Gross collections at the Pune-based logistics unicorn ElasticRun, or Ntex Transportation Services Private Limited, were surprisingly down 48.6% on the fiscal year that ended March 2024. The firm meanwhile managed to shrink its losses by about 42% in the same period and said it had done this because it had pivoted to regional brands with higher margins.

elasticrun reports

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Standalone financial statements of ElasticRun showed the gross revenue of the firm, or simply the gross merchandise value, had slipped down to ₹2,434 crore in FY24 from ₹4,738 crore the previous fiscal year. In short, it had tumbled in FY24 largely because the firm faced considerable difficulties selling in a saturated market. Its income in trading goods also fell hard, tumbling 53.7% to ₹2,023.19 crore. In contrast, the services revenue increased 10.3% to ₹406.3 crore, which means that the company is moving forward with diversifying its revenues.

ElasticRun has a distribution network through which it enables kirana stores, small neighborhood shops, to sell branded products. Logistics and technology help in optimizing the distribution process in rural and semi-urban areas. This approach has made it possible for ElasticRun to find a niche in an otherwise crowded market.

In addition, non-operating activities brought about almost ₹110 crore from items such as income arising on bank deposits, proceeds earned on the sale of financial instruments, and other similar small miscellaneous sources. This aggregated FY24 gross revenue of the company to ₹2,544 crore, reflecting clearly the huge challenges facing this firm.

On the cost side, ElasticRun managed to post a total cost reduction of 46.7% at ₹2,904.42 crore against ₹5,452.79 crore in FY23. The material costs were down by 53.4% at ₹2,015.81 crore. Employee costs too have been reduced by 27.5% at ₹250.5 crore. Other operating costs have been cut back to ₹585.63 crore. These reductions have been vital for the company to reduce its losses.

ElasticRun reported a fall of 42% year-on-year in losses despite the scale of operations plummeting. Its loss last fiscal year is ₹360 crore. Improving losses indicates that the company is in the process of making necessary improvements to operational efficiency despite a tough market landscape.

So far, ElasticRun has managed to raise $430 million in total. The valuation is about $1.44 billion. TheKredible, the intelligence platform, reported that Prosus owns 21.36%, followed by Avtaar Ventures and Kalaari Capital. The co-founders- amongst them Sandeep Deshmukh, Saurabh Nigam, and Shitiz Bansal- hold a total of 22% stake in the company.

The figures seem mixed, but they also highlight the intricacies of ElasticRun’s situation. The shift into services raises questions about the sustainable future of the company and whether this course will pay off. From here, the operational updates that are to come in the future will be more important in determining the viability of this new course for ElasticRun. Investors and stakeholders will be keen to see how the company navigates this new course and can grow in a fast-moving sector.