Please note that this conference is being recorded. I now hand the conference over to Mr. Srinivas. Thank you, and over to you, sir. Thank you, Sejal. Good evening, everyone. On behalf of MedPlus, it's my utmost pleasure to welcome you all to the MedPlus Q1 FY25 earnings call to discuss the financial results of MedPlus for the first quarter of FY25, which were announced on 2 August 2024. We have with us today the senior management team represented by Mr. Madhukar Gangadi Reddy, CEO and MD, Mr. Sujit Mahato, CFO, and Mr. Chetan Dixit, CSO. 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 1 of the investor presentation shared with all of you earlier. Documents relating to our financial performance were 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 a very good evening to everyone on the call. We are pleased to share that as of June 30, we have been serving communities in over 650 cities across 10 states through our network of 4,444 pharmacy outlets. Also, the company operates 4 full-service diagnostic centers, 8 level 2 centers, and over 110 collection centers offering essential diagnostic services at affordable rates. I would now brief upon the openings and closures of our outlets. Over the past 12 months, we have added a net total of 469, gross 568 store additions, with 66 stores opened during quarter 1. However, planned new store openings for FY25 remain at 600. In the first quarter, 44% of our store openings were in Tier 2 cities and beyond. At present, out of our 4,444 stores, 2,031, representing 45%, are situated in Tier 2 cities and beyond. We continue to acknowledge the growth potential inherent in these markets. Throughout Q1, there were 29 store closures. Taking into account both openings and closures, we achieved a net addition of 37 stores during the quarter compared to the 174 stores added in Q4. In terms of our network, the age of the network is around 36% of our stores are operational for less than two years, and the remaining 64% of our stores have been operational for two years or more. It's noteworthy that all stores in the less than two years age bracket are still in their ramp-up phase. As these stores mature, we anticipate a positive contribution to our profitability. As a guardrail, we closely monitor the time frame for our new stores to reach break-even. For stores opened between July 2023 and December 2023, approximately 64% of them achieved break-even within six months of operation. As a cohort, all stores combined reached break-even in just four months. In terms of our store size, as of the end of the quarter, our network has grown to 4,444 stores with 2.3 million+ sq ft compared to 3,975 stores representing 2.1 million sq ft at the end of June 2023. The average store size was 529 sq ft. To give you a sense of spread in store sizes, we have 3,269 stores less than 600 sq ft and 1,175 stores that are greater than 600 sq ft. On our revenue mix, we are strategically positioned to increase our revenue share from private-label products. Our private-label range is crafted to provide customers with high-quality products at competitive prices. Presently, MedPlus offers over 880 carefully selected SKUs spanning across pharmaceutical and non-pharmaceutical categories. Private-label sales for quarter 1 FY25 constitute 15.8% of our total revenue. Moreover, our growing presence in Tier 2 cities and beyond is significantly impacting on our revenue mix. Sales from these markets comprise 36% of our pharmacy revenues in the current quarter, marking an increase from 34% in the same period last year. The following is the impact of the launch of MedPlus-branded products across our network. In quarter 1 FY24, prior to the launch, the share of private-label pharma stood at 7.9% of total GMV compared to 15% during the current quarter. The increase in the private-label GMV share indicates a positive reception from customers and validates our commitment to delivering high-quality products under the MedPlus brand umbrella. Now, on the financial numbers. On our quarter performance, our consolidated revenue was INR 14,888 million, with growth of 15.9% YOY and remained flat quarter-on-quarter. Our consolidated operating EBITDA stood at INR 435 million, representing 2.9%. Around 99% of our revenue is from our pharmacy operations. Revenue from pharmacy operations grew by 24% year-on-year on GMV basis and by 15.3% year-on-year on net basis. The pharmacy operating EBITDA stood at INR 432 million, representing 3%. The pharmacy operating EBITDA adjusted for special marketing spend of INR 95 million stood at INR 527 million, representing 3.6%. Now, on our store performance, I would like to update on our stores older than 12 months. Revenue from these stores in quarter 1 was INR 13,604 million, or 94% of pharmacy revenues. These stores had a store-level EBITDA margin of 9.3%. The store-level operating ROCE of these stores stood at 46.1%. A word here on the store-level EBITDA margin by age: while stores greater than 12 months had a margin of 9.3%, this was 9.7% for stores greater than 24 months and 6.8% for stores in the 13 months to 24 months age bracket. If we allocated non-store-related costs, then the operating EBITDA of stores greater than 12 months would be INR 525 million, which translates to a margin of 3.8%. On our diagnostic numbers, diagnostic revenue grew to INR 242 million in quarter 1 FY25 compared to INR 139 million in quarter 1 of FY24. Diagnostic segment recorded an operating EBITDA of positive INR 3.3 million compared to a loss of INR 46 million in quarter 1 FY24. However, central-level operating EBITDA stood at INR 31 million. Working capital. Our net working capital for Q1 was 69 days. The inventory in our warehouse stood at 40 days. In quarter 1, the inventory level of our first-year store was 104 days. In comparison, for our stores older than 12 months, the inventory was 47 days. Now, I request Chetan to update on our diagnostic business. Over to you, Chetan. Thank you, Sujit, and good afternoon, everyone. As you know, Q1 is a seasonal weak quarter for diagnostics. With that context, in April, we sold 406+ plans per day. In May and June, this was 408 and 442, respectively. As on 31st March, we had 133,000 active plans and 247,000 underlying lines covered under our plans. As on 30th June, we had 141,000 141K active plans and 270K underlying lines. Our current observed on-time renewal rate was 24% in Q1 versus 21% in Q4. That concludes our update for the quarter. I request the host to open the line for questions. Thank you very much. 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. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Tanmay Gandhi from Investec. Please go ahead. Hi, sir. Sir, the quarter looks relatively weaker when I understand that this is a relatively weaker quarter on a seasonal basis. But I just want to understand. Sir, may I request you to please use your handset? Hello. Am I audible? Yes, sir. Yeah. Sir, my question is that whether do we need to revisit our guidance, or are we reiterating our guidance of 20%+ top-line growth and maintaining 4Q level margins? No, I don't think we need to change anything out there. As we mentioned earlier, Q1 is typically slow, and that's what it is. I don't think there's anything more to look beyond that, honestly. Sure. Sir, 16% growth looks very weak given, specifically, if you look at pharma companies' growth, right? Even the largest players had reported almost 16% year-on-year growth. So just wanted to understand, have we plateaued in terms of market share gains? Even our same-store sales growth also looks a little tepid. So just wanted to understand, is it something? Is it a market-specific trend, or there is some one-off in our numbers? No, no, Tanmay, it's actually 23%. Given that a significant portion of our sales is now coming from MedPlus private label, and these are all selling at half the price of our regular brands, right? So any growth in this is going to definitely affect the overall top line. So if you look at it MRP to MRP, and if you compare like-to-like over there, our growth is actually 23%. Understood. So GMV growth is 23%. Got it. So the 20%-plus growth which you have guided for, that is for reported revenue, or that is for GMV revenue? No, that's actually for normal reported revenue only for this year. Understood. Sir, our stores' generics are relatively better in terms of gross margins, right? Still, we have seen a good 50 basis points decline sequentially. Just wanted to understand that is there any inventory write-off during the quarter? See, while the private label margin is definitely better than the regular branded margin and all, there are two things happening here. One, we are cannibalizing into the old private label, which had a slightly higher margin. And this one, as you know, while it is better, it is not as good as the old private label. But we actually have a 52%-55% overall discount on this product. So the margin is not going to be as accretive. So if you look at the INR 100 MRP equivalent for private label and for a branded generic, the regular one, if after the discount on a branded generic, we get something like 13.13% or 13% or something like that, on the new private label, we end up getting anywhere from 23%-26%, right? This is on the INR 100 MRP. If you look at on the net sales, it is going to be around 60-64. So it's not going to be as accretive. On the inventory and all, I'll let actually Sujit answer that to see if there's any other adjustment. As far as I know, the private label growth is definitely accruing to us, the margins. Yeah. In addition, what I would like to highlight is, since we are speaking on the sequential quarter, Tanmay, in terms of the other business income and the data fee which we had recorded in quarter 4, we had also highlighted during that time that to the extent of 0.3% of the gross margin, there is a shortfall, which means that that was a Q4 event which we also expect during the current fiscal. To that extent, it has impacted our gross margin. And some amount of inventory provisioning has also impacted, which is another 0.3%. Sure. Got it. That's all from me. Thank you. Thank you. Thank you. The next question is from the line of Aditya Chowdhury from Nomura Financial Services and Securities. Please go ahead. Hello. Good evening. Yeah, I was just trying to gauge the baseline margin performance of the stores. So what I'm looking at is, in 1Q FY24, the overall retail pharmacy had an operating EBITDA margin of 2.7%. And on the like-for-like basis, if I look at 12-month-plus operating EBITDA margin that is reported in this quarter, that's 3.8%. So that's roughly like 110 basis points of increase on the baseline stores, excluding the stores that were not aggregated particularly. So I was just trying to understand if you could qualitatively let me know how much of this 110 basis points is just pure efficiency in terms of margin profitability, and how much is it just ramp-up of a lot of stores that were on the platform at 12 months? Or if you could just give me a number at how much is the operating EBITDA margin for 24-month-plus stores as of now? Yeah, sure. So in terms of year-on-year, the way we have to look at is, due to the change in the private label pharma mix, which has increased from 7.98% to 9.5%, there was an additional margin. Net of the cannibalization of our old private label, we were able to increase the gross margin by 60 basis points. Additionally, we had an impact, what I just mentioned, Tanmay, a few moments ago. We had an unusual inventory provision around 0.3%, which impacted our gross margin. In addition to that, on our private label non-pharma products, due to the mix change from 5.7% up to 7%, we had a positive gross margin impact of another 25 basis points. So with this, you will be able to broadly reconcile the year-on-year gross margin. Okay. So what is your sense, just to follow up quickly, that out of this 110 basis points increase that we are seeing on the baseline stores, how much could be attributed to just organic margin improvement, and how much could be attributed to the ramp-up of the new stores that were there on the platform last year? So if you could, out of the 110 basis points, is there some sort of attribution that could be done? I think we'll take that up offline, please. I don't have that handy. Okay. And just finally, for me, could you share the private label at MRP growth for the new and the old? Yeah. So as of last quarter, the private label stands at 15%. This is on GMV. I think it moved from 13.5 to 15. So the growth over the quarter was, yeah, 1.44. Like, a YOY growth? Could there be a YOY growth in the private label, new and old? Yeah. Last year, it stood at 7.9% overall, and now it stands at 15%. Okay. And how much of this could be the new one, the new private label, and how much is old? Or are you only talking about the new private label? Because there's obviously cannibalization in the quarter. Yeah. Out of this, I think that, yeah, the old private label is at around 1.8%, and the balance is new private label. Okay. Thanks a lot. Thank you. That'll be it. Thank you. Thanks. The next question is from the line of Madhav from Fidelity International. Please go ahead. Hi. Good evening. Thank you so much for your time. I wanted to understand that given that there's a big product mix, category mix change which is playing out in the company, is it more accurate to look at the company on a per store? Should we look at EBITDA per store or gross profit per store? Would that be a better reflection of the profitability? Because if you look at that special marketing spend which we are doing of INR 9.5 crore in quarter 1, and if you assume that that's not going to be a recurring expense, EBITDA per store, in my understanding, probably improved quite well on a year-over-year basis. So roughly, am I thinking in the right direction? If you could share your thoughts, Reddy. Sure, Madhav. See, as we had said earlier, we were running a pilot in Tamil Nadu, and on that ground, we ended up spending INR 9.5 crore. While it is, we did get what we expected, I don't think we're going to go and spend any more money, or at least to this level in the coming quarters. So yeah, there's not a recurring expenditure. So if you take that out, definitely, I think from a 3, it goes up to 3.6 for MedPlus Pharmacy. And. Sorry. To your question about should we do it store by store, yeah, we can take it offline. I don't think we don't have the data right now, but yeah, that could be one way of looking at it. Good point. And then just the second question was, I think you all said that the GMV growth was about 24% versus 15%-16% on a sales basis. So that 24% basically reflects volume growth at the network level, right? Is that how we should read into it? Absolutely. Absolutely. Yeah. It is just a delta between 83, which is the selling price for us at INR 100 MRP for a branded generic, versus 42-43, which is for the MedPlus brand. So every time we do that, the percentage of these drugs which are sold at 42 on a INR 100 MRP are going to be reflected in a slightly higher GMV growth. Got it. Got it. And just the last question was that in some of the stores, like in Tamil Nadu or West Bengal, where the MedPlus private label mix has probably it's higher versus some other parts of the network. Maybe if not now, maybe in the Q2 call, if you could give us some more color in terms of how the profitability is in those stores, given that you would have probably good product mix change which has played out. So just let me know directionally how the network would look two, three years out for the company as the private labels feel that. We will try and do it as we go forward. But right now, while the growth has been very encouraging and it is something which we are banking on, I can't give you the exact numbers right now, Madhav, but definitely, we can report the loss. Okay. Thank you. Thanks, Madhav. Thank you. The next question is from the line of Vinod Chandra, who is an individual investor. Please go ahead. Thank you for the opportunity, sir. I have two questions. One is, generally, we receive a notice about our store suspension, and there are a lot of notices that come in a month. So is there a specific reason behind those store suspensions, or can we not control value in advance before receiving these notices? So that is the first question. Yeah. So yeah, the second one is. Do you want to go with the second? Yeah. Okay. Yeah. The second question is about, I know you are reporting and showing the store-level operating EBITDA, right, or ROCE, we say, around 46%. So is it something if you can give us the ballpark figure about what would be the store-level ROE figure rather than operating ROCE? So these are the two questions I have. Thank you. Okay. Great. Can I answer to your first question? See, the suspensions, unfortunately, some of them are at least a part of the business. We have a large network of 4,444 stores. And as you know, healthcare, especially pharma retail, is a highly regulated business. And there's always some small issue or the other for which you could receive a small suspension. For us, it is not material, and it never came up earlier because it was not any non-material stuff was not supposed to be. We were not asked to report any non-material kind of events. Now, of course, we got to change the rules. We're doing everything out there. But again, as an answer, these are largely documentary issues, documentation kind of issues. So this is something which we try to actually keep pace and try to reduce them. And other thing is, in a bunch of the suspensions which we receive, which were for slightly higher number of days, we have actually gone to the court and got a stay. So I don't think that's going to really impact us too much. We will fight that and get it out. But yeah, it is, I would say, unfortunately, something which we have to live with, not material. And we are trying our best to basically keep it under control as much as possible. We will definitely evaluate the store-level ROE figure. We'll try and come back to you. Right now, we are reporting what we see our PO supported right now, but we will consider this and then come back. Okay. Thank you. Thank you. Thank you. Ladies and gentlemen, you may press star and one to ask a question. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Akanksha Gupta from Solidarity Investment Managers. Please go ahead. Hello. Yes, I'm audible. Yes. So my question is around the gross margins. Could you please give us the breakup of the gross margin segment-wise, that is, the private label pharma, the private label non-pharma, and the branded pharma and branded FMCG businesses? Yeah. As a reference, for branded pharma, we will drive between 13% and 13.1%. Private label pharma, which was our old private label, in the range of 74%-76%. We'll only launch MedPlus store-level brands in the range of 64%-66% gross margin. Branded non-pharma products in the range of 10.5%-11%, and private label non-pharma products in the range of 16%-18%. Okay. Okay. Thanks. That's all from my side. Thank you. Thank you. The next question is from the line of Harith Ahamed from Avendus Spark. Please go ahead. Hi, sir. Good evening. Thanks for the opportunity. In terms of store relations, this quarter seems to be on the lower side, while we had guided for around 500 and 600 stores for FY25. Are we still maintaining that number? Yeah, Harith. So there's no change in guidance, which you have seen the last couple of years also. We usually do slightly better in the second, third, and fourth quarters, usually. This year, Q1 was unduly, I would say, kind of slippery because of a couple of reasons. One of the main reasons was elections, I would say. We actually had a lot of attrition, and we had a lot of people, and we were finding it a little difficult to hire the right kind of people during that month. And so almost everything, due to various things, actually, got a little delayed. And I had already mentioned that our overall focus on MedPlus brand has increased a lot. And while that is not the main reason, that's where the company has been focused. For us, the guidance remains the same, one. We are looking at our complete network. In addition, so this year, while the net will remain more or less the same, we could have a few more closures than usual because we have added quite a few stores in the last three years. Could be anywhere from 30-50 more than usual. We're looking at the entire network out there. And so that may change the number a little bit, but I don't think the addition itself will be affected too much. Okay. And this 15% GMV share of pharma private label, how should we think about this number progressing over the next few quarters? And probably, where do you see this reaching by FY26? I think we'll probably be able to see the trajectory a little bit more clearly after this quarter. When we started initially, obviously, there were a lot of early adopters who came in immediately. And after that, it has been moving steadily at around 1.5%-2% per quarter. If you look at it, I think last quarter was at around 13.56, and today it is 15%. That's 1.44% growth. We expect, as we go forward, it will maintain at this level and also go up slightly. But I will come back to you guys with the guidance on growth quarter on quarter, maybe in the next quarter or so, end of next quarter. Probably have a more clearer idea. Thanks, Madhav. One question was, Sujit, in the slide where you've shown the Ind AS adjustments, in the interest income line for the quarter, the Ind AS-adjusted interest income is lower by around INR 2 crore versus the reported interest income of around INR 4.3 crore. So what exactly is this adjustment? If you could give some color? I would say these adjustments are for the security deposits, what we have placed for the property. But I'll just look into this and give you the details offline, Harith. Right. Thank you very much. That's all from my side. Thank you. The next question is from the line of Aejas Lakhani from Unifi Capital. Please go ahead. Yeah. Hi. So firstly, could you call out what was the entire ad and marketing expense for the quarter versus the same thing last year and last quarter? Sure. This year, we ended up spending around INR 9.5 crores in this quarter versus Q1 of last year was INR 1.3 crores. Okay. And so what was the same number for the previous quarter? Previous quarter was 8.5. Okay. So I just want to understand that you've made these spends in a time frame when you just said on call that elections, and there were some challenges and delays and attrition on account of that. So how do you measure the effectiveness of these spends? No, no. So I said the store openings did not happen because of that, to be honest. That has nothing to do with the effectiveness of spending. Okay. Sir, could I understand that when you think of these larger spends, which is more than the normal course of business, how do you measure the effectiveness? Then what is the outlook for this line item for FY25? We're not going to be doing any more of this in the next two quarters, for sure. We actually spent this money in two different states. One was in West Bengal, and the other was Tamil Nadu. Largely, the money was spent in Tamil Nadu. And for us, we are internally looking at a couple of things. One, the number of new customers we have acquired and the growth of MedPlus brand private label. So those two would be the three key criteria for us to rightly decide if the ad is worth spending on or not. But obviously, you can only get the I would say you can only assign so much value to the immediate growth, the benefit to the brand, and the benefit to the MedPlus brand. That is going to come over a period of several quarters, much more difficult to measure, I would say. Got it. Sir, the private label pharma, which is 9.1, could you just tell me that what is the split of 9.1 in old and new? Sure. The INR 9.1 which you're talking about is the net sales number. I think the old one is around INR 1.8, and the balance goes to the new one. Okay. Sir, when do you expect this runoff of the INR 1.8? I mean, do we expect it during the course of FY25, or do you expect a sharper rundown? We will most likely see a slightly more sharper rundown as we go forward. Maybe in the next two quarters, it should actually go down. But it'll probably be always there to some extent. But from now, I think it'll probably end up going to slightly under one in the next two quarters. Got it. Sir, I just wanted to understand more at a strategy level that why this decision to run down that old brand and replace it or replace it with MedPlus? Because as you would I mean, there has been an impact on margins on account of this entire movement. Why not just introduce the MedPlus brands and let that automatically or naturally run down or progress with time? Why have we done this intervention which has been sort of forced to run that down and increase the MedPlus? Could you just help me triangulate that at a strategy level? No, no. It is not a question of running it down intentionally. We always had two different brands. But when customers walked in and they saw the entire sea, the customers who are buying that old private label, there are people who are willing to take a substitute. The customers who are willing to take the new one are also the same set. Now, given that there is an alternative where they can get a discount for a small membership fee, most of them have chosen to go here. Got it. Okay. Got it. So sir, from here on, we are expecting your growth guidance is 20% on a reported basis for FY25, correct? That's right. Sir, operating margins, what is the outlook there? So we'll continue to grow from here. Q1 typically is our slowest quarter normally. So it should definitely be better than what it was last year. So yeah, that's all I can tell you. Okay. Thank you, and all the best. Thank you. The next question is from the line of Kunal Randeria from Axis Capital. Please go ahead. Hi. Just one question. Continuing on the previous participant's question, do we expect a sharper impact from cannibalization of your private label brands the next one or two quarters? And after that, that impact should completely go? I think so, Kunal. It will be there for a while because we have inventory. There are customers who are willing to buy. As you remember, as we've told in the past, our previous set of private label also had the full set of chronic medicines too. So some of them were people who were on drugs like atenolol, telmisartan, and all. They'll probably continue. We have the stock. We'll probably switch them over to this at some point of time or they may themselves basically ask for this. So that part, that tail stuff, will continue. But most of the acute stuff will probably end in the next two quarters or so. But for us, whatever the impact may be of cannibalizing this slightly more profitable portion of the business will most likely start coming down in the next two quarters as we continue to grow this. So this is also attributed to us. This also gives us more margin. But as long as it comes at the cost of branded generics, it is good for us. If it comes at the cost of our old private label, not obviously. So that impact, I think, will go down in the next two quarters. Sure. Just with the older private labels, have you changed the discounting practice, or is it still trying to get in line with MedPlus discounting, or it's still old method? So you're talking about the old private label? In the state of Tamil Nadu, the old private label has always been sold at the same price as MedPlus, as the new one. But in the rest of the states, we had actually continued to sell it at the old rate out there. So there was some confusion. We'll probably end up taking out some of that and redoing it in the MedPlus side as we go forward. Was that the question, Kunal? Yeah, that was the question. Basically, I just wanted to understand whether, on the old label also, are you giving a 50%-80% kind of discount as you are giving it on made by MedPlus? Yes. In Telangana, yes, we are. We started on that note. We started off with that value proposition earlier. To the customers. But in the rest of the country, while we started with maintaining the old private label at the old discount, there are some products, maybe out of the 600-odd products, probably around 200-odd, which we will end up actually moving to the new pricing, the MedPlus pricing. And this is just to expedite the overall sale of inventory and to make sure that nothing goes into expiry. For us, obviously, we have both the inventories. We want to make sure that everything sells and we're left with nothing at the end of the day. And so part of that will be moving to a new price. Got it. Thanks. Thank you. The next question is from the line of Alina Jain from Perpetuity Ventures. Please go ahead. Hi. In your opening commentary, you mentioned INR 95 million of special marketing spend. Could you elaborate on that? Also, secondly, you have been talking about Q1 being seasonally weak. If you could highlight some of the reasons for the same? Sure. The INR 95 million got spent in Tamil Nadu and West Bengal. Largely in Tamil Nadu, I think around INR 7.5 million probably got spent there and INR 2 million-INR 2.5 million got spent in West Bengal. This ad expenditure was spent mostly on newspapers, some bit on TV very later, some on radio, and a little bit on the social media, YouTube, and everything else, and a little bit on podcasting and influencers and all those other things. That's one. And I think, yeah, on the seasonality side, see, typically, April and May, the sales actually fall for two reasons. People end up actually leaving large cities in which we are largely based. They go out for vacations. They go out of town and everything else and all. Even the senior citizens too end up actually or people who are in their 50s also end up going back to their hometowns and all once vacations start for the kids. That's one. Second, in general, the overall burden of, I would say, disease on the infection side is much, much less. So that whole set of antibiotics and painkillers and fever tablets and everything else which are sold normally throughout the year, and especially so in June, July, and August, are almost null in April and May. That's why Q1 is usually weak. Okay. And so regarding the marketing spend, is this more to do with the private label increase that is happening? And going forward, how should we see the marketing spend increasing? So we'll probably bring it down to a maintenance level of around something like INR 10 million per quarter, which is INR 1-1.2 crore. But yeah, all the money has been spent on private label only. So the whole idea is trying to educate customers as many of them as possible to kind of make them aware that all medicines sold in India, 90% of medicines sold in India are just generics. We're just buying them under different brand names. MedPlus now makes the same medicines. And because MedPlus doesn't have any marketing spend or any, let us say, the channel spend, we sell them through our own stores. We are able to offer this with discount. And that's the value proposition to the customer. And that's what we have been pitching. And that's something which we will continue always in a much, much lower level. Understood. Thanks a lot. Thank you. Pleasure. The next question is from the line of Vinayak Mohta from Axis Bank. Please go ahead. Hello. Yeah. Hi. Good evening. I just have one question on the store numbers for the greater than 12 months. So accounting for the INR 9.5 crores of advertisement expense, one-time advertisement expense, if we remove that, then is it fair to assume that the operating margin for the greater than 12-month stores would be more towards the 4.5%-5% range from the 3.8% that you have reported in the current quarter? I think we'll go up by 0.6%. Sorry? We'll go up by 0.6%. Understood. 0.6 or 4.4. Perfect. And sir, is it fair to assume that when we look at the metrics on a standalone basis from what the quarter has been reported, they look to be disappointing, but it would be fair to assume that barring those one-time expenses and considering how the quarters would pan out going forward, on a year-over-year basis, we should continue to see an improving trajectory on the margins spent for the stores on a store level? That would be a right assumption to have. Definitely. Understood. Understood. And so just wanted to understand from a longer-term perspective while your aspiration would be to be at 100% owned brands, maybe, maybe not. But just wanted to understand over the next three to five years, where do you see this owned brand for yourself settling down in the entire mix of your business? What's your aspiration out there for us to be able to visualize how could the MedPlus as a whole look like maybe three to five years forward with respect to private brands specifically? See, it is not yet one year since we have launched the brand across the country. We're already at around 15% overall. I feel very confident that this number will go up significantly. But to give you the actual trajectory, I think we'll have to wait a couple of quarters. So it is possible that the early adopters have all come in and basically bought. But we're seeing, well, we're seeing a gradual increase every quarter. I just want to wait for a couple of quarters before I can predict that. But just to give you an answer, while it looks like store brands and all are typically capped at around 20%, 30%, 40% and all, the one number we should actually bear in mind is that even in a country like U.S. and places like Walgreens and CVS and all, 90% of what the store actually fills, prescriptions, are generic. And these are all they have the law, of course, basically allows them to actually substitute. And the store then basically decides whether it wants to do its own private label or it has a preferred player, which is also generic. There's no brand, right? So the aspiration would be to go to that level over a period of time. But that would mean a lot of education of customers. Maybe at some point, the government comes in and basically changes the rule a little bit for us to do it. But yeah, even if it were not to go to that number, I see no reason why you cannot settle somewhere in the 30s-odd, 30%-plus kind of number. But again, I will reserve the overall listing for at least another couple of quarters before I actually can make a prediction out there on that. And the reason why we are super excited about the whole thing is we are making slightly lesser margin than our old private label. But please bear in mind that people are now buying the MedPlus brand. They are seeing it. It's not a substitute. It's not something else which we are just giving them. It is the MedPlus brand. Now, as they get used to it and as they start buying it and all, we have in our hands an ability to change the MRP every year. The government allows us to do that. We are allowed to do the 5% or 10% card. We also have a chance to basically move the discount around a little bit to make it closer to 50%. Today it's 50%-80%. We can move it closer to 50%, or we can even shift it. For those two reasons, we feel that the entire thing is going to be based around this whole strategy of private label. Understood. And so is there any reference in the global context wherein a pharmacy has been able to replicate what you are trying to do? Because please do correct me if I'm wrong. From what I had read on a couple of pharmacies, none of these pharmacies were able to cross the 20%-22% mark on the private label side. So do you have any reference on the similar company that I might have missed out on? Maybe my data is not correct. So if you could just help me out there. Okay. So two things here. So one is the store selling it on its own name, right? Then, yeah, maybe 20, 30 probably is the number. Walgreens and CVS and all do that much. And I'm pretty sure other pharmacies across the world also have at least that much. But the number to actually bear in mind is that while these people may not sell on their name, when the patient walks into the store and hands in a prescription, all the pharmacist is asking him is, "Okay. Your insurance says it has to be it can be generic," or "Your doctor has written dispense as written." If the doctor says dispense as written, then it is exactly given. The brand is given. But then the copay is very high and all that sort of stuff. But in 90% of the prescriptions, the pharmacist is filling a generic only. The generic is not, let's say, X company generic or Y company generic or Z company generic. It is the generic which is chosen by Walgreens. As far as the customer is concerned, it is the store generic only. It could be made by whoever it is, right? It is a store generic. So yes, you could actually go all the way up to 70%-80% also in such cases. Got it. Got it. And one last question. Have we, in the recent one-year stage, any kind of regulatory problems or something on the MedPlus brand products, any complaints or any action on that front on the products part? No, no, no. Obviously, what we are doing is it doesn't go very well with the thousands and hundreds of thousands of mom-and-pop retailers. So they have all gone and complained. Drug authorities have come. They've picked up the samples. They've tested them. Everything is fine. So for us, obviously, we are disrupting a big market. It is going to have some people who are not going to be super happy about it. So there have been people who have been calling on us and checking out all the things and all. But yeah, that's about it because whatever you're doing is 100% for sure. Perfect. Perfect. Great. Thank you so much and all the best. Thank you. Thank you. Ladies and gentlemen, we will take that as the last question. I would now like to hand the conference over to Mr. Madhukar 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. On behalf of MedPlus Health Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.