Coffee Day Enterprises Ltd, a Bengaluru-based coffee and hospitality firm set up by late entrepreneur V.G. Siddartha, said a global economic context­­­, surrounded by geopolitical uncertainties, fluctuating commodity prices, and evolving trade dynamics, has shaped a challenging environment for the company.

Coffee Day Enterprises, in its FY25 annual report said the current global scenario impacted market demand, inputs costs and investment priorities.

The company also flagged certain financial risks it might encounter in the future saying: If cash flow proves inadequate to meet financial obligations, its status as a “going concern’‘ might be invoked.

It said it faced competition risk with growing Westernisation and increase in the penetration of global players and growing popularity of individual themed cafés, and therefore it might be a challenge for it to maintain its existing consumer base, it informed shareholders through the annual document.

On economic risk, the firm that owns several subsidiaries including cafe chain Coffee Day, said sluggish growth of the economy impacted the spending power and subsequently reduced coffee consumption. Overall macroeconomic instability resulted in a lower demand and thus fluctuations in the economic scenario possessed a major risk to the business of the company.

On climatic risk, it wrote, bad monsoon might result in lower production of coffee leading to soaring high coffee prices. However, passing it to the customers would incur menu costs and loss in the price sensitive segment of the consumer base, indicating a fall in revenues and profit.

Coffee Day Enterprises, as on 31 March, 2025, had a total loan of ₹ 1,125 crore which consisted of long-term borrowings of ₹201 crore and short-term borrowing of ₹ 925 crore while its net debt stood at ₹ 836 crore.

Its current liabilities (excluding current borrowings of ₹ 925 crores) stood at ₹ 659 crores, comprising of lease liabilities of ₹51 crore, other financial liabilities of ₹348 crores, trade payables of ₹ 60 crores, other current liabilities ₹25 crores, current tax liabilities ₹ 142 crores and others.

The Company’s total assets decreased to ₹4,939 crores in 2024-25 from ₹5,104 crores in FY 2023- 24, representing a decrease of 3%. This decrease in total assets is mainly on account of remeasurement deferred tax balances using the revised tax rate of ₹ 132 crore, it said. FY25 also witnessed a networth erosion of at 6% to ₹ 2,946 crores, compared to ₹ 3,130 Crore in the previous year. Its reserves and surplus stood at ₹2,379 Crores as at 31 March, 2025.