Hector Beverages, the parent company of Paper Boat, reported a 16% growth in its revenue for the fiscal year ending March 2024. The A91 Partners-backed beverage company also made significant strides in improving its profitability, reducing losses by an impressive 48% during the same period.
Paper Boat’s operating revenue rose to Rs 585 crore in FY24 from Rs 504 crore in FY23, according to financial data filed with the Registrar of Companies (RoC). In FY23, the company had recorded over a 50% increase in revenue, signaling a slowdown in growth this fiscal year. Founded by ex-Coca-Cola executives Neeraj Kakkar and Niraj Biyani, Paper Boat offers a variety of products including packaged juices, coconut water, traditional Indian snacks, and dry fruits.
Of its total operating revenue, products traded through third-party manufacturers contributed 52%, amounting to Rs 304.3 crore in FY24, up 16% from the previous year. The remaining 48% came from products manufactured directly by the company, generating Rs 278 crore, reflecting a 15.7% growth. Additionally, the company earned Rs 10 crore from interest income, pushing its total revenue to Rs 595 crore in FY24.
Material costs made up the bulk of Paper Boat’s expenses, accounting for 63% of total costs and increasing to Rs 404 crore in FY24 from Rs 380 crore in FY23. Employee benefits expenses rose significantly, climbing 22% to Rs 66.7 crore. Advertising, finance, and other operational expenses added another Rs 171 crore to the total outlay. Overall, the company’s total expenses grew 7.2% year-on-year to Rs 642 crore.
Despite higher spending, Paper Boat reduced its net losses to Rs 47 crore in FY24, down from Rs 90.5 crore in FY23. The company’s return on capital employed (ROCE) and EBITDA margin stood at -15.45% and -5.63%, respectively. For every rupee of operating revenue earned, Paper Boat incurred Rs 1.1 in expenses during FY24.
With Rs 1,030 crore ($143 million) raised from investors such as GIC, Peak XV, Sofina Ventures, and A91 Partners, Paper Boat has maintained financial stability. GIC owns over 25% of the company, while Sofina and Peak XV each hold more than 18%. As of FY24, the Bengaluru-based company reported cash and bank balances of Rs 168 crore and current assets totaling Rs 305 crore.
Although Paper Boat has been resilient in a competitive market, challenges remain. The rise of quick commerce, modern trade, and e-commerce has transformed the landscape, pressuring margins and profitability. Despite these hurdles, Paper Boat has survived where many others have faltered. The question remains: can the brand adapt and thrive in an increasingly cluttered market?