Hector Beverages, the company behind the Paper Boat brand, posted steady top-line growth in FY26 even as profitability came under pressure from rising costs. Operating revenue rose nearly 14% year-on-year to Rs 760 crore, but net profit fell sharply to Rs 2 crore as expenses outpaced income through the year ended March 2026.
Revenue momentum supported by product mix
Operating revenue increased to Rs 760 crore in FY26 from Rs 668 crore in FY25. Including Rs 18 crore in other income, total income reached Rs 778 crore, up from Rs 682 crore a year earlier, according to filings with the Registrar of Companies.
A change in product mix underpinned the growth. Revenue from traded goods surged 30.2% to Rs 574 crore, contributing over three-fourths of operating revenue. In contrast, revenue from manufactured goods declined 18.6% to Rs 184 crore, indicating a greater reliance on third-party sourced products during the year.
Costs rise faster than sales
Total expenditure climbed 22% to Rs 776 crore in FY26 from Rs 636 crore in FY25. Material consumption remained the largest cost component at Rs 485 crore, accounting for about 62.5% of overall expenses.
- Advertising and promotional spends rose 55.6% to Rs 28 crore
- Selling and distribution expenses increased 15.5% to Rs 67 crore
- Job work charges more than doubled to Rs 25 crore
- Employee benefit expenses edged down marginally to Rs 88 crore
Margins narrow sharply amid higher spends
With costs rising ahead of revenue, EBITDA declined 39.7% to Rs 41.4 crore from Rs 68.6 crore in FY25. The EBITDA margin narrowed to 5.4% from 10.3% in the previous year. Profit after tax dropped 96% to Rs 2 crore, compared with Rs 46 crore in FY25, reflecting the impact of elevated input, outsourcing, and brand-building costs.
Balance sheet position and competitive context
Total assets stood at Rs 522.5 crore at the end of FY26. Cash and bank balances were Rs 101 crore, down 29% year-on-year, while current assets were reported at Rs 365 crore.
Paper Boat competes across the non-alcoholic beverages market with players such as Dabur, PepsiCo, and Coca-Cola, alongside strong regional brands. The company’s increased outlay on advertising and distribution in FY26 suggests a focus on market reach and brand salience. Industry observers will watch whether tighter cost control and a calibrated product mix can help restore margins in the coming year.
