Chaayos Cuts Losses by Half in FY24, Turns EBITDA Positive

Chaayos, the well-known tea café chain, marked a significant milestone in FY24 by achieving positive EBITDA of ₹28.35 crore, even as its operational scale stayed flat. Revenue from operations grew 4.85% to ₹248.5 crore, up from ₹237 crore in FY23. The company, with over 200 outlets across Delhi-NCR, Mumbai, and Bengaluru, saw its core revenue from manufactured goods like tea rise 3.1% to ₹236.87 crore, accounting for 95.32% of its total revenue. Revenue from traded goods, such as snacks and tea leaves, nearly doubled, growing 98.52% to ₹10.74 crore, while income from services dropped 51.89% to ₹0.89 crore.

Adding ₹22.7 crore from non-operating sources, Chaayos recorded a total income of ₹271.2 crore. By keeping a tight lid on expenses, the company successfully reduced total costs by 11.07% to ₹325.21 crore, compared to ₹365.68 crore in FY23. Notable expense reductions included an 11% drop in material costs to ₹76.54 crore, while employee benefit expenses rose marginally by 4.45% to ₹81.15 crore.

Chaayos' strategic focus on premiumisation and balancing online and offline sales posed challenges. Competing in the premium segment pits it against stronger players, while online sales continue to strain margins. Yet, these efforts paid off as the company halved its losses, which fell 50.6% to ₹54 crore, compared to ₹109 crore in FY23.

On a unit basis, Chaayos spent ₹1.31 to earn a rupee in FY24. The company reported current assets of ₹181.42 crore, including a cash and bank balance of ₹89.16 crore. Twelve years into its journey, Chaayos has become a well-regarded brand, known for its innovations and unique experiences. The challenge ahead lies in scaling up these successes while cutting costs and time by half to sustain its growth trajectory.