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.