Vasa Denticity Limited ($DENTALKART)

Hi, everyone. Good day, and welcome to the Vasa Denticity Limited earnings conference call to discuss the operational and financial performance for the quarter and financial year ended on 31st March 2026. From the management team, we have with us Dr. Vikas Agarwal, CEO, Chairman and Managing Director of the company; Mr. Sandeep Aggarwal, Whole-Time Director and Chief Financial Officer of the company; Mr. Sunil Gupta, AVP Finance; Mr. Rajit Anand, AVP of Supply Chain; Mr. Akash Bairwa, General Manager of Supply Chain; Mr. Mukesh, General Manager of Warehousing. [Operator Instructions] Further, please note that this call is being recorded. I now hand the conference over to Dr. Vikas Agarwal, Chairman, CEO and Managing Director of Vasa Denticity Limited. Thank you, and over to you, Dr. Agarwal.

Good morning, everybody. Thank you all for joining the earnings call. Let me be direct with you about FY '26. We grew total income to INR 283 crores on continuing operations after deliberately exiting INR 39 crores of low-margin trading. Our [indiscernible] grew 33%. We added over 70,000 new dentists, a 62% jump, and now serve 1.44 lakh customers, most of them in Tier 2 and Tier 3 of India where our category is structurally underserved. But we also fell short where it mattered. Own brand stockouts pulled our gross margins from around 34% to 23.7% by Q4 and a weaker rupee raised the cost of imported products. That compressed our EBITDA, and I own that. These are operational issues, not structural ones, and they are being corrected. We also chose to work away from the IDS Denmed acquisition. FY '27 will be a year of deep focus on the core, restoring availability improving inventory productivity and converting growth into profit. The long arc is unchanged. India's dental market is barely penetrated. We are the largest online-first platform serving it, and 2 in 3 new customers already returned within 6 months. We are building dental infrastructure for the next decade. I am happy to take your questions on it further. Maybe we can take questions one by one. All the participants, all the shareholders, you can raise your hand, and we'll take the questions one by one.

So the first query is from Chintan Parikh.

Am I audible now?

Yes, yes, you are audible.

It took a while for me to get unmuted. Sir, because I understand you owning up on those two things, right? This was actually one of the questions which you own up. The question is why didn't we pass on the imported product price increase to the customers? Because these are not contractual orders which runs in months. This is on-demand orders where you can raise the price. So is there any other competitor which is not allowing you to raise the price on fear of losing the customers? What's the real story why these prices could not be passed on?

Yes. So this market is mostly a traditional market where the price rise reflect in the real market after some time because of the traditional supply chain. And if we increase the prices, we fear that we might lose some customers. So it takes us some time to increase or decrease prices.

Because, I mean, if I look at your, let's say, nearest listed competitors who have a very large presence on Tier 3, Tier 4 market, you enjoy a presence in a Tier 1 market as well, right, where those customers, depending on, let's say, they are in some macro cities, operate in 15 cities of India, would we be able to absorb those prices and pass on to the actual end consumer? I can understand the strategy for defending the prices for Tier 3, Tier 4. But why not for Tier 2 as well?

Yes. But we have one price for the whole country as per the Competition Commission of India. We cannot have multiple prices. And talking about the nearest competitor, I think the whole off-line supply chain is our competitor. And for somebody, for some dealer in Mumbai to raise the prices, it takes some time for them to actually understand that the price has increased. But for us, it is directly manufactured, even sales. However, we try to increase prices, seeing the competitive landscape keep in mind. And first priority for the company is growth. First priority is not losing the customer, then thinking about price hikes. And at the same time, Chintanji, it is a learning curve for us. We are also trying to learn and understand how this behavior converts or loses a customer.

Understood. Sir, I just also wanted to understand about the rental cap and other bridges and other segments. So what is the growth over there? Is the business stabilized? How we see that's going up or shaping up in coming days.

Yes. We have a subsidiary called [ Smile Works ], which is into manufacturing of processes like crowns and bridges. They are not over-the-counter products. They are customized products after adopting an impression of the patient's mouth. The customized for that particular patient. So [ Smile Works ] is currently at a run rate of INR 4.8 crores annual. And we feel that by the end of this year, it will be around INR 10 crores to INR 12 crores of run rate.

And sir, this is currently operating in how many cities? And are we able to meet the local companies which provides, let's say, a fraction of a day or [indiscernible] timeline, if you can?

Yes. So we are currently operating in only Delhi NCR majorly. However, we are supplying to some parts of Punjab and Haryana. But we have not yet decided to scale it. We are building the structural engine inside [ Smile Works ], where we have the whole digital flow, how the lab internally behaves and how our customer communicates with the lab and different technicians. So while you build the processes, the doctor also has to communicate whether the technician sometimes would be ceramists, sometimes with different departments. So we are trying to build that engine. We have already built it. It is live inside, but we are optimizing it. So this year, we think that [ Smile Works ] will reach a certain stage. And over the next 4, 5 years, we can take it to scale in different cities, different states. And maybe 2 to 3 days will be the average for the nation.

Sir, any plan to get into dental insurance space? Because from a pediatric perspective, a lot of kids undergo corrective treatment, which drains the pocket of a parent, which is something which is predictable and it's a future event. Is there any plan to get into something like that, which can -- with a minimal effort, you can corner the market share with the new such innovative financial program?

There are a lot of priorities before that. But in the short term, there is no plan. Whether it's something amazing something really exciting comes to our mind, we'll definitely look at it.

So the next query is from Mr. Swaraj Mehta.

So my first question was now that we are not going ahead with the acquisition, what do we plan to do with the cash that we have?

We plan to currently target and use it over the years as a growth capital of the company. No immediate plans to invest that money.

Okay. All right. And now I think we faced stockouts for H2. So what was this shortage of our own brand and why did this happen?

This is because of our internal supply chain issues. There were some series of mistakes are [indiscernible] over last 2 quarters of last financial year, and that resulted in a lot of missed calculations in the ordering of own brands. And the lead times are long for own brands because it undergoes a different packaging, different metallurgy scenarios, different licenses from [ CDSCO ]. So took us more than usual to get them back in stock. So the stockouts went upwards of 33% in own brands at one point of time. And now we are at 14.6%. That is still higher than usual. The usual is 5% to 7%.

Okay. And so we are mandatorily required to list a product on CDSCO before selling them in the country. So are all products registered on CDSCO?

Most of them are registered if there is continuous registration processes going on. So at one point of time, there are so many applications with CDSCO. And once we get the license, we are able to import the product and list it.

Okay. So we spoke to a few dentists. And I think the major part by customers prefer on offline distribution in Tier 1 currently, I think it's relationship, same-day delivery and credit period. So what are we trying to do to address these?

Yes. So for same-day delivery, mostly in Tier 1 cities, we are currently delivering next day. Close to 60% of the orders in any Tier 1 city of India is delivered next day. So slowly and steadily, we are trying to go near the customer by opening smaller warehouses and try to bridge that gap. Secondly, we have a large assortment of products which might not be available with a regional leader. So that is something which makes us stand out. Credit facility is not available on Dentalkart as of now, but we offer EMIs and credit card. We offer Buy Now, Pay Later through various NBFCs, but unstructured finance is not available with us. And third is relationship. We are learning to do BTL activities to get more closer to the customer's mind and personality. We are a company which has access to over 10 years of customer behavior and what products they are currently looking at and what products they might need, which they might not be aware of. We're trying to bring that AI-based pop-ups or knowledge to the customer on what they can do with their inventory, with what procedures they can do, what kind of products are available in the market, which they are currently not using and missing out on certain procedures. Many things like that we are trying to do and trying to create value for the customer.

Sir, so are we incorporating like voice notes for taking delivery, like a CV for taking deliveries? Like one of the dentists mentioned that it's very convenient while trying to give orders on the phone to the local distributor. So anything like that, that we've incorporated through AI?

Yes. That is under plans. But before that, we'll come out with innate search, we'll come out with a doctor and tie the products they need instead of searching and adding to their cart. So voice search can be there to search products but not directly taking orders as of now. It is in the plans in the future, but there are a lot of priorities before that. Very good idea. Thanks a lot for the suggestion.

And sir, the number of NRIs also who visited India significantly reduced this year. So do we see an impact because of that or any issue because of that, the growth?

I don't think so we have had such an impact since we are just 2% of the overall industry. And that kind of tailwinds might not impact us immediately, but we'll keep an eye on that.

And have we changed the way we have reported any data because some data points did not match with the partial? Because like past year number of orders in earlier PPT was by 5,036,000, and this year, I think order number is 7,060,000. So the growth number mentions [indiscernible], but it is much higher. So was there any change in the number quarter-to-quarter? Volumes were also different than what were reported in this current PPT. So is there any change in that?

I don't think so there's any change to the numbers. And I'll give a briefing to the market on this.

And how many employees do we have currently? On our website on about us criteria, I think we mentioned that we have 680 team members. And last year, we had around 360 or 350. So how is this split bifurcated? And how do we see employee going forward?

So there are two kinds of employees we have. One is on our payroll and one is off. So combined together, it is the number mentioned in About Us section. Actual number of employees is 303 on payroll. And this will stabilize going forward. We don't need more people now to grow. I think we only need people in the higher straight up. The senior level hiring might happen. But with the help of AI, I think lower level hiring wouldn't be required moving further.

Okay. We have 4 warehouses correctly, right? So we had 7 earlier. So which warehouses did we close and why? Because I think other expenses probably was the closure of [indiscernible]. And the reason for the other expense? And is that sustainable? Will that be the range of other expenses going forward?

I think wherever you have related for warehouses are the largest ones. And we have the same number of warehouses as earlier.

Okay. So we have 7 warehouses only.

Yes.

So what was the reason for drop in other expenses this quarter?

So we optimized some warehouses. For example, we were spending INR 100 on a certain warehouse. And we realized that there were a lot of manpower who are doing only one kind of work and they were not participating in other activities. For example, inbound people are only having KPI of inbound and not outbound. So we have tried to optimize that and we saved some money.

Okay. And you mentioned one line in equity, like 4 warehouse plus digital fulfillment plus dispatch automation developed. So can you throw color on that, what is that and how do you plan to work on that?

That's the future plan that we can have smaller warehouses of 500 to 1,000 square feet in small cities where the number of orders are small, but because of the distance from other warehouses, it takes us 4 to 5 days to deliver. So if we have a local warehouse, we might be able to deliver for the fast selling or for the most common used products by dentists, maybe same next day. And that's the plan I showed.

What was the split of consumables, inventory and instruments this quarter for the whole year?

It was close to 70% for consumables. But a lot of own brand consumables were not there in the last financial year.

And instruments, this will be 30%. This would be same for quarter 4 and full year?

No. I don't have it handy for quarter-on-quarter, but it is a little bit different in last financial year.

And how do we decide which products to make or import for our own brand portfolio, let's say, Waldent? So how do we decide which products we include in our own brand portfolio?

So generally, what we see is, for example, there is a particular chemical, which is sold by 10 different brands on dentalkart at different price points. And we understand the pain point of the customer that what is the right price point for that product? And what is the right features required in that product. So based on that data, we talk to the manufacturers. I know what price we can buy that product in bulk. And if we can eliminate some of the brands when they do that which are not actually being searched by a customer, which is only offered by us, so we're trying to optimize the same product when one of the product of our brand and 2, 3 major players in the market. And that way, we offer the right trade and value to the customer with our own brand products.

Got it. And what are we -- sir, what was the contribution of private label of our own brands for FY '26? And for the private labels, how much is the proportion of Tier 1 versus Tier 2 and 3 for third-party brands?

So the proportion of owned brands last year was lower and that shows in the declining gross margins quarter-on-quarter last year. And rest of the numbers, I don't want to go into detail for it because there are a lot of proprietary information, et cetera, we don't want to give to the market at this stage of our company.

So we have next question from Mr. Pawan Kumar

Sir, because earlier we guided of around INR 500 crores to INR 600 crores revenue in FY '27. That looks difficult now. Sir, do you want to revise the guidance?

So actually, earlier calls or guidance showed our [ immaturity ] how to handle the capital markets. We believe that we can double our top line every 3 to 4 years. And going forward, I don't want to get into giving guidance, but just have a North Star of doubling on the top line every 3 to 4 years.

So are you saying maybe around 30% CAGR?

That is possible, Pawanji.

Where do you see?

That's what I'm saying. I don't want to give a particular number to you because it's a dynamic market and there are a lot of things going on currently globally. I don't want to give a particular number to you, but I just want to assure you that I am bullish on what I'm doing, and I'm highly confident that I'll be able to achieve as much as possible. And meanwhile, we are also learning on a lot of things. So giving a number won't be right at this stage.

Okay. And our EBITDA margins have fallen from 10% to 4%. When do you see coming back to around earlier like 9%, 10% level?

So in the presentation, I have mentioned that we aspire to bring it back to mid-teens in the next 3 to 4 years. And the EBITDA margin falling at such levels in last quarter or last financial year according to us is a one-off, and it is not something structural. We'll get back to better numbers in EBITDA in this year, in years ahead.

So we have next quarter from Mr. S.

Am I audible?

Yes, yes.

So my first question is you have completed 3 years in the SME segment. So are you planning to go to the main NSE?

Yes, we are exploring that. And we are trying to find out what all is required, what kind of compliances will increase in the company and also taking advice that is it the right stage of the company to go to the main?

Any timeline that you can provide that you'll be switching to the main?

I'm not aware of a particular timeline, but yes, we are exploring that.

Okay. So my next question is that are you still targeting 2-day delivery? [Foreign Language] Please go ahead.

Are you finished your question?

Yes. Then -- but yes, let's start over here.

Thanks on or for so many things together. I feel that there are different customers in different segments of the country and different mindset. So most of the customer base is not organizing their inventory, maybe you are. But as per our data patents, customer want it urgent, and that's what the sentiment in the reviews everywhere shows. So we feel that in Tier 1 cities, with the density of dealers, the traditional supply chain is strong. There, the expectation is much higher than Tier 3 and 4 towns. So Tier 3 and 4 towns, our average is close to 5% right now. And for Tier 1, it is close to 2 days. So that is showing us growth if we are going close to the customer or if we are delivering same day or next day. We are seeing higher not -- AOV is not higher, but the average revenue per growth as we delivered -- try to deliver faster to the customer. Talking about the product pricing and price comparison, we have our own proprietary price comparison engine. And there are more than 22,000 products we deal in. So we cannot promise that every product is best priced. But yes, majority of the products on Dentalkart are way better priced than any competition out there. And the assortment of product is much bigger, competitive.

Okay. The other thing I wanted to ask that mainly your focus has shifted from consumables to the main machineries, okay? So I want to share my personal experience. [Foreign Language] And for you, we don't have a person in front of us, right? And the main growth that you had seen was because of consumable, I'm talking from my personal experience. [Foreign Language] Why is not so much focus in consumables. What is your take?

Sir, well noted. Your point is noted, we'll say internally. But I -- as the founder the company, don't think so that our focus is shifting. Consumable is the core of our business. These larger machines, whatever we are selling in the market, is a different offering in the digital division of the company. And we feel that we need to have all the possible products which the industry offers to the market. And whatever is not there in the country, we should also offer that to some extent. That doesn't mean that the focus is shifted. That means that we have broadened the horizon of what we supply. Also talking about that, we don't have a person in front of the customer. I'm sorry to disagree here, sir. There are people on ground who regularly meet doctors, demonstrate the equipment and take orders from them. That happens through our off-line sales, and that has some share in the overall sales of the company.

Okay. That is good to hear. [Foreign Language] But I think showrooms, are you still thinking of opening showrooms?

Sir, in the long term, yes, but your suggestion is well noted.

Okay. Fine. [Foreign Language] I think that it's good that we didn't go ahead with it because a lot of this thing was going, and what value do you see in the idea at that point of time? Personally, I feel if it wasn't that good decision.

Sir, so first of all, we still feel that they have a very good value, which they could have offered us if integrated well. But while we went ahead with the deal, we realized that there'll be a lot of issues in cultural integration of the company with our tech first company. And that will take a lot of bandwidth from us, which we currently need to focus on the core of the business. So that's why we decided not to go ahead in the equity structure, but work as strategic partners, more from what we used to do earlier. There are some exclusive rights of some companies to offer in India. We would like to stay with them, collaborate with them on those brands so that we can be a partner in distribution together.

Okay. And are you planning to keep any CEO, any professional in this foreseeable future?

Yes, of course, why not? We always think about succession planning in the long term. And me and Sandeep, being the co-founders, we would like to have more strategic approach to the company and getting out of the day-to-day or operational work. But that is in the long term. Right now, we want to focus on what we have promised to the market, what we want to build, what is our dream internally, how you want to see Dentalkart. Later on, definitely succession planning will be there.

But don't you think they'll bring a little more professional experience with them to help you guys?

Yes, you are right. So we will look into it.

Okay. And my next -- one of the advices about the search engine of the Dentalkart. I think that can be included in [indiscernible], okay? Just more advice, keep a team for keeping an eye in the [indiscernible].

Sir, we are keeping an eye on everywhere.

So next, we have Mr. Ketan.

Sir, my first question is with respect to the cash flows. Now I understand that we have to keep a lot of inventory in stocks and everything. And for the past 3 years, we've had a negative operating cash. So is this trend likely to continue going forward? Or we are likely to have positive cash flows? I asked this question in the context of your statement where you mentioned that you would aspire to double the revenues every year, 4 years or 5 years, whatever the time period is, not going by the guidance, per se. But the kind of growth that we aspire, would we be in a position where we would have continuously negative cash flows?

Sir, I think this will improve over the next couple of years. This year, you will see better cash flows in Vasa. A lot of optimization is happening, and we are trying to keep the right stock levels at the right warehouse. So we are underoptimizing the inventory. But last year, during October, November, something happened because of optimizing inventory. We lost a lot of stocks of items, just taking the pressure of keeping less inventory. So while we will be highly aware of that because it was a lot of stockouts and terrible situation as a CEO for me to place, but going forward, cash flow is very important, and long-term free cash flow per share is really important to build.

Okay. Related and a linked question is while that we will grow at a good pace, would you need to raise funds going forward? And if yes, then what path would you choose to kind of go with the short-term working capital kind of a fund, or you would kind of dilute equity?

Yes. So right now, there's no plan to raise funds. We have necessary funds available with us as growth capital and for future growth also. We cannot see a fundraise right now. But in future, if we require funds, we have a decline of INR 15 crores available from various financial partners. And we have a stable rating from CRISIL, which will help us to raise that funds. So right now, we look at that as a possible fundraise in the future.

Okay. And the other question is I had come across certain news items wherein some brands are kind of barred or the notices were therein in any people buying from dental card probably will not get the required support from those brands. Is this true, first of all? And if yes, what led to that?

Yes. So first of all, all of them are supplying to us despite that. And many of them were 4 years or 5 years old, 3 year old, but they all were combined by some competition in the market and then flown in the market. But yes, there were 2, 3 correct from them, which actually happened after the Delhi exhibition last year, where lot of manufacturers wanted us to increase the price on Dentalkart for products so that they'll be able to sell more in the exhibitions. And there were some miscommunication or disagreements with my pricing team. They'd like them to come out in the market and say they don't recommend Dentalkart. But most of them are supplying directly to us.

So that incident has been taken care of, and now it is kind of pretty smooth in terms of they supplying to you and they not kind of barring customers providing it from you.

They never stopped supplying us.

Okay. They didn't stop supply. But then they still made a statement in the market saying that the customers should not buy from you.

They made a statement at that point of time just after the exhibition out of 2, 3 people combining their understanding and just sending out to the market. But that didn't change anything for us. That, in a way, did some marketing for us. A lot of -- if you can go through some social media posts where people are discussing this, a lot of dentists came in our support that Dentalkart did the right thing, not coming into pressure from some manufacturers so that some short-term strategy is favored for the exhibition. For us, it is a year-long 365 days exhibition on Dentalkart.

And going forward, you foresee our own brands kind of growing in relation to the brands that we sell on our platform?

We do.

Okay. And does this not pose a kind of a cannibalization kind of a thing for the other brands that you have on your platform?

That is what prevents us from going all in. So we -- first of all, we want to maintain Dentalkart neutrality. We want to always make sure that Dentalkart behaves as a neutral platform, but yes, giving right value to the customer, the right price point of particular feature set or a particular product should be made available to the customer. So because of that, we are not at 70% of our own brands. We are at 45% to 50% still because it takes time to build those products offer the right value to the customer. So we are not looking at cannibalizing the different brands sold on Dentalkart. But yes, as I earlier mentioned that if there are same products on Dentalkart, it wastes a lot of our energy, a lot of our location in different warehouses to sell them. And it doesn't add any value to the customer. So it's better that we have 3 to 4 real in demand with us and one of our own products.

Okay. And in terms of distribution, as of now, if I were to talk in a number of PIN codes, like how many PIN codes being reached? And like what is the target for us to reach, say, maybe in the next 4 years, 5 years, whatever?

So there are big logistic partners whom we work with. And I think they are available almost everywhere in India. So upwards of the 19,000 PIN codes of India, we are already supplying. However, we deliver in 13,000, 14,000 SKUs only until now. 5,000 PIN codes of India have never ordered yet.

Okay. Wish you all the best. And I should compliment you that you accepted and admitted all the challenges that you faced head on. You took responsibilities for whatever things didn't go the right way. So a good show there.

Thanks a lot.

Am I audible?

Yes.

So we have next question from Mr. Madhur Rathi.

Just to continue on the previous participant's question, right, it looks like this is still a B2B2C market than a B2C market, here, customer being a dentistry because there is a lot of local supply chain still which is more prevalent. So did you contemplate on actually thinking about building that model which could facilitate for a larger growth and probably building a better business model like what [ Entera ] probably has done, right, where they are not going after the end customer, but rather going after a retail pharmacy, where can you also go to a distributor in local areas where you could be their tech enabler, right? Is that a thought which you have given?

Yes. So we have contemplated on that and we are still looking at it, like what are the different ways of growth. But at the same time, we have to, in long term, offer the value to the customer, which we envisaged over the past couple of years or after -- or before IPO. So based on that, if we supply everything through a B2B channel or through a dealer, then we'll be doing the same with our traditional network did over last 30, 40 years. So why not we go through a [indiscernible] Amazon, where we can supply to B2B companies or dealers through a tech platform rather than going offline and doing that traditionally.

No, but Vikas, my question is more like if the market structure is already -- like it's similar to insurance, right? Insurance is a very touch-based product. You need some local presence. You need -- so if this market is also structured in that format, where probably a doctor wants -- like to call someone -- he always wants a channel manager, where like he just -- because he is not a person who will use an app, keep the -- I mean, put an online inventory in a cart, et cetera, right? He wants to talk to someone. So these are fundamental market structures which are very prevalent in the market is what I understand from one of the previous dentists probably who just spoke a lot about these aspects, right? So hence, I'm a bit worried about this overall narrative on the B2C front, whether is this something which can really pan out in the long run or whether is it like we are just burning a lot of capital.

Yes. Thanks a lot for this. The team will contemplate this further and think on it of how we can utilize this suggestion.

Got it. And just another, Vikas, because given the world also has moved into quick commerce model, right, everybody now knows about [indiscernible], and now the instant purchase behavior of customer has gone up, right? Do you even think that this 2-day, 3-day thing will -- I mean, will people expect it to get delivered probably in 1, 2 hours or probably in a very short span of time? Is that what you are also witnessing in the market?

I feel like given the quick commerce growing so fast in India, the expectation of the consumers, customers definitely will be towards that. We have to supply it to the customer faster. And we believe that most of the customers don't stock all the SKUs. So sometimes [indiscernible] they need it immediately. Sometimes they finish with a GIC. Everybody is not storing GIC like the doctor who came in the call earlier. But there are a lot of people who require it urgently. So yes, delivering in 2 hours, 3 hours might be needed in future, but that's not what we are trying to do. I think if we are able to deliver within 2 days to majority of the market, we'll reach the level we think of. And then we'll see if in certain state or certain cities where the demand is such, we'll try to have an experiment on that model. So we already have a trademark called [ insta link ], where it is taken on the belief that suddenly we have to deliver very fast from maybe within 2 or 3 hours, and we did a pilot in Delhi also. However, we lost some money on that. We try to deliver 1,000 orders in Delhi NCR and we were able to deliver within 3 or 4 hours. But the unit economics was not favorable at that time. In future, if we have specialist delivery partners or companies who can manage this rather than us building that model, so we'll definitely go with it.

Got it. But any chance of us integrating with these e-commerce players like Zepto? So it is like -- I don't know if you know about this industry called ICT, where Rashi Peripherals, Redington, they actually tie up with multiple such quick commerce platforms to enable it, right? Because even doctors can quickly go on to Zepto and start buying some of the inventory, if not, let's say, very big consumables, but maybe a very small consumables can be [indiscernible]. I mean, again, I'm naive to this industry, maybe you are better with what you know. But this is -- because what is happening, Vikas, is a local supply chain expert can always give it in a day. If Dentalkart gives it in 2, 3 days, what is the value addition? Because here, the key variable probably is how fast you can probably deliver it to him, right? And is the brand -- I mean, price probably is yes, but I think it comes third, right? I mean, probably time, then comes brands, then comes price, if I'm not wrong. So yes.

Sir, while I agree with you on some points, but I would like to have an agreement on disagreement on this that availability is the only -- is the first priority. I think the right product is the first priority. While the local supply chain can offer a product same day or next day, but they won't be able to provide them maybe choice among the 5 different SKUs of the same set of features at different price points. So when I was practicing myself 10 years back, I had to accept what my local dealer had. So if the [indiscernible] is available from Dentsply, which is INR 1,700, I had to accept it. If the leader had INR 500 worth of [indiscernible], I had to accept it. if the dealer had a INR 200 worth of [indiscernible], which I didn't like as a product, I had to accept it because I had no other choice or I have to wait. With Dentalkart, this freedom comes that you can choose whatever product you want. Yes, it takes 2 to 3 days to deliver, but you have a bigger assortment of products to make that choice. So that is one. Second, yes, availability has been timely. We'll grow on our numbers and the wallet share of the same clinic. And third, yes, price plays a role, but for various strata of the market, especially in Tier 3 and 4, the price really matters. They are sometimes to wait for 4 days, but the price matters to them, and then they try to buy maybe for next month as well.

So we have next, Mr. Vibhor.

Dr. Vikas, the online businesses all take its own time to mature, and we have seen that in across categories. And if an industry is only 2% online, it does take its time. So that's okay. And have gone through your guidance of aspiration to have mid-teen EBITDA margins in 2 to 3 years with growth of, like you said, 2 to 3 in average, 3 to 4 years -- 2x in every 3 to 4 years. But I wanted to more focus on the near term as well. The last couple of quarters where the margin has seen a decline, where you have mentioned that it has been because of ForEx as well as owned products not being available, of which I'm sure the own products are now being available because that's an inventory management issue which can be corrected in a couple of months. The ForEx part still continues. So can you give me a color of -- because mid-teen EBITDA is very far from what we are. Right now, we are at low single digits, and from low single digits, it becomes mid-single digits, the high single digits in that. What are you seeing in the near-term trajectory for the business given the competitive environment and the ForEx stock-outs?

Yes. Thanks a lot for a good question, Vibhorji. I think stockout situation, we are majorly over it. But yes, it is still more than what it used to be earlier. It all depends on the gross margins we have on the sales we make, then cutting down our expenses. However, in the last 6 months, we have optimized the other expenses we are making. We get the manpower expenses, we get the warehouse expenses. We are trying to reduce the expenses. At the same time, with the stock coming back in and the regular own brand share in the sales, we think that we can reach there faster. But for this year, if we talk about, it will be -- I hope it will be much better than what happened last year.

Okay. You say for this year, for coming year, it will be better than last year. I'm just focused on gross margins right now because the last year is a function of first half and second half. So right now, I was more focused on the material cost being 77% in March quarter, which was, frankly, a surprise from what one had read through in the earlier calls. Is that recovering fast? Or it will take its own time?

That will take time. Because in the normal MNC brands, we only have 10% to 15% margin. If their share of sales is high, definitely, naturally, the gross margins will come down and that showed in the last quarter of last year. Now since our own brands and all the research we have done over the years on the right set of products in our brands is coming back, we expect the gross margins to come back to certain level and the EBITDA coming back towards higher numbers

So we have next question from Mr. Rajveer Singh.

It's okay, we can come back to Rajveer later.

Okay. So we have a next question from Mr. Naitik Shah.

Am I audible?

Yes.

Sir, I just wanted to understand, like for FY '25, our -- let's say, when we do a gross profit per order kind of an analysis, that was somewhere about INR 1,360. Now I understand for this year in H2, we faced several issues in terms of our own brand sales. But H1 was fairly, I mean, fair for as rate. So there, we see a gross profit per order roughly about INR 1,200. So why did we see a client growth in terms of revenue per order or gross profit per order, especially in a year where, let's say, on a H1 basis, our equipment sales was much higher, where on a per order basis, the absolute amount of our gross profit or revenue should have been higher?

Okay. sir, I'm sorry, I missed some part of your question. Can you please repeat?

Yes. So let's say, when you look at revenue per order, for FY '26, it was somewhere about INR 3,670. For H1, this number was -- sorry, for FY '25, the number was INR 4,600, and for FY '26, this fell to INR 3,670. So can you help us understand the decline in revenue per order?

Yes. So that was a function of a lot of off-line trading activities as well. Combined together, the off-line trading activity, when we do a B2B trading activity, the absolute value is higher. So combined together, it became INR 4,600. And we stopped trading, as I mentioned in the...

Okay. So trading component had a much higher revenue per order and a gross profit per order as well.

Yes.

Understood. And when did we stop this trading?

Last year, we completely stopped it.

So for the -- so the full year impact is there in FY '26? Or should that continue 2Q?

We have identified that it's not a good long-term journey for us, where we are not adding right value to the interest line. So we decided to focus on the core business of dentalkart.com going forward and with some teams building off-line divisions with minimal bandwidth from the company.

So we have next question from Mr. Nikhil .

Am I audible?

Yes, yes. You are audible.

It's still great to see how the majority in terms of depth of the business and your communication towards the investors has changed over the last few calls. I really appreciate that. I broadly have a few questions mainly on Digital Dentistry. So today, dentists may engage with Vasa for specific products or services. Over time, do you see the opportunity to become an integrated workflow partner across diagnosis, treatment planning, design, manufacturing and practice support? What would need to happen Vasa to become embedded in the day-to-day workflow of a dentist rather than being one of several vendors?

Correct. So I'm trying to build an ecosystem for dentists where the workflow -- anything which a dentist needs is available with us. So that's why we started Digital Dentistry. However, we are not making much money on the off-line division or the digital side of the business. But we are learning to build a workflow for dentists. For example, recently, we set up a whole Digital Dentistry arm of a dental college, where from the point a patient walks into the clinic, to one of the clinics of that college, we take part in diagnosing what kind of problems the patient has. And then that scan goes to an AI engine, which actually reads the scan that actually also reach the CBCT from the customer and then make a differential diagnosis for a patient. And then a process or [indiscernible] or something that sort of is planned, it goes directly to the milling machine or 3D printer, and the final processes comes and then some person has to do some finishing work. And later, it comes back to the doctor to finally see that processes into the patient's mouth. So this is something we are trying to learn with Digital Dentistry right now. And yes, in future to complete that ecosystem which I really want to supply to my customer base, we have to keep on experimenting with all these different arms. And same is the case of Smile Works. That's why we started Smile Works because the same customer base of Dentalkart, also orders processes from a lab. And why not we integrate all of this into one app in future?

Got it, got it. And if we look at India today versus more mature markets, where do you think India is on, on the digital dentistry or adoption curve far? And in general, what are the bottlenecks that you see that is maybe addressing those bottlenecks out of [indiscernible] to the pace of adoption for this?

Yes. So digital dentistry has been there in India for the last 25 years. There has been CAD/CAM machine. There has been metal DMLS printers. There were scanners in the market, I think, for the last 14 to 15 years. But the problem was price point? [Foreign Language] And what we see in Australia in the last 10 years, I think we'll see the same in India. I think before that.

Okay. So basically, a scanner that probably used to charge -- used to cost maybe a couple of 10s of lakh, which has come down to, I think, 3 to 5 lakhs, that's a major breakthrough. And hopefully, that also creates a flywheel for the rest of the product portfolio in Digital Dentistry.

Yes.

And I also happen to note, you've mentioned supplying to some institution or university. Has it been a usual business for Dentalkart before? Or this is a new customer cohort altogether?

This is a new customer cohort. We have never done that before. However, we received a query and we were already learning that you were selling -- in the digital division, we were selling milling, scanners, 3D printers, metal laser, sintering machines. So there's -- further, we combined that workflow and delivered to an institution. And

This does build a sticky demand for consumables as the base for Digital Dentistry picks up. Am I right in understanding that?

Yes, it creates two new demands in the market. Number one is naturally the consumables. And number two is the AMC and CMC or the machine supply.

Okay. Okay. My last question is so, see, many companies can distribute equipment, which India already has a lot of players. But fewer can build long-term relationships with clinicians and labs. So over the next 5 years, what capabilities are you investing in today that you believe will make Vasa a preferred partner for both of these, of which technology platform ultimately will help you win? So in general, how are you thinking about this?

So we are first of all learning how to service these products phenomena. And we are still exploring how we can be a long-term partner to the customers we serve. So we are still new in this segment. It will take us some time to explore.

So we have now investors on repeat, sir.

Go ahead.

Okay. So Mr. Swaraj.

My first question was on the service centers. Now as we increase our own brand sales, servicing those products also become more important. So how are we bridging the gap on service centers for our products and existing products as well?

Yes. For the own brand, small equipment and large equipment, let's divide them into two parts. Own brand small equipment can be serviced in the nearest warehouse. So wherever we have delivered the product, if a doctor wants to claim a warranty, there are two ways to solve it. One is the technical support, where the customer care just does a video call through our software with the customer and try to resolve it. Most of the issues are very easily solvable online. But if it is not possible, then we'll take a video. The product will be reversed from the doctor's clinic, brought to the nearest warehouse. The service cart is generally between 2 to 6 hours and then delivered back to the customer. If the lead time is longer, we try to give us time by unit to the doctor. This is for the small equipment. For the large equipment, it requires on-site service. For that, we are building a service team. We already have 14 service engineers in India. And also, we have channel partners who, for example, in Southern part of India, we have 2 channel partners who service for all the machines they have themselves sold and service the machines which we have sold on chargeable business. That saves a lot of our fixed cost to build a service person everywhere in the country.

Very And so now we are increasing our SKUs from 23 to 35 in the coming years. So what gap are we trying to fulfill through the SKUs?

So recently, we have launched a brand called [ Dental Tech ] that supplies implant accessories compatible with most of the [indiscernible] of the world. That category was not available on Dentalkart earlier. So we are trying to find out categories which are not there on Dentalkart. So idea is not to reach 35,000 just to show the numbers that we are reaching 35,000. We want to add the right category of products which are not there on Dentalkart. So for sterilization, we have the sterilization reels. We have the sterilization power chains, the indicator tapes and whatnot. But recently, 15 different SKUs my team found where we can provide silicon rings on instruments for EV identification. So those products are not easily available in India. We are trying to find out those products and double down on this approach to find more products. And that raises a question that, that will just increase the inventory. But we'll keep less products and see how it works and then gradually increase the inventory. So the next few years will be experimentation on what works in India and whatnot. And if that product works, then we'll scale that product from there.

And what do we mean -- I just wanted to have clarity on what do we mean by unique customers, new customers and customers so on a quarterly perspective and yearly perspective? I want to understand those numbers.

So unique customer is a unique e-mail ID. So sometimes 1 customer places 10 orders in a month. That is still 1 unique customer. Total number of customers are both total unique customers over a quarter or over a year. I'm sorry, what was the third thing in your question?

New customers and customers served, how are they different? And the meaning was quarterly and yearly.

Customers served includes new customers and old customers. New customer is the first time -- first a unique e-mail ID which was never ordering with us before. I have Sandeep also with me. Sandeep, you want to -- do you think you can answer this better?

Vikas, the definition that you're providing is fully correct. New customer is basically the customers are coming that year. and served customers a total customer that we have served in that year.

Sorry, can you repeat the last line?

Total customers are those which we have served in the entire year.

And new customers in those particular quarters whichever new customers we've -- which have neared from us again.

Yes, yes.

Could you give a trend of the -- you've given a retention rate for each quarter as well. And I wanted to understand the retention rates that have been given, how to read those numbers as well.

So suppose you are a dentist. And you order on 1st of January from us. So if you come back on anywhere between Feb 1 to Feb 28, that cohort is a monthly retention rate. So the retention that I've given is with the number of days. So 30, 60, 90, 180. If a customer is not coming back to us from January to June and coming after that, that is not part of 180 days cohort. So the number itself is explanatory that how many days it takes for a customer to come back to us and how many customers are coming back. Okay. I'm sorry if you want to repeat your question, please do.

No, no. I got it. And just the quarterly retention rates, how do we read that?

Yes, it is every 90 days what customers are coming back to us is the quarterly retention rate.

The experience centers that we've launched, how are they doing? And how has the response been?

They're doing okay. We have not highly focused on them. But there are some sales to them. And if a customer is able to see the look and feel of a capital equipment, there's a higher chance of conversion. And that was the idea behind opening the showrooms.

Mr. Rajveer, if you can unmute yourself, please mute. Otherwise, I'm going to ask questions on behalf of you, which you have mentioned in the Q&A box. Okay. So the first question from Mr. Rajveer Singh is what percentage of products are we importing from China? And are we planning to diversify the same by increasing local sourcing?

If it is possible to replace them with local sourcing, we will definitely try to do that because importing a product is tedious and selling it from the local market or doing contract manufacturing from local manufacturers is more convenient. Right now, a large chunk of the imports are coming from China compared to any other country. I don't want to give a particular number to that.

Okay. So the second question is, what are we doing to increase awareness about our portal among dentist community? Do we pay search engines to show our website on top? If someone does a search for online dentist products, I see and [indiscernible]. That came up at our website when I did the same search in Google.

Okay. So that happens from place to place and customers' socioeconomic status and different price points they might be looking at, or maybe certain products, there might be more possibly they'll buy those products. So search engine works that way. Secondly, to show our products or our website and app with the customers, we do SEO, AEO, more recently the AI search, we are doing that. Apart from that, we do social media marketing on products and a lot of other ways of how the tech companies market themselves. Same is the case with us.

Okay. So the last question is, what percentage of our business this FY came from repeat customers? Do we have a sales team on ground which goes to dentists and made them personally to acquire new customers?

Online segment, we don't have a team on ground which requires customers because we think it is costly to do that. And it is not scalable. We can do much better than that online. And what percentage came from repeat customers, we want to keep it proprietary as for now.

So Mr. Rajveer, if you have any other questions, you can mention the same in the Q&A box. Meanwhile, we are taking questions from the next investors. So Mr. Chintan Parikh.

Am I audible?

Yes, yes.

Perfect. So Vikas, my question is on Digital Dentistry result. So I spent a very small stint with [indiscernible] way back in 2002 when they were introducing India intraoral cameras as well as sensors for the first time. I met a lot of dentists across Bombay, small, big, [indiscernible]. The problem I saw, even again -- so I'm currently in Pune. And here as well, what I see is that not -- and I'm not you're not 20 years or 24 years gap between these two . Not all the dentist have adopted in intraoral camera. First one is because of the operational issues where there are only one attendant operating as attendant as well as receptionist. Second is it's a vanity where [Foreign Language] There is a procedure. So there was a lot of challenges for the intraoral camera. But [ RVG ] sensor definitely was a big hit, and now we see that everywhere. The biggest issue, what we found was that all this division is very much tied to the chair that they buy, the first chair or whenever they are upgrading the share. Is there any tie-up that you have done for the Digital Dentistry? , the equipment which you mentioned are very, very high-end equipment, hardly 5% of the vendors will be able to afford it for their clinic. It's my personal opinion. You could correct me.

Okay. You're right, there is a low number of people will adopt the big equipment that I mentioned earlier in the call. But yes, at the same time, while we were discussing faster turnaround of an e-commerce company,now set higher standards in the mind of consumers, similarly, the patients are also expecting faster turnaround of the processes they want. So I suppose you go to get a crown from doctors. There are some doctors in the market [indiscernible] or some other similar machines compared to another doctor who takes 3 days. So there might be preference for the doctor who is delivering faster. So that kind of population or consumer base, we will definitely see growing. Like we are seeing more buyers of scanners, we'll definitely see more buyers of same-day processes is in future.

But sir, does this conflict? Because, I mean, we are one way going toward mass market Tier 3, Tier 4, for our online businesses yes. And at the same time, we are now targeting a very niche market, which requires a lot of in-person service. So it creates a bit of a dichotomy in the sales strategy.

That's not what I meant. Since you started the portion with Digital Dentistry. So I told you that the whole Digital Dentistry workflow only gets completed if we have the larger picture in mind. Yes, we are bullish on the scanners, with relation on the intraoral cameras. I think intraoral camera is a very personal thing to me how my practice got completely revamped or changed after I installed a camera on my chair. So cameras are here to stay, although RVG definitely surpassed all the numbers comparatively. You also mentioned having tie-ups with a particular brand of chair or chairs of the market for having a large number of these equipments related to Digital Dentistry to grow. Our cameras are such that they can be compatible with any dental chair in the market. So the clamps here matter and the kind of connection that clamps provide here matter. So it irrespective of any chair the dentists use.

Okay. Understood. Sir, on the -- so just to, let's say, dissect Q4 financials a little bit further. Sir, I see that there is roughly INR 2 crores of other income. So can you elaborate what exactly is that other income in Q4?

Yes. That is the sale of some financial instruments which resulted in interest income.

Okay. Because sir, if I just look at our Q4 profitability in isolation, the margin becomes 0.34% or something like that if I remove the other income.

Correct.

And again there is a -- while looking at that, and if I look at your statement on the inventory as well as our own product stockout, so that is not making sense to me. Let me explain you why is that. We are saying that in Q4, we had a stockout of our own product, which are high-margin products. At the same time, if I look at our inventory on Page 13, we see that we had a INR 27 crore of inventory increase because of our own product. So what happened? How did we stock wrong products of our own brand and still ended up with stockout? So if you can help me understand the issue and how this will not happen in future.

So first of all, that INR 27 crores is for the whole year. That includes H1 and H2 as well. And we actually missed on some what sellers -- like if you see [indiscernible] on the Dentalkart, which is one of the top sellers, the whole rotary inventory is out of stock. Those are the kind of products where we have good margins and we provide the best value to the customer. So those kind of consumables were not in stock. However, a lot of Digital Dentistry sales happened last year, for which the stocks they had with us and sales also grew. So you can see 85% growth in the off-line segment, while the online did a 25% growth. We feel that such issues have made us more mature for taking care of the denture supply chains of the company. And I also want to admit that the supply chain of many big companies in the market, if they are at level 10, I am at a level 6.5 or 7. I have to work hard on my supply chain and my leadership of supply chain in future.

Okay. Sir, if I look at our inventory turnover, you are guiding that in near term, you want to see it around 90 to 120 days. And we have close to INR 80 crores in inventory currently. At the same time, we to third-party products. So why we have such a massive inventory buildup happening currently where we have discounted other products? If you can help me understand this.

So first of all, we have not discontinued other brand products. We have discontinued off-line sales of other brand products. But yes, having more share of sales of own brands also tells us that we have to import more products. We have to contract manufacture more products. And they come with MOQs, which we sometimes have to keep when we start that relationship with the manufacturer. I've also mentioned in the presentation that 120 to 150 days is what I see my inventory levels in the short term. And when we optimize that, it will be below 120 days. And in the long term, I see it below 100 days. That's what I see as a North Star. Past also during earnings calls, I have mentioned that I want to optimize the inventory [indiscernible] numbers. But sometimes -- last year, we did a mistake because of that taking pressure of inventory from a lot of people in the market and trying to optimize that to a level like where some issues happened and we missed a lot of stock and lost sales as well as some possible customers' wallet share. So we are also keeping that in mind. Inventory is not the main priority right now. Growth and more wallet share of the customer is.

Okay. Sir, regarding our acquisition which we could not do, why took 9 months to realize that there is a lot of overhead on the integration, if you can? Because, I mean, there was a lot of management time which got devoted towards that. So what happened? And why it took 9 months?

Yes. So first of all, it was looking a very good deal for us. We were so happy about it. And when we signed the agreement and we gave a public announcement, we started finding different perspectives of the business. So there was a due diligence earlier on, which was appropriate and things were all good. When we were trying to do the merger, actually, I saw a lot of cultural differences and it took me some time to open up with the promoters of ideas. And when I did, we also bought some more time from each other to look at it again because it was one of the biggest decisions of both of our lives. And it was really difficult for me as such a young company coming back from such a large decision I made and which was public. So that was the time we tried best that we'll be able to merge this. But we ultimately realized that it will take much more time for us, especially me and Sandeep, to give our bandwidth to integrate this cultural difference between traditional supply chain and our tech first company. And secondly, they were doing very good and they are doing very good in the off-line segment. They're doing very good in the laboratory side of dentistry. And since you have been involved with team, you must be knowing what kind of business they are in. So it is a very good business. But at the same time, we are totally different. So some teams have to communicate with each other. And definitely, me and Sandeep also have to invest a lot of time in merging that. We saw that it is really difficult to make that merger soon, and it is really difficult for us to divert our attention outside Dentalkart. So will Dentalkart in mind, we took that decision.

Okay. And sir, if I compare you to another listed company, [indiscernible], how are they able to get such a high operating margin compared to us?

So they are into dental materials, perishable dental materials, which are mostly chemicals, and they are manufacturers of those products themselves. We are into a high-growth segment where we don't want to enjoy such margins, whereas we want to enjoy more wallet share of the customer and larger customer base. So the aspirations of both the companies are different. We have to choose between slow growth and more margins or faster growth or lower margins. So we are trying to balance between that.

Okay. Any plan to go into the similar kind of field which they are operating in? Because you mentioned about contract manufacturing as well, right? We are doing that. So why we are not touching that particular area? If it has a -- you already have a supply chain. You have already a distribution done. It is just about adding certain products into your catalog and pushing it and compete against the price.

We do that. In fact, [indiscernible] is one of our partners in contract manufacturing. So we do that. Internally, brand-wise sales, we have not disclosed and we would not like to disclose. But our share of sales is also significant comparatively in that segment.

Okay. With a similar type of profit margin in those categories?

In that category, yes. Okay.

So we have the last question from Mr. Manish Gupta.

Dr. Vikas, can you hear me?

Yes, sir.

Okay. Great. So Dr. Vikas, I have two questions. My first one is that just listening to the suggestions of various people and also some vision that you have outlined, just one concern I had. And I learned by asking questions. So this is not being prescriptive, it is really just trying to understand. Are we trying to do too much in terms of scope of the problems that we are trying to solve for different dentists? And you've talked about how we missed the inventory in H2. So the question is that would we be better off if we just focused on solving a core issue of dentists first, which is a broader assortment, quick delivery, very responsive customer service, and only when we have completely cracked that, do we move on to the next mountain to climb? I mean, are you trying to climb too many mountains at the same time? And I again reiterate, this is a query. It is not a comment. Just I learned by asking questions. So this is the first question. And after this, I'll ask my second one.

You are right. In the past, there were scenarios that we were trying to do too much and we were trying to climb a lot of mountains together. So the time this majority came, that I also mentioned in my presentation that this year, will be focusing on the core. And the core is dentalkart.com. There are a lot of issues which we need to sort in next couple of years. And by a lot of issues, the topmost are availability of the right SKU, right place at the right time, having responsive customer care which can tackle most of the customer queries almost instantly and then delivering products on the right time to the customer. So this all is the core of the business. I think we have to crack it properly. And only by doing that, I expect a multi-fold jump because don't I see any problem in the demand. There are people coming and requesting products and we were not able to supply in the past. There were people asking us for bulk orders in certain products, we were not able to supply on that. And we still have a very small wallet share of our own customer base where there is a large room, I can say even 10x room for growth in the wallet share in some states. We will definitely focus there first, and that is the mountain me and my team wants to climb first. So thanks a lot for those questions.

So if I, -- just a follow up on this itself. So if you would list, say, what your three biggest priorities are for this coming year, fiscal year '27, what would they be?

I think number one is customer service. Number two is faster delivery. By faster delivery, I don't mean faster everywhere, but in the places where customers are demanding faster delivery and the customer segment which provides bigger wallet share on faster delivery. And number three is better assortment of the inventory categories and brands. Like I mentioned about Dentalkart earlier in the call, we would like to have more categories, which we are currently not supplying. And this new customer base needs those products and they are buying from specialized dealers of those products would like to have those categories in place. So let me sum it up. Number one is customer service. Number two is faster delivery. Number three is the more categories on Dentalkart.

Okay. My second question, Dr. Vikas, is that I note that you're not offering guidance. And personally, I think that's a very good suggestion because it's a very uncertain world. And you offer a guidance and then we all beat you up and you haven't met it without understanding how the world has changed. But hopefully -- we are long-term investors, and I'm sure one day, dental card will reach, say, INR 1,000 crore revenue milestone, hopefully, sooner rather than later. What I'd like to understand, Dr. Vikas is very broadly if -- just the problem ahead of that number is, say, 5 or 6 years out, it could be hopefully sooner. But what I'd like to understand is that at approximately INR 1,000 crores revenue just for Dentalkart in the core business that we have, what would be the different line items where you will have a certain warehousing cost, you will have employee costs. So when you say mid-teen EBITDA, I guess there should be a lot of operating leverage in warehousing employee cost. And again, I don't want to guidance. I just want your hypothesis, that what would those line items be such that the 25% to 30% gross margin that you are talking about drops to a mid-teen EBITDA?

Yes. So thanks a lot. That's also a very good question. I think in long term, I don't see my manpower cost increasing in proportion to the revenue increment. I don't see my warehouse cost increasing like the revenue increment I envisaged. So I think I'll have the -- I've already started having the operating margins leverage. If you see us before IPO, we were not making much profit. And compared to FY '25, we made significant profits. So I think last year was a one-off. Going forward, I expect that the operating leverage will continue to be seen in our business.

So Dr. Vikas, let's say 5, 6 years out, you've got about 7 warehouses today. How many do you think you will have 5 years out?

It is very difficult to predict. But I have a internal [ bond ] and some numbers also back this up that we should have smaller warehouses in small cities of India, all the small cities like Jaipur, Bhopal, Lucknow, where we have only 500 to 1,000 square feet kind of space managed as dark stores and we are able -- and only store the top SKUs required by that state or that city. And that can be 20, 25 or that can maybe 7 only, like it is now?

So actually, I didn't ask the question appropriately. How many warehouses would you need to have to be able to deliver within 2 days?

Okay. We have to explore that. I'm sorry. I'm not ready with an answer.

But what is your personal aspiration? You were a practicing dentist, right? So different people will have different inventory levels. But what do you think from a dentist perspective is a good service level to expect of a vendor like yourself?

It depends on where I practice. So I practice in Delhi. So my expectations will definitely be, if I order it in the morning, I need products by evening or by next day. And if I'm planning to buy something in bulk because of offer, I am ready to wait for 3 to 4 days.

So if, say, you're a dentist in a Tier 2 town, how would Dentalkart want to serve a dentist in a Tier 2 town?

I think 2 days is a good TAT.

Okay. And therefore, for 2 days delivery in a Tier 2 town, how many warehouses would you need across India?

Close to 25, 26.

So why would we not invest in those in FY '27? Why only 7? Why would we not put that investment front?

We can, definitely. But there are more priorities before that. Just if I don't have availability -- I need to have more inventory if I openly announce this. So first of all, I need to optimize what I have right now. And opening more warehouses increases the chaos which might occur. And I'm just coming back from over the last 2 quarters. I don't want to take this decision in a hurry or maybe this financial year or next couple of quarters. However, we will think on this suggestion. And this is a good question raised by you, why not we do it now if we have to build in the now.

Just to push on this point a little further, Dr. Vikas. You mentioned it a bit earlier in the call that you have 10-year demand patterns of various dentists, right? So you should have good data on what customers want, correct?

Yes.

And you have good data on what customers want. You perhaps have good data on what frequency they want and the kind of products they would want. So when you say that you still have to work on assortment, can you explain that a little better because you have the data of what people want. So can you explain that a little better? I mean, you have the data of what people want. You perhaps have it at a micro level by city. So if you have the warehouse, you can actually plan the inventory by city. So can you expand a little bit about what you mean by assortment?

You are totally right. We have the data, and with the use of AI, we can definitely predict it to a good extent. But there are some issues to that. First of all, the products over the last 10 years have changed. The market dynamics changed. The price points changed. The new launches changed. For example, [ automotive ] category, 10 years earlier, there were a lot of demand for traditional automotive braces. Now market share [indiscernible] aligners. So there are products which are accessories to the aligners, which doctors are giving to the patients. So market dynamics also changed. While I'm not giving this as an excuse, but yes, in every state, in every tier of the market, there is different demand patterns. There are different kind of products coming up every year. In fact, every couple of months, there are new products coming up. So seeing all of that, we are trying to build up a recommendation engine. We are trying to build a personalization engine. As some gentlemen also questioned about the search engine of Dentalkart, we have revamped the engine three times in the past and it is much better. It used to be just a plain search earlier on, and now it is a semantic search. And later on, it will be an AI-based search where you can ask anything to the search, and then it will recommend new products. That all will be happening with time. And there are a lot of things coming up and in pipeline. Once they show up, we'll update the market.

If I may just pursue this line of thinking a little bit more, Dr. Vikas Again, I'm just trying to learn. Would 70% of the products that a dentist need really be -- like one needs toothpaste, one needs soap. I mean, maybe this 30% is changing. But wouldn't 70% of base demand be the same?

Yes, it will be the same. Manishji, there is one more thing to that. We try to deliver everything in a box. If we try to split the order in two parts or three parts, it increases a lot of our costs. And our logistic cost is close to 5.5%. We have a target that we will reduce the logistic cost and not let it increase. Due to various factors, it will impact later on. So if I keep 70% of those items in a particular warehouse and 30% goes from my mother warehouse, it will split majority of the orders of that stage into two parts. So by delivering it maybe 1 day or 2 days faster, first of all, I am impacting my customer experience by splitting the order into two. Secondly, I'm also making more expenses. And later on, I have to increase my prices in certain products or certain categories of products in future. So there are a lot of dynamics to any decision we take. And I understand what you're saying. I would also love to make smaller warehouses open, very fast and deliver what we keep there. But a lot of formulation combinations are there for us to take that decision.

So as there are no further questions from the investors, so Dr. Vikas, you can give your closing remarks.

Thanks a lot for, first of all, being there for the last 1.5 hours and listening to every other questions. There are some people who have not asked questions, but they're listening to the whole call. Thanks a lot for being there, trusting in us. I just want to say one thing, that last year was not as I promised earlier. I want to assure that it was a one-off. That was a situation that happened not because of demand. That happened because of the mistakes we have done. And we understand that we are not near perfect. There are a lot of errors we do. And we are learning, like me, me as a dentist and Sandeep as an engineer, see ourselves as the same founders we saw ourself 7, 8, 10 years back. We will learn. We will try to have the right experts in the company who can not let the same mistakes happen that happened in the past. I want to thank my whole team for all the hard work and whatever we have achieved in the past. I want to thank my customers. I want to thank all the shareholders for being there. Thanks a lot, everyone.

Okay. So thank you, everyone, for your time and for your questions and your confidence in the vision of the company. So yes, this meeting is now officially concluded. Thank you.

Thank you, everyone.