Construction goods and services platform Infra.Market turned unicorn earlier this year after raising a $100 million Series C round led by Tiger Global. The Mumbai-based company has recently filed its financial results for the fiscal ending March 2021. We analyse the performance of the billion-dollar baby.
The five-year-old company generated revenues of Rs 1,243 crore during FY21, recording a 3.5X jump as compared to Rs 351 crore in FY20. Infra.Market sells construction material, infrastructure goods and technical equipment which accounts for 98% of its total earnings. It has a mandate to bring technology, design and supply chain innovations to the relatively slow world of infrastructure and construction.
The sale of goods grew 3.5X year-on-year to Rs 1,217.4 crore during FY21.
Apart from sales of construction goods, Infra.Market also provides contractual services of labour, technical consultants and project managers for infrastructure projects. This service income ballooned 21.3X YoY to Rs 25.5 crore in FY21 from only Rs 1.2 crore in FY20.
The company also generated another Rs 4.8 crore from its financial assets during the fiscal ended in March 2021.
Infra.Market didn’t bleed to grow
Expenses incurred in the procurement of construction material, equipment and other related stock in trade was the largest cost centre for the infrastructure company, making up 91% of annual costs.
These expenses grew in line with sales, increasing 3.5X to Rs 1,092.5 crore during FY21 from Rs 311.4 core spent in FY20.
The company has managed to grow its scale of operations significantly during the last two years and expanded its employee base to harness growth. As a result, employee benefit payments have grown over 2X year-on-year to Rs 37.2 crore in FY21 but still remain around 3% of the total annual cost incurred by the company.
With the growing scale of business, the finance costs of the company have also increased nearly 10X year-on-year to Rs 21.4 crore in FY21 but remain less than 2% of the annual expenditure which is remarkable for an infrastructure business.
Further, the Tiger global backed firm spent Rs 12 crore and Rs 7 crore on contractual labour and transportation of goods respectively during FY21. The firm has picked its markets carefully, with just the one office in Noida, to mark a presence in North India, and none in the East, while focusing on South and West India.
Operating revenue and profit grew hand in hand
Its aggregate annual costs have grown in line with revenues, amounting to Rs 1,202 crore during FY21 as compared to total costs of Rs 341.1 crore incurred during FY20. On a unit level, Infra.Market spent Rs 0.967 to earn a single rupee of revenue during FY21.
During the fiscal affected by the pandemic, the unicorn has managed to grow its profits over four folds to around Rs 36 crore in FY21, compared to FY20 profits of Rs 8.7 crore. Even with significant growth of scale, the efficient business practices employed by the management contributed to an improved EBITDA margin of 5.53% in FY21 as compared to the FY20 margin of 3.86%.
As per a recent report India is expected to become the third-largest construction market by 2022 and new age ventures like Infra.Market which are weeding out the middlemen is likely to grow at a quick pace.
Infra.Market’s financial numbers emphasised the fact that the growth can be hacked without burning a lot of money.
Importantly, it’s one of the rare startups to cross the Rs 1,200 crore revenue mark with only Rs 37.2 crore expense on an employee benefit.
As a firm focused on the massive and largely unorganised construction sector, the emergence and growth of firms like Infra.Market should be a welcome move for a more organised, fair sector for all players, especially the millions of workers involved.
Over 30 million in fact, and a GDP share of over 5% currently. With huge initiatives like the National Infrastructure Pipeline started, the opportunity and need for service providers like Infra.Market is bound to attract many more firms into the sector. It should be interesting to see how Infra.Market benefits from its early mover status.