Zoho’s profit grows to Rs 801 Crore in FY20
Zoho Corp, a gem of the Indian SaaS-startup ecosystem with its magical bootstrapped philosophy, has registered 59.2% growth in India revenue during FY2020 and other geographies operation also registered a growth of 28.1% during the same period.
Even during the Covid-19 pandemic world business landscape, California-headquartered Sridhar Vembu founded Zoho Corp registered steller growth as its profit jump over 55% in FY2020.
Zoho operates with 12 subsidiaries which handle its operations across the globe. Here it is important to note that the company improved its margins phenomenally and at the same time registered decent income growth.
Zoho’s revenue from operations surged by around 29% to Rs 4,274.7 crore during FY2020 from Rs 3,308 crore earned in FY19, regulatory filings show.
Here we have to understand the fact that only 4.5% of these revenues which to the tune of Rs 192.8 crore were booked from India.
The rest of the revenues to the tune of Rs 4,082 crore were collected from services provided outside the country. As per calculations, Zoho’s revenue from the other geographies surged by 28.1% during FY2020.
According to Arvian Research, Zoho Corp (US) fetched the biggest share in the consolidated comprehensive income during FY2020 followed by Zoho Europe. While Zoho Corp (US) registered total income of Rs 1,108.32 crore followed by Netherlands-headquartered Zoho Europe amassed Rs 509.06 crore.
“Even though the US and European entities of Zoho registered phenomenal growth, its counterparts which handle the IT park business in Chennai and Tenkashi and its China-based subsidiary have reported losses this year,” said Arvian Research.
According to available data, Zoho Corp collected another Rs 111.3 crore as non-operating revenues during the fiscal ended in March 2020.
On the expenses front, Zoho Corp incurred a whopping 35% of total expenditure on advertisement and promotion activities. But the company succeeded in stabilising these expenses are controlled and allowed to grow by only 7.4% to Rs 1,205 crore in FY2020 from Rs 1,122.2 crore in FY2019.
As any other company, Zoho Corp also incurred its biggest expenses on employee benefits as it touched Rs 1,089 crore during FY 2020 registering a growth of 17% compared with Rs 931.09 crore in FY2019. Employee benefit is 32.3% of the total expenses.
In addition to that, the company’s expenditure on legal and professional fees was the most during the previous fiscal. These payments surged by 82% to Rs 129.2 crore in FY20 from Rs 71 crore paid for during FY19.
Miscellaneous expenditure amounted to Rs 226 crore while rental and fuel payments grew by 21.6% to Rs 45 crore in FY20. Zoho’s tax expenditure jumped 120% to Rs 221.3 crore during FY20 and it spent another Rs 25.06 crore on corporate social responsibility initiatives.
Travelling conveyance expenses of Rs 95.42 crore pushed the total expenditure to increase by 16.8% from Rs 2,885.04 crore spent in FY19 to nearly Rs 3,370 crore during FY20.
On a unit level, Zoho spent Rs 0.79 to earn a rupee of operating revenue in FY20.
Zoho has managed to improve its annual profits by a whopping 55.24% to Rs 801 crore during FY2020 from Rs 516 crore profit in FY19. Its EBITDA margin has improved by 836 BPS to 33.57% in FY20 from 25.21% in FY19.
Zoho has improved its operational efficiency and this reflects in its income statement. Although income has grown less than 30%, the company’s profits have surpassed 55% in FY20.
Zoho is likely to post improved performance in the ongoing fiscal as it is one of the few companies which thrived during the pandemic. With its offerings, Zoho enabled remote working for companies and services around the world at a time when many had to work during lockdowns or restrictions imposed to curb the spread of the coronavirus.
(This story is based on a report published by Entracker)
