Sastasundar Ven. Management Discussions

economic outlook

Global economy

In its latest World Economic Outlook report, released in April, IMF had projected the global growth to fall from 3.4% in 2022 to 2.8% in 2023, before settling at 3% in 2024. Advanced economies are expected to see an especially pronounced growth slowdown, from 2.7% in CY 2022 to 1.3% in CY 2023. With economic activity slowing, especially in manufacturing, medium-term growth prospects globally could remain weak, and higher inflation could require more monetary policy tightening. However, the IMF believes the slowdown will not be as severe as previously predicted, due to recovery in demand in the Emerging markets and Developing Economies. The easing of energy costs and the re-opening of China would facilitate faster economic growth in 2024.

IMF also stated that the global economy has shown some resilience despite successive shocks in recent years and the rapid rise in interest rates. The global growth inspite of the challenges of Russia-Ukraine war, Global supply chain issues and aftereffects of the pandemic has still remained in positive territory, supported by strong labour markets and robust demand for services.

Indian Economy

Indias real GDP (Gross Domestic Product) grew by 7.2% in FY2023, as compared to the expansion of 9.1% in FY2022 as per National Statistical Office (NSO). Despite the GDP growth moderating to the previous year, India remains one of the fastest growing economies among major global players. However, in a year which saw growth decelerating across the world with recessionary expectations building up, the Indian economy still exhibited resilience, underpinned by robust domestic consumption demand and well supported by the Governments push on infrastructure buildup in various parts of the economy.

Recently, India became the worlds fifth largest economy by overtaking the United Kingdom. Now, the United States, China, Japan, and Germany are the only nations with economies larger than Indias.

The RBI has projected Indias GDP growth at 6.5% for FY24 and has predicted inflation to be at 5.4% for FY24. The Repo rate has been maintained at 6.5% by RBI in its Aug 2023 policy meet after doing six consecutive rate hikes of 250 basis points in FY23.

Industry Structure and Developments

Indian Domestic pharma Industry

The Indian pharma industry has grown from USD 35.41 billion in FY18 to USD 49.78 billion in FY23 and as per report by CareEdge Ratings, the domestic pharmaceutical industry would likely reach US$ 57 billion by FY25. Globally, Indian pharma industry has a strong footprint in the generics segment. The pharma exports and domestic market contribute equally to the overall Indian pharma Industry.

The Indian pharmaceutical business experienced a compound annual growth rate (CAGR) of 6-8% from FY18 to FY23, mostly due to an 8% increase in exports and a 6% increase in the domestic market. The Indian pharmaceutical market grew by about 5% in FY23, reaching US$ 49.78 billion. The local market expanded 7% year-over-year, while exports only increased by a meagre 3%.

Indian Health tech startup ecosystem - a Surge in Funding and Investment

The Indian health tech startup ecosystem has witnessed a surge in funding and investment. Investors are drawn to Indian health tech startups for various reasons.

First and foremost, the Indian market is expanding, and this influx of funding is paving the way for startups with the necessary resources to scale their operations, develop robust technologies, and expand their reach. India has a population of about 1.4 billion people, with a rising number of individuals accessing healthcare. Second, the Indian government is aggressively spending on healthcare. The Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, a national health insurance program, is one of several efforts introduced by the government to increase access to healthcare. Third, India has an extensive reservoir of talent. Fourth, the startup ecosystem in India is flourishing.

The Indian health tech startup ecosystem is still in its growing stages, but it is fast expanding. Investors recognize the potential of the Indian market and are putting their money into businesses that are discovering new solutions to problems.

Key factors attracting Investors eye towards health tech startup:

Technological advancements and market potential:

Health tech startups in India are leveraging their strong IT expertise to develop innovative healthcare technologies, such as telemedicine platforms, health monitoring devices, AI-based diagnostics, and health information systems. Rural India is home to approximately 65% of the countrys population, creating a sizeable unexplored market for health tech businesses. As smartphone usage and internet access increase in rural regions, the possibility of using technology and digital solutions to reach underserved people is rising.

Rise in chronic diseases:

The prevalence of chronic diseases such as diabetes, heart disease, and cancer are increasing in India. These disorders are frequently expensive to treat and can result in long-term incapacity or death. Remote patient monitoring and telemedicine are two examples of health tech firms providing innovative products and services to assist individuals in managing chronic conditions.


Telemedicine has emerged as a game changer in rural healthcare, involving the distant diagnosis and treatment of patients using telecommunications technology. Health-tech entrepreneurs are creating platforms and apps that allow patients in rural locations to consult with doctors in the cities. Patients are no longer needed to travel large distances and may obtain prompt medical advice and medicines from the comfort of their own homes or villages.

Affordable and scalable solutions:

Investors are attracted to health tech startups that offer affordable and scalable solutions. These startups can deliver healthcare services for a fraction of the cost of traditional techniques by harnessing technology. Furthermore, the scalable structure of digital platforms enables them to reach many consumers simultaneously, maximizing their influence.

Availability of skilled talent:

India has a big pool of highly talented engineers and scientists well-versed in cutting-edge technology. This reservoir of skills is an invaluable resource for health tech startups.

Health data analytics and artificial intelligence:

The healthcare business creates a large quantity of data, which may be used to get valuable insights for improving patient outcomes. Health tech startups use data analytics and artificial intelligence to analyze patient data, detect patterns, and diagnose accurately. These technologies can help forecast disease outbreaks, optimize resource allocation, and improve preventative treatment in remote locations. The potential of AI in healthcare presents an attractive investment opportunity for those looking to invest in the future of rural healthcare.

Government initiatives and support:

The Indian government understands the need to harness technology to enhance healthcare services, particularly in rural regions. Increased investment in health tech startups has been facilitated by initiatives such as the National Health Policy and the Digital India campaign. The governments assistance creates a favorable regulatory framework and financial opportunities, encouraging investors to invest in this area.

e-pharmacy gaining traction in market

The e-pharmacy market was valued at INR 50.71 Billion in 2020. It is estimated to reach INR 458.14 Billion by 2026, expanding at a compound annual growth rate (CAGR) of ~44.99% during the 2021-2026 period as per Report Ocean

In the recent years, e-pharmacy emerged as a better and more convenient approach that addressed the issues faced by the consumers and provided superior customer solutions over its physical counterparts.

The market is categorized into two segments chronic and acute therapy. In 2020, the chronic therapy segment dominated the market, accounting for 63.42% of the revenue. It is expected to dominate during the forecast period. However, its market share is likely to decline to 53.92% in 2026. The acute therapy segment is forecast to achieve promising growth during the forecast period. Its market share is anticipated to increase from 36.58% in 2020 to 46.08% in 2026, expanding at a CAGR of 50.56% during the 2021-2026 period.

Consumers with chronic conditions require long-term treatment, and thus, have repeated need for medication. People prefer e-pharmacy platforms, owing to the availability of a wide range of medicines at discounted prices. Customers may increasingly prefer these platforms for managing acute ailments such as common cold in the coming years.

The market has gained traction in recent years because of increased penetration of the internet and smartphones, prevalence of lifestyle disease and government initiatives. Discounts impacting profitability, data breaches and cybercrime and bottleneck in supply network are a few of the factors that impedes its development.

Furthermore, the digital-enabled collaboration between online and offline pharmacies will be the way forward to provide the best customer-patient experience. Such is the only way to co-drive value for consumers. For instance, tie-ups with local pharmacies could offer last-mile delivery by allowing offline vendors to expand their bases. Such a model will also provide consumers with easier access to both online and offline pharmacies to choose from based on their requirements, availability and price.

Indian Diagnostic Market Outlook

According to research firm Edelweiss, the domestic diagnostic industry is estimated at $9 billion (around Rs 67,500 crore) and is expected to grow at a compounded annual growth rate (CAGR) of 10 per cent over the next half a decade. Additionally, growing healthcare awareness among the population related to early disease diagnosis and treatment is expected to fuel the market growth over the next few years. Also, India is emerging out as a medical tourism hub and a lot of medical tourists are visiting the country for getting their treatment done on account of availability of cost effective and better treatment options. This in turn is expected to positively influence the market growth through FY2027.

The growth in the industry is largely volume-driven and is highly fragmented. That is, dominated by a few large (organised) players and various small and regional players. Analysts point out that 80-85% of the industry is unorganised or dominated by regional players.

So far, higher life expectancy and changes in lifestyle, a health-conscious population, and improvement in testing services, could directly contribute to the growth of the companies in the diagnostics industry.

While all the indicators appear to be positive for the industry, it has pricing pressure. That is, the players in the diagnostics industry cannot take advantage of the pricing. Their services are offered at a steep discount considering the competition, particularly from small regional players.

The diagnostics industry has two categories - pathology (offered by all and accounts for nearly 58% of the revenue in the industry) relates to testing of all major illnesses. And radiology (which accounts for 42% of revenue in the industry) relates to imaging diagnoses such as x-rays, CT scans and Ultrasound.


The Sastasundar Digital Healthcare business forms substantial part of its business.

The subsidiary company, Sastasundar Healthbuddy Limited has entered into the strategic partnership deal of B2C E-pharmacy (Sastasundar Marketplace) with Flipkart Group, wherein the SastaSundar mobile APP and the website have been renamed as FlipKart Health+. Consequent to the transaction, Sastasundar Healthbuddy Limited holds 24.9% of equity share capital of Flipkart Health Limited (formerly Sastasundar Marketplace Limited) and 75.1% of equity share capital is held by the Flipkart Group. This partnership will help us to participate in the significant opportunity of Digital healthcare in India and which will also help us to manage our risks appropriately.

The subsidiary company, Sastasundar Healthbuddy Limited is engaged in the wholesale business to support the Seller Pharmacy Network of Flipkart Health+ (earlier The Company is managing the supply chain of medicine and wellness products through its PAN India warehouses to sellers on Flipkart Health+.

For B2B operations, the step down subsidiary company, Retailer Shakti Supply Chain Private Limited is operating digital platform in the name of and RetailerShakti APP for medicine, wellness products and FMCG products. The operations are now PAN India and it leverage Digital Technology to expand data-driven efficient Supply Chain. The RetailerShakti supplies products to retail pharmacies and local kirana stores.

Another vertical of healthcare is Diagnostic business. The Company has separate step down subsidiary called Genu Path Labs Limited to operate its diagnostic business. The Company is focussing on Eastern India initially for its diagnostic vertical.



1. The partnership with Flipkart group will help us to participate in the significant opportunity of Digital healthcare in India and which will also help us to manage our risks appropriately. Flipkart health shall leverage Flipkarts strength of large consumer base and digital tech capabilities.

2. With the Strategic Partnership with Flipkart group, we shall have the opportunity to work for cash flow, customer experience and community wellbeing.

3. We are working to expand and grow network of seller pharmacies across PAN India.

4. We have an opportunity to solve one of the biggest problems of India, i.e., consistent access to affordable healthcare.

5. We have this opportunity to operate as a national distributor for international supply chain.

6. This is the occasion for us to continue to strengthen digital technology to expand data-driven efficient supply chain and appropriately leverage customer base and capital to grow.

7. The traction in building D2C brand presents scope to establish Genu Path Labs as D2C brand.


1. We operate in the domain of healthcare which is highly regulated, and therefore any adverse regulation may affect our growth.

2. We operate with a high technology backbone and therefore data security is a threat.

3. We are subject to the risk of changes in technologies and/or the introduction of new technology, which calls for the need of constant technological upgradation.


The Indian healthcare sector is expected to grow significantly in the upcoming years. Rising income levels, an ageing population, growing health awareness and a changing attitude towards preventive healthcare is expected to boost healthcare services demand in the future. The low cost of medical services has resulted in a rise in the countrys medical tourism, attracting patients from across the world. Moreover, India has emerged as a hub for R&D activities for international players due to its relatively low cost of clinical research. The Government also aims to develop India as a global healthcare hub.

The Companys strategic partnership with Flipkart group with will help us to participate in the significant opportunity of Digital healthcare in India and which will also help us to manage our risks appropriately. Looking at the potential growth in pharmacy, diagnostic and wellness and the positive growth in use of digital medium, the managements outlook is positive.

risks and concerns

1. We work in a highly regulated environment, and therefore, any adverse regulatory changes possess a risk.

2. We carry the risk of mindless competition primarily based upon heavy discount on the back of capital. Recent years have also marked advent of online portals and web aggregators into parts of the diagnostic business value chain. In order to establish rapid salience, the new entrants are not shy of utilizing pricing as a marketing tool.

3. We carry the risk of a digital base and therefore, exposure to data security threats.

4. We are operating in a highly-competitive and fragmented industry and our business, financial condition and results of operations may be adversely affected if we are not able to compete effectively.

5. We carry the risk of changes in technologies and/or the introduction of new technology could reduce demand or failure of our equipment, information technology and other technological systems.

financial performance

The segment wise consolidated financial performance on year to year basis is given below:

(Rs. In Lakhs except for EPS)

Revenue FY 2022-23 FY 2021-22 (Restated)
Financial Services 74.03 835.62
Healthcare Network 1,03,907.81 62,307.20
Other Income 2,363.88 1,163.19
Total Revenue 1,06,345.72 64,306.01
EBITDA before exceptional item (2,032.32) (3,702.30)
EBIT before exceptional item (2,852.07) (4,117.92)
Share of Profit/(Loss) of associates and joint ventures accounted for using equity method (8,489.82) (518.61)
Profit/ (Loss) before exceptional item and Tax (11,428.65) (4,800.15)
Exceptional Item (796.45) 1,15,748.53
Profit/ (Loss) before Tax (12,225.10) 1,10,948.38
Profit/ (Loss) after Tax (9,946.92) 86,511.22
EPS (22.70) 197.04

Details of significant changes in key financial ratios along with explanation

In compliance with the requirement of the SEBI (Listing Obligations & Disclosure Requirements) (Amendment) Regulations, 2018, the key financial ratios of the Company along with explanation for significant changes (i.e., for change of 25% or more as compared to the immediately previous financial year will be termed as significant changes), has been provided hereunder:

SI Particulars No. FY 2022-23 FY 2021-22
1 Debtor to sales (in days) - -
2 Inventory to Turnover Ratio (in Months) - -
3 Interest Coverage ratio - -
4 Debt Equity ratio* - -
5 Operating profit Margin (%) - -
6 Net Profit Margin (%) - -
7 Return on Net Worth (%) ** 0.2% (0.2%)
8 EPS- Basic and Diluted 0.20 (0.12)

* There is no borrowing in the Company.

** The changes in Return on Net Worth has been recorded on account of extraordinary exceptional items recorded in the previous year.

internal control systems and their adequacy

Your company has adequate Internal Audit and Control system across all businesses. The internal control systems provide, among other things, reasonable assurance of recording transactions of operations in all material respects and of providing protection against significant misuse or loss of company assets. Your company believes in the conduct of its affairs in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical behaviour. The internal processes have been designed to ensure adequate checks and balances at every stage. Internal audit is conducted to assess the adequacy of our internal controls, procedures and processes, and the Audit Committee of the Board reviews their reports. Policy and process corrections are undertaken based on inputs from the internal auditors.

human resources

Your company was able to grow last year only because of the employees of the company and their hard work. The group employed a total 1,111 employees in the last year. Your company also utilizes independent contractors and temporary personnel to supplement our workforce, if required. The relation of the employees with your company is considered good.