A significant chunk of the increase in Tata 1mg’s loss was attributable to a Rs 668.1 crore one-time expense. The expense was recorded against a loss on remeasurement of a financial liability designated at fair value through profit or loss (FVTPL). This led to the company’s miscellaneous expenses ballooning to Rs 906.2 crore in FY23 from Rs 241.4 crore in FY22.
During FY23, sale of medicines accounted for nearly 80% of the company’s operating revenue, while the remainder was attributable to services such as diagnosis, consultation and testing. Tata 1mg also earns revenues from advertising on its platforms.
Revenue from sale of products stood at Rs 1,290 crore in FY23, more than double the previous year, while income from services and other operations totalled Rs 337 crore.
On the expenses front, the epharmacy’s wage bill increased 58% on year to Rs 313.87 crore.
The epharmacy was hived off from Healthkart in 2015 and Tata Digital acquired a majority stake in the company in 2021.
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Tata 1mg’s FY23 financials were first reported by online news portal Entrackr.The widening of the online healthcare company’s loss adds to the woes of Tata Digital, which saw its other consumer business, BigBasket, also bleeding during FY23.
ETtech reported in June that Innovative Retail Concepts, which runs the business-to-consumer (B2C) arm of BigBasket, reported an 89% spike in its net loss for the year ended March 2023, even as operating revenue grew almost 5%.
The growth in the Tata 1mg’s scale comes at a time when the epharmacy sector has been facing heat from policymakers. In February, the Central Drugs Standard Control Organisation (CDSCO) had issued showcause notices to various online pharmacy firms, including Tata 1mg, Pharmeasy, Flipkart Health+, and Netmeds suggesting that they were in violation of existing norms.
In response to a question on the status of the showcause notices issued to epharmacies, the government said on August 8 that the firms had mostly responded by stating that “they are only providing online platform for facilitating the sale of pharmaceutical products to customers and the platform [SIC] operate solely as intermediaries, connecting the users and the licensed pharmacies”.