Chaayos FY2025: Revenue ₹305 Cr (+23%), Losses Halved, OCF Positive

The Number That Matters

Revenue at ₹304.97 Cr. Losses at -₹24.95 Cr. OCF at +₹27.52 Cr.

The arithmetic is unusual: operating cash flow is positive while the company still reports a net loss. This divergence is structural in QSR businesses under Ind AS 116 — lease costs are split between interest (through finance costs, hitting PBT) and principal repayment (through cash outflows from financing activities). The cash the stores generate is visible in OCF; the accounting charge from amortising the lease ROU asset shows up as depreciation, dragging PBT into loss territory.

The underlying store economics appear solid. The question for Chaayos is whether they can grow revenue fast enough for fixed costs to fade to a smaller percentage, pushing PBT to breakeven.

Nitin Saluja's Thesis

Chaayos was founded in 2012 by Nitin Saluja and Raghav Verma, both IIT Bombay alumni who left corporate careers to build a chai brand. The founding thesis was specific: Indians drink more tea than coffee, but India had no premium branded chai experience. Coffee chains (Café Coffee Day, Starbucks) had proved urban Indians would pay for a branded beverage-and-seating format. Saluja believed the same model would work for chai — and that customisation was the hook. Chaayos lets customers specify their tea's strength, sweetness, ginger, and other variables — a level of personalisation that a street chai vendor cannot systematically offer.

The second part of the thesis: chai has lower input costs than coffee. Tea leaves are cheaper than coffee beans. A 70%+ gross margin on product (as the FY2025 numbers show) gives the business more room to absorb overhead than most F&B formats.

The scale journey has been methodical, not explosive. Chaayos took twelve years to reach ₹305 Cr in revenue. The company expanded city by city — Delhi NCR first, then Bengaluru, Mumbai, Pune — without chasing fast franchise growth. Store count is approximately 300+. Each store is company-owned and operated, which gives quality control and brand consistency but limits how fast the network can grow.

Tiger Global led a Series B in 2017. The company has not disclosed recent funding rounds publicly; the FY2025 XBRL shows equity of ₹211.83 Cr with no major share issuance in FY2025, suggesting the company is operating on existing capital.

The financial numbers in FY2025 are the first validation that the thesis is working at meaningful scale: ₹305 Cr revenue at 70%+ gross margins, OCF positive at +₹27.52 Cr, losses narrowing without a corresponding slowdown in revenue growth.

Three Years: Revenue Growth and the Loss Trajectory

Year	Revenue	PAT	OCF
FY2023	—	—	—
FY2024	₹248.58 Cr	-₹53.98 Cr	+₹12.28 Cr
FY2025	₹304.97 Cr	-₹24.95 Cr	+₹27.52 Cr

FY2023 figures are not available in the FY2025 standalone XBRL filing. The FY2024 comparative is from the FY2025 filing.

The trend is consistent: revenue growing at 20%+ annually, losses narrowing sharply, OCF improving. If FY2026 revenue reaches ₹370-380 Cr at the same growth rate, and if cost growth remains disciplined, the company could move closer to PBT breakeven — though that outcome depends on both continuing.

How the QSR Economics Work Here

Chaayos operates physical chai cafes where the product margin (tea, coffee, food) must cover rent, staff, and overhead. The Ind AS 116 accounting complicates the reading, so it helps to separate the layers.

Revenue: ₹304.97 Cr Product sales: ₹303.80 Cr (manufactured goods ₹294.79 Cr + traded goods ₹9.01 Cr) Services: ₹1.17 Cr

Cost of materials consumed: ₹90.24 Cr (29.6% of revenue) This is raw inputs — tea leaves, milk, food ingredients. A 70%+ gross margin on product before any overhead.

Employee costs: ₹77.62 Cr (25.5% of revenue) The barista and café staff layer. Stable as a percentage; scaling revenue here without proportional staff increases is the core operating leverage story.

Rent (conventional, separate from lease liabilities): ₹4.72 Cr Under Ind AS 116, most multi-year lease agreements are capitalised as ROU assets and lease liabilities. The ₹4.72 Cr "rent" in expenses is likely for short-term or variable leases not captured in the Ind AS 116 model.

Finance costs: ₹29.00 Cr Almost entirely lease interest (₹28.64 Cr) on the ₹196 Cr of lease liabilities for store locations. This is the Ind AS 116 cost of carrying the store network — not conventional bank debt interest.

Depreciation: ₹51.29 Cr Includes ₹32.64 Cr of lease ROU asset amortisation (the balance sheet unwinding of the lease principal), plus ₹16.87 Cr of actual PPE depreciation and ₹1.78 Cr of intangibles amortisation.

Together, the lease interest (₹29 Cr) and lease amortisation (₹32.64 Cr) account for ₹61.64 Cr of non-cash or committed-payment charges. Without these Ind AS 116 effects, reported PBT would shift considerably.

The Lease Liability: Understanding the Store Network Cost

As of March 31, 2025:

• Non-current lease liabilities: ₹167.29 Cr (the rent committed beyond 12 months)
• Current lease maturities: ₹28.94 Cr (rent due within 12 months)
• Total: ₹196.23 Cr

For context, Chaayos has zero conventional bank borrowings visible in the filing. The entire ₹29 Cr in finance costs is lease interest. The balance sheet "debt" is actually the store network.

Where the Money Is

Liquid assets as of March 31, 2025:

• Cash and bank balances: ₹13.61 Cr (cash ₹2.12 Cr + bank deposits ₹11.49 Cr)
• Current investments: ₹35.97 Cr (mutual funds/FDs, up from ₹0.90 Cr in FY2024)
• Total readily available: ~₹50 Cr

The decline in cash (from ₹21.58 Cr at FY2024 year-end as per I2024) is offset by growth in current investments — funds moved from current accounts to short-term investment instruments. Total liquidity is approximately stable.

Capital Work in Progress: ₹155.25 Cr

This is the largest item on the non-current asset side — stores under construction or fit-out. At ₹155 Cr of CWIP, Chaayos has significant expansion in progress. This will convert to ROU assets and lease liabilities once stores open, increasing both assets and obligations further.

Other Income Surge: Understanding ₹18.39 Cr

Other income jumped to ₹18.39 Cr in FY2025 from ₹22.64 Cr in FY2024.

The components include:

• Interest income: ₹14.06 Cr (from fixed deposits and non-current investments)
• Net gain on sale of investments: ₹0.72 Cr
• Miscellaneous: ₹3.60 Cr

The ₹186.39 Cr of fair value gains (AdjustmentsForFairValueGainsLosses) in the XBRL suggests unrealised gains on investments, which inflate other income but are non-cash. These are reversed out in the OCF computation.

Backing Out the Ind AS 116 Effect

The OCF of +₹27.52 Cr already reflects the store economics net of the Ind AS 116 adjustments. The reconciliation shows ₹51.29 Cr of depreciation added back and ₹28.64 Cr of lease interest removed from operating cash (lease interest is classified as financing). The net ₹27.52 Cr OCF is after all these effects.

On a pre-Ind-AS-116 basis (treating all leases as operating expenses as was standard pre-FY2020), the profitability picture would look worse — but the cash generation picture would look similar, since lease principal repayments would appear as rent expense reducing operating profit.

Either way, the stores appear to generate positive operating cash.