ZOTA Q3 FY26 earnings call.
A source-linked concall view: reported numbers, management language, guidance, commitments and risks that should carry forward.
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Revenue
₹142.95 Cr
verified against source
Revenue YoY
98.2%
reported change
EBITDA
Pending
latest reported figure
Source
screener in enriched
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Zota Healthcare reported strong Q3 FY26 revenue growth of 98.2% YoY to Rs 142.95 crore, driven by rapid Dava India retail pharmacy network expansion adding 276 stores to reach 2,331 total. However, EBITDA contracted sharply to Rs 127 lakh due to elevated pre-operative costs for ~400 stores in pipeline and higher employee expenses (Rs 53 crore total). The company completed a Rs 350 crore QIP to fund CPO store rollout and acquired Skia pharmacy brand for generic market expansion. Management targets 5,000 stores by March 2029 and 1,000 CPO openings in FY27. Cohort data revealed concerning trends: stores over 3 years saw revenue decline from Rs 7 lakh to Rs 6.85 lakh per store, while 2-3 year stores flattened at Rs 3.9 lakh. Near-term margin compression is transitory per management, with mature store EBITDA margins of 25-30% and blended target of 17-20% company-level. Risk includes unit economics not materializing as stores mature and sustained employee cost inflation amid aggressive expansion cadence.
Colored figures show movement against the previous available record.
Guidance to track
- Medium to long-term objective of crossing 5,000 Dava India stores supported by QIP capital and improving cash flows from maturing stores.
- Planning to open 1,000 company-operated stores in FY27, maintaining near-similar aggression as current year.
- Mature CPO stores target 25-30% EBITDA margins and FPO stores 40-45% gross margins, translating to 17-20% blended company-level margin when all stores mature.
- CPO store gross margin of 67% currently may reach 70% down the line as scale benefits continue.
Risks flagged
- Stores over 3 years showed revenue per store declining from Rs 7 lakh to Rs 6.85 lakh, while 2-3 year cohort flattened at Rs 3.9 lakh. Management attributed this to store expansion but unit economics trajectory is under stress.
- Total employee cost jumped to Rs 53 crore with per-store cost of Rs 65,000-80,000 monthly including pipeline stores. Analyst raised concern that despite similar pipeline in prior quarters, cost spike was unusually high this quarter.
- Whole-time director remuneration increased ~43% from Rs 42 lakh to Rs 60 lakh per person, plus 1.1% commission on consolidated turnover (approximately Rs 1.44 crore in Q3 alone). Analyst questioned linking incentives to net profit rather than revenue when company is loss-making.
- Management targets 17-20% EBITDA margins at company level from mature stores (25-30% CPO, 40-45% FPO gross), yet current consolidated margins are 3-5%. Timeline for margin normalization was vague at '2-3 years' with no specific quarterly trajectory provided.
Key quotes
- If we have opened the number of stores that we spoke about and in spite of that the wallet spend is 231. It means if you put the formula then what it means is that we have actually grown because there are a bunch of new stores that you have right where the actual wallet spend is low.
- We are little careful about the spending budgets and the reason for the carefulness of the spending budgets is that the money would have to be well utilized towards spreading our FPO stores.
- It is too early to say right now there is not any thought process [on Dava India IPO].
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