Grofers' FY18 revenue stands at Rs 53.4 Cr against tall claim of Rs 100 Cr

Update: The company has reached out to clarify that the revenue posted in the filings is only the commission income, and not the overall revenue earned via sale of goods over the platform (GMV).

Amidst a multifaceted war in the grocery delivery segment, Grofers has released its financials for the last fiscal FY18.

As per the company’s RoC filings with Ministry of Corporate Affairs, the revenue earned in FY18 was Rs 53.47 crore, 57.7 per cent up from Rs 33.92 crore in FY17.

Out of this, however, the basic sale of products earned by the company was only 55.8 per cent - Rs 29.83 crore. Not surprising (factoring the well-established trend across funded startups) but notable earning - about 39.5 per cent, Rs 21.12 crore, was contributed by the sale of mutual funds.

Total other income stood at Rs 23.64 crore.

Still, these figures are an improvement as the basic turnover took a 2.25X jump from Rs 13.23 crore, and the share in revenue increased from being 39 per cent to the aforementioned 55.8 per cent.

Simultaneously, the share of other income in the total decreased from 61 per cent to 44.2 per cent. This is a positive sign as it indicates that the company’s basic operations are also becoming the major source of its income.

The company was also able to control its losses by a mere 3.7 per cent from Rs 268.33 crore in FY17 to Rs 258.3 crore in FY18.

Apart from the growth in revenue, another factor behind this minor Rs 10 crore subtraction in losses is the bare minimum of 3.2 per cent increase in expenses from Rs 302.25 crore to Rs 311.77 crore in FY18.

During the fiscal year, the company saw a 17.2 per cent decrease in employee benefits expense from Rs 142.43 crore to Rs 117.9 crore. Meanwhile, the advertisement, promotional and discount altogether increased by 14.4 per cent to Rs 74.18 crore.

By optimising its team and scaling up its marketing and discount, the company might have achieved an efficient growth in FY18. There still, however, remains a huge gap in the amount spent and the amount earned. 

The company’s FY18 income wasn’t even able to cover the single expense of advertisement which stood at Rs 54.63 crore. To earn a rupee in the fiscal, the company spent Rs 5.8.

Even though it is on the path towards unit economics, there is a huge gap that still needs to be covered.

The company in FY18 was still healing from the massive pivot from 90 minute delivery to next day delivery model in 2017, when it onboarded a new service of last mile delivery in April 2018.

In July realizing the inefficiency of fruits and vegetable delivery Grofers pulled a plug on it in several cities.

Meanwhile, the bizarre projections that the company had made regarding revenues in FY19 seem highly unlikely looking at the figures in FY18 financial.

Albinder Dhindsa, CEO of Grofers, told ET in August that the company has a monthly revenue run rate of Rs 150 crore, and expects to earn Rs 2,500 crore in FY19 counting on its loyalty programme Smart Bachat Club.

But isn’t it an unimaginable scenario where a company goes from earning Rs 54 crore in a year to Rs 150 crore in a month? Can group buying and loyalty programmes bring that dramatic a change?

Not to forget, Dhindsa in another conversation with Financial Express, had claimed a Rs 100 crore worth revenue in FY18, and in yet another article with Mint claimed to have a consolidated revenue of Rs 700 crore.