The financial year 2019 was a roller coaster ride for Infibeam Avenues. The public firm saw the erosion of its two-thirds market cap after a WhatsApp message raised concern over corporate governance.
It also faced questions from an auditor who the firm later fired. Nevertheless, Infibeam financial performance in FY19 is no less than an unsolved case study for analysts, media, and observers of the Indian e-commerce market.
Despite all, India’s first listed e-commerce company had recorded a net profit of Rs 26.6 crore during Q3 2019.
For entire FY19, it has registered Rs 1,159.07 crore in annual total revenue and Rs 126.31 crore in annual profit after tax or net profit.
This is an increase of 38.1% in revenue while net profit saw a jump of 43.3% as compared to FY18. In the financial year 2018, the revenue and net profit stood at Rs 839.32 crore and Rs 88.14 crore respectively.
According to an ET report, Infibeam will continue to focus on its core web services and scale through a transaction-based revenue model.
In the span of 24 months, Infibeam’s digital transaction grew by 4X to Rs 49,500 crore in value and merchant base also grew by 8X to over 8,00,000. This growth also included Infibeam’s business in the Middle East where it provides digital solutions to some of the major retail brands like Saudi Telecom, Jumbo Electronics, Axiom Telecom, and others.
Meanwhile, Infibeam’s auditor SRBC & Co. LLP had raised alarm over advance payment made to vendors and how it recognises revenue. The auditing arm of EY questioned over the absence of documentation for recognising Rs 32.01 crore revenue in December quarter. According to them, about Rs, 24 crores out of the reported revenue belonged to the first and second quarter.
Apart from the aforementioned concern, the auditor had also asked the management to conduct an independent investigation merger and acquisition and other financial statement related matters materialised in Q1 FY19.