Sugar Cosmetics reports Rs 505 Cr revenue and Rs 76 Cr loss in FY24

Following a 90% year-on-year growth during FY23, the direct-to-consumer (D2C) beauty brand Sugar Cosmetics saw a modest 20% growth in the fiscal year ended in March 2024. However, the company managed to reduce its losses by 11.4% in the same period.

Sugar’s revenue from operations increased to Rs 505 crore in FY24, as compared to Rs 420 crore in FY23, its annual financial statements sourced from the Registrar of Companies (RoC) show.

Sugar generates its revenue from the sale of cosmetic and beauty products, including export sales amounting to Rs 2.5 crore in FY24. It also earned Rs 10 crore as interest income which brought its total revenue to Rs 515 crore in the last financial year.

Similar to the other D2C brands, advertising and sale promotion remained Sugar's largest cost center. This cost remained unchanged from FY23 and stood at Rs 162 crore in FY24.

To the tune of scale, the cost of procurement of materials increased by 21.1% to Rs 138 crore in FY24 from Rs 114 crore in FY23. Its employee benefits, rent, information technology, legal, outsourced support, packaging, and other overheads increased the overall expenditure by 15.6% to Rs 584 crore in FY24 from Rs 505 crore in FY23.

See TheKredible for the detailed expense breakup.

The decent scale and controlled overheads helped Sugar to reduce its losses by 11.4% to Rs 67.5 crore in FY24, as compared to Rs 76.2 crore in FY3. Its ROCE and EBITDA margin stood at -31.87% and -9.22%. respectively. On a unit level, the company spent Rs 1.16 to earn a rupee in FY24. Sugar has total current assets of Rs 302 crore in FY23 including Rs 54 crore as cash and bank balances.

According to the startup data intelligence platform TheKredible, Sugar has raised around $85 million to date including its $50 million last round led by L Catterton in 2022. A91 Partners and Elevation Capital are some other notable investors in the company.

Head to TheKredible to see the complete captable.

During FY24, Sugar was reportedly in talks to raise $100 million at a valuation of $700-800 million. However, the deal did not go through.

As one of the D2C firms that would have considered an IPO soon, Sugar’s struggles to grow topline faster will worry the team, as the IPO window seems to be shrinking, albeit slowly. At least when it comes to the kind of generous valuations MamaEarth managed to get. Sticky costs are just one area of concern, besides seemingly running out of steam when it comes to big success stories on the product side.