PharmEasy’s parent company, API Holdings, has reported a 16% increase in operating revenue to Rs 6,644 crore during FY23. However, its net loss grew by 30% to Rs 5,212 crore on a consolidated basis. The Mumbai-based company strategically reduced advertising and promotional expenses to Rs 235 crore, less than half of the amount incurred in FY22. Staff costs also saw a 12% reduction to Rs 1,283 crore. Despite these cuts, PharmEasy faced a surge in finance costs during FY23 to Rs 665 crore, almost 2.5 times the amount recorded in FY22.
Facing a debt-repayment burden, PharmEasy shifted its focus on profitability plans, leading to a change in its leadership position in the e-pharmacy market to Tata Digital-backed 1mg in terms of gross merchandise value. Nearly 90% of the company’s revenue came from the sale of pharmaceuticals and cosmetic goods. Other revenue streams included licensing of internet portals or mobile applications related to the sales and distribution of pharmaceutical and cosmetic goods, diagnostic services, tele-consulting, among others.
Recently concluding its Rs 3,500 crore rights issue, PharmEasy has gained the financial flexibility to clear pending debt and continue its business growth. Ranjan Pai, chief of the Manipal Group, emerged as the largest shareholder in API Holdings, holding at least a 15% stake after the rights issue. PharmEasy’s rights issue valuation was at a 90% discount to its peak valuation of $5.6 billion.
As part of debt conversion, some of PharmEasy’s lenders, including Goldman Sachs, MacRitchie Investments, and EvolutionX, converted a portion of their debt into preference shares in the Temasek-backed firm. The Competition Commission of India has granted approval for the issuance of preference shares in API Holdings to these entities. In the competitive landscape, PharmEasy faces rivals such as Tata 1mg, Flipkart Health Plus, Reliance Netmeds, Apollo, among others. Additionally, the company owns the listed diagnostics firm Thyrocare.
