Ambrane Surpasses Rs 230 Cr Revenue in FY23, Sets Ambitious Goal to Nearly Double in Next Two Years

Ambrane Surpasses Rs 230 Cr Revenue in FY23, Sets Ambitious Goal to Nearly Double in Next Two Years

Ambrane, a manufacturer of smart devices and accessories, experienced flat growth during FY21 and FY22. However, in FY23, the company witnessed remarkable growth, scaling over 90%. This significant expansion resulted in a surge in revenue from operations.

In FY23, Ambrane’s revenue from operations jumped by an impressive 92%, reaching Rs 230 crore, compared to Rs 119.8 crore in FY22. This substantial increase in revenue highlights the company’s successful efforts to capitalize on market opportunities and meet the growing demand for its products.

Looking ahead, Ambrane is optimistic about its prospects. The company aims to continue its growth trajectory and expects a revenue of Rs 500 crore in the next two years. This ambitious goal reflects the company’s confidence in its products, strategies, and ability to cater to the evolving needs of consumers in the smart devices and accessories segment.

Ambrane, founded in 2012, is a bootstrapped firm that has made significant strides in the consumer electronics market. The company offers various categories of products, including power banks, cables, smartwatches, speakers, wearables, and more. Its comprehensive product portfolio caters to the needs of tech-savvy consumers and addresses various aspects of modern-day living.

Over the years, Ambrane has established itself as a reputable brand in the electronics industry. Since its inception, it boasts an impressive track record of selling over four crore products. Among its offerings, power banks have emerged as a significant contributor to the company’s success and sales. Power banks have become increasingly essential in today’s fast-paced digital world, providing portable and convenient charging solutions for smartphones and other electronic devices.

The company’s bootstrapped approach indicates that it has grown and expanded its operations without relying on external funding or investments. This speaks to its financial sustainability and ability to generate revenue through its products’ sales and market success.

Ambrane’s sales are predominantly driven by online channels, including marketplaces and their website, accounting for a significant proportion (70%) of their total sales. The remaining portion of their sales comes from omnichannel sources, such as partnerships with retail chains like Reliance Digital.

Regarding geographical distribution, South India significantly contributes to Ambrane’s revenue, accounting for approximately 30-35% of their total sales. This suggests the company’s strong presence and popularity in the country’s southern region.

To further strengthen its market position and expand its customer base, Ambrane focuses on direct sales and increasing its availability in Tier 2 and Tier 3 cities across India. This strategy reflects the company’s focus on reaching a wider audience and tapping into the untapped potential of emerging markets.

The cost of procurement, which includes all direct expenses, constitutes 65% of Ambrane’s revenue. This indicates that sourcing raw materials and producing their products is a significant aspect of their operational expenses.

Ambrane’s gross margin varies between 20-35% depending on the products they offer. This range suggests that certain products may have higher profit margins while others may have lower margins, depending on manufacturing costs, competition, and market demand.

According to Ashok Rajpal, the Managing Director of Ambrane, the company allocated around 15% of its revenue towards marketing expenses in the previous fiscal year. This indicates the company’s focus on promoting its products and brand to reach a wider audience and attract customers in a competitive market.

Similarly, an equivalent percentage of approximately 15% of the revenue was dedicated to employee benefits during the same period. This highlights the company’s commitment to its workforce and investing in its employees’ well-being and development.

Ambrane takes pride in its manufacturing capabilities and claims to have a manufacturing unit in Sonepat, India. The company manufactures 80% of its products within the country, showcasing its commitment to the government’s ‘Make in India’ initiative and supporting domestic manufacturing. The rest of its products, approximately 20%, are imported from China.

While Ashok Rajpal did not disclose specific details about the size of profit in the last fiscal year, he mentioned that Ambrane remained profitable in FY23, and its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) stood at 6-7% during the same period. This indicates that the company’s financial performance remained positive, generating a healthy operating profit relative to its revenue.

In the fiscal year FY22, Ambrane registered a profit of Rs 2.2 crore, indicating its ability to maintain profitability even in challenging market conditions.

Looking ahead, the company has ambitious growth plans. Rajpal stated that they aim to achieve a revenue of over Rs 500 crore by the fiscal year 2025-26. This goal reflects the company’s determination to scale its operations and capitalize on market opportunities.

Additionally, Ambrane is open to exploring inorganic growth opportunities through acquisitions and mergers in its segment. This strategic approach suggests the company’s willingness to expand its market presence and strengthen its position through strategic partnerships and collaborations.

In the competitive consumer electronics market, Ambrane faces competition from established players such as Xiaomi, Lenovo, Intex, Zebronics, Philips, and Sony. However, Ambrane’s focus on quality products, strategic growth plans, and commitment to profitability positions it as a strong contender in the industry. As the company continues to innovate and expand its product offerings, it will be interesting to see how it fares against its competitors and achieves its revenue targets in the coming years.

The Indian power bank market presents significant growth opportunities, with the industry report indicating that it was worth $9 billion in 2020 and is expected to reach $15 billion by 2027. Ambrane, while enjoying a different brand pull than some of its competitors, has the potential for growth by focusing on lower prices and expanding its reach into more value-conscious markets.

In the smart devices and accessories category, startups have found opportunities due to the use-and-throw nature of the products, allowing them to establish a foothold in the market by offering competitive pricing. These firms have dominated the lower end of the market, as they target segments that might find top brands’ products unaffordable. Margins in this segment are typically low but stable, and successful distribution strategies become crucial for companies like Ambrane to thrive.

As Ambrane aims to achieve its revenue target of Rs 500 crores, it may encounter increased competition from upstart companies looking to challenge more prominent players. The company’s larger size and presence can make it a bigger target for newer entrants seeking a foothold in the market. Additionally, regulatory actions, especially concerning imports or the handling of e-waste generated by these devices in the future, could pose challenges for the company.