boAt’s Bounce: How the Audio Brand Tuned Back to Profit Before Listing

boAt is an Indian consumer electronics brand that specialises in trendy and stylish audio and wearable devices. It built a reputation for itself from 2016 by offering affordable options. The brand quickly gained popularity through its direct-to-consumer (D2C) model. It markets fashion-forward headphones, earbuds, and speakers at competitive price points. These products helped boAt gain early traction but also brought challenges along the way. Now, as it looks to enter the market, we are examining how boAt returned to the path of profitability while still facing challenges ahead.

What’s the News?

In FY25, boAt achieved a consolidated net profit of ₹60 crore, recovering significantly from the net loss of ₹79.7 crore in FY24 and a net loss of ₹129.5 crore in FY23. The FY25 results indicate a full recovery in performance following two years of unprofitable results. The standalone net profit stood at ₹64.2 crore, supported by disciplined cost management and product innovation.

In addition, FY25 saw an Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) of ₹142 crore, a significant improvement from the negative EBITDA in FY24.

Factors Driving boAt’s Growth

Here are some of the factors that have helped in the bounce back of boAt:

New Inclusion

The company launched 100+ new products in FY25. They include True Wireless Stereo (TWS) with head-tracking technology and advanced Knowles drivers. Such innovators extended the company’s product line into new markets and delivered against a niche consumer need. The diversified set of products allowed the company to be less reliant on legacy Stock Keeping Units (SKUs), which benefited total revenue and margins.

Localisation Push

By FY25, over 70% of production volumes were manufactured domestically, including Printed Circuit Boards (PCBs) and plastics. This localisation reduced import dependency, improved supply chain resilience, and lowered costs. It also aligned with government incentives under Production Linked Incentive (PLI) schemes, enhancing margins and supporting the “Make in India” strategy.

Premium Segment Growth

boAt’s premium audio product range, called Nirvana, was a significant contributor to the company’s FY25 revenue. The segment experienced a strong double-digit growth, fuelled by increased Average Selling Prices (ASPs) and improved margins. Growth in the premium space demonstrates a shift in consumer preference and further establishes the brand’s ability to compete in higher value categories, which enhances the company’s profitability.

Strategic Entry into connected consumer tech

FY25 marked the company’s entry into connected consumer tech via products like ‘TAG’, expanding into smart accessories. The boAt Tag, which is a small smart tracker that connects via Bluetooth, enables you to find misplaced items, such as keys, wallets, bags, or anything else. The boAt Tag uses the Google Find My Device network. This entry leverages IoT-enabled devices, creating additional revenue streams and positioning the brand well for future convergence into technology. It also helped build a customer base among technologically inclined customers and increased average value per order.

Marketing Efficiency

In FY25, the business entered into a strategic marketing partnership with Netflix and formed another one with the Indian Premier League (IPL) team Royal Challengers Bengaluru (RCB) to deepen connections and engagement with Gen Z and millennial consumer audiences. The response campaigns generated a positive brand recall and conversion rate at product launch. With a digital-first strategy, the company was able to lower customer acquisition costs (CAC) and improve marketing return on investment (ROI). Global Footprint

In FY25, there was strong traction in the Gulf Cooperation Council (GCC) markets, particularly in the United Arab Emirates (UAE) and Saudi Arabia, as the brand expanded its in-store presence and e-commerce partnerships. This expansion helped the company reduce its exposure to fluctuations in domestic market demand. IPO Readiness

The company submitted the draft IPO papers to the Securities and Exchange Board of India (SEBI) in April 2025, using the confidential pre-filing option. This means that the IPO plans won’t be publicly available until the DRHP is made public. This allows the firm to organise its financial structure and settle on a valuation without any public scrutiny to help instil confidence from potential investors.

What Challenges Does boAt Still Face?

While talking about the positives, there are many grey areas that remain a concern for boAt. This includes:

Limited International Revenue

Despite expansion into GCC markets, international revenue remains marginal, with no breakout figures disclosed in FY25 filings. This overdependence on domestic sales exposes the business to regional economic cycles and regulatory shifts.

Unlisted Share Price Drop

The unlisted equity value fell from ₹1,675 to ₹1,450 in six months—a 13.5% decline—despite the IPO announcement. This mirrors pre-listing trends seen in NSDL and HDB Financial, both of which listed at significant discounts. Such erosion in pre-IPO investor confidence may signal valuation concerns or overhang from secondary market liquidity.

Product Saturation Risk

As mentioned, in FY25, more than 100 products were launched under new SKUs, including premium audio and smart tags. However, this innovation comes with the risk of portfolio dilution and inventory accumulation. Rapid SKU proliferation that is outpacing demand can add pressure to working capital and may ultimately cause the need for markdowns or write-offs.

Extraordinarily High P/E

The price-to-earnings ratio stands at 312, which is significantly above industry benchmarks. For context, most listed consumer electronics firms in India trade between 25–60x earnings. Such a steep valuation multiple may be unsustainable unless backed by aggressive growth, which recent revenue trends do not support.

Revenue Contraction

While net profit rebounded to ₹60 crore in FY25, consolidated revenue declined to ₹3,097.8 crore from ₹3,122 crore in FY24, marking a contraction of ₹24.2 crore. This signals that profitability was driven more by cost-cutting than top-line growth, raising concerns about scalability.

Conclusion

boAt’s reversal is a major indicator of positive momentum in the Indian stock market, particularly among consumer technology and lifestyle companies. The company’s FY25 profit of ₹60 crore, after two years of losses, reflects operational discipline, cost containment measures, and innovation. Localisation, premium products and Internet of Things products are significantly driving growth and showcase resilience and the opportunity for scalable revenue streams.

However, challenges remain. To establish a sustainable position, boAt needs to aggressively work on diversifying its revenue streams beyond borders. Instead of just launching new products, the company should thoroughly analyse evolving trends to avoid ending up with a piling inventory.

Sources

The Economic Times
The Hindu Businessline
Financial Express