PharmEasy’s Fiscal Year 2023: Revenue Rises 16%, Net Loss Grows by 30%

Amidst an eventful fiscal year ending March 2023, API Holdings, the entity behind the popular online pharmacy, PharmEasy, reported a notable 16% surge in its operating revenue, reaching Rs 6,644 crore. Despite this robust growth, the company encountered a challenging period, with its consolidated net loss widening by 30% to a substantial Rs 5,212 crore. These figures offer an intriguing snapshot of the company’s journey during this fiscal year.

Throughout the fiscal year, the Mumbai-based company diligently pursued cost-curbing initiatives, notably halving its advertising and promotional expenses to Rs 235 crore, while also witnessing a 12% decline in staff costs to Rs 1,283 crore. However, amidst these efforts, PharmEasy grappled with the weight of surging finance costs, which soared to Rs 665 crore in FY23, representing an increase of more than 2.5 times from the previous fiscal year.

Despite facing the burden of debt repayment, the company has adjusted its strategies to ensure sustainable growth, significantly reducing its overall expenditure to prioritize its profitability plans. This shift in approach led to a reshuffling in its position within the e-pharmacy market, with Tata Digital-backed 1mg overtaking PharmEasy in terms of gross merchandise value, marking a notable milestone in the industry’s competitive landscape.

The bulk of PharmEasy’s revenue, accounting for almost 90%, was derived from the sale of pharmaceutical and cosmetic goods, with additional revenue streams encompassing licensing of internet portals or mobile applications related to sales and distribution of pharmaceutical and cosmetic goods, diagnostic services, and teleconsulting. The company recently concluded a substantial Rs 3,500 crore rights issue, affording it the opportunity to address pending debts while continuing its business expansion.

As a result of this rights issue, Ranjan Pai, chief of the Bengaluru-based Manipal Group, emerged as the largest shareholder in API Holdings, with at least a 15% stake in the company. Notably, some of PharmEasy’s lenders, including Goldman Sachs, MacRitchie Investments, and EvolutionX, converted a portion of their debt into preference shares, signaling a coherent effort to navigate the company’s financial landscape.

The evolving story of PharmEasy serves as a compelling illustration of the evolving e-pharmacy market, dominated by robust growth and the inherent challenges in achieving profitability. Amidst such intricacies, the company’s trajectory in FY23 presents an absorbing narrative of resilience and strategic recalibration, encapsulating the intriguing dynamics of the industry.