Rentomojo, the recently listed Indian furniture rental firm, posted a 52.8% year-on-year increase in its Q2 FY27 revenue to ₹142.1 crore but saw its net profit after tax drop 62.6% to ₹18.2 crore, largely due to unfavorable deferred tax impacts compared to the prior year.
- Q2 revenue grows 53% YoY to ₹142.1 Cr, operating profit rises on normalization
- Net profit falls 63% due to deferred tax expense, though sequential profit improves
- Subscriber base and rental inventory expand strongly, boosting asset utilization
What happened
In the quarter ended September 30, 2026, Rentomojo reported operating revenue of ₹142.1 crore, a 52.8% increase from the same period last year, driven by a 45% rise in customer orders and significant growth in subscribers and rental inventory. The company expanded its omnichannel footprint to 96 experience stores across 14 cities. Despite this strong top-line growth, Rentomojo's net profit after tax fell by 62.6% year-over-year to ₹18.2 crore, following a deferred tax credit in the prior year and a deferred tax expense this quarter.
On a sequential basis, the net profit improved significantly, increasing 133% from ₹7.8 crore in the previous quarter. Normalized profit after tax, excluding tax adjustments and exceptional items, rose 52.2% year-over-year to ₹24 crore. EBITDA also grew 52.7% to ₹58.8 crore. Total expenses increased by 53.2% year-over-year due to higher employee benefits and finance costs. The company disclosed it had used 63.7% of IPO proceeds, primarily for debt repayment, leases, and corporate purposes.
Why it matters
Rentomojo’s performance highlights the challenges and opportunities in the rapidly evolving furniture rental market in India. The strong revenue growth and increasing subscriber base reflect rising consumer preference for rental models and greater acceptance of flexible home furnishing solutions. The higher asset utilization rates and improved average revenue per item indicate the company’s operational efficiency and effective monetization of its inventory.
However, the decline in net profit reveals the impact of non-operational factors like deferred tax expenses. The rise in costs, including employee benefits and finance charges, also suggests that scaling and expansion efforts come with increased expenditure. Investors and stakeholders will watch how Rentomojo balances growth with profitability going forward, particularly as it continues to deploy IPO proceeds for strategic initiatives.
What to watch next
Going forward, key areas to monitor include Rentomojo’s ability to sustain subscriber growth and asset utilization while managing costs amid expansion. The company’s focus on technology and omni-channel experience stores could provide competitive advantages and improve customer retention. Tracking quarterly trends in normalized profit and cash flow will be important to gauge whether Rentomojo can convert top-line growth into consistent profitability.
Additionally, how the furniture rental market in India evolves post-pandemic, regulatory changes if any, as well as Rentomojo’s pricing strategies and product mix adjustments will affect future performance. Rentomojo’s management outlook on capital returns, margin improvements, and potential new market entry will also be pivotal for investors assessing the long-term trajectory of the firm.