The Pune-headquartered health-tech firm MyLabs recorded a significant 396.7% surge in losses as it completely moved out from the profitability bracket which the company earned in FY22. The firm which recorded ₹16Cr of profit in the financial year 2022 has reported a net loss of ₹47Cr in FY23 as per its filing with the Registrar of Companies. The Indian biotechnology company was founded in 2016 by Shailendra Kawade. In the financial year 2023, the company reported a decline of approximately 64% in operating revenue. The revenue from operations in FY22 was ₹261Cr which has ballooned down to ₹95Cr in FY22-23.
Adar Poornawalla-backed firm has observed its scale skyrocket during the COVID-19 pandemic with the increase in demand for COVID-related tests and other services. But as the world is moving to normalcy, Mylabs has recorded cuts in its profits.
MyLabs working in the health-tech sector is an online patient portal that allows patients, hospitals, clinics, and stand-alone laboratories to view and manage laboratory results securely. It develops and sells diagnostic kits for clinical diagnostics. Just like in FY21 and FY22, selling of these kits was the major source of revenue for the startup. The global healthcare company added ₹29Cr from interest and other sources marking the total income to ₹124Cr in FY22-23.
Expenditure Breakdown
Coming to the breakdown of the expenses, the firm spent nearly 27% of its expenses on the manufacturing costs of the diagnostic kits. The burn on employee benefits including bonuses and increases in salaries along with money spent on marketing, legal, royalty, advertising, and other overheads took the overall expenditure to ₹185Cr in 2023 from being ₹250Cr in FY22. With the shrinking scale in mind, the manufacturing cost was reduced to 60% to ₹50Cr.
The company’s EBITDA and ROCE margin have reduced to -24.19% and -18% in FY23. The EBITDA margin in FY22 was 14.81% while ROCE stood at 11.42% the same year.
The budding online healthcare platforms that observed huge growth during the pandemic times have mostly underestimated the competition in offline firms. With time as the world leaves the “new normal” tag behind, offline health centers have started claiming their positions back in the market and are observing more and more people returning to their old trusted methods of checkups. MyLabs diagnostic kits and ancillary services model have also faced suspiciousness regarding the credibility of these processes. By the look of things, the firm will require a better diagnosis for its survival in the future.
