Vahdam Teas Cuts Losses by 68% as Cost Control Measures Show Results

Premium D2C tea brand Vahdam has significantly reduced its losses to Rs 17.7 crore in FY24, down 68% from Rs 55 crore in the previous year, while achieving modest revenue growth. The company's consolidated financial statements filed with the Registrar of Companies show that operating revenue increased by 10.6% to Rs 225.2 crore.

The US market continues to be Vahdam's strongest revenue driver, accounting for 68.5% of operating revenue with Rs 154.2 crore, representing 12% growth. The company saw its India business grow by 18% to Rs 14.84 crore, while European operations and other markets contributed Rs 37.4 crore and Rs 18.8 crore, respectively, each increasing by 5-6%.

The Delhi-based company, which sources premium tea and spices directly from Indian farms and estates, implemented successful cost-cutting measures across operations. Advertising expenses were reduced by 18.9% to Rs 50 crore, while freight and forwarding charges decreased by 7% to Rs 68 crore. These reductions helped bring total expenses down by 4.7% to Rs 253 crore.

Employee benefit expenses increased 18.4% to Rs 29 crore, while material costs remained stable at Rs 47 crore. The company's total revenue, including non-operating income of Rs 10 crore, reached Rs 235 crore in FY24.

Vahdam, which has raised $39 million to date from investors including Fireside Ventures, Sixth Sense Ventures, and IIFL Asset Management, reported current assets of Rs 142 crore, including Rs 83 crore in cash and bank balances as of March 2024.

Vahdam's financial stats show an EBITDA margin of -4.26% and a ROCE of -13.2%, with an expense-to-earning ratio of Rs 1.12. This reflects its continued focus on profitability while maintaining growth in key markets.