The FY26 numbers look like a turnaround. The maths behind them looks like a down round.
Imagine you run a shop.
Last year you sold goods worth ₹100. This year you sold ₹96. Your customers bought less. Your shelves moved slower.
And yet, you went home with 43% more profit.
Sounds like magic, no?
That's roughly what happened at Imagine Marketing Limited — the company that owns boAt, the brand stuck in every second pair of earphones in this country.
Except here's the twist. That same company was once marked at nearly ₹11,000 crore. Run today's profit through the market's usual arithmetic and you get a number closer to ₹3,000 crore.
In today's UnlistedZone's Analysis, we look at what boAt's latest annual report tells us about its business — and why a better profit might still come with a much smaller price tag.
First, let's get one thing straight. boAt doesn't really make earphones.
Look at its books and you won't find a single rupee of raw material cost. No plastic, no copper, no lithium. What you'll find instead is a line called Purchases of stock-in-trade — ₹2047 Cr of finished goods, bought from someone else and sold onward.
Its entire property, plant and equipment? ₹13.1 Cr. That's it. A company doing nearly ₹2930 Cr in revenue owns less machinery than a mid-sized textile unit.
So what does boAt actually do?
It designs. It brands. It markets. And it sells.
The hardware gets made by contract manufacturers. The "Make in India" bit is handled through a 50:50 joint venture with Dixon Technologies — a separate company, sitting off boAt's balance sheet.
And this is the thing about asset-light models. When you don't own the factory, you have very little to defend yourself with. Anyone can go to the same manufacturer in Shenzhen and get the same driver, the same battery, the same plastic shell.
So what stops a customer from buying the ₹800 no-name earphone instead of the ₹1,500 boAt one?
The brand. Only the brand.
Which is why the second-largest expense at boAt isn't salaries, or rent, or logistics.
It's advertising. ₹339 Cr of it.
To put that in perspective — boAt spent ₹2.2 Cr on research and development last year.
Read that again. For every ₹1 spent on R&D, roughly ₹153 went into advertising.
That's not an accident or a scandal. That's the model. Marketing is the factory here.
Particulars (In cr) | FY2025-26 | FY2024-25 | Change | % Chg |
|---|---|---|---|---|
| Revenue from operations | 2,928.08 | 3,062.83 | (134.75) | -4.4% |
| Other income | 40.24 | 26.81 | 13.43 | +50.1% |
| Total income | 2,968.32 | 3,089.64 | (121.32) | -3.9% |
| Purchases of stock-in-trade | 2,047.54 | 2,057.23 | (9.69) | -0.5% |
| Changes in inventories | 31.58 | 105.38 | (73.80) | -70.0% |
| Employee benefits expense | 130.04 | 111.57 | 18.47 | +16.6% |
| Finance costs | 7.79 | 20.15 | (12.36) | -61.3% |
| Depreciation & amortisation | 25.85 | 25.26 | 0.59 | +2.3% |
| Other expenses | 601.60 | 686.68 | (85.08) | -12.4% |
| Total expenses | 2,844.39 | 3,006.27 | (161.88) | -5.4% |
| Profit before tax | 123.93 | 83.37 | 40.56 | +48.6% |
| Current tax | 24.85 | – | 24.85 | n/a |
| Deferred tax | 6.93 | 19.15 | (12.22) | -63.8% |
| Total tax expense | 31.78 | 19.15 | 12.63 | +66.0% |
| Profit for the year | 92.15 | 64.22 | 27.93 | +43.5% |
Other factors where cost has reduced.
Particulars | FY2025-26 | FY2024-25 | Change | % Chg |
|---|---|---|---|---|
| Advertisement and promotion | 339.76 | 389.72 | (49.96) | -12.8% |
| Freight and transportation | 63.65 | 64.51 | (0.86) | -1.3% |
| Warranty expenses | 57.50 | 82.58 | (25.08) | -30.4% |
| Royalty and licence | 36.81 | 30.27 | 6.54 | +21.6% |
Here's where FY26 gets interesting.
Revenue fell 3.93%. Profit after tax jumped 43.48%, from ₹64.2 cr to ₹92 cr
The money didn't come from selling more. It came from three quiet decisions.
One. They stopped bleeding on smartwatches.
boAt reports three segments — Audio (earphones, headphones, speakers), Wearables (smartwatches), and Others (chargers, cables, gaming gear, grooming kits).
Wearables lost ₹46 cr at the segment level in FY25. This year? It made ₹2.9 cr
Tiny profit. But it's the direction that matters. India's smartwatch market turned brutal — every brand slashed prices, features became identical, and margins evaporated. boAt seems to have stopped chasing volume there and started chasing sanity.
Two. They cut the ad budget.
₹389 cr down to ₹339 cr. Half a billion rupees, gone from the marketing line.
Ad spend fell from 12.7% of revenue to 11.6%.
Now, this is a trade. Spend less on ads and your profit looks better today. But brand recall is a leaky bucket — stop pouring and it drains. Whether that ₹50 cr shows up as lost sales in FY27, we'll only know later.
Three. Fewer things broke.
Warranty expenses dropped from ₹82 cr to ₹57 cr. Either the products got better, or fewer people bothered to claim.
Add it up and you get the FY26 story: revenue down, discipline up, profit up.
Two customers accounted for ₹1692 cr of boAt's sales.
That's 58% of everything the company sold.
The report doesn't name them. But when a company describes itself as scaling through "leading online marketplaces," you can do the maths yourself.
This is the flip side of being digital-first. The marketplace gave boAt its distribution for free — no shops, no salesmen, no leases. It also gave the marketplace enormous leverage over boAt. Commission rates, search rankings, ad placements, private-label competitors sitting one scroll away.
Which explains the offline push. The company has been building a distributor-led network across Tier 1, Tier 2 and smaller cities. Slower to build. Lower margin. But it's yours.
Meanwhile, the growth is quietly shifting. Audio revenue fell 10% this year. "Others" — the chargers and cables nobody writes headlines about — grew 60%.
The category that made boAt famous is shrinking. The boring one is compounding.
Because there's a date on the calendar.
boAt has filed for an IPO — ₹500 cr of fresh shares plus a ₹1000 cr offer for sale by existing shareholders. The draft papers have been with SEBI since 2025, observations have come through, and the listing is expected on the NSE and BSE.
Now think about what a company wants investors to see in the year before it lists.
Not a growth chart with a loss at the bottom. A profit. A turnaround. Costs under control. A segment that stopped haemorrhaging.
FY26 delivers exactly that.
That doesn't make the numbers fake — the auditors signed off, the wearables turnaround is real, the cost cuts are real. But it does make the timing worth noticing. Every number in a pre-IPO annual report is technically true and carefully chosen.
Let's do some rough arithmetic.
boAt has about 15.06 crore diluted shares. Consolidated profit for FY26 was ₹84.5 crore. That works out to earnings of roughly ₹5.61 a share.
Now, what multiple does the market pay for a company like this?
If boAt were growing 30% a year, you could argue for 50x, 60x, whatever the story supports. But it isn't growing. Revenue fell this year. The flagship category shrank 10%. The profit came from cost cuts, and cost cuts only work once.
For a consumer brand with flat-to-declining topline, no manufacturing moat, and 58% of sales riding on two customers, the market usually settles somewhere around 35-40 times earnings. Generously.
Do the maths.
35x on ₹84.5 crore is roughly ₹3,000 crore. 40x gets you to about ₹3,400 crore.
Call it ₹3,000-3,500 crore.
Now here's the uncomfortable bit.
In October 2022, boAt raised ₹500 crore from Warburg Pincus and Malabar Investments. That round carried a valuation floor of around $1.2 billion. Trackers today still peg the company at roughly ₹10,900 crore. And when the IPO was first being talked about, the number floating around was $1.5 billion — about ₹12,500 crore.
So: last marked at ₹10,900 crore, potentially worth ₹3,000-3,500 crore on today's earnings.
That's not a discount. That's a two-thirds haircut — roughly ₹7,000 crore of paper value, gone.
Flip it around and it looks worse. At ₹10,900 crore, investors were paying roughly 129 times boAt's current annual profit. That number only makes sense if you believed 2022's growth would keep going forever.
It didn't.
This is the private-market hangover playing out in public, and boAt isn't alone in it. A lot of Indian consumer startups got marked at 2021-22 prices, on 2021-22 assumptions, and are now walking into a public market that asks a very boring question: what did you actually earn?
Of course, the market may disagree with all of this. Brand strength counts for something. A 2 cr-strong customer base counts for something. If investors decide to value boAt on revenue rather than profit — the way they once valued Mamaearth — the number could land higher. And if the IPO is priced sensibly, listing below the last private round isn't a disaster. It's just honest.
But somebody who bought in at ₹10,900 crore is going to have a difficult conversation either way.
The question a buyer should ask isn't "did boAt become profitable?"
It's "what happens to that profit when the ad budget has to go back up — and what is it really worth if it doesn't grow?"
Until next time…
Don't forget to share this piece with the friend who owns four pairs of boAt earphones and has lost three.
Sources: Imagine Marketing Limited, Annual Report and 13th AGM Notice, FY 2025-26. Valuation history from public reports of the October 2022 Warburg Pincus–Malabar round and IPO coverage. All company figures are standalone unless stated otherwise. Valuation estimates are illustrative, not a recommendation.