Personal care brand mCaffeine, known for its caffeinated beauty and skincare products, experienced steady revenue growth until FY23, scaling from ₹40 crore in FY20 to ₹205 crore in FY23. However, the brand’s trajectory shifted in FY24, with a 6% decline in revenue attributed to reduced sales of its signature products.
mCaffeine reported operational revenue of ₹193 crore in FY24, a drop from ₹205.3 crore in FY23, as per its financial filings with the Registrar of Companies (RoC). This dip contradicted earlier expectations, as co-founder and CEO Tarun Sharma had projected a 50% growth in sales for the fiscal year, aiming for profitability by FY25.
The Mumbai-based brand primarily operates through online platforms, including its website and e-commerce marketplaces. Revenue from product sales, its main source of income, dipped by 6%, while total income, bolstered by ₹8.9 crore in interest earnings, stood at ₹201.9 crore for FY24.
Expense Analysis
Advertising costs, a significant expenditure for mCaffeine, fell by 11.8% to ₹106.17 crore from ₹120 crore in FY23. Employee benefits also saw a slight decrease of 2.8%, amounting to ₹38.54 crore. However, raw material costs surged by 12.5%, reaching ₹67.67 crore. The company’s total expenses marginally decreased to ₹287.33 crore.
Despite its shrinking scale, mCaffeine managed to narrow its losses by 6.8%, reporting a net loss of ₹85.41 crore in FY24 compared to ₹91.6 crore in FY23. The company spent ₹1.49 to generate a rupee of revenue during the fiscal year, with its ROCE and EBITDA margin at -240.19% and -40.42%, respectively.
Financial Position and Market Challenges
mCaffeine held cash and bank balances of ₹32 crore and reported current assets of ₹108.9 crore in FY24. Backed by ₹337 crore in total funding, the brand was last valued at ₹1,000 crore, with Amicus Capital as its largest investor, holding a 12% stake, followed by RPSG Ventures and Paragon Partners.
Despite its valuation, mCaffeine has struggled to secure additional funding over the past year, reportedly pushing the company to consider acquisition opportunities. This challenge comes as competitors like Minimalist achieved a 90% growth to ₹347 crore with profitability, while others, such as Wow Skin, faced revenue declines.
Future Outlook
While mCaffeine’s cost-cutting efforts have provided some relief, the company continues to grapple with high advertising expenditures and a lack of flagship products to drive consistent growth. As the beauty industry evolves, mCaffeine will need to adapt its strategies to overcome these hurdles and regain momentum in the coming fiscal years.
4o