After witnessing flat growth during FY21 and FY22, smart devices and accessories maker Ambrane said it scaled over 90% in FY23 and expects to clock a revenue of Rs 500 crore in the next two years.
Ambrane’s revenue from operations surged 92% to Rs 23o crore in FY23 from Rs 119.8 crore in FY22, according to the company’s statement.
Founded in 2012, Ambrane is a bootstrapped firm that offers a wide categories of products including power banks, cables, smart watches, speakers, wearables, and others. Since its inception, the company claims to have sold over 4 crore products with a major contribution coming from power banks.
A significant proportion of Ambrane’s sales (70%) comes from online channels encompassing both marketplaces and their own website. The remaining portion of their sales originates from omnichannel sources such as Reliance Digital, the company founder and CEO Ashok Rajpal told Entrackr in an interview.
When it comes to the geographical spread, south India contributed 30-35% of the revenue, Rajpal added. The company aims to focus on direct sales and strengthen its availability in Tier 2 and Tier 3 cities of India.
The cost of procurement including all the direct expenses formed 65% of the revenue. The company has a gross margin that varies between 20-35% depending on the products, according to the company’s statement.
“Ambrane allocated approximately 15% of its revenue towards marketing expenses, while an equivalent percentage was dedicated to employee benefits during the previous fiscal year,” Rajpal added.
The company says that it has a manufacturing unit in Sonepat, and 80% of its products are manufactured in India. It imports the rest from China.
While Rajpal did not reveal the size of profit in the last fiscal year, he claimed that the company remained profitable in FY23 and its EBITDA stood at 6-7% in the same period. In FY22, the company registered a profit of Rs 2.2 crore.
“We are on our way to cross Rs 500 crore in revenue by 2025-26,” added Rajpal. “We are also looking for inorganic growth via acquisition and mergers in our segment.”
The company competes with Xiaomi, Lenovo, Intex, Zebronics, Philips, and Sony, among others.
According to an industry report, the Indian power bank market was worth $9 billion in 2020 and is expected to reach $15 billion by 2027.
For Ambrane, which doesn’t quite have the brand pull that many of its competitors enjoy, growth will presumably come via lower prices and spreading its reach into more value conscious markets. The smart devices and accessories category has spawned its share of startups, thanks to the use and throw nature of the category which can allow many firms to find a foothold as long as they can sell at a price that works. The vast, lower end of the market has been ceded to these firms, as they seek to bring the ‘benefits’ of such devices and accessories to segments that found them unaffordable from top brands. Margins are low but predictable, with distribution key. Ambrane might yet make it to Rs 500 crores, where it will quickly find that the going simply gets tougher as larger size and presence makes you a bigger target for upstarts as well as possible regulatory action linked to imports or even the handling of e-waste generated in the future.
