Livpure’s scale dwindles in FY22, losses shoot up 2.5X

Gurugram-based Water purifiers and air conditioners manufacturer Livpure delivered the worst possible combination in its results for Fy 22.  The firm shrank 26% during FY22, even as losses for the 12-year-old company also jumped over two- folds in the last reported fiscal year.

Livpure’s operating revenue plunged 26% to Rs 217.4 crore in FY22 from Rs 293.6 crore in FY21, according to its consolidated financial statements filed with the Registrar of Companies.

Livpure is a consumer retail brand known for its water purifiers and air conditioners. Its portfolio also includes water purifiers on subscription, mattresses and sleep accessories, and smart home solutions.

Water purifiers, its original business remained the key revenue driver for Livpure, and accounted for 86.9% of the total collection. Income for this vertical, however, shrank 20.2% to Rs 188.9 crore in FY22. Revenue from air conditioners and coolers also weakened by 45% to Rs 28.28 crore in FY22.

The company also has an interest income (non-operating) of Rs 12 crore during FY22.

On the expenses side, the cost of procurement formed 43.5% of the overall spending. With the slowing down of scale, this cost declined 29.5% to Rs 119 crore in FY22. Employee benefit cost for Livpure remained flat at Rs 54 crore in FY22.

The advertisement and marketing cost surged 28.6% to Rs 27 crore in FY22, while freight and traveling jointly rose 22.6% to Rs 12 crore in FY22.

Livpure incurred another Rs 19.3 crore against rebate and service charges, pushing the overall cost to Rs 273.8 crore in FY22.

As the scale contracted during FY22, losses for Livpure swelled 2.54X to Rs 44.1 crore in FY22 from Rs 17.3 crore in FY21. Its EBITDA margin also worsened to -13.93% in FY22. On a unit level, Livpure spent Rs 1.26 to earn a unit of operating revenue.

FY22 seems to have been a classic case of diversifications going awry for Livpure. A firm that was getting somewhere good with its water business ventured into newer areas, and by all indications, that has botched up the core business too. Whether the diversifications were driven by stagnation in the water purifiers business or a push to grow faster, Livpure has clearly come a cropper either way. The Air-conditioners category is  as seasonal and competitive as it comes among consumer durables, so Livpure will certainly not find it easy to find its feet anytime soon. It will need to be careful it doesn;t slip up completely in the purifiers business in doing so.