Tata 1mg’s Net Loss Soars 2.3X To INR 1,259 Cr In FY23

Tata 1mg’s Net Loss Soars 2.3X To INR 1,259 Cr In FY23

SUMMARY

Tata 1mg’s operating revenue jumped 2.6X to INR 1,627 Cr in FY23 from INR 627 Cr in FY22

Tata 1mg reported a total expenditure of INR 2,893.6 Cr in FY23, a 147% jump from INR 1,171 Cr in FY22

On a unit level, the startup spent INR 1.7 to earn every INR 1 from operations

Tata Digital-backed epharmacy Tata 1mg’s net loss surged 2.3X to INR 1,254.8 Cr in the financial year 2022-23 (FY23) from INR 526 Cr in FY22. 

The startup, which entered the coveted unicorn club last year, also saw its operating revenue jump 2.6X to INR 1,627 Cr in FY23 from INR 627 Cr in the previous fiscal year. The startup generates revenue by primarily selling online medicine and conducting lab tests. 

Total revenue, including other income, stood at INR 1,633.9 Cr in the financial year under review as compared to INR 644.8 Cr in FY22.

On the expenses font, the startup saw a 2.4X increase in FY23. Total expenditure stood at INR 2,893.6 Cr in FY23, a 147% jump from INR 1,171 Cr in the previous fiscal year. 

Purchase of stock-in-trade continued to remain the biggest source of expenses in FY23. Tata 1Mg spent INR 1,222 Cr on materials consumed, a jump of 182% from INR 432.8 Cr in FY22. Purchase of stock-in-trade accounted for 42% of the total expenses during the year under review. 

Tata 1mg’s employee benefit expenses grew 61% to INR 354 Cr from INR 219.8 Cr in FY22. Employee benefit expenses generally comprise salaries, PF contributions, gratuity, among others. The startup has over 4,000 employees, as per LinkedIn. 

Tata 1mg’s advertising and promotional expenses stood at INR 135.2 Cr in FY23, a decline of 25% from INR 180 Cr in the previous year. It also spent INR 201.6 Cr for fulfilments, which mostly comprise logistics expenses, in FY23 as against INR 171.6 Cr in FY22. 

Non-cash expense in the form of net loss on remeasurement of financial liability designated at FVTPL (Fair Value Through Profit & Loss) ballooned to INR 668 Cr in FY23 from INR 48.8 Cr in FY22.

On a unit level, Tata 1mg spent INR 1.7 to earn every INR 1 from operations. 

1mg was one of the earliest bets of the Tata Group as part of its efforts to launch the country’s first superapp – Tata Neu. Tata Digital owned over 66% stake in the parent entity of Tata 1mg at the end of FY23.

Tata Digital acquired a majority stake in Tata 1mg (then 1mg) in June 2021. While the deal amount was not disclosed, it was estimated that Tata Digital infused about $100 Mn to $120 Mn in the startup then.

1mg was founded in 2015 by Prashant Tandon, Gaurav Aggarwal and Vikas Chauhan. The platform offers home delivery of medicines, health and wellness products, diagnostics services and doctor consultancy. 

Tata 1mg competes against the likes of PharmEasy, Reliance-backed Netmeds, Flipkart Health Plus, Apollo Pharmacy, among others. 

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