Razorpay demonstrated significant growth in the last two fiscal years, rising 2.7X from Rs 841 crore in FY21 to Rs 2,279 crore in FY23. Despite the growth, the bottom line of the company remained stagnant in FY23.
Razorpay’s revenue from operations increased 53.88% to Rs 2,279 crore in FY23 from Rs 1,4812 crore in FY22, its consolidated financial statements sourced from the Registrar of Companies show.
Razorpay collaborates directly with banks and payment card networks, alleviating its merchants from the burden of handling the intricate systems, regulations, and prerequisites of the payment industry.
The fees paid by merchants for making the transactions are the primary source of revenue for Razorpay. The company also earned Rs 14 crore from interest and gain on financial assets (non-operating) which tallied its total income to Rs 2,293 crore in FY23.
Expense Breakdown
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- Employee benefit
- Advertising promotional
- Legal professional
- Finance costs
- Hosting and banking partners and others
Its employee benefits emerged as the largest cost center forming 28% of the overall expenditure. This cost rose 71% to Rs 638 crore in FY23 from Rs 373 crore in FY22. This includes Rs 65 crore as ESOP costs which were settled in equity (non-cash).
Its banking partners channel, server, advertising cum promotional, legal, finance and other overheads took the total expenditure up by 54.67% to Rs 2283 crore in FY23 from Rs 1476 crore in FY22.
The substantial increase in employee benefits resulted in the company’s profits stabilizing at Rs 7.2 crore in FY23 which stood at Rs Rs 7.3 crore in FY22. Its ROCE and EBITDA registered at 2% and 2.5% respectively. On a unit level, it spent Re 1 to earn a rupee in FY23.
FY22-FY23
| FY22 | FY23 |
| EBITDA Margin | 3% | 2.5% |
| Expense/₹ of Op Revenue | ₹1 | ₹1 |
| ROCE | 3% | 2% |
The company has raised over $800 million across rounds and was valued at around $7 billion in its last round. It competes with Cashfree which posted a revenue of Rs 614 crore in FY23, and PayU which reported a scale of $400 million in the previous fiscal (FY23).
The coming months are going to be crucial for the payment gateway and neo-banking platform. In December 2023, Razorpay along with a few other companies received the final payment aggregator (PA) license. This finally enables the company to move their business forward by onboarding new customers.
Moreover, the company recently announced that it has achieved an annualized total payment volume (TPV) of $150 billion.
“Over the last year, the brand witnessed significant growth via industry-first innovations, strategic acquisitions, and expansion of its footprint in the Southeast Asia region,” the company said in a press release.
Also, Razorpay is in the process of moving its domicile to India. According to co-founder and chief executive officer Harshil Mathur, the process is expected to conclude in the next six to 12 months. Razorpay also plans to go for an IPO after a couple of years.
