Yudiz Solutions, a listed blockchain and IT development company, reported a net loss of INR 2.9 Cr for the financial year 2023-24 (FY24), marking a significant downturn compared to its previous fiscal performance. The company attributed this loss primarily to a decline in revenue during the second half (H2) of the fiscal year and a notable increase in employee costs.
Financial Performance Overview
Yudiz Solutions had recorded a net profit of INR 2.7 Cr in FY23, with an operating revenue of INR 27.3 Cr. However, in FY24, its operating revenue experienced a slight dip, falling by over 4% year-on-year (YoY) to INR 26.1 Cr.
The company’s financial woes were accentuated by its performance in the second half of FY24. Despite reporting a net profit of INR 1.33 Cr in the first half (H1) of FY24, Yudiz incurred a significant loss of INR 4.2 Cr in H2. This decline was mirrored in its operating revenue, which dropped to INR 10.3 Cr in H2 from INR 15.9 Cr in H1 FY24, marking a 37.2% YoY decline.
Factors Behind the Loss
Yudiz Solutions, based in Ahmedabad and founded in 2011, specializes in web and mobile app development, along with services in emerging technologies such as AR/VR, AI/ML, blockchain, and IoT. Despite its niche expertise, the company witnessed a surge in total expenses during FY24, which rose by 31.5% to INR 31.3 Cr from INR 23.8 Cr in the previous year. Notably, employee benefit expenses surged by 21.4% YoY to INR 20.4 Cr, with employee costs escalating to INR 11.2 Cr in H2 from INR 9.2 Cr in H1 FY24.
Market Response and Legal Proceedings
The market response to Yudiz’s financial performance was evident as its shares concluded Tuesday’s trading session at INR 73.05 on NSE, marking a 1% decrease. Additionally, earlier in the month, the company issued a legal notice to HDFC Bank challenging the freezing of its bank account concerning IPO proceeds, indicating ongoing legal challenges amidst its financial struggles.
Yudiz Solutions’ FY24 performance underscores the challenges faced by IT development firms amidst evolving market dynamics. As the company grapples with revenue declines and rising expenses, its strategic maneuvers in the coming quarters will be crucial in navigating the competitive landscape and restoring profitability.
