The Ayurveda Co's Losses Skyrocket Over Threefold in FY24 Amidst Escalating Costs
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Synopsis
The Ayurveda Co has reported a staggering increase in losses for FY24, with net losses exceeding Rs 68 crore, primarily due to soaring material and advertising costs. Despite a revenue growth of 66%, the company's financial health is concerning as it navigates a challenging market landscape.
Key Takeaways
- Net loss surged to Rs 68 crore in FY24.
- Material costs doubled to Rs 28.6 crore.
- Advertising expenses rose by 73% to Rs 26 crore.
- Total expenditure increased by 97% to Rs 109.5 crore.
- Revenue grew by 66%, reaching Rs 59.6 crore.
New Delhi, Feb 17 (NationPress) The direct-to-consumer (D2C) brand The Ayurveda Co experienced a significant increase in losses for FY24, with its net loss climbing over three times to Rs 68 crore, a sharp rise from Rs 21 crore reported in FY23.
The company’s financial reports indicate that the substantial loss is largely attributed to material expenses, which more than doubled to Rs 28.6 crore from Rs 12 crore in FY23.
Advertising costs surged by 73% to Rs 26 crore, while employee-related expenses jumped by 80% to Rs 15.5 crore.
Costs associated with manpower and recruitment also escalated, contributing an additional Rs 11.3 crore to the company's overall expenditures.
With total expenses rising by 97% to Rs 109.5 crore in FY24, The Ayurveda Co reported a negative EBITDA margin of (-) 100.65% and a return on capital employed (ROCE) of (-) 700%.
At the unit level, the company expended Rs 1.84 to generate a single rupee, illustrating its financial challenges.
Despite securing Rs 100 crore in a Series A funding round led by Sixth Sense Ventures in 2023, the company’s financial condition remains precarious.
By the end of FY24, the firm had current assets amounting to Rs 45 crore, but its cash and bank balance was a mere Rs 52 lakh, raising concerns about liquidity.
Nonetheless, the company achieved a revenue growth of 66%, reaching Rs 59.6 crore in FY24, compared to Rs 36 crore in FY23.
The total income for the firm, which includes Rs 2.4 crore from interest, stood at Rs 62 crore in FY24.
Specializing in ayurvedic beauty and personal care products such as skincare, haircare, makeup, and wellness items, The Ayurveda Co is backed by Sixth Sense Ventures.
In a market saturated with competitors like Ayurveda Experience, Wow Skin, and Sugar, The Ayurveda Co faces growing pressure to enhance its financial performance.
Reports suggest that the upcoming fiscal year will be crucial for the company’s long-term sustainability.
