RentoMojo Files Its RHP With ₹104 Crore FY26 Profit As Furlenco's Rises 19-Fold

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RentoMojo has filed its red herring prospectus, trimming the offer for sale component to 2.7 crore shares alongside a ₹150 crore fresh issue, and disclosed a fourth consecutive profitable year.

Restated profit after tax rose 142 per cent to ₹104.2 crore in FY26 from ₹43.1 crore, helped by a one-time tax credit of ₹36.6 crore. Operating revenue climbed 45.5 per cent to ₹387 crore from ₹266 crore, and total income reached ₹394 crore. EBITDA rose 38 per cent to ₹163.5 crore, though the EBITDA margin narrowed to 41.5 per cent from 43.6 per cent as expenses grew 41.5 per cent to ₹323.9 crore. Gross items ordered rose 42.5 per cent to 9.89 lakh and product occupancy edged up to 83.3 per cent. The company operates across 22 urban markets.

Its closest competitor reported in the same window. Furlenco's profit rose to ₹59.52 crore in FY26 from ₹3.11 crore, a 19-fold increase and its second consecutive profitable year. Operating revenue grew 61.9 per cent to ₹370.43 crore from ₹228.74 crore, with furniture rental contributing 92 per cent of it. EBITDA nearly doubled to ₹129.5 crore and the margin expanded to 35.01 per cent from around 29 per cent. Return on capital employed improved to 13.17 per cent from 5.37 per cent, and cash and bank balances more than doubled to ₹75 crore.

Furlenco's operating revenue has grown 2.6 times in two years from ₹140 crore in FY24, since Sheela Foam took a 35 per cent stake. Founded in 2012, it runs more than 300 SKUs across 28 cities and has raised over $290 million.

The number that explains both companies is not a profit figure. Furlenco now spends 93 paise to earn a rupee of operating revenue, against ₹1.03 a year earlier. That is the point at which a business stops subsidising its own customers.

Furniture rental took more than a decade to reach it, and the reason is structural rather than commercial. This is an asset-heavy subscription model. The company buys a sofa once and must rent it repeatedly across several tenants before the asset pays for itself. Everything depends on occupancy and asset life. RentoMojo's product occupancy is 83.3 per cent. Below some threshold you are running a warehouse. Above it you are running an annuity.

That is the inverse of the consumer internet model these companies were funded alongside. Quick commerce is asset-light and demand-heavy, and needs volume to keep growing. Rental is asset-heavy and demand-light, and needs a stable base of renters rather than an expanding one. The capital requirement is front-loaded and the return arrives slowly, which is precisely why it looked like a poor business through the growth years and a sound one now.

Both companies date from around 2012. Neither found a shortcut. What changed is that they held occupancy high enough for long enough.

The two sets of numbers are not equivalent, and anyone reading the prospectus should hold the difference clearly.

RentoMojo's 142 per cent profit growth includes a one-time tax credit of ₹36.6 crore. Strip it out and the underlying figure is closer to ₹67 crore, a rise of roughly 57 per cent rather than 142. More telling, its EBITDA margin contracted from 43.6 per cent to 41.5 per cent while revenue grew 45.5 per cent, because expenses grew faster. Performance marketing rose 86 per cent, contractual manpower 54 per cent, employee costs 47 per cent.

Furlenco moved the other way. Its EBITDA margin expanded from about 29 per cent to 35 per cent, and its cost to earn a rupee fell.

So the company about to price a public offering carries the larger headline number and the softening margin, while the one staying private carries the smaller number and the improving one. Neither is a verdict. RentoMojo is deliberately spending into expansion ahead of a listing, which is a defensible choice. But a 142 per cent figure resting partly on a tax credit deserves to be understood before the roadshow rather than after it.

The timing is the more interesting part. Indian private capital is rotating towards infrastructure, credit and control transactions and away from growth venture, while public markets price on cash flow rather than growth multiples. Rental sits closer to a leasing business than to a startup: predictable subscription revenue, physical assets on the balance sheet, occupancy as the operating metric. RentoMojo listing in this window rather than in 2021 is not misfortune. It is the correct window for this kind of asset.

The limit is size. Two companies, roughly ₹387 crore and ₹370 crore of revenue, across 22 and 28 cities. The model depends on urban households that move often enough to prefer renting to owning, which ties both directly to the residential rental cycle. If churn slows, occupancy falls, and occupancy is the whole business.

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