Ladies and gentlemen, good day and welcome to 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. 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. Srinivas. Thank you, and over to you, sir. Thank you, Sagar. Good evening, everyone. On behalf of MedPlus, it's my utmost pleasure to welcome you all to MedPlus Q3 FY25 earnings conference call to discuss the financial results of the company, which were announced on 31st January 2025. We have with us today the senior management team represented by Mr. Madhukar Reddy Gangadi, Chief Executive Officer and Managing Director, Mr. Sujit Mahato, CFO, and Mr. Chetan Dikshit, 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 one 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 good evening, everyone, on this call. Our company remains committed to balance growth with profitability while continuously enhancing our operational efficiency. We are strategically strengthening our back-end operations and infrastructure to support long-term scalability and ensure seamless execution. As we prepare for the next phase of expansion, we remain focused on optimizing our existing network while laying a strong foundation for opening new stores across the 13 states in which we operate. As an update, we have added four additional warehouses to enhance our availability at our existing outlets and further supporting our endeavor in opening new stores. This disciplined approach will enable us to drive sustainable growth and enhance value for all the stakeholders. On our network, we opened 87 stores during the current quarter. Over the past 12 months, we have added a net total of 379, gross of 484 store additions. Throughout quarter three, there were 27 store closures. Taking into account both openings and closures, we achieved a net addition of 60 stores during the quarter compared to the 108 stores added in quarter two and 37 stores in quarter one, totaling 205 stores on a YTD basis. We expect a total of 300 net store additions in the current financial year. In terms of our network, in terms of our stores' network age, around 27% of our stores are operational for less than two years, and the remaining 73% of our stores have been operational for two years or more. As a guardrail, we closely monitor the time frame for our new stores to reach break-even. For stores opened between January 2024 and June 2024, approximately 55% of them achieved break-even within six months of operation. As a cohort, all stores combined reached break-even in six months. These include stores which have been opened in the new state. In terms of our store size, at the end of the quarter, our network has grown to 4,612 stores with 2.4 million plus sq ft compared to 4,233 stores and 2.2 million sq ft at the end of December 2023. The average store size is 528 sq ft. On the revenue mix, presently, MedPlus offers over 1,200 carefully selected SKUs spanning across pharmaceutical and non-pharmaceutical categories. Private label sales for quarter three FY25 constitutes 19.6% of our total revenue. The following is the impact of the launch of MedPlus brand products across our network. In Q1 FY24, prior to the launch, the share of private label pharma stood at 7.9% of total GMV compared to 17.7% during the current quarter. On the financial numbers, now on a quarter's performance, our consolidated revenue is INR 15,614 million with a growth of 8.3% on YOY basis and a degrowth of 0.9% on quarter-on-quarter basis. Our consolidated operating EBITDA stood at INR 799 million, representing 5.1%. Around 99% of our revenue is from our pharmacy operations. Revenue from pharmacy operations grew by 12.3% year-on-year on GMV basis and 7.9% year-on-year on net basis. The pharmacy operating EBITDA stood at INR 780 million, representing 5.1%. On our store performance, I would like to update on our stores older than 12 months. Revenue from these stores in quarter three was INR 14,388 million, representing 94% of pharmacy revenue. These stores had a store-level EBITDA margin of 11%. The store-level operating ROCE of these stores stood at 61.7%. A word here on the store-level EBITDA margin by age. While stores greater than 12 months had a margin of 11%, this was 11.3% for stores greater than 24 months and 8% for stores in the 13 to 24-month age bracket. If we allocated non-store-related costs, then the operating EBITDA of stores greater than 12 months would be INR 815 million, which translates to a margin of 5.6%. On our diagnostics numbers, diagnostic revenue grew to INR 274.7 million in quarter three compared to INR 196 million in quarter three of the last year. Diagnostic segment recorded an operating EBITDA of INR 22.1 million, representing 8.1% compared to a loss of INR 34.1 million in quarter three last fiscal year. However, center-level operating EBITDA stood at INR 49 million. On working capital, our net working capital for Q3 was 61 days. The inventory in our warehouse was 36 days. In Q3, the inventory level of our first-year stores was 88 days. In comparison, for our stores older than 12 months, the inventory was 40 days. Now. Sorry, sir. We have lost the audio from your line. Excuse me, sir. We have lost the audio from your line. Ladies and gentlemen, the line for the management seems to have disconnected. Please stay connected while we reconnect the line back. Ladies and gentlemen, we have the line for the management reconnected. Please go ahead, sir. Our update on the working capital. Our net working capital for Q3 was 61 days. The inventory in our warehouse was 36 days. In Q3, the inventory level of our first-year stores was 88 days. In comparison, for our stores older than 12 months, the inventory was 40 days. Now, I request Chetan to update on our diagnostic business. Over to you, Chetan. Thank you, Sujit, and good afternoon, everyone. Q3 is a seasonally weak quarter for diagnostics. In October, we sold 413 gross plans per day. In November and December, this was 433 and 419, respectively. As on 30th of September, we had 148K active plans and 299K underlying lives. As on 31st of December, we had 152K active plans and 315K underlying lives. Our current observed on-time renewal rate was 26% in Q3 versus 25% in Q2. That concludes our update for this 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 one on their touch-tone phone. 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 will wait for a moment while the question queue assembles. Our first question comes from the line of Saion Mukherjee from Nomura. Please go ahead. Hi, thanks, and good afternoon. So my question is around the growth in the pharmacy business. So you mentioned GMV growth of 12.3% this quarter. Obviously, there is some slowdown in new store addition that might have played a role. And also, if I look at the branded business, right, branded pharma number, probably we are growing in low single digit, which is obviously much lower than what the pharma market growth is. So can you just throw some color on how the dynamic with respect to private label is playing out? Is there a very significant substitution that's happening from private label to branded, which is leading to very slow growth in branded? And now, going forward, how are you thinking about the overall GMV growth in the pharmacy in the quarter the next week? Thank you. So we look at the growth in the pharma. Sir, we have lost the audio from your line once again. I think you have to reconnect. Sir, now we are able to hear you. Can you hear me, sir? Ladies and gentlemen, the line for the management seems to have been disconnected. Please stay connected while we reconnect the line for the management back. Ladies and gentlemen, we have the line for the management reconnected. Please go ahead, sir. Sure. Thank you. So, as I was saying, we actually look at the overall pharma sales, and for us, it is not. There's no real division between private label and brands and all. Growth is growth. We offer the customer an alternative when he comes to the store. We tell him, "Okay, we have got what you have requested for," and we also have an option in the private label, and that is at a 50%-80% discount. Now, one thing may get substituted for the other depending on the customer's comfort with the overall thing and all. So, for us, as long as we are growing the overall pharma pie, we are fine. Now, the growth itself, I know, was a little muted, actually, this quarter, and that is partly because the actual net sales would be slightly muted, I would say, mainly because the private label sells at a much lower rate and all. But, yeah, outside of that and a little bit of seasonal, I would say, effect, having plenty of holiday season and all, especially in January and all, we did see a slightly, I would say, lesser sales than expected, but I expect that we get back. So, sir, are you willing to guide any number for the GMV growth, or how should we think about for the next year or so? So, it should be the usual listing of inflation plus kind of thing, or it should be in line with the typical pharma market growth out there. So, as we keep seeing that, for us, it is more important that we maintain the store level a bit of 10% or 11% rather than just trying for the same store sales growth and all. Some amount of cannibalization is always going to be there when we do this when we set up so many stores. But I'm fairly comfortable in saying that we should grow on the two-plus-year stores also at inflation and slightly above that. Nice. And my second question would be on your private label and gross margin. In this quarter, we have seen a significant pickup in private label, which is also reflected in gross margins, much higher than what you had guided in the previous quarter. So, how should we think about that going forward? So, think about the private label as going up by roughly around 1% every quarter on the volume basis, which is on MRP basis, which means additional margin of roughly around 15-20 basis points maximum per quarter. We could have one or two slightly better than normal kind of quarters and all, but I am fairly comfortable we should be able to do 1% every quarter. Okay. Thank you. Thank you. The next question comes from Sudarshan Agarwal from Axis Capital. Please go ahead. Yeah. Hi. So, continuing on the previous participant's question, apart from the fact that your share of private label will kind of go up, what are your thoughts about the discounting policy in the private label? I know right now you are at 60-65. At what levels do you think that maybe you could take a lower discount into consideration? And additionally, adding to this point, so let's say the branded that you are discounting against takes a hike, does that get reflected in your discount price also? Okay. About our private label discount itself, we advertise a 50%-80% discount based on the molecule. And I think the average discount though comes out to around 50%-51%, that's all, because most of the higher-selling drugs are all around the 50% discount. I don't expect that we'll really reduce this at any point of time. It may go down slightly over a longer period of time, I would think, but as of now, given where the discounting is on various generic products and all, I don't think we'll be able to reduce this much lower than what it is right now. I think the second part of your question, if I understood it right, was, is the discount reflective of what the original brand we're substituting for? If that was your question, no, not necessarily. We set the price based on the average price of the top two or the brand leader out there, because most of the people would end up actually buying those, and in places where the thing is fragmented a lot more, the market is fragmented a lot more, and there are one or two or three players, all of them having more than 20%-25% market share, then we would probably take an average or come somewhere close to the middle of that and then set the price, set the discount such that the net price to the customer is around that. The discount is off the average of these three. Got it. Got it. And one more additional, while I understand the next store addition this year, you have trimmed it. For next year, are you guiding any number that we should kind of take into account, 500, 600, or it would be lower than that? No, I think it'll be at least 600 stores. I don't think it'll be less than 600 stores. This year, we have had a few things which we had to actually take care of because of our focus on private label and a couple of other things. We also are, as Sujit spoke in this call, we are also in the process of strengthening the backend. We have actually launched a bunch of warehouses across the states in which we are there right now. These will help us actually reach the stores faster and help us to actually grow faster too. So, a lot of that work is on. I expect that we'll be done in this quarter, and we'll be able to start with the usual growth next year onwards. Got it. Thanks. That's it from my side. Thank you. The next question comes from Tanmay Gandhi from Investec. Please go ahead. Congrats, sir, on a good set of numbers. Sir, my question is, again, on private labels, right? So, on a GMV basis, they're already at around 20% level, right, for the pharmaceuticals. So, my question is that, do we need to put in more efforts to actually increase the contribution of the private labels from here on, or do you think that it is going to be more organic? Tanmay, if you mean, are we going to spend a lot of money advertising? I don't think so. What we'll end up doing is probably increasing the number of products which we have in private label. We are today, for the overall set of medicines, we probably are there at roughly around 68%. I expect insulins, which cover around 10% of the overall medicine sale, and some branded products will be another 5%, which means that leaves at least around 85% to be targeted. I expect, if not 85%, we'll probably take the 68% to maybe 75%-77% or so. So, increasing the number of products would be one thing. Making these available on a much better level than what we have been able to do will be another thing. And third, as the number of people who buy these continue to increase, I expect that over a period of time, the word will spread, and we will basically see a lot more people asking for the product. We may not really need to push as much as we are doing right now at this point. Sure. So, sir, is it fair to assume that for the next year, the core focus area for the management will be store additions? The focus will be definitely on adding new stores also, 600 stores or, and then same-store sales growth. Private label will continue to grow anyway, so that's going to be 1% per quarter is what we're aiming at. We could do slightly better, but I think we'll be at least able to hit that number easily without too much of a problem. Okay. And, sir, one more question. The four new warehouses which you have launched, right, so that is largely for the upcoming stores which you are planning to add in FY26, or these are also to cater to your own private labels and overall increase the volumes at your existing stores? No, no. These are actually to increase the overall operational efficiency. For instance, you know that we have actually added around 3,000 stores in the last four years. In some of the states, we have got now roughly around 1,000 stores each. Karnataka, we've got 1,000 stores. Tamil Nadu, we've got 1,000 stores. And AP and Telangana combined, we have more than 1,200 stores. So, some of these states are big, and we have not been able to reach the extreme parts as easily. And so, supplies have not been as good as we wanted to be, and so, sales have suffered a little bit. So, now we're setting up a warehouse in Hubli, one in Madurai, and two in Andhra, one in Vijayawada, and one in Visakhapatnam, and one in Kadapa, and so on. So, we're dividing up the states into two parts now, at least a main area from where we operate and manage around 60%-70% of the stores, and a sub-area from where we manage around 25%-30% of the stores. So, West Bengal will probably have one warehouse in the Asansol area, and so on. So, this will do two things. It'll supply our current stores better, and with the operational head sitting out there in that area, we'll probably be able to launch new stores faster in those areas too. Understood. Sir, what is the plan for warehouse additions for the next couple of years? So, I think I've pretty much told you where all we're going to put. We are adding a few more, let us say actually, there's one more coming up in Nagpur. In the new states, we're adding warehouses, a small one in Raipur and one in Indore. That'll help us actually go deeper into Madhya Pradesh as we go forward. But I would think most of these we have already acquired, so you're probably already seeing the rents in the cost already, but we probably will add three or four more warehouses. I think a total of 10 smaller warehouses, anywhere between 30 to 50,000 sq ft kind of places. Understood. Thanks. That includes the ones I've already talked about. Got it. Thank you. The next question comes from Madhav from Fidelity. Please go ahead. Hi, good evening. Thank you so much for your time, Madhav. So, I had a slightly longer-term question. So, now that our new MedPlus Private Label has been in the market for about six or seven quarters, maybe six quarters, if I'm not wrong. So, I think it's reached about high teens, almost 20% of our sort of volumes. So, my sense is that it's kind of stabilizing within our network over the last few quarters now. Now that some of this has been absorbed into the system, could you give us some sense on a three-year view, if you think about network expansion, if you think about how gross margins could change for us? And EBITDA margins have crossed 5% for the pharmacy business, which is quite healthy. So, is this a sustainable base to work with for us as we think two, three years? Can it go a bit higher? Could you give us some sense? Because we've done a big transition in terms of the product mix, but how are we thinking in three years will be really, really helpful. Thank you. Madhav, as I said earlier, even if you take it for the next eight quarters, I fully expect that we will be able to grow at the level of 1% per quarter on the MRP basis, right? See, this is something which we feel we can achieve without too much of a problem. Now, we could get benefited from the network effects of these, a large number of people using it, being happy about it, maybe talking about it, one. Two, government pushing the generic products even more aggressively. And three, possibly competition also taking these up and talking up the value of generic products out there. So, all these could see a, I would say, disproportionate increase if it is possible for it to happen that way, but I won't bank on it. I would say by our own thing, just by increasing the product, increasing the range of products, and also pushing it a little bit, we should be able to get that 1% for every quarter easily. And that would mean possibly, and if nothing else changed, I would say 1% growth in gross margin, because every 1% in MRP, I think increases our margin by around 20 basis points. Essentially, gross margins from here only have scope to improve as the private label or MedPlus brand private label sort of improves. I understand that bit. If you're adding 600 stores, it seems like we can grow our network at, let's say, 11-12% network expansion each year. That's low double-digit. Is it fair to assume that if we have some SSSG as well, we're looking at 15-16% sales growth with margins expanding for us from here? Or do you think this 5.1% margin has any element which can bring it down? I understand seasonality of the business, which would be every different quarter would have different seasonality. But are we at a fairly sustainable base now, or how should we think about margins going ahead? Can we be 5.5-6% in three years? No, I think we are at a fairly sustainable kind of margin level for the company out there. Now, the only thing which can change it is if we add a ton of new stores. But as you said, the number of stores which we add are going to be much lesser than the base which we have. So, I really don't see a significant dip out there. What we can do is we can call out that number as we go forward, but the current set of stores should only be at this level or should get better. It's not going to be a significant dip. There'll always be a drag as we add stores, but it's not going to be significant. If the pharmacy GMV growth, which is 12%, which is kind of a proxy for volumes, do you think that should grow in line with our store expansion, or can it grow a bit faster? I don't know. Is that the right way to think about the pharmacy GMV growth? See, it's a little difficult to tell you, but I am sure that as new warehouses come into play and as our supply chain also becomes slightly more efficient, I think we should be able to get some benefit, but I can't really commit anything. We will maybe guide you in the next couple of quarters on any efficiency coming from that side. Sir, how much cost can these warehouses save for us? Is it any substantial cost saving which can come through, or it's only sort of to kind of help the next leg of growth for the company? It is only to help the next level growth, that's all. Next level. Okay. Got it. Okay. Thank you. Thank you. The next question comes from Harith Ahamed from Avendus Spark. Please go ahead. Good afternoon. Thanks for the opportunity. I joined the call a bit late, so my apologies if it's repetitive. The first question is on the pharma private label GMV. What exactly was the share of pharma private label as percentage of our total GMV for the quarter? And Madhukar, you comment that we are looking to increase this by a percentage point every quarter. Is there a level that we are targeting and beyond which probably any further increase would be difficult, given that branded generics will still be a significant part of our overall business and a significant part of the overall market? Yeah. So, the private label itself, on a GMV basis, is around 17.6% right now on the pharma side. If you look at the net sales side, I think it's around 11.6%. The non-pharma is also pretty significant now, around 8% overall. So, we are a little under 20% right now for the overall private label on net sales basis. On our aspiration for growth, I have always been saying this. If the customer actually starts to believe that the same. And if we can actually put in substitutes for all the products, I know there are some which we will not be able to do for a long time, insulins and some obviously, leave the patented products aside. Other than that, only insulins is something which we will not be able to do a substitution for. But outside of that, if we are able to put everything out there and over a period of time, over the next two, three, four, people are not going to be, I would say, completely blind to the fact that these are all the same products being made in the same factory. And across the world, this is what actually sells. If you look at a country like the U.S. and all, 90% of what they sell is generic, and that's all store generic. There's just any one store basically selling their products. So, people are not going to be completely blind to all this. I expect as we go forward, this will go all the way up to whatever numbers there are across the world. I don't see any limit to it. But over the next seven or eight quarters, I would still say maybe 1% every quarter. Okay. Got it. The second question is on discount rates. So, earlier, before we launched this MedPlus branded pharma private label, we used to share the number of around 16%-20% as the blended discount rates across various formats. Now, my first question is, what is the current blended discount rate in the pharma private label, and what is that rate for the rest of the business, which used to be at that 16%-17% level in the past? Okay. For the pharma private label, it is around 51% right now. For the rest, I don't see any reason why it should be any different. It used to be around 17 or 18%. It'll probably be the same number even today, but I will tell you. I'll come back to you with the number. Okay. Last one, To Madhukar, the MRP level growth that we've shared for the quarter, it's around 8-8.5%. And the decline versus 2Q, where we had 13-14%. So, any reason for this? The lower store addition could be a reason, but that was the case even in 2Q. So, I'm just wondering what has led to this lower growth rate on a sequence basis? A little bit of effects of seasonality, holiday season and everything else. And honestly, I can't think of any other reason out there. Possibly, some of the stuff which we're doing on the warehousing and everything else will add a little bit of efficiency and all. Possible that our super quick addition of stores may have compromised the supply chain a little bit. That also could have cost it, but I'm not 100% sure. But I feel that I believe it's largely seasonal effect, nothing more. Okay. Got it. Thanks for taking my question. Thank you. Thank you. The next question comes from the line of Prateek Poddar from Bandhan Asset Management Company. Please go ahead. Yeah. Hi. I was just wondering if you could give me SSG basis GMV? What would be SSG growth basis GMV? Hello? Am I audible? No, we can hear you. Outside of what is there in the slide three I've given, I'd like to come back to you with the more granular breakdown. I think on the GMV side, we're seeing the growth is year on year 8.3%. But we will come back to you with the actual SSG. Yeah, please. Thanks. The second question is distribution of private label, right? Obviously, the average is 10.7 for the system, but maybe you could give us a sense in terms of the median number, or let's say, what's the difference between the highest store and the lowest store? Just trying to get an understanding as to where are we trending. I understand you called out 1% per quarter, but just that would help me. Yeah. Sure. So, if you see across the board, the smaller towns and the rural areas are going to have a higher private label than the bigger cities. One. Second, the older states in which we have been functioning are going to be higher than the newer states in which we have gone to. For instance, Madhya Pradesh and Chhattisgarh are going to be at a slightly lower private label number than AP, Telangana, or West Bengal, or Odisha, where we've been for a long time. To give you an idea, I think Maharashtra, which is as urban as you can get, is probably at around 7% or 8%. I think Bombay and all are at 7% or 8% for us on the pharma side private label, or maybe slightly less. On the other hand, a smaller town in Telangana or even Odisha or West Bengal is probably close to 20%. 20, 2-0, right? Yeah. And this is on net sales basis, correct? Yeah. It's on net sales basis. Okay. Fantastic. And the last question. Look, when I see your gross margins, sequential improvement of 130 basis points, and when I look at your operating EBITDA margins for stores older than 12 months, only a 40 basis points of improvement, can you help me understand where does this 80 basis points go or where have you reinvested? Sorry, could you just repeat the question once again, Prateek? No. So, Madhukar, when you look at your gross margins, right, on an overall basis, 130 basis points of improvement on a sequential basis, correct? But when I look at your store operating EBITDA margins, which is post all the unallocated, I mean, corporate costs, etc., went up from 5.2 to 5.6, so 40 basis points improvement. I'm just trying to understand why a lot of it didn't slow down. What am I missing here? Yes. Sure. In terms of the movement, I would say around 60 basis points came in because of our increase in the private label pharma share mix. 20 basis points came in because of the non-pharma private label share mix. And due to lower inventory provision, we had a 60 basis points positive impact during the current quarter. And your observation is right. The entire thing did not flow down to the EBITDA as certain costs also went up. For example, in Tamil Nadu, the minimum wages increased by 28%. This has also eaten away some portion of our store level EBITDA. And we also set up, as we had explained earlier, certain warehouses which had cost us some amount of money. Understood. No, but let's okay. So, I can also ask you when I look at, yeah, store level is going up by 80 basis points. Okay. Fair. Thanks. Thanks. Thanks. Thanks a lot for this clarification. Best wishes for the future. Thank you. The next question comes from Prakash Kapadia from Spark Capital. Please go ahead. Yeah. I have a question from my end. What exactly is the store level revenue growth which is reported in the PPT? Because if I take the absolute revenue growth of mature stores, it doesn't come to 4.5%. Typically, most of the retail companies break sales down into SSG growth, new store addition, and sales from new stores. So, we can do that. It'll give a lot of clarity to investors. As you know, retail, that's the key metrics. Because here, it's very difficult to understand these numbers, 8.3, 4.4. So, if you could give some insight, that would be helpful. And secondly, as I see, net store additions were 60 during the quarter, which brings us to around 205 stores. So, what has changed? Because every quarter, we are scaling down the expected store addition. So, those are my two questions. Yeah. So, for us, I know this year we have been a little up and down on the new store opening and all, but a lot of our bandwidth has been taken up by focusing on the private label, one, and two, on setting up the new warehouses and everything else. We have seen that some of the supplies have suffered a little bit because of the super fast growth which we have had in the last few years. So, some of that we are already getting done. On the same store sales growth itself, for us, we actually, and this is something which we have been talking about even before the IPO and everything, and even before the IPO and all. For us, we always look at the overall store level EBITDA, and to us, that is the most important thing. The reason I say that is, in markets like Hyderabad, Bengaluru, and Chennai and all, where we already have 300, 400, and 450 store kind of stores, we have to put in new stores because new markets keep coming up. No matter how much of a different catchment it is, it ends up cannibalizing some of our stores anyway. There is always that effect. If you were to basically look at it, a store which is doing, let's say, a lakh of rupees per day, it's probably bringing in more customers from slightly farther than what you would want. If you go and set up a new store in that catchment, maybe 500 meters or even 750 meters away, we will always see some decrease in sales. We're not really concerned about that. When we set up a new store, we try to figure out whether it'll break even in three or four months or not, and whether it'll actually get to the expected level of EBITDA within two or two and a half years, which is around 10% at the store level, and two, on the existing stores, let us say, even if the sales were to dip a little bit, our goal would be to make sure that these are the stores doing 10% or more, so overall, we would continue to gain market share and everything else in that area, but for us to mention explicitly SSG would be a little bit more tough given how we operate, so for us, it's more the market level and 10% EBITDA kind of thing, which we actually look at. I do understand the point of profitability, but typically, that's the standard retail metrics which is the key performance indicator, and it becomes difficult to evaluate businesses and cycles over a period of time, so think about it. I think maybe the SSG breakup, new store addition, and store sales from new stores would really be helpful to investors. That's my suggestion. Absolutely. We'll definitely consider that. Thanks. Thank you. The next question comes from Akhil Parekh from B&K Securities. Please go ahead. Hi. Thanks for the opportunity. And congratulations on a good set of numbers and healthy opening cash reserves. On the penetration level of private label, you did highlight that the penetration levels are different across small versus larger towns. But going forward, say, next two, three years, how are we seeing the private labels? Will it be because of the increase in depth of private label in the existing stores or more by increasing the width of presence of private label in the stores? So, both. We definitely increase the range of products which we have out there, and we definitely try and convert more customers into our private labels. But I also hope that some of the positive benefits which the private label has on the consumer population out there will get talked about, and more new customers will walk in from neighboring stores to our stores. And so, that'll also help us in basically increasing our overall sales growth. For us, it's going to be a combination of all three. And I think the longer we are in the market, the more likely it is that it'll continue to actually grow. Sure. Second question on store expansion, right? I mean, answering to the previous participant, you highlighted that focus is more on the profitability rather than growth and more on gaining the market share within that particular geography. So, we have seen a reduction or decline in SSG over the last four, five quarters, over Q3 of FY24 versus Q3 of 2025. I believe part to do with the increasing sales contribution from private label. But are we monitoring if there is a cannibalization of sales because we are expanding aggressively within a similar cluster of region? So, we are. But the thing which concerns us even more is that each individual store isn't basically sitting with a profitability number which we expect or not. So, that would be the first thing we should actually look at, one. Second, one of the things which probably is showing up as lesser SSG and all for us is also this, that we've always been talking about stores which are more than one year. The number of stores which are between, let us say, 12 months to 24 months have been decreasing constantly. And that number, those number of stores, the stores between 12 and 24 are going to be growing much faster. And so, decrease in those number of stores would have probably shown it as decreasing overall number. But I don't think the overall mature stores themselves are behaving any differently from what they were earlier. Okay. Okay. So, should we assume that SSG of whatever, 4.5%, is that a sustainable rate for next two, three-year perspective? Because SSG certainly helps in terms of absorption of fixed costs, right? I mean, at one end, we want to improve the profitability. But at other end, if we're not focused on SSG, it may not help us in terms of absorption of fixed costs, right? I mean, that's how the typical retail model works. So, what would be a normalized SSG growth rate if we were to expand to 500, 600 outlets every year, say, for next two to three years? I think we would be at least at the current level where we are. I don't really see it dipping any further and all. I don't think that's going to be a problem because we're not going to be adding. We are looking to add these stores next year. I don't see any. Sorry. Just to clarify, you're saying 3%-4% is the base, new base at least for SSG? Four to five is what we're looking at, actually. That is the number at which we can be at a certain rate as far as profitability is concerned. Okay. Okay. Sure. So, that's all from my side, and best luck for coming to the stores. Thank you. The next question comes from the line of Prolin Nandu from Edelweiss Public Alternatives. Please go ahead. Yeah. Hi, Madhukar. Thank you for taking my question. While you have talked a lot about private label, but my question is also on the same. So, Madhukar, you mentioned about the difference between metros and non-metros. But are you positively surprised by how fast the private labels are taking off? Can you give us some instances as to what are the products within pharma which are tough to crack? And have customers come asking for private labels in those kind of products as well? And in some of these stores where you have introduced private labels much earlier than the rest of your network, are you probably surprised by, let's say, that number from a net sales point of view, reaching maybe 25-odd%? Can you give some qualitative color on private label and whether it is surprising your internal estimate as well? Not really. We expected this growth. I actually expected a slightly higher growth, honestly. But yeah, this is not out of. I would say it's not surprising. And as I said earlier, the numbers are. Smaller towns do slightly better and all. And across the country now, we are almost at the same level, I would say, because it's now been more than. I would say we started in June of 2023. It's almost one and a half years right now. The full country started in November. So, even for the full country, it's been more than four quarters right now. So, not much out there. But to give you an idea, the, I would say, private label share of chronic versus acute is exactly the same as it is for the regular brands. So, I think 60%-70% of our sales of private label comes from the chronic segment. And so, people are buying all those telmisartans and atenolols and everything else also at the same level. The top 10 molecules probably will have at least six chronic and four acute molecules. Oh, okay. That's clear. Thank you for that. Now, the second question is more on competition, let's say, from quick commerce, right? While what is appreciated is that a typical quick commerce versus a quick commerce for pharma requires a very different kind of a setup. But in case if the competition were to ramp up and you were to match their service levels in terms of two hours or whatever for all your stores which you are doing for some part of your store, how much of a drag will it be on margin? How soon will you be able to ramp up, right, to probably meet the standards of quick commerce? Let's say, even if you were to launch two hours delivery from your stores, right? How soon can you do it, and what kind of a drag will it create on your margin? Yeah. As long as the customer is willing to pay the delivery fee, I don't think there'll be a drag at all. If the delivery were to be 100% free, today we charge around INR 20. If we shift to a zero delivery fee and also try to kill ourselves by doing a 10-minute delivery, then yeah, it would be a drag. But I don't foresee that happening. If we decide to do a 10 or a 20-minute delivery, if we bring on delivery partners, we're looking at the prices right now. The prices are not something which the customer will not pay. So, I don't really expect this to be a drag. Right. But how soon will it take, Madhukar, for you to ramp up, let's say, where you are offering a two-hour delivery all our stores? No, no. We'll never do all our stores at any point of time because customers across all the 600, 700 small towns in which we are there don't really expect this service and don't really want to pay that kind of delivery fee also. It will always be there in the urban areas, in the highly dense networks where you can actually go and supply. I don't think it's going to, so we already have a two-hour thing. Now, do we want to ramp it up to much faster delivery time or not? That's something which we have not yet decided. But we are monitoring the situation right now, and we'll figure out the best way forward in the next. Sure. But Madhukar, a couple of quarters back, you had probably ramped down this, right, in the number of stores or whatever your reach was. And right now, what I understand is that you're not sensing any reason for you to ramp up, right? Am I correct in terms of competition and in terms of what the market is doing? We are monitoring the space right now. We will see depending on how the whole see. It all depends, right? If we are able to get some delivery partners who are able to do it at a very good price, at a price at which the customer is willing to pay, then we could do it overnight. But yeah, we will have to figure that out. All right. That's it from my side. Thanks a lot, Madhukar, and all the very best. Thank you. Ladies and gentlemen, we would take that as our last question for today. I now hand the conference over to Mr. Sujit for closing comments. Thank you, Sagar. Thank you, ladies and gentlemen. I thank all the participants on this call for your interest in the MedPlus journey. Our investor relations teams can be contacted at ir@medplusindia.com. Thank you. Thank you. On behalf of MedPlus Health Services Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.