Max India (NSE:MAXIND) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Q1 FY 'twenty seven Earnings Conference Call hosted by Max India Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Rajiv Mehta, MD and CEO from MAX India Limited. Thank you, and over to you, sir. Thank you. Namaste, everybody. A very good morning to all of you. On behalf of Max India Limited, we extend a very warm welcome to all of you for the Q1 FY 'twenty seven earnings call.

0:52 Sincerely, thank you for your continued support, your trust, your confidence, which keeps us encouraging to undertake this journey in a very fast evolving sector. Really appreciate your time for joining us today. And let me share a few updates. But before that, I have with me my colleague, Vishant Kanna, who is the CFO for Amphora Citric Care Services Ajay Agarwal, is Deputy COO, CFO, Amthara Senior Living and Head of Investor Relations Sandeep Patak, who is the CFO for Max India and also the Legal Counsel for Max Group Ankit, who is the CFO for Amthara Assisted Care and Abhishek Singh, who is part of our IR team and Dev Raj from SGA and Rahul as well, who are our IR advisers. We uploaded the deck yesterday, so hopefully all of you have had a chance to go through it.

1:38 I think if I start with what happened in the last quarter has been just execution, execution, execution. We've been focused on executing and therefore, you're able to see now green shoots in all parts of the business. I would like to inform you that after a long, long wait, we have now issued offer of possessions to all our three forty residents in Anhara, Noida in the month of June 2026. This is something we have been waiting for. This is a very important milestone in Anhara's journey. We'll be operationalizing the first community in NCR. While we have many, many learnings from Dehradun, this is going to be quite different for us as well. Three forty units, 200,300 people moving in the next thirty to forty five days is going to be a vibrant and buzzing community.

2:25 We raised a demand of about INR 169 crores with the offers of position. INR 30 odd crores were collected within June, but the rest has now come most of it in July and August. As on date, approximately 75% of total dues have been collected. The rest are becoming due now, and we should be able to collect them as well. We have started to already put the team together. There are some people we have seconded from Dehradun to make sure the learnings and the culture of Dehradun also permeates into Noida. And we'll be ready to welcome the residents in a few weeks from now. After that, the focus will now shift to saying that can we go ahead and get the approval for Phase two, which is where we realize most of our profits. Just to remind you, while the average prices at which we sold Nordau was between 7,000 to 10,000, the last sale being 11,000 or so.

3:22 The rates have moved significantly up and they are in the range of 16,000, 18,000 plus. So hopefully when we launch Phase two, we should be able to realize the profits as well. We continue to focus on growth of other geographies. I know some of you will be waiting impatiently saying why haven't we announced more growth, but we are in the last stages of diligence for a wonderful opportunity in Bangalore. It's about about 300 odd units. It's in North Bangalore, twenty five minutes from the airport in Devanhali overlooking the Nandi Hills at the back. Potential realization about INR 900 crores in terms of sales value. We've in the last stage of diligence now with the developers. So let's see how that goes.

4:11 Also aggressively working on a beautiful opportunity in Zeradun. We have had a long waiting list. We don't have inventory to sell. We have found a small piece of land. It might be just less than 150 unit, but given the sales price we are commanding, the sales value will be again INR $8.50 crores to INR 900 crores. So if you look at our INR 1,500,000 square feet ambition, about INR 1,800 crores of value that we should be able to achieve with these two. But we are still working on some more geographies as well. But these two are very specific, so I thought I'll mention them to you. We're also in dialogue with people in Chennai, Chandigarh and Lucknow, whereas these two will help us meet the commitment for this year. And obviously, we'll provide disclosure in more detail once we execute the definitive documents.

4:59 The expansion in assisted care is exactly as per plan. The occupancy in four eighty five beds is gradually increasing and is giving us confidence to explore further expansion sometime later part of the year. AG is also growing steadily, whatever teething issues we have faced with our D2C channel or marketplace is now behind us. And I will share some numbers with you as we go forward. The efforts are to make sure we are able to manage the inventory days given the current geopolitical situation. That is something that come under pressure because of logistics costs and the ships not being available to bring the material from China. But that is something we are focusing on and deploying capital very prudently. We are very clear in our focus in terms of scalability and achieving profitability and demonstrating path to profitability. And I will share some numbers as I go forward to substantiate what I'm saying.

5:52 If you look at the consolidated numbers, the revenue grew at Q1 FY twenty twenty seven to INR68.6 crores compared to INR41.3 crores in Q1 FY twenty twenty six, representing a Y on Y growth of 66%. On a sequential basis, revenues marginally declined primarily due to the lumpy where the DM income comes to us. The EBITDA loss for Q1 FY twenty twenty seven stood at 25 crores compared to INR 23.2 crores in Q1 FY twenty twenty six and INR 6.8 in Q4 twenty twenty six. While revenues saw a decline in April due to cyclical impact, the profitability decline was primarily due to the impact of the exceptional DMP received in the previous quarter, reflecting the lumpy nature of this revenue.

6:39 If I give you some numbers for comparison, if I look at FY 2025, '24 and 2026, the revenue on consolidated basis was 175 in 2024,145 in 2025 and 119 in 2026, the revenue grew. The EBITDA was 57 in FY 'twenty four, 139 in 'twenty five and one 121 in 'twenty six. The reason between 'twenty four and 'twenty five was basically we put up two fifty beds and also launched ADZ. But as you can see now, as the revenue is increasing, the EBITDA losses are now coming down. So this is a demonstration of our commitment to work towards profitability. As of 06/30/2026, the treasury assets in Max India level stood at about INR21 crores with a consolidated net worth of INR372 crores.

7:25 Now coming to residences, starting with Dehradun, the operations continue to be profitable. We continue to focus on deeper engagement with our residents, cost optimization and profitability. Operating revenue was INR 6.2 crores in Q1 FY twenty twenty seven, which is 1.1 times Y on Y basis, marginally down by INR 7 lakhs primarily due to club membership. These are all cyclical things will catch up. But our operation profit was a bit better, 0.92, which is up 2.3 times Y o Y and 1.2 times Q on Q, driven by continued cost optimization. There were four units which were released, which gave us additional revenue approximately INR 1.9 crores in marketing fee. And the community is now fully occupied, quite stable.

8:12 Therefore, the growth will be linear in the future. Coming to Gurgaon, which was the first intergenerational project in Gurgaon Estate 360 developed by MAX Estate fully sold out. Collection continues to be strong INR42.5 crores taking the ITD collection to INR556 crores with a collection efficiency of 87% from inception to June 26. And Antara has earned INR47.69 crores of management fee till 06/30/2026, out of which INR3 crores has accrued in the current quarter. The second international project, three sixty one, which we only launched if you recall in December, total three sixty units. We launched one hundred eighty first and then 180 in June. As of June end, the bookings were 154.

9:00 So April, May, June, the market was sluggish given the geopolitical situation, but it is now caught up. So while we sold only 27 units in Q1 FY twenty twenty seven, in the month of July alone, we sold about 34 units and a similar trend continues in August. So we have caught up. The market is now getting back to a little bit of normalcy and therefore the sales velocity has not totally caught up on that side. Total collections INR108.2 crores since inception. So about INR194 million, INR197 million units sold so far. On the entire Assisted Care side, total bed capacity of four eighty five beds across eight care rooms in NCR, Bengaluru and Chennai. We have now completed and relaunched the DLF Phase two Bruneo Centre in July 26, and all the eight centers are now operational.

9:50 Happy to report that five out of the eight care homes are trending as per the operating model and we are confident that others will also follow this trend. And we continue to watch this progress very carefully. The Care Home and Services revenues were INR 12.03 crores, up by 1.5x Y on Y and 1.1x in Q on Q. The Care Homes revenue on a standalone basis was 1.3x in Q on Q and the OBDs, the occupied bed days went up by 23 on a Q on Q basis. Many care homes as I said are showing very good trends. Occupancy, Banaragatta, Bangalore 41% in Q1 FY twenty twenty seven, up from 37% in Q4 FY twenty twenty six Gurugram 41% from 33% in Q4 FY twenty twenty six Whitefield Bangalore 18% from 8% and Omar, Chennai 12% versus 3% for the same period. So you can now see how the occupancy is increasing across the care homes.

10:51 Our care homes and services have now served about 2,700 patients during Q1 FY twenty twenty seven and about 53,000 patients in reception. Revenue in the segment rose to INR 12.03 crores, which is 1.5% as I said earlier on Y on-one basis and 1.1% on Q on Q basis. The voice of customer was steady 84% in Q1 FY twenty twenty seven remained stable in July as well, reflecting the consistent quality of care and service we're delivering. Happy to also report that four of our care homes achieved an ever highest ARPOP, which is average revenue per occupied bed day of 7,000 plus in June 2026. This is really a testimony that the customers are appreciating our quality sales at a higher cost.

11:39 Three of the four care homes have shown significant improvement in contribution margins, which now reflects the past profitability. On AGZ, we delivered net revenue of INR 19 crores in Q1 FY twenty twenty seven showing a 1.3 times Y on Y growth. It was lower than Q on Q of INR 23 crores driven basically by moderation of demand beyond the Q4 peak demand period. As all of us know March quarter is always high from a revenue perspective to cover the annual targets, but some of this will get caught up as we go on in the year. The ARR now is trending towards INR120 crores and a monthly run rate of about INR10 crores in July with marketplaces INR6 crores, the ROAS of 3.8 and at D2C the exit ROAS of 2.6. So you can see from the numbers that now we are catching up on the ROAS as well. The offline channels achieved its highest ever revenue of INR5 crores growing 18% Q on Q basis, a very good response to the newly launched product Komoot Wheelchair.

12:44 The overall ROAS, which is return on ad spend in Q1 FY twenty twenty seven exit has improved to two versus 1.8 in Q4, marking a 10 growth. The stat index in Q1 FY twenty twenty seven was 82%. AGZ now has 112 products launched till date, out of which 86 are currently live. We are now also present on quick commerce, which is Blinkit and Zipto. Our diaper category, which was the new unique diaper that we had launched, which we have a patent on. Now we are hitting a 1,500 pack sale per day, which is really sorry, a six step growth in market share in Amazon over the last sixty days.

13:29 As you know, this is a unique product. It is the only adult diaper with the smart absorption technology and now it is showing up in our increasing market share as well. Our four patents have been granted to us for products and there are three patents which have been filed for senior specific innovative products, reflecting our commitment to innovation. And this really will be the biggest differentiator in the mode that we will have. The more patents we have, the more stronger our products will be differentiated. AGG so far has touched about nine lakh lives with about 88,000 repeat customers and serves and reception achieved NPS of about 60, which is quite high, but that reflects improving customer stickiness as your usage depends over time. Gross margins for online channels, this is D2C and marketplaces maintained at 45% in Q1 versus 46% despite very challenging geopolitical situation, which have pushed up the COGS for each product.

14:27 From this quarter, we are over indexing on brand awareness. We have onboarded Anupam Care as a brand ambassador. And therefore, did spend some money, which we'll see as an expense in the financials submitted to you. But we are seeing the payback as well. In the month of July, the ARR has now picked up to about INR10 crores. Our conversion rates have improved from two to 3.5 and our ROAS has gone up as well. So the brand spend that we did is already showing the payback in the month of July itself. If I was to really consolidate ASCS and look at Q1 last year, Q4 and Q1 this year, the revenue was 21, thirty two and thirty respectively with EBITDA losses at 14, eighteen point five and nineteen. So despite the brand spend, despite the cost of goods going up, we've been able to bring down the EBITDA losses or keep them flat with revenue going up quarter on quarter.

15:24 The last update I'd like to give you is on the Antara integrated wellness clinic. As you know, this is a key differentiator for Residences. We had launched a pilot in Gurgaon in our care home to see what is the impact and what is the receptivity of customers. This is a wellness clinic anchored around modern medicine, but combines modalities of Ayurveda, ozone therapy, infrared sauna, nutrition, etcetera. Financially, the net revenue for Q1 FY twenty twenty seven was 15.75 lakhs. This is expected at this stage to be a negative contribution margin in the first quarter only, but we should be able to cover it up as we go forward. On the customer SAT scores very high satisfaction 96% with average revenue per client of 4,000.

16:12 The footfalls have grown steadily from 199 sessions to three zero seven sessions in June. It's a rapid increase. And therefore, we'll now focus on spending some marketing monies and scaling up this and also making sure we launch this in Uttaran Noida as the residents start checking in. On the partnership front, we continue to work with Star Union and IT Life Insurance to integrate senior wellness with financial literacy, culminating in specialized financial products for seniors and with IIT Delhi on mobility products and well-being nutrition and nutraceuticals and supplements and Swasa on self diagnosis for lung health. Our brand continues to gain strong recognition and Tara Senior Care receiving the Visionary Leadership in Senior Living Award at the HD India Real Estate Expo in June 26, honoring our contribution to India's silver economy.

17:02 We also concluded the NABH acquisition in Balangatta, which is quite essential for TPN insurance. And we have gone through some more infections in aviation and other care homes. So in summary, Q1 FY twenty seven has been full of action and execution. We remain confident in our underlying trajectory backed by with handover opposition in Ankara Noida, steady sales momentum in Gurgaono and improving occupancy trends in care rooms and early signs of recovery in the AGZ ROAS. As we look ahead, we remain committed to profitability. As we said, AGZ perhaps by January or last quarter this year will be in that zone. And we'll continue to contain losses even though we scale up KNOK loans to make sure we are committed to our path to profitability.

17:50 So I'll stop here and welcome any questions that you might have. And thank you once again for joining the call. Thank you very much. We will now begin the question and answer session. Participants are requested to use handsets while asking a question. We take the first question from the line of Harsh from Ionis Alpha.

18:42 Rajat and team. Couple of questions from my end. Firstly, broader question. Just wanted to double click on the EBITDA breakeven by the end of the financial year target. If we could just, you know, understand particularly from the cost angle, what should change, you know, in this quarter versus, say, q four of, you know, this financial year. And even, you know, from a top line basis, where should one look at? I understand the, you know, resi business can be quite lumpy, but just talking about AGZ and Care Homes, what should that look at broadly speaking by the end of the financial year?

19:35 Secondly, on the care homes part, I just wanted to understand, you know, your thought process as to where do we stand now versus, you know, what was the initial plan, especially on the occupancy levels. Reason why I'm asking this is that, you know, what is there is there any plans to start adding beds in near future? Are we, you know, have we reached that inflection point? Yeah. So as I cannot comment on specific numbers of FY twenty seven in the future. But when I made the comment on profitability, I meant on AGZ, which is our commitment. That is one. Kerosa, obviously, since we build out the bed in the last twelve months, they will have to wait out the eight, ten quarters it takes for the bed to be profitable at a unit level.

20:24 ASL will continue to be lumpy. So when we get the DMP and etcetera, it will show as a bit positive, right? But that varies depending on the projects we signed in DMP, right? But to your question, I'll repeat the numbers once again so that you're able to see what I'm seeing. If we look at our overall consolidated, the revenue has steadily gone up from 175 to 145 to 190 over the last three years. The EBITDA losses of 57 went up to 139 because we added two fifty beds launched AGG in that year and then brought them brought 139 down to 121 despite the revenue going up. This trajectory will continue for FY 'twenty seven in terms of revenue going up substantially and EBITDA losses getting contained because now we are not adding any new beds at this point of time.

21:16 AGZ will continue to throw better contribution margins. So as we go into next and next quarter, you'll find the trajectory to be substantiated. Occupancy, as I said, the OBD beds have gone up by 23%. But if you look at respective care homes, Balangatta is from 41% from 37 to 41%, Gurgaon from 33 to 41, Baikal, Bangalore from eight to 18, and UMR from three to 12. So five of the eight care homes are now trending to the model that we have shared with all of you respectively. Five of them. Right? The rest is work to do as we go along. But now we are confident. So sometime, the inflection point, if you recall, was October, November. We had said we'll wait till that time and then start making the call an expansion. So we are sticking to that time line. No changes in that as well.

22:13 Just to add, Harsh, on AGZ, what are the metrics that you could look at and how that will move to profitability in your CM2? If you see historically, we've reported minus 80%, minus 70% CM2 for AGC. As of July, the marketplace's CM2 came down to minus 17%, 0.7%. And this number for all other channels will continue to improve at the back of improving return on advertising spend, which doesn't earlier. And this will be corresponding to better gross margins and higher top line. So that is how the C and C will keep improving to achieving a breakeven till Q4. Some of the aberration you see in, for example, employee expenses, right, is basically the some provisions getting written back. So each year, we provide for variable pay. But when we pay out the month of May for Q4, the provisions get trued up, actualized.

23:13 But once we start Q1, we again start providing. So it's just an accounting thing in terms of provisions, nothing else. Understood. Just on the blended ARPU bit in asking care homes. I understand that the last few bed additions or substantial bed additions were at a higher ARPOP. So ARPOP should be between a blended ARPOP, you know, once these... Once the occupancy rises, should be between six and a half to 7,000. Is that the right way to look at it? It should be 7.5. Okay. Understood. Thank you. Thank you, Harsh.

24:01 Thank you. We take the next question from the line of Nikhil Gupta from YU Capital. My first question is a bookkeeping question on senior living. So out of the INR 33 odd crores collection we did from the Lloyd community, what would be the revenue which would have been attributed to the Q1? So once the revenue in the Lloydar will be booked at the SPV level. And since it's a joint venture with us, we will be only consolidating the net P and L. Now as regards to the joint venture company, if I ask you about the revenue recognition there, presenting June, there had been no revenue recognition because the revenue recognition is not linked with collection.

25:02 It is linked with the possession or registration. So the possessions are going to happen in Q2, and that's the year when all the revenue recognitions and inventory titles will take place. Thank you, Ajay, for that answer. But somehow I'm not able to reconcile the numbers. So let's say, so you have mentioned in the investor deck, the odd INR 38 crore from that senior living segment. I believe around INR38 crore is the treasury increment, INR30 crore operation. So around INR6 crore INR3 crore and INR4 crore is from our Gurgaon communities. I'm not able to add that INR30 crore number. Can you please help me with that? Sorry. From where are you seeing this number? From the results? Yeah. So from the results or from the invested end?

25:50 Both. I mean, it's... They are same only. Right? Residences have three components of income, sir. One is the DMP's income, what we are getting in Ansara Senior. Second is the ops revenue, what I'm getting at Ansara Purukul. And third is the finance lease income, which I'm getting as a release in Ansara Purukul. That amount was approximately INR 15 crores for the quarter. I think that's the gap what you are mentioning in that business. Since it's not a regular income for me, it's always an exception because we don't plan for a release. Hence, I don't explicitly declare this into my gross revenues in my investor release. I just simply say how much release we have done and how much marketing fee I want. Okay. So the DM fees is around 7 crores, operation is also around $6.07 crores, and the finance fees is 15.

26:37 Correct. And what would be the then odd 8 crores that would be the treasury income at the residential level? Correct. Okay. Can you help me explain, like, this finance fees? What is this income? Like, I'm not able to understand this. Basically, our is on a lease model wherein if any any units get resold, so if somebody is exiting because of debt or they are shifting from Delhi... Shifting from and they want to sell their property, it has to be released. So they have to surrender their lease to the company and the company have to release it again. So as per accounting standard, the remaining lease period, I have to recognize as a revenue. And against that, I recognize the cost, the lease premium. And in that particular transaction, I'll be on some bit of a marketing fee that I account for as a additional revenue in our other income.

27:32 Got it. My next question is on our integrated well... Wellness. So going forward three to five years, do you see this segment growing significant... Contributing significant to our p and l? Because in the annual report also, I think we are... We have mentioned this category as a separate segment. So is it... Can you provide more color that... Do do we think that it can contribute significantly going forward next three to five years? See, the AIWC is an integral part of our residences. We're not opening a separate business line where we launch AIWC clinics.

28:18 We will simply put them in all the residences so that it's a strong differentiator, very difficult to replicate. It is not just about a doctor or nurse sitting in the campus, it's about a full fledged protocol based integrated medicine system which we are launching in the residences. And therefore all the revenues which come from there, right, difficult to predict at this point of time. But given the volume of people we're handling, let's say three forty people units in Noida phase one means about 600 people. Right? Difficult for me to comment, you know, how much revenue we will get, but it's a strong differentiator. We will also try to put them in the care homes to be able to work as OPDs to attract, you know, footfalls. Right?

29:06 So that's the intention, really. We are not launching the stand alone clinics. Right. Well understood. The last question is on AGV. I think some... Somehow the the growth has been slow, but sometimes that happens. That's fine. I think we we projected to almost double our revenue from 77 to $1.50 odd growth. So do you still see that happening? Because somehow, the... We are still at the 18 growth q one revenue seems very, very low. Yeah. Some thoughts some thoughts, please, on that. Yes, we are still very much on a plan for doubling this year. If you see the year on year growth, it is still significantly high. Yes, quarter on quarter, there has been moderation.

29:55 But if you look at July numbers, which Rajiv quoted, we are already at 120 crore annual revenue run rate with INR 10 crore closing number for the month of July, which is not only an improvement in the top line, but is also complemented with a significant improvement in return on advertising spend, which is what we were working on in quarter one to solve. So that the next three quarters of growth is at the back of a strong base, both in terms of our CM2s and our ROAS. So Q2 to Q4, we will see a significant improvement in the top line. As now we have already demonstrated that we can efficiently do it by improving the Thank you for the response. That's it from my side. Best of luck.

30:41 Thank you. You. Before we proceed, a reminder to the participants in order to ask a question, We take the next question from the line of Ranu Deep from MAS Capital. Please proceed. Yes. Thank you for the opportunity. My question is around AGV. Now AGV's revenue declined 18% Q o Q after the Q4 peak. Now how much of Q4 was generally seasonal versus demand pull forward through promotions? And what should investors consider the normalized quarterly revenue base going forward? And a connected part to the theme, AGV, is like we've touched nine likes till date, but only 88,000 are repeat customers.

31:36 So how do you distinguish between top line growth purchase through marketing and genuine customer loyalty? And, you know, and the last part of that question is what repeat rate and CAC to LTV ratio would convince you that AGG has become a structurally strong consumer brand? Sure. So I'll let Ishaan answer that. But to your question quarter on quarter, there was a transition that we're doing in Q4 last year, right, which causes aberration. We'll let Ashan explain that. So I think the one has to be cognizant of a couple of things in the business like AGV, which is a products business, is that, one, there will be two impacts that we will see on how this plays through the year. One is that around the festive period, which is depending when it happens September, October, we will see a significant surge, which we saw last year as well. Q3 was a significantly higher number compared to or September, October was the peak. We will see that same peak this year as well.

32:36 And the second seasonality impact that comes which does come for products like knee caps, nebulizers, diapers is during the winter season, where the consumption is higher. So going forward also, I would want to indicate that we will see these it will not be linear. We will have these spurts during periods of either high purchase during the festive time and then in the winter season. What also happens towards the latter half of the year is that we do and because we work with marketplaces, there are some big deals that purchases that they make from us because it's everybody's here and then closing. So that also happens. And hence, you see that kind of an impact.

33:21 Will we see that this year? Yes, we will see that kind of seasonality impact and the severe impact this year as well. Like I also mentioned that July and August, we are already seeing that is going back to INR 120 crores and now INR 140 crores, INR 150 crores ARR as well. So that trajectory is picking up, giving us the confidence that the guidance we have for this year's revenue for AGV should certainly happen. And on the CAC to SGD ratio? We will currently be looking at return on advertising spend. The return on advertising spend is a critical factor because that currently tells us the efficiency that the brand is giving us and how our performance marketing is efficiently moving. We were at if you recall in the last quarters, we were at around one, 1.5 for our B2C, and we were at around 2.5 per market basis, which is now closer to four per marketplaces and 2.5 per D2C.

34:14 Now that efficiency indicates because marketing is the biggest spend in D2C in AGG. So that return on advertising spend is a critical factor. And on your repeat, I want to clarify one thing that our repeats are not 18,000. Our repeats are around 88,000 to 90,000. That's the number. We are at around 10% to 12% repeat rate. One has to also understand the nature of products we sell besides diapers, which is one of our top selling products. The others don't lend themselves to repeat. So somebody who's bought from us one product will at best buy some other product. And chances of buying the same product, like if you bought a BP monitor, you will probably come back and buy a BP monitor from me maybe after a year or two. So same product repeats a letter. The cross sell is where the opportunity is, and that's what now we're building an engine to promote and push. But directionally, if we're able to achieve our 20% repeat rate, we should be in good, good space.

35:13 Sure, sure. Thanks for that clarification. Rajesh, my next question is more of a macro question to you. So Max India's long term thesis appears to be built around India's aging population and the emergence of large silver economy, which you've explained beautifully in the past. But given the significant capital requirement to build communities, care homes and consumer products, what prevents a large hospital chain or a real estate developer or a financial services player from eventually entering senior care and compressing your returns? What is the mode you believe will still exist ten years from now? Yeah. So let's talk about a segment separately. Right? And by the way, please keep in mind that we are saying we are building an integrated care ecosystem. We are focusing on the consumer. It's the same consumer who depending on age, medical condition and circumstances will need either a residence or a rehab or a diaper or a wheelchair. So we've taken a customer view, number one. Number two, if you look at all the three segments, you real estate players have come and replicate the infrastructure, no doubt on that and maybe do a better job. However, the core of that product is services, not infrastructure.

36:24 It is all the IP we have gained over the years in terms of what kind of engagement services, what kind of wellness services to integrate, what kind of mental wellness, emotional, social, etcetera we'll have to offer, all the practices that we have picked up in terms of how to handle muscle loss, fidelity, anxiety, depression. And now our ability to put integrated medicine inside, which is more IP based. It's not just hire a doctor and start doing that, which is going to be a strong differentiator. Most real estate developers if we follow the trend are outsourcing this. Either they are tying up with a nearby nursing home or tying up with a hospital. Right? That's not a sustainable model. You need a doctor to stay on the campus. You need a first responder team for emergencies.

37:11 We need nurses 20 fourseven so on and so forth. So on that our vote is going to be our entire IP around wellness services, right, that we have developed, which we will now keep on strengthening as we go along. That's on that. On the care room side, frankly, there are some hospitals change who are doing geriatric care now wanting to do care rooms. The simple answer I have is, if I was an investor since I come from the healthcare world, I'll prefer to spend INR100 crores on the healthcare business that generates a little bit of 30% plus versus 18% margin. The care homes are more hospitality with some medical care kind of business, while the hospitals are more surgery, diagnostic and pharmacy business. So while they in a summary sense, some year appear similar, the profit signatures and the competencies are very different. So if a hospital decides to come into the care homes, frankly, the investor should ask the question, why the hell are you diluting your margins? Why are spending your time and money, right? Either you say that you are running your hospitals totally full, you can't open more beds and all the flow of what you want to capture, right? If you look at the care at home journey as well, many people are offering at home services, but they're only offering to the captive patients.

38:28 They are not able to market and find profitability. So that's my answer to the second question. On AGC, there are only two modes. This is differentiated innovative products, which are seen as specific and brand. Nothing else is a mode, right? So therefore the patents we are filing, we already have three patents, CBF filed. The more we learn about consumer behavior and the bigger brand we build is what's going to stand us in good stead. The market by the way individually for the process quite large. If you look at the diaper market itself, it's about INR 2,000 crores, 2,500 crores kind of market or INR 5,000 crores only, right? So we are not building a INR thousand crores business in AGZ in the next five years. It's going be INR 5,000 So enough market to be had on that side. That's my answer to the verticals.

39:17 Appreciate the response, sir. On the just from a I think we raised it last time also, think with respect to the announcement about expansion, if we can be a little more aggressive given in the past you've seen couple of cities being on pause or halted. So we eagerly look forward to the announcement and I think you gave a glimpse about the Bangalore opportunity that you spoke, so look forward to that. Yes. Absolutely. I'm quite unfortunate we had to unwind Chandigarh because after operations in Indore, the high clearances were not given to communities on the flight path. And Bangalore, unfortunately, the developer ran into some financial issues, but totally appreciate that comment. Quite focused. And in the next few months, we'll find the announcements coming through. Thank you. Thank you.

40:06 We take the next question from the line of Rajvir Singh from Vivek Investment Managers. Please proceed. Hi. Thanks for the opportunity. My question is that among the residential senior living, care homes, care at home and PAGV, which business do you believe can ultimately generate the highest return on capital? And where do you intend to deploy the majority of the incremental capital? That's my first question. Okay. So by nature, if you look at the way we do our business, serial living model is quite capital light because we don't buy land. We tie up with developer partners who own land and preferably construct. So there we don't require that much of capital per project. It's very small.

40:55 AGZ, we have already done the heavy lifting and the investments. So if you're able to meet our objective of FY twenty twenty seven last quarter being contribution positive and EBITDA positive, that will not require much capital. I think the capital will be required will be care home expansion, where each bed takes about 10 to 12 lakhs per bed, including the ops losses. And therefore, that's going to be a business of scale. That is where most capital will go. So do you think the highest that business is also going to generate the highest return on capital as well? If we had joined so much of capital there instead of the other area? You see, if you look at, you're talking about ROCE, I presume. Yes, ROCE. Right? Correct. There are still, AGG obviously the nature of the business is such as e commerce is not leaner in growth is it jumps in terms of the ARR.

41:53 That is going to be the highest ROCE business followed by Care Homes. The ESS segment is quite IRR based. And there our objective is to be able to build a very healthy annuity income. So if we are able to achieve our target of INR 1,800 crores sale value every year, we are able to see a very healthy annual income in '30 '33. So three businesses operate a little bit differently, but between AGZ and KROM, obviously AGZ will have a much higher ROCE. But even the ROCE in KROM should be 23, 24 plus. Understood. My second question is that despite strong revenue growth, the company is still reporting substantial losses. So can you give us a sense of the expected cash burn over FY 2027 and 2028 before the existing businesses become self sustaining?

42:45 See, can't share projection of '27 and '28 at this point of time. I only shared the past numbers with you. As I said, the EBITDA losses went up from 57 to 139, then we built two fifty beds and we launched the AZ business. But since then the revenues increased and the EBITDA losses have come down from 95% to 63% this year, right, EBITDA loss, significant drop suddenly. And this trajectory will continue in FY 'twenty seven as we report next quarter, I promise you, you will see the reduction in 63 as well. Okay. Thank you so much for answering my questions. Okay. Thank We take the next question from the line of Vikas, an individual investor. Please proceed.

43:45 Hi, sir. Thanks for your time. Just wanted to understand since you're making a decent amount of losses still, and we have reached capital last year. So... And the cash is also limited on the balance sheet. How will you please sustain the business going forward? What kind of capital planning plan we have? So we have... I mean, nothing has changed because from what you said, you know, a year back, two years back in terms of how much capital we need. The first drill was done through two tranches of rights issue and the pref issue. And the balance was supposed to be raised as we went into business. That was supposed to be done June this year, but frankly due to better performance and we're taking some credit lines to manage the working capital, inventory, etcetera. We have been able to push the fund, the second fund raise out, but the number hasn't changed, right. And then INR40 crores we received in July. And we've also received INR40 crores in the second tranche of the pref issue in July.

44:44 What has changed really this caused us to have a push the funding also is that the Moida position opened up and therefore those collections have come in and we're able to utilize that. But the total number of capital required has not changed the last two years. In fact, it's come down a shade from a peak requirement, which we thought was about $25,000,000 has come down to about 20,000,000 or under 20,000,000 now. So let's say for next two years, what is the incremental cash flow required, sir, as per our thought process? The estimate is around 20,000,000. Okay. Thank you. Thank you. We take the next question from the line of Rajvir Singh from Vivek Investment Managers.

45:34 Please proceed. Thanks for the follow-up. My question is regarding BLF announcing its entry into the senior living. So I just wanted to know your thoughts about it. I mean, it's a big competition coming in. Yes, Charlie. It's not only DLF, it's other also marquee investors wanting to look at senior living. DLF, our best understanding though they have delayed launch consistently for last six months now is they have an existing community in Gurgaon where they are putting one or two towers as senior living. It's not something that they are creating new. We're in the existing township is what they want to do. And they're tied up with the most probably Melantha Hospital for doing the healthcare services, how they're attempting it.

46:22 We welcome the move actually because all these people will spend marketing monies and create awareness for the customers. While the announcement made by dealer came six months back, we haven't noticed any impact on our sales velocity of Gurla. It is going as per plan for this year. We are exactly on the plan. But I think we are actually wanting more and more people to step in. A, it increases category awareness. B, it will also push the government to release minimum standards because the more standards that come in, some of us who are specialized in senior living will tend to benefit. So actually, are quite welcoming the move. Yeah. I think as far as it should give us the first mover advantage as well. It's already we haven't stopped our sales in 361.

47:12 And as I said, the launch has been delayed twice now. So let's see when they launch. All right. Sounds good. Thank you so much. Thank you. As there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments. So thank you very much once again for joining again. Deeply, deeply appreciate the questions. I think you're absolutely on the ball. These are questions you should be asking us on the path to profitability, on growth and making appropriate announcements. We absolutely welcome these. I'd like to assure you that whatever plan we had for this year, we're currently on plan as some minor aberrations because of external factors will keep on happening. For example, the labor force pushed up the manpower cost for the quarter. Now we'll have to find ways and means of mitigating that. The geopolitical issue caused the logistics cost and delivery from China impacted.

48:13 And we had to airlift some products which caused a margin depression. But all these in current world are things I think any business should just embrace and keep moving on. And that's what we're doing. We're just focused on execution. There is no new strategy we have to think through. We're very clear what we are doing and what we want to do. Hopefully in the next two quarters you will find more and more evidence from us on our commitment to pass to profitability in all the businesses. There are different points of time, but at least the moment you should be able to see. That's our promise to all of you. So thank you once again and wish you a very, very happy eight year Independence Day as well. Thank you. On behalf of Max India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.