Wow! Momo crosses Rs 400 Cr revenue threshold in FY23

Quick service restaurant chain Wow! Momo scaled 3.8X during the last two reported fiscal years as its revenue rose to Rs 413 crore in FY23 from Rs 106 crore in FY21. Despite this spurt in growth, the Kolkata-based company’s losses increased marginally during FY23.

Wow! Momo’s revenue from operations surged 87.7% to Rs 413 crore in FY23 from Rs 220 crore in FY22, its consolidated financial statements filed with the Registrar of Companies show.

Launched in 2008 by Sagar Daryani and Binod Homagai, Wow! Momo Foods operates three QSR brands—Wow Momo, Wow China, and Wow Chicken. The firm claims to have 630 outlets across 35 cities and directly employs 6,000 people.

The sale of its products was the sole source of revenue for the Tiger Global-backed firm. It also made Rs 3 crore from the interest on deposits and current investments which took its overall income to Rs 416 crore in the fiscal year ending March 2023.

For the Quick service restaurant, the cost of procurement of materials formed 34% of its total expenditure. This cost increased by 66.7% to Rs 160 crore in FY23. Wow! Momo paid Rs 62 crores of rent during FY23.

Its employee benefits, electricity, advertising cum promotional, commissions, and other overheads pushed the firm's overall expenditure to Rs 471 crore in FY23 from Rs 275 crore in FY22.

Check TheKredible for the detailed expense breakup.

Expenses Breakdown

FY22

Total ₹ 275 Cr

FY23

Total ₹ 471 Cr

• Cost of materials consumed

• Employee benefit

• Rent

• Electricity

• Advertising promotional

• Commissions

• Others

To check complete Expense Breakdown visit thekredible.comView full data

The impressive scale and controlled expenditure helped Wow! Momo to keep its losses in check which increased only 13.1% to Rs 60.5 crore in FY23 from Rs 53.5 crore in FY22. Its ROCE and EBITDA margins improved to -11% and -1.8% respectively. On a unit level, it spent Rs 1.14 to earn a rupee in FY23.

FY22-FY23

	FY22	FY23
EBITDA Margin	-7%	-1.8%
Expense/₹ of Op Revenue	₹1.25	₹1.14
ROCE	-15%	-11%

Wow! Momo has raised over $120 million to date including its $51 million Series D round led by Khazanah. According to the startup data intelligence platform TheKredible, Tiger Global is the largest external stakeholder followed by LightHouse. 

The company has current assets of Rs 131  crore including cash and bank balances of Rs 54 crore during the fiscal ended March 2023. As per TheKredible estimates, its enterprise value to revenue multiple is 6.8X.

As a bonafide and well recognised fast food brand, Wow! Momo is on record with an aim to reach a topline of Rs 650-700 crore in the just closed fiscal year (FY24). That seems perfectly possible considering its wide distribution and increasing acceptance. The brand deserves credit for sticking it out in a tough situation post 2020, and making it work as a standalone product based offering. While its menu has expanded, the firm remains nimble enough to make quick changes where required.

Despite a relatively low franchise fee, the firm seeks better control over locations and quality. Competition, specifically in the momos space remains limited yet, at the mid-range it occupies. Momos continue to enjoy growing acceptance, with many regions to be conquered yet.  The firm certainly has a runway long enough to keep pace with the ambitions of its stakeholders.