Kaya chief attributes operational turnaround to price cuts, shift from HNI-focussed services

Kaya Limited posted consolidated revenue from operations of Rs 104.1 crore for the quarter ended June 2018, a growth of 3 percent over the corresponding quarter last year.

Its India business reported a revenue growth of 4 percent and international business revenue grew by 2 percent over the first quarter last year.

Consolidated operating earnings before interest, tax, depreciation, and amortisation (EBITDA) was Rs 6 crore compared to a loss of Rs 4.6 crore in the same quarter last year.

Kaya CEO Rajiv Nair talked to Moneycontrol about the company's performance.

Excerpts

Q: What contributed to the turnaround in operating EBITDA?

A: Increased focus on making services more affordable, increasing product variety, up gradation of technology and adding hair care to services have all contributed to the growth.

Q: How much has the recently introduced hair care category contributed to the growth?

A: The newly-added hair care segment has been very beneficial to the business. It contributes to about 42 percent of the net revenue.

Q: What made you reduce your service prices? How did that impact the business?

A: We were initially targeting the HNIs only but then we decided to be more affordable and accessible too. It is still for the upper middle class and the starting range is for Rs 9,000 for a service but when we reduced prices by 6 percent we saw a 9 percent increase in customers. In the first quarter of FY18 we were booked for 55,000 sessions a month and this year same quarter we have done 60,000 sessions in a month. The target is to take it to 65,000 sessions a month by the end of the fiscal.

Q: Tell us about your overseas presence.

A: We have operations in the Middle East and have around 25 stores in Oman, Kuwait, Saudi Arabia and the UAE. Unlike the Indian market, in the Middle East people are more interested in services and not products. The average ticket size of the services is also four times of that in India. We are exploring Kuwait now.

Q: What are the expansion plans for Kaya?

A: We renovated close to 20 clinics, upgraded our technology and increased products offerings from a variety of 45 products to 75 products. We are in the phase of profitable consolidation and focusing on not just getting new customers but get repeat clientele and make them buy more services as new customers contribute to only 30 percent of the business we do and the remaining 70 percent comes from repeat clientele. We wish to work harder to make our existing clients come back to us for more services.