Myntra announces it is close to breaking even

By

Isabelle Crossley

Published
Nov 27, 2017

The fashion e-tailer Myntra has announced that they are close to breaking even and, as Myntra Fashion Brands has turned profitable, Myntra and Jabong are reducing their negative EBITDA margin.

The combined business of Myntra and Jabong have announced that they aim to reduce their negative earnngs before interest, taxes, depreciation, and amortisation (EBITDA) margin to (minus) two to three percent by the final quarter of financial year 2018. Myntra’s CEO, Ananth Narayanan, has also stated that he believes the only reason they would not reach an EBITDA of zero (breakeven) would be due to “growth investments”. The final quarter of the 2018 financial year spans from January to March 2018 and it is during this time that Myntra forsees it will edge closer to breaking even.

“The big push is our target of a run rate of 2 billion dollars in GMV [gross merchandise value] for FY19 with an exit run rate of 2.6 to 2.7 billion dollars for FY19-end," said Narayanan who also stated that the business has a growth rate of 60 to 65 percent as a target for the coming year. "We should be very close to profitability for the year because after Q4 FY18, we will be maintaining that (trajectory)."

In order to push towards breaking even for the business as a whole, Myntra has been investing in some smaller product categories such as personal care and home furnishings and will also be further exploring jewellery next year. The brand aims to expand these categories to five percent of their total revenue next year. Private brands have been profitable for Myntra and they made 24 percent of the top line when Myntra Private Brands became profitable four months ago. However, Narayanan stated that they will not expand private labels beyond 35 percent as that could slow down their total growth.