Vasa Denticity Ltd

Okay. Hi everyone. Good day and welcome to the Vasa Denticity Limited earning conference call to discuss the operational and financial performance for the quarter and financial year ended on 31st March 2026. From the management team we have with us

Good morning everybody. Thank you all for joining the earning call. Let me be direct with you about FY26. We grew total income to 283 crores on continuing operations after deliberately exiting 39 crores of low margin trading. Our core business grew 33%. We added over 70,000 new dentists, a 62% jump, and now serve 1.44 lakh customers, most of them in tier 2 and tier three of India where our category is structurally underserved, but we also fell short where it mattered. Own brand stockouts pulled our gross margins from around 34% to 23.7% by Q4 and a weaker rupee raised the cost of imported products that compressed our EBITDA, and I own that, these are operational issues not structural ones and they are being corrected. We also chose to walk away from the IDS Denmed acquisition. FY27 will be a year of deep focus on the core, restoring availability, improving inventory productivity and converting growth into profit.

Okay sir. So the first query is from Chintan Parikh. Chintan Parikh please unmute yourself and ask your query.

Yeah. Okay. Am I audible now?

Yes. Yes, you are audible.

Perfect. Yeah. Thanks. So Vikas, I understand you owning up on those two things, right? This was actually one of the questions which you own up. The question is why didn't we pass on the imported product price increase to the customers because these are not you know contractual orders which runs in months. Yeah. This is on demand orders where you can raise the price. So is there any other competitor which is not allowing you to raise the price, on fear of losing the customers? What's the real story why this price could not be passed on?

Yes. So, this market is mostly a traditional market where the price rise reflects in the real market after some time because of the traditional supply chain and if we increase the prices we fear that we might lose some customers. So it takes us some time to increase or decrease prices.

But because I mean if I look at your nearest listed competitor who had a very large presence on tier three tier four market, you enjoy a presence in a tier one two market as well right, where your customers depending upon if they are in some metro cities, top eight or top 15 cities of India, would be able to absorb those prices and pass on to the actual end consumer. I can understand the strategy for defending the prices for tier three tier four but why not for tier 1 and 2?

Yeah, but we have one price for the whole country as per the competition commission of India. We cannot have multiple prices and talking about the nearest competitor. So I think the whole offline supply chain is our competitor and for some dealer in Mumbai to raise the prices, it takes some time for them to actually understand that the price has increased. But for us it is directly manufactured driven sales. However, we try to increase prices seeing the competitive landscape in mind and first priority for the company is growth. First priority is not losing the customer. Then thinking about price rise and at the same time Chintan Ji it is a learning curve for us. We are also trying to learn and understand how this behavior converts or loses a customer.

Understood. Sir, just also wanted to understand about the dental cap and other bridges and other segments. Yeah. So what is the growth over there? Is that the business stabilized?

Yes. We have a subsidiary called Smileworks which is into manufacturing of prostheses like crowns and bridges. They are not over-the-counter products. They are customized products. After a doctor takes an impression of the patient's mouth, they're customized for that particular patient. So Smileworks is currently at a run rate of 4.8 crores annual and we feel that by the end of this year it'll be around 10 to 12 crores of run rate.

And so this is currently operated in how many cities and are we able to meet the local companies which provides this in a fraction of a day or a two days timeline?

Yes. So we are currently operating in only Delhi NCR majorly. However, we are supplying to some parts of Punjab and Haryana but we have not yet decided to scale it. We are

So any plan to get into the dental insurance space because from a pediatric perspective it's a lot of kids undergo corrective treatment which drains the pocket of a parent, which is something which is predictable and it's a future event. Is there any plan to get into something like that which can, with a minimal effort, corner a market share with such an innovative financial product?

There are a lot of priorities before that. But in the short term there's no plan, but if something amazing, something really exciting comes to our mind, we'll definitely look at it.

I'll go back into the queue. Thank you.

Thanks.

Okay, thank you Chintan Ji. So, the next query is from Mr. Swaraj Mehta. Mr. Swaraj, please unmute yourself.

Hello, I'm audible.

Yes. Yes, you're audible.

Thank you for the opportunity. So my first question was, now that we are not going ahead with the acquisition, what do we plan to do with the cash that we have in the balance sheet?

We plan to currently park it and use it over the years as a growth capital of the company. No immediate plans to invest that money.

Okay. And now I think we faced stockouts over H2. So what was this shortage of our own brands and why did this happen?

This is because of our internal supply chain issues. There were some series of mistakes our supply chain did over last two quarters of last financial year and that resulted in a lot of miscalculations in the ordering of own brands, and because the lead times are long for own brands because it undergoes different packaging, legal methodology scenarios, different licenses from CDSCO. So it took us more than usual to get them back in stock. So the stockouts went upwards of 33% in own brands at one point of time and now we are at 14.6%, that is still higher than usual. The usual is 5 to 7%.

Okay. And so we are mandatory required to list our products on CDSCO before selling them in the country. So all our products are registered on CDSCO?

Most of them are registered, and you know there's a continuous registration process going on. So at one point of time there are so many applications with CDSCO and once we get the license we are able to import the product and list it.

So we spoke to a few dentists and I think major part of why customers prefer online distribution over offline distribution in tier one is relationship, same day delivery and credit periods. So what are we trying to do to address these?

Yes. So for same day delivery, mostly in tier one cities we are currently delivering next day, close to 60% of the orders in any tier one city of India is delivered next day.

So are we incorporating like voice notes for taking delivery, like a dentist friend mentioned that it's very convenient while driving to give orders on the phone to the local distributor. So anything like that that we've incorporated through AI?

Yes, that is under plans. But before that we'll come out with image search.

And the number of NRIs who visited India this year had significantly reduced this year. So did we see an impact because of that, or any issue because of that on the growth?

I don't think we have had such an impact since we are just 2% of the overall industry and that kind of tailwinds might not impact us immediately but we'll keep an eye on that.

And have we changed the way we have reported any data? Because some data points did not match with the past year data, like past year number of orders in our earlier PPT was 5 lakh 36,000 and this year I think the order number is 7 lakh 60. So the growth number mentioned is 26.2 in our latest PPT but it is much higher. So was there any change in the data, or the number for quarter 1 and quarter two volumes were also different than what were reported in the current PPT?

I don't think there's any change. I'll check the numbers and I'll give a briefing to the market on this.

How many employees do we have? Currently on our website in about us criteria I think we mentioned that we have 680 team members and last year we had around 360 or 350. So how is this split bifurcated and how do we see employee strength going forward?

So there are two kinds of employees we have, one is on our payroll and one is off roll. So combined together it is the number mentioned in the about section. Actual number of employees is 303 on payroll.

And this will stabilize going forward. We don't need more people now to grow.

I think we only need people in the higher strata. So senior level hiring might happen but with the help of AI I think lower level hiring won't be required going forward.

Okay, we have four warehouses currently, right? We had seven earlier. So which warehouses did we close and why? Because I think other expenses dropped this quarter. So was the closure of warehouses the reason for the other expense and is that sustainable? Will that be the range of other expenses going forward?

I think wherever you have read it, four warehouses are the largest ones. We have the same number of warehouses as earlier.

Okay. So we have seven warehouses only.

So we optimized some warehouses. For example, we were spending 100 rupees on a certain warehouse and we realized that there were a lot of manpower who were doing only one kind of work and they were not participating in other activities. For example, inbound people are only having KPI of inbound and not outbound. So we have tried to optimize that and we saved some money there.

And you mentioned one line in your PPT like four major warehouses plus digital fulfillment nodes plus dispatch automation. So can you throw some color on that? What is that and how do you plan to go with that?

That's a future plan that we can have smaller warehouses of 500 to 1,000 square ft in small cities where the number of orders are small but because of the distance from other warehouses it takes us four to five days to deliver. So if we have a local warehouse, we might be able to deliver for the fast selling or for the most commonly used products by a dentist, maybe same day or next day. And that's the plan I showed.

And what was the split of consumables, inventory and instruments this quarter for the whole year?

It was close to 70% for consumables but a lot of own brand consumables were not there in the last financial year. It differs, I don't have it handy for quarter to quarter but it is a little bit different in last financial year.

And how do we decide which products to make or import for our own brand portfolio? So how do we decide which products to include in our own brand portfolio?

So generally what we see is, for example, there is a particular chemical which is sold by 10 different brands on Dentalkart at different price points and we understand the pain point of the customer that what is the right price point for that product and what are the right features required in that product. So we, based on that data, talk to the customer, talk to the manufacturer, find out what price we can buy that product in bulk, and if we can eliminate some

What was the contribution of private label, of our own brands, for FY26, and for private labels how much is the proportion of tier 1 versus tier 2 and three, and the same for third party brands?

So the proportion of own brands last year was lower and that shows in the declining gross margins quarter on quarter last year, and the rest of the numbers I don't want to go into detail for because there is a lot of proprietary information which we don't want to give to the market at this stage of our company.

Right. Oh, no problem. Thank you. I'll join back in.

Thank you, Mr. Swaraj. So, we have the next question from Mr. Pawan Kumar. Mr. Pawan Kumar, please unmute yourself.

Yeah. Hi Vikas. So Vikas, earlier we guided around 500 to 600 crore revenue in FY27. That looks difficult now. So, do you want to revise the guidance?

So actually, earlier calls or guidance showed our immaturity on how to handle the capital markets. We believe that we can double our top line every 3 to four years and going forward I don't want to get into giving guidance but just have a NorthStar of doubling on the top line every 3 to four years.

So are you saying maybe around 30% CAGR or less or I mean where do you see?

That is possible. Yes, that's what I'm saying. I don't want to give a particular number to you because it's a dynamic market and there are a lot of things going on currently globally. I don't want to give a particular number to you but I just want to assure you that I'm bullish on what I'm doing and I'm highly confident that I'll be able to achieve as much as possible and meanwhile we are also learning a lot of things so giving a number won't be right at this stage.

Okay. And our EBITDA margins have fallen from 10% to 4%. When do you see it coming back to around the earlier level of 9-10%?

So in the presentation I have mentioned that we aspire to bring it back to mid- teens in next 3 to four years and the EBITDA margin falling at such levels in last quarter or last financial year was according to us a one-off and it is not something structural. We'll get back to better numbers in EBITDA in this year and in years ahead.

Okay. Thank you. That's all from me as of now. I'll join back in the queue.

Thanks.

Thank you, Pawan Ji. So, next we have Mr. Ketan. Mr. Ketan, please unmute yourself.

Hello. Yeah. Am I audible?

Sir, I think this will improve over the next couple of years. This year we will see better cash flows in Vasa. A lot of optimization is happening and we are trying to keep the right stock levels at the right warehouse. So we are optimizing the inventory but you know last year during October November something happened because of optimizing inventory. We lost a lot of stocks of our items just by taking the pressure of keeping less inventory. So while we will be highly aware of that because it was a lot of stockouts and a terrible situation for me as a CEO to face, going forward cash flow is very important and long-term free cash flow per share is really important to me.

Okay. A related linked question is, while we will grow at a good pace, would you need to raise funds going forward? And if yes then what path would you choose, short-term working capital kind of a fund or would you dilute equity?

Yes. So right now there's no plan to raise funds. We have necessary funds available with us as growth capital and for future growth also. We cannot see a fund raise right now. But in future if we require funds we have a debt line of 15 crores available from various financial partners and we have a stable rating which will help us to raise those funds. So right now we look at debt as a possible fund raise in future.

Okay. And the other question is, I had come across certain news items wherein some brands had kind of barred or their notices were that any people buying from Dentalkart probably will not get the required support from those brands. Is this true first of all? And if yes, what led to that?

Yes. So first of all all of them are supplying to us despite that, and many of them were 4 years old, 5 year old, 3 year old relationships but they all were combined by some competition in the market and then it was put out in the market. But yes there were two three correct incidents from them which actually happened after the Delhi exhibition last year where a lot of manufacturers wanted us to increase the price on Dentalkart for products so that they'll be able to sell more in the exhibitions and there were some miscommunication or disagreements with my pricing team that led to them coming out in the market and saying that they don't recommend Dentalkart. But most of them are supplying directly to us.

So that incident has been taken care of and now it is pretty smooth in terms of them supplying to you and them not barring customers from buying from you?

They never stopped supplying us.

They didn't stop supply but then they still made a statement in the market saying that customers should not buy from you.

They made a statement at that point of time just after the exhibition, out of two three people combining their understanding and just coming onto the market, but that didn't change anything for us. In a way it did some marketing for us. If you go through some social media posts where people are discussing this, a lot of dentists came in our support that Dentalkart did the right thing, not coming into pressure from some manufacturers so that some short-term strategy could be favored for the exhibition. For us it is a year long, 365 days exhibition on Dentalkart. Thank you.

And going forward, do you foresee our own brands growing in relation to the other brands that we sell on our platform? And does this not pose a kind of a cannibalization risk for the other brands that you have on your platform?

That is what prevents us from going all in. So we first of all want to maintain Dentalkart's neutrality. We want to always make sure that Dentalkart behaves as a neutral platform but yes giving right value to the customer. So the right price point of a particular feature set or a particular product should be made available to the customer. So because of that we are not at 70% of our own brands. We are at 45 to 50% still because it takes time to build those products and offer the right value to the customer. So we are not looking at cannibalizing the different brands sold on Dentalkart. But yes, as I earlier mentioned, if there are 10 same products on Dentalkart, it wastes a lot of our energy, a lot of our bin allocation in different warehouses to sell them and it doesn't add any value to the customer. So it's better that we have three to four real in-demand products and one of our own products.

Okay. And in terms of distribution, as of now, if I were to talk in number of pin codes, how many pin codes have we reached and what is the target for us to reach in say the next four to five years?

So there are big logistic partners whom we work with and I think they are available almost everywhere in India. So upwards of 19,000 pin codes of India we are already supplying. However we have delivered in 13,000 to 14,000 pin codes only till now. 5,000 pin codes of India have never ordered yet.

Okay. Thank you so much for answering all the questions. And I should compliment you that you accepted and admitted all the challenges that you faced head on. You took responsibilities for whatever things didn't go the right way. Good show there. Thank you so much.

Thank you Mr. Ketan. So we have the next question from Mr. Madhur Rathi. Mr. Madhur, can you please unmute yourself?

Hey, hi Vikas. Thanks a lot for the opportunity. I just, to continue on the previous participant's question, looks like this is still more of a B2B market than a B2C market, with the customer being a dentist. Because there is a lot of local supply chain still which is more prevalent.

Yes. So we have contemplated on that and we are still looking at it, like what are the different ways of growth. But at the same time we have to in the long term offer the value to the customer which we have built over the past couple of years before and after IPO. So based on that, if we supply everything through a B2B channel or through a dealer then we'll be doing the same which a traditional network did over the last 30-40 years. So why not we go through a Blinkit or a Zepto way or Amazon way where we can supply to B2B companies or dealers through a tech platform rather than going offline and doing that traditionally.

No, but my question is more like, if the market structure is already like insurance, which is a very touch-based product where you need some local presence, if this market is also structured in that format where a doctor wants to call someone, he always wants a channel manager, because he is not a person who will use an app to keep an online inventory in a cart etc.

Yes, thanks a lot for the suggestion. We'll contemplate it further and think on it of how we can utilize the suggestion going further.

And just another question, because given the world has moved into a quick commerce model, everybody now knows about Zepto and Blinkit, and now the instant purchase behavior of customer has gone up. Do you even think that this 2-day, 3-day thing will hold? Will people expect it to get delivered in one to two hours or in a very short span of time? Is that what you are also witnessing?

I feel that given the quick commerce growing so fast in India the expectation of the customers will definitely be towards faster delivery and we believe that most of the customers don't stock all the SKUs. Sometimes they finish with the alginate and they need it immediately. Sometimes they finish with a GIC. So yes, delivering in 2 hours or 3 hours might be needed in future but that's not what we are trying to do right now. I think if we are able to deliver within 2 days to majority of the market we'll reach the level we think of and then we'll see if in certain states or certain cities where the demand is such, we'll try to have an experiment on that model. So we already have a trademark called Instad where it is taken on the belief that someday we have to deliver very fast or maybe within two or three hours and we did a pilot in Delhi also.

Got it. But any chance of us integrating with these quick commerce players like Zepto? I don't know if you know about this industry called ICT where Rashi Peripherals, they actually tie up with multiple such quick commerce platforms to enable it. Even doctors can quickly go on to Zepto and start buying some of the inventory, maybe small consumables can be facilitated through those routes. Again I'm naive to this industry maybe you are better with what you know but this is something because what is happening is a local supply chain expert can always give it in a day. If Dentalkart gives it in 2-3 days what is the value addition? Because here the key variable probably is how fast you can deliver it to them right and is the brand important? I mean price

Okay. So while I agree with you on some points, I would like to have an agreement on disagreement on this, that availability is the first priority. I think the right product is the first priority. While the local supply chain can offer a product same day or next day, they won't be able to provide maybe a choice among five different SKUs of the same set of features at different price points. So when I was practicing myself 10 years back I had to accept what my local dealer had. If the agent was available from Dentsply which is 1,700 rupees I had to accept it. If the dealer had a 500 rupee worth of agent I had to accept it. If the dealer had a 200 rupee worth of agent which I didn't like as a product I had to accept it because I had no other choice or I have to wait. With Dentalkart, this freedom comes that you can choose whatever product you want. Yes, it takes two to three days to deliver but you have a bigger assortment of products to make that choice. So that is one. Second, yes, availability if done timely, we'll grow on our numbers and the wallet share of the same clinic. And third, yes, price plays a role, but for various strata of the market especially in tier three and four, the price really matters. They are sometimes ready to wait for 4 days but the price matters to them and then they try to buy maybe for next month as well.

You got it. This helps. Thanks a lot.

Thank you Madhur. So we have next Mr. Vibhor Talreja. Mr. Vibhor, please unmute yourself and ask your query.

Hi, thanks Dr. Vikas and thank you for the straightforward conversation and detailed presentation. The online businesses all take their own time to mature and we have seen that across categories. And if an industry is only 2% online it does take its time. So that's okay.

Yes. Thanks a lot for a good question Vibhor Ji. I think the stockout situation we are majorly over it but yes it is still more than what it used to be earlier. It all depends on the gross margins we have and the sales we make, and then cutting down our expenses. However, in the last 6 months we have optimized the other expenses we are making, be it the manpower expenses, be it the warehouse expenses, we are trying to reduce the expenses at the same time.

Okay. You say for this year, for the coming year it will be better than last year.

That will take over because in the normal MNC brands we only have 10 to 15% margin. If their share of sales is high, naturally the gross margins will come down and that showed in the last quarter of last year. Now since our own brands and all the research we have done over the years on the right set of products in our brands is coming back, we expect the gross margins to come back to a certain level and the EBITDA coming back towards higher numbers.

Okay. Fair enough. Thank you.

Okay, thanks.

Thank you Mr. Vibhor. So we have the next question from Mr. Naitik Shah. Mr. Naitik, please unmute yourself.

Hello, I'm Adam.

Okay sir. I'm sorry I missed some part of your question. Can you please repeat?

Yeah. So when you look at your revenue per order for FY26 that was somewhere about 3,670 rupees. For FY25 the number was 4,600 rupees and for FY26 this fell to 3,670 rupees.

Yes. So that was a function of a lot of offline trading activities as well.

Okay. So the trading component had a much higher revenue per order and a gross profit per order as well.

Last year we completely stopped it.

So the full year impact is there in FY26, or should that continue into FY27?

We have identified that it's not a good long-term journey for us where we are not adding right value to the dentist's life. So we decided to focus on the core business of

Understood. Thank you. Thank you.

Thank you Mr. Naitik. So we have the next question from Mr. Nikhil Porwal. Mr. Nikhil, please unmute yourself.

Hello. Am I audible?

Yes. Yes, you are audible.

Yes. Hi Vikas. How are you doing?

I am doing good. How are you?

Even I'm doing good. Thank you so much for the opportunity. It feels great to see how the maturity in terms of depth of the business and your communication towards the investors has changed over the last few calls. I really appreciate that. I broadly have a few questions mainly on digital dentistry. Today dentists may engage with you for specific products or services. Over time do you see the opportunity to become an integrated workflow partner across diagnosis, treatment planning, design, manufacturing and practice support? What would need to happen for Vasa to become embedded in the day-to-day workflow of a dentist rather than being one of several vendors?

Correct. So I am trying to build an ecosystem for dentists where the workflow, anything which a dentist needs, is available with us. So that's why we started digital dentistry.

Got it. And if we look at India today versus more mature markets, where do you think India is on the digital dentistry adoption curve so far? And in general what are the bottlenecks that you see that, if addressed, would accelerate the pace of adoption?

Yes. So digital dentistry has been there in India for last 25 years. There have been CAD CAM machines, there have been metal DMLS printers, there were scanners in the market I think for last 14-15 years. But the problem was price point. Basic RVG, intraoral camera, scanner, that is the entry point to digital dentistry. With the price points coming down and a lot of

Okay. So basically a scanner that probably used to cost maybe a couple of tens of lakhs which has come down to I think three to five lakhs. That's a major breakthrough. And hopefully that also creates a flywheel for the rest of the product portfolio in digital dentistry. And I also happen to note you've mentioned supplying to some institution or university. Has this been usual business for Dentalkart before, or is this a new customer cohort altogether?

This is a new customer cohort. We have never done that before. However, we received a query and we were already learning that, in the digital division, we were selling milling machines, scanners, 3D printers, metal laser sintering machines. So this is the first time we combined all of that workflow and delivered to an institution.

And this does build a sticky demand for consumables as the base for digital dentistry kicks up. Am I right in understanding that?

Yes, it creates two new demands in the market. Number one is naturally the consumables and number two is the AMC and CMC of the machine supply.

Okay. My last question is, many companies can distribute equipment which India already has a lot of players for, but fewer can build long-term relationships with clinicians and labs. So over the next five years what capabilities are you investing in today that you believe will make Vasa a preferred partner for both of these? Ultimately which technology platform will help you win? So in general, how are you thinking about this?

So we are first of all learning how to service these products for the long term and we are still exploring how we can be a long-term partner to the customers we serve. So we are still new in this segment. It'll take us some time to explore that.

Okay. Looking forward to interacting with you again. All the best. Thank you so much.

Most welcome. Thanks.

Thank you Mr. Nikhil. So we have now the investors on repeat. Mr. Swaraj, please unmute yourself.

Hi, thank you for the opportunity again. My first question was on the service centers. Now as we increase our own brand sales, servicing those products also becomes more important. So how are we bridging the gap on service centers for our products and existing products as well?

Yes, for the own brand small equipment and large equipment, let's divide them into two parts. Own brand small equipments can be serviced in the nearest warehouse. So wherever we have delivered the product, if a doctor wants to claim a warranty there are two ways to solve it. One is a technical support where the customer care does a video call through our software with the customer and tries to resolve it. Most of the issues are very easily solvable online.

And so now we are increasing our SKUs from 23,000 to 35,000 in the coming years. So what gap are we trying to fulfill through the SKUs?

So recently we have launched a brand called Dental Tech that supplies compatible implant accessories compatible with most of the implant companies of the world. That category was not available on Dentalkart earlier. So we are trying to find categories which are not there on Dentalkart. The idea is not to reach 35,000 just to show the numbers. We want to add the right category of products which are not there on the card. So for sterilization we have the sterilization reels, we have the sterilization pouches, the indicator tapes and so on. But there are recently 15 different SKUs my team found where we can provide silicon rings on instruments for easy identification. Those products are not easily available in India. We are trying to find those products and double down on this approach to find more products. And that raises a question that it will just increase the inventory, but we'll keep less products and see how it works and then gradually increase the inventory. So the next few years will be experimentation on what works in India and what not, and if that product works then we'll scale that product from there.

And what do we mean, I just wanted to have clarity on what do we mean by unique customers, new customers and customers served on a quarterly perspective and yearly perspective as well?

So unique customer is a unique email id. So sometimes one customer places 10 orders in a month. That is still one unique customer. Total number of customers are those total unique customers over a quarter or over a year. What was the third thing in your question?

New customers and customers served. How are they different? The meaning of quarterly and yearly.

Customers served includes new customers and old customers. New customer is the first time, a unique email id which was never ordering with us before. I have Sandeep also with me. Sandeep, do you want to answer this?

Sure, the definition that you're providing is totally correct. So basically new customer is the customers which are coming that year and served customers is the total customers that we have served in that year.

Sorry, can you repeat. New customers?

Total customers are those which we have served in the entire year.

Okay. And new customers are in those particular quarter, whichever new customers we added which have never ordered from us again?

Yes.

And could you give a trend, you've given a retention rate for each quarter as well and I wanted to understand the 30, 60, 90 and 180 day retention rates that have been given, how to read those numbers?

So suppose you are a dentist and you have ordered on 1st of January from us.

Okay. And just the quarterly retention rates, how do we read that?

Yes, it is every 90 days what customers are coming back to us, that is the quarterly retention rate.

And the experience centers that we've launched, how are they doing and how has the response been?

Okay, we have not highly focused on them but there are some sales from them and if a customer is able to see the look and feel of a capital equipment there's a higher chance of conversion. That was the idea behind opening the showrooms.

Thank you for all these questions. Thank you so much.

Thank you Mr. Swaraj. Mr. Raj Singh if you can unmute yourself, please unmute, otherwise I'm taking questions on behalf of you which you have mentioned in the Q&A box. Okay sir, so the first question from Mr. Raj Singh is, what percentage of our products are we importing from China and are we planning to diversify the same by increasing local sourcing?

If it is possible to replace them with local sourcing, we will definitely try to do that because importing a product is tedious and selling it from the local market or doing contract manufacturing from local manufacturers is more convenient. Right now a large chunk of the imports are coming from China compared to any other country. I don't want to give a particular number to that.

Okay. So the second question is, what are we doing to increase awareness about our portal among the dentist community? Do we pay search engines to show our website on top? If someone does a search for online products, I see some other websites came up and our website didn't when I did the same search on Google.

Okay. So that happens from place to place and customers' socioeconomic status and different price points they might be looking at, or maybe certain products they might be more possibly likely to buy. So Google engine works that way. Secondly to show our products or our website and app to the customers we do SEO, AEO, and more recently the AI search algorithms, we are doing that. Apart from that we do social media marketing on products and a lot of other ways of how tech companies market themselves.

Okay. So the last question is, what percentage of our business this FY came from repeat customers? Do we have a sales team on ground which goes to dentists and meets them personally to acquire new customers?

In the online segment, we don't have a team on ground which acquires customers because we think it is costly to do that and it is not scalable. We can do much better than that online. And what percentage came from repeat customers, we want to keep that proprietary for now.

Okay. Thank you sir. So Mr. Raj Singh if you have any other questions you can mention the same in the Q&A box. Meanwhile we are taking questions from the next investors. So Mr. Chintan Parikh, you can unmute yourself.

Hello, am I audible?

Okay. You are right. There's a low number of people who will adopt the big equipments that I mentioned earlier in the call. But yes at the same time, while we were discussing faster turnarounds of an e-commerce company setting higher standards in the mind of consumers, similarly the patients are also expecting faster turnaround of the procedures they want. So suppose you go to get a crown from a doctor. There are some doctors in the market who are doing a 2 hour to 3 hour crown delivery with a Dentsply Sirona CEREC or some other similar machines compared to another doctor who takes 3 days. So you know, there might be a preference for the doctor who is delivering faster. So that kind of population or consumer base we will definitely see growing, like we are seeing more buyers of scanners, we'll definitely see more buyers of same-day prosthesis machines in future.

Right. But does this not conflict? Because one way we are going toward the mass market, tier three, tier four, for our online businesses. And at the same time we are now targeting a very niche market which requires a lot of in-person service. So it creates a bit of a dichotomy in the sales strategy there.

That's not what I meant. Since you started the question with digital dentistry, I told you that the whole digital dentistry workflow only gets complete if we have the larger picture in mind. Yes, we are bullish on the scanners. We're bullish on the intraoral cameras. I think the intraoral camera is a very personal thing to me, how my practice got completely revamped or changed after I installed the camera on my chair. So cameras are here to stay, although RVG has definitely surpassed all the numbers comparatively. You also mentioned having tie-ups with a particular brand of chairs to grow digital dentistry equipment numbers. Our cameras are such that they can be compatible with any dental chair in the market. The clamps here matter and the kind of connection the clamps provide, irrespective of any chair the dentist uses.

Okay, understood. Sir on the financials, let me just dissect Q4 financials a little bit further. Sir I see that there is roughly 2 crore of other income. Yeah. So can you elaborate what exactly is that other income in Q4?

Yes. That is sale of some financial instruments which resulted in interest income.

Okay. Because sir, if I just look at our Q4 profitability in isolation the margin becomes 0.34% or something like that if I remove the other income. And while looking at that and if I look at your statement on the inventory as well as our own product stockout, that is not making sense to me. Let me explain why. We are saying that in Q4 we had a stockout of our own products which are high margin products, at the same time if I look at our inventory on page 13 we see that we had a 27 crore inventory increase because of our own products. So what happened, how did we stock wrong products of our own brand and still ended up with a stockout? If you can help me understand the issue and how this will not happen in future?

Yes. So first of all that 27 crore is for the whole year, that includes H1 and H2 as well. And we actually missed on some hot sellers. For example, if you see the Superinto brand on Dentalkart which is one of the top sellers, the whole rotary files inventory is out of stock.

Okay. So if I look at our inventory turnover, you are guiding that in the near- term you want to see it around 120 days. And we have close to 80 crore in inventory currently. At the same time you have discontinued other products. If you can help me understand this?

So first of all we have not discontinued other brand products. We have discontinued the offline sales of other brand products. But yes, having more share of sales of own brands also tells us that we have to import more products, we have to do contract manufacturing of more products and they come with MOQs which we sometimes have to keep when we start that relationship with the manufacturer. I've also mentioned in the presentation that 120 to 150 days is what I see my inventory levels in the short term and when we optimize that it'll be around below 120 days and in the long term I see it below 100 days. That's what I see as a northstar. Past also during earning calls I have mentioned that I want to optimize the inventory, I want to go to lower numbers. But sometimes last year we did a mistake by taking the pressure of inventory from a lot of people in the market and trying to optimize that to a level where some issues happened and we missed a lot of stock and lost sales as well as some possible customers' wallet share. So we are also keeping that in mind. Inventory is not the main priority right now. Growth and more wallet share of the customer is.

Okay. Sir, regarding our acquisition which we could not do, why did it take 9 months to realize that there is a lot of overhead on the integration? There was a lot of management time which got devoted toward that. So what happened and why did it take nine months?

Yes. So first of all it was looking like a very good deal for us. We were so happy about it and when we signed the agreement and we gave a public announcement, we started finding different perspectives of the business. So there was a due diligence earlier on which was perfect and things were all good. When we were trying to do the merger actually, I saw a lot of cultural differences and it took me some time to open up with the promoters of IDS and when I did, we also bought some more time from each other to look at it again because it was one of the biggest decisions of both of our lives and it was really difficult for me as such a young company, coming back from such a large public decision I made. So we tried our best that we'll be able to merge this but we ultimately realized that it will take much more time to bridge the cultural difference between a traditional supply chain and a tech first company. Secondly, they were doing very good, they are doing very good in the offline segment, they're doing very good in the laboratory side of dentistry. So it is a very good business but at the same time we are totally different. Some teams have to communicate with each other and definitely me and Sandeep also have to invest a lot of time in merging that. We saw that it is really difficult to make that merger soon and it is really difficult for us to divert our attention to outside Dentalkart. So with Dentalkart in mind we took that decision.

Okay. And sir, if I compare you to another listed company, Privy, how are they able to get such a high operating margin compared to us?

So they are into dental materials, perishable dental materials which are mostly chemicals, and they are manufacturers of those products themselves. We are into a high growth segment where we don't want to focus on such margins, whereas we want to enjoy more wallet share of the customer and a larger customer base. So the aspirations of both the companies are different. We have to choose between slow growth and more margins, or faster growth and lower margins. So we are trying to balance between that.

Any plan to go into the similar kind of field which they are operating in, because you mentioned about contract manufacturing as well right? We are doing that. So why are we not touching that particular area? If it has a, you already have the supply chain, you have already done the distribution, it is just about adding certain products into your catalog and pushing it and competing against the price.

We do that in fact. Privy is one of our partners in contract manufacturing. So we do that internally. Brand-wise sales we have not disclosed and we would not like to disclose but our share of sales is also significant comparatively in that region.

With a similar type of profit margin in those categories?

Yes, in that category.

Okay. Thank you. I don't have any more questions.

Okay, thank you Mr. Chintan. So we have the last question from Mr. Manish Gupta. Mr. Manish, please unmute yourself.

Thank you Dr. Vikas. Can you hear me?

Yes, sir.

Okay great. So Dr. Vikas, I have two questions. My first one is that just listening to the suggestions of various people and also some vision that you have outlined, just one concern I had, and this is not being prescriptive, it is really just trying to understand. Are we trying to do too much in terms of scope of the problems that we are trying to solve for different dentists? And would we be better off if we just focused on solving a core issue of dentists first, which is broader assortment, quick delivery, very responsive customer service, and only when we have completely cracked that do we move on to the next mountain to climb? I mean are you trying to climb too many mountains at the same time? Again I reiterate this is a query, it is not a comment. I just learn by asking questions. So this is the first question and after this I'll ask my second one.

You are right. In the past there were scenarios where we were trying to do too much and we were trying to climb a lot of mountains together. So with time this maturity came.

So if I can just follow up on this itself. If you would list, say, what your three biggest priorities are for this coming year, fiscal year 27, what would they be?

I think number one is customer service. Number two is faster delivery. By faster delivery I don't mean faster delivery everywhere, but in the places where customers are demanding faster delivery and the customer segment which provides bigger wallet share on faster delivery. And number three is better assortment of the inventory categories and brands. Like I mentioned about Dental Tech earlier in the call, we would like to have more categories which we are currently not supplying and the same customer base needs those products and they are buying from specialized dealers of those products. We would like to have those categories in place. So to sum it up: number one is customer service, number two is faster delivery, number three is more categories on Dentalkart.

Okay, thank you. My second question Dr. Vikas is, I note that you're not offering guidance and personally I think that's a very good suggestion because it's a very uncertain world.

Yeah. So thanks a lot. That's also a very good question. I think in the long term I don't see my manpower cost increasing in proportion to the revenue increment. I don't see my warehouse cost increasing like the revenue increment I envisage. So I think I'll have the operating margins leverage. And if you see us before IPO we were not making much profits and compared to FY25 we made significant profits. So I think last year was a one-off. Going forward I expect that the operating leverage will continue to be seen.

So Dr. Vikas, let's say 5-6 years out, you've got about seven warehouses today.

It is very difficult to predict. But I have some internal views and some numbers also back this up that we should have smaller warehouses in small cities of India, all the small cities like Jaipur, Bhopal, Lucknow, where we have only 500 to 1,000 square ft kind of space managed as dark stores and we are able to store only the top SKUs required by that state or that city. And that can be 20, 25, or that can maybe be seven only like it is now.

So actually I didn't ask the question appropriately. How many warehouses would you need to have to be able to deliver within two days?

Okay, we have to explore that. I'm sorry, I'm not ready with an answer.

But what is your personal aspiration? You were a practicing dentist right. So you know different people will have different inventory levels. What do you think from a dentist perspective is a good service level to expect of a vendor like yourself?

It depends on where I practiced. So I practiced in Delhi and my expectations will definitely be that if I order in the morning I get products by evening or by next day. And if I am planning to buy something in bulk because of an offer I am ready to wait for 3 to 4 days.

So if say you're a dentist in a tier 2 town, how would Dentalkart want to serve a dentist in a tier 2 town?

I think 2 days is a good target.

Okay. And therefore for 2 days delivery in a tier 2 town, how many warehouses would you need across India?

Close to 25.

So why would we not invest in those in FY27? Why only seven? Why would we not put that investment upfront?

We can definitely but there are more priorities before that. Just, you know, if I don't have availability I need to have more inventory if I open warehouses. So first of all I need to optimize what I have right now and opening more warehouses increases the chaos which might occur and I'm just coming back from the ashes of last two quarters. I don't want to take this decision in a hurry for maybe this financial year or next couple of quarters. However, we will think on this suggestion and this is a good question raised by you. Why not we do it now if we have to do it in the long term?

Yeah, just to push on this point a little further Dr. Vikas. You mentioned a bit earlier in the call that you have 10-year demand patterns of various dentists. So you should have good data on what customers want. Right. And you have good data on what customers want. You perhaps have good data on what frequency they want and the kind of products they would want.

You are totally right. We have the data and with the use of AI we can definitely predict it to a good extent. But there are some issues with that. First of all, the products over the last 10 years have changed. The market dynamics changed, the price points changed, new launches change. For example, the orthodontic category. 10 years earlier, there were a lot of demand for traditional orthodontic braces. Now a lot of market is shifting to aligners. So there are products which are accessories to the aligners which doctors are giving to the patients. So market dynamics also change. While I'm not giving this as an excuse, yes there is in every state and in every tier of the market different demand patterns. There are different kinds of products coming up every year. In fact every couple of months there are new products coming up. So seeing all of that we are trying to build a recommendation engine. We're trying to build a personalization engine. As some gentleman also questioned about the search engine of Dentalkart, we have revamped the engine three times in the past and it is much better. It used to be just a plain search earlier on and now it is a semantic search and later on it'll be AI based search where you can ask anything to the search engine and it will recommend you products. That all will be happening with time and there are a lot of things coming up and in the pipeline. Once they are ready, we'll update the market.

If I may just pursue this line of thinking a little bit more Dr. Vikas, again I'm just trying to learn, would 70% of the products that a dentist needs really be like one needs toothpaste one needs soap? I mean maybe there's 30% that is changing but wouldn't 70% of base demand be the same?

Yes, it would be the same. There is one more thing to that. We try to deliver everything in a box. If we try to split an order in two parts or three parts, it increases a lot of our cost, and our logistic cost is close to 5.5%. We have a target that we should reduce the logistic cost and not let it increase due to various factors as it'll impact us later on. So if I keep 70% of those items in a particular warehouse and 30% goes from my mother warehouse, it'll split majority of the orders of that state into two parts. So by delivering it maybe one day or two days faster, first of all I am impacting my customer experience by splitting the order into two. Secondly, I am also making more expenses and later on I have to increase my prices in certain products or certain categories of products in future. So there are a lot of dynamics to any decision we take and I understand what you're saying. We would also love to make smaller warehouses and open very fast and deliver what we can keep there, but a lot of permutation combinations are there for us to take that decision.

Understood. Thank you. Thank you, Dr. Vikas.

Okay. Thanks a lot.

Thank you Manish Ji. So as there are no further questions from the investors, Dr. Vikas, you can give your closing remarks.

Thanks a lot for first of all being there for last one and a half hours and listening to every other question. There are some people who have not asked questions but they've listened to the whole call. Thanks a lot for being there and trusting in us. I just want to say one thing, that last year was not as I have promised earlier. I want to assure you that it was a one-off.

Okay. So, thank you everyone for your time and for your questions and your confidence in the vision of the company. This meeting is now officially concluded. Thank you.

Thank you again.