Lenskart’s FY21 revenue growth stalls. Profit soars 4.6X

The eyewear retailer that is Omnichannel Lenskart has emerged unharmed by the disease. While revenue growth stagnated, however, the company’s profits increased over the course of FY2020. Let’s examine the results of 2021 for the company.

In the year marred by disruptions, Lenskart’s operating profits stagnated at 905.3 crores for FY21. This was just a 1% increase contrasted to the Rs 900.2 crore in FY20.

The selling of goods through different retail channels like physical stores and online stores is the most lucrative revenue stream the firm has, producing 94.5 percent of the revenue. These sales remained fairly flat at 855.7 crores in FY21 when compared with sales of 851.2 crores during FY20. The company’s annual financial statements submitted to RoC reveal.

Recurring revenue derived by subscription fees for the “Lenskart Gold Member” program accounted for 4.6 percent of the firm’s operational income. The revenue increased by about 11% to 41.24 crores in FY21 from 37.2 crores during FY20.

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Lenskart made another profit of more than 8.4 crores from the supply of ancillary services, including eye examinations, etc., in FY21.

The 12-year-old venture also made more than 127 crores in non-operating income through its assets in the financial sector, which exhibited an 83.5 percent growth in the fiscal year that ended in (FY21) when compared to the Rs 69.2 crore that was generated in FY20.

In terms of costs, the cost of the raw materials and spares required in the manufacture of products for the eye is the biggest cost centre of the business and accounts for 34% of annual expenses. Due to a lack of demand, these expenses decreased by 6.7 percent to 338.8 crore in FY21 from Rs 363 crore in FY20.

Lenskart also buys finished goods for sale through its website, and these purchases decreased by 24% to 68.6 crores in FY21, down from 90.3 million in FY20. About 88% of these purchases came through its Chinese joint partnership with Bao Feng Framekart Limited.

Lenskart claims to have more than 700 franchise stores. The commissions paid to these sellers, as well as fees for online marketplaces, are the second most significant expense for the company, comprising 21.7 percent of the annual cost. The payments increased marginally by 6.4 percent to 216.73 million in FY21 compared to an amount of 203.74 million in FY20.

The employee benefit payment remained the same at 175 crores, i.e. 17.6 percent of the total annual expenses for FY21. The payments also included share-based payments in the region of four crore rupees.

The cost of advertising and promotions increased by about 23% to 136.52 crores in FY21 compared to 111.1 crores spent during FY20.

Travel and freight expenses of Rs 22.2 crore increased the total cost to 998.8 crores in FY21, only 3.7 percent more than the total of Rs 963.1 crore recorded in FY20. As a unit, Lesnkart’s expenses were 1.1 to generate only one rupee in operating income in FY21.

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Even though revenue was flat during FY21, the business has been able to boost its annual profit by almost 4.6X to 28.92 crore for the fiscal year, contrasted to the Rs 6.32 crore in FY20. It is because of an 83.5 percent increase in the operating income of Lenskart during the current fiscal. Although Indian operations were profitable, the company’s entry into the Singaporean market has not yielded profits yet. The company loss was about 23.5 crore in FY21.

While there is the fact that there was no growth in its operational capacity due to COVID limitations, The Peyush Bansal-led firm has invested the sum of Rs 110.4 crore in equipment and plants to boost the production capacity.

For the founder Peyush Bansal, whose time as Judge for Shark tank India displayed a business leader with a clear focus on his business and his technological advancements, and in that order, returning to normalcy is sure to mark the return of faster growth.

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