Pharmeasy Growth

The debt equity of the company is at 0.24 in FY'21 which denotes a very low risk in terms of solvency position of the company. Even thought the total debt of the company has increased to INR 687 Cr in FY'21 which is mainly due to a cash credit loan taken from a bank as well as increase in current maturities of long term debt. But the company's total equity has also had a massive increase which is mainly due to the increase in the security premium reserve increasing by INR 3779 Cr in FY'21. This has increased the other equity of the company which has resulted in the lower debt to equity ratio.

The current ratio of the company is 1.63 in FY'21. The current assets of the company have increased by 177% in FY'21 over FY'20 which is because of a large increase in the trade receivables as well as inventory of the company. On the other hand the current liabilities have increased by 665% in FY'21 over FY'20 which is mainly attributable to the increase in short term borrowing of the company as a result of cash credit loan taken from a bank and unsecured loans taken as well in FY'21.

The company's EBIT has become further negative by INR 242 Cr in FY'21, which is because of the large increase in inventory expenses as well as increase in the remuneration of employees during the year. Due to this the interest coverage ratio has become negative.

The company has a negative EBIT of INR 576 Cr in FY'21 which is due to increased inventory purchase expenses as well as employee remuneration. On the other hand the revenue has increased massively by 220% in FY'21 over FY'20 due to an increased demand for pharmaceuticals and healthcare services in India as a result of the widespread pandemic. Hence the EBIT margin has become negative.

The company's net loss has almost doubled increasing from INR 335 Cr in FY'20 to INR 641 Cr in FY'21. This is because the company has faced higher expenses due to higher purchase of inventory to cope with the increased demand arising because of the pandemic as well as higher employee remuneration paid during the year. Another reason for increased expenses is the increase in legal consultation and professional fee due to the acquisitions made during the year. The revenue, on the other hand, has increased massively due to surge in sale of pharmaceuticals due to the  pandemic prevalent across the country.

The company has faced a net loss of INR 641 Cr in FY'21 arising despite having higher revenues in the financial year. This is because the company has increased its expenses in order to procure a higher inventory of pharmaceuticals and to pay a higher remuneration to its employees. On the other hand the total equity of the company has increased due to massive increase of INR 3083 in the reserves and surplus. Due to this the ROE is negative.

The company has a negative ROA because the assets of the company have increased 757% in FY'21 over FY'20 majorly due to the increase in the goodwill of the company in FY'21 as a result of the acquisition on Medlife International and Ascent health. The company has faced a net loss in FY'21 due to the large increase in its inventory purchase and employee benefit expenses outweighing the higher revenues in the current year.