Q3 FY24 Concall Notes:
RETAILER SHAKTI QUARTERLY INVOICE DATA - 11K RETAILER, 1.33L AVG QTRLY INVOICE
Q2 FY24 - 9684, 1.27L
PURE B2B BUSINESS SO GROSS MARGINS ARE LOWER BUT OPERATIONAL COSTS ARE LOWER COMPARED TO HEALTHBUDDY BIZ. IS OPERATIONALLY PROFITABLE IN CALCUTTA, NOT IN OTHER REGIONS BECAUSE TECH COSTS AND BUSINESS DEVELOPMENTS COSTS. OPERATIONAL LEVERAGE IS YET TO PLAY OUT.
E-PHARMACY BUSINESS IS FACING CONSUMER SENTIMENT ISSUE BECAUSE DISCOUNT IS MOVING AWAY SINCE BUSINESSES ARE FOCUSING ON SUSTAINABILITY AND THUS REVENUE IS TAKING HIT BECAUSE OF PEOPLE ORDERING LESS BECAUSE OF LOWER DISCOUNTS.
DIAGNOSTIC BUSINESS: THIS BUSINESS WAS STARTED FOR OUR HEALTH BUDDIES TO TAKE ADVANTAGE OF B2C PRESENCE BUT GIVEN SASTASUNDR ACCQUISITION BY HEALTH+ THEY CAN’T MOVE FORWARD WITH THIS. SO THEY’RE DESIGNING A NEW STRATEGY ON THIS FRONT. WILL HAVE SOME UPDATES FOR THE DIAGNOSTIC BUSINESS IN THE NEXT FEW MONTHS.
10% BLENDED GM NOT POSSIBLE FOR NEXT 2-3 QTRS BUT FOR A 2 YEAR HORIZON THE GM WILL BE 10%. EXPECTING INCREASE IN PROCUREMENT MARGIN BY 3-4% OVER THE LONG TERM DUE TO HIGHER VOLUME OFF-TAKE IN RETAILER SHAKTI.
EXPECT OPERATIONAL COSTS TO STABILISE AFTER THE MARCH QTR AND WILL NOT GROW AT LEVELS OF REVENUE GROWTH
APPLYING PREDECTIVE ANALYSIS TO INCREASE WALLET SHARE OF THE RETAILER BY PROVIDING THEM ADDITIONAL OFFERS RELEVANT TO THEM, PASS ON ADDITIONAL BENEFITS.
RETAILER SHAKTI BUSINESS: ORDERS ARE FULFILLED ONLY AGAINST ADVANCE PAYMENT/COD MODEL, SO NO CREDIT MODEL YET RETAILERS CONTINUE TO STICK TO THEM INSTEAD OF COMPLETE BIZ FROM UNORGANISED DISTRIBUTORS WHERE CREDIT IS PROVIDED, SO WE SEE DROPOUTS BUT RETAILERS THEN COME BACK TO US BECAUSE OF OUR TRANSPARENCY AND PRICING MODEL. LOTS OF CASES WHERE AFTER FEW MONTHS RETAILERS COME BACK. LARGE RETAILERS DO GET CREDIT FROM US WHO HAVE MULTIPLE STORES, IN DISCUSSIONS WITH FINTECHS AND BANKS FOR FINANCING CREDIT TO THE RETAILERS WHERE RISK LIES WITH THE FINANCIAL ENTITY AND NOT WITH US.
THERE IS SOME INCENTIVE RELATED TO VOLUMES FOR RETAILERS AND OFFERS QUOTED TO THEM FOR MONTHLY QUOTAS
WC TO STAY AT 10% OF REVENUE
OPERATIONAL LEVERAGE WILL PLAY OUT WITH INCREASING VOLUMES EVEN WITH SIMILAR GROSS MARGIN PROFILE
TARGETING 15K RETAILERS ON THE RS PLATFORM BY THE END OF THIS QTR.
EXISTING WAREHOUSES(7) ARE SUFFICIENT TO TAKE CARE OF GROWTH FOR NEXT 1-2 YEARS
OUR SHARE IN RETAILER’S TOTAL SUPPLY IS VERY MINISCULE ESPECIALLY FOR MOM AND POP STORES
NO PLANS FOR OUR OWN OFFLINE PRESENCE, FOCUS IS ON RETAILER SHAKTI FOR NOW
IN PROCESS FOR COSTS CUTDOWN IN THE HEALTHBUDDY SUPPLYCHAIN BUSINESS BECAUSE OF LOWER SHORT-TERM EXPECTATIONS FROM THIS BUSINESS, SO EBITDA NUMBER NEXT YEAR WILL BE DEFINITELY HIGHER
CASH IS PRESENT IN SUBSIDIARY COMPANIES AND CORPORATE SIMPLIFICATION WILL LEAD TO CASH COMING BACK TO HOLDING COMPANY ONLY THEN FURTHER INSTRUCTIONS CAN BE GIVEN ON CASH UTILISATION
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