💰 Financial Performance

Revenue Growth by Segment

Total revenue grew 43% YoY to INR 95.85 Cr in H1 FY26. The revenue is split equally with 50% coming from the HoReCa (B2B) segment and 50% from the Online (B2C) segment. The B2B segment saw significant momentum, while the online business maintained a high repeat ratio of 88-90%.

Geographic Revenue Split

The Mumbai (West) region has seen rapid growth, now contributing 20-21% of total revenue compared to just 5-6% in the previous year. The company is also established in South India through its acquisition of Sukos Foods (Dr. Meat).

Profitability Margins

Gross margin improved significantly to 34% in H1 FY26 from 29% in H1 FY25, a 490 bps increase. PAT margin rose to 7% from 4% YoY, representing a 369 bps improvement. These gains were driven by better product mix and procurement optimization.

EBITDA Margin

EBITDA margin stood at 16% in H1 FY26, a substantial 783 bps increase from 8% in H1 FY25. Absolute EBITDA grew 188% YoY to INR 14.92 Cr from INR 5.18 Cr.

Capital Expenditure

The company raised INR 54 Cr through its IPO, which is being deployed for capacity expansion, technology enhancement, and working capital optimization. Specific historical capex figures were not disclosed, but the company is targeting inorganic growth through acquisitions 10x the size of previous deals.

Credit Rating & Borrowing

Not disclosed in available documents; however, the company maintains a conservative leverage position with a Debt-to-Equity ratio of 0.65 and a Net Debt-to-Equity ratio of 0.63 as of September 2025.

⚙️ Operational Drivers

Raw Materials

The primary raw materials are fresh chicken, mutton, and seafood (fish), which collectively account for the majority of the cost of goods sold (COGS) of INR 63.68 Cr (66% of revenue).

Import Sources

Sourcing is primarily domestic, utilizing a 'Farm-to-Fork' model. The company partners with innovative farms and operates hygienic slaughterhouses to ensure antibiotic-free and fresh supply.

Key Suppliers

Not specifically named, but the company maintains partnerships with over 300 HoReCa clients and sources directly from a network of farms to minimize middlemen.

Capacity Expansion

Current expansion is focused on deepening presence in Mumbai and South India. The company plans to replicate its turnaround playbook (e.g., growing Dr. Meat revenue 4x within a year) in new markets and is evaluating two major acquisitions in the audit stage.

Raw Material Costs

COGS stood at INR 63.68 Cr in H1 FY26. Procurement strategies involve 'creating depth' in categories like fish and mutton to achieve volume-based margin improvements (fish margins rose from 16% to 23%).

Manufacturing Efficiency

The company focuses on unit economics and sustainable growth. Efficiency is driven by technology-led logistics and a 90% month-on-month repeat ratio in the online business.

Logistics & Distribution

Distribution is handled via an omnichannel model. Average Order Value (AOV) for online orders is approximately INR 540, with over 100,000 monthly orders.

📈 Strategic Growth

Expected Growth Rate

43%

Growth Strategy

The company aims to become a INR 1,000 Cr revenue business through a mix of organic growth and aggressive inorganic acquisitions. It is currently auditing two potential acquisitions expected to be 10x larger than previous ones. Strategy includes deepening leadership in fresh/packaged meat, expanding the omnichannel footprint, and entering new product categories like snacking and dry ready-to-cook items.

Products & Services

Fresh and packaged chicken, mutton, seafood (fish), and meat-based snacking products.

Brand Portfolio

Zappfresh, Dr. Meat (Sukos Foods), and Bonsaro.

New Products/Services

Foraying into export-oriented snacking and dry ready-to-cook categories to diversify the portfolio beyond fresh meat.

Market Expansion

Expanding from North India into West (Mumbai) and South India. Mumbai now accounts for 20-21% of revenue.

Market Share & Ranking

Not specifically ranked, but the company claims a leadership position in the fresh-and-packaged-meat segment in its operating regions.

Strategic Alliances

Deepened partnerships with over 300 HoReCa clients and collaborations for omnichannel distribution.

🌍 External Factors

Industry Trends

The industry is shifting from unorganized local meat shops to organized, hygienic, and branded omnichannel players. The market is growing at a steady pace, and Zappfresh is positioning itself as a 'proficorn'—a profitable large-scale business.

Competitive Landscape

Competes with both unorganized local vendors and other branded meat startups/unicorns in the private sector.

Competitive Moat

Moat is built on a 'Farm-to-Fork' supply chain, high customer retention (90% repeat rate), and a proven M&A playbook for turning around loss-making local brands. Sustainability is driven by high quality standards (antibiotic-free) and technology integration.

Macro Economic Sensitivity

Sensitive to consumer spending trends in urban markets and food inflation, particularly in the poultry and livestock sectors.

Consumer Behavior

Increasing preference for fresh, hygienic, and responsibly sourced meat delivered through online channels.

Geopolitical Risks

Minimal for current domestic operations, but future export initiatives for snacking products may face trade barriers.

⚖️ Regulatory & Governance

Industry Regulations

Subject to food safety and hygiene standards (FSSAI) and regulations governing slaughterhouses and cold chain logistics.

Environmental Compliance

Not specifically disclosed, though the company emphasizes responsibly sourced meat and hygienic slaughterhouse operations.

Taxation Policy Impact

The company is subject to standard corporate tax rates. It recently faced an 'Angel Tax' demand related to equity investments being miscategorized as income.

Legal Contingencies

The company is contesting a pending tax demand related to 'Angel Tax' where equity investment was treated as income by the income tax department; the matter is currently under evaluation and assessment.

⚠️ Risk Analysis

Key Uncertainties

Integration risks of large-scale acquisitions (10x previous size) and the outcome of pending tax litigation could impact cash flows.

Geographic Concentration Risk

High concentration in North India, though diversifying into Mumbai (21%) and South India.

Third Party Dependencies

Dependency on farm partners for antibiotic-free supply and HoReCa clients for 50% of revenue.

Technology Obsolescence Risk

Risk is mitigated by ongoing technology enhancements using IPO funds to maintain the online platform and app (1.4 lac downloads).

Credit & Counterparty Risk

Receivable days increased to 31 days (and mentioned as 69 days in some contexts) due to extended credit terms provided to B2B/HoReCa clients to support sales momentum.