After experiencing remarkable growth of 50% in the fiscal year 2022, Beardo, owned by Marico, faced a significant slowdown in the preceding fiscal year, ending in March 2023. Unfortunately, the Ahmedabad-based company transitioned from making profits in FY22 to incurring losses in FY23.
Revenue and Operations Report
Beardo’s operational revenue saw a 12.2% increase, reaching Rs 106.6 crore in FY23. This data comes from Marico’s recently published annual report.
Beardo Product Range and Distribution Channels
Beardo boasts a diverse range of products, spanning beard oil, beard wax, face wash, beard combs, soaps, lotions, and more. These products are available through both online and offline retail channels, constituting the company’s primary source of income.
Expenditure Analysis
A significant portion, accounting for 32%, of Beardo’s overall expenditure was attributed to material costs. This cost surged by 24.8%, totaling Rs 37 crore during FY23. In addition, the company’s employee benefit costs and legal professional fees experienced respective increases of 19.4% and 7.3%, amounting to Rs 12.64 crore and Rs 5 crore in the previous fiscal year.
Beardo Financial Losses and Future Prospects
Beardo’s expenditures further climbed due to substantial amounts allocated to advertising and freight costs, contributing to a 19.9% overall expenditure growth, totaling Rs 115.3 crore in FY23. Unfortunately, this expenditure outpaced revenue growth, leading to a loss of Rs 6.13 crore in FY23, a stark contrast from the Rs 75 lakhs profit in FY22. The company’s FY23 metrics revealed a ROCE of -94.44% and an EBITDA margin of -6.25. It expended Rs 1.08 to generate a unit of operating revenue.
While the prevalence of high advertising expenses remains a concern, as is common in the Direct-to-Consumer (D2C) and related sectors, the relatively high legal costs are somewhat unexpected. Observers anticipate these legal costs to decrease more rapidly in the future. Notably, Beardo crossed the significant milestone of Rs 100 crore in revenue, validating its presence in the market. With a well-established brand, the company’s potential trajectory is intriguing. However, Beardo, like other new-age firms, faces the challenge of establishing a flagship brand to spearhead its portfolio. This challenge remains an ongoing focus for Beardo as it navigates its journey forward.
