Vaidya Sane Ayurved Laboratories Q4 FY25 earnings call

For H2 FY25, revenue from operations was Rs. 48.05 crore, a marginal decrease of 0.38% YoY from Rs. 48.23 crore in H2 FY24. However, EBITDA (excluding other income) surged by 325% to Rs. 7.74 crore from Rs. 1.82 crore, and PAT reached Rs. 5.79 crore from Rs. 0.81 crore. For the full FY25, revenue declined by 9.2% to Rs. 89.85 crore from Rs. 99 crore in FY24, but EBITDA grew by 199% to Rs. 13.50 crore from Rs. 4.5 crore, with PAT at Rs. 7.15 crore from Rs. 1.99 crore. Basic EPS for FY25 stood at Rs. 6.76.

The significant improvement in profitability was primarily driven by rationalized key operating costs. Employee costs decreased by approximately 28% YoY, from Rs. 25 crore in FY24 to Rs. 18 crore in FY25, through strategic optimization and clear KRA/KPL implementation. Other expenses also saw a notable decline of 17% from Rs. 41 crore to Rs. 34 crore, achieved by reducing advertisement, professional fees, transport, and telephone expenses, along with some rent reduction. The cost of goods sold also decreased from 26% to 18.70% due to consolidated purchasing and inter-company transactions.

Madhavbaug is aggressively expanding its hospital network, with plans to add approximately 200 more beds in FY26, with construction expected to take about 12 months. The new 30-bedded Vadodara hospital became operational in April and is scalable to 100 beds. Permissions have been secured for 100 additional beds at Khopoli hospital and 80 more beds at Nagpur hospital (with 20-40 beds planned initially). The company aims to establish over 1,000 beds and 1,000 clinics by 2030, focusing on tier 1 and 2 cities.

Monthly new patient footfall has increased to 9,000-10,000, with a target of 12,000-13,000 new patients per month. The company offers 9-10 care plans, expanding beyond heart and diabetes to include cholesterol management, PCOD, and gut detox, with plans to introduce 10-15 new care plans in the coming 1-2 months. Care plans range from Rs. 7,000-10,000 for general conditions to Rs. 80,000-90,000 for cardiac cases, typically lasting 365 days with aggressive management for 90-120 days.

The company has empaneled with 5-6 leading insurance companies and over 14 TPAs, including Star Health Insurance. Khopoli and Nagpur hospitals now offer cashless facilities, with Vizag and Vadodara hospitals in the process of obtaining NABH accreditation and CGHS scheme inclusion. Corporate partnerships have been initiated, fulfilling check-up orders for over 80,000 police personnel and Konkan Railway employees, and tying up with entities like JSW and Reliance. Approximately 30% of admissions at Khopoli Hospital are now through insurance companies.

Madhavbaug has shifted its marketing strategy from digital-only to ground-level outreach and direct engagement, which is yielding stronger returns. The onboarding of Mr. Sonu Sood as brand ambassador in April 2025 is expected to enhance visibility and strengthen the brand. Investments have been made in creating advertising materials, content, and collaterals for the entire year to leverage this partnership, contributing to the increase in intangible assets by Rs. 4 crore.

The company has implemented significant internal control process changes, particularly in manufacturing quality, raw material procurement, and HR processes. KRA/KPLs have been established for all employees to ensure clarity and accountability, contributing to the optimized employee costs. These improvements are aimed at enhancing product quality, patient compliance, and overall operational efficiency, which management believes will sustain profitability and support future growth without immediate need for external consultants.

Madhavbaug is actively exploring medical tourism opportunities, connecting with agencies that bring patients from African countries and GCC regions. Online consulting has already begun for these patients. The company is developing care plans for international patients, with a goal to confidently discuss online patient management, medicine delivery, and hospital stays for 7-10 days within the next couple of months.