By: IPP Bureau
Last updated : August 21, 2026 12:40 pm
Company adds 246 net stores in Q1; customer footfall rises to 60 lakh as management targets 600-650 new outlets in FY27 and cash breakeven by Q4 FY27 or Q1 FY28
Zota Healthcare Limited reported a 67.6% year-on-year increase in revenue from operations to Rs. 173.6 crore in Q1 FY27, driven by continued expansion of its Davaindia generic pharmacy network.
Gross profit rose to Rs. 107.56 crore, with gross margin improving to 61.96% from 56% in Q1 FY26. Management, however, noted some sequential pressure on margins from higher input costs, particularly packaging and bottle costs.
The company added 264 new Davaindia stores during the quarter, comprising 201 company-owned, company-operated (COCO) outlets and 63 franchisee-owned, franchisee-operated (FOFO) stores. After closures of two COCO and 16 FOFO stores, net additions stood at 246, taking the total network to 2,825 stores as of June 30, 2026.
Customer footfall increased sharply to approximately 60 lakh, compared with around 35 lakh a year earlier, while total gross merchandise value (GMV) reached Rs. 164.02 crore.
The rapid expansion came alongside higher marketing expenditure. Zota spent approximately Rs. 15-17 crore on marketing in Q1, compared with around Rs. 18 crore for the entire FY26.
The company expects total FY27 marketing expenditure to reach Rs. 40-45 crore, reflecting investments around its brand ambassadors, including Mahendra Singh Dhoni, Suniel Shetty and Akshay Kumar.
The increased spending weighed on near-term profitability, with the company reporting a PBT loss of around Rs. 43-44 crore.
Management estimated underlying cash loss at approximately Rs. 30 crore after adjusting for depreciation and Ind AS-related impacts, and around Rs. 20 crore after excluding incremental marketing expenditure.
Management expects reported EBITDA to turn positive from Q2 FY27, while cash breakeven on a pre-Ind AS basis is targeted for Q4 FY27 or Q1 FY28.
Store maturity remains a key driver of the company's profitability outlook. The 234 stores opened between 2021 and 2024 generate average monthly GMV of around Rs. 4.13 lakh per store, with store-level EBITDA margins of 12-15%.
The 617 stores opened in FY25 generate approximately Rs. 2.28 lakh monthly GMV per store, while the 803 stores opened in FY26 generate around Rs. 1.60 lakh.
Zota expects stores to generally reach maturity within 12-18 months, with newer cohorts potentially reaching maturity within 12-15 months.
For FY27, management maintained its target of adding 600-650 stores, with expansion expected to moderate in Q2 before accelerating in the second half of the year. The company is also investing in Davaindia Health Mart, KMHP Ventures, Curexis Ventures and newer initiatives including UGO Generic and SKIA.
Separately, Zota confirmed the acquisition of Globotask IT Consultancy, aimed at strengthening its internal technology capabilities and reducing reliance on external IT vendors as the retail network expands.