Source: Entrackr
Sleep and home solutions company, Wakefit, posted an operating income of ₹971 crore in the first nine months of FY25, almost equal to ₹986 crore overall in FY24. The company has also filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), as it looks to go public in an initial Public offering (IPO).
According to the DRHP, revenue as it primarily came from the sale of manufactured items, which accounted for more than 97 percent of revenue. The manufactured items general revenue was ₹951 crore, with contributions from traded goods and others that came to ₹994 crore for the nine months ending December 31, 2024.
On the expenses front, cost of raw materials was ₹433 crore representing 43% of the total expenses. Employee benefit expenses came in at ₹126 crore respectively. The advertising expense was ₹82 crore and the cost of delivery and logistics was ₹75 crore. Also included in the expenses were IT and other administrative expenses, depreciation, etc., bringing Wakefit’s total expenses for the period to ₹1,003 crore or a ₹1 crore reduction from the ₹1,032 crore total expenses in FY24.
Wakefit reported a net loss of ₹9 crore for the first nine months of FY25, compared to the same time last year with a loss of ₹15 crore. But the company reported an EBITDA of ₹76 crore or 7.65% EBITDA margin. Their return on capital employed (ROCE) was 1.33% which means they earned ₹0.0133 on every ₹1.00 of capital employed. The company also reported that for every 1 rupee of revenue they earned, they spent ₹1.03 of expense.
As of December 2024, Wakefit had current assets of ₹577 crore, which consisted of ₹19 crore in cash and bank balances.
The company’s financial report, however, indicated certain concerns from auditors, pointing to issues with historical records, including mismatches between bank statements and financial statements, missed statutory payments (being disputed GST dues), and the lack of an internal audit department, as well as the company’s accounting software for FY24, which has not included an audit trail, as required by law.
Though these did not require amending the reported numbers, Wakefit stated that similar concerns in the future may impact its reputation and that of its investors.
The company also uses certain performance measures that are not in accordance with GAAP like EBITDA and ROCE, but it cautioned stakeholders not to be completely reliant on those measures alone because they may not be consistent with industry standards and may not be comparable to its peers.
