Boult Audio’s Revenue Surge and Profit Decline in FY24

Boult Audio, a bootstrapped consumer electronics brand, reported a remarkable 40% increase in operating revenue for the fiscal year ending March 2024. This achievement sets Boult apart as the only competitor among peers like Noise and boAt to experience such growth in this timeframe. Nevertheless, the impressive top-line growth came with a downside, as the company’s profit saw a significant decline of 37%.

According to the financial statement sourced from the Registrar of Companies (RoC), Boult Audio’s revenue from operations rose to Rs 697 crore in FY24, up from Rs 498 crore recorded in FY23.

About Boult Audio

Founded in 2017, Boult Audio focuses on designing, developing, and manufacturing various audio devices, including wireless earbuds, headphones, smartwatches, and speakers. The revenue generated from the sale of these products stood as the company’s only source of income.

Revenue Breakdown

The majority of Boult’s revenue was generated from domestic sales, which grew by 45% to reach Rs 620 crore in FY24. Meanwhile, revenue from international sales remained stable at Rs 77 crore, contributing 11% to the overall revenue. Additionally, the company earned an extra Rs 5 crore from non-operating revenue, raising its total revenue to Rs 702 crore in FY24 compared to Rs 501 crore in FY23.

Cost Analysis

On the expenditures side, the most significant cost driver—cost of materials consumed—increased by 25% to Rs 402 crore, representing nearly 58% of total expenses. Advertising expenses surged by 74% to Rs 162 crore, while post-supply discounts escalated by 84% to Rs 70 crore. Together, these two costs comprised over 33% of the total expenses. Employee benefit expenses also saw a rise of more than 50% year-on-year, amounting to Rs 26 crore in FY24.

Other overheads, including administrative and general expenses, added Rs 39 crore to the overall costs. In total, Boult’s expenses grew by 41% to Rs 699 crore in FY24. For a detailed cost breakdown, refer to various financial sources.

Profit and Performance Metrics

With overall costs outstripping revenue growth, Boult Audio’s net profit fell by 37%, reaching Rs 2.5 crore in FY24 compared to Rs 4 crore in FY23. The company reported its return on capital employed (ROCE) and earnings before interest, tax, depreciation, and amortisation (EBITDA) margin at 52.94% and 2.64%, respectively. On a unit basis, Boult Audio spent Rs 1.00 to generate each rupee of revenue.

Current Assets and Inventory

As of March 2024, Boult recorded total current assets of Rs 211 crore, which included Rs 9 crore in cash and bank balances. The company’s inventory reached Rs 964.5 crore for the same period, marking a 63% increase from FY23. This notable inventory increase could indicate that Boult is preparing for heightened sales volume, potentially ahead of festive seasons or new product launches.

Corporate Social Responsibility and Ownership

Boult made its first recorded corporate social responsibility (CSR) contribution of Rs 12.23 lakh in FY24.

According to various reports, Boult Audio has remained self-funded to this day. The co-founders, Varun Gupta and Tarun Gupta, together hold a 49.5% stake in the company. Vinod Gupta, a director, owns 23.76%, and Pankhuri Gupta, who leads the design team at Boult, holds a 25.74% stake.

Competitive Landscape

Boult competes directly with homegrown electronics brands such as boAt and Noise. In FY24, boAt, the market leader, reported a revenue of Rs 3,118 crore but ended the year with a loss of Rs 80 crore. Following them, Noise reported Rs 1,431 crore in revenue alongside a loss of Rs 19 crore. Notably, Noise has ventured away from its bootstrapped origins, securing two funding rounds from global audio brand Bose within the fiscal year.

Market Pressures and Future Outlook

Amidst strong aspirations, margin pressures remain a significant challenge in this sector, primarily due to limited differentiation and fierce competition in the middle and mass segments, where most companies compete. This competitive climate is reflected in both increased advertising expenses and discounts. In contrast, higher-end brands like Bose, Apple, Sennheiser, and Sony maintain a clear advantage in pricing and brand perception, driven by impulse purchases from consumers. Consequently, other players are perceived as ‘disposable’ or low-risk options, and they find themselves caught in a low-margin competition.

For brands to stand out from the crowd and break free from this constraint, a focus on innovation and unique value propositions will be essential, though it remains largely unaddressed as many brands chase revenue growth.

Additionally, customer service practices have been reduced to mere exchanges, if they occur at all. There is a temptation to dismiss the pursuit of topline growth as a superficial goal. However, given the ingenuity and resourcefulness these companies have exhibited thus far, there is hope that improvements will come sooner rather than later.