Paper Boat emerged like a Phoenix, makes operating profit.

Ethnic drinks brand Paper Boat has emerged like a Phoenix from ashes after a struggling year of bad sales.

71% increase in revenues has been disclosed by the parent company Hector Beverages at Rs 118 crore for year 2018. Last year it was 69 crore and the company is said to be targeting 200 crore this year. The profit is wholly on operational basis after trimming the net loss.

The company, backed by Sequoia Capital and Hillhouse Capital, has managed to reduce net losses for Financial year 2018 by over 43% , that calculates to Rs 44 crores. Last year it was Rs 78 crores. The firm is now able to retain its CGR at about 70% over a large part of its 7 year journey. The shared financials for year 2018 is still unaudited and may see some changes after the submission of audited report.

Hector Beverages was founded by ex- Coca-Cola employees Neeraj Kakkar and Neeraj Biyani in 2010. as per Neeraj Kakkar “There were 2-3 months where we neither had direct nor indirect distribution and almost zero sales given it was coupled with demonetization. That led to the impact on FY17 revenues but at the end of FY18, the brand has bounced back stronger and May has been our first Ebitda positive month”. Started with energy drink Tzinga, two years later,the company has shifted its focus on ethnic drinks segment and gained sustainability in the segment.

Looking for expansion, the company is thinking to spread its legs beyond the border of currently served six metros and will hunt opportunities in small cities nad towns next year. The price range will be an important factor for this step and paper boat is looking to introduce low-priced products for these markets. According to experts, the low priced products strategy should be implemented in currently operated bigger markets rather than in smaller towns to ensure maximum effect.