Ladies and gentlemen, good day and welcome to MedPlus Health Services Limited Q1 FY2023 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. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Gangadi Madhukar Reddy from MedPlus Health Services. Thank you and over to you, sir. Thank you. Good afternoon. On behalf of MedPlus Health Services Limited, I extend a very warm welcome to everyone who has joined us on our call today. I'm Madhukar and I'm the CEO of MedPlus. I now request the staff to make the necessary disclosure statements. Thank you, sir. Please note that anything which we say that refers to our outlook for the future is a forward-looking statement which must be read in conjunction with the risk that the company faces. A complete statement is included in our investor presentation dated August 10th, 2022. Thank you, boss. At MedPlus today, we are over 18,800 colleagues and as of 30th June, we cater to the healthcare and household needs of neighborhoods in 374 cities across seven states through our 2,980 pharmacy stores. I'd like to thank my team spread across these these cities and cities and towns. Their hard work and persistence goes into providing a very vital service to our customers. Now, on our last year's performance, last quarter's performance, our revenue was INR 9,937 million and we had a gross margin of INR 2,103 million and an EBITDA of INR 220 million. Over 99% of our revenue comes from our pharmacy operations. The pharmacy EBITDA was INR 292 million and at the pharmacy segment level, the EBITDA was 3%. While comparing our performance with Q1 of last financial year, please keep in mind that Q1 FY2022 performance was in the back of the second wave of COVID-19. Also while comparing our performance with the previous quarter, Q4 of FY2022, please keep in mind that Q1 is a seasonally weak quarter because of lower incidence of typical ailments like cough and cold during the peak summer months of April and May. Q1 of sorry, Q4 of FY2022 had also the advantage of a month of Omicron in the month of January and that also led to a slight extra sales in that month. With that, I now continue with the update for Q1. I'll first cover the update on our network. We're continuing with our store expansion program. We have opened 815 stores in the last 12 months and out of which 288 stores got opened in Q4, the largest quarterly store openings in our history. In Q1, we continued with that and we opened 252 stores. The highest additions came in Karnataka and Tamil Nadu with 51 and 49 stores respectively. MedPlus will continue to push ahead on store openings while sticking to our cluster-based growth strategy. In Q1, 50% of our store openings have been in Tier 2 and beyond. We have 1,189 stores across 2,980 stores in Tier 2 and beyond. Business-wise, these are good markets from a store economics standpoint. MedPlus can expand in these markets because of the maturity of our operations and supply chain capabilities. There are also 20 store closures in Q1 versus 17 stores in Q4. Overall, that makes it 232 store additions in Q1 versus 217 in Q4. For the last 12 months, though, the net additions have been 815. The overall age of our network today, 30% of all stores which we have in our network are less than a year old. 15% are between one and two years and 55% of them are more than two years old. To give you a sense of the impact of our rapid store expansion, on the age of our network, we ended Q1 with 46% of our stores in the less than two years bracket. Given that our stores typically need two years to mature and start delivering on their full potential, you can clearly see that the best is still to come or we are at least investing in the future right now. 45% of the network is still to realize its potential. While in the sub-two-year age bracket, our stores are still in the rental phase, from a financial standpoint, they are a drag on the EBITDA within that. However, as we mature, as I said earlier, we expect these stores to contribute their profits in that plan. We closely track the time to breakeven our new stores and I'm happy to tell you that while our store expansion has been at a breakneck speed, it has not been at the expense of finding the right stores. Even today, 75% of the stores achieved break-even within six months of operations. We closed Q1 with 2,980 stores with 1.73 million sq ft and last year Q1, this was 2,165 stores and 1.3 million sq ft. The average size in Q1 was 581 and to give you a sense of its present store sizes, we have 1,977 stores. 1,976 stores less than 600 sq ft and 1,004 that are greater than 600. Same store metrics. Now, on our same store performance, we measure this as stores that have been in operation for 12 months or more and as in the last day of the reporting quarter. Revenue from these stores in Q1 was INR 8,479 million or 86% of pharmacy revenue. These stores had a store-level EBITDA in the range of 9.5%. The store-level operating ROCE of these stores was 56%. A word here on the store-level EBITDA margin by age. Stores under 12 months had a margin sorry, stores greater than 12 months had a margin of 9.5%-10% while this goes up to 10% and more for stores which are greater than 24 months. The stores between 12 months to 24 months had an EBITDA of 6.5%. Revenue lift. Scale, of course, has benefits. With scale, we're better poised to increase share of revenue from private label. This is not only in terms of us being able to give a wider range of products after meeting the minimum order quantities for most manufacturing companies but also because the size also allows for better acceptance of our brand in the customer's mind and that helps us actually sell more private label. Our private label is intended to provide quality products at affordable prices. MedPlus has over 880 curated SKUs across pharma and non-pharma. In Q1, 12.7% of our revenue came from our private label. This compares with 13% in Q4 FY2022, 11.9% in Q3 FY2022, and 11.1% in Q2 FY2022. I can point out that Q4 also had the impact from Omicron but overall, the trajectory of increasing share of our private labels in our customer basket continues. Within private label, our pharma range has also been gaining share. In Q1, 8.1% of pharmacy sales was from private label pharma. This compares with the 8.1% in Q4 FY2022, 7.3% in Q3 FY2022, and 6.2% in Q2 FY2022. Given that private label pharma is much more profitable, this obviously is very important to us and we continue to focus on increasing the share of this particular segment. Our increasing presence in Tier 2 and beyond is reflected in our revenue mix. This quarter, 31% of our pharmacy revenues came from stores in these tiers. This is up from 28% in Q1 last year. On the omnichannel side, we continue to extend our coverage of PIN codes from where we take orders online. This complements well with our stores. MedPlus will focus on increasing the coverage of our two-hour delivery offering. Store pickups and the share of online orders continues to maintain a higher share than home delivery reflective of the convenience and accessibility of our store network. In fact, we find greater stickiness in those customers who interact with us omnichannel than those that interact with us purely via the online route. We have not spent heavily to acquire customers online and we will continue to work to maintain our omnichannel as a profitable channel. A short update on the diagnostics operation. In March, we launched our first full-service diagnostic center in Hyderabad. In May, we launched our second center and as of today, in the subscription model which we actually follow, we have sold 30,500 plans with over 53,300 underlying lines. I can confidently share that we have received strong adoption from our existing and new customers. Our unique annual plan model provides an exhaustive range of radiology and pathology services to our customers for a full year at very affordable prices. As we proceed, our aim will be to leverage our pharmacy network and our existing customer base to acquire customers. At this stage, we're still in pilot mode in Hyderabad. We will provide a detailed update on the pilot post our Q2 FY2023 results. Moving on to the capital efficiency metrics. Our net working capital for Q1 was 66 days. In Q1, the inventory in our warehouse was 39 days. Because of the same strategy of new stores, their inventory turnover is lower in the first year and hence in Q1, the inventory level of first-year stores was 115 days. In comparison, for our stores that are older than 12 months, where the inventory was only 39 days, this continues to be maintained at that level at the previous levels. The store-level operating ROC trend for our stores greater than 12 months was 56%. While this is a drop from our typical 60% level, we expect to move back towards those levels as more stores approach the full two-year maturity. Our operating cash flow for Q1 was INR 202 million. On our segmental data, I would like to add an important note. On page 17 of our earnings update, we have presented the business segments which are different from the regulatory filings. For example, Opticals have been grouped under Others in the presentation, whereas in the regulatory filings, Opticals is grouped under Retail. We hope this will be useful to you. Going forward, what can you expect from MedPlus going forward? As we all know and as I've been saying, we operate in an extremely attractive pharmacy space and we operate in a market which is extremely fragmented. Even with the entry of several new players, the overall organized retail rate still continues to be in the 10%-12% kind of penetration. We find this a great opportunity for us to actually grow and expand. As the second-largest pharma retail company out there in the country and with the ability to really grow rapidly, we feel that the large network presence in the seven states in which we are there will allow us to get special benefits as we go forward from the industry. It will allow us to actually increase our margins as we go forward both on the backs of operating efficiencies and all and also in better buying capabilities and all. Our cluster-based network also enables profitable omnichannel service. Today, 95% of all the deliveries which are made in the five cities in which we operate and the six cities in which we operate in the online service are delivered under two hours. In this, we actually deliver everything profitably. So scale will also allow us to actually get a larger share in the private label market. This is something which we are hoping to integrate over the last several quarters. This is the end of my update. I request the host to now open the line for any questions. Shall we open the floor for questions? Yeah. Thank you very much. We're now moving into question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Prakash Agarwal from Axis Capital. Please go ahead. Yeah. Hi. Good afternoon. Just wanted to do some flashback in terms of store additions which we talked about, thousands of stores. So we are very much in line with about 232 net store additions. But I mean, 2, 3 quarters, 2 quarters back, we had different operating metrics, right? So now we are seeing SSG decline of 8.7%. Your 12-month operating margins are 9.5% which is guiding that we are guided around 10%. And ROCE which we are much healthier is now going lowering to 4%-5.5%. So is there a rethink in terms of how do we balance these operating metrics along with the growth plans that we have or how do you think about it going forward? So the way I see it, Prakash, is we will continue to grow, of course. Some of the metrics which may have gotten slightly, I would say, muted out here were probably the result of just our really, really rapid growth. That's all. And I'll tell you why. For several years, we had grown at the rate of around 100 stores a year or something like that. And for us, then looking at the withdrawal of all stores which had more than a year was perfectly okay because the new stores added to the overall pool were so less that when we said more than 12 months, it was a reasonable number. Now, given that we have added nearly 815 stores in the last one year itself, now a lot of them and even before we added a significant number, some of them have now moved into the pool of those 12-24 months and they are while they are muting the overall EBITDA there. As I read out in the commentary earlier, our 12-24-month stores operated at EBITDA for only 6.5%. Now, this becomes a much bigger chunk than usual. It is bound to bring the overall thing slightly under. But the real thing is once we start looking at stores which are over 24 months now. So for us, that, of course, is one reason, the rapid growth and everything else. But it would not be right for me to completely negate the overall competitive intensity also at this point of time. As you all know, there are at least three companies out there which are constantly advertising for the 25% discount and are spending quite a lot of money in trying to acquire new customers. I expect that will go on for a little while as long as I don't think that kind of numbers are at least unviable promotional kind of discounts are viable for a long time. So even as they continue, our goal would be to continue to expand and still remain profitable and continue to grow. So that would be the thing. But yes, the effects of both growth and competitive intensity is going to mute it a little bit. Hopefully, this answers you. If there's anything else, please go ahead. Yeah. Yeah, yeah. So internal is your store expansion and external is the high competitive intensity with higher discount, etc. But is there a rethink in terms of next year's store expansion or how do we think about the expansion in next fiscal year? So the way I see it, Prakash, none of the competitive intensity story is going to be around forever because it's not really sustainable. If the whole market suddenly discovered a way of becoming profitable at 25% then and if they're basically continuing it forever, then we would be remiss in not then we would have missed something, right? We would just go and crack out there immediately. I don't think that is the case. I think as long as the market continues to be majority in the hands of unorganized retail and mom-and-pop retail and all and as long as we know that this is only a temporary thing, we just want to continue our store expansion at the same rate. Of course, we always go back and revisit but now is not the time. I don't see any reason to change the next year's plan now. Perfect. And last one is on the how do we feel about the remaining nine months both in terms of sales growth and EBITDA? So typically, Prakash, the first quarter of every year is a lean month for pharmacy mainly because the extreme summer months of April, March, and April really have no significant elements out there and all. So So there's not much sales. People also travel out and all that kind of stuff. This year, of course, it's been slightly different. But the second and third quarters are typically better for us and I expect that we'll only continue to get better at this point of time. Okay. Okay. And something on margins, sir? Some outlook on margins for the remaining nine months? For us, the margins are driven by a couple of things. One, of course, the bought-in margins which continues to remain stable at their usual number. We continue to enjoy the highest margin out there because of our scale and because of the various things we actually work on with the companies and all. But the product mix also drives this margin significantly. As I said earlier in my commentary, the pharma product mix has been going up significantly. Because today, at 8.4%, I see no reason why we cannot push it to another 100 or 150 basis points in the next four years or so. The goal would be to get to around 9.5 or so by the year end. So that's the plan. And that will add to our margin. Okay, sir. Thank you. All the best. Yeah. Thank you, Prakash. Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Amey Chalke from Haitong Securities. Please go ahead. Hi. Thank you for taking my question. So I have a related question which earlier participants had asked. Basically, it's been two quarters since the IPO and since we are in rapid expansion phase. What has been the insight so far for us in terms of do you think that we have enough managerial bandwidth to maintain this rapid expansion phase? Also, is there any change in store metrics after we have started expanding which could have hurt in our profitability? And also whether the capital is enough for you to expand because we have already consumed, I see in the balance sheet, that INR 200 crore from the cash during the quarter. So the remaining INR 460 crore, is it enough for you to keep expanding at this pace for more than a year? Thank you, sir. Okay. Thanks, Amey. So for us, no, there's been no change in the plan since we started the whole expansion plan and all since the IPO. We continue to expand. There have been no. We only look at it from two things. Once we set up a store, is it breaking even in time and is it going towards the 10% EBITDA within two years or not? As long as it is doing that and there is, then we should actually set up the store because if that's the location and if you don't do it, obviously, competition will come into it anyway. So for us, it's critical to maintain our market share in each of the micro markets. So that's one. Two, as I said, we closely monitor the break-even times for our stores. They continue to do well. As I said, 75% of our stores now are breaking even within six months, so that's nothing different from what we had actually said earlier, so that continues. On the bandwidth side, last so we have been continually building up this bandwidth. Over the last three years, we basically went from doing 150 stores to 350 to 750, and now we expect we'll do slightly over 1,000 of much more than 1,000. But yeah. So we are adding that capability every year. The way it works, when I say 1,000 stores a year, it's 80 stores a month, and this 80 stores a month are across seven states and across almost 30 territories in which there are different teams of people doing this stuff. So for us, capability-wise, I think we're well set. On the financial side, I think there is money in the bank right now. We don't have any kind of debt at all in the company. We can easily raise some more money if we need to as we go forward. As we go forward, as more and more stores grow into a two-year range, we will start to also acquire, bring in more EBITDA into the company. So that's the plan for us. Sure. Thank you, sir. I have a second question related to the discount comment you have made. Even in the presentation, the competitors have increased the discount. But what we see since the main, I guess many of your online competitors have discontinued their blanket discounts, are sticking to the first-purchase discount largely. So there is some disconnect. If you can explain that and also do you see any in the near term whether you are planning to reduce discount at your end? Yeah. Well, see, while almost all the competitors claim that it is the first time, second time, or the third time, or first, three times and all, they continually expanded. They really increased that. And even the people who are buying too continually keep changing their accounts too are available discounts. Effectively, it is the same discount for these guys most of the time. It's 25% till they decide to actually put a stop to it completely. For us, it doesn't matter. For us, we are a flat 30% discount and we continue at that. Given that some of the online guys are advertising so heavily, they will end up attracting at least some people. And now will they go and stick with them or not is a question. We believe that most of the people will end up going back to their local stores once they stop getting the discount out there, the promotional discount. And that's what we've seen. Otherwise, we've also been adding customers like me, you know? Online has been there for now at least 7 or 8 years. One, they've been advertising the same discounts forever. If all you required was a one-time promotional discount to get you hooked onto the online app and then you would have that customer forever, I wonder why none of the guys are at least not 10 times as high mainly because of one thing. A chronic ailment customer who comes for diabetes or hypertension from other medication is almost a customer for life. So you should not really be losing customers at all, right, if everything was so good, if people are only coming for the convenience angle of it. So Amey, to summarize, while people may say that they're dealing with only for the first, second, or third purchasers, customers find a way of basically using it forever, continuously. Sure. I have just last question if I get to speak then. The NLEM price hike the price hike has been taken for the NLEM portfolio by a large part of the company and there is also at least mid-single-digit price hike for non-NLEM portfolio as well. This generally happened post-April. Do you expect it to reflect in our revenue number as well from the next quarter onwards and why it has not reflected in this quarter? Thank you, sir. Yeah. See, this quarter, as I said, is coming on the back of and if you compare it to last year's quarter, then it is because of the huge bump of COVID claims out there. It would always compare unfavorably. And even if you compare the Q1 of this year to Q4 of last year, Q4 or Q1 of any year is always going to be slightly worse off because of seasonality and all. And Q4 of last year also has the added advantage of one month of COVID. So for those two reasons, it doesn't really look all that good. And as I said again, I don't want to shy away from the fact that competition will take away a little bit of our overall top line. But that's I expect that to continue for a little while while we continue to take market share from the smaller stores. Thank you. Thank you, sir. Thank you. Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Harith Ahamed from Spark Capital. Please go ahead. Hi. Thanks for the opportunity. So there's been some news around trade margin rationalization in pharma. So is there anything that you've heard from the government or regulators on this and how should we think of the impact of this if this were to happen on our private label investment on the pharma side? So Harith, we have not really heard anything yet. Nothing concrete out there. Maybe some announcement will come out. What we have heard, though, is that there's going to be a cap on the margins of distributors and retailers on some of the products out there. So what that means is that the smaller Gx generics-based kind of companies which usually have this high margin will find it a little difficult. For instance, there are trade generics which sell at 50% and 70% margins in the market. And And a lot of the smaller stores, the mom-and-pop stores, usually end up making all their money out of these. If that margin is capped, and I think a lot of those stores will find it really tough to actually survive. In our case, though, we are getting the drug manufacturer. So we are the manufacturer and we don't really need to we can keep the margin either at the retailer or at the manufacturer. It really doesn't matter to us. So we want to keep the same amount and go on. So that's the plan for us. Okay. What is your blended discount rate currently at the overall level? Our blended discount today is around 15.5%. Okay. Okay. You don't see this inching up further from this level? Well, it probably stayed there. It's unlikely, see, today, already around 60%-70% of people who buy medicines from us buy in the INR 1,000-plus bill size and they get a 20% discount. I don't think it can get any higher than that. While the average bill value continues to rise, I don't think it will go much beyond 20%, I think. Okay. And on the Omnichannel side, there's been a revenue decline quarter on quarter. And when I look at our coverage in terms of number of PIN codes, it's around 1,700, which is lower than our store count. So I'm just trying to understand what's stopping us from being more aggressive here, not in terms of discounts, but just in terms of expanding our coverage. So Harith, see, on the online side, there is a huge cost to acquisition of customers. So if you don't and if you're not there out there in front and center, you're going to lose some of the customers out there. That's for sure. We're not really spending money to go acquire new customers because we feel in the long run, it really doesn't matter. As long as the store coverage is there, people will basically shop either online or offline or sometimes in between both. For us, the increase in PIN codes is only a function of the number of stores out there and all. But that alone is not enough because you also have to follow it up with a lot of advertisements and all. We're not really looking to do that. We feel our money is better spent in just adding stores rather than spending I'd rather spend, let's say, INR 100 crore in doing 330 stores or than basically spending that money in advertisements because the 330 stores will actually give you a far more loyal base of customers and which will actually be more profitable to us than just go and spend that money on just acquiring new customers. So that's been the philosophy for us. We will continue to follow that. Okay. And last one from my side. I'm looking at the operating EBITDA margin that you disclosed in the presentation and it's 3% excluding the diagnostic and other segment losses. So there's a 100 basis points decline versus the fourth quarter. And I believe it's coming because of the network expansion that you undertaken. So when I look at the plans for the rest of the year and when we'll be adding 1,000 stores for the year, can you give a sense of where this 3% margin figure will be for the rest of the year? Should we expect further declines as we add more stores? So some directional sense would be helpful. Sure. I don't think there will be much change from here, Harith, because while the margin pressure will continue to be because of the new store expansion and all, we ourselves are working very hard to make sure that the private label sales go up. And And we'll also be aided by a little bit more advantageous, let's say, seasonal thing going forward in the next two seasons out there. And I also hope that we also know that our stores which are now getting into the two-year plus will also start contributing a little bit more. I don't foresee too much of a change unless we decide to suddenly ramp up even faster, which is not likely. Okay. That's all from my side. Thanks. Thank you. Participants, you may press star and one to ask a question. Ladies and gentlemen, you may press star and one to ask a question. Next question is from the line of Ankit Bansal, individual investor. Please go ahead. See, hello. Go ahead, Ankit. Hello. Please go ahead. Hello sir. Sir, my question is, sir, after seeing the results in quarter three, quarter four, quarter one, profits are declining sequentially, sir. Sir, I'm going to ask you, are we going to see you as a growth company rather than a profit-making company? Sir, I'm just a little bit confused. You are compromising profit against growth. Sir, how much longer this will continue, sir? Please, your guidance. See, Ankit. I hear you, Ankit. See, when we came to the markets, we basically said that it's a huge growth opportunity in the pharmacy retail side. And we're going to pursue that. We've always said that we're going to do 1,000 stores out there this quarter this year. And that's what we're following upon. Now, market competitive intensity is not really in our hands. If they decide to up it a little bit and there is a little bit of losing of profit, so be it. We cannot sacrifice the future for immediate 1 quarter, 2 quarters, or even 2 or 3 quarters kind of growth. So for us, the long-term strategy remains intact, which is get to the number one position, make sure that the brand is accepted widely, and you can sell more and more private label drugs, more and more drugs from our own company, which is what will basically drive profitability in the long run. We're not going to be basically worried too much about what is happening in the current quarter, if that answers your question. Okay. Sir, so can we see you're turning into a loss in the next 2 or 3 quarters with the kind of growth, highly aggressively growth you are planning? No, I don't think so. Okay. Okay. My next question, sir, with this kind of growth strategy, how much long vision are you seeing, like one year, two year, three year, five years? Sir, because investors have bet on you, on your comment that you gave on the time of IPO, picture अभी बाकी है. Sir, I'm not seeing any picture right now because I'm very concerned about the profit. You are saying you are just doing growth, growth, growth. But I'm seeing the companies, newish companies like Zomato, they are doing widening losses and the market is punishing them. Investors are losing their money, sir. Please, can you comment on that? Sir, I'll say it. It is a growth story. Absolutely. And we will grow while being profitable. Now, if the profits dip a little bit here or there, so be it. But it is quite clear that our performance in the new stores as well as old stores continues to be maintained. Stores which are more than a year, still make 9.5%. Stores which are open are breaking even in the right time. Now, if we decide to pursue a very rapid growth, I don't think we should be taken to task for that. Okay. Sir, I'll follow up on the next on-call. Thank you. Thank you, sir. Thank you. Thank you. The next question is from the line of Amey Chalke from Haitong Securities. Please go ahead. Yeah. Thank you for taking my question. Sir, I have a question on the Tier 1 or Tier 2, Tier 3 breakdown which we have given in the PPT. Is it possible for you also to tell how is the revenue per store across these three segments and how is the market dynamics different in the Tier 2 and Tier 3 cities in terms of competitive intensity, online pharmacy presence, etc.? Thank you. Sure. Amey, I can tell you this for sure. The Tier 2 and Tier 3 towns typically have slightly lesser top line. But their costs also remain much, much lesser than the Tier 1 counterparts. Typically, these are the employee costs are less, the rental costs are less, and more importantly, the product mix is much more in favor of us selling a lot more private label. So it makes for much better margin. Overall, what we have seen is our stores in Tier 2, Tier 3 contribute to a better bit of margin for us. But top line-wise, it's always going to be slightly lesser. Now, competitive intensity, it is not necessarily lesser. It is definitely lesser in terms of the online presence. But the regular intensity is just the regular offline stores are just as many as you would see in a larger city. What helps, though, is the fact that in all the big cities like Bangalore has a well-known name, people would have seen us in these stores and in these cities when they come through the big owner stores in each of these cities. So when they go back to the small towns and they see our store, then we have a natural client base already formed which comes closer to the brand and all and for the guarantee of genuine medicines out there. So while the competitive intensity is not any less, the value proposition is even stronger in a small town. Sure. The second question is on the store opening in the Mumbai kind of a metro region. So we have been saying that we don't want to open stores where you think the rents are on the higher side. However, we are seeing in Mumbai, there are a lot of stores, omnichannel stores getting opened up. And these stores are a bit different in terms of size and the look and feel of these stores compared to the stores which we have seen in other parts of the country. So is there a change in strategy over there or what's the rationale in opening stores in cities like Mumbai? In cities like Bombay, you said? Yes. No, see, for us, we have always been a cluster-based kind of we always followed a cluster-based approach. We go to a city, we set up as many stores as possible out there so that the warehouse then is fully taken care of and all that. The cost is fully undertaken. Now, we put a store according to the market of the local market. In Bombay, maybe a couple of stores we have slightly bigger. But otherwise, our regular stores, the stores which are coming right now, are very much in the same line as the regular medical store. Sure. Thank you so much. I will join back with you. Thank you. Thank you. I reminded all the participants, you may press star and one to ask a question. The next question is from the line of Kunal Randeria from Edelweiss Financial Services. Please go ahead. Yeah. Good afternoon, sir. Sort of spread across West, East, and South India with a dominant presence in the south. And again, you're present across Tier 1 to Tier 3 cities. So I just want to understand if the discount dynamics are also same across all the regions and all the Tier 1 to Tier 3 cities or do they tend to vary? Because I presume the smaller town and cities may not have the kind of e-pharmacy or the organized player penetration as high as some of the metros. Yeah. One thing that the smaller towns probably would not have the same thing. But to be quite honest, it is not really that different. As I said, in the southern states in which both MedPlus and Apollo are quite prevalent, most of the people have seen stores like us give discounts in the bigger cities. And even before we have entered some of the markets, they already have some kind of a discounting model out there whether it is 10% or 15%. MedPlus, of course, continues with the same discount model everywhere in every city we go to. So for us, honestly, we haven't seen too much of a difference. Maybe you will discover it when you start going to other states like Madhya Pradesh or cities like maybe in Kerala. But for now, in the states in which we are there, we don't see too much of a deviation. Sure, sir. So it's fair to understand on an average, the 16.5% discount that you speak of is most likely evenly spread. Yeah. Sure. And I'm not sure if it's too early to ask you, but any kind of expansion plans you have thought of for FY2024 and beyond? No, not as of now. I mean, I don't see any. We don't have a 1-year plan. We obviously have a 5-year plan out there. I don't see any deviation from what we have today. We'll probably grow just as fast. Sure. That means around 800-1,000 stores every year for the next two years. So is my understanding correct, yeah? Obviously, I can't commit to that number right now. We will see as we go forward. But that's the temporary plan, yes. Got it. Thank you and all the best. Thank you. Ladies and gentlemen, that was the last question. I'll hand the conference over to the management for closing comments. Thank you. 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. Thank you. Thank you very much. On behalf of MedPlus Health Services Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.