Storia Foods Reports Strong Growth Amid Rising Expenses

Storia Foods, a notable name in the beverage and dairy alternative sector, has announced a remarkable 51% growth compared to the previous year in FY24. Despite this impressive revenue increase, the company experienced a widening of losses during the same timeframe due to escalating costs associated with essential expenditure.

According to the financial statement lodged with the Registrar of Companies (RoC), Storia Foods’ operational revenue climbed to Rs 169 crore in the last fiscal year, a rise from Rs 112 crore recorded in FY23.

Product Offerings and Revenue Sources

Founded by Vishal Shah, Storia Foods provides a variety of products including sugar-free shakes, lattes, smoothies, coconut water, juices, and booster drinks. These products alone constituted the company’s operational revenue. Additionally, the firm generated Rs 2 crore from interest accrued on deposits, which brought its total revenue to Rs 171 crore in FY24.

Expenditure Overview

During FY24, Storia Foods’ overall expenses surged by 44%, reaching Rs 203 crore, up from Rs 141 crore the previous year. The major component driving costs was the material expenses, which increased by 40% to Rs 98 crore. Furthermore, employee benefit costs rose by 17% to Rs 27 crore, while other expenses skyrocketed by 63% to Rs 78 crore.

Financial Performance and Losses

Despite the robust revenue growth, the increased expenditure resulted in a net loss of Rs 33 crore in FY24, compared to the Rs 27 crore loss in FY23. However, the firm’s EBITDA margin saw improvement, standing at -19.18% in FY24, a notable change from -24.69% in FY23. On a unit level, Storia Foods incurred Rs 1.20 for every rupee earned during the fiscal year.

Current Assets and Financial Backing

The Mumbai-based company boasts current assets valued at Rs 24 crore in FY24, which includes a cash and bank balance of Rs 5 crore.

As per various sources from startup data intelligence platforms, Storia Foods has successfully secured a total of $6 million in funding thus far. The lead investor, Sixth Sense Ventures, holds a 23.86% stake in the company, while its founder, Vishal Shah, retains a 20.30% ownership.

Market Challenges and Strategies

Storia Foods represents an intriguing venture within a category that has proven to be notoriously challenging. The issues surrounding the notion of “pure juice” and the price sensitivity of Indian consumers often affect purchasing behaviours. To tackle these challenges, Storia Foods has adopted a strategic approach by offering many products in packs of six, promising quality whilst hoping to attract more buyers. It will be fascinating to observe whether this strategy has successfully boosted orders for full packs of six or more.

Nonetheless, despite displaying commendable growth and managing expenses, the company acknowledges the looming challenges ahead. Apart from the critical distribution concerns, it may inch closer to breakeven, but it must also navigate a market that has historically discouraged predecessors. Such dynamics may compel them to compromise on their initial vision to sustain growth through offerings of lower value and quality dilution.