The focus of startups on improving profitability as the long-running funding winter bites seems to be yielding results. Several direct-to-consumer (D2C) brands which have reported their FY24 numbers have either registered a jump in profits or narrowed their losses compared to the preceding fiscal.
Companies such as jewellery retailer Bluestone, babycare retailer FirstCry, Mamaearth-parent Honasa Consumer, mattress brand Wakefit, and skincare startup Minimalist figure in this list.
IPO-bound Bluestone, which recently raised Rs 900 crore in a funding round, narrowed its losses to Rs 142.20 crore in FY24, from Rs 167.20 crore in the previous fiscal, as the increase in revenue was higher than that of expenses, according to RoC filings sourced via Private Circle. Its revenue from operations rose about 64% to Rs 1,265.80 crore in FY24 from Rs 770.70 crore in FY23, while expenses surged 51% year-on-year, primarily because of higher cost of materials.
In FY23, Bluestone’s losses had widened to Rs 167.20 crore from Rs 59 crore in FY22, excluding a one-time non-operating expense of Rs 1,209 crore which it had incurred in FY22.
Similarly, FirstCry, which debuted in the public markets in August, managed to reduce its losses by 34% to Rs 321 crore during FY24 from Rs 486 crore in the previous fiscal.
It was because the jump in FirstCry’s revenue was higher than the increase in expenses. Moreover, some expenses such as advertising and transportation costs decreased on a year-on-year basis.
Revenue from operations rose 15% to Rs 6,481 crore in FY24 from Rs 5,633 crore in FY23, while expenses rose only 9% over last year. During its IPO, FirstCry stock debuted at Rs 651 apiece on the NSE, which is a 40% premium over its IPO price of Rs 465.
In contrast, FirstCry had posted 6x wider losses in FY23 at Rs 486 crore, compared to Rs 79 crore in FY22, despite a significant surge in revenue.
Another listed D2C brand, Honasa, also turned profitable for the full fiscal year, with a profit after tax of Rs 110.50 crore in FY24 compared to a loss of Rs 151 crore in the previous year.
To drive sales, the company has been doubling down on its offline presence and increasing the share of revenue from its younger brands. It currently houses six brands under its portfolio including Mamaearth, The Derma Co, Aqualogica, Dr Sheth’s, and BBlunt, with about 80% of its revenue coming from its flagship brand Mamaearth.
Besides these companies, Wakefit recently announced that it has once again returned to profitability with an Ebitda of Rs 65 crore. The company used to be Ebitda profitable for the first four years of its operations. Wakefit also crossed Rs 1,000 in revenue in FY24, marking a 24% year-on-year growth.
Among the new-age beauty brands, Minimalist is the first to announce its FY24 financials. After reporting shrinking profits in FY23 due to rising advertising and employee costs, the company managed to double its profit to Rs 11 crore in FY24, from Rs 5 crore a year ago, as revenue rose faster than expenses.
While most of these startups are managing to improve their financials, some, such as Virat Kohli-backed apparel brand Wrogn, are still struggling to scale their business. The company’s revenue decreased 29% in FY24 to Rs 243.70 crore, while losses surged by 28% to nearly Rs 57 crore even as it tried to rein in expenses.