Myntra’s FY24 turnaround: From massive loss to Rs 31 Cr profit

Myntra, a fashion e-commerce platform owned by Flipkart, reported a profit of Rs 30.9 crore in the fiscal year ending March 2024, marking a significant turnaround from a loss of Rs 782.4 crore in FY23. The company achieved this recovery through increased revenue and cost optimization, particularly in advertising and material costs.

Myntra’s revenue from operations grew by 14.71% to Rs 5,121.8 crore in FY24 from Rs 4,465 crore in FY23, according to its consolidated financial statement sourced from the Registrar of companies (RoC).

The company derives its revenue primarily from logistics, marketplace, and advertising services. Revenue from logistics services accounted for 47.6% of the operating revenue, which spiked 22.5% to Rs 2,439 crore in FY24. Revenue from marketplace services remained stable with Rs 1,774.6 crore, while income from advertising surged 33.07% to Rs 712.3 crore. Myntra also generated Rs 195.9 crore from other income sources.

The firm made Rs 51 crore from non operating revenue, majorly from royalty income which pushed its total revenue to Rs 5,173 crore in FY24.

The cost of materials, its largest expense, decreased by 7.82% to Rs 1,996.4 crore, while advertising costs shrank by 4.63% to Rs 1,677.4 crore. However, employee benefit expenses rose by 7.74% to Rs 800 crore. Other overheads such as finance cost, information technology (IT) expense added another Rs 650 crore in the last fiscal year.

Myntra managed to reduce its total costs by 3.16% to Rs 5,123 crore in the fiscal year ending March 2024, from Rs 5,290 crore in FY23.

The optimization of expenses and growth in high-margin revenue streams enabled Myntra to turn profitable. The company recorded profit of Rs 31 crore in FY24 from loss of Rs 782 crore in FY23. Its ROCE and EBITDA margin improved to 11.07% and 2.76%, respectively.

In March, Myntra had disclosed that it turned EBITDA profitable in the last two quarters of calendar year 2023.

On a unit basis, the company spent Rs 1.00 to earn a rupee during the fiscal year. The Bengaluru based firm recorded cash and bank balances of Rs 37 crore while its current assets were worth Rs 4384 crore in FY24.

Led by Nandita Sinha, Myntra has entered the quick commerce space with the introduction of its new feature, M-Now. This service promises to deliver fashion and beauty products to users within just 30 minutes.

While somewhat expected, Myntra’s entry into profitable territory is a big event nevertheless, considering the long  road it has undertaken.  That it would take 16 years is something not many would have expected. Along the way, the firm has picked some valuable and expensive lessons that should hold it in good stead going ahead. That the biggest disruption in the market in recent times has come from Zudio, an offline venture should give an indicator of just how unpredictable the market has been. Now that it has demonstrated it can deliver profits, the question is, will Myntra still go all out for growth or seek to temper it to stay profitable? We believe it will be the former, while keeping a leash on costs that can spin out of control, like advertising.