Accel-backed construction materials marketplace unicorn Infra.Market has reported a nearly six-fold jump in its net profit for FY22 (2021-22), thanks to strong growth in its revenue for the year.
Infra.Market reported a net profit of Rs 186 crore in FY22, against Rs 36 crore in FY21 (2020-21), the company said in a statement on October 13. During the year, revenue jumped five-fold to Rs 6,236 crore from Rs 1,242 crore a year earlier, the company said.
The company's operating profit also grew six-fold to Rs 410 crore for FY22 from Rs 69 crore a year earlier, the company said. Infra.Market's EBITDA (earnings before interest, tax, depreciation and amortisation) margin grew to 6.6 percent in FY22 from 5.5 percent a year earlier.
Infra.Market said it scaled its businesses across product categories and geographies during the year. It claimed to be currently present across 20 states in India and said that it recently set up its global offices in Singapore and Dubai.
The strong growth in profit comes at a time when investors have raised concerns over profitability for startups. Moneycontrol had reported how little more than a fifth of India's unicorns are profitable.
Infra.Market's closest competitor Zetwerk had recently reported an operating loss of Rs 42 crore in FY22 on account of a rise in non-cash employee stock option plan (ESOP) expenses as against a loss of Rs 43 crore in the previous year.
“Our results speak for themselves, growth coupled with profitability is the need of the hour and something we have always believed in, but most importantly, the need to build business models with deep fundamentals which can withstand cycles and funding winters," said Souvik Sengupta, Co-Founder, Infra.Market.
"We are proud to say that we, as a team, have built a business which is extremely capital efficient and robust and will withstand the test of time. Our growth is further aided by the economic push for infrastructure growth by the government and the renewed focus to make India a manufacturing hub for the world,” Sengupta added.
Infra.Market said that it has large private-labelled brands in concrete, walling products, chemicals, paint, electricals, and tiles. Private labelled brands constitute almost 60 percent of the overall revenue from the sale of construction material products, the company said.
During the year, Infra.Market also bought two companies to strengthen its private-labelled play. It bought a concrete manufacturing company, RDC Concrete, from Truenorth for Rs 700 crore, which propelled Infra.Market as a group to become one of the largest suppliers of concrete in India, the company said.
Infra.Market also bought a strategic stake in listed entity Shalimar Paints, making forays into industrial and decorative paints.
Infra.Market had also started retail business in 2020, which represents 10 percent of the overall revenue of the company. It claimed that the retail business was able to clock 5x growth during FY22, however, the retail venture is yet to turn profitable on a standalone basis. It turned EBITDA positive in FY22, the company said.
During FY22, the company also ventured into a new business vertical focusing on creating a platform for speciality chemicals under the brand Chemical.Market, it said.
"We have also gone beyond B2B, focused on retail and B2C opportunities and built our own private labelled brands to ensure we are not subject to only distribution opportunities. The launch of private labels has helped us grow our margins and differentiates us from other platforms," said Aaditya Sharda, Co-Founder, Infra.Market.
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