@® unlistedZone 4 PharmEasy UNLISTED SHARE ANALYSIS wnuntstedzonecomwww.unlistedzone.com ABOUT COMPANY PharmEasy is India's leading digital healthcare platform. It provides information, consultations, diagnostics tests, medicines, healthcare products and services from registered and trusted pharmacies, leading diagnostic laboratories and trusted doctors across India, serving every habitable zip code of the country. The journey of PharmEasy was started in 2015, when founders Dharmil Sheth, an MBA from IMT Ghaziabad and Dr Dhaval Shah, MBBS from Rajiv Gandhi Medical College and MBA from XLRI Jamshedpur, came up with the idea of an online pharmacy to make healthcare affordable and accessible to one and all Basic Details of the Company Current Unlisted Price ns Book Value 5.871 Dividend Yield NA EPS -1.05 P/E -109.38 ROE -17.91 Free Cash Flow -8,446 Mcap(millions) 701500 FV 1 ROCE -0.157 Number of shares(Millions) 6100OVERVIEW OF 4 PharmEasy They are India’s largest digital healthcare platform (based on GMV of products and services sold for the year ended March 31, 2021), according to RedSeer Report. They operate an integrated, end-to-end business that aims to provide solutions for healthcare needs of consumers across the following critical stages A, providing digital tools and information on illness and wellness B. offering Teleconsultation. ©. offering diagnostics and Radiology tests. D. delivering treatment protocols including products and devices. PharmEasy custom-built proprietary technology, unified data platforms, supply chain capabilities, and deep understanding of the dynamic interplay between the various sub-segments of India's healthcare market are the capabilities that differentiate them. These capabilities enable PharmEasy to provide each stakeholder in the healthcare value-chain, viz (a) channel (wholesalers, retailers and chemists / institutions). (b) consultants (and hospitals), diagnostic and radiology labs (c) consumers (d) companies (pharmaceutical, nutraceutical, medical devices) The businesses have a presence across the country, with last-mile 163 capabilities to deliver in over 18,587 pin codes (for June 2021) via PharmEasy marketplace, allowing the ability to provide access in an affordable manner to the common man. The platforms have scaled across urban, semi-urban and rural india, with an ability to serve people across income groups and geographieswww.unlistedzone.com Journey of 4 PharmEasy &) senbeln ca © 2015 Received Serie-A funding and aoe (@) fertyeacner: GO) diagnostics service. Received Se B funding _% GIO etaswreegimewoons, @) 2017 health care products, 2018 © Gnd expanded PAN Inula ©, presence. Received Series-D funding ~ fz, and expanded more than fill — seo00+ Pivcoues 2019) IRhas merged with Ascent Health ‘and § other companies to form wer @ 2020 (@) ngtaronsorsnae CY Ithas purchased 667 stakes jin Thyrocare and this is the ~ RL DENI Srey tte 2021 txcqied by any unleom in ina Currently, there is a team of 4000+ dedicated employees and have more than 10000+ retail stores working 24*7 to ensure medicines are delivered on time and at the best possible prices.www.unlistedzone.com Product and Services If you check the website of Pharmeasy, you will find following services, (1) Order Online Medicine How does it work? Step-1: The buyer needs to upload the prescription. Once the PharmEasy receives it, they verify and send the same to the Medical stores near the pin code. Step-2: PharmEasy delivery agent then collects medicine from Pharmacy and delivers it to the user. (2) Healthcare Products Similar to buying medicine you can buy various healthcare products such as Nutritions, Personal care, Skin Care, Ayurvedic Products, Life-Style Ailments Products. (3) Diagnostics Tests Under this service, you can book diagnostics tests under PharmeEasy labs. PharmEasy labs is a diagnostic service offered by its partner lab Medlife Labs directly. Medlife is now being acquired by PharmEasy. As they have recently acquired Thyrocare, they are giving the option to book tests to these labs as well.www.unlistedzone.com — ° Business Model of 4 PharmEasy The business model is very simple and straightforward. It connects buyers, suppliers and distributors. Buyer has the option to choose services such as Medicine, Health-Care Products, book diagnostic tests etc from the application and website. They get +-2% commission on selling medicines, they get advertisement money for displaying products of various pharmaceuticals, Nutraceuticals, companies etc. and also get income from diagnostics tests.www.unlistedzone.com (1) Balance Sheet Particulars (in Million) Fy21 FY20 Long-term Assets - - PPE 614 208 Intangible 669 22 Goodwill 31922 7 Investments 14 59 Other long-term Assets 1400 10 Short-term Assets 13181 4787 Cash & Cash Equivalents 2295 242 Inventory 4056 1159 Trade-receivables 3583 473 Other Assets 2127 977 Total Assets 49053 5725 Total Equity 35812 2462 Equity Capital 256 o Reserves 33193 2367 Long Term Liabilities 3480 1987 Debt 2322 1527 Other Long Liabilities 8 108 Short Term Liabil 9762 1275 Trade Payable 3540 681 Debt 3532 309 Other Long Liabilities 707 a1 Total Equity and Liabilities 49053 8725www.unlistedzone.com (2) P&L Statement Particulars (Millions) Fy21 FY20 Revenue - - Revenue 23,353 6,675 % Growth 250 - Other Income 254 699 Total Revenue 23,607 7.374 % Growth 220 Expenses Cost of goods sold 22,668 6,991 % of sales Gross Margin 938 383 % Gross Margin 4 5 Employees Expenses 2,703 1,372 % of revenue 12 21 Other Expenses 4,819 2,757 % of revenue 20 37 Operating Profit 6,583 -3,745 Operating Profit -28 -51 Margins Depreciation 329 188 % of PPE 54 90 Financial Cost 434 19 PBT ~6,203 -3,470 Tax an 7 Profit, PAT -6,413 -3,353 Net Profit Margins -27 45 EPSwww.unlistedzone.com (3) Cash Flow Statement Particulars (Millions) FY21 FY20 Cash-Flow from Operations -8,137 -4,520 Profit Before Tax -6,203 -3,470 Adjustment of Non-Cash 1,934 -69 Adjustment of Working Capital -3,752 -949 Other Adjustments(Income tax) “7 -32 Cash-Flow from Investments 45 1895, Capex -309 -187 Acquisition 495 -8 Other Investment 231 -2,041 Cash-Flow from Financing Dividends Paid Equity raised/buy/back 7,077 4,487 Debt raised/given back 151 2,008 Other Financing 2,962 -179 (4) working Capital Particulars Fy2i FY20 Debtor Days 56 26 Creditor Days 58 25 Inventory Days 12 8 Working Capital Cycle 10 9womunlistedzone.com Revenue Profile of 4 PharmEasy Below is the data of companies which were acquired by PharmEasy in the last few years and their contribution in the consolidated revenue of PharmEasy. Particulars (Millions) FY21 Revenue Sources - Medlife 3828 Thyrocare 5070 Akna 1507 Vardhaman 30 Novogene 494 Shreeji 433 Ascent 7861 Below data shows revenue contribution based on Products and Services. Products & Services Wise FY21 FY20 Sales of products retailers 41.40% 94.90% Sales of goods to chemist/institutions 56.30% 0% Sale of services 110% 0.90% Other operating revenue 1.20% 430%www.unlistedzone.com Ratio Analysis Particulars FY21 Fy20 Debt/Equity 0.37 132 Asset Turnover Ratio 0.48 7 Debtor Days 56 26 Creditor Days 58 25 Inventory Days 12 8 Working Capital Cycle 10 9 Interest Coverage Ratio “14 -29 Current Ratio 1 4 Particulars FY21 Fy20 Return of Equity -0.18 -136 Return on Capital Employed -0.16 -0.78 OPM -279 -508 NPM -27.2 -455 P/s 20.8 - Particulars FY21 Fy20 CFO/EBITDA 124 -1.21 Free Cash Flow -8,446 -4,657 Free Cash Flow/Debt “14 “25www.unlistedzone.com Management Profile Management Team Qualification Designation Experience Siddharth Bhaskar yaa yy a COnfounder, Managing Director Shah " and Chief Executive Officer Harsh Shailesh Co-founder and Parekh MBANMIMS Whole-time Director Bharti Airtel , Co-founder and Dharmil Sheth MBA, IMT Wee eee or MakeMyTrip Dhaval Rajesh McKinsey and ‘Shah MBA, IIM A Key Management Personnel Company Hardik Dedhia MBA,IIMA Key Management Personnel NetApp, ascent AnkurThandani B.Tech, ENTC Non executive director RISE fund Aditya Puri CA,ICAI Chairman and HDFC bank (MD) Non executive director MBA, Booth School Non executive director Ashutosh Sharma , PGDM - Savita Sharma symbiosis Chief HR M&M, Bharti Airtel Akash Bharadwaj B.Tech, MBA Chief Strategy Officer alstreets, Goldman Sachwww.unlistedzone.com Industry Analysis Particulars e-Health market Fy2l FY20 - 89Bn FyI9 67Bn FYI8. 32.Bn In the last 3 years, the e-health market is growing at 66% CAGR and attracted a lot of VC/PE money. China $1,019 69.84% 5.40 Particulars 2020 2025P Total Healthcare Market 10.4Tn 20Tn Pharma market 21Tn 3.2Tn Diagnostic Market 595 Bn 1127 Bn Doctor Consultation 692 Bn 1380 Bn OTC Market 260 Bn 600 Bn Hospital Supplies 989 Bn 1913 Bn Particulars Global Average Healthcare spend per capita $1,459 % of average 1048.66% % of GDP spending 9.86 Doctors/10000 10 % of out of pocket spend 18 Particulars Pharma Diagnostic OTC Consultancy Health Care Spend 20.00% 6.00% 3.00% Hospital supplies CAGR 14% 9% 14% 15% 18% 14% India $306 20.97% 4.40 20 60 Hospital treatment 55.00%www.unlistedzone.com Shareholding Pattern Name of Shareholders No.of Shares % of holding Siddharth Bhaskar 89,176,340 130% shah Dharmil Sheth 18,269,323 0.30% Harsh Parekh 17,037,456 0.28% Naspers Ventures BV 813,316,570 12.04% Macritchie Investments aN 732,516,290 10.84% TPG Growth V SF 449,492,340 6.65% Markets Pte. Ltd. Funding Information Name of Investor Date of Funding Total Funding (Cr) Valuation (in Rs.) Bessemer Venture Partners March 2016 34 Bessemer Venture Partners March 2017 104 Bessemer Venture Partners April 2017 13 Eight Roads Ventures India, F-Prime February 2018 13 Capital, and others InnoVen Capital and more September 2018 350 Eight Roads Ventures India and others september 2018 2800 Temasek Holdings and others November 2019 1650 Prosus Ventures, TPG Growth and others April 2021 2400 12,000 Crores B Capital June 2021 150 15,250 Crores Arokiaswamy Velumani July 2021 3500 15,250 Crores Amansa Capital October 2021 2478 36,000 Croreswww.unlistedzone.com Competitors of 4 PharmEasy Name of Competitors % of Market Share img 18 NetMeds 12 PharmEasy 55 others 15 Valuation and Peer Learning In India, currently there are no listed peers to compare with. However, Net-Med in the same business was recently acquired by Reliance Industries and one US based listed company almost in the similar business is taken for peer comparison. Net-Med Deal NetMed was acquired by Reliance Industries in August-2020 for Rs. 622 Crores. The Netmeds Marketplace, the B2C e-commerce unit of online pharmacy, saw its total income decline by 44% to INR 7.7 Cr in FY20 from INR 13.98 Cr in the fiscal year 2018-19 (FyI9). In FY20, they have revenue of just 7.7 Crores. So, we can assume that deals happened at P/S of 80x. American Listed Company Hims & Hers Health, Inc. is an American telehealth company that sells prescription and over-the-counter drugs online, as well as personal care products. The company is currently trading at P/S of 8.10x— Companies Mcap Revenue EPs els NetMed 6200.00 77.00 805 Hims(USA) $1200.00 $148.00 8110 Pharmeasy has clocked a revenue of Rs.1600 Cr in the first 3MFY22, so if they annualize it, the annual sales will come out at Rs. 6400 Crores. CMP of PharmEasy in Unlisted Space = 15 Per Share Mcap = 115*610= 70000 Crores Mcap/Sales = 70000/6400 = 10x So, valuation looks fully priced in as compared to American Peer. UnlistedZone Framework MRFV Framework Scoring Average Scoring Management Quality 4 60% Revenue Growth 5 10% Free Cash Flow 1 10% Valuation 35 20% Average Scoring 37 Management Quality Revenue Growth 1to3 Fair 1to3 >10% 3to4 Good 3to4 >15% 4to5 Excellent Ato5 >20% Free Cash Flow Valuation lto3 Over-Valued Ito 2 Negative 3to4 Fair Valued 3to5 Positive 4to5 — Under-Valued(@®unlistedZone Follow us on reetrud 0 8 oO conn or EAC 7