a global tea market pushing $60 billion, premium teas are estimated to be worth close to 15% of the market, with premium spices emerging as a more recent category of significance. Vahdam certainly has enough and more to aim for, if the stars align for it, although the possibility of reaching the kind of margins one expects in a premiumised product portfolio like it has seems to be some time away.

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