Paper Boat Grew Revenue 14% in FY26 — But Its Profit Nearly Vanished

Growing your top line and watching your profit nearly disappear in the same year sounds like a contradiction, but that's exactly the year Paper Boat's parent company just had. The numbers tell a story of a brand that got bigger and, somehow, almost stopped making money doing it.

Hector Beverages, which sells the nostalgia-flavoured drinks under the Paper Boat label and competes against giants like Dabur, PepsiCo, and Coca-Cola, closed FY26 with operating revenue up 13.8 percent to Rs 760 crore, according to annual filings sourced from the Registrar of Companies. Add Rs 18 crore in other income and total income came in at Rs 778 crore.

The interesting part is where that growth actually came from. Revenue from traded goods, meaning products the company sources and resells rather than manufactures itself, jumped 30 percent to Rs 574 crore and now makes up over three-quarters of the operating revenue. Meanwhile, revenue from goods the company actually manufactures fell 18.6 percent to Rs 184 crore, a pretty significant shift in the underlying business mix for a brand known for making its own drinks.

That shift came with a cost problem. Total expenditure grew 22 percent to Rs 776 crore, outpacing revenue growth by a wide margin. Material consumption stayed the biggest line item at Rs 485 crore, but the real damage came from spending choices: advertising and promotion jumped 55.6 percent to Rs 28 crore, job work charges more than doubled to Rs 25 crore, and selling and distribution costs rose 15.5 percent to Rs 67 crore.

The bottom line absorbed all of it. EBITDA fell nearly 40 percent to Rs 41.4 crore, margin narrowed to 5.4 percent from 10.3 percent, and profit after tax collapsed 96 percent to just Rs 2 crore, down from Rs 46 crore the year before. Cash reserves also slipped 29 percent to Rs 101 crore, leaving a company that grew louder this year, but noticeably leaner in what it actually kept.