After a turbulent period of leadership churn and persistent losses, API Holdings, the parent of Pharmeasy, Thyrocare and medicine distributor Ascent, is focused on stitching all its business segments into a single, profitable OPD healthcare platform. Heading this turnaround is Rahul Guha, who formally took over as MD and CEO last August, and aims to turn the company profitable by March next year. In an interview with Ayanti Bera, Guha outlines the company’s path to profits, Thyrocare’s next phase of growth in specialised diagnostics, and focus on deleveraging the balance sheet ahead of a potential market listing. Excerpts:
Q. How are you settling into your new role?
A. It hasn’t been a sudden transition for me. I joined Thyrocare in May 2022 as MD and CEO, and in February 2024, I was appointed President-Operations at API Holdings, which came with the responsibility of driving group-level synergies. By the time I formally took over as CEO and MD in August, I had already spent close to 15 months working on integration and operations.
Q. What were your immediate priorities when you took on the group operations role?
A. Back then, we were essentially four separate companies pursuing independent strategies. My mandate was to capture synergies across the group. For instance, Pharmeasy and other API Holdings’ group companies were buying medicines, but only 20-30% of procurement came from Ascent. We changed that and today, internal sourcing is the first preference. Similarly, in certain cities, each entity had its own warehouse. We consolidated these into single mother warehouses serving all businesses, which helped reduce costs.
Q. Your Ebitda improved sharply in H1 FY26. What specific measures drove that improvement?
A. We moved away from a one-size-fits-all discounting model, and now target our discounts more towards repeat users. On the margin side, we improved buying efficiency by sourcing internally, and also through planned buying rather than ad-hoc procurement. Warehouse consolidation reduced cost-to-serve dramatically, and we also rationalised overheads.
Q. But finance costs have been a concern. How are you planning to deleverage the balance sheet?
A. We refinanced Rs 1,700 crore of debt last August, bringing interest costs down from over 20% to around 12%. We’ve already repaid Rs 500 crore, and currently have about Rs 1,200 crore outstanding at roughly 11%. Our goal is to bring this down to a sustainable Rs 400-500 crore by March 2027. We’re also evaluating non-strategic assets for sale to help deleveraging. Broadly, these include businesses and markets that haven’t been integrated into our one-roof operating model. In some cases, we have warehouses or are running operations in markets that are no longer strategic for us. We may evaluate exiting them.
Q. The B2C business, Pharmeasy, continues to weigh on the bottomline. Is there a clear path to profits?
A. Yes, and it will be driven by cross-selling higher-margin products and services. B2C margins are thin, around 28-30%, compared to Thyrocare, which being a services business, naturally has higher margins. For Pharmeasy, profitability will come from private labels, especially healthcare essentials, and services like diagnostics and doctor consultations. Our private label portfolio ranges from band-aids and thermometers to BP monitors and nebulisers.
Q. How does cross-selling work across the group?
A. Partners like Marg (billing software for chemists), for instance, have our QR codes printed on their bills that allow customers to book diagnostics. Chemists using our Retailio app, mostly to book medicines, can also book diagnostic tests from Thyrocare. Even within Thyrocare, we use PharmEasy’s private-label consumables. These are small examples, but collectively they drive group-level value.
Q. With rising competition in online medicine delivery, how does Pharmeasy differentiate itself?
A. We’re very clear that we are a savings platform, not a quick-commerce player. Our core customer is the chronic medicine user, someone who plans purchases and values affordability over speed.
Q. B2B remains the largest revenue contributor. What’s the growth strategy there?
A. Our focus over the last year has been cost correction rather than growth. The cost structure in the B2B business wasn’t optimal, particularly warehousing costs. Growing without fixing that would only deepen losses. Once costs are stabilised, which we expect by the end of this year, we can scale quickly.
Q. Thyrocare has remained profitable. What’s next for that business?
A. Thyrocare is growing at over 20%, well above industry peers. Our focus until now has been to deepen penetration across the country by increasing the number of franchises from 2,700 in 2022 to nearly 10,000 today. The next big push is into specialised testing, that is, genomics, histopathology, and other complex diagnostics. These tests may not have higher gross margins, but they are of significantly higher value.