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Ecommerce Major Infibeam Almost Doubles Its Revenue For Q2 FY18

Ecommerce Major Infibeam Almost Doubles Its Revenue For Q2 FY18

The Strong Q2 FY18 Performance Came On Heels Of Strong Growth In Infibeam Web Services Segment

Ahmedabad-based ecommerce major Infibeam has announced a strong growth in its Q2 FY18 financials. As per the recent BSE filing, the company posted a net profit of $3.3 Mn (INR 21.6 Cr) with a 117% year on year (Y-o-Y) increment for the period ending September 30, 2017.

Also, in Q2 FY18, Infibeam reported consolidated revenue of $30.8 Mn (INR 201.6 Cr), a 76% Y-o-Y rise on the earlier $17.55 Mn (INR 114.7 Cr) in Q2 FY17.

As claimed by the company, the strong net profit and revenue growth in Q2 FY18 has been due to its increasing focus on the fast-growing Infibeam Web Services (IWS) segment. “This segment has grown 92% YoY with 38% EBITDA margin. The revenue contribution from IWS Segment has increased to 61% in Q2FY18 from 29% in Q2 FY17.”

A Close Look At Infibeam’s Achievements And Q2 FY18 Performance

Infibeam is a cloud-based omni-channel ecommerce platform provider offering end-to-end ecommerce solutions to small and large merchants, enterprises and government.

As of now Infibeam operates on two fronts. First is Infibeam Web Services, where major growth drivers are its platform technology BuildaBazaar; government contracts, the recent being Government EMarketplace (GeM); large brands and retailers; marketplace as well as payments platform CCAvenue, which it acquired in February 2017.The second one is Infibeam Eretail Platform, the multi-channel and multi-category online shopping business of Infibeam, which is operated from the e-Retail platform,

As stated by the company, “The combined company will have a powerful synergy in the form of providing a complete ecommerce platform fully integrated with payment gateways, supply chain logistics, data analytics, social media marketing and advertising platforms, making it a unique one-stop shop ecommerce service provider in the world.”

Although Infibeam saw a rise in service revenue in comparison to both Q2 FY17 and H1 FY17, the growth was almost stagnant on the product side. The product segment registered a revenue of $12.14 Mn (INR 79.4 Mn). The company claims to have 8.05 Mn active customers at the end of Q2 FY18.

As mentioned in the BSE filing, “The asset-light low inventory model significantly saves operational cost and helps to conservatively use cash and register profits rather than burning cash, as is the case with most other online marketplace companies. The combined efforts of operational and logistic efficiency have assisted the company in improving the margins.”

Infibeam: The Road Ahead

Going ahead, the company has switched from primarily subscription-based revenue model to ‘subscription and transaction’ based revenue model with the addition of payments, whereby there are earnings from online platforms and payments.

Commenting on the Q2 performance, Vishal Mehta, Managing Director at Infibeam, said: “We have transformed our revenue model which now focused more on transaction-based earnings along with the subscription-based earning giving us an opportunity to earn on every transaction executed on the platform. This will be our driver for growth. I am also excited about the partnership with large brands to bring their products online on our platform. This signifies our strengths in the ecommerce technology space where we provide complete support to our customers to entirely build their business online with all services offered under one roof.”

Infibeam has quite been a newsmaker for the year 2017. Initially, the company first came into limelight during the Snapdeal-Flipkart merger talks, with speculations of acquiring Snapdeal at $1 Bn. Post that Infibeam continued with its strategic investment spree and also left behind incumbents like TCS, Flipkart, and Amazon in the bid for Government Emarketplace. Recently, Mauritius-based LTS Investment Fund also sold over 363K shares of Infibeam, which fetched about $8 Mn (INR 50 Cr) in an open market transaction.

Thus, in a scenario where ecommerce firms are seen as mere loss-making entities, Infibeam has provided its shareholders a good prospect so far. The strong Q2 FY18 performance in terms of positive net profit and revenue is a further indication of the company’s strong grip on its business processes and futuristic strategies. The projections for the next quarter have not been mentioned in the BSE filing of the company.