Rentomojo Profit Slumps 39% Despite 51% Revenue Surge
A warehouse fire caused an exceptional loss, masking a quarter of strong underlying growth in subscribers and orders for the rental platform.
Rentomojo's Q1 FY27 saw revenue jump 51% year-on-year, but profit fell 39%. The decline was due to a one-time fire loss; normalised profit actually grew 72%.
Rentomojo’s first quarterly report as a listed company presented a story in two parts. The furniture and appliance rental platform posted blistering top-line growth, but a sudden operational shock kept the reward from reaching the bottom line.
Revenue for the quarter ended June 2026 surged 51.1% year-on-year to ₹126.33 crore. Profit after tax, however, fell 38.7% to ₹7.83 crore. The net profit margin contracted sharply from 15.3% to 6.2%.
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin
| Metric | CurrentQ1 FY27 | Same quarter LYQ1 FY26 |
|---|---|---|
| Revenue (₹ Cr) | 126.33YoY +51% | 83.60 |
| Profit (₹ Cr) | 7.83YoY -39% | 12.77 |
| Net Profit Margin | 6.2%YoY -59% | 15.3% |
The entire profit decline traces to a single event: a fire at a company warehouse in Noida. According to regulatory filings cited by The Economic Times and Quartr, this resulted in an exceptional charge of ₹11.37 crore. Excluding this one-off, the underlying business performed strongly. Management reported a normalised profit of ₹21.93 crore, a 71.8% increase from the prior year.
The engine behind the growth
The revenue jump was driven by core operational strength. Items ordered by subscribers grew 45.8% year-on-year, according to the company’s investor presentation. CEO Geetansh Bamania told CNBC-TV18 that demand remains firm, with occupancy rates holding at 83-85%. The seasonal summer demand for products like air conditioners and refrigerators, coupled with new graduates entering the workforce, provided a natural tailwind.
This operational leverage is key to the company’s model. With normalised EBITDA margin steady around 41%, as noted in the filings, each new subscriber adds predictably to earnings. The company is now using its post-IPO balance sheet to expand into new cities like Indore and Lucknow and deeper into service-intensive categories like water purifiers.
A resilient model faces a capital-heavy reality
The quarter confirmed the model’s cash-generating ability. Management highlighted that in FY26, operating cash flow of ₹1,729 million fully funded the year’s growth capital expenditure. This internal funding capacity is critical for an asset-heavy business that must continually invest in its rental fleet.
The balance sheet, however, shows the strain of that model. The debt-to-equity ratio stands at 0.66, and a current ratio of 0.55 points to short-term liquidity management as a constant focus. The planned use of IPO proceeds to repay ₹70 crore of borrowings should provide some relief in subsequent quarters.
Key Points
- Revenue grew 51.1% year-on-year, driven by a 45.8% increase in items ordered and healthy occupancy rates.
- Reported profit fell 38.7% due to a one-time ₹11.37 crore exceptional loss from a warehouse fire.
- Underlying profitability remained strong, with normalised profit growing 71.8% and EBITDA margin stable around 41%.
- The business funded its FY26 growth capex entirely from operating cash flows, demonstrating improving capital efficiency.
- Expansion plans focus on new cities and categories like water purifiers, leveraging the strengthened post-IPO balance sheet.
Hexa Perspective
The fire was a costly accident, but it doesn't change the fundamental trajectory. Rentomojo’s quarter shows a scalable subscription model working: demand is robust, unit economics are intact, and cash flow is beginning to cover the capital needs of growth.
The real test is whether this capital efficiency holds as the company scales into new markets. The spread between its return on capital (26.6%) and cost of debt (9.58%) is healthy, but it must be defended through disciplined execution. Investors are ultimately betting that the shift to rental living in urban India is durable enough to support the heavy asset investment required to serve it.
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