Entero Healthcare Solutions Ltd — Q3 FY26

Entero Healthcare Solutions Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=xalDGbTqDbs Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to Q3 FI26 earnings conference call of Entro Healthcare Solution 0:08 8 seconds Limited hosted by DAM Capital. As a reminder, all participants line will be in the listenon only mode and there will be an opportunity for you to ask 0:16 16 seconds questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then 0:24 24 seconds zero on your touchstone phone. Please note that this conference is being recorded. A brief reminder, this conference call may contain 0:32 32 seconds forward-looking statements about the company which are based on the beliefs, opinions, and expectation of the company as on the date of this call. These 0:41 41 seconds statements are not the guarantees of future performance and involve risk and uncertainties that are difficult to predict. I now hand the conference over 0:49 49 seconds to Miss Py Sha from DAB Capital Advisors. Thank you and over to you. 0:54 54 seconds Thank you. Hi, good morning everyone and a very warm welcome to Entro Healthcare Solutions Q3 FI26 earnings call hosted 1:02 1 minute, 2 seconds by Dan Capital Advisors. On the call today we have representing Entro Healthcare Solutions the management team comprising of Mr. Prabat Agraal managing 1:12 1 minute, 12 seconds director and CEO Mr. Bal Krishna Koshik Group CFO and Miss Akanga Gupta head investor relations. I will hand over the 1:19 1 minute, 19 seconds call to the management team for opening remarks and then we'll open the floor for questions. Please go ahead sir. 1:27 1 minute, 27 seconds Uh thank you uh and good morning everyone and thank you for joining our earlings conference call to discuss the 1:34 1 minute, 34 seconds performance for quarter 3 and 9 months of this year. 1:38 1 minute, 38 seconds My name is Prabat and I'm joined by uh Balakrishn Kashik group CFO Miss Akanga 1:46 1 minute, 46 seconds Gupta head investor relations and SGA are investor relations advisers on the call. 1:54 1 minute, 54 seconds I hope everyone had an opportunity to go through the financial results and investor presentation which are uploaded on the stock 2:02 2 minutes, 2 seconds exchanges as well as on our company's website. 2:08 2 minutes, 8 seconds Let me begin with performance update of the quarter which is another strong quarter for us. 2:14 2 minutes, 14 seconds Revenue grew by 26% yearonear and 9% quarteron quarter to rups 1,77 crores. 2:23 2 minutes, 23 seconds After adjusting for the sales recognized on net margin basis and divestment of its subsidiary on like basis our revenue 2:32 2 minutes, 32 seconds growth stood at 28.5% yearonear and organic growth was 17.1% yearonear. 2:40 2 minutes, 40 seconds This is the highest organic growth for this financial year and we continue to grow faster than the industry which grew 2:48 2 minutes, 48 seconds by 12% and hereby increase our market share. 2:53 2 minutes, 53 seconds Gross profit came in at rupes 173 crores up 29% yearonear with our gross margins 3:00 3 minutes improving by 30 basis points to 10.1% versus last year. Compared with last 3:06 3 minutes, 6 seconds quarter, the GP margin was 10 bips lower because of one-time GST incentive amounting to 17 BIPS received from 3:14 3 minutes, 14 seconds farmer companies being offset by improvement driven by better business mix, margin accative categories and procurement efficiencies. 3:23 3 minutes, 23 seconds A beta for the quarter was rupees 68 crores representing the growth of 36% yearon year with margins improving by 3:31 3 minutes, 31 seconds around 30 basis points versus last year to 4%. 3:36 3 minutes, 36 seconds In this quarter there is an exceptional impact of new labor code of 6.1 crores on PAT. 3:44 3 minutes, 44 seconds Adjusted for the one-off impact of new labor code PAT margin was 2.3% with PAT at rupees 40 cr that is a growth of 36% over last year. 3:55 3 minutes, 55 seconds Our reported profit after tax increased 15% yearonear to rupees 34 crores with patch margin of 2%. 4:05 4 minutes, 5 seconds On working capital front, I had shared during the last quarter that this optimization remains remains a key priority for us. The same is now 4:14 4 minutes, 14 seconds reflected in our networking capital days on a light to light basis that improved to 61 days in quarter 3 FY26 from about 4:23 4 minutes, 23 seconds 66 days in quarter 1 and 63 days in quarter 2. 4:29 4 minutes, 29 seconds Reported NWC at 64 days is primarily due to change in grossing up GST tax rate on 4:35 4 minutes, 35 seconds sale from 12% to 5% in quarter 3 which doesn't reflect 2 days of inventory reduction and one day of receivable reduction. 4:44 4 minutes, 44 seconds One of the most important key positive improvements that was reflected in operating cash flows with OCF at rupees 49 crores in the quarter. 4:55 4 minutes, 55 seconds This is driven by our ongoing focus on Eida margin expansion and improvement in working capital management. 5:02 5 minutes, 2 seconds I'm confident that we are on track to deliver operating cash flow for the year in the range of 100 crores through improvement in the beta margin profile 5:10 5 minutes, 10 seconds and initiatives being undertaken to further optimize working capital. 5:15 5 minutes, 15 seconds You can also see a steady improvement in in the return ratios. Return on capital employed improved to 14.8% in quarter 3 5:22 5 minutes, 22 seconds from 13.8% 8% in quarter 2 and return on equity excluding impact of new labor code in India increased to 12.3% from 11% the last quarter. 5:34 5 minutes, 34 seconds Operationally our reach and network have continued to expand. In the first nine months of the year, we cater to over 5:41 5 minutes, 41 seconds 97,600 retailies and more than 3,000 hospitals across 55 districts in India 5:49 5 minutes, 49 seconds supported by 131 strategically located warehouses and 89,200 plus SKUs sourced from more than 3,100 healthcare manufacturers. 6:00 6 minutes Our relationships with such a huge range of healthcare product companies, nationwide pharmacies and hospital reach, robust and technology enabled 6:08 6 minutes, 8 seconds last mile distribution infrastructure creates a very strong business mode and differentiated value proposition for both our suppliers and customers. 6:19 6 minutes, 19 seconds Now coming to inorganic growth progress, we closed acquisitions of Anand Medylink in Pune, Ace Cardiopathy, Bio Bio 6:28 6 minutes, 28 seconds Technologies and Anand Chemistics in Medtech segment. Each of these acquisitions further expands our distribution reach, widens our product 6:36 6 minutes, 36 seconds segments and builds new capabilities for us. Particularly in met segment, we have added scale in IVD, cardiology, POC devices, lab consumables etc. 6:49 6 minutes, 49 seconds As I've already guided post completion and integration of all these businesses annualized revenue will cross over thousand crores in met segment there 6:57 6 minutes, 57 seconds will be a positive impact of 70 to 90 bips on gross margin and 50 to 75 bips on aida margin on prof basis after all the acquisitions are integrated with us. 7:08 7 minutes, 8 seconds This segment represents a attractive growth opportunity for interero along with margin enhancement potential. 7:15 7 minutes, 15 seconds Overall we are very well poised to accelerate the growth margin expansion and cash flow generation journey post 7:23 7 minutes, 23 seconds integration post integration of the acquisitions and on are on track to achieve our FY26 guidance. 7:30 7 minutes, 30 seconds With this I close my opening remarks and invite people to ask questions. Thank you. 7:36 7 minutes, 36 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one. If you wish to remove 7:45 7 minutes, 45 seconds yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will 7:54 7 minutes, 54 seconds wait for a moment while the question assembles. 8:04 8 minutes, 4 seconds The first question is from the line of Anish Tari from Varia change LLP. Please go ahead. 8:13 8 minutes, 13 seconds Hi um congratulations on closing these medical device transitions. Uh can you 8:19 8 minutes, 19 seconds articulate uh your growth strategy in this medical device segment? uh let's say for your branded pharmaceutical 8:28 8 minutes, 28 seconds segment you needed uh acquisitions as well to grow uh but here uh how you think what kind of levers you can pull 8:36 8 minutes, 36 seconds to accelerate growth here yes thank you Vish you know I believe that you know in uh in met segment you 8:46 8 minutes, 46 seconds can grow much faster without lot of inorganic acquisitions because you know unlike pharma in in met you can do a lot 8:55 8 minutes, 55 seconds of pan India exclusive distribution deals with lot of companies because there are not many specialized distributor in this space in uh in India 9:03 9 minutes, 3 seconds and it you know the companies also are looking for you know people who have pan India reach who can give you know access to them uh who can give customer access 9:12 9 minutes, 12 seconds at an all India level to them right and they are very very few players who can do that so you know now we have you know kind of built a reasonable scale of 9:21 9 minutes, 21 seconds 1,000 crores plus in met gives a lot opportunity for us to grow on from here, right? And what is the existing 9:29 9 minutes, 29 seconds infrastructure you think you can leverage either physical or human uh as you grow which you already have? If you can just uh help us understand that part. 9:38 9 minutes, 38 seconds Yeah, true. Like we have 130 warehouses. 9:40 9 minutes, 40 seconds You know, we have existing relationships with all these pharmaceutical companies who also have met segments, right? For example, advertise agnostic, you know, 9:49 9 minutes, 49 seconds devices and stuff like that. Same with Ro, right? So you know our existing relationship with the companies our you know distribution infrastructure you 9:57 9 minutes, 57 seconds know further provides uh you know leverage to uh to grow this business together you know there's a lot of synergies that can happen between uh 10:05 10 minutes, 5 seconds pharma and met for us right the second question I had on the margin side if you look at uh the the 10:13 10 minutes, 13 seconds leverage to over time with the scale improving margins uh it was somewhat uh uh somewhat different here in met 10:21 10 minutes, 21 seconds Because as you can scale, you get better pricing terms compared to more associationdriven segment which is uh branded pharmaceutical. 10:31 10 minutes, 31 seconds Can you repeat the last part? I I didn't understand very well. Sorry. 10:34 10 minutes, 34 seconds I was going to say as you as you become bigger as you grow in this business, do you have a ability to get better margins 10:41 10 minutes, 41 seconds uh or better pricing bulk volume based uh pricing in medtech? Is it better than you would have in uh branded uh 10:49 10 minutes, 49 seconds pharmaceuticals? Yes, certainly. The reason because you know in the metric segment the distributors not only play only the demand fulfillment part but 10:57 10 minutes, 57 seconds they also play an active role in demand creation part right. So the companies also depend on distributors to grow sales right and for that you know they 11:05 11 minutes, 5 seconds they kind of if you grow their business they are ready to part with more margins with with distributors. 11:12 11 minutes, 12 seconds And lastly, is there an opportunity for overtime getting to private level here which you have seen some places but in India you think not today but over time 11:20 11 minutes, 20 seconds when you scale up in this business you can think on that line. 11:24 11 minutes, 24 seconds Yeah, one one can think on those lines you know on uh on launching some of your labels as well. We have you know some private labels on home healthcare but as 11:32 11 minutes, 32 seconds of now it's uh it's not scaled up. It's still pretty small right but over a period of time we will definitely push for it. 11:39 11 minutes, 39 seconds Great. Thank and wish you best. 11:44 11 minutes, 44 seconds Thank you. The next question is from the line of Dave from Seven River Holdings. Please go ahead. 11:53 11 minutes, 53 seconds Hi, good morning Prabhat. Uh congratulations on a great set of numbers. uh you know just to clarify you had given a guidance of uh achieving a 12:02 12 minutes, 2 seconds CFO of 100 crores in uh FI26 and uh so far in 9 months we've achieved a 12:09 12 minutes, 9 seconds negative 8 and a half cr CFO does does that mean that you that you're looking to to generate over a 100 crores in in 12:17 12 minutes, 17 seconds CFO in Q4 alone yeah that's that's what we are shooting for Dave 12:24 12 minutes, 24 seconds got it now the earlier guidance that that that we were that we that we were given is on your IBITA margins for the full year to be north of 4%. 12:33 12 minutes, 33 seconds And uh looking at the trend so far in 9 months we have achieved around 3.8%. 12:38 12 minutes, 38 seconds So to to meet that guidance we'll have to cross 4 and a.5% in IITA in Q4 alone. 12:44 12 minutes, 44 seconds Are you still holding on to that guidance of achieving a 4% ITA margin? 12:49 12 minutes, 49 seconds Yes. So I think you know now all the eyes will be on quarter four because you know everyone can work out this match that you know on a full year guidance 12:57 12 minutes, 57 seconds and subtract 9 months actual. So what is it that needs to be done to what needs to be done in quarter 4 to achieve the 13:05 13 minutes, 5 seconds full year numbers right and we are we are on track to deliver our full year guidance. 13:10 13 minutes, 10 seconds Got it. Got it. U lastly just a bookkeeping question from my end. Why has your interest cost gone up significantly? uh why the working 13:19 13 minutes, 19 seconds capital days have improved or or rather you're you've generated a CFO this quarter uh why is the interest cost going up 13:28 13 minutes, 28 seconds uh you know because we have been uh you know acquiring companies right so we have been investing in acquisition so that you know cash is going out which 13:36 13 minutes, 36 seconds was earning interest for us before IPO funds are almost used now are there any plans for a further fund 13:44 13 minutes, 44 seconds raise or or loading on some additional debt uh for the the next set of acquisitions. 13:50 13 minutes, 50 seconds So broadly we have completed all the big acquisitions. Now as of now we are not you know looking forward to raise any 13:58 13 minutes, 58 seconds equity capital. There could be some movement in debt but you know overall we are not looking to do more meaningful acquisitions from here on you know we I 14:06 14 minutes, 6 seconds think next few quarters we will spend in you know consolidating what we have acquired because we have made big moves in this financial year. So we'll wait 14:14 14 minutes, 14 seconds for some quarters you know stabilize operations, improve margins, improve cash flows and then we will you know uh look for new acquisitions. 14:24 14 minutes, 24 seconds Got it. Thank you for Thank you ladies and gentlemen. In order to ensure that the management is able to 14:33 14 minutes, 33 seconds address questions from all the participants in the conference, please limit your questions to two per participant. The next question is from 14:41 14 minutes, 41 seconds the line of Naman Bhaga from IIFL Capital Services. Please go ahead. 14:48 14 minutes, 48 seconds Thanks for the opportunity. Uh one question uh our listed let's say peer 14:54 14 minutes, 54 seconds highlighted that they have discontinued their Amazon partnership. Uh does this benefit in any way? 15:05 15 minutes, 5 seconds Sorry, I didn't hear very well. What have they discontinued? 15:09 15 minutes, 9 seconds They have discontinued the partnership with Amazon. One of our listed players highlighted on the call that they've 15:16 15 minutes, 16 seconds discontinued the partnership with Amazon. Uh so it does this in any way uh benefit Inter. 15:25 15 minutes, 25 seconds Yes, it does. Okay. Thanks. 15:32 15 minutes, 32 seconds Thank you. The next question is from the line of Chintan S from Giri Capital. Please go ahead. 15:40 15 minutes, 40 seconds Hi Prabhas and the team. Uh good show. 15:42 15 minutes, 42 seconds Congratulations. Uh one question uh on on the acquisition you mentioned uh to slow down a little bit uh for uh next 15:51 15 minutes, 51 seconds couple of few quarters. Um so next year uh the capex required will be lower 15:58 15 minutes, 58 seconds right. we'll be focusing more on generating cash, retain uh uh retain that and then maybe look look out for uh 16:07 16 minutes, 7 seconds for acquisition maybe in FI28 that understanding stands correct. 16:12 16 minutes, 12 seconds Yeah. Yeah. So that's what I said you know next two three quarters you know we have done some big acquisitions in this year you know so we'll focus on 16:19 16 minutes, 19 seconds integrating those with us you know and there are a lot of other businesses that can grow significantly so and met segment also as I said is a focus area 16:27 16 minutes, 27 seconds for growth for us so you know I think next two three quarters will be a little bit slow on acquisitions you know next three quarters uh we we focus and you 16:37 16 minutes, 37 seconds know improve our margins you know improve our cash flows and then uh we'll uh we'll will evaluate more opportunities 16:44 16 minutes, 44 seconds right and uh on the competition front uh as I'm seeing uh you know uh farm is kind of uh getting back on its feet not 16:54 16 minutes, 54 seconds not completely but uh they are at least recovering uh uh over time does that 17:01 17 minutes, 1 second challenge us in a way that uh by the time we uh get into the market for uh 17:08 17 minutes, 8 seconds right equations uh they will be also to you know be a party of competing with us 17:16 17 minutes, 16 seconds in in in acquiring businesses which which we are kind of looking forward to. 17:23 17 minutes, 23 seconds Uh in my view that's not any much of a concern for us right now because when we started off you know pharmacy was acquiring businesses right and we were 17:31 17 minutes, 31 seconds also acquiring at the same time and then you know pharmacy went through its own set of issues and they kind of stopped the acquisition 17:40 17 minutes, 40 seconds I'm not sure if they are you know looking to get back into this space aggressively in future 17:47 17 minutes, 47 seconds even if they choose to do so you know uh I don't see much of a problem because you know the the set of distributors available for acquisitions are huge 17:55 17 minutes, 55 seconds while the buyers are only two or three right so not a that dynamic remains the same uh 18:03 18 minutes, 3 seconds uh that's what you're trying to say yes it doesn't change the dynamics much got it and and on the employee cost uh 18:12 18 minutes, 12 seconds you know the provision uh which you have made that's uh kind of retrospective uh but that does that uh you know on the 18:19 18 minutes, 19 seconds recuring basis going forward uh does have any implication to our uh employee cost and margins uh because of the new 18:29 18 minutes, 29 seconds labor code. Do do we see or expect some incremental pressure on employee cost because of the higher provision required uh under the new labor code? 18:40 18 minutes, 40 seconds Uh Chintan this is quantify. Yes. Yes. 18:43 18 minutes, 43 seconds Yeah. Chintan this is Bala here. So what we have recognized under exceptional is the past service cost which is a onetime cost 18:50 18 minutes, 50 seconds and going forward we don't expect the the numbers to materially affect our uh 18:57 18 minutes, 57 seconds overall margins we don't expect that so ballpark what we are currently or historically being operating as a 19:05 19 minutes, 5 seconds percentage of revenue we we kind of try to maintain and improve upon it uh etc. Yes, that is correct. 19:13 19 minutes, 13 seconds Okay, got it. Got it. But I'll jump back into you. Thank you and all the very best. Thank you. 19:19 19 minutes, 19 seconds Thank you. The next question is from the line of Barav Budv from Ambbit Asset Management. Please go ahead. 19:29 19 minutes, 29 seconds Yeah, good morning team and uh congratulations on a good performance. 19:33 19 minutes, 33 seconds Uh so my first question is is it possible to uh share what could be the gross margins and the bit of margins in our tech business. 19:45 19 minutes, 45 seconds So, backup we have not disclosed you know u you know product wise margins you know uh but we have given you a perform 19:52 19 minutes, 52 seconds impact of that you know like 70 to 90 basis points improvement over on overall basis for us right on the gross margin 20:00 20 minutes and 50 to 75 basis point improvement on the AIDA on overall company basis. 20:06 20 minutes, 6 seconds Okay. So this is only contributed by metric. 20:11 20 minutes, 11 seconds Yeah, because what we said in the investor presentation, this is just a performer impact, not including impact from anything else. 20:20 20 minutes, 20 seconds Understood. And uh maybe the next three years, where do you see this uh business shaping up for you? 20:29 20 minutes, 29 seconds We are very very bullish and optimistic about this business. Yeah, this is a unique opportunity in India in a very large you know market size more than 20:37 20 minutes, 37 seconds three lakh cr of market size available for us to go and with a very clear right to win in this segment you know uh the value proposition that we offer both for 20:46 20 minutes, 46 seconds our customers and for to our vendors is very unique you know not many people can offer the same value proposition I I I 20:54 20 minutes, 54 seconds give for example you know like GLP drugs you know this being launched almost I would say 10% of GLP drugs is being sold by Wow. 21:02 21 minutes, 2 seconds So the reason being because we have a pan India presence, we can enter into relationship with the companies and then at a at you know at one point in time 21:11 21 minutes, 11 seconds they get access to a huge market through us. 21:16 21 minutes, 16 seconds Okay. And lastly sir you said that in terms of acquisitions now it's time to 21:22 21 minutes, 22 seconds sort of slow it down. Does that mean that organically only we are seeing almost 20 25% 21:30 21 minutes, 30 seconds revenue growth opportunity and therefore it makes sense to first integrate the acquisition made so far and then maybe 21:39 21 minutes, 39 seconds one year down the line again we look at more acquisition. 21:44 21 minutes, 44 seconds Oh, if you look at the next year, you know, the all the acquisitions that we did this year are basically in the second half of this year, right? And 21:52 21 minutes, 52 seconds part of it in quarter three and some in even quarter four. So, you know, the full impact of these acquisitions will will be visible in the next financial 22:00 22 minutes year. So, a lot of growth will come just because of the timing impacts of acquisition that we did this year, right? Plus the organic growth. So I 22:08 22 minutes, 8 seconds mean next year the revenue growth are all you know sorted and we would want to focus on first few quarters on you know 22:15 22 minutes, 15 seconds improving it and then anyway you know once we see the cash flows and all that coming we'll keep identifying opportunities and maybe you know do 22:24 22 minutes, 24 seconds something next year for FY28 but FY27 is more or less ordered just because of the work that we have done in this year 22:33 22 minutes, 33 seconds and lastly sir do we have any exposure to this neutrautical market. How big is that for us? Is it likely to become big? 22:43 22 minutes, 43 seconds I mean we have exposure to neutrautical like we are doing distribution for Himalaya, Dabber, Gina, many many you know companies well-being 22:53 22 minutes, 53 seconds many many neutrutical companies right so it's it's part of our portfolio I mean uh you know if if they grow at a rate 23:02 23 minutes, 2 seconds higher than the overall IPM growth rate we will enjoy that growth rate in our our business as well. 23:07 23 minutes, 7 seconds And here in the margins may also be better, right? Or because they need you more than you need them all. Maybe I'm wrong. 23:15 23 minutes, 15 seconds I mean both need each other. So uh you know it's like you know if the if those products are being sold at a you know 23:23 23 minutes, 23 seconds medical counter a pharmacy counter or a hospital we will it will become or it is part of our portfolio you know so so the retailers will you know took it from us. 23:34 23 minutes, 34 seconds I don't see any any big meaningful difference coming from there. See, we are an aggregator. We we have all as I 23:42 23 minutes, 42 seconds told you, we have 87,000 SKUs in our portfolio. With more than 3,000 plus companies, I don't think anyone would 23:50 23 minutes, 50 seconds have such a big portfolio. Uh right. So any few companies will not make a big difference in that portfolio. Sure. 23:58 23 minutes, 58 seconds Sure. Great. Thank you very much and all the very good. 24:04 24 minutes, 4 seconds Thank you. Ladies and gentlemen, you are requested to restrict your questions to two per participant. The next question 24:11 24 minutes, 11 seconds is from the line of Akshhat Mata from Seven Rivers Holding. Please go ahead. Hello sir, am I audible? 24:20 24 minutes, 20 seconds Yes. Hello. 24:23 24 minutes, 23 seconds Yeah. My first question is on the growth path sir. this year that we'll guide it for 30% lifelike growth rate that implies that we'll have a 35% you know 24:32 24 minutes, 32 seconds growth requirement in Q4 you know uh will we be able to achieve that and s are we planning to get to a 35% revenue 24:40 24 minutes, 40 seconds growth rate and on the other side as well sir given the uh acquisition slowdown that we are expecting next year 24:49 24 minutes, 49 seconds what is the kind of growth that we should look forward to is it 30% or 20 25% what should we kind of bacon into for assumptions. 24:59 24 minutes, 59 seconds So uh coming you know first to you know answer your question on this year which I answered also previously in this call 25:08 25 minutes, 8 seconds that you know Q4 we can work out the math you know and you are right in your math that you know to deliver 30% like to like we'll have to grow 35% in 25:15 25 minutes, 15 seconds quarter 4 right and same for margin same for OCF everything goes so what I've said we are on track to deliver full year which means we are on track to 25:23 25 minutes, 23 seconds deliver Q4 okay so next year how Should we look at growth? 25:29 25 minutes, 29 seconds So next year you know whatever acquisition that we have done this year you know the impact of this will be felt in the next year right in terms of you 25:38 25 minutes, 38 seconds know revenue growth right. So plus there will be organic growth uh as well. So even without much of an acquisitions we our growth rate is not going to materially come down. 25:51 25 minutes, 51 seconds Yeah. Uh okay sir. Uh next is on the market. clear maybe I'll give you you know in Q4 conference call we'll 25:58 25 minutes, 58 seconds probably I'll give you uh you know the the broad range of numbers that we can look for next financial year 26:05 26 minutes, 5 seconds okay uh so next question is on the uh margin part sir you you said earlier that we are obviously looking at doing 4.5%. Can you help us understand you 26:14 26 minutes, 14 seconds know what will be the factors that will drive 4.5% margins in Q4? 26:20 26 minutes, 20 seconds The impact of metric acquisitions will drive the margins up plus all other factors that we continuously work on. 26:28 26 minutes, 28 seconds Okay. Okay. Uh just a small bookkeeping question as well sir. Our other expenses have kept on increasing you know very 26:36 26 minutes, 36 seconds sharply you know every quarter on quarter. or what is the uh key factor behind increasing other expenses? 26:45 26 minutes, 45 seconds So when when I say you know the meta acquisitions and all they come with a higher gross margin but at the same time they come with a higher cost also 26:53 26 minutes, 53 seconds because they are in the business of demand generation also. So the cost structures are not as lean as uh you know farmer distribution. At the same time their gross margins are also high. 27:03 27 minutes, 3 seconds So one should look at the net margin impact net a beta margin rather than you know uh only gross margin or only 27:11 27 minutes, 11 seconds operating leverage on the excluding that there is a good operating leverage on uh on our business. In fact if you look at 27:20 27 minutes, 20 seconds even inclusive of that you know our uh total we were like 20 basis points improvement over quarter 1 of this year. 27:28 27 minutes, 28 seconds You know quarter one our expenses were like um quarter two it was 6.4% now it has gone to 6.1%. 27:39 27 minutes, 39 seconds Okay. 27:41 27 minutes, 41 seconds Uh one last question sir just wanted your views on you know what will be the impact of these new trade deals that have happened with US and EU on the 27:49 27 minutes, 49 seconds industry as a whole and probably for the company if you can share your views on that. 27:55 27 minutes, 55 seconds So I can speak about our company you know. So in our company we are insulated from these uh you know global trade 28:02 28 minutes, 2 seconds deals and all that because uh you know we are focused on domestic India market right so we are not exporting anything out of India and our import component is 28:11 28 minutes, 11 seconds also very low right so uh we are practically more impacted by what happens in India consumption story you 28:19 28 minutes, 19 seconds know what happens in India macro you know what happens in India healthcare rather than uh rather than you know US you know EU trade deals with India. 28:30 28 minutes, 30 seconds So will it not be positive for us if sorry to interrupt you uh sorry to interrupt you a uh can you please rejoin the queue for more questions? 28:38 28 minutes, 38 seconds Sure. Thank you. 28:40 28 minutes, 40 seconds Thank you ladies and gentlemen. You are requested to restrict your questions to two per participants. The next question 28:47 28 minutes, 47 seconds is from the line of Rakim Dalal from Fincom Advisors LLP. Please go ahead. 28:58 28 minutes, 58 seconds Rim you can go ahead with your question. 29:01 29 minutes, 1 second Hi thank you for taking the question. Uh it's Ronald Dal. Sorry I think the mistaken again. Uh so my first question 29:09 29 minutes, 9 seconds is that on the cash flow from operations you know you had mentioned to an earlier participant that we're on track to do 29:16 29 minutes, 16 seconds over 100 crores for the first for the fourth quarter. So what could be the drivers or mathematics behind that? What are your assumptions there? 29:27 29 minutes, 27 seconds The assumption would be increase in uh a beta margins and uh reduction in days of 29:35 29 minutes, 35 seconds working capital. I mean the basically cash flow is a function of these two only right how much margins we are generating adjusted for change in working capital. 29:44 29 minutes, 44 seconds So we are still on track for working capital days moving towards 60. 29:49 29 minutes, 49 seconds Yeah, I mean what we are saying is we we should be uh we are on track to deliver that 100 cross of OCF right on a full 29:56 29 minutes, 56 seconds year basis which means that it will have to happen in the fourth quarter because we are basis we are almost 30:04 30 minutes, 4 seconds breaking even on cash flow uh which is a significant improvement if you consider what is last year you know uh so it's 30:13 30 minutes, 13 seconds not that everything is going to happen in last quarter only in quarter three also you know we generated almost 49 crores of uh positive cash flow compared 30:22 30 minutes, 22 seconds to negative 21 crores in in the last year quarter 3. So it's almost like 70 cr improvement has happened in this year al also in the in one quarter itself. 30:34 30 minutes, 34 seconds Sure. The next question is that you know like I just wanted to check um you know some of your older acquired companies like maybe if I give an example of GS 30:43 30 minutes, 43 seconds fararma is reporting losses uh while the revenues are still increasing. So what factors are contributing to this? What 30:51 30 minutes, 51 seconds are the thoughts around shutting down companies which are loss making for extended periods of time in case any such companies you're having? 31:01 31 minutes, 1 second We we have done uh similar you know actions before you know we have closed down we closed down a company called CPD 31:08 31 minutes, 8 seconds Pharma before we closed down a branch in Tirupati before we closed down a branch in Belg before. So that's a normal 31:16 31 minutes, 16 seconds process uh you know on uh on where we see that you know uh that particular subsidiary or is not making sense then we kind of you know walk away from it. 31:28 31 minutes, 28 seconds uh specifically for GS Pharma I think it's also because of the interest being charged from uh from Entro to their 31:36 31 minutes, 36 seconds subsidiary you know on a a beta level they are not at loss right next is that you know is procurement from pharmaceutical 31:44 31 minutes, 44 seconds companies currently centralized or does it occur at the individual entity or pharmacy level and uh the second is do 31:52 31 minutes, 52 seconds you operate on a hub and spoke distribution model in markets such as Mumbai, Bangalore and Hyderabad 32:00 32 minutes So coming uh the first question that whether it's centralized so all the procurement is happening at the at the local level you know so the supplies are 32:09 32 minutes, 9 seconds being received at the local level from the local CFAs the discussions negotiations and anything like that is happening at central level but the 32:17 32 minutes, 17 seconds supplies are happening at local level so we get the benefit of centralized sorry to interrupt you Mr. Dal, sorry to 32:25 32 minutes, 25 seconds interrupt you. Can you please join the queue? Same question. The question is not answer. Yeah. 32:33 32 minutes, 33 seconds Go ahead. Sorry, Ron. 32:36 32 minutes, 36 seconds No, no. I was just saying that the question was left unanswered. So, uh, the second part was on the hub and spoke and do we get the benefits of centralized purchase? 32:47 32 minutes, 47 seconds So yes, the centralized purchase you know the the discussion negotiations and all that happen at the central level but supplies happen at the local level 32:56 32 minutes, 56 seconds because it doesn't make sense to buy centrally in one warehouse and then redistribute to 130 warehouse right because that will just add to your cost. 33:05 33 minutes, 5 seconds So uh all the you know deals and discussions happen at the central level but supplies we are receiving at the local level because that's the most 33:13 33 minutes, 13 seconds efficient way to do it and the hub and spoke sir uh what exactly would you mean by her and spoke 33:22 33 minutes, 22 seconds no so I was saying let's say supposing like Mumbai Bangalore Hyderabad places where you have like a lot of uh you know 33:29 33 minutes, 29 seconds volumes uh you know instead of having many warehouses would you maybe have some centralized warehouses because earlier we didn't have that. So I was 33:37 33 minutes, 37 seconds just wondering in case we have transitioned to having large warehouses which then cater to uh the smaller areas. 33:47 33 minutes, 47 seconds It is not it is not possible to supply Hyderabad from Mumbai. Okay. For two reasons. One that you know we are in the last mile business where the 33:55 33 minutes, 55 seconds no not Hyderabad sorry sir sorry to clarify but not Hyderabad to Mumbai. In Mumbai you would have large warehouse 34:02 34 minutes, 2 seconds catering to Mumbai. Bangalore larger warehouses catering to Bangalore. For example earlier you know you may have 34:08 34 minutes, 8 seconds had maybe 10 warehouses in the city of Mumbai which are smaller in size. Maybe then you move to a large warehouse. 34:16 34 minutes, 16 seconds Yes. 34:17 34 minutes, 17 seconds Which then caters to two three smaller ones. So then you move from 10 warehouses to four example like Yes. Yes. That that we have you know. So 34:25 34 minutes, 25 seconds we have a large warehouse in Mumbai which is you know gets into large part and from there we supply to other smaller you know places also like Tana 34:34 34 minutes, 34 seconds and others right so that is that always happens right right okay thank you I'll get back 34:41 34 minutes, 41 seconds in the queue thank you the next question is from the line of W Solanki from RSP ventures 34:50 34 minutes, 50 seconds please go ahead Uh hi. 34:54 34 minutes, 54 seconds Uh my question seems on a particular on private labels and Chandi and MD tech. 35:00 35 minutes So currently how much revenue contribution is from these segments and uh after the acquisition of the Anand uh 35:08 35 minutes, 8 seconds what will be the revenue contriution you are expecting from these segments? Uh for private labels, generics and metric. 35:17 35 minutes, 17 seconds So metric I think we have given that you know with the post this 1,000 crores coming into our books it will reflect 35:24 35 minutes, 24 seconds almost 15% of our business right uh generic and private label are still very small part of our business you know in 35:33 35 minutes, 33 seconds low single digits uh okay and the second reason that our 35:39 35 minutes, 39 seconds effective tax rate is are continuously lower like 16 18% in quarter one and quarter two and also these quarter also 35:47 35 minutes, 47 seconds it is 13%. So are we is anything getting benefit from taxes and style any tax 35:54 35 minutes, 54 seconds sales or this will continue or we will come to the normal 25% corporate tax 36:00 36 minutes levels soon. So once currently we have uh certain uh uh losses available to us 36:09 36 minutes, 9 seconds carry forward losses uh on account of which currently you're seeing the effective tax rate at about 18%. As and when those losses get completely 36:17 36 minutes, 17 seconds consumed the tax rate obviously will slowly go up a bit but for this financial year we are holding on to our 18% of effective tax rate. 36:29 36 minutes, 29 seconds Okay. Uh can you give me a number how much accumulated losses are there uh as of now or maybe if you are not number is 36:37 36 minutes, 37 seconds available for now then you can give also for September if you have. 36:42 36 minutes, 42 seconds So if if if you look at the losses probably we will utilize all those losses maybe by next year. 36:52 36 minutes, 52 seconds Uh okay okay that will be also helpful. 36:54 36 minutes, 54 seconds And the last question on the bookkeeping uh how much is growth growth debt and net death level we have as of quarter 3 37:02 37 minutes, 2 seconds and so net debt is at about 200 crores and we had uh cash of about uh 250 crores. 37:14 37 minutes, 14 seconds Okay. Uh thank you from my side and all the back. Thank you. 37:20 37 minutes, 20 seconds Thank you. The next question is from the line of Saraj Maha from Perpetual Capital Advisors. Please go ahead. 37:28 37 minutes, 28 seconds Hi, thank you for the opportunity. I'm relatively new to the company. I just had one question. Uh what metrics do we look at before acquiring companies and 37:36 37 minutes, 36 seconds what is the reason for acquiring companies? Is it scale or reach to client? Thank you. 37:41 37 minutes, 41 seconds What is what do we look at when acquiring companies and what is the reason to acquire? So we uh we acquire 37:49 37 minutes, 49 seconds distributors to gain entry into those geographic segment and product segment right. So with with any acquisition what comes to us is basically a portfolio of 37:57 37 minutes, 57 seconds companies a portfolio of customers right operating in a particular product segment or in a particular geography? 38:07 38 minutes, 7 seconds Did did I answer or do you want me to elaborate more? 38:10 38 minutes, 10 seconds Yes. And what metrics do we look at before acquiring company? like what are the key things we look at before acquiring a particular company. So 38:18 38 minutes, 18 seconds basically the most important criteria we look at before acquiring company is what is that company going to add to us you know because we already sitting on a 38:26 38 minutes, 26 seconds wide network today right we don't want a duplication of our network so you know what is it that unique thing that he's going to add to us which will be more 38:35 38 minutes, 35 seconds difficult or timeconuming for us to build ourselves so either he's giving us a new geography that you know is a difficult geography for us to go on our 38:43 38 minutes, 43 seconds own or he is getting giving a product segment that is very difficult to build on our own or will take time for to build on all. So if you look at last 38:52 38 minutes, 52 seconds year's acquisitions and I've given that in one of the slides and rationally for each of those acquisitions. So some acquisition gave us entry into met 39:00 39 minutes segment which was not our you know forte before. Uh some people gave us you know you know take generic exposure you know 39:09 39 minutes, 9 seconds one of the acquisition gave us one of the largest presence in Punea as a market which is a large market. So like that you know every acquisition has to 39:18 39 minutes, 18 seconds add something to us you know uh either a new geography or a new product segment like that. 39:26 39 minutes, 26 seconds Got it. Thank you. 39:29 39 minutes, 29 seconds Thank you. The next question is from the line of prren Chatterjee from Burman Capital Management. Please go ahead. 39:38 39 minutes, 38 seconds Hi uh good morning. Am I audible? Yes. 39:42 39 minutes, 42 seconds Hi. Yeah. My question is pertaining to the launch of uh GLP1 products uh expected in the near term. So uh and I'm thinking about it from two perspectives. 39:52 39 minutes, 52 seconds Uh one is you have an existing product which contributes obviously you put it the other way where you sell 10% of GP1 products uh based on 40:01 40 minutes, 1 second the numbers I can see at an IPM level that would likely be high singledigit to low double digit percentage of your existing business. So it's a meaningful 40:10 40 minutes, 10 seconds contributor. uh one impact could be when these cheaper alternatives uh come into the market there could be some hit to 40:18 40 minutes, 18 seconds your existing business or there could be a cap to further growth because this existing product has been growing tremendously on a month-on-month basis. 40:25 40 minutes, 25 seconds The other second order impact is that if uh there is a new product that is expected to be launched uh I would 40:33 40 minutes, 33 seconds expect that a pan India distributor to get a upfronted disproportionate benefit uh just for the sake of you know easier 40:41 40 minutes, 41 seconds access to the market or you know wider access before it normalizes and all the smaller guys also get a piece of the pie. So from these two perspectives uh 40:50 40 minutes, 50 seconds netting off against each other, how do you see your overall throughput expanding over the next let's say four quarters uh simply because of uh these new product logic? 41:02 41 minutes, 2 seconds Yeah. Well, we have to look at our base. 41:04 41 minutes, 4 seconds You know, our base is huge. You know, our base is today more than 7,000 crores annual revenue, right? So you know any one particular product is not going to 41:12 41 minutes, 12 seconds make a very meaningful uh change in our uh you know growth profile or anything like that right because even if we are 41:20 41 minutes, 20 seconds doing you know let's say the GLP one is still a very small proportion of our sale because we are selling so many other products at the same time and you 41:29 41 minutes, 29 seconds know let's say by end of March or April the semaglutide you know new players come in generic players come in and uh 41:37 41 minutes, 37 seconds we we will continue to sell their products also So how much share they will take from the innovator because today you know most of the sales is only 41:44 41 minutes, 44 seconds from the innovator right. So how overall the market is going to expand. So uh but 41:52 41 minutes, 52 seconds how much it will impact our own growth I don't think so any very meaningful part I can estimate right now. 41:59 41 minutes, 59 seconds Got it. Uh my second question is on it's more a hygiene question. uh if I simply divide uh your organic like forl like growth of 17% by the IPM growth of 12%. 42:11 42 minutes, 11 seconds Uh it comes to about 1.4 uh I know it might be a myopic way to look at your business on a quarterly basis but uh 42:18 42 minutes, 18 seconds that being said mathematically this is the low lowest uh quarterly outperformance uh we have seen uh at least since I have started collecting 42:27 42 minutes, 27 seconds the numbers from back in FI23. So is there any one-off or uh we should just uh ignore this quarterly volatility? 42:37 42 minutes, 37 seconds I would say just ignore this quarterly one. I I I mean I was also surprised to see such a huge growth on uh on the IPM side because you know last four five 42:46 42 minutes, 46 seconds quarters the IPM had been growing by 7 8% and in this quarter it grew by 12%. 42:51 42 minutes, 51 seconds Right? So the denominator completely changed. Uh so I I wouldn't read much into it you know. 43:00 43 minutes Got it. So sir thanks and all the best. Thank you. 43:04 43 minutes, 4 seconds Thank you. The next question is from the line of Binoy Jariala from Opacia Investments. Please go ahead. 43:12 43 minutes, 12 seconds Yeah. Hi thanks for the opportunity. Uh two questions from my side. Uh so one is that uh you've already called out you know that next two three quarters the 43:21 43 minutes, 21 seconds focus will be on integrating the acquisitions improving the margin profile and uh working on uh reducing working capital. uh is there any target 43:31 43 minutes, 31 seconds for FI27 uh that you'd like to call out in terms of cash flow generation as well as uh working capital day reduction and the 43:40 43 minutes, 40 seconds second question is how many more 100 cr plus revenue size acquisitions are actually available now for you uh going 43:48 43 minutes, 48 seconds forward whenever whenever the pace you decide to increase the pace of acquisition 43:55 43 minutes, 55 seconds so you know your first question on FY27 I'm not giving the guidance except that I can only say that FY27 is going to far 44:03 44 minutes, 3 seconds better than FY26 given the fact that lot of work we have done in the second half of FY26 is going to have a fullear impact for next year. 44:12 44 minutes, 12 seconds Okay. But we will talk about the next year numbers in the next call you know when we'll have the full business plan and everything ready. Uh uh coming to 44:21 44 minutes, 21 seconds your second question in you know how many distributors of above 100 crores are available there are many available. 44:27 44 minutes, 27 seconds uh so when we want to go even today we have so many in our pipeline so when we decide to go back to the market and shop 44:34 44 minutes, 34 seconds for more we would find enough uh targets. 44:40 44 minutes, 40 seconds So just a follow up on this uh would you say that whenever you go back to the market you have a pipeline visibility of at least a couple of years. 44:50 44 minutes, 50 seconds So pipeline is already there with us you know there are many people who keep approaching us for you know collaboration. So we we we we we have 44:58 44 minutes, 58 seconds the pipeline ready you know once as I told you next two three quarters we improve on our our own internal operations you know internal metrics and 45:07 45 minutes, 7 seconds then we will go and see which of those pipeline are still there and which of those pipeline would make sense to us. 45:15 45 minutes, 15 seconds Understood. Uh if I may ask uh one more question. 45:18 45 minutes, 18 seconds Uh sorry to interrupt you sir. Can you please rejoin the queue for more question? Sure I'll come back. 45:26 45 minutes, 26 seconds Thank you. 45:28 45 minutes, 28 seconds The ladies and gentlemen, you are requested to restrict your questions to one per participant. The next question 45:35 45 minutes, 35 seconds is from the line of Venit from Toro Wealth Managers. Please go ahead. 45:43 45 minutes, 43 seconds Um hi sir, am I audible? Yes. Yes, you are. 45:49 45 minutes, 49 seconds Yes sir. So my question was with respect to like one of the participants asked you about the other expenses. uh being increased this quarter right um but if 45:58 45 minutes, 58 seconds you can like uh mention about the few of the line items few of the top five line items in the other expenses uh because I 46:05 46 minutes, 5 seconds didn't exactly get what uh what medtech is actually making the other expense to increase 46:13 46 minutes, 13 seconds so in met you know we are doing demand generation also which means higher manpower because you know and more 46:20 46 minutes, 20 seconds qualified manpower you know as compared to you know warehouse and delivery manpower in uh demand fulfillment business right there other marketing and 46:29 46 minutes, 29 seconds promotion expenses also there in uh in uh metric. So these are the two big uh cost items that are there when you when 46:37 46 minutes, 37 seconds you do demand generation activity as well. 46:42 46 minutes, 42 seconds Okay you to that helps you to drive higher gross margins but at expense ratio they will be higher compared to uh you know pure play farmer distribution. 46:53 46 minutes, 53 seconds Mhm. Got it and sir like if you can also interrupt you Vinnie uh uh as we have a long queue can you please rejoin the queue for a follow-up question. 47:03 47 minutes, 3 seconds Uh this was my second question only. 47:06 47 minutes, 6 seconds Yeah but uh we are restricting to one question per participant to ensure that the management answers all the question. 47:13 47 minutes, 13 seconds Okay I'll join with you then. Thank you so much. 47:18 47 minutes, 18 seconds The next question is from the line of Rishad Sitsuoria from Bashan Research. Please go ahead. 47:27 47 minutes, 27 seconds Hi sir, thank you for the opportunity. Am I audible? Yes. 47:33 47 minutes, 33 seconds Yeah. So I have a slightly longerterm question about the business. So if you could just uh explain the levers behind the organic growth you know which we 47:42 47 minutes, 42 seconds have at know 1.5x and more higher than that. So what are the levels if you could just quantify let's say is it the increase of the wallet share of the 47:50 47 minutes, 50 seconds existing customer is it the cross sale that we do to the newer acquired customers via the M& activities uh the reason I asking I'm trying to understand 47:59 47 minutes, 59 seconds what would be a sustainable growth rate for our business you know let's say five years down the line when we would be you know out of any sizable or meaningful acquisition. 48:10 48 minutes, 10 seconds Yeah. So you know a very good question actually you know and this is the basically the core of our business. Why should we grow faster than the industry 48:18 48 minutes, 18 seconds or why should we grow faster than our competitors right and this is totally dependent on the value proposition that we offer to our customers you know so 48:26 48 minutes, 26 seconds what do we offer to our customers? We offer to our customers a very huge product portfolio. Right? Today the farmer market is so fragmented that for 48:34 48 minutes, 34 seconds any retailer, you know, to run a shop, he needs, you know, 6,000 different items, right? That that those could be divided over 300, 400 companies, right? 48:42 48 minutes, 42 seconds We offer him an opportunity to consolidate his buying through one buyer uh one supplier, right? So he gets a huge amount of convenience in terms of 48:51 48 minutes, 51 seconds getting a large portfolio fulfilled through uh through us. Secondly, you know, our service levels to him in the 48:58 48 minutes, 58 seconds sense that, you know, we are delivering two two to three times per day. We are running our warehouses 24 by7. So, you know, he can uh place order right before 49:07 49 minutes, 7 seconds closing a shop and he gets the goods just before opening a shop in the morning, right? So, uh he can order on our app. So, he doesn't have to, you know, do manual ordering and all that. 49:18 49 minutes, 18 seconds So, all this is a big value ad for for a customer and that helps us to gain wallet share at his counter. Okay. And at the same time we also expand our 49:27 49 minutes, 27 seconds customer base you know we keep hunting for new customer new shops that are open in the area. We expand our geographical reach. So you know we are going from 49:35 49 minutes, 35 seconds main center in the city we are also going to the you know nearby districts where we offer the same value proposition because we have we are 49:42 49 minutes, 42 seconds sitting on a huge portfolio you know the portfolio of products and that gives you a huge you know advantage over anyone else 49:50 49 minutes, 50 seconds uh in business and that's the reason why we have been acquiring also companies to build that portfolio because we have the customer it's like a two-way mode you 49:58 49 minutes, 58 seconds know why do so many companies come to you because you have such a huge customer base and why do so many customers come to you because you have so many products to sell to them or they 50:07 50 minutes, 7 seconds can buy from you. So that that mode reinforces itself every time you know every time we add companies or every time we add customers. 50:19 50 minutes, 19 seconds So can I have a small followup on this? 50:21 50 minutes, 21 seconds Uh so uh just can yeah so can you just give me any guidance for any of maintenance capex for our business? So if you could just explain me that so we 50:29 50 minutes, 29 seconds have been continuously increasing our overall warehouses. So I'm just trying to understand what is like a peak you know asset turns for us or if any color 50:38 50 minutes, 38 seconds on that part. So it would help us understand better what would be the uh incremental you know return on capital potential for our business given we are continuously decreasing our working 50:47 50 minutes, 47 seconds capital days and um we what would be further operating leverage benefits for our business. 50:54 50 minutes, 54 seconds So as you know our business is not capital intensive. It's only working capital intensive. So you know fixed assets point of view we have a very 51:01 51 minutes, 1 second small fixed asset base because most of the I'm not most all of the warehouses are on leases right. So the only equipment that we would put there is 51:09 51 minutes, 9 seconds storage equipments and cooling equipments right to maintain the temperature and stuff like that. So capex point of view it's it's very 51:17 51 minutes, 17 seconds minimal compared to the revenues that we generate from from uh from that warehouse. Probably to do one warehouse 51:25 51 minutes, 25 seconds you would not need more than 30 40 lakhs of capex. 51:32 51 minutes, 32 seconds Understood. Understood. That's it from my side. Thank you. All the best. 51:37 51 minutes, 37 seconds Thank you. The next question is from the line of Pratik Shastawa from Nish Wisdom. You are requested to limit your 51:46 51 minutes, 46 seconds questions to one per participant. Please go ahead. 51:50 51 minutes, 50 seconds Uh sure sure mim. Uh sir uh I recently attended one of the calls for the 51:57 51 minutes, 57 seconds ayurveetic healthcare provider. Uh I think they have they were mentioning in the openly mentioned in the call that they have tied up with you for the 52:04 52 minutes, 4 seconds distribution of their ayurveetic products. But they also mentioned that you know for uh alopathic and other uh 52:12 52 minutes, 12 seconds devices the margins are high but for these the margins are low. So is that true and why are we getting into low margin if that is true? So I want your uh uh you know color. 52:22 52 minutes, 22 seconds What did they say in the last I didn't hear that conference call so you'll have to tell me what what what did they say? 52:29 52 minutes, 29 seconds So in that conference call sir they were saying that they have anyway sign tied up with interero for their ayurvedic uh 52:37 52 minutes, 37 seconds you know supplements and other products distribution. Uh but they were also saying that you know it is better for them to tie up and they were saying they 52:44 52 minutes, 44 seconds are getting that at a lower margin than what typically you charge for other u like alopathic sort of products like 52:52 52 minutes, 52 seconds other electronic devices or other things right. So is that true? I want your uh I want to hear from you also on that. What 53:01 53 minutes, 1 second is the margins? What are the margins going to be in the ayurveic uh products distribution sir? 53:07 53 minutes, 7 seconds So so ayurveic products don't carry lower margins than uh than other pharmaceutical products. Right? So the normal pharmaceutical product margins 53:15 53 minutes, 15 seconds are like 10% plus. Right. So it's in the same line or could be more it won't be less. 53:21 53 minutes, 21 seconds Okay. All right sir. Okay. I can ask just one more question sir because on the US now there are other US uh devices also uh Mr. Dr. Pratik, sorry to 53:30 53 minutes, 30 seconds interrupt you. Please rejoin the queue for if you have a follow-up question. Okay, sure. Okay. 53:35 53 minutes, 35 seconds Thank you. The next question is from the line of Sumit from Finserve Analytics. Please go ahead. 53:43 53 minutes, 43 seconds Uh thanks for the opportunity. I have a simple bookkeeping question on uh datas outstanding for more than 6 months. What 53:51 53 minutes, 51 seconds is the amount of uh datas outstanding for more than 6 months as on December 25? 54:01 54 minutes, 1 second Hello. Uh am I audible? 54:05 54 minutes, 5 seconds So you know all the letters you know which are at different uh aging profile they are adequately provided. We are not giving the data aging separately in uh in the deck. 54:18 54 minutes, 18 seconds Okay. Whatever you know as for the accounting policy of the company approved by the auditors and the board whatever you know provision is required to be made is being made based on the aging profile of the letters. 54:29 54 minutes, 29 seconds Okay. Uh I wanted to understand that what is the amount of uh datas outstanding for more than 6 months as of December 21st. 54:37 54 minutes, 37 seconds We don't we don't give that kind of a data. Why would you need that data? What would you do with that data? 54:42 54 minutes, 42 seconds Okay. uh just for the valuation purpose and uh to understand how much provision can come in future 54:51 54 minutes, 51 seconds just based on that data you won't be able to take a judgment on how much provision is required right that that judgment is being taken by the management 55:00 55 minutes okay unders thanks thank you the next question is from the line of chintan from giri capital please 55:09 55 minutes, 9 seconds go ahead yes hi krabat uh Just a follow up and clarification on the cash flow. Sorry to 55:16 55 minutes, 16 seconds hop on hop on it. You mentioned third quarter last year was negative 23 odd cr and first half I think it was 62 odd cr 55:24 55 minutes, 24 seconds negative. So uh 9 monthly we were uh down 85 cr uh and the full year was down 55:32 55 minutes, 32 seconds 77 cr and this year we are kind of recover from 85 negative to8 cr. already 55:40 55 minutes, 40 seconds 100 cr delta is largely you know has been uh covered. So is is the numbers 55:48 55 minutes, 48 seconds right? I'm just trying to uh reconcile that you mentioned 23 last year it was 62 85 was 9 month negative. 55:59 55 minutes, 59 seconds Yeah. So Chintan uh numbers are right and uh when you're looking at operating cash flows uh yes there has been a 56:08 56 minutes, 8 seconds significant improvement in Q3 uh so so like praad mentioned earlier we've done 56:14 56 minutes, 14 seconds 49 crores of positive in Q3 itself and we were 56:21 56 minutes, 21 seconds 47 negative in Q1 10 negative in Q2 so we are about 8 as of YTD And we maintain 56:30 56 minutes, 30 seconds our fullear cash flow projections, operating cash flow projections. We maintain if you look at you know the the 56:37 56 minutes, 37 seconds last year on a full year basis we were 77 77 correct. So fourth quarter implied was positive only. 56:46 56 minutes, 46 seconds Yes. 56:46 56 minutes, 46 seconds Yes. Last year fourth quarter was positive. Yes. 56:50 56 minutes, 50 seconds Got it. Got it. I think uh great. Thank you for the clarification. I'll jump back. Yeah. Okay. 56:57 56 minutes, 57 seconds Thank you. Uh ladies and gentlemen, we'll take this as a last question for today due to time constraint. I now hand the conference over to Mr. Prabhad 57:05 57 minutes, 5 seconds Agraal for his closing comments. Over to you sir. 57:09 57 minutes, 9 seconds Well, thank you everyone for uh joining this call and thank you for your trust in the company. You know if you have any questions which is which has been left 57:17 57 minutes, 17 seconds unanswered, please do reach out to SGA or to our IR team. Thank you once again for joining. Bye. Take care. 57:27 57 minutes, 27 seconds On behalf of Dam Capital Advisers Limited, that concludes this conference.