Paper Boat’s FY23 Loss Surges 71% To INR 90.6 Cr, Revenue Crosses INR 500 Cr Mark

Hector Beverages, the parent company of refreshing drinks maker Paper Boat, saw its net loss widen 71% to INR 90.6 Cr in the financial year 2022-23 (FY23) from INR 53 Cr in FY22 due to higher cash burn.

The startup’s bottom line took a hit despite its revenue from operations rising 56% to INR 504 Cr during the year under review from INR 324 Cr in FY22.

Founded in 2010 by former Coca-Cola executives Neeraj Kakkar and Neeraj Biyani, Paper Boat sells fruit-based drinks in Indian flavours such as aam panna (raw mango) and jaljeera (spicy, tangy lemonade). Besides, it also sells dry fruits and healthy snacks, including chikki and aam papad.

Biyani exited the company in December 2022 and has launched a new skincare brand Asaya.

Paper Boat primarily earns revenue from sales of its products. In FY23, it sold fruit juices worth INR 474.9 Cr and food items worth INR 28.7 Cr.

Including other income, Paper Boat’s total income rose 56% to INR 508.5 Cr during the year under review from INR 325.1 Cr in the previous fiscal year.

Where Did Paper Boat Spend?

In line with the growth in its top line, Paper Boat’s total expenses rose to INR 599.1 Cr in FY23 from INR 378.1 Cr in the previous fiscal year.

Material & Stock Cost: While purchase of stock-in-trade rose to INR 205.2 Cr in FY23 from INR 149.4 Cr in FY22, cost of material consumed climbed to INR 182.3 Cr from INR 93.6 Cr in the previous fiscal year.

Employee Costs: Employee benefit expenses rose 30% to INR 54.7 Cr in FY23 from INR 42 Cr in FY22. Employee costs comprise salaries, PF contribution, gratuity, among others.

Advertising Spend: The startup, which is known for its nostalgia-infused campaigns, spent INR 13.2 Cr on advertising and sales promotion in FY23, a jump of 11% from INR 11.9 Cr in FY22.

Hector Beverages counts the likes of Sofina Ventures, Catamaran Ventures, and A91 Emerging Fund among its backers. The startup last raised a funding of INR 400 Cr ($50.1 Mn) from Lathe Investment Pte Ltd, which is owned by Singapore-based sovereign fund GIC, in 2022.

Paper Boat faces competition from the likes of Lahori and Raw Pressery in the Indian food and beverage (F&B) market. It also competes against FMCG giants such as Dabur, ITC, Pepsico, and new-age startups such as Beyond Water, and Coolberg.

The country’s F&B industry has been expanding by leaps and bounds and is further estimated to become a $156.25 Bn market by 2026.