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Ambrane, a manufacturer of smart gadgets and accessories, saw flat growth in FY21 and FY22. However, the company had tremendous growth in FY23, scaling up by more than 90%. This large expansion resulted in an increase in operating revenue.
Ambrane’s revenue from operations increased by 92% in FY23, hitting Rs 230 crore from Rs 119.8 crore in FY22. This significant growth in revenue demonstrates the company’s effective efforts to capitalize on market possibilities and meet rising product demand.
Ambrane is hopeful about its future possibilities. The company intends to maintain its current growth rate and anticipates a revenue of Rs 500 crore in the next two years. This lofty target represents the company’s faith in its goods, strategies, and capacity to meet the changing needs of consumers in the smart devices and accessories market.
Ambrane, a bootstrapped company launched in 2012, has made great progress in the consumer electronics market. Power banks, cables, smartwatches, speakers, wearables, and other devices are available from the company. Its diverse product portfolio meets the needs of tech-savvy consumers and addresses numerous elements of modern living.
The company has built a solid reputation in the electronics industry over the years. It has a remarkable track record of selling over four crore products since its beginning. Power banks have emerged as a significant contribution to the company’s growth and sales among its offerings. Power banks, which provide portable and simple charging solutions for smartphones and other electronic devices, have become increasingly important in today’s fast-paced digital world.
The bootstrapped approach adopted by the company suggests that it has grown and expanded its operations without relying on outside capital or investments. This reflects its financial stability and ability to produce revenue through the sale of its products and market success.
Ambrane’s sales Channel
Ambrane’s sales are mostly driven by online channels such as marketplaces and their website, which make for a large amount of their total sales (70%). The remainder of their sales are generated through omnichannel channels, such as partnerships with retail chains like Reliance Digital.
In terms of geographical distribution, South India contributes significantly to the company’s revenue, accounting for around 30-35% of total sales. This demonstrates the company’s significant presence and popularity in the country’s south.
Ambrane focuses on direct sales and expanding its availability in Tier 2 and Tier 3 cities across India to further boost its market position and customer base. This strategy shows the company’s goal on reaching a larger audience and capitalizing on emerging economies’ untapped potential.
The procurement cost, which includes all direct expenses, accounts for 65% of Ambrane’s revenue. This suggests that procuring raw materials and manufacturing their products accounts for a large portion of their operating expenses.
The gross margin of Ambrane fluctuates between 20 and 35% based on the things they supply. Depending on manufacturing costs, competition, and market demand, this range implies that certain items may have higher profit margins while others may have lower margins.
Ashok Rajpal on Results
According to Ashok Rajpal, Managing Director of Ambrane, the company spent approximately 15% of its revenue on marketing in the previous fiscal year. This reflects the company’s emphasis on marketing its products and brand in order to reach a larger audience and attract customers in a competitive market.
Similarly, over the same time period, a similar percentage of around 15% of sales was committed to employee perks. This demonstrates the company’s dedication to its employees and investment in their well-being and development.
The company is proud of its manufacturing capabilities and claims to have a factory in Sonepat, India. The company makes 80% of its products in India, demonstrating its support for the government’s ‘Make in India’ policy and domestic manufacturing. The remaining 20% of its items are sourced from China.
While Ashok Rajpal did not provide specifics on the size of the profit in the previous fiscal year, he did state that Ambrane remained profitable in FY23, with EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) ranging between 6-7%. This shows that the company’s financial performance remained positive, with a healthy operating profit relative to revenue.
The company made a profit of Rs 2.2 crore in fiscal year FY22, demonstrating its capacity to retain profitability even in difficult market conditions.
Looking ahead, the organization has big aspirations for expansion. Rajpal added that they hope to generate more than Rs 500 crore in income by fiscal year 2025-26. This target indicates the company’s ambition to grow and capitalize on market opportunities.
Furthermore, the corporation is open to exploring inorganic development prospects in its segment through acquisitions and mergers. This strategic strategy indicates the company’s commitment to increase its position in the market through strategic alliances and collaborations.
Competitions in Indian Market
Ambrane competes with established businesses like Xiaomi, Lenovo, Intex, Zebronics, Philips, and Sony in the competitive consumer electronics sector. Ambrane, on the other hand, is a formidable player in the sector due to its focus on quality goods, strategic growth strategies, and commitment to profitability. It will be interesting to observe how the company performs against its competitors and meets its sales projections in the coming years as it continues to develop and expand its product offerings.
According to industry reports, the Indian power bank market was valued at $9 billion in 2020 and is predicted to reach $15 billion by 2027. The corporation has the potential for development by focusing on lower prices and increasing its presence into more value-conscious areas, while having a different brand draw than some of its competitors.
Due to the use-and-throw nature of the products, startups have identified opportunities in the smart devices and accessories segment, allowing them to build a market foothold by offering competitive pricing. These companies have dominated the lower end of the market because they target segments that may find the products of top brands unaffordable. In this category, margins are often low but stable, and successful distribution methods are critical for companies like Ambrane to succeed.
The company may face more competition from upstart enterprises aiming to challenge more established players as it strives to meet its revenue target of Rs 500 crores. Because of the company’s higher size and prominence, it may be a more attractive target for newer entrants looking for a footing in the industry. Furthermore, future regulatory actions, particularly those relating to imports or the disposal of e-waste generated by these devices, may provide difficulties for the corporation.