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Gameskraft Achieves Rs 3,500 Cr Income in FY24 with Rs 947 Cr PAT

Online gaming platform Gameskraft has successfully navigated through legal challenges and continued its impressive growth in FY24, posting an income of Rs 3,500 crore and a profit after tax (PAT) of Rs 947 crore. This marks a significant achievement for the Bengaluru-based company, demonstrating its robust performance amid industry hurdles.

Gameskraft, widely known for its popular gaming apps like Rummy Culture, Pocket 52, and Ludo Culture, reported a solid year-on-year revenue growth of 30%. For the fiscal year ending March 2024, the company’s revenue surged to Rs 3,475 crore, up from Rs 2,673 crore in FY23. This growth comes despite the pressures posed by the legal complexities surrounding online gaming and competition in the industry.

Revenue Growth Amid Legal Hurdles

Despite encountering various legal obstacles in the past few years, Gameskraft has managed to expand its footprint. The company’s revenue from operations, which is primarily driven by its gaming platforms, has been rising steadily. Its gross gaming revenue stems from the platform fee charged as a percentage of the buy-in fees invested by users. This remained its sole source of income throughout FY24.

Gameskraft online gaming

The company also recorded an additional Rs 46 crore in income from interest on fixed deposits and gains from the sale of current investments. This pushed the total revenue for FY24 to Rs 3,521 crore, compared to Rs 2,732 crore in the previous fiscal year. These figures underscore Gameskraft’s resilience in an increasingly competitive and regulated market.

Increasing Marketing Costs Fuel Growth Strategy

To expand its reach and increase brand awareness, Gameskraft invested heavily in advertising during FY24. The company’s advertising costs more than doubled, surging by 113% to Rs 1,315 crore from Rs 616 crore in FY23. This investment in marketing campaigns featuring prominent figures such as cricketer Harbhajan Singh, tennis player Mahesh Bhupathi, and Olympian Abhinav Bindra has helped the company build its brand presence across multiple platforms, including TV and social media.

However, the sharp rise in advertising expenditure slightly impacted the bottom line. While the company’s revenue growth was impressive, the increase in marketing costs outpaced the rise in income, leading to a 10.8% drop in profits. Gameskraft’s profit after tax (PAT) for FY24 stood at Rs 947 crore, down from Rs 1,062 crore the previous year.

Rising Operational and Employee Costs

In addition to advertising, Gameskraft’s operational costs have also seen a notable increase. Employee benefits, including stock options, grew by 23.5% to Rs 463 crore in FY24, partly due to the company’s expansion and the rise in operational scale. The Rs 12 crore cost for ESOP settlements was one of the notable expenses under employee benefits.

Meanwhile, the company’s legal, communication, web hosting, and other administrative costs jumped by a hefty 71.7%, totaling Rs 2,232 crore in FY24, compared to Rs 1,300 crore in the previous year. This increase in overhead costs, combined with the surge in marketing expenditures, resulted in a decrease in profitability, even as revenue continued to climb.

Profitability Challenges and Future Outlook

Despite the challenges posed by escalating costs, Gameskraft has managed to maintain strong profitability metrics. The company’s return on capital employed (ROCE) stood at a solid 69.4%, while its EBITDA margin was reported at 37.46%. The expense-to-earnings ratio for the fiscal year was 0.64, which indicates that the company remains relatively efficient in converting its income into profit.

With total current assets recorded at Rs 1,680 crore by the end of FY24, Gameskraft remains well-positioned to continue its growth trajectory. However, the company will need to manage its cost structures carefully moving forward, especially in light of rising advertising and operational expenses.

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