The Gurugram-based provider of personal mobility solutions, Park+, reported revenues of ₹131 crore as it comes out with its fiscal performance for March 2024, which reflects a commendable year-on-year rise of 36.5% from ₹96 crore in FY23. Nevertheless, the company maintains stable losses; this grew by only 4% from corresponding periods, attributing efforts to control expenses and expansion of service offerings.
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Revenue and Service Breakdown
Service diversification of the company, which includes car cleaning, parking solutions for home and workplaces, fine (challan) payments, insurance management, and also car servicing, has mainly contributed to this revenue growth by the company. Ancillary services include FASTag issuance and electric vehicle (EV) charging networks, which have also improved its income base.
In FY24, service sales accounted for about 80% of the operating income of Park+, which translates into ₹104 crore. Service sales volumes were robust at an increase of 44%.
The balance revenue was generated through product sales of access control systems and FASTags.
Cost Structure and Financial Performance
The employee benefits, therefore were the major cost for Park+, accounting for 41% of the costs; increase is highly marked at 29.5%, reaching ₹101 crore; employee stock ownership plan (ESOP) and others involve ₹27 crore. Now, the cost of materials consumed that reflects the cost of FASTags and some other consumables increased substantially by 65.7% at ₹58 crore.
The total expense for Park+ was ₹245 crore in FY24 compared to ₹202 crore reported in FY23. The increase was majorly propelled by employee and material costs, in keeping with the largest part of its efforts that involved expansion while maintaining financial health. Consequently, the company incurred a loss of ₹103 crore in FY24, somewhat more than ₹99 crore it incurred during the previous fiscal year.
Park+’s financial metrics clearly state its on-going challenges in becoming profitable. ROCE for the company came in at -72%, while EBITDA margin stood at -68%. With ₹1.87 spent to generate every rupee of operating revenue, Park+ needs some efficiency in cost control.
The company’s financial position remains relatively healthy with total current assets standing at ₹160 crore, which also includes cash and bank balances at ₹102 crore. That is important because Park+ still continues to ride out its growth curve in an extremely competitive market.
Funding and Market Position
To date, the company has raised about $54 million in several funding rounds, and valued at around $355 million when it closed its Series C round in December 2022. The list of major stakeholders includes Peak XV, Matrix, and Epiq Capital. The founder, Amit Lakhotia holds a 45% share of the company.
As Park+ expands further, new competition enters the mobility solutions market to challenge this company: Get My Parking and Park Smart, for example. Moreover, Park+ has entered the on-demand driver services market through Drive+, putting it squarely in the fight with existing competition in that emerging space.
In brief, though Park+ has brought out excellent revenue growth in FY24, still, it has not stopped the leakage of stable losses and rising costs. The future possibility of generating profitability could be achieved through the strategic expansion of services. However, there are different challenges facing it to reach profitability, such as cost management and market competition. As observed in personal mobility solutions with changing land, Park+ would have to innovate and change its business model to achieve growth to reach financial stability.
