MedPlus Health Services (NSE:MEDPLUS) Q2 2026 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Medplus Health Services Limited earnings conference call. 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 mister Srinivas from MEDPLUS Health Services. Thank you, and over to you, sir. Thank you. Good evening, everyone. On behalf of MEDPLUS, it's my utmost pleasure to welcome you all to the Medplus Q2 FY 'twenty seven Earnings Conference Call to discuss the financial results of Medplus for the second quarter of FY 'twenty seven, which were announced earlier.

0:55 We have with us today the senior management represented by Mr. Madhukar Reddy Gangadi, CEO and MD and Mr. Sujit Mehta, CFO. Before we begin, I would like to mention that some of the statements made in today's discussion may be forward looking in nature and may involve risks and uncertainties. Please note the disclaimer mentioning these risks and uncertainties on Slide one of the investor presentation shared with all of you earlier. Documents relating to our financial performance was circulated earlier, and these have also been posted on our corporate website. I would now hand over the call to Sujit. Thank you, and over to you, Sujit. Thank you, Srinivas, and good evening, everyone, on this call.

1:45 An update on our network in terms of openings and closures. We have opened two nineteen stores, and there were 53 store closures, including 14 relocation cases and 23 franchisee outlet closures. We achieved a net addition of 166 stores, including net addition of 82 franchisee outlets during the quarter compared to the 146 stores added during the last quarter. We continue with the outlook for adding 800 net new stores, including the franchisee outlets in FY twenty twenty seven. An update on the store network. In terms of our store network's age, around 29% of our stores have been operational for less than two years, and the remaining 71% of our stores have been operational for two years or more.

2:37 In terms of the store size, at quarter end, our network consists of 5,642 stores, including 849 franchisee outlet spanning over 3,000,000 square feet. This compares with 5,476 stores, including 664 franchisee outlets as of June 2026. The average store size stood at 539 square feet. During the quarter, we added 82 franchisee stores and converted 103 Cocoa stores to franchisee money. An update on the revenue mix. Presently, MEDPLUS offers a large range of SKUs spanning across pharma and non pharmaceutical category.

3:24 Private label sales for quarter two FY twenty seven constitute 21.4, pharma being 10.7% and non pharma 10.7% of our total revenues. Private label non pharma sales grew by 18% quarter on quarter with the sales mix improving from 9.8% to 10.7%, primarily due to improvement in supplies post quarter four FY 'twenty six. We plan to further expand the product range to drive growth and increase the private label non pharma sales mix. Private label pharma sales grew by 5.9% quarter on quarter, while the sales mix declined marginally from 11% to 10.7%.

4:13 Gross margins increased from 24.5% in quarter one FY 'twenty seven to 25.1% in quarter two FY 'twenty seven, driven by a higher private label sales mix and lower discounts. During the quarter, we updated the presentation of revenue mix by product category on Slide 13 of the investor presentation by reclassifying revenues from franchisees previously included under others into the respective product category. To ensure comparability and consistency, the same reclassification has been applied retrospectively to the preceding quarters covering all the periods presented. Our consolidated revenue for the quarter stood at 20,371 million dollars Our consolidated operating EBITDA for the quarter stood at $981,000,000 representing 4.8%.

5:14 This quarter included a onetime benefit of INR 79,600,000. This relates to the reversal of retention bonus provision for store employee. Excluding this reversal, consolidated operating EBITDA for the quarter would have been 901,000,000, representing 4.4%. Revenue from pharmacy operations grew by 21.3% on a year on year reported basis. The pharmacy operating EBITDA stood at 885,000,000 rupees, representing 4.4%. An update on our store performance. Stores older than twelve months. Revenue from these stores in quarter two was 17,325 million, representing 93% of pharmacy revenue.

6:04 These stores had a store level EBITDA margin of 11.7%. A word here on the store level EBITDA margin by age, while stores greater than twelve months had a margin of 11.7%. This was 11.9% for stores greater than 24 and 8.4% for stores in the thirteen months to twenty four months age bracket. On allocating all nonstore related costs, the operating EBITDA of stores greater than twelve months would be 945,000,000 rupees, which translates to a margin of 5.4. An update on our working capital. Our net working capital for q two was fifty four days. The inventory in our warehouse was thirty four days. In quarter two, the inventory level of our first year stores was eighty six days.

6:56 In comparison, for our stores older than twelve months, the inventory was thirty four days. An update on our diagnostic numbers. Diagnostics revenue for the current quarter grew to INR 410,500,000 compared to INR 332,500,000 in quarter two FY 'twenty six. Diagnostics segment recorded an operating EBITDA of rupees 97,900,000, representing 23.8% compared to rupees 50,900,000 in quarter two FY twenty six. In July, we sold 648 plants per day. In August and September, this was six hundred and forty and six hundred and fifty seven, respectively. As on September 30, we had around 2.16 lakh active plan.

7:45 That concludes our update for the quarter. I request the host to open the line for questions. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. The first question comes from the line of Paresh Chaudhry with Latent Advisors PMS. Please go ahead. Hi, can you hear me?

8:33 Yes, Paresh, please go ahead. Yes. So in the previous calls, we had given a commentary expected the franchises to have a higher sale, a higher share of private label products as compared to the cocoa. So how has it played out on ground? If you could do some like to like comparison of, let us say, some geography. So we'd like to come back to you with details on that. Maybe starting next quarter, we'll actually start splitting out the franchisee numbers for all of you. But for now, I think it is more or less in line with what the company has. The private label sales are a function of two things. Typically, the region in which the store is and the vintage of the store. So for a rural franchisee, the private label is bound to be higher versus a city store.

9:28 And, obviously, the... While we expect that the franchisee will do more private label as we move forward, initially, it is still going to be less. So given that most of our guys are still new, it may still not be at the same level as the overall company. Got it. That is from my side. The next question comes from the line of Sudarshan Agarwal with Axis Capital. Please go ahead. Hey. Hi. Just checking on the private label mix. So this quarter, we have seen steadying on the private label pharma side, I guess.

10:16 So where do you see this going ahead in quarters ahead on the private label pharma? And secondly, on non pharma also, we are seeing consistent growth, right, on a Y on Y basis as well. So where do you see this kind of moving in the next, let's say, three to four quarters? Sure. So on the pharma side, as we mentioned in the past, the sale growth got muted. In fact, it actually went down a little bit in absolute... In percentage terms because we wanted to make sure that our that our employees are not miss selling or not miss selling. I would say that they're not being too aggressive in pushing the fancy... In pushing the private label.

11:05 That was causing a little bit of a problem with our regular customers since we got it muted down. Hence, over the last three or four quarters, you would have seen that we had gone down by around point five or point six quarter on quarter. This quarter, though, I think that largely got arrested, that the growth was much smaller. And in absolute terms, the number was actually higher than what we had sold in q two. The big difference was... Yeah. The the the big difference was... Though, was that the brand sale went up. So while even the private label sale went down slightly in the pharma side, overall, it actually grew in absolute terms. That's one. On the non pharma side, that was a problem more of supply chain and the pricing being not quite right and all that.

11:59 So both of those have been corrected now. I think it went up from 9.8% to 10.7 quarter on quarter. This is now going to be just a function of us adding as many new categories as possible. Obviously, we cannot... We have to do only the adjacent categories. You can't just do... Sell anything out there. It is also gonna be a function of how many stores come up in a newer format, which has got a self-service kind of thing, which is slightly more amenable to the private label non pharma kind of sales. But I don't see any gap on that. I don't see any reason why it should not continue to grow. Yeah. But I think a few quarters back, you used to kind of allude to the fact that, you know, maybe we can increase the private label mix by 50 to a 100 basis points on either net or, you know, the other basis on a quarter on quarter basis.

12:52 So does that trajectory now start back given that... Yeah. If you take both the components of private label, which is pharma and non pharma, I don't see any reason why we should not grow in the range of around point 5% every quarter. Maybe slightly less, but, yeah, on the whole, I think that's the number we'll be at if you combine both. The pharma side may actually grow slightly lesser, maybe at point two, point three, but the other one, maybe point one or point two or something like that. The balance will be made up by the non pharma side. Where it is not a question of substitution, it is just a question of adding new products and taking the largest share of the wallet. Got it. And lastly, I think I saw that your discounting has come down a bit, one odd percent on, you know, broadly, membership or otherwise.

13:46 This is in relation to the wage hike kind of offset the wage hike, etcetera, that has happened. And, I mean, will this kind of remain at these levels, the discounting? And is there a similar trend being observed in the industry as a whole that discount rates are coming off a little bit? No. Not really. So we we kind of had this in our thing even earlier. Unfortunately, the increased wage hike did not let us get the full benefit of this. Otherwise, we should have had a slightly higher EBITDA, obviously. But, no, given that we are the biggest discounters out there, I don't think anyone else is really following us out there. I don't think there's anything.

14:31 It's not a general trend in the industry. Let me put it that way. This is part of a plan for us to decrease the discounts over a period of time. Got it. Got it. Yeah. That's it from my side. Thank you. Thank you. The next question comes from the line of Rikan Singh, an individual investor. Please go ahead. Hello, sir. Yeah. Hello. Sir, your profitable margin, that is $22,000 and near about 2,000 crore or net profit 56 crore. Or improve...

15:18 Improve... Last quarter supply chain to net profit margin. At least you should be near about 10% as a investor management Yeah. Think thank you for your question,.

16:05 It's a it's a journey. If you look at the retail business, I think what you alluded is 10% back. That's a wishful thinking. But, yeah, the process to it is between what we have been there for last two years, you would see a continuous steady improvement on the back levels, and that journey will continue as MEDPLUS explained as in how we expand the EBITDA margin that flows down to the pack, and that continues to increase. But definitely, we will not allude anywhere between 10% of pack. Currently, we are at two point five and three, three and a half percent, and that's the trajectory we will take and slowly increase. Okay, sir. Okay. Thank you, sir. The next question comes from the line of Akhil Parekh with three sixty one Capital.

17:11 Please go ahead. Yes. Thanks for the opportunity. My first question is on the margins. Last quarter, you had said you will be in better position to guide how the EBITDA margins will look like for the remainder of the year. And going forward in FY 2020, if you would like to guide on the EBITDA margin spend, that would be helpful. So I think this quarter, we are at around 4.8% EBITDA. I expect that we'll only get better in the next coming quarters. I cannot tell you exactly how much, but it'll definitely improve as we do two things. One, streamline the cost, and more importantly, actually improve the product mix. So both of those are happening. I expect it'll increase.

18:02 I think for the year, though, the overall EBITDA may be in the range of, you know, I would say, conservatively around 380 to 400 crores is what I think the number will be depending on how the next two quarters are. But, yeah, you know, that is something which we can easily commit to. Don't think that's a challenge. The AOP, though, I think which got, you know, by mistake, circulated out there, had a slightly higher number. And, unfortunately, after the day of PV saw a huge increase in the salaries across Karnataka and Telangana and all, and that has actually been a pretty big impact, I would say. If it were not for that, we should definitely be in a much higher number. But...

18:48 Yeah. As a percentage basis, though, the EBITDA will continue to grow. I would say that the last quarter was an aberration. This quarter, we'll probably be back in the 4.8, four point, you know, five kind of thing as we move forward. Yeah. So three eighty to 400 was the annual pre invest advertise work roughly we can make it basic. Yes. Got it. Second on the cash flow. Right? For first half, they are softer as compared to last year because of the increasing working capital needs. While if I look at last couple of years, our cash flows have been very strong, like FY 'twenty five, 'twenty six, they have been roughly in between INR500 crores to INR500 crores. Is it fair to assume our cash flow generation for full year '27 and '28 will get back to what we have delivered in terms of, say, EBITDA to OCF conversion will be similar to what we did in '25 and '26?

19:45 So a fair portion, yes. Because if you also look at it, it's a function of the number of new stores what we are adding. Because as in when we add new stores, there is a gestation period of when the store starts, you know, delivering positive cash. So to that extent, subject to that, absolutely, we'll be back on track. Great. That's very good to hear. Last two questions from my side. One is on the aging structure, right, of our store that has kind of deteriorated from 79% to 71%, if I look at it for last 0.5, obviously, because we're adding stores at an aggressive pace. Do you think the streamlining of cost and private label going up, that can get offset because of the inferior aging structure of our stores going forward? So will that clear a role on the margins?

20:41 So I think for a growing company like us, that trade off will always be there. That's historically... That's the only reason we explained the details about the network age because as you rightly pointed out, there will be a play between the mature stores versus the stores which we believe are still in the nascent stage. And to that extent, that drag as the network size increases versus our growth, for sure, will offset and still be... Should be able to deliver a positive growth net. Okay. Sure. That's helpful. Last is a promoting pledging of the shares. Given that our business fundamentals are so strong, as an analyst, I feel we are not getting the right multiple and probably the share pledges, one of the overhang. Any thoughts on that, that would be helpful and if any corrective measures will be taken by the promoters, but I think that that can lift up the price pressure of the stock.

21:45 So the pledging is only a function of the pricing of the stock, unfortunately. We're not really selling or taking any cash or doing any extra loans or whatever stuff. I believe it is the wrong time for me to, you know, sell any stock and get the debt down. Although that is in... On the cards, but it is not going to be immediate or it's not going to be in the next quarter or so. We'll probably do other things to make sure that the price goes up, but, you know, eventually, it is the overall, I would say, performance of the company, which will take the share price up is my belief. One of the things which we think is that, you know, the the whole thing around the private label and our ability to sell a high value product like the medicine and make it in our own brand and be able to sell is not getting communicated properly, I guess. I'm sure eventually the message will go.

22:44 Just look at the fact that today, out of the six hundred and fifty to six seventy crores which you sell every month, 21% comes from private label, and 70 crores is general goods. So if you take it, that's almost 800 crores of, you know, our own brand selling out there in general goods and a equal amount selling in the medicine side, which is, again, a pretty substantial amount. We're seeing a small but steady growth in both these things. I think this is what will, you know, help us get the EBITDA up, get the overall percentage up and get the share price up. Appreciate your detailed answer, sir. Thanks a lot, and wish best luck for the coming quarters.

23:30 Thank you. The next question comes from the line of Akash Shah with Investec Capital Services. Please go ahead. Sir Akash, this is... Now you are. Yeah. Yeah. Sir, in first quarter, you had guided for same stores growth to remain at nine to 10% for FY twenty seven. You maintain that? And second is you had high... Alluded to quarter on quarter improvement of 30 to 50 bps in the share of overall private label going ahead. So just wanted your confirmation on these two things. Thank you. Yeah. So private label pharma, non pharma combined, I think that should be pretty easy to get.

24:23 We have already seen that in this quarter. Private label pharma, which had actually dipped for a while, has now basically started to plateau out and... Although it is growing in terms of absolute numbers, as a percentage, it's actually dipped a little bit. But I think this will be the end. We'll probably start seeing a growth out there in that also as a percentage. Alright. So point five percentage points improvement every quarter should be achievable in your opinion. Yes. That that ballpark number should be achievable. Alright. And is this... On on SSSG growth, sir? So on the matured stores, we continue to believe it will be between nine and ten, 10 and a half percent. Alright, sir. And, sir, last question.

25:11 Any thoughts on the CapEx plans that we had withheld? No. I I don't think we are going to be visiting that anytime soon. CapEx now is out of the question. Focus will be only on opening new stores and doing that privately. Alright, sir. And, sir, just lastly, in fourth quarter, you had mentioned... In fourth quarter of FY '26, you had mentioned that you would be maintaining the gross and EBITDA margins, which was back then. So should we assume that the percentages that were reported in fourth quarter could be normalized from FY 'twenty eight and onwards? Should be. I mean, this year also, we would have been able to do it fairly easily, if not for the two events which happened. One, of course, was the huge increase in salaries across couple of states.

26:06 And in fact, you know, across the board also, we had seen several different revisions to all sorts of things on the wage bill. So if not for that, we should have been able to do it easily. But, yeah, going forward I'm sorry. See. I think for FY '27, it it is impacting because... It it is impacted because of that private label issue and the salaries. That's what you wanted to allude. Right? That's right. Alright. Thank you, sir. Thank you. That's it. The next question comes from the line of with MIT. Please go ahead. Please unmute your line in case if you're on mute.

27:01 Hello. Yes, Ashutosh, please go ahead with your question. Yes. Question from the gross margin front, given that the mix improvement on the private label side will largely come from non pharma versus pharma. So how should we expect that to play out in the gross margin front? Firstly on that? And on the EBITDA margin front, given that we have a huge headwind of very, very high. So apart from the discounting that we have reduced, what else are we doing? And I have a couple more questions that I'll ask in the phone. Sure. So the impact of the general side is not going to be very high, I must say.

27:47 It'll just help us grow the sales because that'll be a larger share of the wallet, private label general goods, because the margin is roughly in the range of what we actually get normally. But that doesn't mean that we are not going to grow the private label pharma side. The overall growth will be around point five, but we expect that the private label non pharma will also... Pharma will also end up growing. And there, the impact is going to be much better for us. So that's one. On the... I I think you had one more question. Yeah. Just on the... Apart from discounting, what else are we trying to speak? I don't So that kind of I I don't think there's going to be any more shocks on the rate side. I don't think we really want to do anything more out there. I think now it's just going to be improvement in the same store sales growth, adding new stores and product mix, and streamlining our cost to the back end. These are going to basically do it. I don't think we're going to do anything on the discounting side as of now.

28:50 Okay. On the store, didn't say given that we are close to around 300 feet in in the first half. So are we on track towards that 800 store addition this year and next year also probably? And in terms of the size of store, are we doing something different there in terms of new store reopening, let's say, bigger size stores in order to accumulate more of the non pharma private label stuff, etcetera. So any tweaks are we doing there? And then lastly, on the diagnostic front, we have seen very good margin pickup over the last two quarters. So what are the plans there? That would be it. Yeah. For us, I I think we have a net addition of 340 stores, I think, overall. So that makes it around 458. We are... We will easily get the number of 800 for this year.

29:40 Next year, we will guide you maybe next quarter or so. I think the number is going to be higher next year. It's not... 800, but I would I would I would think much higher than that. On the size of the store, we have around a 100, a 150 large format stores now. And... But what has happened is, over a period of time, our size of store has actually grown significantly. So every store which we add right now has a space for us to display our private label non pharma products outside the counter, and so that is anyhow happening. So irrespective of what size, how many large format stores we have, the non Hover size is still gonna grow. That's our issue.

30:27 Got it. Just last follow-up if I may. What would be the minimum kind of strategy that actually would need in order to keep that Sorry to interrupt,. You're not audible. Could you please use your phone on the handset mode in case if you are using a hands free device? Hello. Is this right now? Yes. Yes. Just last question on the SSD front. So just wanted to understand what would be the minimum kind of SSD that we need in order to continue that operational EBITDA margin expansion. So we are currently at double digit, but that base will also get a bit stiffer in the second half. So what kind of SSD do we expect? And what would be the minimum threshold that will allow us to kind of continue getting that margin expansion?

31:20 So for us, given our gross margins and everything else, and given that the given that the rents increased by roughly around 5% every year, and salaries increased by roughly around six to 7% at the store level, Overall growth of around 4% with enough to actually keep us in the... Keep us steady at the same EBITDA level for a steady store. Does that answer your question, Ashutosh? Yes. The next question comes from the line of Paresh Chaudhry with Latent Advisors PMS. Please go ahead. Yes. Thanks for the follow-up. I just wanted the current quarter's number, if you could give the EBITDA margin breakup across categories across standard pharma, private label and both for private label pharma and standard pharma.

32:19 That's a little difficult to give right now that I have said. We can... Maybe you can reach out to us later and then we'll come back to you. Okay. For that, I'll connect offline. And other question was regarding the quantum of the one time benefit which we got. What was it for exactly? And the amount was 8 crores. Right? Yeah. Yeah. The amount is right. It was related to the store level retention plan, employee retention plan, post the increase in the minimum wages and the other factors the company evaluated. The first change was effective first of March where new enrollments had stopped. This quarter, there was a modification to the existing plan. For all the existing employees, the company gave an option of encashing the accrued benefit to the employee, which most of the employees exercise.

33:08 And due to that, future cost related to this plan was reversed in the current quarter. Okay. Got it. Thank you. The next question comes from the line of, an individual investor. Please go ahead. Oh, hi. I'm I'm a bit new to the company. Just wanted to know on on the franchisee model. If I'm not wrong, like, I I heard you stating, like, once we refine this model, we we can grow it as a base of approximately 3,000 franchisees a year.

34:00 So just wanted to know, like, where are we at that refining, and what is stopping us to just that later on that? So we'll probably... So as we said earlier, we'll come out of the numbers maybe starting next quarter or so. But the model itself is more or less done. It'll take us maybe, you know, when we guide you for the next year, we'll let you know how many more franchises we can put and how fast we can actually start accelerating. Okay. Okay. And on on the diagnostic business, like, I've been hearing, like, we have just given planning stage, but you want to share any any developments on that? Like...

34:49 Or or for how long will we stay in that planning on watch mode? The diagnostic, I think, see, we had actually started this on a subscription model basis. For it to really work effectively and to get the level of returns which we want, we would have needed at least 300,000 to 400,000 subscriptions on an annual basis. So by now, we should have had that. Given the fact that we are at still 216,000, we're still waiting. So the day we hit that at least, you know, 300,000 number, then we'll be ready to take a call on any further investments with that. Otherwise, it is a profitable business. It is growing, and we... But we're still, you know, figuring out what are the best way for us to go forward on that is.

35:44 Mhmm. Okay. And and do we have any large format stores? Is it like... And it's like... I've seen... I'm I'm based in Australia, actually. And the good... The big players here, they they open large format stores, which help in building the brand and the premiumness of the brand. So do we have such things or plan such in at least good catchment area on where our sales are good? Yeah. Actually, we do. Our large format stores are roughly around 200, 2,500 square foot. Some of them are as large as 2,000 square foot too. I think we have around 80 of these stores now functional.

36:32 The plan is to basically open maybe another 70, 80 this year. We will see how it is working for us. And then... But largely, they they have been quite effective both as, you know, being profitable ventures and also for building the brand. So we will most likely continue this format as we go forward. Okay. And lastly, if I may, any revival of the plans for CapEx, like, which you highlighted last quarter, something like concierge or wellness No. So we have withdrawn the plan. I don't think we're going to be doing that. Okay. Yeah. Thanks. Thanks for your help. Thank you, Pankaj. The next question comes from the line of Harit Ahmed with Aventis Park.

37:24 Please go ahead. Hi. Good evening. Thanks for the opportunity. So under the franchisee model, this quarter, the net store addition I see is around 80. It's a bit lower than what we had done in previous quarters. So, what is the outlook here? And Sujit, if you could share the revenue from franchisee stores, which you had shared for the last quarter. So what would that number be for this quarter? And then related question, also if you could provide some color on the economics under the franchisee model, what would be the revenue per store compared to our own stores and the gross margin as well as well, the EBITDA margin profile from franchisee stores, whether it's currently dilutive to the overall margins?

38:20 Sure. Sure, Hari. Thank you for the question. So in terms of the revenue from the last quarter, it was 83 crores or $830,000,000, and current quarter is 116 crores. This is the net revenue from the franchisee business. And the other details that you mentioned, we also plan to, you know, bring out these details on a regular basis from maybe next quarter. But at this very high level, as we had explained the model, the same 100 rupees MRP when we sell to the franchisee, the gross margin, there's a split. If the gross margin of pharmacy business, let's say, is 24%, we retain around 13 to 14%, and we pass on 10 to 11% to the franchisee... Oh, I'm sorry. We retain around 10 to 11%, and we pass on around 14 to 15% to the franchisee, which means we recognize revenue of 85, and we have a margin of absolute 10 or 11, which translates to more or less the similar store level margin when compared to the Coco store.

39:23 But more details in terms of what you also asked, I've made a note of it. Going forward, we would maybe provide that on a quarter on quarter basis. And and just to confirm, Sujit, majority of these franchisee stores will be in the less than twelve months cohort as of today. Right? Yes. So their revenue profile will be a bit lower on a per store basis. Okay. And then the second one is on the operating EBITDA margin. Good to see the sharp improvement on a quarter on quarter basis. Given that we've seen the private label pharma private label share stabilizing now going forward, and also some of the cost impacts in terms of wages, etcetera, is already in the second quarter and the first half numbers.

40:08 How should we think about the margin profile, the operating EBITDA margin profile in the second half and for FY 'twenty eight? So, Harith, whatever, you know, this thing... We have taken the hit as you said already. So it is going to impact the overall EBITDA for the year, unfortunately. What had... What we had actually planned for around 04/24 40 and all is now going to be around three eighty to 400 is what I think it will be. The... Obviously, the the percentage is going to be in a similar line, 4.8. Will probably go up to 5% max. But the goal, though, is for us to, you know, keep going from here both by streamlining our cost at the back end and also by increasing the private label overall in the front end. While it has stabilized, it does not mean that it is going to be there in that number. It is definitely going to start growing right now. We are feeling very confident that we can grow the private label both on the pharma and non pharma side. Pharma, a little, I would say, it is slightly smaller increment every quarter, but different growth.

41:22 Okay. Thanks,. Last one. Not sure if you've explained this previously, but the increase in inventory that I'm seeing in the first half, you know, what what exactly explains that? Yeah. I think on a full year basis, I think this should be taken care of it. What happened is previous quarter, at the end of the quarter, we had certain purchases for which there was also payables outstanding at the June 30. And therefore, from a cash flow perspective, it shows an adverse number. And this quarter, those payables as well as the normal payables got paid off, and there's an increase in inventory. So you're seeing the net working capital increase. So what I've looked into that and discussed internally also, I think going forward by the year end, we should be, again, coming back to the normal level.

42:15 Got it. Thanks for taking my questions. Participants, please press star and one to ask a question. The next question comes from the line of Jatin Chawla with RTL Investments. Please go ahead. Yes. Hi. Good evening, and thanks for the opportunity. My first question is on the franchisee side. When I look at your store closures, I see that franchisee withdrawn, that's a very large share on the store closures. Franchisee as a percentage of the total stores will be much smaller number than that. So is this a recurring feature? Is this something that we should expect going forward as well?

43:00 Or are these kind of initial teething troubles as you are kind of, you know, getting the model, franchisee model right? I think your observation is right. This is part of the initial, you know, setup, I would say, or readjustment. So this is an initial teething issue, which we believe going forward, it should stabilize this... The number of store closures on the franchisee part. Yeah. Got it. So this 116 crore revenue from franchisees that you said, how many total franchisees stores did you have at the end of the quarter? It's around eight forty nine active ones. Okay. Second question, on the hit to from the two states where there was a big increase in wage cost, what is the absolute amount here that you have seen for the full year on account of that?

43:54 I think it's roughly around 7 crores a month. 7 crores a month. Okay. So roughly around $80.85 crores for the year. You said in terms of, you know, trying to improve your EBITDA margins, two things. One is, you know, increasing the private label share, and second, streamlining costs. On the cost side, what are the areas where you are looking for, you know, cost reduction and over what period we should be start, you know, seeing some of those benefits? See, over a period of four quarters is what I'm thinking. Two things. One, we are using AI, and we will basically... We are using it to do a lot of stuff on the back end to automate a lot of our work. And this will basically... This, we're already seeing the benefits of that.

44:49 Two, for a period of time, we have also grown a little haphazardly as far as our... We know those are concerned. You know, every time we added... We needed to add 20, 30,000 square foot, we kept on adding it. And the result is that in most of the cities in which we started early, we have several warehouses. And that is actually a lot of extra cost both in terms of transportation, manpower costs, and everything else. We are now looking to basically consolidate all of them into one place each in each of these places. We expect a lot of benefit to come from that. So both on the warehousing as well as on the overall operational costs, we expect that we'll be able to use technology better and get to a slightly more rationalized cost on the... On on this side.

45:41 Got it. Got it. And one of four point of... Peter, any kind of rough ballpark number in terms of what kind of cost reduction we could see? So on the entire thing, I see no reason to believe that we should not get at least a point five to point 75% reduction in cost. Got it. Got it. Thanks a lot. That was very useful. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing remarks. I thank all participants on this call for your interest in the MEDPLUS journey. Our investor relations team can be contacted at ir@medplusIndia.com.

46:29 Thank you. Thank you, sir. Ladies and gentlemen, on behalf of MEDPLUS Health Services Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.