boAt Reports 7% Revenue Decline in FY24, Narrowing Loss to INR 79.7 Cr

• ByStartupStory     |    November 8, 2024

boAt, the popular audio products and smartwatch maker, reported a decline in its consolidated operating revenue for the financial year 2023-24 (FY24), falling over 7% to INR 3,117.7 crore, compared to INR 3,376.8 crore in FY23. This downturn was primarily driven by a significant slump in the company’s wearables category, with sales plummeting by nearly 40% to INR 550.3 crore in FY24 from INR 910.6 crore in the previous fiscal year.

In contrast, boAt’s audio products segment, which continues to make up the lion’s share of its sales, saw a modest 5% increase in revenue, reaching INR 2,459.2 crore in FY24, up from INR 2,350.8 crore in FY23. The ‘others’ category, which includes mobile accessories such as chargers, cables, and power banks, also faced a 4% decline, with revenue dropping to INR 105.5 crore in FY24.

Despite the decline in revenue, boAt managed to reduce its losses for the year. The startup reported a 38% reduction in net loss, which stood at INR 79.7 crore in FY24, compared to INR 129.4 crore in FY23. Excluding the share of profit/loss from associates and joint ventures, the company’s loss from continuing operations amounted to INR 81.7 crore, down from INR 124.6 crore in FY23.

Founded by Aman Gupta and Sameer Mehta in 2015, boAt ventured into manufacturing its products in India in early 2022. By 2023, co-founder and chief marketing officer Gupta had claimed that 70% of boAt’s products were manufactured in India. The startup faces stiff competition in the market from global giants like JBL, Sony, Samsung, and emerging brands like Noise.

The company first reported a loss in FY23 and has now marked its second consecutive year of negative performance. According to boAt, its profitability was impacted in FY23 due to substantial investments in scaling its smartwatch category and enhancing the ‘Make in India’ infrastructure.

In a recent media interaction, co-founder and CEO Sameer Mehta expressed optimism about the company’s financial future, stating, “I expect boAt to become net profitable again in the ongoing fiscal, FY25.” He also revealed plans for an INR 2,000 crore Initial Public Offering (IPO) within the next 12-18 months.

Decline in Revenue and Sales

The revenue drop was not limited to the wearables category. boAt’s domestic revenue also saw a decline, with sales in India falling to INR 3,101.2 crore in FY24, down from INR 3,239 crore in FY23. In stark contrast, the company’s overseas revenue witnessed a dramatic plunge of almost 89%, sinking to INR 13.8 crore in FY24 compared to INR 124.3 crore in FY23.

Despite the overall decline in sales, boAt launched a new smartwatch earlier this year, the Storm Call 3, which boasts features like independent navigation, eliminating the need to rely on smartphones.

Expense Management

Amid the revenue downturn, boAt managed to control its expenses, which helped mitigate the overall loss. The company’s total expenses fell over 9%, amounting to INR 3,233.6 crore in FY24, compared to INR 3,562.1 crore in FY23.

A major component of boAt’s expenses is the procurement of raw materials for its consumer electronics devices. The company reported a 10% year-on-year decline in procurement costs, which totaled INR 2,271.1 crore in FY24, down from INR 2,526.9 crore in FY23.

boAt also made cuts in advertising and promotional expenses, reducing them by 14% to INR 365.7 crore in FY24 from INR 427.6 crore in the previous year. Notably, the company’s advertising spend had more than quadrupled in FY23.

However, while the overall expenses were reduced, boAt’s employee benefit expenses saw a rise. The company spent INR 130.5 crore on employee costs, reflecting a more than 31% increase from INR 99.4 crore in FY23. This includes INR 109.6 crore spent on salaries and wages, along with INR 11.1 crore on employee share-based payments.

Despite the challenges, boAt remains focused on regaining profitability in the coming fiscal year and expanding its product offerings, while navigating the competitive landscape of audio devices and wearables.

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