Even as demand for cloud kitchens remains strong, Rebel Foods — one of India’s biggest operators in the space — has reported a net loss of ₹336.6 crore for the fiscal year ending March 2025 (FY25). The result underscores how tough it is for food tech firms to balance growth and profitability, even with rising sales.
What the Numbers Say — Revenue Up, But Loss Persists
- Rebel Foods’ operating revenue increased by 13.9%, reaching around ₹1,617.4 crore in FY25 from ₹1,420.2 crore in FY24.
- Despite higher revenue, total expenses rose approximately 7%, driven by costs including materials, advertising, commissions and other operating overheads
- As a result, net loss stood at ₹336.6 crore — a modest improvement from the ₹380.3 crore loss in FY24.
- On the brighter side, Rebel Foods’ EBITDA-loss narrowed and EBITDA margin improved compared to prior years — suggesting some operational efficiencies.
Why the Loss — Key Headwinds for Rebel Foods
- High operating and input costs: Costs of raw materials, advertising, delivery and commissions remain high — eating into margins despite sales growth
- Scale and expansion pressure: As Rebel Foods expands kitchens and delivery infrastructure, fixed costs and overheads increase, which can weigh on profitability before scale catches up.
- Competitive market pressure: The cloud-kitchen space in India is crowded with many emerging players — pricing pressure, discounts and marketing spend remain high.
- Burn from diversification and new initiatives: Rebel Foods is exploring new offerings (e.g. 15-minute delivery through a new app) which requires additional investment and may not yield immediate returns.
What It Means — For Rebel Foods and the Cloud Kitchen Sector
- Sustainability doubts: Even with decent topline growth, persistent losses raise questions about the long-term viability of cloud-kitchen models that depend heavily on delivery, discounts, and high overhead.
- Need for sharper cost control and efficiency: For Rebel Foods to turn profitable, controlling costs (sourcing, delivery, marketing) and improving unit economics is essential.
- Investor scrutiny ahead: Given the large losses, investors — both existing and prospective — may demand clearer path to profitability, stricter discipline on expansion, or pivot in strategy.
- Potential consolidation in the industry: Smaller or less-funded cloud-kitchen players may struggle in such conditions — leading to consolidation, acquisitions, or exits over time.
Larger Context — Cloud Kitchens’ Growth Is Not Enough Without Margins
The performance of Rebel Foods highlights a broader truth about food-tech: growth in orders and scale alone isn’t sufficient. Efficient operations, cost control, supply-chain management, and sustainable economics are critical. For many cloud-kitchen players, achieving scale is easier than turning that scale into profit.
