Healthy Snacking: Happilo’s Financial Update

Healthy snacking brand Happilo reported a 15% drop in its operating scale for the fiscal year concluding in March 2025. Despite this decline, the company managed to decrease its losses by 93%, bringing them to below Rs 10 crore through reduced advertising and other discretionary expenses. The revenue from operations for Happilo fell to Rs 280 crore in FY25 from Rs 329 crore in FY24, according to the annual financial statements of Happy International Pvt Ltd, the parent company, submitted to the Registrar of Companies.

About Happilo

Founded in 2016, Happilo offers an array of snacks, including dry fruits, trail mixes, nut protein bars, dates, and muesli, available through online platforms and its omnichannel network. The sale of these items constitutes the sole revenue stream for the company in FY25.

Revenue and Income Overview

Additionally, the company earned Rs 2.5 crore from non-operating activities, bringing its total income to Rs 282.5 crore in FY25. For the D2C brand, procurement costs represented 73% of total expenses. In terms of scaling, this cost saw a 17% decline, reducing to Rs 212.4 crore in the fiscal year ending March 2025 from Rs 257 crore in FY24. Employee benefit expenses also fell by 34%, now at Rs 15.5 crore for the last fiscal year.

Cost Management Efforts

In FY25, Happilo significantly reduced its advertising and promotional spending by 59%, bringing it down to Rs 28.2 crore from Rs 69.4 crore in FY24. The company served as the ‘Snacking Partner’ for Royal Challengers Bangalore during the Indian Premier League 2024. Transportation costs for the year amounted to Rs 7.6 crore. Other overheads, which comprised travel, legal and professional fees, had their impact, raising Happilo’s total expenditure to Rs 292 crore in FY25 compared to Rs 467.7 crore in FY24. This marked a substantial year-on-year decline of 38%, primarily attributed to a sharp drop in undisclosed miscellaneous expenses, which fell to Rs 6.2 crore in FY25 from Rs 46.2 crore in FY24.

Performance Metrics

Despite a 10% decline in revenue, effective cost management allowed the Bengaluru-based firm to reduce its losses by 93%, now sitting at Rs 9.5 crore in FY25, down from Rs 136.6 crore in FY24. Happilo notably achieved positive EBITDA with Rs 3 crore, while its return on capital employed and EBITDA margin improved to -11.54% and 0.89% respectively. On a unit level, the company spent Rs 1.04 to generate a single unit of operating revenue in FY25.

Funding and Investor Interest

Happilo has accumulated approximately $38.5 million across two funding rounds, the latest of which occurred in February 2022, with Motilal Oswal Private Equity investing $25 million. Earlier, the company secured $13.5 million from A91 Partners in February 2021. The challenges facing Happilo are not unexpected, given the competitive nature of the market it operates in. Low entry barriers and intense rivalry have made it difficult to establish brand premiums, as Happilo, after initially reaching Rs 200 crore, is experiencing the realities of the competitive landscape. The market continues to grow, but margins are under pressure as more competitors vie for market share.

Market Dynamics and Future Outlook

Quick cash rotation is the strategy favoured by many players, since while the product is not perishable within weeks, the mix still needs careful handling to avoid prolonged periods in storage. Differentiation and consumer education remain weak, resulting in gaps that niche players can exploit, but only to a certain extent before the market adapts. Fluctuating procurement prices significantly impact the category, particularly as many products are imported. However, the recent India-US trade treaty and other agreements are expected to lower import costs for key nuts, facilitating market expansion well into the foreseeable future. Happilo faces challenges, as investor interest may be limited without a strong differentiating factor, especially given that the premium strategy that once worked for the brand is losing its effectiveness.