Release Date: October 28, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Kaya Ltd (BOM:539276, Financial) reported a 5% growth in its clinic business and a 4% growth in product business at clinics over the previous year.
- The Hair Care category saw a significant growth of 183%, while Body Care and Sun Care grew by 57% and 20%, respectively.
- Kaya Ltd launched two new clinics in Pune and Ludhiana, both receiving high customer ratings.
- The company invested in 29 new dermatology machines to enhance customer experience and service outcomes.
- Kaya Ltd was recognized as one of the 2024 Avtar and Seramount 100 Best Companies for Women in India for the fifth consecutive year.
Negative Points
- Kaya Ltd reported a stand-alone loss after tax of INR10.7 crore for the quarter.
- The company recognized a loss of INR4.7 crore from discontinued operations during the quarter.
- There is uncertainty regarding future impairment losses related to the pending sale of Kaya DMCC.
- The customer count has declined, with existing customers decreasing despite new customers growing in double digits.
- Corporate costs, including marketing and back-office expenses, account for 25% of the company's top line, indicating high overhead.
Q & A Highlights
Q: Can you provide a like-to-like revenue comparison for the current year versus last year, excluding the subsidiaries sold off?
A: Yes, the consolidated financials now reflect a like-to-like comparison, which is essentially the stand-alone entity. You should compare the current consolidated figures with last year's stand-alone numbers. - Arihant Dhariwal, CFO
Q: Could you elaborate on the partnership with Marico and its expected impact?
A: The collaboration with Marico involves granting them exclusive rights to scale up Kaya's product range outside of clinics, enhancing product growth and brand visibility. This is expected to indirectly increase footfall at Kaya Clinics. The partnership began in September, so it's too early to quantify its impact. - Arihant Dhariwal, CFO and Rajiv Suri, CEO
Q: Are all write-offs completed this quarter, and can we expect any further impairment losses?
A: The consideration from DMCC is pending, and once completed, we will have clarity on any further impairment losses. There might be minor losses in the upcoming quarters, but nothing material. - Arihant Dhariwal, CFO
Q: What is the path to profitability, and how does the company plan to achieve it?
A: The Clinics business is profitable at about 26-27% EBITDA, except for three clinics. Profitability will be driven by organic and inorganic growth, a strengthened balance sheet post-rights issue, and accelerated expansion without borrowing. - Rajiv Suri, CEO
Q: What is the expected time frame for a new clinic to become EBITDA positive?
A: A new clinic typically takes around 1.5 to 2 years to break even at the operational level, with a payback period of 3 to 4 years. - Arihant Dhariwal, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
