Ad space, enterprise products sale boosts Google India FY24 financials

Mumbai: Google India recorded an 11% increase in gross advertising revenue, reaching ₹31,221 crore for the financial year ending March 31, 2023, compared to ₹28,040 crore in the year-ago period, according to its filings with the Registrar of Companies.

The company paid ₹28,477 crore to Google Asia Pacific Pte Ltd for the purchase of ad space, reflecting an 11% rise from last year’s ₹25,717 crore.

As a leading player in search and digital video advertising space, Google India earned ₹2,743 crore in net advertising revenue, an 18% increase from the previous year. The company owns market-leading products and services including the likes of Google Search, Play Store, YouTube, Chrome, and Google Maps.

Gross sales from enterprise products rose by 35% to ₹1,551 crore. Google India paid ₹1,396 crore to Google Asia Pacific for services related to enterprise products, up 34% year-on-year.

Net revenue from the sale of enterprise products increased by 40% to ₹155 crore.

Google India declined to comment on the financials.The company provides information technology (IT) and IT-enabled services (ITES) to its group companies within the internet industry. It also acts as a third-party reseller of advertising space on the Google AdWords platform and other Google advertising products and services in India, catering to advertisers looking to reach consumers and business users online.Expenditure falls
Total income from continuing and discontinued operations fell by 25% to ₹7,097 crore, while total expenditure decreased by 32% to ₹5,186 crore. Net profit increased by over 6% to ₹1,424 crore.

Total income from continuing operations grew by 26% to ₹5,921 crore, whereas income from discontinued operations declined by 75% to ₹1,176 crore.

Net profit from continuing operations increased by 60% to ₹1,294 crore, while net profit from discontinued operations fell by 76% to ₹130 crore.

Transfer of IT biz operations
In its regulatory filing, Google India stated that it had submitted an application with the National Company Law Tribunal (NCLT) to demerge its IT business by transferring it to Google IT Services India.

The NCLT approved this scheme of arrangement on May 25, 2023, and it was implemented in the financial statements effective June 30, 2023.

Accordingly, the IT business operations were officially transferred to Google IT Services India as of April 1, 2021, in line with the scheme’s provisions.

Additionally, in March this year, it entered into a bilateral advance pricing agreement (BAPA) with the Central Board of Direct Taxes (CBDT) under Section 92CC of the Income-Tax Act, 1961.

This agreement sets arm’s length pricing for transactions involving the purchase of advertising space and enterprise products from Google Asia Pacific for FY 2016-17 through FY 2024-25.

Following the BAPA, Google India recognised additional income of ₹229 crore for FY17 to FY23 under “Revenue from Operations (net)” in its financial statement for the year ending March 31, 2024. This additional income has been duly reported for tax purposes, the company stated.

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