The Ayurveda Co Revenue Growth in FY24

The Ayurveda Co, a direct-to-consumer (D2C) brand, has reported substantial revenue growth of 66% year-on-year, reaching Rs 59.6 crore for the fiscal year ending March 2024. However, in the same timeframe, the company’s losses saw a dramatic increase, more than tripling in scale.

Financial Performance

The increase in revenue from operations was revealed in the financial statement obtained from the Registrar of Companies (RoC), showing a rise from Rs 36 crore in FY23 to Rs 59.6 crore in FY24.

Product Offerings

The Ayurveda Co specializes in ayurvedic beauty and personal care products such as hair care, skincare, makeup, and wellness options. The company generates its revenue solely from these product sales.

Additional Income

Additionally, The Ayurveda Co earned Rs 2.4 crore from interest, leading to a total revenue of Rs 62 crore in FY24.

Expenditure Overview

The largest expense category for the company was the cost of materials, which increased significantly, rising 2.4 times to Rs 28.6 crore from Rs 12 crore in FY23. Advertising and employee benefits also saw significant growth, climbing by 73.3% and 80.2% to Rs 26 crore and Rs 15.5 crore, respectively. Furthermore, manpower and recruitment expenses surged to Rs 11.3 crore, contributing to total expenses that soared by 97% to Rs 109.5 crore in FY24, up from Rs 55.6 crore in FY23.

Impact on Losses

This substantial increase in expenditures resulted in a 3.2 times rise in losses, reaching Rs 68 crore in FY24 compared to a loss of Rs 21 crore in FY23. The company’s return on capital employed (ROCE) and EBITDA margin were alarming at -700% and -100.65%, respectively. Essentially, the company spent Rs 1.84 to generate a single rupee in earnings.

Current Assets

At the conclusion of FY24, The Ayurveda Co reported current assets amounting to Rs 45 crore, which included cash and bank balances of only Rs 52 lakh.

Funding and Competitors

To date, The Ayurveda Co has raised around $16 million in funding, including a Rs 100 crore Series A round led by Sixth Sense Ventures in 2023. The company faces competition from brands like Ayurveda Experience and Wow Skin, with the former reporting Rs 250 crore in revenue for FY23, alongside others like Sugar.

Future Expectations

Despite the sharp rise in costs, which comes as a surprise following significant funding, there is hope for FY25 to showcase not just reduced costs but also a remarkable increase in revenue. The current market is highly competitive, and valuations are plummeting for all but the most profitable firms. The Ayurveda Co’s performance figures have raised some concerns, and the expectation will now be for a strong showing in FY25.