Following a notable 50% growth during FY22, Marico-owned Beardo decelerated during the previous fiscal year ending March 2023. However, the Ahmedabad-headquartered company slipped into losses in FY23 after registering a first-ever profit during FY22.
Beardo’s revenue from operations increased 12.2% to Rs 106.6 crore in FY23, according to the annual report published by the holding company Marico.
Beardo offers an extensive array of items including beard oil, beard wax, face wash, beard combs, soaps, lotions, and more via its platform. It distributes its products through various retail channels such as online and offline commerce. The primary income source for Beardo is derived from the sale of these products.
The cost of materials accounted for 32% of the overall expenditure. This cost increased by 24.8% to Rs 37 crore during FY23. Its employee benefit cost and legal professional fees were elevated by 19.4% and 7.3% to Rs 12.64 crore and Rs 5 crore in the previous fiscal year.
The company added another Rs 37.5 crore and Rs 3.8 crore towards advertisements and freight costs which pushed the overall expenditure by 19.9% to Rs 115.3 crore in FY23.
While the total cost outpaced the revenue growth, this led the company to turn red and registered at a loss of Rs 6.13 crore in FY23, whereas the figures were in profit of Rs 75 lakhs in FY22. Its ROCE and EBITDA margin stood at -94.44% and -6.25 in FY23. The company spent Rs 1.08 to earn a unit of operating revenue.
While the high share of advertising remains a worry, as it does for most of the D2C and related sectors, high legal costs are a little surprising, and one would expect those to start coming down faster now. Crossing the Rs 100 crore milestone is notable though, validating as it does Beardo’s market, and with a well established brand, it remains to be seen how far the company can take it. The challenge has always been to create a flagship brand that can lead the portfolio for these new age firms, and that remains an issue for Beardo too.
