Snapdeal Records INR 388 Crore Revenue in FY23; Reduces Losses by 45%
Three points you will get to know in this article:
- Snapdeal cut FY23 losses by 45%, turning profitable in FY24.
- Emphasis on raising gross margins and leveraging analytics enhanced operational efficiency.
- Snapdeal’s subsidiaries, Unicommerce Esolutions and Stellaro Brands, displayed diverse financial performances; IPO withdrawal linked to market sentiments.
In the realm of horizontal e-commerce ventures, Snapdeal, the Gurugram-based e-commerce platform, stands out for its unwavering commitment to profitability. Notably, the company has achieved a commendable feat by reducing consolidated losses by 45%, from Rs 510 Cr in FY22 to Rs 282 Cr in FY23. Impressively, Snapdeal achieved profitability in the third quarter of the current fiscal year (FY24).
The company has effectively curtailed its Adjusted EBITDA loss by an impressive 65.6%, plummeting from Rs 419 crore in FY22 to Rs 144 crore in FY23, as highlighted in a company statement.
Snapdeal attributes its enhanced performance to a strategic focus on elevating gross margins, reaching 35.5% of revenue in FY 2022‐23, a significant increase from 31.8% of revenue in FY 2021‐22 on a standalone basis, as emphasized in its official statement.
Impact of Analytics in Marketing And Revenue and Operational Efficiency
According to the company’s insights, a heightened integration of analytics in marketing has notably enhanced the effectiveness of marketing expenditures. On a standalone basis, marketing and business promotion now account for only 31.3% of revenue in FY 2022‐23, a substantial decrease from the 66.6% reported in FY 2021-22. Concurrently, the company’s overall revenue experienced a 31% decline, falling from Rs 563 crore in FY22 to Rs 388 crore in FY23. This contraction can be attributed to the strategic implementation of various measures aimed at curbing losses and optimizing operational efficiency.
Although specific figures for FY24 were not disclosed by the company, its primary focus lies in achieving a break-even point and enhancing overall profitability. Notably, the ongoing October-December quarter reflects profitability on a consolidated basis.
Performance of Subsidiaries
AceVector Limited, formerly known as Snapdeal, boasts two additional subsidiaries: Unicommerce Esolutions and Stellaro Brands. In the preceding fiscal year (FY23), Unicommerce reported a noteworthy revenue of Rs 90 crore, accompanied by a profit after tax amounting to Rs 6.45 crore. Meanwhile, Stellaro Brands, the company’s other subsidiary, generated a revenue of Rs 2.4 crore, offset by a loss of Rs 6.96 crore during the fiscal year concluding in March 2023.
Strategic Filing of Initial Public Offering (IPO)
Snapdeal initiated the filing of its Initial Public Offering with the Securities Exchange Board of India in December 2021. However, in response to subdued public market sentiments, the company made the decision to withdraw its $152 million IPO.
Snapdeal, a Gurugram-based e-commerce platform, showcased remarkable financial resilience by reducing consolidated losses by 45% in FY23. Notably, it achieved profitability in FY24 and significantly lowered its Adjusted EBITDA loss. Emphasizing on elevating gross margins and leveraging analytics in marketing, Snapdeal reduced marketing expenses while experiencing declining overall revenue. The company’s core focus is on achieving a break-even point and bolstering profitability. Despite market challenges, it continues to pursue growth. Snapdeal’s subsidiaries, Unicommerce and Stellaro Brands, also exhibited varying financial performances. Although its IPO filing was withdrawn due to market sentiments, Snapdeal remains dedicated to its trajectory of sustainable profitability.
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