Ikea India Reports Widening Losses in FY25 Financial Results
Ikea India, the Swedish furniture and home furnishing retail giant, has disclosed concerning financial figures for the fiscal year 2025, revealing a significant expansion in losses alongside a decline in operational revenue. According to regulatory filings accessed through business intelligence platform Tofler, the company's total loss widened substantially during this period.
Financial Performance Details
The company reported a total loss of ₹1,325.2 crore for the financial year ending March 31, 2025. This represents a notable deterioration from the previous fiscal year's performance. In FY24, Ikea India had recorded a net loss of ₹1,299.40 crore, indicating that the company's financial challenges have intensified over the past year.
Revenue from operations also experienced a downward trend, declining by 3.33 per cent to ₹1,749.50 crore in FY25. This compares unfavorably to the ₹1,809.80 crore revenue generated during the preceding fiscal year. The company's total income, which incorporates other income streams beyond core operations, fell by 3.9 per cent to ₹1,780.10 crore for the same period.
Increased Expenditure and Borrowing
Despite the revenue contraction, Ikea India significantly boosted its spending on advertising and sales promotion activities. Expenses in this category surged by 14.06 per cent to ₹223.9 crore in FY25, up from ₹196.3 crore in the previous year. This strategic increase suggests the company is investing heavily in marketing efforts to stimulate consumer interest and drive sales.
The furniture retailer's total borrowing has also escalated dramatically as part of its expansion strategy. In FY25, borrowing reached ₹8,335.20 crore, marking a substantial increase from ₹7,060 crore in FY24 and ₹5,709.90 crore in FY23. This financial leverage supports Ikea's ambitious omnichannel approach to market penetration across India.
Expansion Plans and Investment Strategy
Ikea India continues to pursue aggressive expansion within the Indian market. The company currently operates three large-format stores located in Hyderabad, Navi Mumbai, and Bengaluru, complemented by two city stores in Worli and New Delhi. A significant investment of approximately ₹7,000 crore is earmarked for entering the National Capital Region with planned stores in Gurugram and Noida.
These developments align with Ikea's broader investment commitment to India. The company's foreign direct investment (FDI) limit is approaching completion of its original target. In 2013, the Indian government approved an FDI proposal of ₹10,500 crore by Ikea to establish ten stores with supporting infrastructure over a decade-long period.
Ingka Holding Overseas BV, based in the Netherlands, maintains a dominant 99.9 per cent equity stake in Ikea India as of March 31, 2024. This ownership structure underscores the global parent company's continued commitment to the Indian market despite current financial challenges.
Future Outlook and Leadership Perspective
Ikea India's leadership remains optimistic about the company's long-term prospects in the country. During the recent launch of online sales in Tamil Nadu, CEO Patrik Antoni announced in Chennai that the company plans to amplify its investment in India. This statement suggests that despite current financial setbacks, Ikea views India as a strategic growth market worthy of continued capital infusion.
The combination of increased borrowing, heightened marketing expenditure, and planned store expansions indicates that Ikea is pursuing a growth-at-all-costs strategy in the competitive Indian retail landscape. Whether this approach will eventually translate into improved financial performance remains to be seen as the company navigates the challenges of the Indian furniture and home furnishings market.
