“No one understands what we do,” says Vishal Mehta, the founder and CEO of Infibeam. He is a slightly stocky man with a full head of hair. “When people don’t understand, they say all sorts of things,” he raises his voice. He seems to be winding himself up. “It is all because they don’t trust us,” his voice rises another octave. Why should they? “Because they should.”
Mehta or Vishal bhai (as he is known in the circles) is the CEO and founder of Infibeam. It is one of the largest e-commerce companies in India. It is one of the few internet-led companies in the country to be listed on the stock exchange. It is a unicorn—a company valued at more than $1 billion. This time, the value isn’t decided by venture investors from across the world. Currently, the company has a market cap of over $1 billion. Unlike its tech peers, this unicorn actually turns a profit.
Brace yourself for numbers. Infibeam went public in April 2016. It listed with a topline of Rs 337 crore ($49 million) and a profit of Rs 8.8 crore ($1.3 million). A year before, in the financial year ending March 2015, it made a revenue of Rs 288 crore ($42 million) and a loss of Rs 10 crore ($1.5 million). In the year ending March 2014, it clocked a revenue of Rs 207 crore ($30.2 million) and a loss of Rs 26 crore (~$4 million). But ever since it listed, Infibeam’s loss-making trend reversed. In FY17, the company reported a revenue Rs 441 crore ($64.4 million) and a net profit Rs 43.5 crore ($6.4 million). This further saw a jump in FY18. The revenue stood at Rs 839 crore ($122 million) and profit at Rs 88 crore ($12.9 million). That’s a year-on-year (YoY) jump of 90% and 102% in revenue and profit, respectively.
In the last couple of years, the company has won high profile contracts such as making tourism department websites, an e-commerce project for Amul, India’s biggest dairy cooperative and the government e-marketplace (GeM). And these are just a few trophies on display. Senior officials at the company believe Infibeam is a gem waiting to be discovered. A few are already on it, though. Dhaval Shah and Pritesh Thakkar, both analysts from the brokerage firm KRChoksey Shares and Securities, have a buy recommendation on Infibeam with a price target of Rs 256/share ($3.74); currently, the stock trades at levels of Rs 150/share ($2.19). “Considering the growth from each bucket, we have envisaged the company’s top-line to grow at a CAGR 67.2% between FY19E and FY20E [estimated financial year ending 2019 and 2020]. Additionally, we expect the transaction and subscription-based revenues to contribute 61.2% and 25.4% respectively to the overall revenues,” the latest KRChoksey report states.
If all of this sounds too good to be true, here’s the clincher.