Infra.Market, a business to business (B2B) marketplace for construction materials, reported a net profit of Rs 186 crore for FY22, up from Rs 36 crore a year ago, on the back of horizontal expansion, the company said on Thursday.
Revenues also grew five-fold to Rs 6,236 crore for the financial year ended 31 March 2022. Its operating profitability or earnings before interest tax, depreciation and amortization, or Ebitda, grew to Rs 410 crore from Rs 69 crore in FY21.
"Ebitda margins saw substantial improvement as it increased from 5.5% in FY21 to 6.6% in FY22,” the company said.
“Our results speak for themselves, growth coupled with profitability is the need of the hour and something we have always believed in, but most importantly, the need to build business models with deep fundamentals which can withstand cycles and funding winters,” Souvik Sengupta, cofounder, Infra.Market said.
The company counts Accel Partners, Evolvence India, Sistema Asia Fund, Foundamental Gmbh and Nexus Venture Partners as its other investors. In June, Infra.Market raised $50 million in growth capital from Liquidity Group’s MARS Unicorn Fund at a valuation of $2.5 billion.
Founded by Sengupta and Aaditya Sharda in 2016, Infra.Market uses technology to provide a procurement experience for players in the construction ecosystem. It focuses on high-volume construction products under its own brands and aims to solve issues such as a lack of price transparency, unreliable quality, fragmented vendor base, and inefficient logistics. It is currently present across 20 states in India and recently set up offices in Singapore and Dubai.
It has now gone beyond B2B and has expanded its focus on retail and B2C opportunities and built its own private labelled brands.
The company already has 12 active franchise outlets across tier II cities in India and plans to scale this up to 50 stores by March 2023.
While the retail business is still not profitable, it turned Ebitda positive during the financial year.
“The launch of private labels has helped us grow our margins and differentiates us from other platforms. Our ability to also scale across industries, such as from construction materials to chemicals, also ensures that we are always looking at new opportunities for growth. Our focus during the year will be to grow our retail and private labelled businesses at a faster pace,” Sharda said, adding that the company will also focus on building a layer of service in the business and transform into a construction solutions company from merely a material platform.
Infra.Market has private labelled brands in concrete, walling products, chemicals, paint, electricals, and tiles. Private labelled brands constitute almost 60% of the overall revenue from the sale of construction material products.
“Our acquisition of Equiphunt, an equipment rental platform, is just a start of the journey. We have also backward integrated into manufacturing through the acquisition of companies like RDC Concrete and Shalimar Paints. This will help us unlock true value and margins in the years to come,” Sharda said.
Though other B2B players face inflationary risks back home, Infra.Market’s global push has helped it hedge risks. “We have not only built a strong business but also a well-diversified one in terms of risk. We are insulated from geographical risk due to our ability to focus on cross-border opportunities,” Sharda said.
Infra.Market also marked its foray into industrial and decorative paints vertical through acquisition of a strategic stake in listed entity Shalimar Paints. This enabled it to get a jumpstart in the highly lucrative paint market in India.