How has been the historical performance of Docmode Health?

Revenue and Operating Performance

Docmode Health’s net sales have shown a robust upward trend, rising from ₹12.42 crores in March 2022 to ₹41.77 crores by March 2025. This growth reflects a more than threefold increase over three years, signalling expanding market presence and sales traction. Total operating income mirrored this trend, with no other operating income reported during this period.

However, the company’s expenditure profile reveals some challenges. While raw material costs were nil, the purchase of finished goods surged dramatically to ₹44.77 crores in March 2025 from just ₹1.05 crores in March 2022, indicating a shift in procurement or inventory strategy. Employee costs have slightly decreased from ₹5.56 crores in March 2023 to ₹3.76 crores in March 2025, suggesting operational efficiencies or workforce optimisation.

Other expenses, which were ₹4.43 crores in March 2022, escalated sharply to ₹30.29 crores in March 2024 before falling back to ₹2.58 crores in March 2025, highlighting volatility in overheads or one-off costs. Total expenditure excluding depreciation rose in line with revenue but exceeded operating income in the latest fiscal year, resulting in an operating loss excluding other income of ₹0.68 crores in March 2025, compared to a profit of ₹1.88 crores in March 2022.

Profitability and Margins

Operating profit before depreciation and interest (PBDIT) excluding other income peaked at ₹3.75 crores in March 2023 but declined to a loss of ₹0.68 crores in March 2025. Including other income, operating profit dropped from ₹3.85 crores in March 2023 to a marginal ₹0.25 crores in March 2025. Interest expenses have steadily increased from ₹0.38 crores in March 2022 to ₹1.92 crores in March 2025, exerting pressure on profitability.

Consequently, the company reported a profit before tax of ₹1.50 crores in March 2022, which rose to ₹2.69 crores in March 2023 but turned into a loss of ₹1.97 crores by March 2025. After tax, net profit followed a similar pattern, peaking at ₹1.95 crores in March 2023 before declining to a loss of ₹2.03 crores in March 2025. Earnings per share (EPS) reflected this volatility, with a high of ₹8.52 in March 2023 and a negative ₹6.46 in March 2025.

Margins have contracted significantly; operating profit margin excluding other income fell from 15.14% in March 2022 to -1.63% in March 2025, while net profit margin declined from 7.41% to -4.86% over the same period.

Balance Sheet and Financial Position

Docmode Health’s total assets expanded substantially from ₹10.01 crores in March 2022 to ₹39.06 crores in March 2025, driven by growth in both non-current and current assets. Notably, intangible assets under development increased to ₹11.60 crores by March 2025, indicating investment in future capabilities. Inventories and sundry debtors also rose, reflecting business expansion.

Shareholders’ funds grew from ₹1.39 crores in March 2022 to ₹8.35 crores in March 2025, although reserves decreased from ₹7.23 crores in March 2024 to ₹5.21 crores in March 2025. Total liabilities increased from ₹10.01 crores to ₹39.06 crores, with a notable rise in current liabilities, particularly short-term borrowings which climbed to ₹5.70 crores in March 2025.

Long-term borrowings decreased from ₹4.38 crores in March 2024 to ₹1.12 crores in March 2025, suggesting some debt repayment or restructuring. The company’s net current assets turned negative in March 2025, indicating potential liquidity pressures.

Cash Flow Trends

Cash flow from operating activities was positive at ₹4.00 crores in March 2024 but had been negative in earlier years, reflecting improving operational cash generation. Investing activities consistently showed cash outflows, peaking at ₹7.00 crores in March 2024, likely due to capital expenditure or intangible asset development. Financing activities provided inflows, supporting the company’s funding needs.

Overall, net cash inflow was modest at ₹2.00 crores in March 2024, with closing cash and bank balances improving to ₹3.00 crores that year before settling at ₹1.83 crores in March 2025.

Outlook and Considerations

Docmode Health’s historical performance reveals a company in a growth phase, with expanding revenues and asset base but facing challenges in sustaining profitability and managing costs. The recent loss in the latest fiscal year underscores the need for careful cost control and debt management. Investors should weigh the company’s growth potential against its margin pressures and liquidity position when considering exposure.

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