DroneAcharya Posts INR 15 Cr Loss In H2 FY25 Amid Topline Collapse & Regulatory Scrutiny

After months of delays, listed drone tech company DroneAcharya has finally disclosed its financial performance for the second half of the fiscal year FY25 (H2 FY25). The company swung to the red in the half, reporting a net loss of INR 15.1 Cr as against a profit of INR 2.2 Cr in the year-ago period. 

In the first half of the fiscal, it had reported a net profit of INR 1.6 Cr. A drastic drop in its top line was the primary reason behind the heavy loss in the half. In H2, its operating revenue shrunk 47% to INR 7.6 Cr from INR 14.3 Cr in H2 FY24. The gap was wider on a sequential basis, with its top line plummeting 72% from INR 26.9 Cr clocked in H1 FY25.

Including other income of INR 1.4 Cr, total income for H2 stood at INR 9 Cr, down 42% YoY and 68% QoQ. 

With the burgeoning losses incurred in the second half, DroneAcharya slipped into the red for the full fiscal year FY25, reporting a loss of INR 13.5 Cr as against a profit of INR 6.2 Cr in FY24.

Meanwhile, the company’s top line for the full fiscal stood at INR 34.5 Cr in FY25, marginally 1.9% lower than INR 35.2 Cr in the previous year. Including other income of INR 2.2 Cr, total income for the year was INR 36.7 Cr, down 1.34% from INR 37.2 Cr in FY24.

The H2 disclosures come almost five months late, with the company attributing the delay to “resource constraints and extended internal audit reviews.” As a result, BSE had imposed a fine of INR 1.5 Lakh in June.

In its disclosures today, the company informed that it had received a show cause notice from the markets regulator SEBI in May under Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995. 

Without giving a clear picture of what exactly is being investigated, the company said that it had submitted its response to the regulator within the prescribed timelines, including the necessary clarifications and explanations.

“As of the date of this report, the matter remains under examination and no final order has been passed. Accordingly, the potential financial implications, if any, arising out of the said proceedings cannot be presently ascertained,” the filings read. 

Notably, in the year under review, the company recorded a provision of INR 13 Cr for doubtful debts and advances, highlighting collection challenges.  Despite this adjustment, trade receivables remained high at INR 25.3 Cr at year end. Operating cash flows turned negative at INR 7.1 Cr, indicating pressure on liquidity.

Breaking Down DroneAcharya’s Expenses

While the company’s top line receded in the half, its total expenditure surged 139% to INR 29.4 Cr in H2 FY25 against INR 12.3 Cr in H2 FY24 and INR 25.2 Cr in H1 FY25. Here’s what happened:

Other Expenses: These spends surged about 4X to INR 22.6 Cr from INR 5.2 Cr in the year-ago period. The company didn’t disclose the nature of these expenses.

Employee Expenses: The drone tech company’s employee spends shot up x% to INR 35.1 Cr from INR 27.1 Cr in H2 FY24. 

Costs Of Materials Consumed: These expenses fell over 90% YoY to just over INR 1 Cr from INR 17.4 Cr. 

DroneAcharya’s shares ended Friday’s trading session down 2.98% at INR 64.78.