HomeLane revenue remains flat in FY24; losses down by 30%

Home interior design firm HomeLane reported flat growth for the fiscal year ending March 2024. However, the Bengaluru-based company reduced its losses by 30%, driven by controlled expenses on material costs as well as employee benefits.

HomeLane’s revenue from operations rose by 7% to Rs 613.6 crore in FY24, from Rs 573.8 crore in FY23, its consolidated financial statement filed with the Registrar of Companies (RoC) shows.

HomeLane provides home interior solutions, integrating design, contract manufacturing, and installation. Revenue from these services was the company’s sole source of income in the last fiscal year.

The company also made additional Rs 4 crore from interest on deposits which took its total revenue to Rs 617 crore in FY24.

On the expense side, employee benefit expenses slightly decreased by 2.4% to Rs 187 crore, while material costs, the largest expense category, dropped by 6.8% to Rs 391.25 crore in FY24. However, advertising cost rose 20.1% to Rs 83.1 crore in this period. Overall, the company reduced total costs by 2.4% to Rs 738.77 crore in the last fiscal year.

In the end, HomeLane managed to reduce its losses by 30% to Rs 121.66 crore in FY24, from Rs 173.51 crore in FY23.  Its ROCE and EBITDA margins improved to 448% and -14.99%, respectively.

On a unit basis, HomeLane spent Rs 1.20 to earn a rupee in FY24.  The company has a total current assets of Rs 148 crore with cash and bank balances of Rs 21.3 crore during the said fiscal year.

According to TheKredible, HomeLane has raised a total of $166.45 million to date, with its lead investors including Accel, Peak XV Partners, and IIFL.

HomeLane recently announced its plans to acquire DesignCafe, a leading player in the home interiors market. The combined entity is expected to become one of India’s largest in the sector, with projected revenues of Rs 1,000 crore ($120 million) in FY25 and to achieve EBITDA profitability.

A stagnating topline coupled with dropping losses is not always a good thing, indicating a focus on bringing an out of control cash burn to some sort of disciplined spending. The problem usually is that the impact on the topline follows with a lag for an extended period in most cases. Homelane seems to have an acceptable level of liquidity for now, but a plateauing growth curve will make future fund raising very difficult, or on demanding terms.  After almost a decade and more of startup investments, the home decor and interiors segment remains as challenging as it was, with the unorganised sector holding out well against the new entrants. For the decade-old Homelane occupying the lower premium end of the market, it might just be a question of now or never before the next real estate downturn cycle starts.