Fashion brand Rare Rabbit reports Rs 32Cr profit In FY23, revenue up by 77% YoY

Bengaluru-based fashion brand House of Rare, which operates the popular apparel brand Rare Rabbit, has nearly doubled its net profit for the financial year ending March 31, 2023. 

The bootstrapped startup reported a profit of Rs 32.2 crore in FY23, marking an 84% year-on-year increase from Rs 17.5 crore in the previous fiscal year. 

The growth was primarily driven by a substantial rise in sales.

Revenue growth 

In FY23, Rare Rabbit's revenue from operations surged by 77% year-on-year to Rs 376 crore, up from Rs 212.5 crore in FY22.

Including other income, House of Rare's total income reached INR 381 crore, reflecting a 74% increase from Rs 219 crore. The impressive revenue growth is attributed to the company's diversified sales channels, including retail stores, a native ecommerce store, and various online marketplaces.

Expenses

The total expenditure for House of Rare stood at rs 338.7 crore in FY23, 72% higher than the Rs 196.6 crore spent in FY22.

The startup's most significant expenditure was on raw materials, with Rs 136 crore spent, a 77% increase from the previous year's Rs 76.9 crore.

Advertisement expenses accounted for nearly 20% of the total costs, rising by 51% to Rs 63.3 crore from Rs 42 crore.

Employee benefit expenses also saw a notable increase, amounting to Rs  39.5 crore in FY23, up 54% from the previous fiscal year. These expenses include employee salaries, provident fund contributions, gratuity, and ESOP costs.

Rare Rabbit's EBITDA

In FY23, the startup's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) stood at Rs 56.2 crore, translating to a 14.9% EBITDA margin. This marks a slight improvement from the 14.4% EBITDA margin reported in the previous year. 

What does Rare Rabbit do?

Founded in 2015 by Manish Poddar and Akshika Poddar, House of Rare operates multiple brands, including Rare Rabbit, women's fashion brand Rareism, and everyday wear brand Articale.

The startup is reportedly in talks to raise its first funding round of around Rs 500 crore from A91 Partners. Notably, the round will also include participation from the family offices of Manyavar owner Ravi Modi and Zerodha co-founder Nikhil Kamath. 

The funding round is expected to include both a primary capital infusion and a secondary sale by the founders, valuing the startup at approximately $266 million.