Rentomojo shares have surged 38% above their IPO issue price of ₹404, as investors assess the company’s strong revenue growth, improving profitability and rising demand for rental furniture and appliances. Rentomojo shares listed on the stock exchanges on 17 September 2026.
Ishan Tanna, Senior Associate at Ashika Capital, said the company’s Q1 FY27 results highlighted robust demand, improving monetisation and healthy utilisation of its rental inventory.
Rentomojo’s ₹1,250 crore initial public offering (IPO) was subscribed 73 times, and the stock listed at a premium of around 20% to its issue price. According to Tanna, the company’s June-quarter performance has further strengthened investor interest, with its market capitalisation rising 8% to ₹5,800 crore following the results announcement, less than three weeks after listing.
Revenue from operations increased 51% year-on-year to ₹126.3 crore in Q1 FY27. Tanna highlighted the company’s normalised EBITDA of ₹52.3 crore, translating into a margin of around 41%, while normalised earnings before interest and tax (EBIT) stood at ₹29.2 crore, with a margin of nearly 23%.
However, reported profitability was affected by an exceptional loss of ₹11.37 crore following a fire at the company’s Noida warehouse.
Rising demand and inventory utilisation
Tanna pointed to strong growth in customer demand, with items ordered increasing 45.8% year-on-year to 3.29 lakh and live subscribers rising 36.3% to 2.83 lakh. Rentomojo’s live rental inventory also expanded 41% to 9.23 lakh items.
Inventory utilisation improved alongside this expansion. Average occupancy increased to 85.7% from 83.3% a year earlier, while period-end occupancy reached 86.8%. These trends highlight the company’s ability to grow its rental inventory while maintaining healthy utilisation levels, according to the brokerage assessment.
Better monetisation and cash generation
Tanna also highlighted improvements in monetisation. Average revenue per item rose 6.8% year-on-year to ₹1,663, while the number of items per user remained stable at 2.8. Purchase displacement, which measures the value of purchases replaced by renting, increased 51.6% to ₹413.7 crore.
Cash generation is another factor supporting the business model. Rentomojo generated operating cash flow of ₹173 crore in FY26, comfortably exceeding growth-related capital expenditure of ₹87.5 crore. Management has also highlighted an EBITDA-to-operating-cash-flow conversion ratio of more than 100% over the past three years.
Expansion and new product categories
Looking ahead, Tanna’s assessment highlights Rentomojo’s omnichannel expansion, entry into new cities and broader product portfolio as potential growth drivers. The company ended Q1 FY27 with 89 company-operated experience stores, up from 82 in March, while its offline channel recorded approximately 83% year-on-year growth.
Rentomojo is also expanding its private-label and contract-manufacturing initiatives. Since FY25, it has been sourcing its own refrigerators and washing machines manufactured by Dixon Technologies. Its entry into service-intensive categories such as water purifiers could further strengthen its offering through bundled maintenance services and potentially improve product economics.
Overall, Tanna’s assessment points to rising demand, improved inventory utilisation, better monetisation and cash generation as key factors supporting Rentomojo’s growth prospects. The company’s ability to sustain these trends while executing its expansion plans will remain important for its performance going forward.
Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
