First two quarters of the year were hugely impacted by pandemic, however the growth is mainly driven by recovery in last two quarters.
One of the reasons for muted growth in Q4 iis most of the company’s customers have signed up for annual and 3- yearly subscriptions.
Only 1/3rd of the customer base is signed up for monthly subscriptions. As the second wave struck in Feb-March, monthly customer addition tapered off resulting in muted growth.
Also during the year, some of the annual customers could not survive the pandemic and had to change the business model.
Lower growth rate in supplier base (~8% growth in FY21), mainly as company has become stringent with supplier addition and every supplier has to fulfil certain criteria like OTP verified mobile number, GST number, etc.
Net Profit margin of the company was impacted due to one time charge of Rs 11 crore derecognition of deferred tax assets in its cash book.
During the quarter , company has successfully raised a QIP to the tune of Rs 1070 crore and the proceeds would be used for organic as well as inorganic growth opportunities. Company will continue to invest in companies that have synergies with company’s business model.
Total traffic grew by ~42% YoY in Q4FY21, amounting to 85 Mn visits every month
In FY21, business enquiries delivered increased to 610 Mn , registering a growth of ~31% YoY. There is a net addition of 5000 paying suppliers in FY21 as compared to FY20.
Renewal rate of subscriptions has gone down by 10% and churn rate in platinum subscription is less than 6%.
Company has reduced entry level fee which resulted in increasing the customer base. However, this also attracts several trial customers.
Huge impact on SME business in past few years due to demonetisation, GST , pandemic, etc and hence keeping pace with new customer addition in past few years has been difficult.
Since most of the companies try to complete their budgets before end of fiscal year, it has resulted in higher collections in Q4.
25% of new customer acquisition from channels from not so traditional channels.
Board of directors have recommended dividend of Rs 15 for FY21, subject to approval by shareholders.
Capital Allocation – Company aims to have a 3 fold capital allocation strategy.
Investment for organic growth by building more marketing, payments, lead management, category development, etc
Significant Minority Investments like the company undertook in Vyapaar, Legistigy, Super Procure, etc
Investments in large ticket deals.
Company has recently invested in 3 companies:
11% stake in Legistify.com for Rs. 1.3 crores. Legistify allows the companies to manage legal workflows and track legal cases around them
25% stake in TruckHall for Rs. 11 crores.It operates SuperProcure.comto managetheir supply chain and operate real time freight sourcing.
26% stake in Shipway.in for Rs 18 crores. It helps the business to automate their shipping operations through a SaaS based tool. Company has forayed into logistics through this investment.
Company did not hire anyone in the first two quarters due to uncertainty related to pandemic.
In FY 21, company reduced its employee base by ~500 employees as compared to FY20
Future growth guidance:
Company has cautiously optimistic outlook on growth in FY22. However company remains confident of being a market leader in online B2B marketplace. It expects net customer addition to the tune of 25-30k in the next few years.
Management has indicated that current EBITDA margins to the tune of ~50% are not sustainable and company expects the margins to consolidate from the current levels in FY21 to around 30-35% in FY22.
It is looking at one large investment deal and several small deals in this year.
Company hopes to grow 5-10x in upcoming 5-10 years provided how company is able to access the markets, new technologies and financing.
Management is confident of getting a first mover advantage given the data analytics and technological platform it has built in past years.
Company is focussing development of new categories as well as payment modes like UPI.
Company sees ~50% growth coming from metro cities and rest from tier1/2/3 cities.