What The Financials
Inc42 unveils and deciphers all the important financial metrics of Indian startups across industries. Find out revenues, unit economics, profit & loss and all the important financial metrics to judge how the startup will perform in the coming years.
In a year when many consumer and retail businesses are buckling under pressure due to the financial disruption caused by the Covid-19 pandemic, leveraging data to gain actionable insights into business performance is more paramount than ever.
With decreased demand for non-essentials because of a flagging economy, how can a business distinguish itself from competitors in any sector, ranging from retail to hospitality? The answer lies in leveraging analytics and customer intelligence tools.
While adoption of enterprise tech tools for analytics is growing rapidly in the wake of the pandemic, startups such as Bengaluru-based Manthan Systems have already capitalised on the digital transformation needs of retail businesses through artificial intelligence (AI) and predictive analytics.
Manthan Systems’ filings with the ministry of corporate affairs (MCA) reveal that the company’s profit in the fiscal year 2019-20 (FY20) grew by a whopping 647% to INR 72.1 Cr. Last year, the company recorded a profit of INR 9.64 Cr. Manthan counts US-based global restaurant chains Pizza Hut and KFC as its clients. In India, its past partners have included retail giant Future Group.
A significant portion of the jump in profit can be attributed to the company’s sale of its research analytics division to M-Panels Research Services Pvt Ltd, under a business transfer agreement for INR 96.48 Cr. M-Panels, a healthcare market research business, is a Manthan-owned company. The filings show that Manthan made a profit of INR 74.9 Cr on the transfer of business.
In March this year, Tokyo-based M3 Inc acquired Manthan’s healthcare market research business for an undisclosed amount and rebranded it as m360 Research. The acquired business will serve as a research partner for corporates in the life sciences industry, aiding them in conducting market surveys amongst healthcare professionals the world over.
Manthan’s Operational Revenue Grows Healthily
Manthan’s operational revenue also increased in the year. While revenue from exports increased marginally by 6%, from INR 204.2 Cr in FY19 to INR 210.9 Cr in FY20, the revenue from domestic sales grew by a healthy 40%, from INR 14.3 Cr in FY19 to INR 20 Cr in FY20.
As for the company’s expenses, Manthan spent INR 100.2 Cr as part of its employee benefits expense in FY20, an increase of 17% from the previous year. The company’s finance, and depreciation and amortisation expenses came down by 14% and 31% respectively, although both constitute a minor chunk of the total expense pool. In ‘other expenses’, Manthan spent INR 134.8 Cr, an increase of 14% from last year’s expenses worth 118 Cr. Other expenses include the company’s spent amount on products and services such as housekeeping, rent, travel allowances, power and fuel, advertisements and legal services, among several others.
Manthan’s financials reveal bad debts, software expenses and advertising and business promotion expenses as some of the components in ‘other expenses’ which saw a significant jump in spending in FY20. Bad debts increased from INR 1.6 Cr in FY19 to INR 5.8 Cr in FY20; software expenses from INR 3.8 Cr to INR 5.1 Cr; advertising expenses from INR 1.2 Cr to INR 2.5 Cr.
In the column for segmented revenues, it is revealed that of the company’s total revenue from operations of INR 231 Cr in FY20, 66% or INR 153 Cr came from the US. Europe contributed INR 16.5 Cr in revenue in the same period; India contributed around 9% or 20 Cr and the revenue from other parts of the world was around 41.4 Cr.
Covid-19 Impact On Manthan
Launched in 2004 by Atul Jalan, Manthan is a provider of business intelligence and big data analytics solutions for enterprises. It offers solutions for retail and consumer businesses across industries such as fashion and apparel, food and grocery, restaurants and convenience stores. The company designs prescriptive analytics applications powered by AI for customer-facing businesses to help them better understand their audience.
The company’s last funding round was last year, a venture round for an undisclosed amount led by one of Asia’s leading venture lending firm InnoVen Capital. Before that, Manthan had raised funding back in 2015, as part of its Series D round worth $60 Mn, led by Temasek Holdings, a Singapore-based investment company, and Norwest Venture Partners, US-based venture capital and growth equity investment firm.
While many Indian companies have witnessed losses amid the Covid-19 pandemic, Manthan mentions in the filings that the company’s business wasn’t especially hindered because of the Covid-19 induced lockdown. “The company’s operations haven’t been significantly impacted due to the pandemic as it has been able to operate remotely with employees working from home etc,” read the filings for the year ending March 31, 2020.
“The management believes it has taken into account the possible impact of known events arising from Covid-19 and the resultant lockdown, in the preparation of the standalone financial statements.”