Myntra, Flipkart’s fashion e-commerce subsidiary, has achieved an impressive feat: turning a Rs 782.4 crore loss in FY23 into a Rs 30.9 crore profit in FY24. This remarkable recovery is attributed to revenue growth, cost optimization, and a strategic pivot toward high-margin revenue streams.
Revenue Growth Across Key Verticals
Myntra’s revenue from operations climbed by 14.71%, reaching Rs 5,121.8 crore in FY24 compared to Rs 4,465 crore the previous year. The company’s earnings came from three primary streams—logistics, marketplace, and advertising services:
- Logistics Services: Contributing 47.6% of operating revenue, this vertical saw a 22.5% rise to Rs 2,439 crore.
- Marketplace Services: Revenue remained steady at Rs 1,774.6 crore, showcasing consistent performance in this segment.
- Advertising: A standout performer, advertising revenue surged 33.07% to Rs 712.3 crore, reflecting the company’s successful monetization strategies.
Additional revenue of Rs 195.9 crore from other sources and Rs 51 crore in non-operating income, largely from royalties, pushed Myntra’s total revenue to Rs 5,173 crore for FY24.
Cost Optimization: The Game-Changer
Myntra’s success story isn’t just about revenue growth—it’s also a tale of meticulous expense management.
- Material Costs: These decreased by 7.82%, settling at Rs 1,996.4 crore, marking significant savings in the company’s largest expense category.
- Advertising Expenses: Reduced by 4.63% to Rs 1,677.4 crore, reflecting a more targeted and efficient marketing approach.
- Employee Benefits: While costs rose by 7.74% to Rs 800 crore, the increase was balanced by reductions in other areas.
Other overheads, including finance costs and IT expenses, amounted to Rs 650 crore, helping Myntra reduce its total costs by 3.16% to Rs 5,123 crore in FY24.
Profitability Metrics
Myntra’s cost management and revenue growth translated into profitability:
- EBITDA Margin: Improved to 2.76%, reflecting efficient operations.
- ROCE: Jumped to 11.07%, signaling robust returns on capital employed.
- Cost-to-Revenue Ratio: The company spent Rs 1.00 to earn a rupee, highlighting its balanced approach to spending.
Innovations Fueling Growth
Under CEO Nandita Sinha, Myntra has ventured into quick commerce with its “M-Now” service, promising delivery of fashion and beauty products within 30 minutes. This innovative feature targets urban consumers seeking speed and convenience, further enhancing the brand’s market position.
Myntra’s profitability milestone coincides with the evolution of India’s retail sector, where offline disruptors like Zudio have proven to be formidable competitors. The unpredictability of the market has pushed Myntra to not only refine its strategies but also adapt to changing consumer behaviors.
Cash Reserves and Current Assets
At the end of FY24, Myntra recorded Rs 37 crore in cash and bank balances and Rs 4,384 crore in current assets. These figures highlight the company’s strong liquidity position, enabling it to invest in future growth while maintaining operational stability.
Challenges and Future Outlook
While turning profitable is a significant achievement, the road ahead poses new challenges. The key question remains: will Myntra prioritize aggressive growth or focus on sustaining profitability?
The company’s ability to maintain a delicate balance between expansion and cost control will determine its trajectory. Industry observers believe Myntra will pursue growth, especially in the burgeoning online and quick commerce sectors, but with a keen eye on controlling costs like advertising, which could spiral if unchecked.
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