ZOTANSE27 December 2021

Zota Health Care LImited has informed the Exchange about Investor Presentation

Zota Health Care LImited

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Q2FY22

P E R F O R M A N C E H I G H L I G H T S

D E C E M B E R 2 0 2 1

Safe Harbour

This presentation has been prepared by the Zota Health Care Limited (the “Company”) only for information purpose to the stakeholders and does not contain any offer or invitation to subscribe the securities of the Company. No offering of securities shall be made except by means of offer documents.

This presentation has been prepared on the basis of information and data available with the Company consider reliable. This presentation may not contain all the information that you may consider material. Any liability in respect of the content of or any omission from this presentation is expressly excluded.

Stakeholders are advice to compare the data provided in the presentation with the full financial results available on the website of the Company as well as on website of NSE.

This presentation contains “forward looking statement”, including “future oriented financial information” and “financial outlook”. This forward looking statement is based on management’s current expectations and belief, and subject to uncertainty. Actual result may be vary from the material facts contained in this presentation due to changes in government policies, regulations, economics reforms, natural calamities, competition, technology, etc. Company is not under obligation to inform any update or alter in forward looking statement, whether as a result of any new information or future events

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Table Of Contents

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RESULT HIGHLIGHTS

OPERATIONAL METRICS

DAVAINDIA

BUSINESS OUTLOOK & STRATEGY

FINANCIAL SUMMARY

Q2FY22- Result Highlights

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Stand Quarterly Financial Highlights

Q-o-Q

Revenues (₹ Lakhs)

Gross Profit (%)

Operating Profit (₹ Lakhs)

PAT (₹ Lakhs)

3,539.70

Q2-FY22

3,344.49

Q1-FY22

33.82%

Q2-FY22

493.62

Q2-FY22

34.02%

Q1-FY22

488.62

Q1-FY22

331.63

337.41

Q2-FY22

Q1-FY22

Y-o-Y

Revenues (₹ Lakhs)

Gross Profit (%)

Operating Profit (₹ Lakhs)

PAT (₹ Lakhs)

Q2-FY22

Q2-FY21

3539.70

Q2-FY22

2816.64

Q2-FY21

33.82%

Q2-FY22

493.62

Q2-FY22

331.63

33.56%

Q2-FY21

85.24

Q2-FY21

101.74

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Revenue Break up – Quarterly

Domestic Sales

Dava India Sales

Export Sales (SEZ)

1,815.1

896.8

848.1

991.7

1,699.9

575.0

685.1

632.6

1,556.6

Q 2 - F Y 2 1

Q 1 - F Y 2 2

Q 2 - F Y 2 2

Q 2 - F Y 2 1

Q 1 - F Y 2 2

Q 2 - F Y 2 2

Q 2 - F Y 2 1

Q 1 - F Y 2 2

Q 2 - F Y 2 2

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FY- Result Highlights

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Stand Profit & Loss Statement - Quarterly

Particulars (Rs Lakhs)

Export Sales (SEZ) Dava India Sales Domestic Sales Revenues from Operations Cost of Goods Sold Gross Profit % Margin Operational Exp Employee cost Other expenses Operating Profit % Margin Other Income EBITDA % Margin Depreciation EBIT % Margin Interest Cost EBT % Margin Taxes Profit After Taxes % Margin

Q2FY22

Q1FY22

991.7 848.1 1699.9 3,539.70 2,342.47 1197.23 33.82% 703.61 224.49 479.12 493.62 13.95% 18.04 511.66 14.45% 66.02 445.64 12.59% 1.19 444.45 12.56% 114.07 331.63 9.37%

632.6 896.8 1,815.1 3,344.49 2,206.54 1,138.0 34.02% 649.33 261.33 388.00 488.62 14.61% 30.48 519.10 15.52% 61.68 457.42 13.68% 0.88 456.54 13.65% 112.73 337.41 10.09%

YoY %

45% 47% 9% 26% 25% 27% 27 bps -18% -5% -23% 479% 1092 bps -15% 381% 1068 bps -14% 1398% 1153 bps -20% 1472% 790 bps 288% 226% 576 bps

QoQ %

Q2FY21

57% -5% -6% 6% 6% 5% -20 bps 8% -14% 23% 1% -66 bps -41% -1% -107 bps 7% -3% -109 bps 35% -3% -109 bps 1% -2% -72 bps

685.1 575.0 1,556.6 2,816.64 1,871.49 945.15 33.56% 859.91 236.81 623.10 85.24 3.03% 21.14 106.38 3.78% 76.63 29.75 1.06% 1.48 28.27 4.66% 29.39 101.74 3.61%

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Management Commentary

The Company recorded best- ever quarterly Revenues in Q2FY22, while emerging from a challenging external environment.

The Company has registered highest-ever quarterly Standalone Revenue of ₹3539.70 Lakhs and gross margins of 33.82% in Q2FY22.

Exports performance recovered well with a 57% increase QoQ, after a subdued Q1FY22 due to container shortages and higher freight costs.

The sales contribution from new-age business stood at 52% in Q2FY22 as compared to 46% in Q1FY22 and 45% in Q2FY21.

EBITDA stood at Rs 511.66 Lakhs, with margins at 14.45% due to optimization of operational expenses on Davaindia front. Healthy Exports sales further aided the profitability.

PAT stood at Rs. 331.63 Lakhs, increasing 226% YoY basis and down 1% QoQ basis.

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Management Commentary

DOMESTIC OPERATIONS

Domestic Revenues registered a decline of (6.04)% QoQ and a growth of 19.53% YoY at ₹ 2548.0 Lakhs supported by healthy performance in both verticals.

EBITDA at ₹ 343.38 Lakhs for Q2FY22, backed by strong recovery in demand of Prescription Based Drugs.

*Here, Domestic Operations includes the operations of Davaindia.

EXPORTS

PAT stood at ₹ 205.76 Lakhs for Q2FY22.

Exports revenues grew 56.77% on QoQ basis and 44.75% YoY at ₹ 991.7 Lakhs in Q2FY22.

EBITDA at ₹ 168.29 Lakhs for Q2FY22, backed by increase in export sales volume.

PAT stood at ₹ 125.86 Lakhs for Q2FY22.

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Davaindia Generic Pharmacy

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Davaindia Key Figures

Gross Mercantile Value (GMV)

Total GMV of Davaindia Stores stood at 1401.69 Lakhs during Q2FY22.

No. of SKU’s

New Stores rolled-out

1,585

1,503

Q1-FY22

Q2-FY22

Q1-FY22

Q2-FY22

12 12

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Davaindia Key Figures

Average Wallet Spend

No. of Customers Served

2 2 9

2 2 0

2 0 9

2 0 4

1 8 1

1 5 9

1 6 4

1 5 2

1 3 6

5 , 4 0 , 9 2 4

4 , 7 3 , 1 8 1

4 , 4 0 , 4 5 8

3 , 5 2 , 6 2 3

3 , 3 8 , 4 1 5

3 , 2 3 , 3 9 5

2 , 5 9 , 0 2 2

2 , 6 7 , 0 3 0

2 , 7 5 , 5 2 0

Q 2 - F Y 2 0

Q 3 - F Y 2 0

Q 4 - F Y 2 0

Q 1 - F Y 2 1

Q 2 - F Y 2 1

Q 3 - F Y 2 1

Q 4 - F Y 2 1

Q 1 - F Y 2 2

Q 2 - F Y 2 2

Q 2 - F Y 2 0

Q 3 - F Y 2 0

Q 4 - F Y 2 0

Q 1 - F Y 2 1

Q 2 - F Y 2 1

Q 3 - F Y 2 1

Q 4 - F Y 2 1

Q 1 - F Y 2 2

Q 2 - F Y 2 2

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Davaindia- Generic Pharmacy

During the quarter Davaindia has catered to the highest-ever number of customer i.e. 5.41 lakhs against 4.73 lakhs in the previous year. Coupled with increasing Average Wallet Spends which stood at 229 against 220 in the previous quarter.

Davaindia has led the revolution of patients opting for generic medicines against branded counterparts. As of Q2FY22, Davaindia has catered to more than 4.08 million happy customers.

Davaindia retail pharmacy stores’ focus continues to be chronic ailments – Cardiac, Diabetic, Thyroid, among others – as repeat orders from existing and new customers remain high, thus aiding the overall growth of Davaindia's business model.

Davaindia expansions continues, although the pace has slightly slowed down in Q1 & Q2 due to the lockdown & disruptions in light of the 2nd wave of Coronavirus. The Company is confident of rebounding with higher quarterly store roll-outs.

The company has adopted various advertisements, marketing, and promotional channels like Print, TV, Digital, and Outdoor mediums to increases top-of-the mind brand recall in the minds of its customers. This exercise that begun to gain traction and has led to footfall & wallet share increase among its users.

A higher number of SKU’s i.e. 1,585 has enabled Davaindia to better serve customers across all segments. Thus increasing its customer spends across varied price points, the Average Wallet Spend was ₹229 in Q2FY22.

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Davaindia- Generic Pharmacy

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Davaindia- COCO Stores

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Operational FOFO Stores

425

OPERATIONAL FOFO STORES AS ON 30.09.2021

Legend

Franchise Owned Franchise Operated (FOFO) Stores

States

Arunachal Pradesh Assam Bihar Chhattisgarh Delhi Goa Gujarat Haryana Himachal Pradesh Jammu And Kashmir Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Meghalaya Odisha Punjab Rajasthan Tamil Nadu Telangana Tripura Uttar Pradesh Uttarakhand West Bengal

No. of Stores

1 6 9 1 25 1 55 22 1 2 7 8 13 64 45 1 31 3 23 4 5 5 69 6 18

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Operational COCO Stores

OPERATIONAL COCO STORES AS ON 30.09.2021

Cities

Surat Palanpur

No. of Stores

3 1

Legend

Company Owned Company Operated (COCO) Stores

Operated by wholly-owned subsidiary Davaindia Health Mart Limited

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Management Commentary

Commenting on Q2FY22 financial performance and operational highlights, Management Team of Zota Health Care said,

“We are satisfied with the overall performance of the Company in Q2FY22. Q2FY22 witnessed the highest ever quarterly revenue Zota has reported, led by good performance on all fronts. The highlight for the quarter remains the quick rebound in export sales which were subdued in the first quarter of FY22.

Davaindia rolled out another 65 stores this quarter, taking the total tally to 429 operational stores spread across the country. Store rollout has been a little slow in H1FY22 given external circumstances; however, the management is confident of coming back on track to its orignal run rate prior to the 2nd wave of Covid-19. It is also noteworthy that the Company has set up 4 new COCO (Company-owned and Company-operated) stores in Gujarat; these stores are receiving an excellent response in terms of customer footfall and sales.

We will further build on this performance, and Zota Health Care will evolve into a newer, better version of itself as a result of our continued focus on new-age businesses.”

Note – There is a one-time readjustment in the number of stores as the Company has decided to shut- down low-volume/non-operational stores in Q2FY22. Accordingly the current store count only includes operational store data, which has been further classified into two categories i.e. FOFO & COCO.

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Industry Snapshot & Business Strategy

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Retail Generic Medicine Landscape in India

To achieve the objective of making available quality generic medicines at affordable prices to all, ‘Jan Aushadhi Scheme’ was launched by the Department of Pharmaceuticals, Ministry of Chemicals & Fertilizers, Government of India across the county. The scheme was later renamed to Pradhan Mantri Bhartiya Janaushadhi Pariyojna (PMBJP)

Objectives of PMBJP

Savings to the common man

Strong Implementation

• To make available quality medicines consumables and surgical items at affordable prices for all and thereby reduce out of pocket expenditure of consumers/patients.

• To popularize generic medicines

among the masses and dispel the prevalent notion that low priced generic medicines are of inferior quality or are less effective.

• Generate employment by

engaging individual entrepreneurs in the opening of PMBJP Kendras.

• A medicine under PMBJP is priced on the principle of a maximum of 50% of the average price of the top three branded medicines. Therefore, the price of Jan Aushadhi Medicines is cheaper at least by 50% and in some cases, by 80% to 90% of the market price of branded medicines.

• The Product Basket of the scheme

now covers more than 1,449 medicines and 204 surgical & consumables.

• Presence in all major therapeutic categories such as Anti-infective, Anti-allergic, Anti-diabetics, Cardiovascular, Anti-cancers, Gastro- intestinal medicines, etc.

• As on 24/06/2021, 7,855 PMBJP

Kendras are functional in the country. Pradhan Mantri Bhartiya Janaushadhi Pariyojana has marked its presence in almost every district of India by covering 732 districts out of 734.

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Impact of PMBJP

In the financial year (2019-20), PMBJP has achieved sales of ₹258 crores (at MRP), up to 30-11-2019. This has led to savings of approximately ₹1,800 crores of the common citizens of the country.

Growth in number of stores

Growth in turnover

Product basket

Price of Janaushadhi medicines to branded medicines

(Number of stores as on 31st March of the year)

(Sales value in crore)

(No of Medicines)

5,928

5,140

3,322

315 303

900

371

700

600

488

141

1,080

269

2 0 1 3 - 1 4

2 0 1 4 - 1 5

2 0 1 5 - 1 6

2 0 1 6 - 1 7

2 0 1 7 - 1 8

2 0 1 8 - 1 9

2 0 1 9 - 2 0

2 0 1 4 - 1 5

2 0 1 5 - 1 6

2 0 1 6 - 1 7

2 0 1 7 - 1 8

2 0 1 8 - 1 9

2 0 1 9 - 2 0

2 0 1 6 - 1 7

2 0 1 7 - 1 8

2 0 1 8 - 1 9

2 0 1 9 - 2 0

Note : 2019-20 – till 31/12/2019

295

5 0 %

C h e a p e

b y

141

7 0 - 8 0 %

C h e a p e

b y

6 0 - 7 0 %

C h e a p e

b y

8 0 - 9 0 %

C h e a p e

b y

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Underpenetrated Generic Medicine Market

4 pillars to drive healthcare

4 As of healthcare

Branded and generic mix of Indian pharma market (%)

Overall India

Urban India

Rural India

Accessibility

Affordability

Awarness

Aliments

• Setting up of new

• Higher per capita

• Rising literacy

• Growing incidence

hospitals

income

• Higher number of

• Rising insurance

doctors

penetration

• Government

initiatives

• Cost advantage of

India

of non- communicable diseases

• Growing

urbanization

Generic GX

Branded GX

Source : CLSA

Source : IQVIA, CLSA

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Financial Summary

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Profit & Loss Statement

Particulars (INR Lakhs)

Income from Operations

Other Income

Total Income

Operating Expenses

EBITDA

Margin %

Depreciation

EBIT

Margin %

Financial Charges

PBT

Margin %

Tax

PAT

Margin %

EPS

FY15

5,646.3

1.4

5,647.8

4,796.5

851.3

15.1

150.6

700.7

12.4

66.5

634.2

11.2

207.6

426.7

7.6

3.0

FY16

6,473.3

7.7

6,481.0

5,516.8

964.2

14.9

123.5

840.8

13.0

68.3

772.4

11.9

261.5

510.9

7.9

3.6

FY17

7,158.0

5.6

7,163.6

6,153.8

1,009.8

14.1

105.4

904.4

12.6

68.2

836.2

11.7

282.1

554.1

7.7

3.9

FY18

7,785.2

151.9

7,937.0

6,695.0

1,242.0

16.0

93.7

1,148.3

14.8

12.1

1,136.2

14.6

407.4

726.8

9.3

4.2

FY19

8,562.9

154.5

8,717.4

7,788.7

928.7

10.8

139.4

789.3

9.2

3.7

785.6

9.2

230.7

554.8

6.5

2.3

FY20

9,511.3

151.3

9,662.6

9,059.7

602.9

6.3

209.8

393.1

4.1

6.9

386.2

4.1

112.0

274.1

2.9

1.1

FY21

10678.92

125.97

10804.89

10616.46

188.43

1.76

316.87

-128.44

-1.2

10.98

-139.42

-1.3

15.65

-20.89

-0.2

-0.09

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Balance Sheet & Key Ratios

Particulars (INR Lakhs)

Share capital

Reserves and Surplus

Non-current liabilities

Current liabilities

Total Equity and Liabilities

Non-current assets

Current assets

Total Assets

Key Ratios

RoCE (%)

RoE (%)

Net debt to equity (x)

Interest coverage (x)

Inventory days

Receivables days

Payable days

FY14

1,196.9

384.2

521.3

1,381.7

3,484.1

926.3

2,557.8

3,484.1

FY14

17.4

19.7

0.3

7.5

91.2

77.8

109.0

FY15

1,436.3

395.7

548.7

1,657.6

4,038.4

842.4

3,196.0

4,038.4

FY15

20.0

23.3

0.3

10.5

113.9

75.6

116.2

FY16

1,436.3

707.8

272.7

1,988.3

4,405.2

855.6

3,549.5

4,405.2

FY16

23.5

23.8

0.1

12.3

92.1

89.0

126.5

FY17

1,436.3

1,262.0

466.8

2,215.4

5,380.5

932.5

4,447.9

5,380.5

FY17

19.3

20.5

0.1

13.3

121.9

87.1

148.4

FY18

1,754.3

5,223.4

64.7

2,137.0

9,179.4

3,605.4

5,574.1

9,179.4

FY18

10.5

10.4

0.0

94.8

113.8

107.5

117.8

FY19

1,754.3

5,138.2

87.1

1,981.0

8,960.7

2,723.3

6,237.4

8,960.7

FY19

8.0

0.0

214.5

138.6

94.2

103.5

FY20

2,456.0

4,426.9

105.3

1,859.6

8,847.9

2,961.4

5,886.4

8,847.8

FY20

4.0

0.0

56.6

97.2

111.8

82.5

FY21

2,456.0

4,173.6

95.1

1,822.7

8,547.5

2,427.0

6,120.5

8,547.5

FY21

-1.9

-0.3

0.0

-11.7

96.3

98.3

85.7

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Thank You

Contact Information Mr. Himanshu Zota / Mr. Ashvin Variya

"ZOTA HOUSE", 2/896, Hira Modi Street, Sagrampura, Surat-395 002(Gujarat)

cszota@zotahealthcare.com

www.zotahealthcare.com

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