Highlights
Vahdam Teas Reports Growth and Improved Financial Metrics
Direct-to-consumer (D2C) tea brand Vahdam has achieved a commendable double-digit growth over the past fiscal year. The company has notably enhanced its unit economics, resulting in a 68% reduction in losses, which fell to below Rs 20 crore.
According to the consolidated financial statement submitted to the Registrar of Companies (RoC), Vahdam Teas’ operational revenue rose by 10.6%, reaching Rs 225.2 crore in FY24, up from Rs 203.6 crore in FY23.
Direct Sourcing of Premium Products
Vahdam Teas strategically sources high-quality tea and spices directly from various farms and estates throughout India. The brand markets these premium products to customers both domestically and internationally, including key markets such as:
- United States
- Canada
- Europe
Products are sold through the company’s own website and other online marketplaces.
Revenue Breakdown
Product sales accounted for an impressive 99% of Vahdam’s operational revenue. Notably, the USA emerged as the largest revenue contributor, representing 68.5% of total operating revenue, with a growth of 12%, amounting to Rs 154.2 crore. Other revenue highlights include:
- India: Revenue increased by 18% to Rs 14.84 crore
- Europe: Revenue contribution stood at Rs 37.4 crore
- Rest of the World: Contributed Rs 18.8 crore, showing consistent growth of 5-6%
In addition to its operational revenue, the company earned an additional Rs 10 crore from non-operating sources, raising its total revenue to Rs 235 crore in FY24.
Cost Management Strategies
On the expense front, Vahdam successfully managed to reduce key costs:
- Advertising expenditures decreased by 18.9%, amounting to Rs 50 crore in FY24
- Freight and forwarding charges saw a 7% decline, totalling Rs 68 crore
- The cost of materials remained constant at Rs 47 crore
- Employee benefit expenses rose by 18.4%, reaching Rs 29 crore
- Other overheads totalled Rs 58.9 crore
Overall, the company’s total expenses fell by 4.7%, reducing to Rs 253 crore in FY24 from Rs 265.5 crore in FY23.
Financial Performance Indicators
The Delhi-based firm reported a significant decrease in losses, which shrank by 68% to Rs 17.7 crore in FY24 from Rs 55 crore in FY23. Additional key financial metrics include:
- Return on Capital Employed (ROCE): -13.2%
- EBITDA Margin: -4.26%
- Expense-to-Earnings Ratio: Rs 1.12
Current Assets
As of March 2024, Vahdam Teas reported current assets totalling Rs 142 crore, which includes Rs 83 crore in cash and bank balances.
Funding Overview
To date, Vahdam Teas has successfully raised $39 million in funding, with prominent investors including Fireside Ventures, Sixth Sense Ventures, and IIFL Asset Management.