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INTRASOFT TECHNOLOGIES LIMITED REPORTS REVENUES OF Rs. 155 Cr. FOR Q2 FY2015-16

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IntraSoft Technologies Ltd. (BSE: 533181, NSE: ISFT) today announced its Unaudited Consolidated Financial Results for the Quarter and Half Year ended September 30, 2015. 

Q2 FY2015-16 HIGHLIGHTS: (All comparisons are with Q2 FY2014-15 figures) 

  • Total Income at Rs. 154.68 Cr. up by 159% from Rs. 59.63 Cr.
  • Profit after Tax (PAT) at Rs 1.66 Cr. up by 80% from Rs 0.92 Cr.

H1 FY2015-16 HIGHLIGHTS: (All comparisons are with H1 FY2014-15 figures) 

  • Total Income at Rs. 272.69 Cr. up by 128% from Rs. 119.42 Cr.
  • Profit after Tax (PAT) at Rs 2.89 Cr. up by 64% from Rs 1.76 Cr.

Trailing Twelve Months ended 30th September, 2015 HIGHLIGHTS: 

  • Total Income at Rs. 496.60 Cr.
  • Profit after Tax (PAT) at Rs 7.09 Cr. 

MANAGEMENT’S STATEMENT

Commenting on the results, Mr. Arvind Kajaria, Managing Director said, “We are pleased with the results of this quarter with 159% increase in Revenue and 80% increase in Profit. During this quarter, we tied up with a new marketplace Jet.com and added a number of new suppliers & products to our offering, which is reflected in the topline growth. The new products have performed well and the technology platform has been further strengthened to seamlessly manage the upcoming holiday sales. Overall, we are excited about our performance in the quarter and about the market opportunity ahead of us. Our outlook for Q3 is positive. Macro trends and overall market conditions are expected to pick up further as the quarter celebrates major festivals in markets where we have a strong presence. Given our leadership position and our ability to leverage market conditions, we are optimistic of enhancing our growth trajectory.”

During the quarter the E-Commerce business saw impressive performance growth and improvement in all parameters.

One of our marketplace partners, Amazon.com, celebrated their 20th Birthday by launching “Prime Day” on July 15th, a shopping event that offered shoppers new deals as fast as every 10 minutes, and from every product category. This event was met with tremendous success and great reviews and as one of the key partners to Amazon.com, 123Stores revenues on Prime Day was up more than 500% Y-o-Y. We look forward to this becoming an annual event in the future.

During the quarter, the Company expanded it’s catalogue to cater to the upcoming Holiday Season demand and is now partnered with more than 1440 Suppliers and is selling more than 2,65,000 unique products on its website and partnered marketplaces. 

Revenue:

Particulars Q2 FY 2015-16 Q2 FY 2014-15 Growth (%)
E-Commerce Revenue 150.59 Cr. 55.98 Cr. 169%

E-Commerce Revenues increased from Rs 55.98 Cr. to Rs 150.59 Cr. during the quarter, a growth of 169% Y-o-Y. This growth was across all product categories, with Furniture, Patio, Lawn & Garden being the largest category.

The Top Product Categories by Revenues during Q2 FY2015-16 were

Product Categories % of Sales
Furniture, Patio, Lawn & Garden 28%
Musical Instruments & Gadgets 26%
Kitchen, Dining & Appliances 14%
Home Improvement & Art Crafts 13%
Sports & Outdoor 8%
Toys, Games & Baby 6%
Others 5%

Orders Shipped:

Particulars Q2 FY 2015-16 Q2 FY 2014-15 Growth (%)
Orders Shipped 377,083 118,606 218%

The Number of Orders Shipped grew tremendously over the quarter from 118,606 to 377,083, a growth of 218% Y-o-Y. Our proprietary technology platform allows us to scale order volumes with minimal human intervention, enabling cost savings as we grow volumes.

The Number of Orders Shipped during the last 5 quarters were

Quarter Orders Shipped
Q2 2015-16 377,083
Q1 2015-16 293,894
Q4 2014-15 253,024
Q3 2014-15 285,270
Q2 2014-15 118,606

As we leveraged our technology and efficient supply chain, we were able to offer customers a better shopping experience including a better price point. Accordingly, we were able to sell many newer lower priced products during the year, resulting in a lower average order value of Rs. 3994 as compared to Rs. 4720 Y-o-Y, but much higher number of orders shipped.

GROSS MARGIN:

Particulars Q2 FY 2015-16 Q2 FY 2014-15 Improvement (%)
Cost of Goods Sold (Inc. Shipping) 82.0% 80.6% -1.4%
Gross Margin 18.0% 19.4%  

As the operations of the Company continue to expand, expenses related to shipping & handling represent an important area of Cost of Good Sold (COGS). Moving forward, we shall report a summation of the cost of products as well as the Shipping & Handling Expenses as Cost of Good Sold (incl. Shipping).

The slight decrease in the Gross Margin was because of the addition of newer suppliers and products to the catalog and also because of the slight shift in the sales mix. As the sales momentum continues to improve, the overall Gross Margin will trend upwards as the year progresses and we continue to increase our purchases from these newer suppliers.

Inventory:

As on September 30th 2015, Inventory at our warehouses was Rs. 32.37 Cr. The increase is primarily to cater to the upcoming holiday season demand.

Other Highlights:

During the quarter, 123Stores, Inc. integrated with Jet.com, an e-commerce marketplace, making it the 9th shop-in-shop partnership for 123stores.com. Now with this integration the partnered market places are Amazon, Ebay, Rakuten (Buy.Com), Bestbuy, NewEgg, Sears, Amazon Canada, Alibaba’s 11 Main and Jet.Com.

During the quarter, a 100% subsidiary of 123Stores, Inc. was formed in India under the name of 123Stores E Commerce Pvt. Ltd. to increase focus on the E-Commerce business by consolidating all operations related to E-Commerce under 123Stores, Inc. so as to further increase financial and operational efficiencies.

E-GREETINGS BUSINESS

123Greetings.com continued to see increased Mobile Application usage Y-o-Y with increase in the number of cards sent, from 2.40 Lakhs in Q2 FY 2014-15 to 2.52 Lakhs during Q2 FY2015-16. Mobile application downloads reached 7.63 Lakhs as on 30th September, 2015. E-Greetings business revenue for Q2 FY2015-16 was Rs. 3.39 Crs.

Exceptional Items:

During the quarter, the Company sold 5,50,000 shares held by Intrasoft Beneficiary Trust, whose sole beneficiary is the Company, at a rate of Rs 510 per share resulting in a Net Gain after expenses of Rs. 2696 Lakhs. The funds raised were used to expand our E-Commerce Business as we head into the Holiday Season.

Additionally, the Company completed the review of the software assets that have been under development for some time. These software assets were related to different features of the E-Commerce Business that were yet to be launched. Management decided to write off these software assets under development amounting to Rs 2635 Lakhs as an exceptional item as these software resources would not be contributing to future revenues. As the write off would be of a non-cash nature, this would not have any impact on cash flows or on operations. This write off completes the review process of all the software assets of the Company. Since April 2013, all software development expenses are expensed in the same year as and when they are incurred.

Consequently, there was a net gain from Exceptional Items amounting to Rs. 61 Lakhs in the quarter.