Prozo maintains growth streak in FY24 with improved economics

Full-stack supply chain company Prozo recorded a 30% year-on-year revenue growth in the fiscal year ending March 2024. The Gurugram-based company also reduced its losses by 26% during the same period as it cut material costs by 50%.

Prozo’s revenue from operations increased to Rs 166 crore in FY24 from Rs 128 crore in FY23, as per its financial statements sourced from the RoC.

Prozo enables fast fulfillment  for businesses through its pan-India warehousing and freight network, which is powered by an end-to-end supply chain technology stack and control tower.

The company generates revenue from the sale of services and products. Revenue from services saw a remarkable surge of 181.4% to Rs 121 crore in FY24, solidifying its position as the primary income stream. However, revenue from product sales declined by 47% to Rs 45 crore in FY24.

On the expense side, the company optimized material costs, which fell by 50% to Rs 37 crore. However, transportation costs surged 209.1% to Rs 34 crore, and employee benefits expenses increased by 12.9% to Rs 35 crore. Other overhead costs, including technology and operational expenses added another Rs 81.5 crore. In the end, Prozo's total expenses rose by 22% to Rs 187.5 crore in FY24 from Rs 154 crore in the previous fiscal year.

Due to revenue growth outpacing expense, Prozo managed to cut its losses by 26% to Rs 20 crore in FY24 from Rs 27 crore in FY23. Its ROCE and EBITDA margin improved to -19% and -7.44%, respectively.  On a unit level, the company spent Rs 1.13 to earn a rupee in FY24.

The company recorded current assets worth Rs 107 crore which includes Rs 31 crore worth cash and bank balances in FY24.

According to TheKredible, Prozo has raised a total of $18.4 million of funding till date, having Sixth Sense Ventures, Auctus Capital, and Earlsfield Capital as its lead investors. Its founder and CEO Ashvini Jakhar owns 21% of the company.

While the drop in product sales have led to a drop in material costs as well, Prozo still has work ahead to turn profitable. In a fast evolving industry with many startups, access to capital will not necessarily be the decisive advantage it would have been a few years back. That should actually be some comfort to Prozo, as it works in a market that counts players backed by giants like Amazon as well. What would help will be a major account win, even as a comfortable cash situation provides the runway to ensure a tiny delivery of profits by FY25 possibly.