Tata Digital Loss Widens Over 5X to INR 3,052 Cr In FY22, Revenue At Over INR 16,000 Cr

Tata Digital, the new-age vertical of the Tata Group which houses its ecommerce business, saw its consolidated net loss widen 5.6X to INR 3,052 Cr in financial year 2021-22 (FY22) from INR 536.7 Cr in FY21.

Tata Digital, which holds majority stakes in unicorn startups such as Tata 1mg and BigBasket, saw its total income jump 3X to INR 16,201 Cr during the year from INR 5,463.3 Cr in FY21. Similarly, its expenses jumped to INR 19,316.3 Cr in FY22 from INR 6,069.4 Cr in FY21. 

Tata Digital’s consolidated financial statements include its subsidiaries – Tata Digital Private Limited, BigBasket, Tata 1Mg, Croma, Tata Payments Limited, Protraviny Private Limited, and Tata Fintech Private Limited. 

Operating Revenue Rises On Acquisitions 

Tata Digital’s revenue from operations rose 200% to INR 15,979.6 Cr from INR 5,315.2 Cr in FY21. This increase can be attributed to the acquisitions made by the company in FY22. 

In order to beef up its superapp game through Tata Neu, Tata Digital acquired majority stakes in grocery delivery platform BigBasket and online pharmacy and lab testing platform 1Mg in FY22.

As per media reports, Tata Digital acquired the stakes in the companies for around $200 Mn. Later, it pumped in additional cash in the acquired companies. 

Tata Digital earned INR 15,344 Cr from sale of products during FY22, while it generated revenue of INR 190 Cr through sale of services.

Its EBITDA margin contracted further to -11.27% in FY22 from -2.8% in FY21. 

Advertisement Expenses Rise

The company’s total expenses in FY22 rose three-fold to INR 19,316.3 Cr led by a sharp rise in other expenses, including advertising cost.

Employee expenses contributed a significant chunk to the total expenditure at INR 1,419 Cr, a whopping 310% rise from INR 345.8 Cr in FY21. Employee benefit expenses usually comprise employee remuneration, PF contribution, gratuity, and other employee welfare benefits. 

Other expenses also rose 4X to INR 3,019 Cr in FY22 from INR 700 Cr in FY21. Other expenses usually comprise advertising and promotional expenses, legal professional charges, rent, electricity bill, transportation, among others. 

Tata Digital spent INR 581 Cr on advertising in FY22, a 9X rise from INR 62.8 Cr in FY21. Transportation distribution expenses stood at INR 558.5 Cr in FY22, a 19.3X rise from INR 28.8 Cr in FY21. The company also spent INR 471.7 Cr on legal professional charges, almost a 2X increase from INR 249.4 Cr in FY21. 

With the launch of Tata Neu, Tata Digital became the first company in the country to offer a super app experience to its customers. Reliance Industries and Adani Group are also in the race to launch super apps. 

However, the going has not been all smooth for Tata Neu. Soon after its launch, customers complained about the app being slow. Later it was reported that the app failed to achieve its internal target of $200 Mn gross sales in the first month of its operation. 

Tata Neu’s chief technology officer (CTO) Sauvik Banerjjee also left the organisation in the month of July.