Rentomojo shares gain 4% after strong Q1 revenue and EBITDA growth — Here's what impacted its profitability

Shares of the recently-listed Rentomojo Ltd. gained 4% on Tuesday, October 6, after the company reported strong revenue and EBITDA growth in the first quarter, with a decline in its profit after tax (PAT). This is the first quarterly earnings report released by the company after its listing.

For the June quarter, Rentomojo's revenue increased by 51.3% to ₹126.3 crore from ₹83.5 crore last year, while its earnings before interest, taxes, depreciation and amortization (EBITDA) grew 54% to ₹51.42 crore from ₹33.39 crore. EBITDA margin expanded to 41% from 40% in the year-ago period.

However, despite the steady operating performance and strong topline growth, Rentomojo's net profit after tax (PAT) declined by 38.6% to ₹7.8 crore from ₹12.7 crore last year. A fire incident at one of its warehouses led to an exceptional loss of ₹11.3 crore during the quarter.

In an interaction with CNBC-TV18 on Tuesday, the management of Rentomojo said that 2% of the gross block or inventory was impacted due to the abovementioned fire.

Adjusted for the exceptional item, the company's net profit increased by 71.8% on a year-on-year basis to ₹21.9 crore.

Items ordered via the platform increased 45.8% to 3.29 lakh and its current live items were at 9.22 lakh compared to 6.54 lakh last year. Rentomojo's average revenue per item was at ₹1,662.6 from ₹1,557.2.

The company's occupancy at the end of the June quarter was at 86.8% from 84.8%.

Post its listing on September 17, the company told CNBC-TV18 that it has been growing at a 40% compound annual growth rate (CAGR) over the last few years, aided by the changing dynamics in India.

It said it is the largest player in the segment in terms of total number of subscribers. Last year, the cash flow the company generated was ₹170 crore and its assets deployed were at ₹175 crore, it added.

Shares of Rentomojo gained over 4% on Tuesday but were later trading 2.5% at 523.75 apiece at 9.30 am. The stock is up 26.9% from its issue price of ₹404 last month. Its market capitalization is at ₹5,319 crore.

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