Tractor Junction’s Remarkable 3X Growth in FY23, Records INR 7.5 Cr Losses

In the preceding fiscal year (FY23), Tractor Junction, a rural vehicle marketplace, witnessed a remarkable surge in its scale, nearly tripling its size. However, this rapid expansion came with a downside as the five-year-old enterprise found itself in the red during this period.

According to the company’s consolidated annual financial statement filed with the Registrar of Companies, Tractor Junction experienced a substantial growth in revenue from operations, soaring by 196.2% to Rs 26.84 crore by the fiscal year ending March 2023, compared to Rs 9.06 crore in FY22.

In the preceding fiscal year (FY23), Tractor Junction, a rural vehicle marketplace, witnessed a remarkable surge in its scale, nearly tripling its size. However, this rapid expansion came with a downside as the five-year-old enterprise found itself in the red during this period.

According to the company’s consolidated annual financial statement filed with the Registrar of Companies, Tractor Junction experienced a substantial growth in revenue from operations, soaring by 196.2% to Rs 26.84 crore by the fiscal year ending March 2023, compared to Rs 9.06 crore in FY22.

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Tractor Junction saw a significant boost in its finances, securing a handsome sum of Rs 1.75 crore through interest and gains on financial assets, which contributed to its overall income reaching Rs 28.6 crore in the fiscal year FY23. Notably, the company, headquartered in Alwar, allocated a substantial portion of its resources towards material costs, constituting 42% of its total expenses. This expenditure surged dramatically, skyrocketing over 20 times from Rs 71 lakh in FY22 to a staggering Rs 14.54 crore in FY23.

Additionally, there was a remarkable uptick in employee benefits, which more than doubled to Rs 9.35 crore in the past fiscal year. Furthermore, expenditures on advertising and publicity also saw a notable increase, rising by 56.1% to Rs 3.81 crore during FY23, compared to Rs 2.44 crore in FY22.

The company’s spending witnessed a substantial escalation, expanding more than fourfold to Rs 34.67 crore in FY23 from Rs 8.28 crore in FY22. This reflects a concerted effort to invest in growth and development, underlining Tractor Junction’s commitment to advancing its operations and market presence.

Amidst soaring expenses, the company found itself in the red. Tractor Junction faced a loss of Rs 7.46 crore in the financial year 2023, a stark contrast to the Rs 67 lakh profit it enjoyed in FY22. The repercussions of this financial downturn are evident in the surge of operating cash outflows, reaching approximately Rs 17 crore in the previous fiscal year.

In the fiscal year FY23, the firm’s EBITDA margin and ROCE were at -19-41% and -15-36%, respectively. Looking closely at the unit level, Tractor Junction invested Rs 1.29 to generate a single rupee of operating revenue throughout the year.

Tractor Junction experienced unprecedented growth, tripling its scale and achieving a substantial 196.2% rise in revenue to Rs 26.84 crore, predominantly driven by tractor sales and service offerings. However, a surge in expenses, including substantial material costs, employee benefits, and increased advertising expenditure, resulted in a significant financial loss of Rs 7.46 crore. Despite efforts to invest in growth and development, the company’s operating cash outflows reached approximately Rs 17 crore, leading to negative EBITDA margin and ROCE, signaling the need for strategic financial re-evaluation and cost management in the upcoming fiscal year.