Paper Boat, from Hector Beverages, saw a 16% jump in revenue in FY25. Losses decreased by 24%, landing below ₹50 crore. Once considered a top D2C food and beverage name in India, Paper Boat still is relevant in the growing D2C space. The question is whether it can keep up growth for the long run.
Operating revenue went up to ₹668.28 crore in FY25, from ₹574.48 crore in FY24. Total income, with non-operating revenue, reached ₹682.44 crore. Interestingly, most D2C revenue came from products made by others, up 45% to ₹441.43 crore, about two-thirds of the business. Products made by Paper Boat itself dropped 16% to ₹225.72 crore, about 34% of revenue. This shows a change in Paper Boat’s business approach, balancing its own production with using other manufacturers for scalability.
The VC-backed brand has attracted investors, raising over $143 million from Peak XV, GIC, Sofina Ventures, and A91 Partners. GIC owns 25% of the company, while Peak XV and Sofina each own over 18%. These investors are key as Paper Boat deals with a D2C market shift, where making money and being efficient are more important than growing too fast. D2C investors are pushing founders to have achievable growth goals.
Raw materials were the biggest cost at 62%, while employee costs rose 32% to ₹90.35 crore. Marketing, distribution, and overheads brought total expenses to ₹716.53 crore. Still, Paper Boat cut losses to ₹48.25 crore in FY25, a sign of better cash control. Its ROCE was -14% and EBITDA margin at -3.86%, showing there are still challenges to becoming profitable.
For the D2C industry, Paper Boat’s performance is both a lesson and a warning. The brand is well-known, but the category is still tough. India’s juice and beverage market hasn’t grown as much as expected, with premium juices being too expensive for most people. Because of this, many D2C brands in this area, like Paper Boat, have switched to simpler options and more products like dry fruits and snacks.
After twelve years, Paper Boat is another D2C example that staying in the D2C market means more than just hype and innovative packaging. It’s now about creating a sustainable go-to-market plan, improving distribution, and adapting to customer behavior, where value and trust are as important as storytelling. For investors watching D2C startups, Paper Boat is a good example of balancing growth, funding, and profitability in India’s D2C world.
