Tata 1mg’s financial statements sourced from the Registrar of Companies (RoC) indicate its revenue to have soared by 21% to Rs 1,968 crore in FY24 from Rs 1,627 crore in FY23. Its losses came down to Rs 313 crore in FY24 from 1,255 crore in the previous fiscal year, showing a drop of 75%.
Breaking down the income for the firm in the financial year ended March 2024, income from sales of medicines contributed 81.3% of the total revenue, standing at Rs 1,599 crore with a 24% increase from Rs 1,290 crore in the previous year.
The company made Rs 23 crore from interest, gain of financial assets, and other sources such as lab test fees, patient support programme, advertising, and shipping- taking the total to Rs 1,991 crore.
The Gurugram-based firm’s total cost for FY24 was Rs 2,303 crore, 20.4% more as compared to Rs 2,894 crore in FY23, of which medicine procurement cost accounted for 56% at Rs 1,289 crore, 8.5% more than Rs 1190 crore in FY23. Employee benefits, information technology, commissions, packaging, advertising, and fulfilment were some of the major overhead costs.
The growth in revenue and controlled costs were the driving forces in reducing the losses as the major contributor to the firm’s losses in FY23 was the FVTPL cost, amounting to Rs 668 crore. Tata 1mg’s EBITDA margin was noted -10.85% in FY24 as compared to -71.66% in FY23. while the firm had to spend Rs 1.78 to earn a rupee in FY23, the same was Rs 1.17 for FY24. ROCE for FY24 was -341.99.
In June 2021, Tata Digital acquired a 55% stake in 1mg, and has gained 8.5% more ever since, now holding 63.5% stake with the e-medicine platform being valued at $1.25 billion. Its enterprise value to revenue multiple was last noted as 4.78X.
The company’s cost control also represents the realization that the e-commerce firms have come to, that acquiring customers at high cost has become unfavourable because of loyalties becoming non-existent. It has prompted them to adapt to data-led targeted campaigns and discounts.
