New Delhi, Dec 24
The online pharmacy sector in the country will see steady revenue growth next fiscal, reducing operating losses to below 10 per cent from over 30 per cent in fiscal 2023, by sharpening focus on high-margin product segments and operational efficiencies, a report showed on Tuesday.
E-pharmacies are eyeing sustainable growth by diversifying into high-margin segments such as wellness products and medical equipments, which are expected to comprise 40 per cent of sales next fiscal, up from about 30 per cent now and under 15 per cent in fiscal 2023.
“Players are also moving away from aggressive discounting to reduce key operating costs (discounting, delivery, distribution and employee — or DDDE) from around 65 per cent in fiscal 2023 to below 35 per cent next fiscal, which should help narrow losses and accelerate the move to profitability,” said Poonam Upadhyay, Director, CRISIL Ratings.
While the sector will see steady revenue growth, securing timely equity funding will be essential for two key reasons: one, to secure the capital needed to maximise growth opportunities arising from under-penetration; and two, to effectively manage cash burn while supporting credit profiles during the expansion phase.