SASTASUNDR - Sastasundar Ven.

📊 NSE: SASTASUNDR 🏢 Finance & Investments 📅 Last Updated: 12/14/2025 12:53

💰 Financial Performance

Revenue Growth by Segment

In Q2 FY26, the Healthcare Network segment grew 16.9% YoY to INR 307.9 Cr. Within this, the B2C Sastasundar segment grew 60% YoY to INR 39.4 Cr, while the B2B RetailerShakti segment grew 13% YoY to INR 267.8 Cr. Financial Services revenue declined significantly to a loss of INR 1.1 Cr from INR 32.3 Cr in Q2 FY25. For the full year FY25, total revenue was INR 1,110.95 Cr, a 19.2% decrease from INR 1,375.71 Cr in FY24.

Geographic Revenue Split

Not disclosed in available documents, though the company is pursuing targeted geographic expansion to support a durable scale-up.

Profitability Margins

Gross profit for Q2 FY26 was INR 22.9 Cr, up 34.2% YoY. Gross profit margin expanded by 100 basis points to 7.5% from 6.5% in Q2 FY25. Net Profit Margin for FY25 was negative at -12.3% compared to 0.4% in FY24, primarily due to an extraordinary exceptional item of INR 190.63 Cr.

EBITDA Margin

RetailerShakti is currently at breakeven and is expected to reach 1% EBITDA positive for the full year FY27. The company targets a consolidated EBITDA margin of 4% to 5% by FY30. EBITDA before exceptional items for FY25 was INR 3.81 Cr, a 94.2% decline from INR 65.83 Cr in FY24.

Capital Expenditure

The company maintains a total treasury of INR 565 Cr (INR 445 Cr in Sastasundar Healthbuddy and INR 120 Cr in other subsidiaries) to fund growth. It recently utilized INR 100 Cr for a buyback of Mitsubishi Corporation's holding. Net capital raised for the healthcare platform stands at INR 222 Cr.

Credit Rating & Borrowing

The company reports zero borrowing as of March 31, 2025. Interest coverage and debt-equity ratios are not applicable due to the debt-free status.

⚙️ Operational Drivers

Raw Materials

Pharmaceutical medicines, healthcare products, and private label consumer goods (JITO brand) constitute the primary procurement costs, representing approximately 92.5% of revenue based on gross margins.

Import Sources

Not disclosed in available documents; however, procurement is managed through disciplined vendor sourcing and streamlined operations across India.

Key Suppliers

Not disclosed in available documents, but the company utilizes a network of pharmaceutical manufacturers and healthcare vendors for its B2B and B2C platforms.

Capacity Expansion

The company is expanding its fulfillment capacity and high-tech stack to support a target revenue run rate of INR 500 Cr for the B2C segment within 18 months and a total revenue of INR 6,000 Cr by FY30.

Raw Material Costs

Procurement costs are approximately 92.5% of revenue. The company is focusing on disciplined vendor sourcing and automated fulfillment to improve gross margins, which increased from 6.5% to 7.5% YoY in Q2 FY26.

Manufacturing Efficiency

The company focuses on digital asset efficiency, aiming for a Return on Capital Employed (ROCE) of 50% to 60% as the business scales over the next 4-5 years.

Logistics & Distribution

Distribution is managed through a healthcare network that delivered INR 307.9 Cr in revenue in Q2 FY26, utilizing automated fulfillment to maintain a low-capital model.

📈 Strategic Growth

Expected Growth Rate

30%

Growth Strategy

The company plans to achieve a 30% CAGR by scaling RetailerShakti to INR 4,000 Cr and Sastasundar B2C to INR 2,000 Cr by FY30. Strategies include launching the JITO private label brand to offer 60% cost savings, implementing AI tools, expanding fulfillment capacity, and executing a merger/demerger of Sastasundar Healthbuddy by March 2026 to simplify corporate structure.

Products & Services

Prescription medicines, over-the-counter healthcare products, diagnostic services, and private label consumer goods sold via the Sastasundar App and RetailerShakti B2B platform.

Brand Portfolio

Sastasundar, RetailerShakti, JITO, Sastasundar Healthbuddy.

New Products/Services

Launch of the JITO brand and private label expansion are expected to drive higher margins by offering alternatives that save customers up to 60% in costs.

Market Expansion

Targeting market expansion through digital assets and geographic growth, aiming for a total revenue of INR 6,000 Cr by FY30.

Strategic Alliances

The company previously partnered with Mitsubishi Corporation (which held a stake in Sastasundar Healthbuddy) and handed over a portion of the B2C business to Flipkart.

🌍 External Factors

Industry Trends

The industry is shifting toward digital healthcare distribution and B2B e-commerce. Sastasundar is positioning itself as a capital-efficient platform with a target ROCE of 50-60%, contrasting with traditional models like Entero which have lower RONW of ~9%.

Competitive Landscape

Key competitors include Entero (B2B) and MedPlus (Retail). Sastasundar differentiates through its integrated B2B/B2C platform and private label strategy.

Competitive Moat

The moat is built on digital assets (previously valued at INR 1,100 Cr), a low-capital model, and high efficiency in capital utilization. The company claims RetailerShakti is 'double efficient' compared to competitors due to its credit scale and 20-25 day working capital cycle.

Macro Economic Sensitivity

The business is sensitive to healthcare spending and digital adoption rates in India.

Consumer Behavior

Shift toward online pharmacy apps and cost-conscious purchasing, which the company addresses through its Sastasundar app and JITO brand.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with SEBI (LODR) Regulations and Prohibition of Insider Trading. Operations are subject to pharmaceutical distribution standards and drug authenticity regulations.

Taxation Policy Impact

The company recorded a tax credit in FY25, resulting in a PAT of INR (133.54) Cr against a PBT of INR (203.66) Cr.

Legal Contingencies

Not disclosed in available documents; however, the company maintains an internal audit and control system to ensure transaction recording and asset protection.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the timeline for the B2C segment to reach EBITDA positivity (projected for FY28-29) and the successful integration of the proposed merger/demerger by March 2026.