Personal hygiene and self-care brand Soothe Healthcare is targeting breakeven by the end of the ongoing financial year (FY24). That target, however, appears to be challenging as its losses neared Rs 100 crore in FY23.
While we will analyze its expense pattern in the second half of the story, for now let’s focus on the firm’s topline.
Soothe Healthcare’s revenue from operations increased 23.74% to Rs 172 crore in the fiscal year ending March 2023 from Rs 139 crore in FY22, its consolidated financial statements sourced from the Registrar of Companies show.
The Delhi-based firm manages a variety of hygiene and self-care brands under the brand names Paree, Baby Bear, and Super Liife. Its product portfolio comprises sanitary pads, hair removal creams, razors, adult and baby diapers, and baby care products. Sales of these products were the only source of operating revenue in FY23.
The company claims to sell around 5 million Paree Sanitary pads per month and has a brand presence across 300,000 general stores, supermarkets, and e-commerce marketplaces.
Akin to other D2C firms, the cost of materials consumed formed 43% of the overall expenditure which surged by 78.5% to Rs 116 crore in FY23. Its employee benefits also spiked 26.5% during the previous fiscal year.
- Cost of material consumed
- Employee benefit expense
- Telephone postage
- Sales and marketing expenses
Its freight, sales cum marketing, commissions, legal professional, rent, and other overheads took Soothe’s overall cost up by 22.6% to Rs 271 crore in FY23 from Rs 221 crore in FY22.
See TheKredible for the detailed expense breakup.
At the end, Soothe’s losses grew by 19.75% to Rs 97 crore in FY23 as compared to Rs 81 crore in FY22. Its ROCE and EBITDA margin improved to -95.7% and -42.7% respectively. On a unit level, it spent Rs 1.58 to earn a rupee in FY23.
|Expense/₹ of Op Revenue
As of March 2023, Soothe had a total assets of Rs 194 crore including Rs 64 crore worth inventories and bank balances of Rs 30 crore.
Soothe Healthcare was valued at around Rs 700 crore during its last fundraise. According to the startup data intelligence platform TheKredible, A91 Partners is the largest stakeholder with 29.33% followed by Britten Holdings and Sixth Sense Ventures.
Like most firms targeting the mid market segment of aspirational value buyers, Soothe Healthcare has its task cut out to deliver both to its target buyers. The firm has sought to capture value by sending out multiple offerings for this segment but will need a flagship success story to open up the market for itself and improve margins. At this point, it is very difficult to say that Paree sanitary pads can be that product.