Ladies and gentlemen, good day and welcome to the MedPlus Health Services Limited Q1 FY 2026 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 initial remarks from the management. 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. R P 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 the MedPlus Q1 FY 2026 earnings conference call to discuss the financial results of MedPlus for the first quarter FY 2026, which were announced earlier. We have with us today the senior management team represented by Mr. Madhukar Gangadi Reddy, CEO and MD, and Mr. Sujit Mahato, CFO. Before we begin, I would like to mention that some of the statements made in today's discussion may be forward-looking in nature and may involve risks and uncertainties. Please note the disclaimer mentioning these risks and uncertainties on slide one of the investor presentation shared with all of you earlier. Documents relating to our financial performance 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. As informed earlier, we continue to strengthen our backend operations and infrastructure to support long-term scalability and ensure seamless execution. 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, out of the 10 additional warehouses, six warehouses have become operational. This disciplined approach will enable us to drive sustainable growth and enhance value for all stakeholders. In terms of our network, we have opened 124 new stores during the current quarter. Over the past 12 months, we have added a net total of 369, gross additions of 456 in terms of new stores. Throughout Q1, there were 23 store closures. Considering both openings and closures, we achieved a net addition of 101 stores during the quarter compared to the 100 stores added during the last quarter. Store closures also include eight franchisee conversions. We continue with the outlook of adding 600 new store additions in fiscal 26. In terms of our store network age, around 21% of our stores have been operational for less than two years, and the remaining 79% of our stores have been operational for two years or more. At the end of the quarter, our network grew to 4,813 stores with 2.5 million plus sq ft compared to 4,444 stores and 2.3 million plus sq ft at the end of June 2024. The average store size is 527 sq ft. On the revenue mix, presently, MedPlus offers over 1,350 plus carefully selected SKUs spanning across pharmaceutical and non-pharmaceutical. In the quarter, the share of private label pharma sales stood at 20.4% compared to 7.9% in Q1 2024 prior to the launch of MedPlus branded pharmaceuticals. On our financial numbers, our stores stood at INR 728 million, representing 4.7% for the quarter. Around 99% of our revenue is from our pharmacy operations. Revenue from pharmacy operations grew by 6.6% YoY on GMV basis and 3.3% YoY on net basis. The pharmacy operating EBITDA stood at INR 690 million, representing 4.6%. Update on our stores performance, I would like to update on our stores older than 12 months. Revenue from these stores in Q1 was INR 14,188 million, representing 95% of pharmacy revenue. These stores had a store-level EBITDA margin of 10.9%. The store-level operating ROCE of these stores stood at 59.8%. And year-on-year on the store-level EBITDA margin by age. While stores greater than 12 months had a margin of 10.9%, this was 11.1% for stores greater than 24 months and 6.9% for stores in the 13 to 24 months age bracket. If we allocated some store-related costs, then the operating EBITDA of stores greater than 12 months is INR 727 million, which translates to a margin of 5.1%. And now, on our working capital. Our net working capital for quarter one was 59 days. The inventory in our warehouse was 36 days. In Q1, the inventory level of our first-year stores was 97 days. In comparison, for our stores older than 12 months, the inventory was 39 days. An update on our diagnostic business. Diagnostics revenue grew to INR 302.9 million in quarter one FY 2026 compared to INR 242.4 million in quarter one of fiscal 25. Diagnostic segment recorded an operating EBITDA of INR 41.3 million, representing 13.6% compared to INR 3.3 million in quarter one of the last fiscal. In April, we sold 457 gross plans a day. In May and June, this was 468 and 520 plans, respectively. As of end of June, we had 164,000 active plans covering 340,000 underlying lines. As of 31st March, this number was 157,000 plans covering 327,000 underlying lines. Our current observed on-time renewal rate was 24% in Q1 versus 27% in the last quarter. 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 then one on the touch-tone phone. If you wish to remove yourself from the question queue, you may press star then 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. Again, to register for a question, please press star then one. Our first question comes from the line of Sanjay from Bastion Research. Please go ahead. Yeah, hi there. Thank you so much for the opportunity. Sir, my first question would be, we have seen quite net investors in the last five, six months. And in terms of SSG, it is bigger. I understand we have scaled our private label revenue, and therefore the growth has been quite lower. But can you explain me a bit more on that side? When we extend the growth to 12 months, the degrowth in the revenue, I'm not able to kind of think on that side. So can you explain more on that? Sure. See, as we explained in the last call also, there were some issues out there on the supply chain and also on the warehousing and a couple of other things out there on the manpower and all. Most of them are being addressed, and as we go forward, we will see a growth in sales. We are already seeing that right now. Second, see, you also have to see that we grew from 7.9% to 20.1% GMV on the private label. And that has actually driven our margins, gross margins from something like 22%-23% all the way to 26%, right? So there's a, I would say, definitely there's a small trade-off out there. Whenever our employees go in and push this very actively, we want to see some customers who may not want to switch and may even get put off a little bit and go. So that is something which we are addressing right now. But we were aware that something like this would happen. It is a trade-off, as I said. We would rather take slightly sluggish sales and go in for 2%-3% extra private label is what we thought originally, and that's what happened. Now we are tempering the whole thing and basically holding the private label at that number. We'll probably still continue to grow going forward at around 0.5% to 1% every quarter. Although we did promise 1% every quarter, I think most of it has already achieved in the Q4 for at least a couple of more quarters. So we're going to be holding it out there, adjusting the overall incentives and everything else to our employees, aligning it in line with the overall company objectives of increasing top line, at the same time growing the private label. So for us, not too concerned about this at this point. We just continue to focus on profitability and getting the stores to break even and all that. Sure, sir. Thank you for the answer, sir. The another issue would be, as in the last phone call, also we said that, and you also alluded to right now, we will see private label to grow by 1% quarter on quarter. But when we see this quarter, the private label share has been dipping down, and therefore the margin has also been dipped for the quarter. Is there something to read on that line? Is this one-off, or will we see for a full year as you alluded that margin will improve 50-60 basis points from here on? Is that trend continue, and how should one think on that line? See, last quarter, I did say that we would actually have a slight dip or flattening of sales on private label because Q4 had actually taken a lot of sales from the future. So their employees were heavily incentivized. There were all sorts of plans, and they ended up actually doing a little bit more on Q4. So Q1 was always going to be a pullback, and that is just the reason for that. Maybe Q2 will also be slightly flatish and everything else. But for us, there's nothing more to look into it. As I said, it's a trade-off. If I continue to push on private label, the sales will be flat. We don't want to do that. So we will have 1% kind of growth. By the way, 1% growth or whatever is on the overall GMV sales, which means it's on the MRP value. Otherwise, the net sales value will always be around 0.5% growth quarter on quarter. So I think most likely, I would say this quarter will probably be flatish or something like that. But beyond that, we'll again continue to grow. Great, sir. Sir, another question would be, we can see in break-up of stores overview, we find that there are eight stores which have been converted to franchises. So what is the strategy regarding how we are identifying which existing stores to convert to franchises? Are these less performing stores, or the strategy regarding franchising model? So in the coming year, what proportion of stores can we expect from this model like four, five years down the line? Yeah. See, for us, some of the existing stores where we feel that a franchisee can do slightly better, in some places where these are slightly secluded kind of locations, where they have to be, I would say, will probably benefit from a franchisee who comes in and does the informal kind of labor thing in which you stay longer hours and everything else, where we think where the benefit will most likely be there. There's no particular model out there. But going forward, though, while this year, of course, as I said, we will only be doing piloting on the franchisee stuff. While going forward, that is the plan for us. I don't see any major changes. We will have some more conversions, but not to a major extent. We will, once the pilot is done, maybe in a quarter or two, we'll be able to guide you on the future, which is how many, what percentage will be end up actually going as franchisee versus company-owned stores. Right now, it's still not yet. I would say the numbers are not yet frozen. Sure, sir. So my last question would be, we have seen that our diagnostic segment has been ramping up, and we were making 13.6% operating EBITDA level. So is the plan to not grow this business still in place or we can expect some expansion in this segment? At least in the states, we are already operational. No, no, we don't really expect to grow this at all at this point of time. While we were never in doubt that this would actually get to profitability and all, that is not the criteria which we have set out there. Or at least that is not the metric which will decide whether we end up expanding or not. The metric is the membership numbers. They are still at only 164,000 as of now. We need them to go beyond 200 and preferably closer to 250,000 members before we decide on expanding into new states or new cities. Thank you so much for answering very good. Thank you. Thank you. Thank you. Our next question comes from the line of Sudarshan Agarwal from Axis Capital. Please go ahead. Yeah. Am I audible? Yes, you are audible. Yeah. So on the branded and this side, I think in the last call, you did highlight that our incentive scheme on the private label side was kind of affecting the branded piece. This quarter, obviously, the decline has dropped a little bit to around 3%. Does it need to grow going ahead in future quarters? I don't think so. I don't think the percentage of private label is going to dip any further or will go down. It will be there. As we go forward, as the incentives of the employees, aligned not just for private label growth, but also for top-line growth, we will see an overall increase in top line. The absolute number of private labels may go up with the overall increase in top line. But yeah, I would expect that they will end up being higher in the cost of private label. Got it. Got it. And on the SSG point, I understand that last year, last quarter, sorry. But when do we see the high SSG growth by? I think the whole mid-year process, I think, still needs a lot of work to happen at the back end for us to actually really take advantage of whatever we have in the front end. So that has been slightly slower than what we expected, although we did open some warehouses, which gave more. And so we are getting there maybe a quarter to quarter to, I think, investment. Got it. Got it. Thank you. This is from my side. Thank you. Thank you. Our next question comes from the line of Lakshmin arayanan K G from Tunga Investments. Please go ahead. Hi. A few things. First, how the branded fill rates have actually taken place in the last two quarters because you mentioned that there were hikes. So just wanted to check if branded pharma fill rates dropped in those two quarters. So it wasn't a big upfront hike or the company does not actually track the brand. No, no, the brand will be interested in some of those from some other products. So that has changed. So on their side, as long as the cost is there and which is not their work, the work of the supply chain leaders, they will now be more than enthusiastic, at least not averse to non-private label products. And just to cut your omnichannel sales, those two quarters, it has actually declined, and just want to understand how many orders you actually do, what is the number of bills itself? Is it a decline in the value of the bill or what has taken place here? So I think as a percentage, it may not have gone down too much, but it has not been growing. We are now taking steps to make sure that we are able to do this. We are re-ranking to get this to. That's all internally done. So I think we should be ready with everything. So the only thing which we don't do that most of the other companies do is that we don't have any cash discount. Now we have found cost of acquiring customers is a bit too high. It's not really that incremental to your business, so we have not done much on that. But I think that's why there may be a gap in the stores which we have across all the regions. We have not maybe kept the salaries or whatever is the incentive we have to give to the delivery guys. So some of those have been addressed, and that as we go forward, we'll see the results. But no, we are conscious of the fact that some of the customers will want to go online, but we are not against selling or we have nothing against the online channel. What is the average bill ticket per bill online? Average bill value for us is because we have some in the day we tend to buy slightly on the higher side. So yeah. You introduced a platform fee or something, some standard charges. So, is it meaningful, or is it just you intend to increase that also? No, no, I don't think we'll increase it. The platform fee, or I think as in all the online bills, that is there. That is in line with most of our companies. I don't really expect to increase that in any way. Got it. Got it. Thank you. Thank you. Thank you. Our next question comes from the line of Sridharth Srikumar from ithought. Please go ahead. Yeah. So my first question is, you said that going forward, you are foreseeing only 0.5% growth per quarter for your private label. Does that mean that the percentage of private label in your overall sales will come down, and therefore gross margin will also be not 26% going forward? No, why do you say that? I said we'll grow from here, right? So if I'm growing from here by 0.5% every quarter, it should actually grow. It's not going to come down. But you're saying that 0.5% is the volume growth, or is it like the share in your overall sales? Share in our overall sales. Okay. It's not the growth number. Okay. Second question I have is regarding when I went to a lot of your stores, one thing which was visible was that they don't have all the branded generics, which are not your brand, and therefore some customers are not buying from the store. So do you plan to address this issue in any way? As much as possible. It is almost impossible to have 100% growth. It takes several growth of inventory needs to do that. So our growth used to be the best in the market over there. I believe we are still much better than most of our competition. But it is possible that in some places, in some stores, maybe some brands we may not have. It's a continuous process of improvement, actually, and we continue to get better and better. Okay. So one more question I have was regarding the warehousing. At a pan-India level, how many warehouses do you have? And how many stores can the warehouse cater to effectively without actually pressuring your supply chain? Sure. So around 40 warehouses is what we are currently having, including the 10 which we have recently added. Roughly around 350-400, 450 max, we can fit each of the warehouse. So service our stores in that region. Okay. So 40 is the overall number of warehouses across the country, and one warehouse can service how many stores? 300 stores? 350-450 range. Again, some of the warehouses are purely only pharma. Some return to the FMCG products as well. And that's how we think for our current network, this would service actually in some areas, we've set up to 500 stores. In some areas, this is between 300-400, which means there is sufficient capacity even to grow new stores in those areas. Okay. Thanks. Thanks for answering the question. Thank you. Our next question comes from the line of Raman KV from Sequent Investments. Please go ahead. So it's more like a clarification. My understanding is as your share of private label increases, your revenue MRP revenue, sorry, store-level MRP decreases mainly because the average cost of private label medicine is comparatively less than branded generics. Is my understanding right? That is right. So if you are growing the private label, there will be two things. There won't be. The same store growth will be very hard to achieve, and the store-level MRP growth will be declining trend. So how are you planning to address this? One is that, and a follow-up on that is you initially mentioned the employees were sick. Now you have found that the strategy has changed. What's the change in the strategy? How are you planning to bring things to growth across all the stores of MedPlus? Okay. So first of all, let us say the private label is sold more, even if the top line actually goes down, the absolute amount of money you make is much higher. So if you are making X on a brand, after the discount, you actually make 2X on this, not as a margin or not as a percentage, but actually in absolute terms. So it is actually good if you were to do it. So there's nothing wrong. Now, but also that is not the intention, right? It is not to make private label 100% and not supply the customers what they want. Because everyone wants our private label, there will be people who will want the brands. So the goal is to basically be a multi-branded guy, keep offering our private label and show the benefits of it, and keep convincing some people to switch. That's all. Now, on the employee incentive, so where the earlier incentives were only aligned towards improving the private label, now they have a mix where they are supposed to also grow the top line, but they'll get the private label incentive, so it is different in different places. I can't go into the full details, but yeah, that's what it is generally, so they are no longer linked only to one part of their performance. Okay, and so with respect to CapEx per store, what's the CapEx per store for us? Typically, INR 700,000-800,000 per store. It of course depends on the size of the store. The rental advance is around INR 200,000-300,000. So you could say INR 1 million-1.1 million overall. With respect to what you said, now you will be giving for increasing private label share products by 0.5% every quarter, which is effectively two% increase from current 13% to 15% by the end of this year. I just wanted to understand how will the gross margins and operating margins will improve? Yeah. It's a little unlikely that this quarter will also grow. So most likely the quarter after is not growing. The reason I say that is because we kind of achieved the growth of two or three quarters in last quarter, and we have stabilized in Q4. So after that, we'll continue to grow. So it is going to be a function of the growth of private label. 0.5% on exchange value or 1% on MRP value, which is what we did say. Yeah. So if you are increasing 0.5% on net sales value, how much will your gross margin improve by? Any ballpark number? Every 0.5% will probably give it to you by around or give you around 0.2%. Gross margin improvement. Okay. Thank you. Around 2.5%. Thank you, sir. Thank you. Our next question comes from the line of Madhav from Fidelity. Please go ahead. Yeah. Hi, Mr. Srinivas. Thank you so much for your time once again. So one question. I joined a little late. Sorry about that. Maybe it's a repeat question, but just wanted to understand thinking going ahead, how is the management thinking about balancing the margins and the growth? I guess margins have been very strong, and it seems like we still have levers to grow the private label, which means gross margin should remain strong going ahead. But how do we think about just the top line and the gross margin or the EBITDA margin equation for the next sort of few quarters or one or two years? That would be great. Thank you. Just wanted to understand that. Okay. Sure. Sure. So a couple of things. One, the margin can come down if the number of new stores we open are going to be very high. The overall margin. I don't mean the gross margin, right? But we expect to open only 600 stores, so it's not going to be a huge impact on the overall EBITDA of the company. Now, on the gross margin, obviously, it is very beneficial for us to continue to grow the private label, and we are doing that. But at the same time, we don't want to put off customers who are coming for brands, and so that will be counterproductive. So we are going to, as I said, we have already realigned some of the implementation one. So we expect that if not this quarter from next quarter onwards, we'll continue with the same kind of growth, which is either 1% on MRP sales or 0.5% on net sales. Okay. So the mix part is quite clear, actually. Just on getting the top line growth back, because I guess if you can balance that with the growth of the EBITDA margin, then sort of earnings growth becomes pretty strong for the company. Even now, it's quite good, but just to get the top line moving, yeah, how do we fit that equation? Sure. Sure. So we're doing a couple of things. One, making sure that the back end is strong, it is able to supply in time, and it's able to also do the fill rate properly and all. And also, we are aligning our employees into doing a little bit more of the top line sales and everything else. So both those will help catch up on the SSG. I don't think it's going to be a big concern. So yeah. And so just on the EBITDA margin side, now that Q1, we've done about 4.5%-4.6%, and I guess this is easily one of the weaker quarters for the company. Correct me if I'm understanding you wrong, please. So is it fair to assume that sort of full-year basis that EBITDA margin should be not a 5% for sure and maybe moving closer to 6% in coming times? Is that how we should think, or that's being a little too optimistic? I think that's actually a little too optimistic. I think we definitely grow from here as we move forward, especially since last year was a very, very strong growth year for us on the private label. And as I said, we want to balance it a little bit and grow slightly more moderately at around 0.5% or 1%, depending on how you look at it. I think the growth may be not as high as that. And last year also, we added only around 350 new stores. This year, we plan to add at least 600. So yeah, that could also be a slight discount there. So any guidance on the top line growth then? Any guidance there for the full year? How that could end up for us? Not right now. We'll come back. Wonderful. Thank you so much. Thank you. Thank you. Thank you. Our next question comes from the line of Aradhana Jain from B&K Securities. Please go ahead. Hi. Thank you for the opportunity. I have two questions. So first is, if you see the total amount of inventory that we have as of June, it would be the lowest that we have seen in the last seven, eight quarters now. While we understand the upward push to the level of inventory should be the new store addition, and the downward push is the shift to branded generic to PL. But if you could help us understand what is the level of inventory you hold in a store and where do you see the inventory settling, and would there still be room to see a declining absolute inventory in spite of new store opening? Yeah, that's my first question. See, new store opening will basically increase the number of days of inventory. That's all. In absolute terms, it's always going to be around INR 17-18 lakhs of inventory per store, per super store. So that's going to be the number. But every time you open a store, you have to open it with a buffer inventory out there. Buffer meaning you really don't know what the customer's last day is a set of which had to be in the store. And initially, since the store usually starts at around INR 3 or 4 or 5 lakh rupees per month, you're going to see a much higher number of days of working of inventory. So that's one. So that's not going to change. Second, on the private label, will it push down the inventory and all? It's still early days because we are not really looking to so we are actually carrying both private label as well as our own right now. At some point, we may get a slightly better idea of which private label, sorry, which branded inventory to drop or which not to stock, and then maybe you'll start seeing the decrease of inventory days out there, or at least a value, people would say, for us as we go forward. Understood. The second question is, how is the acute versus chronic mix currently under PL? Is it similar to the historic levels of chronic more than acute or at 60-40 ratio, or has there been any change there? No, it's always been chronic higher, mainly because chronic patients usually have a much higher need of medicines. They are also, since they spend so much more, they are going to be affected a lot more by increase or decrease of discount, and so we expect those guys to actually come in, and that's been the cost, but that's been the case, actually. Chronic is always higher for us. Understood. That's all from my side. Thank you so much, and all the best. Thank you. Thank you. Our next follow-up question comes from Sanjay from Bastion Research. Please go ahead. Hi, sir. Thank you for this follow-up. So my question would be, when we say backend and supply chains are challenging for us, so what does that mean? What is the challenges we are facing on backend? And you also mentioned that you are doing some work on supply chain side to opening warehouses. What else we are doing on that side? If you can explain in detail, it would be really great to understand going forward how things will change from there. Yeah. So it's largely what you said earlier, right? It's on the warehouse inside. Tamil Nadu basically had one warehouse and it was supplying 1,000 stores. And from Chennai, you're supplying all the way down to Madurai and deep south. And that became a problem out there since we set up Madurai warehouse. Now, Madurai warehouse is slowly coming to speed, and so we will see some of the problems going on as we go forward. Similarly, in Karnataka, we had one warehouse in Bengaluru, and we were supplying all the way to Bengaluru and Hubli. Now we have set up one more warehouse in Hubli. So A, obviously, when you have something close by, you are able to so that is one. Just the distance alone will basically come down significantly when you have a local warehouse and you are able to supply every day. The city opened a lot of stores very, very quickly. The warehouses themselves were a physical constraint. They were overflowing out there, and so we are not able to just put in enough stock and have it retrieved on time to central stores. These are getting addressed. Some of it is done, and some of it continues to be there. So we hope in the next one quarter or so, we should be all streamlined. Thank you. Ladies and gentlemen, please press star and one to ask a question. Participants, if you wish to register for a question, please press star then one. Our next question comes from the line of Omkar Hadkar from Mirabilis Investment Trust. Please go ahead. Like for example, insulin or others, like say GLP drugs, etc. Sorry to interrupt. It's okay. Sorry to interrupt. Omkar, sir, we could not hear your question earlier. If you can please repeat the question once again. Okay. Is my line clear right now? It's a bit unclear, sir. Yes, please go ahead, sir. Okay. Yeah. So my question is on the private label. So at this point in time, just wanted to understand in terms of availability of private label across the store network in terms of whatever SKUs we launched. Is it fully available? And the second part is, are there any other kind of missing categories, like for example, either insulin or GLP drugs or some other things where there is an opportunity to kind of further introduce private label in the overall network? So some color on that would be appreciated. Sure. So today, I would say 80% of everything is self-service store. We would have a substitute for that. The balance would be some of the patented drugs. A lot of the me-too drugs, 80% or I would say 75%, a lot of the me-too drugs would be the vitamins and small, I would say, very little sold combinations which have brought either a small change in the strength of one of the combination products or additional minerals or additional kind of vitamin, multi-vitamin kind of complex kind of product. So those, I would say, we have equivalents. We don't have the exact equal, and we'll probably never have. But other than those products, I would say we probably have everything other than insulins. Insulins, we haven't really found a very good, I would say, a reliable supplier for us to go forward on that. That's one. We just hope for newer products, definitely. I think GLP-1, GLP. I think both BJV and Ozempic are going to come off patent next year, and we are getting ready to launch it in the one month or so, after the product comes off patent. Got it. Got it. Sure. And I have a question on the diagnostic business. So I saw that right at this point in time, you were adding about 7,000, 8,000 kind of labs per month, per quarter. So just wanted to understand maybe the underlying phenomenon there because I guess you would have started renewal cycles of some of the older subscribers. So currently, what are the retention rates like for that kind of a business? And also to reach your kind of stated goal of 2.5 lakh subscribers, at this current trend rate, it looks like it might take a while to get there. So are you kind of working on any strategies to accelerate the net additions in that business? Yeah, we're looking at a couple of things. It's a little early to say, but the basic listing is going to be around B2B. And once B2B kicks in, then having, let's say, 5 or 10,000 per month is not a big deal, or even more if you get a large company on board. So B2B has to be the way we have to go, and that's why we have kind of put off all expansion plans till we can convince people to come on board. On the renewals and all, I think within the first quarter, anywhere from 24%-27% is the usual renewal rate for us. And after that, see, if it is B2C, people are going to come and renew when they need it. They're not going to renew immediately. A lot of the people are chronic customers. A lot of them may have gotten their test done in the last one month of their membership, and they're going to wait for one quarter or more till the next cycle of test starts for them to come and renew it, but the renewals have been fairly steady. Okay. Okay. And I missed part of the call, but if I can just summarize what you said about the inventory, you mentioned that the overall warehouse level inventory has come down because of the opening of the new warehouses and making it more efficient. And the store level inventory is more a function of the pace of the opening of the stores. Is that the right inference on the way inventory is? No, no, no, no. The second part is right. The inventory level is not going to come down because of the opening of new inventories. It is just going to be split between, let us say, Chennai and Madurai. Where earlier, it was only in Chennai. So that's not going to come down. It's going to go faster into the stores, and hopefully, with better results and everything else, I will go forward. Okay. So at the warehouse level, the turnovers have increased. That is what is reflected in the days. And at the store level, the metrics are pretty similar. There's not much change, right? Yeah, yeah. It doesn't change much. In the first one year of its opening, it's always going to have a very high base of listing out there. But the real metric to see is the inventory of stores which are more than one year. And that has usually been constant around 35-40 days. It's around 39 days, I think, right now. Your old private label inventory, has that largely been cleaned up one way or the other? More or less. I think there's a very small, I would say, not a material amount still left. It's fully growing. It's all fully growing as well. Okay. Understood. Great. Thank you. That's all I had for questions. Wish you all the best. Thank you. Our next question comes from the line of Sidharth Srikumar from ithought. Please go ahead. So you said that most of the Private Label sales is for the front side. So I just want to know what would be the out of the customers you have in that segment, how many customers do repeat? Almost everyone. I mean, I'm sure there are some customers who don't. We don't have the exact numbers for it. But anyone who comes and takes a chronic medication is just going to repeat. We haven't seen. I would say when we looked at it, it is not dissimilar to any branded product out there. Understood. One more question I have is, you have said that 80% of whatever drugs you sell in your stores, you have your own brand for it. So the 80% of the branded generics, right? How many have you taken off from your stores? How many branded generics did we remove? Yeah, and replaced with your own brand. No, no. That's not how it works. We don't replace any of the branded generics, actually. The assortment and the depth of that is completely a function of the sales of the product. Only if the sales goes on completely, does it actually go off the shelves. Otherwise, we don't take it off proactively. Okay. Understand. So if I can squeeze in one more qualitative question, is that what are the learnings for you since the introduction of the private label? I think we knew everything. I'm just kidding, so I would have wanted the adoption to be much faster, honestly. I thought we would right now be at close to a 30% by GMV kind of terms. It is only at 20 out of 80 right now, so it is around 25% of overall sales. The earlier adopters have to get moved in. I think the rest of the naysayers out there will take a little while to come on board, and we are seeing that happen gradually, so slightly slower than expected. That's all. Okay. Thanks. Thanks for the opportunity. Thank you. Thank you. Our next question comes from the line of Neelam Punjabi from Perpetuity Ventures. Please go ahead. Yeah. Thanks for the opportunity and congratulations on the margin execution that we have demonstrated over the last 12 months. My first question is that on a GMV basis overall, how was the growth YoY for the quarter for the pharma business? Just hold for a second. Sure. I think on a GMV basis, it is around 6% is what I remember. 6.8%. Got it. Okay, and my question is on the overall growth. While historically, we were growing at a high double-digit, and in the last four to five quarters, we have slowed down to about mid- to high single-digit growth, and you mentioned that this is because of private label going up, which is at a steep discount to branded generics. However, given that this higher private label is now in the base, can we expect the growth to pick up and go back to the double-digit growth that we had historically, let's say, in the next couple of years? Yeah, yeah. Definitely. It's going to be a function of two things. One, the number of stores we add, and two, the overall growth itself. I fully expect that we will start growing out there. See, one of the reasons is there's definitely, I would say, a trade-off between margins and growth, which is between private label and private label, which basically accounts for the gross margin, and just growth, which is going to come from selling branded products. So we chose to go the private label way. We wanted to really expand the market, take a pharma solid base, and from there, grow private label slightly in a slightly more consolidated fashion, but again, refocus on the branded stuff. So we will now start growing because of that. But for us, it is a conscious call. We really wanted to expand the margin and take it to at least 25%. That makes sense. But what I'm trying to understand is that while that has happened in the last, let's say, 12 months or so, is this now a pivotal or an inflection point where we'll be able to grow at a better rate compared to the last one year with keeping the margins at this current healthy rate? What is that inflection point? Is it today? Is it six months out where the growth would start picking up along with maintaining the kind of healthy margins that we've already demonstrated? Sure. So two things. One, of course, the reshifting of focus to, or realigning the interest of all the employees to make sure they will sell both branded as well as private label. Second, as I said, streamlining of the overall supply chain and everything else which will take a quarter or two completely to happen. That will also help us increase the fill rate and increase our sales. So both those things will start happening, and they'll really going to top and growth. Thank you. Understood. Got it. And just one last question. In terms of our target of 600 store addition, what would be the broad split between the franchisee stores that we'll be opening and our own stores? I'm thinking at least 100-odd stores will be franchisee. We're trying to see if we can do more, but we want to make sure that the pilot and all are going well before we really take off on that. Got it. At least 100-odd stores. At least 100. Yes. Got it. Thank you. Thank you. Bye. Thank you. Ladies and gentlemen, we'll take that as the last question for today. I now hand the conference over to Mr. Sujit for closing comments. 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. On behalf of MedPlus Health Services Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.