SUMMARY
- Logistics startup Ecom Express successfully cut its annual net loss by 67% YoY in FY24, dropping to Rs 255.8 crore compared to Rs 428.1 crore in FY23.
- The total income rose by 3% to Rs 2,652.8 crore in the fiscal year ended March 2024 from Rs 2,575.5 crore in the fiscal year before.
- The total costs rose by a slight increase of 0.65% to reach Rs 2,921.5 crore in FY24, compared to the total expenses of Rs 2,902.8 crore in FY23.
Logistics startup Ecom Express, which recently filed its DRHP for IPO, successfully cut its annual net loss by 67% YoY in FY24. Its total loss dropped to Rs 255.8 crore compared to Rs 428.1 crore in FY23.
Specifically, Ecom Express’ losses from ongoing operations decreased to Rs 248.5 crore in FY24, a significant drop from the Rs 359.8 crore recorded in FY23. On the other hand, its losses from discontinued operations fell to Rs 7.4 crore in the fiscal year under review from the previous fiscal year’s figure of Rs 68.3 crore.
The term ‘loss from discontinued operations’ is related to the losses incurred from Paperfly Private Limited, a partially-owned subsidiary of Ecom Express in Bangladesh. Ecom Express announced its decision to withdraw from its investment in Paperfly during the fiscal year ended March 2023.
On July 7, 2024, the holding company finalized a Shareholder Agreement for Shareholder Acquisition, effectively selling its entire stake in Paperfly Private Limited under Form 117 – Instrument of transfer of shares for a total consideration of Rs 11.44 million, which was received on July 16, 2024.
In the DRHP, Ecom Express mentioned that it plans to keep investing in its operations, which could result in it continuing to operate at a loss in the coming years.
The firm has disclosed that future periods might see ongoing losses and negative cash flows, due to the anticipated investments aimed at expanding the business and logistics infrastructure, improving supply chain capabilities, introducing new solutions and services, growing its customer base in current markets, entering new markets, and further innovating its technological platform.
The startup has indicated that it has already allocated substantial financial and non-financial resources to technological investments, which will likely continue, encompassing data science, infrastructure, and the expansion of its team, among other projects.
The firm further added, “When we become a listed company, we will incur significant additional legal, accounting and compliance costs. These efforts may be more costly than we expect and may not result in corresponding increased revenue or growth in our business.”
At the same time, the startup’s income from operations experienced a slight increase of 2.15% to reach Rs 2,609 crore in FY24, up from Rs 2,553.9 crore in the fiscal year before, according to its draft red herring prospectus (DRHP).
Established in 2012 by TA Krishnan, Manju Dhawan, K Satyanarayana, and Sanjeev Saxena, Ecom Express is a B2C ecommerce logistics solutions provider. It earns money by serving clients in the ecommerce sector, including various types of platforms such as horizontal, vertical, D2C, and quick-commerce in India.
By March 31, 2024, Ecom Express had a comprehensive network spread across 115 pickup and processing centers, 81 sorting hubs, 32 fulfillment centers, 3,421 delivery points, and 89 return locations.
Adding other sources of income, the total income rose by 3% to Rs 2,652.8 crore in the fiscal year ended March 2024 from Rs 2,575.5 crore in the fiscal year before.
The total costs rose by a slight increase of 0.65% to reach Rs 2,921.5 crore in FY24, compared to the previous fiscal year’s total expenses of Rs 2,902.8 crore.
The largest category of expenditure was the cost of services, with the company allocating Rs 1,389.9 crore for this in FY24, marking a 0.23% rise from the previous fiscal year’s expenditure of Rs 1,386.7 crore. The cost of dealing with damaged or lost shipments saw a significant increase of 9.21%, reaching Rs 92.4 crore from Rs 84.6 crore in the same period.
On the other hand, the expenses related to employee benefits decreased by 9.1% to Rs 603.3 crore in FY24 compared to Rs 664 crore in FY23.
Additionally, the company’s earnings before interest, tax, depreciation, and amortization (EBITDA) saw a remarkable increase, soaring to Rs 103.5 crore in FY24 from just Rs 3.2 crore in the previous fiscal year.
Ecom Express aims to secure Rs 2,600 crore through its public offering, which will encompass a new issuance of shares up to Rs 1,284.5 crore and a component for sale up to Rs 1,315.5 crore. Additionally, the company plans to secure Rs 256.9 crore through a pre-IPO placement prior to submitting its red herring prospectus (RHP).
