After a flat growth in FY21, omnichannel eyewear retailer Lenskart has delivered 66% growth in its operating revenue during the last fiscal year. However, the growth extracted a cost as the company slipped into losses in the fiscal year ending March 2022.
Lenskart’s operating income surged 66% to Rs 1,503 crore in FY22, according to its annual financial statement filed with the Registrar of Companies (RoC).
The sale of eyewear products was the main source of income which contributed around 94.3% of the total operating revenue. Collection from this vertical surged 65.8% to Rs 1,418 crore in FY22 whereas income from subscription fees grew 14% to Rs 49 crore. Revenue from lease, website license fees, scrap, and customer support fees collectively stood at Rs 36 crore in FY22.
Lenskart also made Rs 115 crore from interest on fixed deposits and gain on its investments which pushed its total revenue to Rs 1,618 crore in FY22.
On the expenditure front, the cost of procurement emerged as the largest cost center and formed 37% of the overall cost which soared 88% to Rs 635 crore in FY22. Commission paid to selling agents increased 64% to Rs 305 crore.
Meanwhile, employee benefits increased by 53% to Rs 245 crore in FY22 while marketing and promotion expenses also surged 71.5% to Rs 235 crore in FY22.
Tele postage and IT cost for the company spiked 50% and 77.3% respectively to Rs 42 crore and Rs 39 crore in FY22 which pushed Lenskart’s total expenses to the tune of Rs 1,726 crore in FY22. Its expenses grew by 72.8% in FY22.
With a surge of over 72% in the total cost, the Piyush Bansal-led company recorded a loss of Rs 102 crore in FY22. Lenskart had made a Rs 29 crore profit in the previous fiscal year (FY21).
As the company’s expenses ballooned, its cash outflow from operations increased by 56% to Rs 183 crore in FY22. On a unit level, Lenskart spent Rs 1.15 to earn a single unit of operating income.
While a simple reading will indicate a jump in costs driven by higher procurement costs as a key reason for the losses making an entry on the books, the firm’s expansion into tier 3 and 4 cities, a key part of it’s growth strategy would have also added to costs, and will continue to do so in FY23 too. That might mean a return to profitability only early in FY24, perhaps just in time for an IPO, market conditions permitting.
