From Losses to Profits: How India's Largest Digital Healthcare Platform Turned Around in FY26
Reviewed by Kanishk Dev Bangia, NISM Series XV Certified Research Analyst
Last Updated: June 2026 | Reg. No: NISM-202300182946
Introduction: What Is This Blog About?
If you happen to be a beginner venturing into the investing world, especially in unlisted firms, this blog might come handy.
Let us consider the financial results for FY26 of a big Indian conglomerate in the field of healthcare that has numerous popular Indian digital health brands like the online pharmacy app, the diagnostic chain, the hospital supplies firm and the business-to-business pharmaceuticals division.
Here comes the crux: this group has seen losses of Rs 515 Crore in FY24 reduced to Rs 231 Crore in FY25 before becoming profitable on the EBITDA front with profits of Rs 62.5 Crore for FY26. This would be explored in detail here, along with the significance and reasons for the investor’s keen interest in such developments.
Note for Beginners - Understanding EBITDA?
EBITDA is an abbreviation for Earnings Before Interest, Taxes, Depreciation and Amortization. It is one of the most popular indicators of the profitability of a business without taking into account the cost of debt capital and taxes among other non-operating considerations. Making a company earn a positive EBITDA is indeed a momentous occasion, since it demonstrates profitability despite the bottomline figure (often called PAT/PBT) being in the red.
What Is an Unlisted Company? (For Beginners)
The vast majority of people know about the stocks that have been listed at the NSE or BSE exchanges; examples include Reliance Industries, Infosys, or HDFC Bank. One can trade these stocks freely at the stock market on any day it operates.
An unlisted firm, on the other hand, means that it has not gone through an IPO yet. Therefore, one cannot trade shares freely at the stock market. It does not mean, however, that one cannot trade in unlisted stocks; they are simply traded off the market.
Why might the unlisted shares carry risks higher than listed shares:
- Low liquidity: finding a purchaser might be difficult;
- Possibly infrequent and less detailed financial reporting;
- Less open pricing terms for unlisted shares.
Despite all the risks, some investors still trade in unlisted stocks since they aim to get to the company before its IPO, which sometimes allows them to make good profits.
The Company: A Multi-Business Digital Healthcare Group
The company we are examining is the holding company (parent company) of a large digital healthcare ecosystem in India. It operates across four major business lines:
This multi-segment model means the company does not depend on one single revenue source. Each division earns differently and serves different customers — which is actually a financial strength when one segment struggles.
Group Financial Performance: The Big Picture
Revenue Growth
The group posted consolidated revenue of ₹6,869 Crore in FY26 — a growth of 14.3% compared to ₹6,010 Crore in FY25. For a business of this scale, growing at ~14% year-on-year shows solid momentum.
The EBITDA Turnaround
This is the headline of the entire story. Let's see how the profitability trajectory changed:
Three years of losses. Then a positive swing. This is what investors call an inflection point.
What Drove This Turnaround?
These two happened simultaneously, and together resulted in an upturn:
- Gross margins went up from 18.6% to 19.8%, which means that there was more money left after selling a rupee worth of goods because of lower cost of goods sold.
- Operating expenses fell from 1,349 crores to 1,288 crores despite an increase in revenue by 859 crores. In other words, revenue can be amplified without a corresponding rise in costs due to the principle of operating leverage.
For Beginners’ Reference – What Is Gross Margin?
Gross Margin = (Revenue - Cost of Goods Sold) / Revenue. Gross margin is used to measure the profit earned from sales before deducting any other operational costs, including salaries, advertising, rent, etc. A higher gross margin means more room to make up for the costs.
Deep Dive: The Four Business Segments
1. B2B Distribution — The Revenue Engine
It is the biggest contributor in terms of size, generating roughly 60% of the division’s revenues. This arm supplies medicines to pharmacies in India via its Order Management System (OMS), which allows retailers to order online.
In FY26, this arm broke even from an EBITDA standpoint, for the first time in its history as a money-losing company. More significantly, there was a revenue growth of ₹535 crore along with a decrease of ₹45 crore in operating costs, which is a typical example of operating leverage.
- Improvement in working capital from 53 days to 44 days, implying faster collection cycles.
- Highest EBITDA margin of 1.6% recorded in Q4 FY26.
- Risk factor: The gross margins are extremely low, around 9%, and hence even minor changes in price/supplier policies can adversely affect profitability.
2. B2C Healthcare App — The Great Narrowing
This division offers India’s largest consumer healthcare super-app, whereby patients can purchase medicine from the platform and book appointments for various tests. Ownership of the brand and technology lies with the parent company while the operation is done by an associate company.
Margin improvements have been experienced in FY26:
• Gross margin moved from 22.8% to 25.7%
• EBITDA loss declined from ₹86.1 Crore to ₹39.4 Crore
• EBITDA loss in Q4 FY26 stood at -1.5%, meaning that we were almost breaking even.
It is clear that the trend is moving in the right direction. Whether this division will be able to break even with regards to EBITDA in FY27 will remain an important milestone for analysts and stakeholders.
Why Is Breaking Even Important For The Consumer Healthcare App?
The B2C app started as the flagship brand in the group and contributed significantly to the losses over the last three years. In case this division breaks even, then profits will increase substantially in the group and even lead to an IPO or a re-IPO opportunity.
3. Hospital Supply Chain — Restructuring in Progress
The segment provides drugs, consumables, and surgical goods to hospitals across the country. In contrast to other segments, FY26 saw a slight decrease in revenues (-2%).
The key positive factor is that there were savings on operating costs, which fell by 64%, from ₹141.7 crore to ₹50.9 crore. But a major part of this saving came as a result of the write-off of expected credit losses (ECL) booked in FY24.
The main problems associated with this segment:
- The segment saw a poor performance in Q4 FY26, with negative EBITDA of 4.9%, compared to nearly breakeven figures in Q3 FY26 of 0.4%.
- Margins shrank from 8.2% in FY24 to 5.5% in FY26.
- Days working capital remains high at 80 days, which is the longest among all segments.
4. Diagnostics Chain — The Profit Powerhouse
This is the top performing arm within the organization. The diagnostic chain from India's largest player features a complete panel of tests conducted in in-house labs, third-party labs, and even at-home collection labs.
Different from all other arms, the arm in question does not only generate profits; it generates significant profits:
• EBITDA of ₹279.9 crore for FY26, with margins of 33.8%.
• Sales have grown roughly by 20% per year for the past two years.
• The fourth quarter of FY26 saw an EBITDA margin of 35.1%.
For reference: The diagnostic chain produces more profit than the total loss that both the business-to-customer sales segment and the hospital segment combined generate (₹53.3 crore).
Key Financial Metrics Every Beginner Should Know
When reading financial analysis like this, you will repeatedly encounter certain terms. Here is a plain-language guide:
What Investors Are Watching in FY27
Taking into account the FY26 performance, here are some important milestones to keep track of for next year:
1. B2C App FY EBITDA Break-even
After reducing losses to -1.5% in Q4, achieving this milestone is not out of the question, but it would eliminate one big hurdle on the group's profitability. The milestone can serve as a re-rating catalyst.
2. PBT Performance
In spite of reaching the EBITDA milestone, the company still reported a Profit Before Tax of -₹388 Crore for FY26 due to legacy finance costs. However, compared to -₹2,300 Crore in FY24, this is a marked improvement towards PBT breakeven.
3. Stability in Hospital Business
After recording volatility in Q4 (-4.9%), and despite continued gross margin pressure, the hospital business has a lot to do before becoming a net contribution for the group.
4. Diagnostics Growth Maintenance
Diagnostics are crucial for maintaining profitability. In order to maintain the group's valuation story, revenue growth needs to stay above 20%, and EBITDA margins need to remain above 33%.
5. Debt Paydown
The group has achieved significant progress in paying down its debt, which has been brought from higher than average to around ₹1,050 Crore. Reducing debt is critical in reducing finance expenses and therefore improving PBT.
What This Means for Someone Interested in Unlisted Shares
When reviewing unlisted stocks from an investor perspective, the business performance track record in such a case provides numerous valuable insights:
• Turnarounds take time. Three consecutive years of negative performance before becoming EBITDA positive illustrate the need to be patient during early-stage ventures or turnaround operations.
• It pays off to diversify in a conglomerate. The diagnostics unit helped support loss-making units to keep the group going long enough for profits to happen.
• Momentum matters. Quarter-to-quarter changes can reveal much more about transitioning firms than year-over-year.
• One-off expenses or revenues distort results. While the cost-saving efforts in the hospital unit look good on paper, some of the benefit was because of one-off expenses – ECL reversals.
• Understanding EBITDA vs. PBT is vital. It can happen for businesses to be EBITDA positive but still make losses when accounting for all of their debts and interest costs.
Disclaimer:
This is written for educational and informational purposes only. Nothing here constitutes investment advice or a recommendation to buy or sell securities. All data is sourced from publicly available information. Investments in securities markets are subject to market risks — please read all offer documents carefully before investing.
