PharmEasy, the big name in the online healthcare aggregator business, has been inheadlines. Recently, the company recorded a positive cash flow with its EBITDA of around Rs 16 crore. In addition, PharmEasy also reported that its operating revenue in April was Rs 600 crore, the highest since its inception. In the last few years, the company's net loss widened due to unstable business operations.
As a result, PharmEasy investors have a confusion about the business's future outlook in the share market. However, the recent comeback of PharmEasy in terms of positive cash flow proves a positive sign for the company and investors. PharmEasy pre-IPO shares performance improves in the grey market, resulting in high prices.
You might want to know how the company managed the positive cash flow despite business challenges and economic slowdown. Make sure to stick with this blog till the end to know everything about PharmEasy recent financial performance.
About PharmEasy- India's leading Online Healthcare Provider
API Holdings Ltd, popularly known as PharmEasy, is India's largest digital healthcare aggregator. The platform provides information, prescription, medical consultation, and medicine delivery to people in different parts of the country. PharmEasy was founded in 2015 by Dr. Dhaval Shah and Dharmil Sheth to make online pharmacy accessible and affordable to everyone.
The company has projected growth since its inception. In FY21, the Gross Merchandise Value (GMV) of PharmEasy was $1.05 billion, of which the company's B2C operations consisted of 21% while B2B operations comprised 72%. In addition, PharmEasy also served as the wholesaler of pharma and OTC products.
Business Model of PharmEasy
The business model of PharmEasy is simple as it connects buyers, suppliers, and distributors together via its platform. Buyers have the option to choose from its various services, such as medicine and OTC products, and book an appointment for a diagnostic test. The company earns revenue by selling the medicine, for which it gets 1-2% of the commission.
Apart from this, PharmEasy also earns a specific percentage by advertising the products of various Pharmaceuticals and nutraceutical companies. The company's business segment is different, earning good revenue. Various business segments of the PharmEasy are as follows:
- Distribution to retailer
- Distribution to medical institutions and chemists
- Diagnostic services
- Direct-to-PharmEasy (D2P) services
- Telecommunication services
- ERP services for the pharmacies
The business model of PharmEasy is different from its competitors and helps the company target different types of customers.
How PharmEasy Generated Positive Cash Flow?
The improved performance of PharmEasy shares clearly indicates that the company generated a positive cash flow. As per the financial data shared by the company in April, PharmEasy recorded a positive cash flow due to its efforts to reduce costs. In addition, various sources also suggested that PharmEasy cut down the employee benefits expenses like Employee Stock Ownership Plan (ESOP), which helped it achieve a positive cash flow.
As a result, the company's EBITDA for FY23 reached Rs 16 crore, which helped the company improve its financials before an IPO. PharmEasy achieved a positive EBITDA just before the repayment to the lender Goldman Sachs. Here are the possible efforts of the PharmEasy that helped it achieve positive cash flow:
Cut Down Expenses
The prominent move that helped PharmEasy come back with net positive cash flow is to cut down the expenses. In the last few years, the company's financial performance remained negative, making it difficult to record a positive net profit. Due to this, PharmEasy could not secure new funding from investors.
In November 2021, PharmEasy filed a DRHP with SEBI for its IPO to raise more than Rs 6,000 crore from the public. With the strategy of lowering the business expenses, including cutting down the employee benefits expenses, the company successfully achieved a positive net cash flow in the last quarter.
Business Expansion Plan
Apart from controlling the cash burn, PharmEasy also focused on the business expansion plan that helped it achieve positive cash flow. Whether it's expanding services or targeting new geographical locations, PharmEasy worked towards its business expansion.
As a result, the registration of new users has increased by 23% in the last two years on their various digital platforms. With the improved business performance, PharmEasy share price in India increased, which directly benefited its retail investors.
Raise New Funds
For any business, it is essential to access new funds to boost the business operations that directly affect cash flow. PharmEasy participated in various funding rounds and secured the funding of its investors like Goldman Sachs. The company has used the new funds to expand the business, creating demand for its services and bringing in new customers. As a result, the company managed a positive cash flow and made an epic comeback regarding financials.
The company's efforts to manage the positive cash flow and adjusted EBITDA are also vital from an IPO point of view. As for now, PharmEasy unlisted shares are traded in the grey market, and the company is gearing up for its IPO, through which it will raise around Rs 6,000 crore by providing its listed shares to the public.
Current Performance Of PharmEasy In Unlisted Shares Market
PharmEasy is a company that has shown impressive growth in the last few years. The positive cash flow and EBITDA are signs that every investor should take advantage of PharmEasy's success by investing in it.
However, the company only allows its investors to invest via PharmEasy pre-IPO shares traded in the grey market. Investors can buy its listed shares once the PharmEasy IPO goes public.
Before you make an investment decision, you must analyse PharmEasy current performance in the unlisted share market. Here is the financial report of PharmEasy unlisted shares for the last three financial years:
| Particulars (in Rs cr.) | FY20 | FY21 | FY22 |
| Operating Revenue | 667 | 2,335 | 5,728 |
| Total Revenue | 737 | 2,369 | 5,781 |
| Finance Cost | 12 | 43 | 258 |
| Employee Benefit Expenses | 137 | 270 | 1,458 |
| Profit After Tax | -335 | -641 | -3991 |
| Depreciation | 19 | 62 | 158 |
| EPS | -12 | -2 | -7 |
The above data in the table clearly shows the growth of PharmEasy in terms of financials. The company's operating revenue increased from Rs 667 crore to Rs 5,728 during FY20-22. However, profit after tax decreased over the years, negatively impacting the company's financial performance in the pre-IPO market. The positive sign for the investors is that in the recent quarter, PharmEasy managed to achieve a positive EBITDA. Another financial metric you should closely monitor is PharmEasy unlisted share price In India. Here is a quick overview of PharmEasy pre-IPO shares price:
The unlisted share price chart of PharmEasy for the last few months has shown a sudden spike. On an average, PharmEasy share price remained between Rs 20-23.5 per share. However, PharmEasy share price today is Rs 22.0 per updated market data.
According to financial analysts, PharmEasy unlisted shares price is expected to increase with the company's performance. You should keep monitoring the change in PharmEasy stocks price and financials to make a profitable investment decision.
Start Your Investment In Pre-IPO Stocks With Stockify
PharmEasy's recent financials indicate its future growth in the healthcare industry and pre-IPO market. It is an opportunistic time to buy PharmEasy unlisted shares, whose price is expected to increase in the coming months. In addition, the company is also planning to launch an IPO, of which you can take advantage in the future. If you are confused about buying unlisted shares, our experts at Stockify will help you throughout the process. Our qualified unlisted shares brokers and experts will walk you through registration, Pre-IPO selection, and trading.
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FAQs
1- What is the EBITDA of PharmEasy for the recent financial year?
As per the data shared by the company in April 2023, it recorded a positive EBITDA of approx 14 crore with an operating revenue of Rs 600 crore.
2- How Can I Invest In PharmEasy Shares?
Since PharmEasy is not a listed company, you can only invest in PharmEasy unlisted shares by using online pre-IPO stocks trading platforms like Stockify. For more info, connect with us now!
3- Is It Profitable To Invest In PharmEasy Unlisted Shares?
PharmEasy recorded a positive cash flow in the last quarter and offered a good return on investment. So, it is profitable to invest in PharmEasy unlisted shares.
4- What Is The Estimated Profit Margin Of PharmEasy?
Based on the recent financials of PharmEasy, the estimated profit margin of the company is 16-22 percent. The company makes most of its profit from various schemes and medical offerings.
5- How To Check The PharmEasy Unlisted Share Price In India?
Stockify is India's trusted platform for checking PharmEasy Pre-IPO shares price and other financial data. Here, you also get access to the other companies' unlisted shares.
