B2B ecommerce unicorn Udaan returned to revenue growth in FY26 after several years of decline, with operating revenue increasing 12.6% to Rs 5,134 crore from Rs 4,561 crore in FY25. Its net loss narrowed 19.4% to Rs 851.5 crore, compared with Rs 1,055.4 crore a year earlier, according to financial statements filed by its Singapore based parent.
The improvement marks a shift for the Bengaluru based company, whose revenue fell around 40% in FY23, grew only marginally in FY24 and declined approximately 20% in FY25. But the recovery comes with a significant caveat: Udaan’s financial statements flag material uncertainty over its ability to continue as a going concern.
The numbers point to progress in the company’s operating turnaround, but not yet a clean financial reset.
- Tighter Operations Help Udaan Return to Growth
Udaan has moved away from aggressive geographic expansion towards a cluster led model that concentrates on improving performance within existing markets and categories.
SVP Vishnu Menon said the company’s revenue grew at a compound annual growth rate of around 25% over the 10 quarters from Q4 CY23 to Q1 CY26. Contribution margin improved by nearly 500 basis points, while EBITDA burn fell around 70%, according to his LinkedIn post.
The company has also focused on groceries and essential goods after exiting non-core categories such as lifestyle and general merchandise. Private labels now contribute approximately 15-25% of staples sales across operating cities, according to Menon, potentially improving margins and increasing customer spending on Udaan’s platform.
Cost movements were mixed in FY26. Material expenses rose 11.3% to Rs 4,859 crore, while logistics expenses increased 16.7% to Rs 182 crore and finance costs climbed 33.5% to Rs 247 crore. Employee benefit expenses fell to Rs 347.5 crore from Rs 500 crore, partly because employee stock option (ESOP) expenses declined from Rs 280 crore to Rs 140 crore.
- Balance Sheet Pressure Remains the Bigger Concern
At the end of FY26, Udaan’s current liabilities exceeded its current assets by Rs 1,391 crore, while total liabilities were Rs 790.9 crore higher than total assets. The company said it received additional funding after the financial year and expects revenue growth and cost reductions to improve operating cash flows.
In July 2026, Udaan announced a $160 Mn recapitalisation involving fresh equity, new debt and debt to equity conversion. In September, it agreed to acquire Swiggy’s retail distribution business Lynk Logistics for Rs 500 Cr, with Swiggy set to receive an approximately 2.8% stake and invest another Rs 75 Cr for an additional 0.4% stake.
The deals strengthen Udaan’s financing and distribution position, but they do not by themselves resolve the balance sheet concerns highlighted in its accounts.
Udaan is reportedly targeting an IPO by early 2028, with profitability expected by the end of 2027. That timetable will depend on whether revenue growth translates into sustainable cash generation and a stronger financial position.
The Unicorn Magazine:- Editing by Dhiraj Shaw
