Health X Platform Limited (HEALTHX) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Sastasundar Ventures Limited Q3 FY '24 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ronak Jain from Orient Capital, the Investor Relations partner. Thank you, and over to you, sir.

Thank you. Hello, everyone, and welcome to the Q3 FY '24 Earnings Conference Call of Sastasundar Ventures Limited. Today on this call, we have Mr. we have Mr. Banwari Lal Mittal, Founder and Executive Chairman; along with Mr. Ravi Kant Sharma, Founder and CEO of Sastasundar Healthbuddy Limited. Before we begin the call, I would like to give a short disclaimer. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations as of today. Actual results may differ materially. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. A detailed safe harbor statement is given on Page 2 of the company's investor presentation, which has been uploaded on the stock exchange and the company's website as well. With this, I will hand over the call to Mr. Banwari Lal Mittal for his opening remarks. Over to you, sir.

Thank you. Good afternoon, shareholders. I am B.L. Mittal, serving as the Chairman and Executive Director of both Sastasundar Ventures Limited and its subsidiary, Sastasundar Healthbuddy Limited. I am pleased to inform you that our comprehensive presentation outlining the company's vision and performance has been made available on the stock exchange platform. Innovation, efficiency and sustainability are core to our approach. The quarter witnessed 31.1% growth in revenue, reaching to INR 366.8 crores compared to INR 279.8 crores in Q3 FY '23. Sequentially, the quarter-on-quarter revenue demonstrated a 3.2% increase. Gross profit for Q3 FY '24 was at INR 31.1 crores, marking 44.7% growth from INR 21.5 crores in Q3 FY '23 with gross profit margin standing at 8.5%. Profit after tax, excluding the share of associates, amounting to INR 20.1 crores in Q3 FY '24. Now turning our attention to 9 months FY '24, the company achieved year-on-year revenue growth of 45.1%, reaching INR 1,052.3 crores. Gross profit for 9 months FY '24 nearly doubled, reaching to INR 101.2 crores compared to INR 52.8 crores in 9 months FY '23. Profit after tax for 9 months FY '24, excluding the share of joint ventures, stood at INR 57.8 crores increased from INR 7.1 crores in 9 months FY '23. The segments -- performance-wise, in the Healthbuddy supply chain segment, revenue reached INR 236.7 crores showcasing a 5% year-on-year growth. We face some challenges in the Healthbuddy supply chain segment because of the overall industry structure of the retail e-pharmacy sector, and we continue to see the challenges in the coming quarters. However, I would like to inform you with a happy mood that the RetailerShakti, our B2B business, has shown a remarkable growth, which generated revenue of around INR 129.5 crores compared to INR 52.5 crores in Q3 FY '23 registering growth of 147% year-on-year growth. And we are pretty sure that in the coming quarters, we would be -- it is possible to compensate the Healthbuddy supply chain growth issues into the RetailerShakti issues. I would also like to update you on the merger part, that because of the technical reasons, the Mitsubishi Corporation's stake in Sastasundar Healthbuddy Limited, the Stock Exchange and SEBI was not ready to consider as a public holding, though Mitsubishi Corporation is a widely known public company, but the guidelines prescribe that those have to be QIB to classify as a public holding. And as you are aware that Sastasundar Ventures Limited, the promoter stake is 75% -- 73%, while the public holding is only 27%. And therefore, it is required that part of the holding of Mitsubishi and Rohto should be considered as public. So for the time being, they have refused to consider it as a public holding, but I assure all the shareholders that the simplification of this structure is our top priority. We are committed to this, and we are in consultation with our advisers and also Stock Exchange and SEBI, and we will find an appropriate legal solution so that it can be done. But I again assure you that we are fully committed for simplification, and I am sure some way we will find out so that the structure can be sustainable. India, as you all are aware, presents a very unique opportunity of the robust framework of health care, and we have a very good ecosystem, which is efficient, sustainable, and which is very, very innovative. And therefore, I am pretty sure about this journey of growth, and I am sure that this company will be rewarding shareholders very good. Now without wasting much of the time, I would like to spare your question and answer session. Please ask the question. Our CEO, Ravi Kant Sharma, would be happy to answer those. Thank you.

[Operator Instructions] The first question is from the line of [ Dixit Kalra from Seinvest. ] Please go ahead.

So congrats on good numbers in RetailerShakti. So I had a question pertaining to RetailerShakti only. So can you give me some data around whether the growth in our same retailer growth versus the new retailers that we're acquiring year-on-year or quarter-on-quarter? Do you have some numbers around that?

Can you please repeat the question? Your voice was not clear.

So let's say, we already have a retailer. The growth in the wallet share of the existing retailer versus the number of new retailers that we are acquiring, so we are seeing good growth in RetailerShakti. What part of that growth is the growth in wallet share of existing retailers versus the new retailers that we are acquiring or expanding into new geographies? Do you have some color around that, some data around that?

Yes. So yes, I will be taking that question. Actually, I'm Ravi Kant Sharma, Co-Founder and CEO of Sastasundar Healthbuddy Limited. So it would be -- the growth would be the mix of both coming from the new retailers as well as increasing the wallet size of the retailers as well. Just to give you the numbers actually, during the current quarter, close to 11,100-plus unique retailers actually have given the order. And the average invoice value of the retailer was close to INR 1.33 lakhs. The same number in the last quarter was 9,684 retailers and the average invoice value was INR 1.27 lakhs actually. So as a strategy, we are focusing on, number one, increasing the wallet share of the existing retailers; and number two, continue to add the new retailers.

Yes, that's good. This data will help me. The second is, sir, so our tech platform, the RetailerShakti, so do we have a tech in-house? Or do we have a consultant use as third-party model?

We have our tech in-house completely. It's not dependent on outside. We have our own technology team. The -- Vinay Khaitan is the CTO, and we have the full in-house team to develop and management of the tech part.

Okay. And sir, what new areas have we expanded into in the current quarter? Or are we looking to expand into the future quarters for RetailerShakti?

So like the geographical expansion, as we mentioned in the last quarter, actually, we are focusing on expanding the Eastern, Northeastern and the Northern markets. And from a geographical perspective, that is the focus area. And in the RetailerShakti actually, we are doing a lot of experiments, I would say. Like working with the trade-generic kind of the concept and how to promote the higher-margin product kind of stuff. So there are a lot of things that we are doing on the RetailerShakti side. actually. Right now there is no much kind of dataset actually that has been created till now. But we are hopeful that in the coming quarters, actually, there would be substantial things to be shared on these fronts.

And sir, in these markets, do we see any organized wholesaler competition from any other entities? You don't have to name the entity, but do we see a lot of competition here?

So basically, the market is -- if you will look at the pharma supply chain, there is a clear shift that is happening from the unorganized sector to the organized sector. And there are very few players actually who are right now operating on the organized side. So I believe that the size of the cake is very large and can be very easily distributed among the existing organized players actually or even there is scope for the new players to enter into this space as well.

So you're confident on the growth prospects moving ahead?

We are.

And sir, we see a lot of gross margin volatility. Is it like there were -- this is a previous inventory that we have that went out at higher prices? Or what is the reason? Because for the last 2 quarters, we've seen the gross margin trajectory going down?

So as you are aware that we have 2 verticals of the business line. One is supply chain to the Healthbuddy that are selling on the Flipkart Health+ platform. And second is the supply chain for the other retailers. The gross margin, the other retail business is basically a pure B2B business, where the gross margin is relatively lower than your Healthbuddy business. But simultaneously, the good point is that the operational cost of the B2B side is much, much lower as compared to the Healthbuddy supply chain side. As we are witnessing a very good growth coming from the RetailerShakti side, just to mention that in the last quarter, the revenue has grown by close to 20% as compared to the previous quarter. So it is due to the revenue mix of the RetailerShakti and Healthbuddy supply chain business.

Okay. And sir, purely on the RetailerShakti business, we are profitable or we are just operationally profitable on that side?

Operationally, we are profitable at Calcutta. And at the other locations also actually, we are hopeful to become operationally profitable very soon. But there are certain costs actually that is centralized fixed costs like your technology development that needs a continuous effort. And then the business development team actually that works on the field to grow the business. So these are basically fixed in nature. And with the volumes coming in actually, this cost will be recovered very soon.

Obviously, our existing warehouses, they will also add operational leverage, right?

Absolutely right.

So can you give me a percentage utilization of the warehouses? Like, let's say, the capability, units and how much are we utilizing it currently, and...

So warehouses are basically, like the maximum cost are the variable cost in terms of the operation, and we hire the people on the basis of the demand that we plan or forecast for the coming months. So in terms of the utilization of the workforce, actually, I would say it would be close to 100%. But in terms of the -- your warehouse facility, the cost is not much in that front. So maybe we can utilize the same infrastructure for growing the business to 3 or 4x from the current numbers, but only variable costs would be there.

Okay. And sir, you also mentioned in the starting remarks that there are some challenges in the e-pharmacy business because of which we had some problems with the Healthbuddy side. Can you elaborate on that side, what are those challenges?

So I'm sure there are a lot of articles that has been published in the -- recently on the pharmacy side, actually, and you all must have gone through that. So these are basically, I think, the industry cycles that happens. And we are hopeful that going forward, actually, there would be your stability actually coming in this industry.

This is a natural phenomenon. Earlier, the e-pharmacies were heavily discounting their offers. And then the discounting has gone. Those are now focusing on sustainability, so it's a question of habit that customer needs some time. They hope that, again, the discount will come, so they defer their purchase decisions. So -- but this is -- we are quite sure that by the time the customer also understand and they get the value proportion of like getting genuine medicine, getting medicine home delivered, availability. So those qualitative issues come into focus. But yes, the habit is a substantial part in customer behavior. And that's why it's an industry phenomena and the same challenges we also face in health care business.

Okay. So you think this is a short-term blip and mostly related to customer behavior and as trust grows, people will likely order more, right?

Yes, right. You are right.

The next question is from the line of Mansi Manoj Kumar Desai from Dalal & Broacha Portfolio Managers.

I missed out on 1 number that you gave on the retailers that we had in the last year, same quarter, and the average ticket -- average purchase value.

Yes. So basically, the current quarter, close to 11,100 retailers -- unique retailers have ordered and their invoice value was -- average invoice value was INR 1.33 lakhs. And the same number in the previous quarter was close to 9,680 retailers with average invoice value of INR 1.27 lakhs.

Okay. And sir, going forward, what is the kind of growth in the retailer -- retailer addition growth that we could see? I mean, within a quarter, if we are seeing around 1,000 -- roughly around 1,000 retailers adding, how much do we see that going ahead?

So we have recently entered into the newer geographies of Northeast actually, that operation has been started very recently. And we are very hopeful of adding more retailers going forward in the coming quarters. So the market response for the RetailerShakti is very encouraging and highly positive and the receptibility of the retailers towards the value propositions offered by the RetailerShakti is also very encouraging. So we are very hopeful and very excited with the opportunity that this particular space offers to us.

Okay. And sir, on the Healthbuddy side, you said that now that the discounting is going down and people are deferring their purchases. But as a company, we always had -- Sastasundar always had much lower discounting versus the other platforms. So despite that, are we seeing some deferment in the purchases?

Actually, the Healthbuddy side demand generation is not controlled and managed by us. It is a Flipkart Health+ platform. Flipkart has their own management. And the discounting policy is also not in our hands. But yes, because we at Sastasundar, when we were managing it, we were managing it very efficiently and the discount was also very low. But after Flipkart takeover, the discount increases, and that may be a cause because now by virtue of reduction in discount, we have seen that there is demand slowdown. And as you have seen in the last quarter results also, the growth is not in the expected line. And -- but nothing to worry about. We are fully geared up to make up that by RetailerShakti. And we have continued to increase our focus and energy on RetailerShakti, so that at aggregate level, the growth comes back.

Okay, sir. Sir, anything on the diagnostics side that you would like to say that in terms of growth, what's really happening there? The numbers continue to be quite low.

Diagnostic side, we opened this diagnostic to utilize our Healthbuddy network. But because of the transition from Sastasundar to the Flipkart Health+, that networking benefit or integrated B2C platform benefit is no more under our control and management. The diagnostic side, we see a great opportunity, but we have to find a very innovative, sustainable competitive advantage. And we are working something very innovative in technology side. And this quarter, I'm not able to give you the clear road map how the diagnostic will scale up, what kind of the future we'll look into because we are still working on it. And I'm sure in the next 6 months, we'll be able to give you a clear picture about our diagnostic business.

[Operator Instructions] The next question is from the line of Manav Vijay from Deep Financial Consultants.

Sir, first of all, if you can help us to understand on the Healthbuddy side. So now -- so because of the change in the management, the growth has slowed down. So how should we think about this going forward? Because for last 3 quarters, almost, I would say, 4 quarters, the top line is flat. So going forward, should we assume that, let's say, the incremental efforts that the management will put in would be on the RetailerShakti side and not on the Healthbuddy side?

Yes, you are true. So I mean, the -- since it's not only going future, but after our strategic tie-up with Flipkart Group, it was already on to the RetailerShakti because -- from FK platform supply side, there is nothing to do from our side, except to management of procurement and bringing efficiency in the supply side that we are fully equipped and geared up. So now we are reorganizing the entire efforts towards RetailerShakti. And going forward, the critical focus area will be the RetailerShakti. And we are working upon a framework of the business organization where more than 60%, 70% of our revenue and profitability comes from RetailerShakti.

Okay. And sir, in your Healthbuddy business, you had already reached a certain 10% kind of a gross margin, whereas in RetailerShakti, the margins were slightly lower. Now in this quarter, when the Healthbuddy has gone down in terms of, let's say, overall contribution to the sales, we have seen, I mean, a dip on the gross margin side as well. Now RetailerShakti will take some time to move up in terms of sales. So let's say, till that time, RetailerShakti overtakes the Healthbuddy sales, till that time, would it -- so can we expect 10% kind of a gross margin that you are doing earlier? Or we will see slightly lower gross margin, sir?

10% gross margin for a near term for next 2, 3 quarters looks not possible. But if we see the -- if we take a 2-year perspective, then I'm pretty sure that the margin will improve substantially. And this particular program in Healthbuddy side looks not that kind of permanent, but we will sort out this. And we are pretty sure that the gross margin will also improve substantially because of the incremental procurement margin. So there could be -- we are expecting at least 3%, 4% increment in our procurement margin by virtue of increase in volume in RetailerShakti and, thereby, increasing the gross margin. But 10% in next 2 quarters looks not achievable.

Okay. Sir, my next question is regarding the other income that you have posted in this quarter. So I believe that at the end of March, you had a cash balance of around INR 400 crores. This quarter, I think the cash balance moves roughly INR 490 crores or so. Last full year, we had a total other income of INR 26 crores. This quarter, we had a total other income of around, I believe, INR 29 crores. If you can just help to understand how this other income is coming, sir, that would be really helpful.

Other income is coming from the treasury function. So the treasury functions are the 2 parts. One, the treasury lying into the Healthbuddy business and other treasury lying into the financial services business. So financial services business, we have certain income from our erstwhile PMS services. So this extra profit is coming from that vertical.

So sir, if you can help us to understand how should we project this number because this number on the base that you have seems to be very, very high. And plus this number is also volatile. So if you can help us to understand how should we project this number?

So in the next year, we can safely presume that around 10% yield we will get into our treasury functions. So around INR 500 crores treasury we have. So between INR 40 crores to INR 50 crores will be other income next year, full year.

And apart from this, the PMS portfolio that you have, you expect some income from that as well, sir?

That is inclusive of. So a large part of the portfolio is into the debt part. And so that part is fixed deposit bonds, there we are expecting yield of around 8% because next year, we are expecting some slowdown in interest rate curve also. So 2% may be added by the financial services business. So aggregate level, I'm assuming that around 10% yield we should get on our liquidity.

Okay. And now, sir, considering the fact that the construct of the business will slightly change between your Healthbuddy and your RS business, so is there a cost angle that you can bring in? So you have an employee and other expenditure cost of around INR 35 crores for a quarter. Can this number be managed for the stable sales? Or you believe that this number will continue to remain the way it is?

So basically, see, going forward, RetailerShakti growth actually, we would not be needing much of the expenses coming on the P&L side for the growth that we are forecasting for next 2 to 3 quarters. And with the kind of the stability or the forecast of the Healthbuddy supply chain business, we can expect that in the coming quarters, actually, not maybe in the March, but in the coming quarters, this number may come down. So like INR 35 crores of the cost that you are seeing right now on the quarterly numbers, it may come down in the coming quarters actually.

The next question is from the line of Harsh Bhatia from Bandhan Asset Management Company.

Sir, just 2 quick questions. Are we sharing the Healthbuddy partners, number of partners that we have on ground right now? Or because the last time we spoke, it was somewhere around 600, if I'm not wrong.

Can you repeat the question, it was not clear.

Yes, the number of Healthbuddy partners as of now? And what was it last quarter? Like are we sharing those numbers?

The number of Healthbuddy, we are not -- we have not shared because this comes under our joint venture agreement with Flipkart Health+. So by agreement, we can't share as a part of 1 partner only.

Okay. Fair enough. And what is your take or view on the discounting behavior in the market as of today? Like are things improving? Or are there still certain outliers, which are behaving irrationally in the market in terms of the discounting in particular? So anything that you can help us with?

Yes. This is a very clear cut shift now. So entire the start-up ecosystem, including e-pharmacy has shifted from purely growth perspective to a sustainability growth perspective. So every company is now working more towards sustainability and the growth, instead of 10%, 20% month-to-month growth, they are now looking for 20%, 30% year-on-year growth. So the sustainability is key for everyone, including Flipkart Health+. And the entire industry has come down to discount of around 15% base discount. And they all stand together at 15%. But customer behavior will take a certain amount of time. So the growth is compromised, but the sustainability is taking power over the blind -- blended burn-based growth. So it will take some amount of time before the customers' behavior change. But yes, the industry is certainly poised for change towards more sustainability rather than burn-based growth.

Okay, sir. And lastly, in terms of the number of retailers that you highlighted in the early part of the call, I think so from 9,600, we are somewhere around 11,000 retailers for placing the orders with slight increase in the average order value or invoice value. Is there any particular region that is contributing to the incremental growth? Or it would be fair to say that West Bengal, for example, would be the primary driver in this sense from a quarter-to-quarter perspective?

Yes. So I would say that is the advantage of the kind of business model that we are building in RetailerShakti where once the retailer has been onboarded, the retailer is required to do everything online digitally with us. And once you have the retailers onboarded digitally with you, you can work on a lot of things to increase the wallet size of the retailers by applying the predictive analytics in terms of the past purchase behavior of the retailers, any extra margin products that has been given by the companies, any offers. So all this plays a very, very critical role. And we are doing a lot of work on the technology side on how to engage the retailers digitally and how to increase their wallet share. And we are hopeful to increase this number in the coming quarters.

Yes. Sir, my question was more pertaining to the fact that regionally or geographically, this incremental movement that is coming from 1 particular geography in the sense that West Bengal is a primary driver or...

It's spread across actually.

[Operator Instructions] The next question is from the line of Vishal Manchanda from Systematix.

Sir, would you be able to kind of break up your revenue? How much was it from West Bengal and how much was it outside of West Bengal?

So we are not giving the breakdown the geography-wise. So -- but this is a good point. We would basically think of providing those information actually in the coming quarters.

Got it. And on the Healthbuddy, like you don't give out the numbers, but directionally, are you expanding the number of -- directionally expanding the network or you have stalled because of the growth issues?

No, we are expanding, but the growth rate is not up to the desired and projected level. So we don't say that we have stalled adding the Healthbuddy. Healthbuddy are being added, but we can definitely say because this discount shift from burn-based discount to sustainable discount may take a certain amount of time. So the Healthbuddy are being added continuously, but not to that speed as we expected earlier.

Okay. And sir, on RetailerShakti, we have been adding retailers to our network. But is there also a dropout that you are seeing? A percentage of retailers not actively participating in your business or that's not the case?

So in RetailerShakti, we are supplying to the retailers only against advance payment. or the cash on delivery kind of the stuff, whereas the retailers have the opportunity or already have engagement with the other distributors who are providing the credit to them. So in terms of the dropout, there may be the cases where the retailers have dropped out due to, you can say that, the credit facility kind of stuff. But still the kind of value that we are providing to the retailers in terms of the availability of all the products at 1 platform, in terms of the margin transparency, we see that the retailers come back as well, dropping out for certain months and then again come back to the platform.

Okay. And apart from the regular margins that you -- so basically, you kind of supply the retailers at a given price and they get a markup -- they take a markup on that. But is there also an incentive that you have for annual volumes that they do with you apart from the regular markup that they earn from the business, earn on the drugs?

Yes. So there are a lot of promotional schemes or offers that continue to run during the entire year for the retailers on the basis of their past volume or on the basis of the committed volume during the month. So the marketing team comes out with this kind of offer continuously.

Okay. And on the gross margins, can you share what is the RetailerShakti gross margin?

So again, this is a very good question, and we would plan basically to include the breakdown of the gross margin in the coming quarter's presentation.

[Operator Instructions] The next question is from the line of Neelam Punjabi from Perpetuity Ventures.

First of all, congratulations on some good set of numbers. Sir, my first question is on the working capital cycle. So we've done a phenomenal job of reducing the cycle from 51 -- 54 days a year back to almost 31 days currently. My question is, are we confident of sustaining this number going forward, 31 days of working capital?

So thanks, Neelam. You can forecast that the working capital percentage to the revenue would be close to 10-odd percent. Definitely, the finance team has done a good job, and our CEO has done a very good job of controlling the inventory, and we have been basically able to bring them down from 10% to 9%. But I would suggest that 10% would be something that we should aim for actually or you can plan for the future.

Got it. My second question is on the Healthbuddy business. You mentioned that with discounting going down, our growth has been impacted. However, my question is that, is this impact only on growth? Or has it also been on the gross margin in the Healthbuddy supply chain business?

There was no impact on the gross margin percentage for the Healthbuddy business. The impact was on the -- in terms of the growth. And as the gross margin is the blended gross margin of RetailerShakti and the Healthbuddy business, that's why we are seeing the -- you can say that the downtick on the gross margin side.

Got it. Okay. Understood. So sir, on gross margin, so I wanted to understand that what is the kind of gross margin expansion that we can achieve next year? You mentioned that with scale, we can extract almost 400 basis points of gross margin. But can we achieve something like 100 basis points in fiscal year '25?

Right now it will be very difficult for us to give you any indication of the gross margin improvement that can be planned for the coming year. But I would like to highlight one important point here. We are definitely seeing that there is a gross margin drop -- blended gross margin drop, I would say, in our results. But simultaneously, the cost of operation of the RetailerShakti, that is our eB2B platform is much, much lower in comparison to the cost of operation of the Healthbuddy supply chain business. Since the drop has happened recently and in the volume, that's why you are not seeing the impact of the cost reduction on the quarterly results. In the -- maybe in the June quarter result, the current cost of INR 35-odd crores that has been there in the December 2023 quarter result, it will come down in the June quarter, this number. But there would not be much impact on the EBITDA side of the business.

Understood. Sir, my next question...

If we just see that the gross margin was down by close to 1.2% or 1.3%, the EBITDA impact was also to the same extent in the December quarter result. But the kind of cost reduction that would be implemented and the benefit that would come, it would -- the impact on EBITDA would be much, much lower as comparison to the impact on the gross margin percentage.

Got it. Okay. Sir, my next question is on the RetailerShakti. So you mentioned that we have about 11,100 retailers that were transacting in Q3. Can we achieve about 15,000 actively transacting retailers by the end of this fiscal?

We are -- to be very precise, we are targeting close to this number for the current quarter. And for that, the entire team is working.

Got it. And sir, what would be a 3-year target for this number for the RetailerShakti platform?

Right now it's very difficult for us to give any future guidance on the RetailerShakti business side or any other business side.

Okay. For the RetailerShakti business, we had some plans of offering credit to the retailers. When do you plan to start this? And will it impact us significantly?

So right now also, we are giving credit to certain retailers after doing the credit history verification and to the large retailers, I would say, having certain chain of stores in particular cities. But we are also in discussion with fintech companies, NBFCs and the bank, if there can be any kind of product that can be developed together where the risk on the credit side is taken care of by the financier. And through technology, it's a seamless transition for the retailers as well. So we are exploring the opportunity on this side. And once any concrete things are being finalized, we would be happy to share with all.

[Operator Instructions] The next question is from the line of Rishikesh from RoboCapital.

Sir, my first question is with respect to the warehouses. How many warehouses do you have currently? And what's the plan going ahead with respect to warehouse expansion?

So in terms of the warehouse expansion, we are not seeing any opportunity right now for the expansion of the warehouse in the next 1 or 2 quarters right now. So we would continue to basically work with the existing warehouses. We have 7 warehouses and the existing warehouses would be enough to take care of the growth opportunity that we have planned for the coming 1 to 2 years.

Okay. Okay. And with respect to the RetailerShakti, the retailers, you said they have an average order value. And what would that percent be of their total requirement broadly?

Very difficult because different retailers have different kind of the sales volume. But I would say that the wallet share right now that we are taking from the retailers would be very, very miniscule. There are 2 kind of retailers, if you will divide. One would be the larger retailers and second would be your average mom-and-pop store. So the percentage share of mom-and-pop store is very, very miniscule right now with us.

Okay. Okay. And also lastly, if you could just give a broad indication what kind of revenue growth are we looking for in the near term, 1 or 2 quarters? And what is the idea of broadly plan for 2 to 3 years?

So as a policy, actually, we don't give any guidance for the future in terms of the revenue or the profitability. So I'm sorry, we would not be able to share anything on that front.

[Operator Instructions] We have the next question from the line of Manav Vijay from Deep Financial Consultants.

First question is regarding the Healthbuddy. So the decline that we have seen on a quarter-on-quarter basis, you believe that, that going forward, we should not see any kind of a decline in this sales? Or considering the challenges at the industry level, this number can come down further?

Mr. Manav, it would be very difficult for us to give any indication of the future volumes. As I said earlier during the call, there are a lot of articles that have been published on the e-pharmacy industry recently. And you can refer to that in terms of the future growth or the plan, but very difficult for us to share any indication on that side.

Sure. Sir, on the Retailer side, you have shared the average invoice value of INR 1.3 lakh for quarter 3 and INR 1.27 for quarter 2. Is it possible to share what was the number for FY '23?

FY '23, I have to dig out that number actually. So definitely, we can share later on, on that.

Okay. My third and last question to you, sir. Now you are sitting on a substantial amount of cash balance. So does your -- I mean, your agreement with Flipkart, does it allow you to start an offline presence or, let's say, under the agreement, you are not allowed?

No, there is no debar under the agreement. We can start the offline business. But right now, we don't see any competitive advantage of going offline. So rather than going offline business, we would like to focus more on the RetailerShakti. There is no plans, but there is no agreement of stopping going offline.

Okay. Sir, in that case, since the amount of CapEx that you need in business is minimal, plus also the burn is not going to be there at all. So any -- let's say, any kind of a usage that you can provide us for the cash that you have on the balance sheet?

Yes, we are working upon it. Unfortunately, this simplification of the structure got delayed because of the technical reasons. So once the simplification comes, then the distribution of cash or further utilization of the cash, we can decide upon. So the first step is to simplify the structure because the cash is lying into subsidiary company, not into the holding company where all the shareholders have the equal interest. So the first part is to bring all the shareholders at one level and then to plan for the liquidity.

Okay. And sir, last quarter, you had mentioned to us that this entire restructuring process will take around 15 to 18 months. Now with this application getting rejected, so we should stick to the same time line or we should expect that this time line gets further pushed into, let's say, maybe FY '26?

So yes, definitely, the time line has to be extended because now any application can only be filed after the '24 finalization of the accounting. So we expect that by end of the May, we can take up any further scheme. And after filing, it takes around 1 month -- 1 year's time frame. So definitely, before 31st March '25, we don't expect any final outcome. So it should come in '25, '26 financial year.

[Operator Instructions] The next question is from the line of Alkesh Jain, an individual investor.

Sir, I would like to know that we are constantly in the last 2, 3 quarters, we have INR 360 crores run rate. When do you expect we go to that INR 500 crore run rate?

It's a good question. This much I can tell you that we all are working very hard to achieve that. And I'm sure soon we will be showing those kinds of numbers. But your company is working very hard to achieve that, and that is fully achievable.

Secondly, I would like to ask you then when can we expect to turn PAT positive?

Operational positive?

Yes.

Next year, we expect that we will be operationally positive.

And in the last con call, you had said that the next 2 quarters is going to be somewhere more consolidation. Do you think that the consolidation phase is over for the company or we are still in that process?

We have understood and -- I understood that there is a consolidation, and we are now finally taking effective steps to downsize the cost cutting. So the growth momentum in the e-pharmacy segment, we were seeing last year, and we projected and had certain particular cost ready for that growth momentum. But unfortunately, that was not played out. So we are under the process to cut down the cost. So the EBITDA for the next year will be more positive than the projected because of the cost cut down and substantial growth in RetailerShakti. We firmly believe that the next year, we should end with the EBITDA positive result.

So what do you think that the growth engine for Sastasundar is going to be RetailerShakti or the Healthbuddy tie-up with Flipkart?

I think the growth engine will be RetailerShakti. It's clear.

And how do you plan to utilize the cash, which is lying in the balance sheet?

The planned utilization of the cash is only possible once the simplification is completed because right now, suppose if we plan for utilization, then the options are very, very limited because the cash is into subsidiary company. So from subsidiary company, it has to come down to holding company. So it's a very tax inefficient structure. So the first focus is to plan the simplification and get it executed and then we can plan for the liquidity utilization.

I would now like to hand the conference over to the management for closing comments. Over to you, sir.

So thank you so much, everyone, for joining our Q3 FY 2024 conference call. We are very happy to answer your queries and look forward to have more interactions in the coming future. Thank you so much.

Thank you. Thanks a lot.

Thank you. On behalf of Sastasundar Ventures Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.