News Post

Heads Up For Tails posts flat scale in FY23; losses mount 5X

Entrackr

· 2m

Pet care brand Heads Up For Tails struggled to grow in FY23. While the firm’s scale grew mere 2%, its losses blew 5X in the same period. This happened as its expenses on marketing and employee benefits rose sharply in the fiscal year ending March 2023. Heads Up For Tails’ revenue from operations grew to Rs 140 crore in FY23 from Rs 138 crore in FY22, its consolidated financial statements filed by the group company Sara Global Pte. Ltd. in Singapore show. For context, the Rashi Narang-led company achieved 85% year-on-year growth during FY22. Heads Up For Tails offers 13,000 pet products with over 250 brands on its platform including its own labels. The company claims to have a presence in more than 18 cities with over 90 stores and 65 pet spas. The sale of pet products comprised 96.7% of overall revenue which increased 3.4% to Rs 135.42 crore in FY22. Advertising, warehousing, and logistics were some other revenue drivers for Heads Up For Tails. See TheKredible for the complete revenue breakdown. Importantly, 93% of its revenue originated from domestic sales while the rest of the income came from outside India. It’s worth mentioning that the consolidated financial statements represent the group picture including its subsidiaries: Barkyard Private Limited and Precious Pet Services Private Limited. Coming to the expense side, the cost of procurement accounted for 55.59% of the overall expenditure which increased by 15% to Rs 118 crore in FY23. Heads Up For Tails’ burn on employee benefits, freight, marketing (advertising cum business promotion), professional charges, software, and other overheads took its overall expenditure up by 38.8% to Rs 212 crore in FY23 from Rs 153 crore in FY22. Head to TheKredible to see the complete expense breakup. Expense Breakdown Total ₹ 153 Cr https://thekredible.com/company/heads-up-for-tails/financials View Full Data To access complete data, visithttps://thekredible.com/company/heads-up-for-tails/financials Total ₹ 212 Cr https://thekredible.com/company/heads-up-for-tails/financials View Full Data To access complete data, visithttps://thekredible.com/company/heads-up-for-tails/financials Procurements of goods Procurements of goods Employee benefits Employee benefits Freight Freight Advertising and business promotion Advertising and business promotion Professional charges Professional charges Website and software Website and software Others To check complete Expense Breakdown visit thekredible.com View full data The flat scale and 39% surge in the total cost led Heads Up For Tails to bleed heavily and its losses reached Rs 71 crore in FY23 compared to Rs 14 crore in FY22. Its ROCE and EBITDA margin worsened to -25% and -43.8% respectively. On a unit level, it spent Rs 1.52 to earn a rupee. The company has raised around $40 million including its $37 million Series A round led by Peak XV and Verlinvest in 2o21. It competes with Supertails, Zigly, PetSutra, Wiggles, and most recently perhaps, Drools. FY22-FY23 FY22 FY23 EBITDA Margin -5% -43.8% Expense/₹ of Op Revenue ₹1.11 ₹1.52 ROCE -6% -25% The 2.5x jump in marketing costs is just one indicator of how competitive intensity in the pet care segment has grown. For Heads Up For Tails, it has come a little too early, as another strong year of growth would have placed it much better to take on competition. Now, it faces the unenviable task of getting back to a growth path without burning a hole in the books. There is every chance of investors seeking some consolidation in the otherwise growing segment , and its losses leave Heads Up For Tails vulnerable to just such an approach. Watch this space to see the last tail wagging.