DeHaat’s Transition to In-House Brands in Agritech

DeHaat is transforming from a marketplace for agricultural goods into a company focused on creating its own brands. This strategy aims at enhancing profit margins, gaining better pricing control, and reducing reliance on external products.

Strategic Shift for DeHaat

In recent years, full-stack agritech platform DeHaat has embraced this approach by broadening its selection of in-house brands. This shift towards brand development appears to involve a short-term compromise on growth, as evidenced by a nearly 10% drop in operating revenue for FY26, despite the company continuing to reshape its operations. The net loss also increased during FY26 as investments in in-house brands continued.

Revenue and Financial Performance

According to DeHaat’s consolidated financial statements reviewed by Startup Superb, revenue from operations declined by 9.8% to Rs 2,715 crore in FY26 from Rs 3,010 crore in FY25. Sales of agricultural inputs, including seeds and fertilisers, accounted for Rs 517 crore, which was approximately 19% of its operational revenue. The rest of the revenue was generated from the agricultural output segment, covering staples, chillies, and customer-facing initiatives like Farm Plus and HonestFarms.

Market Overview

India remained DeHaat’s primary market, contributing 83% of total revenue. The remaining revenue streams came from international markets, such as the UK, Europe, the Middle East, Thailand, and Russia.

Cost Structure

On the expenses side, the procurement of materials stood as the firm’s major outlay, constituting nearly 80% of total expenditures. As the scale of operations moderated, this cost decreased by 11.7% to Rs 2,390 crore in FY26. Employee benefit costs fell by 9.1% to Rs 159 crore during the same fiscal year.

Overall Expenditures

Additional expenses, including transportation, rent, warehousing, sales, branding, and legal and administrative costs, raised the total expenditure to Rs 2,972 crore in FY26, compared to Rs 3,242 crore the previous year. Despite an 8.3% reduction in overall expenses, the revenue decline added further strain on the company’s financials, leading to an 11.4% increase in losses to Rs 224 crore in FY26, up from Rs 201 crore in FY25.

Financial Clarity

For clarity regarding the company’s financial performance, Rs 578 crore from the change in the fair value of preference shares has been excluded from the analysis. At a unit level, DeHaat spent Rs 1.09 to generate every rupee of operating revenue in FY26. The return on capital employed (ROCE) was recorded at -53.9%, while the EBITDA margin was noted at 6%. The company held around Rs 1,000 crore in current assets by the year’s end.

Future Outlook for Agritech

The agritech industry has been adjusting to a more cautious growth phase since the funding surge of 2021-22, with startups putting a stronger focus on sustainable business models. DeHaat’s progression beyond its original marketplace concept and the emphasis on in-house brand development may assist in improving profit margins, bolstering customer connections, and providing increased control over operations. While this transition has impacted short-term growth and profitability, it holds the potential to create new opportunities in the future. The crucial consideration is how swiftly DeHaat can scale its brands and turn them into a robust engine for growth and profit.