While several Indian startups are slowly looking to turn in a profit, a prominent name has just slipped into losses.
boAt has reported its first-ever annual loss. boAt reported a loss of Rs. 129 crore in FY23, compared to a profit of Rs. 69 crore in FY22. This is the first time in boAt’s eight-year history that it’s reported a loss.
Interestingly, boAt reported its highest-ever revenue this year, with a revenue of Rs. 3,377 crore. But the pace of its revenue growth was a mere 18 percent year-over-year, compared to the 133 percent average revenue growth it had enjoyed over the last three years. boAt sold wearables worth Rs 902 crore during FY23, but growth in audio and electronic accessories was just 3 percent. In comparison, boAt reported a 75 percent year-on-year growth in smartwatch and other wearables.
But boAt was forced to spend large sums of money on things other than its products — it spent Rs. 521 crore on discounts, and Rs. 469 crore on product returns. boAt was also forced to spend another Rs. 140 crore on servicing its warranty claims. These additional costs caused the company to end up slipping into losses.
boAt has had a mixed year. The company became the world’s second largest seller of wearables behind only Apple, but had to abort its IPO bid as the markets turned. Meanwhile, its co-founder Aman Gupta appeared on the hit TV show Shark Tank, which not only raised his personal profile, but also provided plenty of free publicity to the company.
But as far as hard numbers are concerned, boAt has reported its first-ever loss. This wouldn’t come as good news for the company, which is reportedly looking again attempt to go public — slowing revenue growth and losses might not necessarily be enthusiastically received by the stock markets. And boAt’s latest results show that being profitable isn’t a given, even for companies that have reported 8 years of profits — it doesn’t take long for a company to slip into the red.