Rentomojo Shares Jump 9% After Revenue Rises 51% in First Earnings Since Listing

Rentomojo shares climbed sharply on Tuesday after the newly listed company reported strong revenue growth in its first quarterly earnings since making its stock market debut last month. 

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The stock gained more than 9% to touch ₹557 on the NSE, extending its gains over the IPO price to about 38%. The shares are also more than 15% above their listing price of ₹482.45. 

The rally followed Rentomojo’s June-quarter results, released after market hours on Monday. While revenue and operating earnings grew at a strong pace, the quarter also brought a decline in net profit following an exceptional loss linked to a warehouse fire. 

Revenue Jumps 51% in June Quarter 

Rentomojo’s revenue from operations rose 51.3% year-on-year to ₹126.3 crore during the quarter, compared with ₹83.5 crore in the same period last year. 

Operating earnings grew slightly faster. 

EBITDA increased 54% to ₹51.42 crore from ₹33.39 crore a year earlier. The company’s EBITDA margin also improved to 41% from 40%. 

The numbers marked Rentomojo’s first financial update as a publicly traded company after its shares listed on September 17. 

Warehouse Fire Weighs on Profit 

The strong growth in revenue did not translate into a higher bottom line. 

Rentomojo’s profit after tax fell 38.6% to ₹7.8 crore from ₹12.7 crore in the year-ago quarter. 

The company reported an exceptional loss of ₹11.3 crore during the quarter following a fire at one of its warehouses. 

That one-off impact weighed on profit even as the underlying business recorded higher revenue and operating earnings. 

Shares Extend Gains Since IPO 

Rentomojo’s first few weeks on the stock market have been eventful. 

The company’s shares listed on the NSE at ₹482.45, compared with an IPO issue price of ₹404. 

Following Tuesday’s rally, the stock was trading more than 15% above its listing price and around 38% above the price at which shares were allotted in the IPO. 

The public issue had opened for subscription between September 9 and September 11. It received bids for around 158.68 crore shares against 2.18 crore shares available. 

Rentomojo Banks On Rental Business Model For Households Goods 

Rentomojo has set up an online rental and subscription service offering furniture and appliances among other household goods. 

These products that customers can rent from Rentomojo include beds, mattress, washing machines, refrigerator, wardrobes, sofa, television sets, and water purifier rather than buy. 

The company offers various related services such as transportation, installation, maintenance, and relocating the products as well. 

Tuesday's stock price action reflected investors weighing up two different dimensions of Rentomojo’s first quarter earnings after listing: revenues and operating profits more than 50% increase and a fall in net profit due to loss in the warehouse operations. 

For a newly listed firm, the June quarter earnings marks the first time the actual underlying performance of the business can be seen in earnings terms.