Hector Beverages Sees Revenue Growth Amidst Profit Decline in FY26

Paper Boat maker Hector Beverages has experienced a revenue rise in the fiscal year ending March 2026, but increasing operating expenses have diminished profitability. As per the company’s annual financial records obtained from the Registrar of Companies (RoC), Hector Beverages reported a 13.8% year-on-year increase in operating revenue, reaching Rs 760 crore in FY26 compared to Rs 668 crore in FY25. The company, known for its Paper Boat beverage line, competes with notable firms including Dabur, PepsiCo, Coca-Cola, and a variety of regional juice and traditional drink brands across India.

Financial Highlights for FY26

Including Rs 18 crore from other income, Hector Beverages’ overall income for FY26 amounted to Rs 778 crore, rising from Rs 682 crore the previous year. A notable change in product mix substantially boosted the company’s top-line performance. Revenue obtained from traded goods surged by 30.2%, climbing to Rs 574 crore in FY26 from Rs 441 crore in FY25, contributing over 75% to the operational revenue. Conversely, revenue from manufactured goods saw a decline of 18.6%, falling to Rs 184 crore from Rs 226 crore in the prior year.

Rising Expenses Despite Revenue Growth

The company’s expenses grew more rapidly than its revenue. Total expenditure surged 22% to Rs 776 crore in FY26, up from Rs 636 crore in FY25. The cost of materials remained the largest expense, amounting to Rs 485 crore, which represented 62.5% of the total expenditure, compared to Rs 447 crore in the previous fiscal year. Employee benefit expenses showed a slight drop to Rs 88 crore from Rs 90 crore.

Increased Investments in Growth

Additionally, the company amplified its investments in growth and operational activities. Advertising and promotional costs escalated 55.6% to Rs 28 crore, while selling and distribution expenses rose by 15.5% to Rs 67 crore. Job work charges more than doubled, reaching Rs 25 crore during the year. Other operational costs, including legal, professional, travel, and rent, added Rs 83 crore to the previous fiscal year’s expenditure.

Impact on Profitability

As expenses outstripped revenue growth, EBITDA experienced a significant decline of 39.7%, falling to Rs 41.4 crore in FY26 from Rs 68.6 crore in FY25. Consequently, the EBITDA margin reduced from 10.3% to 5.4%. The increased costs significantly impacted the company’s overall profit. Hector Beverages’ profit after tax plummeted by 96%, landing at just Rs 2 crore in FY26, down from Rs 46 crore in the prior fiscal year.

Balance Sheet Overview

On the balance sheet front, the company reported total assets of Rs 522.5 crore at the conclusion of FY26. The cash and bank balance saw a decrease of 29%, now standing at Rs 101 crore, while current assets totalled Rs 365 crore.