Mumbai-based API Holdings, the parent company of PharmEasy, released its financial report for FY23, revealing both revenue growth and significant challenges.
Revenue Sources and Expenditure Breakdown
PharmEasy’s revenue sources include the sale of pharmaceutical and cosmetic products, contributing Rs 5,925.3 crore, and diagnostic and other services, adding Rs 701.2 crore. The total expenditure for FY23 amounted to Rs 8,974 crore, with procurement costs forming the largest expense. Employee benefit expenses and marketing costs saw significant reductions.
Debt Repayment and Cost-Cutting Measures
PharmEasy, which abandoned its IPO plans in 2022, faced a cash crunch but successfully raised Rs 3,500 crore in a rights issue. The company has been focused on repaying debt, including a high-cost loan from Goldman Sachs. PharmEasy implemented cost-cutting measures, including layoffs and reduced marketing expenses, to navigate financial challenges. The finance costs surged to Rs 665 crore in FY23, indicating a substantial increase from the previous year.
Competition in the Online Pharmacy Market
PharmEasy continues to be a key player in the online pharmacy market, competing with Tata 1mg, MediBuddy, and Practo. Despite financial challenges, PharmEasy reported a gross merchandise value (GMV) of Rs 14,351 crore in FY23. However, the company has witnessed a shift in its market position, with Tata Digital-backed 1mg taking the lead in terms of GMV. The dynamic competition landscape poses both opportunities and challenges for PharmEasy in the evolving healthcare and e-pharmacy sector.