Max India Limited (MAXIND) Earnings Call Transcript & Summary

Ladies and gentlemen, good day and welcome to Max India Limited Q3 and 9 Months FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rajit Mehta, MD and CEO. Thank you, and over to you, sir.

Thank you very much, and good evening to all of you and Namaste, and welcome to this Q3 FY '25 earnings call for Max India. For all our existing shareholders who have joined, a big thank you for your support. The markets have been playing hide and seek, as we know. So really thank you for your support. For the benefit of all of you, I have with me my colleague, Ajay Agrawal, who is the Deputy CEO and CFO of Antara, also leads Investor Relations; Ishaan Khanna, who is the CEO for Antara Assisted Care; Sandeep Pathak, the CFO for Max India and the Head, Legal, for Max Group; and Ankit Kalra, CFO for Antara Assisted Care; Nishant from our Investor Relations team; and our SGA, Investor Relations Advisors, Aakash, as well on the call. To start with, I'm very, very happy and delighted to share it's been quite an action-packed and satisfying quarter. There has been steady progress across all business verticals for the asset side or real estate side or Antara Senior Living. We launched the first intergenerational living community in Gurgaon. Q2 FY '25 has been a phenomenal response, where within the few months, we've been able to sell 82% of the inventory. So roughly 240 of the 292 units have been sold. Some have been sold in Jan and February also, but that's for the next quarter update. Given the encouraging response and the price points that Gurgaon enjoys, we are already in discussion with Max Estates to look at the Phase 2, a similar partnership, in a contiguous piece of land, while we do have some pending demand as well for this geography. On Noida residences, the finishing works is in progress. All the construction-related NOCs have already been obtained and will be ready for possession within timelines. On Antara Assisted Care, we have added 234 new beds in Care Homes in the current financial year. Our bed capacity has now increased to 200. We also had planned to increase some more in Q4 of this year, which will happen as well. We are now in 3 geographies, Gurugram, Noida and Bengaluru. Both Care Homes and Care at Home reported very healthy revenues, with the high double-digit growth over comparable last quarter. Lastly, in the AGEasy vertical, we now have 18,000 repeat customers. We have touched about 1.93 lakh lives, out of which 1.5 lakhs are through marketplaces, rest are on our own website. Our NPS is extremely healthy, which vindicates the customers' confidence in our offerings. It's been growing steadily from 13 to now 36 in the last 6 months. Now, let me go to each vertical, what we have done, what we have achieved. On the Residences vertical, all inventories are already sold out in Dehradun. We're now getting some opportunities of resales, because sometimes circumstances in seniors' life change due to medical condition or loss of a partner. During the 9 months FY '25, we have done 12 resales and earned about INR 2.2 crores as marketing fee. The operational revenue from Dehradun has increased to about INR 6.1 crores for Q3 FY '25, a growth of 13% over the last corresponding quarter. The Dehradun community reported a profit of INR 0.4 crore, much ahead of the plan is now also operationally cash positive. Let me remind you, it is always PBT and cash positive. Now it's operationally cash positive as well. And the overall cash surplus for Dehradun now stands at INR 110 crores. In Noida Phase 1, we had already sold out the inventory many, many, many months back. The collections are better than planned. We have 99% collection efficiency. Total collection achieved so far is INR 382 crores, 14% growth over last year. Our construction is as per plan, and now we are doing all the finishing works, interiors, landscaping, et cetera, and will be ready for possession much before the time line stipulated by the authorities. The application for OC has been kept in abeyance by Noida. As some of you are aware, there is a Sector 150 issues being sorted out, and the Noida authority is waiting for direction from the government. On Phase 2 of Noida Sector 150, in the last earnings calls, I'd informed you that we had temporary pretty setback because of RERA. We have now taken this up in the -- with the appellate authority, and resolution discussions are underway for these approvals. While there'll be a delay in Phase 2, the silver lining is the market continues to be quite buoyant. And compared to the price point we had sold Noida Phase 1, the Noida Phase 2 will be much, much higher. So that's the silver lining, once we get the approval. On new communities, about Max Estates Gurugram, which is a 0.7 million square feet development, of the total 2.1 million, we have 292 apartments. As I said, 240 already sold out. Sales collection of INR 124 crores. And Antara continues to have a steady revenue income by way of management fees. Some of you may get concerned that the quarter-on-quarter consol revenue is going down, primarily because the collections have cycles depending on when the time is due. So while there were some collections done last time, and therefore it showed an uptick, this time, obviously there's nothing due, but as we proceed towards the next quarter, this will catch up. It's just the nature of the business. There's nothing to get worried about. It's very temporary, and we have been guiding you all the time, this will happen, right? But as we collect more, as we launch more communities, this problem will also get sorted out. We are actively pursuing the Chandigarh opportunity in the stage of definitive agreement negotiation now. So our commitment to create 1.5 million square feet every year, quite remains. We have 0.3 million of Noida Phase 2, potential point 0.7 million, 0.8 million of Chandigarh. And we'll have possibly 1 million of Gurugram Phase 2. So the 1.5 million is not a problem at all. For Antara Assisted Care, overall net revenue at INR 19.4 crores in Q3 FY '25, grew sequentially by 57% over Q2, year-on-year growth of 176%. On the Care Homes, significant expansion was planned for FY '25. We already have 234 beds added, and the rest will come in Q4. Fit-outs are going on for 170 beds in Chennai, and 80 beds in Whitefield. So a number of 250, 300 more is also within sight. Full efforts are being to operationalize the maximum beds within this fiscal year. On financial numbers, the Care Homes' net revenue stood at INR 2.1 crores in Q3 FY '25, which is a growth of 22% over last quarter and Y-on-Y growth of about 40%. The existing Care Home DLF Gurugram and Memory Care Home have reported positive contribution margin of 1% in Q3 FY '25. We have been having some issue with occupancy in Gurugram Care Home, primarily because long-term move-ins have not been fed to digital, but the contribution margins have continued to be steady. That's a temporary issue, will get solved over a period of time again. The ARPOB has grown quite healthily by about 8%. The reduction in occupancy I already explained to you. Also what happens is, since we have some seniors who are quite elderly, we often lose them sometimes, which is the nature of the business. So that occupancy gets affected temporarily because of that reason as well. In the mature steady state, we will hit the annual revenue of INR 5 crores, INR 6 crores, as we've been saying, in each care home. Margins have sharply improved from 12% in Q3 FY '24 to 18% in Q3 FY '25. We have served about 200 patients during Q3 FY '25 and over 2,000 patients in Care Homes since inception. And as we ramp up occupancy, obviously the margins will improve. On Care at Home, we continue to expand our footprint in new geographies, Bangalore and Chennai have registered a sequential growth of 17% and 7%, respectively, in Q3 over Q2, and are now nearing contribution breakeven. We've also increased the penetration of higher margin services like critical care and physio. We have now achieved the highest ever revenue of INR 4.6 crores in Q3 FY '25, with strong year-on-year growth of 83%, and around 32,000 patients have been served in this vertical. Please do remember the number of lives we touch, whether through residences, products or services are customers to whom we can sell and cross-sell our other products and services, which was the intention and the aspiration and the vision behind creating an integrated care ecosystem. So in one sense, we are creating a flywheel concept where customers can come through residences, through AGEasy, through Care Homes, through Care at Home, and we kind of create them and sell them different products and services with a much higher LTV. Overall AGEasy, includes the erstwhile MedCare business, achieved the highest ever net revenue of INR 12.7 crores, which is a growth of 92% over Q2. This is the nature of the business. This is a D2C business. Therefore, the growth is never going to be linear. All SBUs, in fact, have shown strong momentum. The AGEasy monthly revenue rate grew from INR 52 lakhs in June to INR 1.3 crores in September, to INR 3 crores in December, and maybe we'll cross that number in January as well, but that's for the next quarter update. So a 6x growth in daily run rate with sharp improvement in our ROAS, which is return on ad spend. And the product portfolio has now expanded to 60 plus products and SKUs of 180. One of the metrics we track very carefully is the revenue on ad spend improving. And if that is improving, it means we're spending less to get more revenue, and that number is true as well. We have crossed an annual revenue trajectory of INR 60 crores, with 68% of the business coming from marketplaces, 22% through D2C channel, and 10% through offline channel. On Amazon, we have BP monitors, hinged knee braces, nebulizers, our top 3 products amongst the top 10 best sellers. We're also focusing on products like bunion corrector, which is for the toes, shower chair, grab bars, Pro X smartwatch, which have ROAS of about 3, right? And we are working on introducing more and more products with senior-specific features. The lung care health condition was launched with 8 products in Q2. We're showing initial good traction with the launch of the offline channel, and the momentum is expected to accelerate further. For joint pain, the focus continues to be on product portfolio expansion and increased offline presence. We have planned for 10 new product launches in Q4, and gut health as the next launch -- condition launch expected in Q1 FY '26. Now in order to increase our access to customers, to make sure we have a stitched-up pipeline of products to launch new innovative products and solutions. We have also been stitching up new partnerships. So we've onboarded boAt. As you know, it's an admirable electronics organization in India, leading player in wearables and hearables. They are going to be our technology partner for AGEasy. So all senior-specific gadgets, devices, wellness products, which require electronics, they will help us develop cutting-edge tech-led solutions, and they are exclusive to Antara AGEasy. So that's one partnership. We also partnered with Dr. Lal PathLabs, a leading diagnostics player, to launch customized geriatric packages for seniors to strengthen our geriatric care services. The package has been created basis our combined learnings on what senior needs, and Antara will be in the customer-facing role in this partnership. We will also develop nutraceuticals to be offered as part of AGEasy. And a leading nutraceutical company, Wellbeing Nutrition, who has also been partly acquired now by Unilever, has done a tie-up with us, again, exclusive to us. They will develop tailored products as a part of this tie-up, which will help us manage holistic wellness for seniors through nutraceuticals and supplements. We are also participating with Axis Bank in their Silver Linings Program. Axis has about 30 lakh customers who are seniors, and they wanted to offer them value-add services. So we have been onboarded as their partner, where we'll target their customers through a specific set of offerings. And this obviously gives us access to a very large pool of customers. Our discussions with Axis Max Life Insurance have also concluded for an annuity plan, which will be offered to Antara customers for financing their monthly expenses. And this also will give access to a large pool of customers. Our partnership with IIT Delhi continues for product innovations. We have initiated our sourcing for China to improve our gross margins, already placed orders worth INR 5 crores for 20 products, which will improve our margin by about 20%. And once we are able to stabilize this supply chain, we look at more sourcing from China. We have continued to receive a very strong endorsement for our brand and offering. We have healthy customer satisfaction scores, 92% for Care Homes, 94% for Care at Home, and 84% for AGEasy. I already said the NPS in AGEasy is now trending towards 36 which is quite a high score for a D2C business. If you look at our Dehradun community, the scores continue to be high, 88% to 90%. We also received the HR Excellence Award from Business World. We were also certified as a great place to work now, a very young organization, and some of these achievements are a big validation and vindication of the vision and the values that we follow. We also entered into collaboration with Dementia India Alliance. That's a not-for-profit, working for dementia across India. They're helping us both in terms of protocols and content for training, and they have tied up with NIMHANS for knowledge partnership. Our contents of our training program on geriatric care have already been certified by the Healthcare Sector Skill Council, again a vindication of the quality that we are building. On the consol basis, for Q3 FY '25, our results are in line with expectations. The revenues are INR 39 crores, 18% lower, primarily, as I repeat, due to lower collection in residences. It's a cyclical, pure, temporary phenomena, which will go as we launch more communities of collect in Gurugram, this will show an uptick. This was planned, and we're also trying to control our cost to minimize this impact. On Antara Assisted Care, as I said, there's been an uptick on revenue, on all the verticals. Compared to Q2 FY '25, the consol EBITDA loss, excluding the exceptional items, stands at 24.7% compared to 15.7%. It's a growth business, and therefore we need the money for growth. However, we are able to contain the losses through cost optimization, a very healthy treasury income. Overall, all treasury and other monetizable assets stand at INR 312 crores as of December '24, and the company has a consolidated net worth of INR 400 crores as of December '24. This is all about the results. Some of you joined the call for the first time. I'd like to reiterate Antara is the only and the largest brand building an integrated care ecosystem for seniors. And we're able to do this because of our unique lineage, where we've handled health care, infrastructure, real estate, insurance, all this, and hospitality businesses. Therefore, we are able to stitch together this complete solution. We do believe that seniors needs change with the age and medical condition, and therefore we want to be there for them on whatever they need. We have 3 verticals, the Antara Senior Living business, which are independent housing, Antara Assisted Care, which has assisted living, Memory Care, Care at Home, and the products business, which is basically products for chronic conditions for seniors, helping them age with ease and joy. You can access AGEasy by calling our command center, doing a WhatsApp video call, calling the expert at home, or walking into our physical spaces for a consult. The size of the senior market actually continues to evolve with more and more players coming in, some deals already happening. The market is between $10 billion to $15 billion depending on which verticals you take. So it's already a very significantly large market. The NITI Ayog has given the charge to Dr. Vinod Paul to set up a committee. He's already been set up to develop the sector, and those meetings are happening now regularly. So in summary, Antara Assisted Care, we have touched about 2.25 lakh patients so far. Hopefully, in the next 5 to 7 years, we will also keep our promise of creating 8 to 10 communities, 4,000 to 5,000 units of senior living, about 1,500 to 2,000 beds of assisted living, plus Antara AGEasy available across India through marketplaces, through our own physical spaces and through our own website. I think this quarter, I repeat, is the demonstration of all the promises we have made. The numbers are visible in terms of our growth. So thank you very much for your support. Happy to answer any questions that you might have.

We will now begin the question-and-answer session. [Operator Instructions] We have our first question from the line of Harsh Kundnani from Aionios Alpha.

A couple of questions from my end. On the AGEasy, fantastic growth this quarter. I wanted to understand, is there a specific product basket that is driving this growth, something that you have launched over the last couple of months or so. Just wanted to understand where this growth is coming from? And how should one look at margins in this segment?

Harsh, Ishaan here. A couple of things. One is, as the business progresses, our channels, which is marketplaces, our own website, each of them are seeing scale. So there is for products that we had launched, we are seeing an uptake improve as our performance marketing, digital marketing efficiency increases. So existing products are contributing to growth. There are obviously new products like lung health, as Rajit mentioned, we launched the nebulizers, BP monitors, which picked up really well. The Bunion Corrector, which is used for correcting the toe bone, is doing exceedingly well on both marketplaces and D2C. So new products are also driving this. On your point regarding how should we look at margins, we track 2 very important parameters. One, again, as Rajit had alluded, is ROAS, which is return on advertising spend. That's a critical parameter for us to look at how efficient we are getting in our performance marketing, and that's been improving month-on-month and quarter-on-quarter. The other we look at gross margins because this is a product-led business. We are working towards healthy gross margins, and that's, again, a very critical parameter that we track.

Understood. Just wanted to clarify, how should one look at the margins of this segment, say, a year down the line or 2 years down the line? What is your aspirational margin profile?

So I think on a gross margin business, that's the first -- we should look at about 55%, 60% range next year, right? And in 2 years' time frame, 60% plus, right? That's what you should look at.

CM2 positive is we want to be in 2 years, we should be CM2 positive as well, which is including all your direct spend.

Also, just one small clarification. You mentioned in the PPT that there is some sourcing that you're doing from China for about INR 5 crores. Is that entire cost item sitting in the base right now in your P&L? Or what is the status of that?

It sits in the inventory, Harsh, because we are ordering this. And so it's part of the inventory that we purchase. So it has not hit the P&L presently because the inventory is still under the purchase phase, right? And so once we will start selling it, then only it will impact the P&L. Presently, it's all in inventory.

Secondly, on the care homes, were there any bed additions in this quarter? Or -- and what is the plan for the next year in terms of the total bed additions?

About 234 were added this quarter.

No, no. They were added in the H1. Now quarter 4 is when the next. So this quarter itself, we didn't have any new capacity. We had planned in H1, we'll have close to 300 beds going live, which is what we have done. Now all the capacity between Chennai and Bangalore will get live in quarter 4, which is again, close to 200 beds.

So as we speak, the beds are under fit-out, and these are going to come operational within this.

Those are 3 care homes in Chennai and 1 care home in Bangalore, all under fit-out right now to go live in Q4.

We have our next question from the line of [ Arsim ] from MAS Capital.

Rajit sir, just wanting to understand while you did share that Chandigarh, we are in very advanced stages of final discussion, and we'll be firming up almost a 1 million kind of project. Any update on Hyderabad and Bangalore, given in the earlier calls, we had kind of indicated about very good traction there? Any update on those 2 markets?

Yes. Actually, we have held back because the Gurugram Phase 2 opportunity came, and this is only because of the phenomenal response of how the sales in Phase 1 has gone. As you know, the price points in Gurugram are a multiple of what is available in Bangalore, Hyderabad. So that has been quite attractive for us. So that's 1 million square feet by itself, right? So given the Chandigarh 0.8 million and this 1 million and 0.3 million coming up for Noida, we thought our 1.5 million commitment will stand and at a much better financial signature. So that's the reason we said, let's focus on the Gurugram Phase 2 and Chandigarh and Noida Phase 2 and push Bangalore and Hyderabad so that we get a much better financial outcome for FY '26.

And also, just to add in this, if you remember, in Bangalore, we had said that we are in advanced stage. So unfortunately, there, the clearance we did not receive from the lenders of the landowners. And there, we never wanted to get into a project, which is risky from day 1. And that's why with these alternatives coming to us, we said, let's play careful. And that's the reason why we backed out from Bangalore.

Got it. Got it. My next question was on AGEasy. I think great to see the ARR at INR 60 crores and the scale at which you're growing looks very interesting and very appealing. Thanks for the education that this looks like a INR 50,000 crore market size. Now pardon my enthusiasm, but do we see this to be a INR 500 crore business in the next 5 to 6 years? This is in the backdrop where you've guided that in the next 5 years, at an overall company level, we are targeting INR 1,000 crore revenue.

Absolutely, it will be INR 500 crores before 5 years, actually.

Very heartening to know that, sir. Just a follow-up question on that bit. The mix that we see at this juncture between marketplace D2C and offline is 68%, 22% and 10%. Usually, that's how an emerging brand kind of starts off. But as the brand kind of moves from an established to a premium range, we see that D2C becomes 60% and then offline 30% and marketplace kind of goes down. Is there a school of thought from the management team here in terms of how do you want this -- the mix to evolve over the next few years?

Yes, we have a going in theory based on all the education we've received from people who have run successful D2C businesses. Eventually, you should end up with a 55:45, 60:40 marketplaces versus D2C. And we have been advised to seed the offline channel right now because after 2 to 3 years, both marketplaces and our D2C website will tend to plateau. And that also we have done. So in the short term, we are focusing on 60:40 and then eventually it will become 50:40:10 offline kind of scenario in the next years.

Sure, sure. My last question, if I may add another question here. Very interesting to see the kind of partnerships you've been doing from on one end, IIT Delhi to Dementia Association to boAt to Dr. Lal to Axis, truly an integrated health care ecosystem you're kind of developing. Now it also kind of -- you will be also kind of bringing your products, especially this is AGEasy specific. There are pockets of institutions like in Pune, I'm sure you studied. I think the largest senior care ecosystem is by the company called Athashri. So have we explored partnerships with some of our direct competition? Because AGEasy seems to be a very great fit for Athashri, just to name a brand. Any thoughts on those lines?

See, so far, since people are also dabbling with the senior care space, their own thinking is evolving. They see us in entirety. So if we were only AGEasy, that partnership is possible. But since we also have Residences and Care Home, they start to see a conflict of interest. So at this point of time, within the senior care world, we have not explored the partnership because they view it as a conflict of interest. We are busy tying up with all the back-end backward integration so we don't have disruption in supply chains, or we get access to large customers. Secondly, it's too early for me to comment on any opportunities or merger or collaboration within the senior care sector. Everybody is currently subscale. So that is also out of the window. So yes, we are very keen to explore if somebody is -- doesn't see us as a conflict of interest. But unfortunately, since we have all businesses, they find that we'll conflict with them in one business or the other.

[Operator Instructions] The next question is from the line of Anjana Shah from Shah Investments.

Two questions from my end. Sir, the Assisted Care business is capital intensive. So are there plans to explore an asset-light model through franchisee partnerships or probably JV structures that can help us expand faster with lower capital requirements? And sir, second one would be, given India's evolving health care and insurance landscape, how do you like plan to integrate insurance-based models or government-backed health care schemes to drive affordability and accessibility for your services?

Okay. See, on assisted care, the model is capital light. We only take facilities on lease. And the only CapEx spend is about INR 8 lakhs or INR 9 lakhs on a bed and about INR 2 lakhs, let's say, on the operating losses so it breaks even. So let's say, INR 10 lakhs per bed is the kind of investment. It's quite asset-light. We don't buy ever. And therefore, we lease out facilities. So that's response number one. On insurance, that's a very interesting question. We have been trying to work both at a NITI Ayog level and Ministry of Social Justice to push the government to create a task force because we think insurance, once it comes into play for senior care, will be a big push to the business. So far, we have succeeded in working with Max Life to take out an immediate annuity product, which seniors can buy to fund their immediate expenses on a monthly basis. We also work with NABH to take out certification standards for Care Homes and Memory Care Homes so that once that happens, then TPA and insurance will be very easy. We are putting the building blocks in place. It's work under progress. I guess it's a question of time before this sector also starts to attract insurers' attention.

We have our next question from the line of Nikhil, a shareholder.

My first question has already been answered on the Bangalore senior residency. But can I please request the management to, let's say, whenever we deviate from our original plan, to state somewhere in the investor presentation or in the commentary so that we are better informed instead of [indiscernible] particular in the region from our original plan.

Okay. So if I hear you correct, you're saying any deviation from the strategy, please call it out at the investor deck. That's what you said?

Yes, yes.

Okay. Noted.

So another question, I think if you're tracking the private market, there is a company called Primus Senior Living. They have recently raised around $20 million from Gruhas, which is led by Nikhil Kamath and other investors. So if you're aware, do you know at what valuation they have raised this capital?

No idea, sir. It's a closed-door negotiation and deal. I have no idea.

We have our next question from the line of Saurabh Gupta, a shareholder.

Most of my questions have been already answered. I just have a couple of questions that earlier you guided that we will achieve INR 1,000 crore top line in the next 5 years. So do you still hold those numbers being the current growth rate? And other question that I have is when do you see that we can achieve breakeven at the consolidated level?

So we are still holding on to our ambition and aspiration of crossing -- of reaching INR 1,000 crores by FY '29, FY '30 in that range. And by FY '27, '28, we'll be breakeven on a consol basis. These are all forward-looking statements, but this is the intention.

We have our next question from the line of Biresh, an individual investor.

I have a question on -- a couple of questions on the AGEasy. One is related to the off-line setup, like what's the strategy? Like in the presentation, I saw there is -- already we have done a setup in Gurugram. So can you tell a bit about it? How much is the size? How much is -- when was -- when did it open? And how is the response? And also, are there any plans to open such setups in the residencies that we have already given like Dehradun or Noida, which is planned maybe in next quarter or so? Secondly, or the second question on same AGEasy. Although the growth seems to be pretty good, but the cash burn is also equally aggressive. So I wanted to know like -- and we are also planning to do some equity dilution. So aren't we too early on diluting the equity to raise funds? And just thoughts on that, like how does the growth plan looks like?

Sure, sure. So the offline channel will operate in 2 ways. One is obviously through the traditional way of distributors and retailers, which is chemists. We already have a sizable presence in NCR, about 30 distributors and 200 chemists, already stock AGEasy products. That's one way. Second is by having our own physical space, which I must dare say more branding than a revenue generator. So we have opened -- not yet open -- we have set up the first product store in a mall in Gurugram on the main Golf Course Road, which is quite marquee. It'll get inaugurated in the next 15 days or so, which has all the products that we offer and expert available. Depending on the footfall that we see on that, it's an experiment that we're doing. We will then start to expand those centers. But I don't envisage 100 of centers coming in the next 2 years. There'll be quite a few in Bangalore, Chennai and Delhi depending on the success. But more importantly, the offline channel, which is comprising of distributors and chemists, that will expand more rapidly. So that's the focus on the offline channel. On the question of dilution, we are currently not specifically diluting AGEasy. We're looking out for funds for growth, both for Antara Assisted Care and AGEasy. So it depends on the deal that we strike. As I said, the rights issue will happen at the holdco level, which is the first tranche of funding. The next $10 million to $12 million will happen at the subsidiary level perhaps. Whether it happens in AGEasy or ACS, we don't know. So it's not a question of diluting AGEasy. I think it's -- and we are in no hurry; 6 to 9 months will take for this deal to happen. We just need the growth capital. And depending on the valuation we'll get, we take a call on how much equity needs to be diluted. But I don't see a very large chunk getting diluted, honestly, at this point of time. The cash burn that you talked about is the nature of our D2C business, right? And I'll request Ishaan or Ankit to throw some light on that.

I think it's important to understand how we look at cash burn in a D2C business. And I think there are certain parameters that we very closely track. We also previously spoke about return on advertising spend, gross margins, contribution margins. And if we see on a quarter-on-quarter basis, our ROAS is improving, our contribution margins are improving with sourcing through China. Our gross margins are also improving. So while yes, it may seem like on a total level, the cash burns are increasing, but our efficiency is also improving at the same pace. And hence, you will see in the coming quarters, this efficiency also manifesting.

Okay. And one bit which somehow it got missed, is there any plan to set up AGEasy in our existing residencies or which will be given when the position happens?

Definitely, in all the communities we have, in all the care homes as well, there will be specific space dedicated to the AGEasy product store.

We have a concept of integrated ecosystem, and that will play around in all our developments. So all my -- the cross-sell opportunity will always be there for all our development, be it residences, all care rooms or vice versa.

And one last question, if I can fit in. I'm not sure how long the queue is. But one question on just the management, like obviously, like we are developing our own residencies, but are we reaching out to other developers who are kind of pure builders and who do not have experience in the senior care? So are we reaching out to maybe take just the management contracts, just expanding our specialization?

So we are reaching out to do partnerships for construction of residences. So land is being contributed by such developers. Preferably, we request them to construct, and our core competence of helping them design, sell and operate will belong to us. Yes, definitely, that we are approaching. But if somebody has already constructed a senior care facility and wants us to run, that is not part of our beat as of now because that's a very small annuity income, right? It doesn't make sense. And there are not very many builders who have senior living ready. But dialogues with developers to make senior living, 100% they are on because they're interested now.

We have our next question from the line of Amisha Shah from KQ Investment.

So I just have 2 questions. So the first one is, given your partnership with IIT Delhi and boAt, is there a road map to build proprietary or high-margin offerings like, for example, exclusive tech-enabled senior care solutions? And if so, what is the expected commercialization time line?

So the intention is to look at small tweaks or innovations to solve customer pain points through existing products. But there is also effort going on. For example, with IIT Delhi, they have started to now develop a prototype of a walker which can provide a sitting -- a seat as well as the seniors walk and get tired. They are prototyping that. That will become like, let's say, a de novo original product that we will have. So yes, the effort is on, but more effort is going on putting tweaks to existing products, so they become more senior specific.

And my second question was regarding AGEasy. So it has seen a strong revenue ramp-up driven by marketplace sales. So what is your road map for expanding offline distribution? And what percentage of revenue do you expect to come from non-marketplace channels in like the next 2 years?

So I'll answer it in 2 parts. For offline, our approach is going to be via distributors and retailers or chemists. Today, we are present across 30 distributors in NCR and 200 chemists, and we plan to expand this further across multiple geographies. We also will be launching our first dedicated AGEasy store. So this is not something we expect to immediately expand. This is a pilot that we are doing. And based on the response and feedback, we will take a call on how we expand this. The way we see the marketplace is to D2C and offline ratio is potentially 55:45 in times to come.

Ladies and gentlemen, that would be the last question for today. I now hand the conference over to the management for closing comments. Over to you, sir.

So thank you very much for those great questions, help us to be able to clarify and see where we are headed. As I said, we are the only brand trying to build an integrated customer -- integrated care ecosystem for our seniors. Our intention is to be able to create 8 to 10 communities with a top line of about INR 250 crores and a healthy EBITDA margin and cross INR 1,000 crore mark maybe in 2, 3 years' time with a bed capacity of 1,500, 2,000 beds of assisted living and AGV available to seniors across chronic conditions in India. We are currently on track. Quarter-on-quarter, we keep on telling you what commitment we made and where we are. We're not deterring or deviating. Yes, there could be some changes we make in terms of geography depending on the financial opportunity that we see. But apart from that, based on our customer satisfaction scores, our NPS scores, we are staying on course in order to achieve our vision to become an admirable organization. So thank you very much for your support and look forward to our continued engagement. Thank you and all the best.

Thank you, sir. On behalf of Max India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.