D2C Brand The Ayurveda Co Reports 66% Growth, But Losses Triple in FY24

In a mixed financial performance, The Ayurveda Co (TAC), a direct-to-consumer Ayurvedic beauty and wellness brand, reported a 66% year-over-year revenue growth while simultaneously seeing its losses more than triple in the fiscal year ending March 2024.

The Sixth Sense Ventures-backed company's revenue from operations climbed to Rs 59.6 crore from Rs 36 crore in the previous year.

However, The Ayurveda Co's aggressive expansion has cost significantly. Total expenses surged a whopping 97% to Rs 109.5 crore, with material costs emerging as the most critical expense, jumping 2.4 times to Rs 28.6 crore. The company also saw substantial increases in advertising and employee benefit expenses, which rose by 73.3% and 80.2%, respectively.

These escalating costs resulted in the company's losses ballooning to Rs 68 crore in FY24, more than three times the Rs 21 crore loss recorded in FY23. Financial metrics paint a concerning picture, with the company's ROCE at -700% and EBITDA margin at -100.65%. For every rupee earned, the company spent Rs 1.84.

Adding to the concerns, the Gurugram-based company reported alarmingly low cash reserves of just Rs 52 lakh at the end of FY24, despite having raised approximately $16 million in total funding, including a Rs 100 crore Series A round led by Sixth Sense Ventures in 2023.

TAC, which offers a range of Ayurvedic beauty and personal care products, faces stiff competition in the market. Its primary competitor, Ayurveda Experience, reported significantly higher revenues of Rs 250 crore in FY23. The company also competes with established brands like Wow Skin and Sugar.