Lenskart’s FY21 revenue growth stalls, profit soars 4.6X

Omnichannel eyewear retailer Lenskart has come out relatively unscathed from the pandemic. Even as revenue growth stalled, the unicorn ensured profits grew over FY2020. Let's take a look at how 2021 played out for the firm.

During the fiscal marred by disturbances, Lenskart’s operating revenues remained flat at Rs 905.3 crore in FY21, registering less than 1% growth as compared to Rs 900.2 crore earned in FY20.

The sale of products via multiple retail channels including physical outlets and online stores is the largest revenue vertical for the company, generating 94.5% of the revenues. These collections remained relatively flat at Rs 855.7 crore during FY21 as compared to sales of Rs 851.2 crore in FY20, its annual financial statements filed with RoC show.

Recurring revenue generated from the collection of subscription fees from its “Lenskart Gold Membership” program made up 4.6% of the company’s operating revenue. Such revenue grew by around 11% to Rs 41.24 crore during FY21 from Rs 37.2 crore in FY20. 

Lenskart earned another Rs 8.4 crore from the provision of ancillary services including eye check et al in FY21.

The 12-year-old venture also generated nearly Rs 127 crore in non-operating revenue from its financial assets, registering an 83.5% growth during the last fiscal (FY21) as compared to Rs 69.2 crore generated in FY20.

When it comes to expenses, the consumption of raw materials and spares used for the production of eyewear products is the largest cost centre of the company, accounting for 34% of the annual costs. Due to stagnated demand, these costs were reduced by 6.7% to Rs 338.8 crore during FY21 from Rs 363 crore in FY20.

Lenskart also purchases finished products to be sold on its platform and these purchases dropped by 24% to Rs 68.6 crore during FY21 from Rs 90.3 crore in FY20. Around 88% of these purchases were made from its Chinese joint venture Bao Feng Framekart Limited. 

Lenskart claims to have over 700 franchise stores and commission paid to these sellers and online marketplace fees is the second largest expense incurred by the company, making up 21.7% of annual costs. Such payments grew marginally by 6.4% to Rs 216.73 crore in FY21 from Rs 203.74 crore in FY20.

Employee benefit payments remained unchanged, amounting to Rs 176 crore i.e. 17.6% of the annual costs incurred during FY21. These payments also included share-based payments of nearly Rs 4 crore. 

Expenditure on advertising and promotion actually went up by around 23% to Rs 136.52 crore during FY21 as opposed to Rs 111.1 crore incurred during FY20.

Freight and travellings costs of Rs 22.2 crore pushed total expenses to Rs 998.8 crore during FY21, just  3.7% higher than the Rs 963.1 crore in FY20. On a unit level, Lesnkart spent Rs 1.1 to earn a single rupee of operating revenue during FY21.

Even with flat revenue during FY21, the company has managed to increase annual profits by nearly 4.6X to Rs 28.92 crore in the fiscal year as compared to Rs 6.32 crore booked during FY20. This is due to the 83.5% growth in the non-operating income generated by the company during the last fiscal. While Indian operations remained profitable, Lenskart’s venture into the Singaporean market has not reaped returns yet and the company’s lost Rs 23.5 crore there during FY21  

Even with no growth in operational scale due to the COVID restrictions, the Peyush Bansal-led company invested Rs 110.4 crore on plant and machinery to boost its production capacity. 

For founder Peyush Bansal, whose stint as a judge on Shark tank India displayed a founder clearly focused on his firm and technology innovations, in that order, a return to normalcy will surely mark a return to faster growth too.