Vakrangee sees strong Q2 growth, reiterates FY22 targets

Vakrangee Kendra New Format

Vakrangee Ltd, India’s largest operator of IT-enabled kiosks and service centers, reported a strong increase in its operating financials for the September quarter as its performance clearly overshot pre-COVID levels.

The company’s total revenue jumped to Rs 207.2 cr for the three months ended September this year, up from just Rs 70.2 cr in the same quarter of last year. This was also clearly ahead of the Rs 151.9 cr that the company had reported for the same quarter of 2019 — before COVID-19 disrupted operations.

Net profit at the company — which provides a wide range of services such as government certificates, bank account opening, assisted e-commerce shopping, and even sells farm equipment, fertilizers and seeds — rose in line with revenue to Rs 26.7 cr from Rs 13.3 cr in the previous year and Rs 10.9 cr in 2019.

Q2 Financials

The company said it has crossed an inflection point in its growth trajectory and is poised for strong growth in coming quarters.

It said it is now on track to augment the number of stores/outlets to 25,000 over the next six months from 13,200 as of the end of September. It added 1,570 stores in the first six months of the current financial year, and plans to add almost 8,000 stores in the second half.

It is also targeting to enable 30 cr transactions on its platform during the full year.

The three month period from July to September of this year saw a total of 3.2 cr transactions taking place on Vakrangee’s platform, up from 1.5 cr transactions during the same quarter of 2019, before COVID.

The total value of the transactions was Rs 11,520 cr, up from just Rs 3,750 cr two years ago.

The company is targeting $10 bln (Rs 75,000 cr) of transactions to take place on its platform this year, which it hopes to raise to $18 bln in the next financial year.

Vakrangee also plans to add another 10,000 franchisees next year to take the total to 35,000 by March 2023.

Out of the Rs 11,520 cr of transactions that took place on its platform during the three months, around Rs 206 cr was contributed by e-commerce, including online healthcare. Around Rs 2,744 cr was contributed by ATM withdrawals and the remaining Rs 8,570 was the share of financial services, including money transfers, account deposits and so on.

The company, which traces its origin to Government of India’s CSC or common service center initiative of the early 2000s, is in the fourth iteration of its business model.

The first iteration was primarily one of enabling outlets for e-governance services, such as issuing government certificates and submitting various government applications.

The second phase added ‘banking correspondent’ services to the mix, while the third phase saw the addition of ATMs, insurance, e-commerce and so on.

The company is currently upgrading its outlets to the fourth model, whose primary thrust is on branding and standardization in terms of the layout and looks, and the installation of networked and safety features such as centrally controlled digital advertising displays and CCTVs.