Atomberg Technologies, a prominent player in the consumer appliances sector, has reported a remarkable 31.4% increase in operational revenue, reaching ₹848 crore for the financial year 2023-24, compared to ₹645 crore the previous year. However, the company’s net losses widened by approximately 46.3%, escalating from ₹138 crore to ₹202 crore during the same period.
Understanding the Revenue Surge and Financial Challenges
Sibabrata Das, co-founder of Atomberg, attributed the increased losses over the past two fiscal years to the implementation of new employee stock ownership plan (ESOP) grants, management bonuses, and expenses related to fundraising activities. Notably, the operational earnings before interest, taxes, depreciation, and amortization (EBITDA) saw an improvement, narrowing the loss to ₹22 crore in 2023-24 from ₹49 crore in the prior year.
“Our operational EBITDA has increased significantly. Looking back at FY22, we did not incur major ‘other non-cash items’ like ESOP and bonuses. In FY23 and FY24, the difference between operating EBITDA and profit after tax (PAT) numbers is largely due to these non-performance items,” Das explained.
Despite the losses, Das expressed optimism, indicating that Atomberg is on track to achieve operational profitability by the end of the current fiscal year.
Key Financial Highlights and Cost Structure
Founded by IIT Bombay alumni Sibabrata Das and Manoj Meena, Atomberg has reported a net loss of ₹39 crore for the fiscal year 2021-22. For 2023-24, around 66% of its total expenses were attributed to material costs, while employee and marketing expenditures also constituted significant portions of its budget.
A noteworthy investment included the establishment of a research and development (R&D) facility in Pune, which cost approximately ₹70 crore. This facility is anticipated to continue attracting investment in R&D, strengthening Atomberg’s competitive edge in the market.
Revenue Streams and Growth Strategy
Currently, Atomberg derives about 70% of its revenue from offline channels, while the remaining 30% comes from online platforms, including e-commerce giants like Amazon and Flipkart, as well as its direct-to-consumer website. Although the company does not operate its own offline stores, it is present in around 30,000 multi-brand outlets across the country, achieving nearly 20% year-on-year growth in reach.
In the fiscal year 2023-24, Atomberg generated ₹841 crore from its fan business, with the remaining ₹7 crore coming from the mixer grinder and smart lock segments. The company aims to bolster the share of its non-fan business in total revenue, with projections indicating that the mixer grinder segment could contribute 4-5% by the end of this fiscal year.
Furthermore, Atomberg is strategically planning to expand into new product segments over the next 12-18 months, including water purifiers and various kitchen appliances, which are expected to enhance its market presence and revenue diversity.
Funding and Future Prospects
Das also mentioned that Atomberg is contemplating a secondary transactions-led funding round next year, aiming to provide exits for existing investors. Earlier in May 2023, the company successfully closed an $86 million funding round led by Singapore’s sovereign wealth fund Temasek and Steadview Capital, with participation from Trifecta Capital, Jungle Ventures, and Inflexor Ventures. This funding round, comprising both primary and secondary issuances, allowed early angel investors to exit partially, while existing investor A91 Partners also divested some of its stake. According to Tracxn, Atomberg has raised a total of $128 million to date and was valued at $358 million as of June 2023.
Das highlighted Atomberg’s venture into quick commerce, stating that the company went live on Zomato-owned Blinkit earlier this year. He views quick commerce as a critical growth driver for its fan business, especially during the summer months when demand typically surges.
Atomberg’s Strategic Path Forward
As Atomberg navigates the challenges of rising costs and widening losses, its strategic focus on expanding revenue streams, improving operational efficiency, and investing in innovative product development positions the company for potential profitability. With plans to enter new product markets and leverage quick commerce, Atomberg aims to solidify its standing as a leader in the consumer appliances sector, catering to the evolving needs of the Indian market.
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