Aman Gupta’s boAt Sold Audio Products, Smartwatches Worth INR 3,376 Cr In FY23

Audio products and smartwatch maker boAt’s sales crossed the INR 3,000 Cr mark in the financial year ended March 31, 2023. The Delhi NCR-based startup’s operating revenue rose 18% to INR 3,376.7 Cr in the financial year 2022-23 (FY23) from INR 2,873 Cr in the previous fiscal year.

Founded by Aman Gupta and Sameer Mehta in 2015, boAt operates in the larger audio and wearables markets and sells products such as headphones, smart watches and speakers. 

boAt earned INR 2,350.8 Cr in FY23 from the audio segment, which accounted for 70% of its operating revenue. The wearable segment contributed INR 901.5 Cr to boAt’s topline this year.

Including other income, boAt’s total revenue stood at INR 3,403.1 Cr in FY23 as against INR 2,886.4 Cr in FY22.
However, the startup slipped into the red for the first time since its inception as the increase in expenses outpaced the rise in sales. boAt reported a net loss of INR 129.4 Cr in FY23 after posting a profit of INR 68.7 Cr in FY22.

Where Did boAt Spend?

boAt’s total expenses jumped 28% to INR 3,562 Cr in FY23 from INR 2,786.9 Cr in the previous fiscal year.

Procurement Cost: boAT spends the biggest amount on procurement of raw materials for its products. In FY23, it spent INR 2,526.8 Cr on procurement of unfinished goods, which accounted for 71% of its overall expenditure. Interestingly, the startup has spent INR 2,591.5 Cr in FY22 on unfinished goods, marginally higher than what it spent this year. 

Advertising Expenses: boAt’s advertisement cost more than quadrupled during the year under review. The startup spent INR 427.6 Cr on advertising in FY23, an increase of 332% from INR 99 Cr in the previous fiscal year. Advertising and promotional costs surged despite Gupta publicly stating that the startup suspends marketing for the nearly three-month period when popular reality show Shark Tank India, in which Gupta appears as a shark, is aired on national television.

Employee Benefit Expenses: Employee costs surged 77% to INR 99.4 Cr in FY23 from INR 56.1 Cr in the previous fiscal year. The sharp increase in employee benefit expenses is an indication of an increase in the startup’s headcount. 

EBITDA margin deteriorated to -1.6% in FY23 from 4.98% in FY22.

boAt began making its products in India in early 2022 and claims to have produced more than 30 Mn units in India till date (over 15 Mn units in FY23). Last month, boAt said it is working continuously with Indian electronic manufacturing services (EMS) providers to streamline the processes and build a high quality manufacturing ecosystem in India.

Last year, boAt also formed a joint venture with Dixon Technologies to design and manufacture wireless audio solutions in India. 

In fact, the startup had claimed that its profitability got impacted in FY23 due to its investments in seeding the smartwatch category and scaling up the ‘Make in India’ infrastructure

boAt was among the Indian startups which filed its IPO papers in 2021. However, it shelved its IPO plans due to market volatility. The startup has raised a total funding of $177 Mn till date from investors such as Qualcomm Ventures, Warburg Pincus, InnoVen Capital, Navi Technologies, and Fireside Ventures.

boAt competes against startups like noise, Leaf, and mivi.