Wow! Momo reports Rs 114 crore loss in FY24, rising costs eat into profits

New Delhi: Quick-service restaurant (QSR) chain Wow! Momo has reported a net loss of Rs 114 crore in FY24, as the company struggled with the rising expenses.

The company’s total expenditure grew by 11.9 per cent to Rs 593 crore in FY24, driven by costs related to raw materials, rent, advertising, and commissions.

The cost of material procurement alone accounted for Rs 158 crore -- increasing by 15.3 per cent compared to the previous year.

However, employee benefit expenses declined by 27.7 per cent to Rs 120 crore. Other costs, including rent, advertising, power, and commissions, contributed to a total expenditure of Rs 593 crore -- an 11.9 per cent increase from the previous fiscal.

The company’s return on capital employed (ROCE) stood at (-) 8.33 per cent, while its EBITDA margin was 7.93 per cent.

The expense-to-revenue ratio remained high at Rs 1.26, which reflects the ongoing financial pressure on the business.

While the company saw a 14 per cent rise in operating revenue, the growth was significantly lower than the 88 per cent surge recorded in FY23.

According to its consolidated financial statements, Wow! Momo’s revenue from operations increased to Rs 470 crore in FY24 from Rs 413 crore in the previous year.

The majority of this revenue, Rs 456 crore, came from the sale of momos, food, and beverages, while the rest was generated from frozen momo sales.

The company also earned Rs 9 crore as interest on deposits, bringing its total income to Rs 479 crore.

According to its financials, the company held total current assets of Rs 250 crore by the end of FY24, including Rs 175 crore in cash and bank balances.

The company, backed by Tiger Global and Khazanah Nasional Berhad, has raised over Rs 600 crore to date.

In its latest funding round, it secured $42 million (Rs 350 crore) in Series D funding. As per the media reports, the company is also planning to go public by 2027.