Zota Health Care Ltd. · NSE:ZOTA
Zota Health Care — Investor Presentation (June 2023)
49 slides from Zota Health Care's investor presentation, Jun 26, 2023
Slide 1: Exchange filing cover letter
June 26, 2023 To, The Manager Listing Department, The National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai – 400051 Dear Sir/Madam, Trading Symbol: ZOTA Sub: Investor Presentation Ref: Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements
Slide 2: India's Largest Private Generic Pharmacy Retail Chain
INDIA’S LARGEST PRIVATE GENERIC PHARMACY RETAIL CHAIN JUNE 2023 Zota Health Care Limited I N V E S TO R P R E S E N TAT I O N
Slide 3: Safe Harbour
Safe Harbour 2 zotahealthcare.com This presentation has been prepared by the Zota Health Care Limited (the “Company”) only for information purpose to the stakeholders and does not contain any offer or invitation to subscribe the securities of the Company. No offering of securities shall be made exce
Slide 4: Executive Summary
Executive Summar y 3 zotahealthcare.com davaindia.com • Zota Health Care Ltd. is a publicly listed company trading at NSE • Davaindia operates on an asset-light model with 493 Franchisee Owned and operating under three verticals i.e. Retail pharmacy operations- Franchisee Operated (FOFO) stores acro
Slide 5: Davaindia is Revolutionising the Indian Healthcare Scenario
Davaindia is REVOLUTIONISING THE 4 zotahealthcare.com davaindia.com INDIAN HEALTHCARE SCENARIO 8370 Lakhs 58 % Gross Merchandise Value in FY23 Gross Margin in COCO format 594 30-90 % Fast growing FOFO & COCO store network Savings to consumers on Generic medicines 8.5 Mn+ 25-30 % Happy Consumers Matu
Slide 6: India is amongst the Lowest Public Spenders
India is amongst the 5 zotahealthcare.com davaindia.com Lowest Public Spenders Medicines account for 17.46% Population with household spending on health greater than 10% of total household budget. 6.67% Population with household spending on 51% of the total out of pocket healthcare health greater th
Slide 7: Pharma companies selling generics as brands passing huge margins to intermediaries
6 In India pharma companies selling generics zotahealthcare.com davaindia.com as a brands and passing huge margins to the inter mediators Total turnover of Pharmaceuticals in India in the fiscal year 2021-22 was $42.34bn* Rosuvas – 10 mg Rosubest - 10 Rosuvastatin 10 The Indian generic Sun Pharma Ca
Slide 8: Quality of davaindia generic medicines at par with branded
The quality in terms of efficacy and safety of davaindia 7 zotahealthcare.com davaindia.com generic medicines is at par with the branded medicines available in the market Quality Source of high quality generics from 45+ WHO-GMP approved plant Private Label 1700+ private label SKUs, a highest in this
Slide 9: Eliminating the traditional pharma supply chain
We are eliminating the traditional pharma supply 8 zotahealthcare.com davaindia.com chain and passing benefits to the Consumers Sourcing directly from manufacturers and selling directly to consumers… Doctors Traditional Pharma Manufacturer Pharma Marketing Distributors Retailers Consumers Company da
Slide 10: On average ~75% savings on medicines
On an average ~75% savings on medicines as 9 zotahealthcare.com davaindia.com compared to branded counter par ts MRP ₹100 MRP ₹ 25 Consumer Price ₹ 100 ₹ 20 - Retailer of Traditional Pharma ₹ 10 - Distributor 75% Saving Save ₹ 30 - Marketing ~75% ₹ 30 – ₹ 15 – Consumer Price ₹ 25 Marketing Marketing
Slide 11: Key Investment Highlights
Key Investment Highlights 10 zotahealthcare.com davaindia.com Huge Potential of Generic Successful Brand Strong Network Clear Value Growth Products in India Positioning and Reach Proposition Strategy Indian Pharmaceutical Davaindia offers products The management has an Started FOFO store P
Slide 12: Zota Health Care Business Verticals
Zota Health Care Business Verticals 11 zotahealthcare.com davaindia.com 1 DAVAINDIA 2 DOMESTIC MARKETING BUSINESS 3 EXPORTS • A Retail generic pharmacy chain which provides quality generic • Procures finished dosage forms from domestic formulations • Commenced operations in 2010 in manufacturing uni
Slide 13: Management Profile (1/2)
Management Profile ( 1 /2 ) 12 zotahealthcare.com davaindia.com Mr. Ketankumar Chandulal Zota Mr. Himanshu Muktilal Zota Mr. Moxesh Ketanbhai Zota Mr. Kamlesh Rajnikant Zota Dr. Sujit Paul Chairman and Non-Executive Director Whole Time Director Managing Director Whole Time Director Chief Executive O
Slide 14: Management Profile (2/2)
Management Profile ( 2 /2 ) 13 zotahealthcare.com davaindia.com AD H E E S H M U K H AR J E E V I C TO R B H AD R A P. S R E E K AN T H SGM – COCO OPERATIONS SGM – FOFO OPERATIONS SGM - HR & T&D Total Experience: 16 Years Total Experience: 12 Years Total Experience: 24 Years Past Experience: Past Ex
Slide 15: Davaindia Competitive Edge
Davaindia Competitive Edge 14 zotahealthcare.com davaindia.com The USP of the brand ranges from quality to affordability to variety to efficiency in operations . . . BENEFITS TO THE CUSTOMERS BENEFITS TO THE FRANCHISEES Medicines priced at low MRP thereby ensuring Store operations and the supply cha
Slide 16: KPIs - Davaindia (Stores and Footfall)
KPI’s - Davaindia 15 zotahealthcare.com davaindia.com No. of Stores Quarterly Footfall (Lakhs) 604 8.6 9.4 594 573 537 562 537 7.6 493 470 6.4 6.4 6.4 6.1 5.5 3.0 2.2 101 1.5 67 0.9 36 42 Q1-FY23 Q2-FY23 Q3-FY23 Q4-FY23 Q1-FY23 Q2-FY23 Q3-FY23 Q4-FY23 FOFO COCO Total FOFO COCO Total Note – The Compa
Slide 17: KPIs - Davaindia (GMV and Wallet Spend)
KPI’s - Davaindia 16 zotahealthcare.com davaindia.com Quarterly GMV Avg. Wallet Spend (₹ Lakhs) (₹) 2525 287 289 2324 262 265 269 268 1926 254 1840 1846 216 223 248 209 1595 1615 1435 170 689 484 311 160 Q1-FY23 Q2-FY23 Q3-FY23 Q4-FY23 Q1-FY23 Q2-FY23 Q3-FY23 Q4-FY23 FOFO COCO Total FOFO COCO Total
Slide 18: COCO Store Format
COCO Store For mat 17 zotahealthcare.com davaindia.com COCO Particulars COCO (IOCL) Area (Sq ft) ~400-500 300-350 Infra Cost (Furniture, Interiors, Electronics) 6 Lacs 5 Lacs A l l C O C O s t o re s a re a w a l k i n s t o re s , w h e re c u s t o m e r c a n Deposit to Landlord 1.5 Lacs 75k feel
Slide 19: Typical Matured COCO Store P&L (Per Month)
Typical Matured COCO Store P&L (Per Month) 18 zotahealthcare.com davaindia.com Matured Store P&L – PM Particulars ₹ Sales at MRP 100 GST @ 12% 11 Working Capital Cycle (in days) Reported TO 89 Inventory 30 - 40 days COGS 37 GP 52 Gross Margin % 58% Opex 25 Store level EBITDA 27 EBITDA Margin % 30%
Slide 20: Davaindia - COCO Stores
19 zotahealthcare.com davaindia.com Davaindia - COCO Stores
Slide 21: COCO Monthly Performance Updates
COCO Monthly Performance Updates 20 zotahealthcare.com davaindia.com Store Count & GMV of COCO Stores 266 218 206 183 159 142 119 105 101 87 72 77 66 67 51 55 58 43 42 42 36 39 21 25 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Store Count (#) GMV of COCO Store
Slide 22: COCO Monthly Performance Updates - Footfall
COCO Monthly Performance Updates 21 zotahealthcare.com davaindia.com Footfall at COCO Stores (Thousands) 118 2.83 2.86 2.83 2.74 2.73 2.58 2.63 2.50 97 93 2.23 83 2.05 2.04 74 1.83 67 56 51 45 42 23 26 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-22 May-22
Slide 23: COCO Average Footfall Per Store
COCO Average Footfall Per Store 22 zotahealthcare.com davaindia.com Apr- May- June- July- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Particulars 22 22 22 22 22 22 22 22 22 23 23 23 Footfalls (In 23k 26k 45k 42k 51k 56k 67k 74k 83k 93k 97k 118k Nos.) Total Stores 21 25 36 39 42 42 55 58 67 72 77 101 Avg
Slide 24: COCO Stores by State
COCO 23 zotahealthcare.com davaindia.com Stores States No. of Stores Uttar Pradesh 19 Gujarat 21 Haryana 4 Karnataka 1 Madhya Pradesh 1 Delhi 24 4 Rajasthan 7 24 Maharashtra 24 Total 101 7 19 21 1 24 3 1 101 Operational COCO stores as on 31.03.2023 Operated by wholly-owned subsidiary Davaindia Healt
Slide 25: COCO Store - Pivot to improve store economics
COCO Store – Pivot to improve store economics 24 zotahealthcare.com davaindia.com Avg. Stores Total Avg. Size Monthly Particulars (#) Sq.Ft. (Sq.Ft.) Rent (₹ pm) First 67 53,284 795 93,000 Phase Second 34 20,480 602 62,300 Phase Total 101 73,764 730 82,750 No t e : Fr o m Q2 F Y 2 4 , t h e Ave r a
Slide 26: COCO Strategic Partner
COCO Strategic Par tner 25 zotahealthcare.com davaindia.com • D av a i n d i a h a s e n t e re d i n t o a g re e m e n t w i t h I n d i a n O i l Corporation Limited (IOCL) for r o l l i n g o u t C O C O s t o re s a t I O C L petrol pump. • Under this model, 6 COCO s t o re s h ave a l re a d y
Slide 27: Store Ageing - COCO
Store Ageing - COCO 26 zotahealthcare.com davaindia.com Age Opening Period No. of Store Average Daily Sales (In ₹) Average Monthly Sales (In ₹) 15 + Months Apr-Dec-21 6 16,458 4,93,730 12-15 Months Jan-Mar-22 11 13,062 3,91,852 9-12 Months Apr-June-22 20 13,802 4,14,061 6-9 Months July-Sep-22 15 10,
Slide 28: Store Opening Lifecycle - COCO
Store Opening Lifecycle – COCO 27 zotahealthcare.com davaindia.com Days 00 02 04 06 08 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 Registration 0 Documentation - Online 0 Sign up fees 1 Signing process Store 4 Store layout Planning Execution Process 25 Color + POP+
Slide 29: Store Opening Lifecycle - COCO
Store Opening Lifecycle – COCO 28 zotahealthcare.com davaindia.com 30 days From Q2FY24 60 days As of now we are taking 90 days Earlier we were taking
Slide 30: FOFO Store Format
FOFO Store For mat 29 zotahealthcare.com davaindia.com Particulars FOFO Area (Sq ft) ~200-300 Infra Cost ₹ 2-3 Lacs Inventory ₹ 3 Lacs Rent (for franchisee) ~₹ 15-25K Fr o m Q 4 F Y 2 3 , A l l n ew a d d e d FO FO s t o re s a re a w a l k i n s t o re s , w h e re customer can feel and experience
Slide 31: Typical Matured FOFO Store P&L (Per Month)
Typical Matured FOFO Store P&L (Per Month) 30 zotahealthcare.com davaindia.com Matured Store P&L - Company Matured Store Economics for Franchisee Particulars (In ₹) Particulars (In ₹ Lacs) Sales 4.5 Sales at MRP 100 Retailers’ Margin (26% - 2nd 1.17 yr onwards) GST @ 12% 11 Opex 0.50 Franchise Margi
Slide 32: davaindia - FOFO Stores
31 zotahealthcare.com davaindia.com davaindia- FOFO Stores
Slide 33: FOFO Stores by State
Store 32 zotahealthcare.com davaindia.com States No. of Stores Uttar Pradesh 96 Opening 3 West Bengal Bihar Odisha 28 14 62 Plan 2 Telangana 2 8 Gujarat 45 5 Haryana 33 FOFO 33 25 2 Karnataka Madhya Pradesh Kerala 4 55 14 22| 96 7 Delhi 25 14 6 Rajasthan 22 Tamil Nadu 13 5 Punjab 8 45 28 Assam 7 55
Slide 34: Store Opening Lifecycle - FOFO
Store Opening Lifecycle – FOFO 33 zotahealthcare.com davaindia.com Days 00 02 04 06 08 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 Property 1 Location Identification Acquisition 2 Property Title Check 7 Rent/Lease Agreement Store 1 Store layout Planning Execution Pr
Slide 35: Healthy Repeats
Healthy Repeats 34 zotahealthcare.com davaindia.com Total Average (in %) COCO FOFO TOTAL 72% 81% 80% Repeat Customers Repeat Customers Repeat Customers 17% 11% 12% New Customers New Customers New Customers 11% 08% 08% Lost Customers Lost Customers Lost Customers Note – The actual lost customer ratio
Slide 36: Category Mix - YTD FY23
CATEGORY MIX – YTD FY23 35 zotahealthcare.com davaindia.com Sales (in %) Chronic Diseases OTC Others 6% 5% 16% 3% 3% 8% 4% 3% 2% 1% 20% 15% 6% 3% 3% 1% 1%
Slide 37: Peer Comparison
PEER COMPARISON 36 zotahealthcare.com davaindia.com Avg. Daily Margins After Avg. Rent Inception No. of Pvt. Label Particulars # Store Size Revenue Passing Discount (In ₹) Since SKU’s Product (In ₹) To Customer Apollo - Standalone 300-500 30-35k 25-30k 20 Year 6-8k 15-16% 6-9% Pharmacy Sq. Foot 400-
Slide 38: Domestic Operations and Export Operations
37 Domestic Operations Expor t Operations zotahealthcare.com davaindia.com Domestic marketing has been the Our Exports business vertical, which started in oldest business vertical for the 2010, serves clients in over 30 countries, Company and has remained its mainly in the CIS, Latin America, Africa
Slide 39: Supply Chain Management
Supply Chain Management 38 zotahealthcare.com davaindia.com • The Company has outsourced supply chain management to a third-party warehousing & logistics partner. • A state-of-art central warehousing & processing center has been built in Surat, in Phase 1. • Eventually the Company will replicate suc
Slide 40: Result Highlights Q4FY23
39 zotahealthcare.com davaindia.com Highlights Result Q4FY23
Slide 41: Standalone Quarterly Financial Highlights
Stand Quarterly Financial Highlights 40 zotahealthcare.com davaindia.com Q-o-Q Y-o-Y Revenues (₹ Lakhs) Gross Profit (%) Revenues (₹ Lakhs) Gross Profit (%) 3,625.74 3,625.74 36.25% 3,404.82 36.25% 34.21% 3,175.26 26.11% Q3-FY23 Q4-FY23 Q3-FY23 Q4-FY23 Q4-FY22 Q4-FY23 Q4-FY22 Q4-FY23 Operating Profi
Slide 42: Revenue Break up - Quarterly
Revenue Break up- Quar terly 41 zotahealthcare.com davaindia.com Domestic Sales Q4-FY23 Q3-FY23 Q4-FY22 Dava India Sales 3,626 3,406 3,175 Export Sales (SEZ)
Slide 43: Standalone Profit & Loss Statement - Quarterly
Stand Profit & Loss Statement- Quarterly 42 zotahealthcare.com davaindia.com Particulars (Rs Lakhs) Q4FY23 Q3FY23 YoY % QoQ % Q4FY22 Export Sales (SEZ) 415.69 380.5 -36.09% 9.25% 650.39 Davaindia Sales 1701.6 1481.8 66.21% 14.84% 1023.77 Domestic Sales 1508.45 1542.6 0.5% -2.21% 1501.1 Revenues from
Slide 44: Management Commentary
Management Commentar y 43 zotahealthcare.com davaindia.com 1 3 The Company has reported resilient The sales contribution from new-age performance in Dava India and Domestic business stood at 58% in Q4FY23 as sales, however, Export performance compared to 55% in Q3FY23. during the quarter took a hit
Slide 45: Management Commentary - Domestic and Exports
Management Commentar y 44 zotahealthcare.com davaindia.com 1 DOMESTIC OPERATIONS 2 EXPORTS Domestic Revenues increased by 6.14% Exports revenues increased by QoQ and a growth of 19.78% YoY at ₹ 9.25% on QoQ basis and 3210.05 Lakhs in Q4FY23 supported by decreased 36.08% YoY at ₹ 415.69 healthy perfo
Slide 46: Management Commentary
Management Commentar y 45 zotahealthcare.com davaindia.com Commenting on Q4FY23 financial performance and operational highlights, Management Team of Zota Health Care said, “The Company’s performance for Q4FY23 has remained intact as compared to Q3FY23. Our exports performance has been improved as co
Slide 47: Profit & Loss Statement
Profit & Loss Statement 46 zotahealthcare.com davaindia.com Particulars (INR Lakhs) FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Income from Operations 5,646.3 6,473.3 7,158.0 7,785.2 8,562.9 9,511.3 10,684.12 13,153.33 13,836.60 Other Income 1.4 7.7 5.6 151.9 154.5 151.3 125.66 164.56 255.87 Total
Slide 48: Balance Sheet & Key Ratios
Balance Sheet & Key Ratios 47 zotahealthcare.com davaindia.com Particulars (INR Lakhs) FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Share capital 1,436.3 1,436.3 1,436.3 1,754.3 1,754.3 2,456.0 2456.03 2,516.0 2,516.0 Reserves and Surplus 395.7 707.8 1,262.0 5,223.4 5,138.2 4,426.9 4,181.2 6,621.4 6
Slide 49: Thank You
Thank You Contact Infor mation M r. Himanshu Zota / M r. Ashvin Variya "ZOTA HOUSE", 2/896, Hira Modi Street, Sagrampura, Surat-395 002 (Gujarat) cszota@zotahealthcare.com www.zotahealthcare.com