Zota Health Care LImited

Zota Health Care Limited delivered robust financial performance in Q1 FY26, with consolidated revenue from operations growing 84% year-on-year to INR 103.58 crores. This growth was accompanied by a 95% increase in consolidated gross profit, reaching INR 58.45 crores. Notably, the company achieved a positive consolidated EBITDA of INR 4.83 crores, translating to a 4.7% EBITDA margin, a significant turnaround from a loss reported in Q1 FY25.

The DavaIndia segment continued to be the primary growth engine, contributing 73% of the total revenue with INR 75.62 crores, marking an impressive 111% year-on-year growth. The DavaIndia store network expanded to 1,745 stores nationwide as of June 30, 2025, comprising 986 COCO and 759 FOFO outlets. In Q1 FY26 alone, 163 new stores were added, reflecting a balanced approach to strengthening infrastructure and asset-light expansion. Quarterly footfall more than doubled to INR 35.35 lakhs, and GMV grew 88% year-on-year to INR 87.78 crores.

The company highlighted the rising demand for affordable healthcare in India, driving the growth of the generics market. Generic medications offer comparable efficacy and safety at a fraction of the cost, making them an attractive option for chronic conditions like diabetes, hypertension, and cardiovascular diseases. Zota Health Care positions itself to capitalize on this trend, with DavaIndia being India's only leading private-sector generic pharmacy chain offering 100% private-label products at 30% to 90% lower prices than branded equivalents.

Management provided insights into store economics, stating that stores over 36 months old generate an average GMV of INR 6.56 lakhs per month with an approximate EBITDA margin of 30%. Stores operational for over two years achieve around 20% EBITDA margin. Newer stores (9-12 months old) are nearing breakeven, with current GMV of INR 2.05 lakhs per month, targeting INR 2.40 lakhs for breakeven in the next quarter. The company expects a significant shift in overall profitability once 600-700 stores reach maturity (18-36 months), with full potential visible in 12-18 months.

Zota Health Care has entered the online B2C business through a hyperlocal delivery app, which is now fully launched across the country on both Android and iOS platforms. This initiative aims to enhance supply chain efficiency, speed, and consumer experience. To further strengthen brand visibility and connect with consumers, the company appointed actor and entrepreneur Mr. Suniel Shetty as its brand ambassador, with plans for a TV commercial and advertising campaign.

The company is focused on aggressively scaling up, with a target to open 800 new COCO stores and approximately 150 new FOFO stores in the current financial year. Management expressed confidence in achieving these targets, noting that Q2, Q3, and Q4 typically see accelerated growth compared to Q1. While a long-term target of 5,000 stores in 2-3 years was mentioned as 'possible', the immediate focus remains on the current year's expansion plans and ensuring positive EBITDA throughout FY26.