Ustraa Reports Revenue Decline in FY25 While Narrowing Losses

Ustraa, the men’s grooming brand owned by VLCC, has encountered ongoing challenges with revenue in FY25. The company experienced its second consecutive year of revenue decline since its acquisition, although effective cost management strategies led to a substantial reduction in losses. According to financial statements submitted to the Registrar of Companies (RoC), Ustraa’s revenue from operations decreased by 22%, dropping to Rs 73 crore in FY25 from Rs 94 crore in FY24. The firm had previously reported a nearly 3% revenue decline in FY24.

About Ustraa

Established in 2015, Ustraa provides a range of products including fragrances, hair care, face care, and beard care. After its acquisition, the founders, Rahul Anand and Rajat Tuli, remained involved with the brand, contributing to VLCC’s direct-to-consumer (D2C) initiatives.

Expense Management and Cost Reduction

The largest expense segment for Ustraa, material costs, witnessed a significant reduction of 55%, falling to Rs 27 crore in FY25 from Rs 60 crore in FY24. Advertising expenses also saw a decline of 60%, down to Rs 9 crore in FY25. Employee benefit expenses reduced by 35% to Rs 10 crore, while transportation costs fell to Rs 7 crore. However, commission payouts increased by 36% to Rs 15 crore during the fiscal year. Overall, Ustraa successfully decreased total expenses by 39%, resulting in expenses of Rs 88 crore in FY25 compared to Rs 145 crore in FY24.

Financial Performance and Losses

With expenses contracting at a faster rate than revenue, Ustraa managed to narrow its losses by 72%, reducing the loss to Rs 14 crore in FY25 from Rs 50 crore in FY24. The company’s EBITDA loss was Rs 13.4 crore, resulting in an EBITDA margin of -18.36%. Ustraa improved its efficiency by spending Rs 1.21 to generate one rupee of income in FY25, compared to Rs 1.54 the previous fiscal year. As of FY25, the firm reported cash and bank balances of Rs 4 crore, while current assets stood at Rs 30 crore, down from Rs 42 crore in FY24.

Acquisition and Competitive Landscape

VLCC acquired Ustraa through a share swap and secondary buyout in the first quarter of FY24. Post-acquisition, Ustraa’s existing investors, including Info Edge, 360 One, and Wipro Consumer Care Ventures, became stakeholders in VLCC. Ustraa faces direct competition from brands like Beardo, The Man Company, and Bombay Shaving Company. Beardo reported a 23.7% rise in revenue to Rs 214 crore in FY25, alongside a 3.6X increase in profit after tax during the same period. Both The Man Company and Bombay Shaving Company recently raised Rs 136 crore ahead of a potential initial public offering (IPO) and have not yet disclosed their FY25 figures. Notably, each of these brands has either merged with a larger corporation or sold a substantial stake to major companies.