Marico Kaya (MaKE)

Q1FY25 Concall Summary

Business Updates

• On relocation as part of continued clinic refresh initiatives, 3 clinics were relocated and enjoys positive customer sentiment
• A total of 9 clinics have been relocated since the brand refresh program was initiated in FY24
• Around 14 clinics have been refurbished since the program was started in FY24
• Earlier this month collaboration with Marico was announced and that will allow them to exclusively scale up Kaya’s products outside of their clinics which will accelerate product growth and brand efficacy for KAYA and help KAYA have greater footfall in its clinics
• The business in Middle East has now been classified as discontinued operations and Rs 108 crore has been recognized as profit from this discontinued operations
• The rights issue process will start once sale process of Middle East business is complete

Participants

Moneybee Investment Advisors

Shubhlabh Research

Anvil

Whitestone Financial Advisors

QnA

• The company will receive royalty from Marico on sale of branded products of KAYA but the main objective is growth in the products that KAYA develops. Marico will also invest in marketing and developing channels of sale
• The plan is to open 6-8 clinics in FY25 and capex per clinic is around Rs 1.8-2 crore and relocation costs Rs 0.75 crore. It takes 12-18 months for a clinic to breakeven
• The marketing expenses are 7-8% of the revenues
• The last time when the deal happened both companies were selling in overlapping channels simultaneously while this time it will be exclusive with Marico and Kaya will not sell in the same channels and only collect royalty
• Kaya today gets 14% of its revenue from products while rest is from services and thus the belief is that product cannibalization if any will be minimal and at the clinic the focus will be on selling premium products priced higher
• The strategy to drive growth remains a combination of expansion, relocations and refurbishment of clinics and focus on the services which should help get into better profitability
• The rights issue will be up to Rs 300 crore and the promoters will participate in the rights issue
• The focus now will be predominantly in the clinics and the offline and online channel for products will be taken care of by Marico
• KAYA will continue to create dermatology based new products and this setup will be in house and marketing and sales will be via Marico