Lahori Zeera crosses Rs 300 Cr revenue in FY24; profits spike 3X

Lahori Zeera has emerged as one of India’s fastest-growing independent beverage companies over the past decade. Its rapid growth is reflected in its operating scale, which surpassed Rs 300 crore in revenue during the fiscal year ending March 2024. Notably, the Rupnagar, Punjab-based company’s profit tripled in the last fiscal year.

On a year-on-year basis, Lahori’s revenue from operations grew 47.2% to Rs 312 crore in FY24 from Rs 212 crore in FY23, its consolidated financial statements accessed from the Registrar of Companies (RoC) show.

The company makes money from beverage sales, including Lahori Zeera, Lahori Nimboo, and Lahori Shikanji. With a small contribution from scrap sales and other non-operating income (gains from investment sales), its total revenue stood at Rs 313.5 crore in the last fiscal.

For the beverage manufacturer, procurement was the largest cost center, accounting for 66% of total expenses. As the company scaled, this cost increased by 35.3%, rising from 136 crore in FY23 to Rs 184 crore in FY24. 

Employee benefit expenses also saw significant growth, increasing by 68.8% year-on-year to Rs 27 crore in the same period. Expenses related to rent, freight, subcontracting, legal fees, and other overheads contributed to a 36.9% rise in total expenditure, which grew from Rs 203 crore in FY23 to Rs 278 crore in FY24.

Lahori Zeera's profits tripled to Rs 22.5 crore in FY24, up from Rs 7.6 crore in FY23, driven by a 47% revenue surge and controlled costs. The company spent Rs 0.89 to earn a rupee during the year. Its ROCE and EBITDA margins stood at 15.36% and 13.65%, respectively. By the end of FY24, total current assets stood at Rs 76 crore, including Rs 38 crore in cash and bank balances.

Lahori Zeera's CEO, Saurabh Munjal, is targeting Rs 500 crore in revenue for the current fiscal year. The company is also reportedly in advanced discussions with Motilal Oswal to raise Rs 400-450 crore.

Lahori Zeera’s success is the stuff of dreams, especially in the last year when the brand benefited from a brilliant advertising campaign backed by beefed-up distribution. Punjab has this habit of throwing out remarkable success stories every now and then,  and Lahori Zeera adds to that legend, after the last big success in the form of Bector Foods from Ludhiana. However, it has also been a peculiar issue with Punjab-based firms that they struggle to scale, and lose their way after the Rs 500 crore mark or thereabouts. One hopes Lahori Zeera has a plan ready to keep the essence of the brand intact as it seeks to scale up, as investor driven pressure might not always lead to the best outcomes for it. The sight of cases of the brand being sold from impromptu roadside stalls in Delhi makes one worry if the firm really has everything in control or is focused on pushing stock at a discount. 

The firm’s success in a market dominated by billion dollar competitors like Pepsi, Coke, and now Reliance, profitably, has been one of the success stories of the last year or two, and we certainly wish it goes much farther than slipping up and getting acquired because it could not meet ‘investor’  expectations.