Construction goods and services platform Infra.Market continues to deliver numbers that will keep its investors smiling. Its scale has grown 17X as compared to FY20 and surpassed the Rs 6,200 crore mark in FY22 while its profits ballooned 21X during the same period.
Infra.Market’s revenue from operation surged 5X to Rs 6,236 crore during FY22 as compared to Rs 1,240 crore in FY21, as per its annual financial statement with the Registrar of Companies (RoC).
Infra.Market sells construction material, infrastructure goods and technical equipment which accounted for over 96% of its total operating revenue. Collections from these verticals grew nearly 5X to Rs 6,002 crore in FY22 from Rs 1,219 crore in FY21.
Apart from sale of construction goods, Infra.Market also provides contractual services of labor, technical consultants and project managers for infrastructure projects. Its collection from these services ballooned 10.9X to Rs 232.5 crore in FY22 from Rs 21.3 crore in FY21.
The company also booked a non-operating revenue of Rs 48.86 crore which drove its total income to Rs 6,285 crore during the last fiscal year.
On the expense side, spendings on the procurement of construction material, equipment and other related stock in trade formed over 90% of the total expenditure. These costs ballooned 5X to Rs 5,467 crore during the last fiscal from Rs 1,091 crore in FY21.
Infra.Market has managed to grow its scale of operations significantly during the last few years and expanded its employee base to harness growth. Correspondingly, its employee benefit expenses jumped 3.7X to Rs 140.4 crore in FY22 from Rs 37.5 crore in FY21. Significantly, this cost includes employee share based payment (settled in cash) of Rs 30.35 crore.
During FY22, the company also incurred finance costs, freight cost and legal – professional fees of Rs 137 crore, Rs 57 crore and Rs 20.3 crore which surged 6.4X, 7.7X and 4.3X respectively during the last fiscal year.
Akin to its scale, Infra.Market’s annual expenditure shot up 5X to Rs 6,058 crore in FY22 as compared to Rs 1,207 crore in FY21. However, the growth in scale helped Infra.Market to achieve a six fold surge in profits to Rs 186 crore in FY22 against Rs 31 crore in FY21.
Its cash outflows from operating activities blew 4.1X to Rs 1,614 crore during FY22 from Rs 391 crore in FY21. Coming to ratios, the EBITDA margin and ROCE improved by 121 and 394 BPS to 6.33% and 11.49% respectively in FY22. Expense to operating revenue ratio (unit economics) of the Mumbai-based company remained flat to Rs 0.97.
Infra.Market competes with OfBusiness which recorded an over 4X surge in scale to Rs 7,270 crore with a profit of Rs 201 crore in FY22. It also competes with Zetwerk which missed to touch Rs 5,000 crore revenue mark with a small margin in FY22 while the company remained in losses.
The close similarity in margins between the firms indicates the limited scope for breakout innovations in the sector. However, unlike OfBusiness, which, besides a focus on smaller firms also has a separate financing sister firm Oxyzo, Infra.Market still has the financing opportunity to tap, which it has avoided till now with its focus on large infra projects. By their very nature, these project vendors do have their own financing in place. It remains to be seen if Infra.Markets jumps in with a finance play here soon, as its track record should ensure backers will certainly be more than willing to get behind it.