SUMMARY
BigBasket’s expenses increased nearly 27% in FY18
It is looking to raise $300 Mn-$400 Mn in fresh funding
BigBasket’s rivals include Grofers, Amazon, and Flipkart
Bengaluru-based online food and grocery store Supermarket Grocery Supplies Pvt Ltd, which runs BigBasket, reported a 34% hike in its revenues for the fiscal year ending March 31, 2018, reaching INR 1,606 Cr ($ 230.95 Mn), as against INR 1,197 Cr ($172.14 Mn) in the previous year.
The regulatory filings of the company showed that BigBasket’s operational revenues contributed 98.5% of the company’s total revenue for the year. At the same time, the company managed to control its losses very well as it reported a net loss of INR 310 Cr ($44.57 Mn), a 53% fall from INR 653 Cr ($93.88 Mn) in FY17.
Some of the interesting aspects that came to light from the filings sourced via business intelligence platform Tofler are:
- BigBasket’s total expenses for the year increased by 26.8% reaching INR 1916 Cr ($275.5 Mn), as against INR 1510 Cr($217 Mn) in FY17
- Employee benefit expenses contributed 8% of the total expenses at INR 154 Cr ($22.14 Mn) in FY18
- Another expense worth noting here was finance costs, which reached INR 2.02 Cr ($290K) from INR 5.5 Lakh ($7,909) in the previous year as the company’s liabilities grew manifold to reach INR 235 Cr ($33.79 Mn), up from INR 138 Cr ($19.84 Mn) in FY17
- BigBasket’s other expenses at INR 301.6 Cr ($ 4.33 Mn) comprised 16% of the total expenses but the details had some interesting revelations. The advertising and promotional expenses reached INR 94.38 Cr ($13.57 Mn), contributing 31% to the other expenses, while transportation distribution expenses increased 60% reaching INR 26.5 Cr ($3.85 Mn)
- The company’s miscellaneous expenses for the year at INR 53.95 Cr ($7.75 Mn) showed that the company registered major impairment of its investment for INR 37.36 Cr ($5.37 Mn). Impairment of assets is the diminishing in quality, strength amount, or value of an asset which means the book value of an asset has exceeded its recoverable value
- The company also accounted for changes in fair value of an investment at INR 4.53 Cr ($651K), allowances for expected credit loss at INR 1.1 Cr ($158K) and loss on sale/disposal of assets at INR 40.47 Lakh ($50K)
Further, an examination of the company’s balance sheet showed that it needs to work on maintaining its interest coverage ratio, quick ratio, current ratio, and turnover ratio as it looks to scale up its presence in the hyperlocal segment.
BigBasket also registered two operating entities: Supermarket Grocery Supplies, its B2B arm which sources products and sells it to Innovative Retail, which runs the online grocery platform.
The company has been looking to strengthen its offline presence via kiosks and at the same time is looking to strengthen its private label presence in the segment.
BigBasket was last speculated to have attained a valuation close to $1 Bn when Alibaba led $300 Mn Series E round in February 2018. It is now looking to raise $300 Mn-$400 Mn in fresh funding from new as well as existing investors.
The Indian online grocery market is expected to grow at a CAGR of 55% during 2016–2021. As BigBasket challenges players like Grofers, Amazon, and Flipkart, its financials have shown improvement but the company has a long way to go to maintain its assets and materialise its losses.
