Paper Boat posts Rs 668 Cr revenue in FY25; narrows losses by 24%

Hector Beverages Pvt Ltd, maker of Paper Boat drinks, pursued steady growth in the fiscal year ending March 2025. The company recorded a modest 16% year-on-year increase in operating scale in the last fiscal year, while narrowing its losses by 24% to below Rs 50 crore.

Paper Boat’s operating revenue rose to Rs 668.28 crore in FY25 from Rs 574.48 crore in FY24, its financial statements sourced from the Registrar of Companies (RoC) shows.

Founded by former Coca-Cola executives Neeraj Kakkar and Niraj Biyani, Paperboat offers packaged juices, coconut water, traditional Indian snacks, and dry fruits. Products traded through third-party manufacturers contributed 66% of its operating revenue. Collection from this spiked 45% to Rs 441.43 crore in FY25 from Rs 304.32 crore in FY24. 

In contrast, revenue from its own manufactured products, which made up 33.78% of the total, declined 16% to Rs 225.72 crore during the fiscal year.

Paper Boat also earned a non-operating income of Rs 14.2 crore, mainly from interest on bank deposits, taking its total income to Rs 682.44 crore.

On the expense side, the cost of materials remained the largest component, which accounted for 62% of total expenses at Rs 444 crore in FY25. Employee benefit expenses rose 32% to Rs 90.35 crore, while selling and distribution costs stood at Rs 58.47 crore. Advertisement, depreciation, travel, and other overheads pushed overall expenses to Rs 716.53 crore.

Caveat: Changes in the fair value adjustment of preference shares for FY25 and FY24 have not been considered, as they are non-cash in nature.

The Peak XV-backed company cut its losses by 24% to Rs 48.25 crore in FY25, with ROCE at -14% and EBITDA margin at -3.86%.

On a unit basis, it spent Rs 1..07 to earn a rupee of operating revenue in FY25. As of March 2025, the company’s current assets stood at Rs 276.17 crore, including cash and bank balances of Rs 42.39 crore.

According to startup data intelligence platform TheKredible, Paperboat has raised $143 million to date from investors including GIC, Peak XV, Sofina Ventures, and A91 Partners. GIC holds a 25% stake in the company, while Sofina and Peak XV each own over 18%.

12 years after it launched Paper Boat, one can do either of two things with Hector Beverages. Celebrate the fact that it has survived, where many others in the same space failed to do so. Or regret the fact that it looks increasingly unlikely to deliver on the sort of promise or returns many hoped for from the firm. The firm is not entirely to blame, as the market in India has not evolved as many hoped for in the juices space. Pure, 100% juice remains too pricey for too a large part of the market for anyone to survive and scale appreciably, forcing most to pivot to much more diluted versions, literally and figuratively. Paper Boat always had one thing going strongly for it, and that was PR. Coverage in the media has generally been good and plentiful, especially in its initial years, building on the goodwill of its founders and their stints in marketing at FMCG firms. There have been both design and packaging innovations that kept the buzz going round the brand. 

But now they will know that positive coverage aside, the numbers are looking more and more underwhelming, and the hopes of being acquired at an attractive enough valuation are also receding, with the general decline in FMCG valuations in India. The whole market has reset expectations to a profitable, low teens growth rate over the past decade. The expectations of 20% plus growth that used to rule  around the time Paperboat was born in 2012 is no longer the norm. Paper Boat might have pulled off a growth rate over 15% last year with its much wider portfolio, but the losses remain a big drag on long term prospects for sustainable growth.