Slice revenue jumps 4X in FY20, curtails losses by 81%

Slice Pay, a payment and credit startup for youngsters, rebranded itself as Slice last year and had a turnaround in terms of collections in the fifth year after its incorporation in 2015. Revenue from operations quadrupled to Rs 29.88 crore in FY20 from Rs 7.41 crore in FY19. 

Income from handling fees accounted for 71.3% of the total income, growing 3.6X to Rs 24.12 crore in FY20. During the same period, commission income shot up 7.3X to Rs 5.36 crore making up 17% of the total income in FY20 as opposed to 9.6% in FY19.

Slice works with its subsidiary Quadrillion Finance Private limited, an NBFC which finances the credit lines the company provides through its cards. The subsidiary recorded Rs 11.82 crore in revenues and posted a profit of Rs 89.2 lakh for the fiscal ended in March 2020.

Slice invested Rs 22.8 crore in this subsidiary and advanced a loan of Rs 10.75 crore during FY20.

Moving over to the expense sheet, costs related to employee benefits stood out as the biggest cost factor for the company accounting for 54.6% of the total expenses during FY20. Such costs grew 2.2X to Rs 19.5 crore in FY20 from Rs 8.75 crore in FY19.

Business promotion and advertising expenditure grew 2.5X to Rs 1.95 crore in FY20 from Rs 78.2 lakh spent on the same in FY19. Another Rs 3.93 crore was spent on payment processing and IT expenses, growing 55.3% during FY20.

Interestingly, printing and stationery costs shot up 33.4X to Rs 2.2 crore during FY20 from only Rs 6.6 lakh spent in FY19. Similarly, credit support fee paid to its subsidiary also ballooned 16.6X to Rs 1.54 crore in FY20.

Total expenditure incurred by Slice grew by 96.7% to Rs 35.72 crore during FY20 and it spent Rs 1.195 to earn a single rupee of revenue as compared to Rs 2.45 spent on the same in FY19.

With the increased scale of operations, Slice improved its profits on account of higher operational efficiency and utilization of assets. Slice has curtailed its losses by more than 81% to Rs 1.87 crore in FY20 and is quite close to recording an EBITDA breakeven. EBITDA margins have improved drastically from -115.11% in FY19 to only -0.91% in FY20.

Importantly the company has achieved cash-flow positive as net cash from operations has improved from a negative flow of 13.24 crore in FY19 to cash inflows of Rs 4.62 crore during FY20.

Slice is focused on building financial products for millennials and Gen Z in the country. Just recently, the company launched a Visa card with its pay later app to cater to the credit needs of Indian youngsters.