Entero Healthcare Solutions Ltd (NSE: ENTERO) Q3 2026 Earnings Call dated Feb. 13, 2026
Corporate Participants:
Prabhat Agarwal — Managing Director and CEO
Balakrishnan Natesan Kaushik — Group Chief Financial Officer.
Analysts:
Unidentified Participant
Payal Shah — Analyst
Avnish Tiwari — Analyst
Devavrat — Analyst
Naman Bagrecha — Analyst
Chintan Sheth — Analyst
Akshat Mehta — Analyst
Bhargav Buddhadev — Analyst
Ronil Dalal — Analyst
Vansh Solanki — Analyst
Swaraj Mehta — Analyst
Pranay Roop Chatterjee — Analyst
Rishabh Botra — Analyst
Chintan Sheth — Analyst
Presentation:
operator
Sa. Sa. Sam foreign. Ladies and gentlemen, good day and welcome to Q3FY26 earnings conference call of Antero Healthcare Solution Limited hosted by DAM Capital. As a reminder, all participants line will be in the listen only mode and and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. A brief reminder, this conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on the date of this call.
These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Ms. Payal Shah from DAM Capital Advisors. Thank you. And over to you.
Payal Shah — Analyst
Thank you. Hi. Good morning everyone and a very warm welcome to Antero Healthcare Solutions Q3FY26 earnings call hosted by DAM Capital Advisors. On the call today we have representing Antero Healthcare Solutions, the management team comprising of Mr. Prabhat Agrawal, Managing Director and CEO, Mr. Balkrishnan Kaushik Group CFO and Ms. Akanksha Gupta, Head Investor Relations. I will hand over the call to the management team for opening remarks and then we’ll open the floor for questions. Please go ahead sir.
Prabhat Agarwal — Managing Director and CEO
Thank you and good morning everyone and thank you for joining our earnings conference call to discuss the performance for quarter three, nine months of this year. My name is Prabhat and I’m joined by Balakrishnan Kaushik Group CFO Ms. Akanksha Gupta, Head Investor Relations and SGA, Our Investor Relations advisors. On the call. I hope everyone had an opportunity to go through the financial results and investor presentation which are uploaded on the stock exchanges as well as on our company’s website. Let me begin with performance update of the quarter which is another strong quarter for us. Revenue grew by 26% year on year and 9% quarter on quarter to rupees 1707 crores.
After adjusting for the sales recognized on net margin basis and divestment of a subsidiary on like to like basis, our revenue growth stood at 28.5% year on year and organic growth was 17.1% year on year. This is the highest organic growth for this financial year and we continue to grow faster than the industry which grew by 12% and hereby increase our market share. Gross profit came in at rupees 173 crores up 29% year on year with our gross margins improving by 30 basis points to 10.1% versus last year. Compared with last quarter the GP margin was 10bps lower because a one time GST incentive amounting to 17bps received from pharma companies being offset by improvement driven by better business mix, margin, accretive categories and procurement efficiencies.
EBITDA for the quarter was rupees 68 crores representing growth of 36% year on year with margins improving by around 30 basis points versus last year to 4% in this quarter there is an exceptional impact of new labor code of 6.1 crores on PAT. Adjusted for the one off impact of new labor code, PAT margin was 2.3% with PAT at rupees 40 crore. That is a growth of 36% over last year. Our reported profit after tax increased 15% year on year to Rs 34 crores with PAT margin of 2%. On working capital front I had shared during the last quarter that this optimization remains a key priority for us.
The same is now reflected in our net working capital days on a like to like basis that improved to 61 days in Quarter 3 FY26 from about 66 days in Quarter 1 and 63 days in Quarter 2. Reported NWC at 64 days is primarily due to change in grossing up GST tax rate on sale from 12% to 5% in quarter three which doesn’t reflect two days of inventory reduction and one day of receivable reduction. One of the most important key positive improvements that was reflected in operating cash flows with OCF at rupees 49 crores in the quarter.
This is driven by our ongoing focus on EBITDA margin expansion and improvement in working capital management. I am confident that we are on track to deliver operating cash flow for the year in the range of 100 crores through improvement in EBITDA margin profile and initiatives being undertaken to further optimize working capital. You can also see a steady improvement in the return ratios. Return on capital employed improved to 14.8% in quarter three from 13.8% in quarter two and return on equity excluding impact of new labor code in India increased to 12.3% from 11% in the last quarter.
Operationally our reach and network have continued to expand. In the first nine months of the year we catered to over 97,600 retail pharmacies and more than 3,000 hospitals across five districts in India supported by 131 strategically located warehouses and 89,200 plus SKUs sourced from more than 3,100 healthcare manufacturers our relationships with such a huge range of healthcare product companies nationwide, pharmacies and hospital reach robust and technology enable last mile distribution infrastructure creates a very strong business mode and differentiated value proposition for both our suppliers and customers. Now coming to inorganic growth progress, we closed acquisitions of Anand Medelink in Pune, Ace Cardiopathy, Bio A Technologies and Anand Chemiseutics in Medtech segment.
Each of these acquisitions further expands our distribution reach, widens our product segments and builds new capabilities for us. Particularly in Medtech segment we have added scale in IVD, cardiology, EOCT devices, lab consumables, etc. As I have already guided post completion and integration of all these businesses. Annualized revenue will cross over 1000 crores. In MedTech segment. There will be a positive impact of 70 to 90 bps on gross margin and 50 to 75 bips on EBITDA margin on pro forma basis. After all the acquisitions are integrated with us, this segment represents an attractive growth opportunity for Antero along with margin enhancement potential.
Overall, we are very well poised to accelerate the growth margin expansion and cash flow generation journey post integration of the acquisitions and are on track to achieve our FY26 guidance. With this I close my opening remarks and invite people to ask questions. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Avnish Tiwari from Vakaria Change llp. Please go ahead.
Avnish Tiwari
Hi. Congratulations on closing these medical device transactions. Can you articulate your growth strategy in this medical device segment? Let’s say for your branded pharmaceutical segment you needed acquisitions as well to grow. But here how you think, what levers you can pull to accelerate growth here.
Prabhat Agarwal
Yes, thank you. Avnish. You know, I believe that you know in Medtech segment you can grow much faster without a lot of inorganic acquisitions. Because you know unlike pharma in Medtech you can do lot of Pan India exclusive distribution deals with lot of companies. Because there are not many specialized distributor in this space in India. And you know the companies also are looking for, you know, people who have Pan India reach who can give, you know, access to them, who can give customer access at an all India level to them. Right? And there are very, very few players who can do that.
So you know, now we have you know, kind of build a reasonable scale of thousand crores plus in MedTech. I think it gives a lot of opportunity for us to grow on from here.
Avnish Tiwari
Right. And what is the existing infrastructure you think you can leverage either physical or human as you grow, which you already have? If you can just help us understand that part.
Prabhat Agarwal
Yeah, so like we have 130 warehouses. You know, we have existing relationships with all these pharmaceutical companies who also have Medtech segments. Right. For example, advertise diagnostic, you know, devices and stuff like that. Same with Roche. Right. So, you know, our existing relationship with the companies, our distribution infrastructure, you know, further provides, you know, leverage to grow this business together. You know, there’s a lot of synergies that can happen between Pharma and medtech for us.
Avnish Tiwari
Right. The second question I had on the margin side, if you look at the leverage to over time with the scale improving margins, it was somewhat different here in Medtech because as you can scale, you get better pricing terms compared to more association driven segment, which is branded pharmaceutical.
Prabhat Agarwal
Avrish, can you repeat the last part? I didn’t understand very well.
Avnish Tiwari
As you grow in this business, do you have ability to get better margins or better pricing? Bulk volume based pricing in Medtech, is it better than you would have in branded pharmaceuticals?
Prabhat Agarwal
Yes, certainly. The reason, because, you know, in the medtech segment, the distributors not only play only the demand fulfillment part, but they also play an active role in demand creation part. Right. So the companies also depend on distributors to grow sales. Right. And for that, you know, they kind of, if you grow their business, they are ready to part with more margins with distributors.
Avnish Tiwari
Lastly, is there an opportunity for overtime getting to private level here, which you have seen some places, but in India you think not today, but over time when you scale up in this business, you can think on that line.
Prabhat Agarwal
Yeah, one can think on those lines, you know, on launching some of your labels as well. We have some private labels on home healthcare but as of now it’s not scaled up. It’s still pretty small. Right. But over a period of time we will definitely push for it.
Avnish Tiwari
Great, thanks Prabhat and wish you best.
operator
Thank you. The next question is from the line of Dave from Seven River Holdings. Please go ahead.
Devavrat
Hi, good morning Prabhat. Congratulations on a great set of numbers. You know, just to clarify, you had given a guidance of achieving a CFO of 100 crores in FY26 and so far in nine months we’ve achieved a negative 8.5 crores CFO. Does that mean that you’re looking to generate over 100 crores in CFO in Q4 alone.
Prabhat Agarwal
Yeah, that’s what we are shooting for, Dev.
Devavrat
Got it. Now the earlier guidance that we were given is on your EBITDA margins for the full year to be north of 4%. And looking at the trend so far in nine months we have achieved around 3.8%. So to meet that guidance we’ll have to cross 4.5% in EBITDA in Q4 alone. Are you still holding on to that guidance of achieving a 4% EBITDA margin?
Prabhat Agarwal
Yes. So I think now all the eyes will be on quarter four because everyone can work out this, match that on a full year guidance and subtract nine months actual. So what is it that needs to be done to what needs to be done in quarter four to achieve the full year numbers? Right. And we are, we are on track to deliver our full year guidance.
Devavrat
Got it. Got it. Lastly, just a bookkeeping question from my end. Why has your interest cost gone up significantly while the working capital days have improved or rather you’ve generated a CFO this quarter. Why is the interest cost going up?
Prabhat Agarwal
You know, because we have been, you know, acquiring companies, right. So we have been investing, investing in acquisitions so that, you know, cash is going out which was earning interest for us before. IPO funds are almost used now.
Devavrat
Are there any plans for a further fundraise or loading on some additional debt for the next set of acquisitions?
Prabhat Agarwal
So broadly we have completed all the big acquisitions now as of now we are not, you know, looking forward to raise any equity capital. There could be some movement in debt. But overall we are not looking to do more meaningful acquisitions from here on. I think next few quarters we will spend in consolidating what we have acquired because we have made big moves in this financial year. So we’ll wait for some quarters, stabilize operations, improve margins, improve cash flows and then we will look for new acquisitions.
Devavrat
Thank you Prabhat.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to two per participant. The next question is from the line of Naman Bagricha from IIFL Capital Services. Please go ahead.
Naman Bagrecha
Thanks for the opportunity. One question are listed, let’s say peer highlighted that they have discontinued their Amazon partnership. Does this benefit NPRO in any way?
Prabhat Agarwal
Sorry, I didn’t hear very well. What have they discontinued?
Naman Bagrecha
They have discontinued the partnership with Amazon. One of our listed players highlighted on the call. So they discontinued the partnership with Amazon. So it does this in any way benefit Entero?
Prabhat Agarwal
Yes, it does.
operator
Thanks. Thank you. The next question is from the line of Chintan Seth from Giri Capital. Please go ahead.
Chintan Sheth
Hi Prabhat and the team. Good show. Congratulations. One question on. On the acquisition you mentioned to slow down a little bit for next couple of quarter. So next year the capex required will be lower. Right. We’ll be focusing more on generating cash. Retain, retain that and then maybe look, look out for. For equation maybe in FY28. That understanding stance, Correct?
Prabhat Agarwal
Yeah, so that’s what I said. You know, next two, three quarters. You know, we have done some big acquisitions in this year, you know, so we’ll focus on integrating those with us. And there are a lot of other businesses that can grow significantly. And Medtech segment also, as I said, is a focus area for growth for us. So I think next two, three quarters will be little bit slow on acquisitions. Next three quarters, we focus and improve our margins, improve our cash flows and then we’ll evaluate more opportunities.
Chintan Sheth
Right. And on the competition front, as I’m seeing, you know, pharmeasy kind of getting back on its feet. Not. Not completely, but they are at least recovering over time. Does that challenge us in a way that by the time we get into the market for Right. Equations, they will be also, you know, be a party competing with us in acquiring businesses, which we are kind of looking forward to.
Prabhat Agarwal
In my view. That’s not any much of a concern for us right now because when we started off, you know, Pharmacy was acquiring businesses. Right. And we were also acquiring at the same time. And then Amizi went through its own set of issues and they kind of quickly stopped the acquisition. I’m not sure if they are, you know, looking to get back into this space aggressively in future, even if they choose to do so. You know, I don’t see much of a problem because, you know, the set of distributors available for acquisitions are huge while the buyers are only two or three.
Right.
Chintan Sheth
So that dynamic remains the same. That’s what you’re trying to say.
Prabhat Agarwal
Yes. It doesn’t change the dynamics much.
Chintan Sheth
Got it. And. And on the employee cost, you know, the provision which you have made, that’s kind of retrospective, but that does that, you know, on the recurring basis going forward. Does have any implication to our employee cost and margins because of the new labor code? Do we see or expect some incremental pressure on employee cost because of the higher provision required under the new labor code? Yes, yes.
Balakrishnan Natesan Kaushik
This is bala here. So what we have recognized under exceptional is the past service Cost, which is a one time cost going forward. We don’t expect the numbers to materially affect our overall margins. We don’t expect that.
Chintan Sheth
So bullpak. What we are currently or historically being operating as a percentage of revenue, we kind of try to maintain and improve upon it.
Balakrishnan Natesan Kaushik
Yes, that is correct.
Chintan Sheth
Okay, got it, got it. But I’ll jump back into thank you and all the very best.
Prabhat Agarwal
Thank you.
operator
Thank you. The next question is from the line of Bhargav Buddhadev from Ambit Asset Management. Please go ahead.
Bhargav Buddhadev
Yeah, good morning team and congratulations on good performance. So my first question is, is it possible to share what would be the gross margins and the EBITDA margins in our MedTech business?
Prabhat Agarwal
So Bhargav, we have not disclosed, you know, you know, product wise margins, you know, but we have given you a performa impact of that, you know, like 70 to 90 basis points improvement over on overall basis for us. Right. On the gross margin and 50 to 75 basis point improvement on the EBITDA on overall company basis.
Bhargav Buddhadev
Okay, so this is primarily contributed by MedTech.
Prabhat Agarwal
Yeah, because what we said in the investor presentation, this is just a pro forma impact, not including impact from anything else.
Bhargav Buddhadev
And maybe in the next three years. Where do you see this business shaping up for you?
Prabhat Agarwal
We are very, very bullish and optimistic about this business. This is a unique opportunity in India in a very large, you know, market size, more than 3 lakh crore of market size available for us to go and with a very clear right to win in this segment. You know, the value proposition that we offer both for our customers are for to our vendors is very unique. You know, not many people can offer the same value proposition. I give, for example, you know, like GLP drugs, you know, this is being launched almost, I would say 10% of GLP drugs is being sold by us.
So the reason being because we have a pan India presence, we can enter into relationship with the companies and then at one point in time they get access to a huge market through us.
Bhargav Buddhadev
Okay. And lastly sir, you said that in terms of acquisitions, now it’s time to sort of slow it down. Does that mean that organically only we are seeing almost 20, 25% revenue growth opportunity and therefore it makes sense to first integrate the acquisition made so far and then maybe one year down the line again we look at.
Prabhat Agarwal
If you look at the next year, you know, all the acquisitions that we did this year are basically in the second half of this year. Right. And part of it in quarter three and some in even quarter four. So you know, the full impact of these acquisitions will be visible in the next financial year. So a lot of growth will come just because of the timing impacts of acquisition that we did this year. Right. Plus the organic growth. So I mean, next year the revenue growth are all sorted and we would want to focus on first few quarters, on improving it.
And then anyway, once we see the cash flows and all that coming, we’ll keep identifying opportunities and maybe do something next year for FY28. But FY27 is more or less ordered just because of the work that we have done in this year.
Bhargav Buddhadev
And lastly, sir, do we have any exposure to this nutraceutical market? How big is that for us? Is it likely to become big?
Prabhat Agarwal
I mean, we have exposure to nutraceutical. Like we are doing distribution for Himalaya Dabur, Gina Seco. Many, many, you know, companies, well being. Many, many nutraceutical companies. Right. So it’s part of our portfolio. I mean, you know, if they grow at a rate higher than the overall IPM growth rate, we will enjoy that growth rate in our business as well.
Bhargav Buddhadev
And here in the margins may also be better. Right, because they need you more than you need them. Or maybe I’m wrong.
Prabhat Agarwal
I mean both need each other. So you know, it’s like, you know, if those products are being sold at a, you know, medical counter, a pharmacy counter or hospital, we will, it will become or it is part of our portfolio, you know, so the retailers will take it from us. I don’t see any big meaningful difference coming from there. See, we are an aggregator. We have all, as I told you, we have 87,000 SKUs in our portfolio. With more than 3,000 plus companies, I don’t think anyone would have such a big portfolio. Right. So any few companies will not make a big difference in that portfolio.
Bhargav Buddhadev
Thank you very much and all the very best.
operator
Thank you. Ladies and gentlemen, you are requested to restrict your questions to two per participant. The next question is from the line of Akshat Mehta from Seven Rivers Holding. Please go ahead.
Akshat Mehta
Hello sir. Am I audible?
Prabhat Agarwal
Yes.
Akshat Mehta
Yeah. My first question is on the growth path. So this year that will guide it for 30 like, for like growth rate. That implies that we’ll have a 35, you know, growth requirement in Q4, you know, will we be able to achieve that? And sir, are we planning to get to a 35 revenue growth rate? And on the other side as well, sir, given the acquisition slowdown that we are expecting next year, what is the kind of growth that we should look Forward to is it 30% or 20, 25%, what should we kind of bake it into our assumptions?
Prabhat Agarwal
So coming, you know, first to, you know, answer your question on this year, which I answered also previously in this call that, you know, Q4, we can work out the math, you know, and you are right in your match that you know, to deliver 30% light to light, we’ll have to 35% in quarter four. Right. And same for margin, same for OCF. Everything goes so what I’ve said, we are on track to deliver full year, which means we are on Track to deliver Q4.
Akshat Mehta
Okay. And so next year, how should we look at growth?
Prabhat Agarwal
So next year, you know, whatever acquisition that we have done this year, you know, the impact of this will be felt in the next year. Right. In terms of, you know, revenue growth. Right. So plus there will be organic growth as well. So even without much of an acquisitions, we, our growth rate is not going to materially come down.
Akshat Mehta
Okay, sir, next is on the margin side.
Prabhat Agarwal
Maybe I’ll give you, you know, in Q4 conference call, we’ll probably, I’ll give you, you know, the broad range of numbers that we can look for next financial year.
Akshat Mehta
Okay. So next question is on the margin part. So you said earlier that we are obviously looking at doing 4.5%. Can you help us understand, you know, what will be the factors that will drive 4.5% margins in Q4 is the.
Prabhat Agarwal
Impact of metric acquisitions will drive the margins up plus all other factors that we continuously work on.
Akshat Mehta
Okay. Okay. Just a small bookkeeping question as well, sir. Our other expenses have kept on increasing, you know, very sharply, you know, every quarter on quarter. So what is the key factor behind increasing other expenses?
Prabhat Agarwal
So when I see, you know, the Medtech acquisitions and all, they come with a higher gross margin, but at the same time they come with a higher cost also because they are in the business of demand generation also. So the cost structures are not as lean as, you know, pharma distribution. At the same time, their gross margins are also high. So one should look at the net margin impact, net EBITDA margin, rather than only gross margin or only operating leverage. Excluding that there is a good operating leverage on our business. In fact, if you look at even inclusive of that, our total, we were like 20 basis points improvement over quarter one of this year.
You know, quarter one, our expenses were like it was 6.4%. Now it has gone to 6.1%.
Akshat Mehta
Okay, one last question, sir. Just wanted your views on, you know, what will be the impact of this new trade deals that have happened with US and EU on the industry as a whole and probably for the company. If you want to share your views on that.
Prabhat Agarwal
So I can speak about our company, you know, so in our company we are insulated from these, you know, global trade deals and all that because, you know, we are focused on domestic India market. Right. So we are not exporting anything out of India. And our import component is also very low. Right. So we are practically more impacted by what happens in India consumption story, you know what happens in India macro, you know, what happens in India healthcare rather than, rather than, you know, us or you know, EU trade deals with India.
Akshat Mehta
So will it not be positive for us?
operator
Sorry to interrupt you, Akshay. Can you please rejoin the queue for more questions?
Akshat Mehta
Sure. Thank you.
operator
Thank you. Ladies and gentlemen, you are requested to restrict your questions to two per participants. The next question is from the line of Rikin Dalal from Fincom Advisors llp. Please go ahead. Rakeem, you can go ahead with your question.
Ronil Dalal
Hi, thank you for taking the question. It’s Ronald Dalal. Sorry, I think the mistake again. So my first question is that on the cash flow from operations, you know, you had mentioned to an earlier participant that we’re on track to do over 100 crores for the fourth quarter. So what could be the drivers or mathematics behind that? What are your assumptions there?
Prabhat Agarwal
The assumption would be increase in EBITDA margins and reduction in days of working capital. I mean basically cash flow is a function of these two only, right. How much margins we are generating adjusted for change in working capital.
Ronil Dalal
So we are still on track for working capital days moving towards 60.
Prabhat Agarwal
I mean what we are saying is we should be, we are on track to deliver that 100 crores of OCF, right. On a full year basis. Which means that it will have to happen in the fourth quarter because we have it basis. We are almost breaking even on cash flow which is a significant improvement if you consider what is last year, you know, so it’s not that everything is going to happen in last quarter, only in quarter three. Also, you know, we generated almost 49 crores of positive cash flow compared to negative 21 crores in, in the last year quarter three.
So it’s almost like 70 crore improvement has happened in this year also. Also in the. In one quarter itself.
Ronil Dalal
Sure. The next question is that, you know, like I just wanted to check some of your older acquired companies. Like maybe if I give an example of GS Pharma is reporting losses while the revenues are still increasing. So what factors are contributing to this? What are the thoughts around shutting down companies which are loss making for extended periods of time in case any such companies you’re having.
Prabhat Agarwal
We have done similar, you know, actions before. You know, we have closed down. We closed down a company called CPD Pharma before. We closed down a branch in Tirupati before. We closed down a branch in Belgaon before. So that’s a normal process. You know, on where we see that, you know, that particular subsidiary or is not making sense, then we kind of, you know, walk away from it. Specifically for GS Pharma, I think it’s also because of the interest being charged from, from Antero to the subsidiary, you know, on a better level, they are not at loss.
Ronil Dalal
Right. Next is, you know, is procurement from pharmaceutical companies currently centralized or does it occur at the individual entity or pharmacy level? And the second is, do you operate on a hub and spoke distribution model in markets such as Mumbai, Bangalore and Hyderabad?
Prabhat Agarwal
So coming the first question that whether it’s centralized. So all the procurement is happening at the, at the local level. You know, so the supplies are being received at the local level from the local cfa. The discussions, negotiations and anything like that is happening at center level. But the supplies are happening at local level.
Ronil Dalal
So we get the benefit of centralized.
operator
Sorry to interrupt you, Mr. Dalal. Sorry to interrupt you. Can you please.
Ronil Dalal
The question is not answered.
Prabhat Agarwal
Go ahead, Rockin. Sorry, Ronan.
Ronil Dalal
No, no, I was just saying that the question was left unanswered. So the second part was on the hub and spoke and do we get the benefits of centralized purchase?
Prabhat Agarwal
So yes, the centralized purchase, you know, the discussion, negotiations and all that happen at the center level. But supplies happen at the local level because it doesn’t make sense to buy centrally in one warehouse and then redistribute to 130 warehouse. Right. Because that will just add to your cost. So all the, you know, deals and discussions happen at the central level. But supplies we are receiving at the local level because that’s the most efficient way to do it.
Ronil Dalal
And the hub and spoke, sir.
Prabhat Agarwal
What exactly would you mean by hub and spoke?
Ronil Dalal
No, so I’m saying let’s say supposing like Mumbai, Bangalore, Hyderabad, places where you have like a lot of, you know, volumes, instead of having many warehouses, would you maybe have some centralized warehouses? Earlier we didn’t have that. So I was just wondering in case we have transition to having large warehouses which then cater to the smaller areas.
Prabhat Agarwal
It is not possible to supply Hyderabad from Mumbai. Okay. For two reasons. One, that you know, we are in the last mile business where the Hyderabad.
Ronil Dalal
Sorry sir, sorry to clarify but not Hyderabad. In Mumbai you would have large warehouse catering to Mumbai, Bangalore, larger warehouses catering to Bangalore. For example, earlier you know you may have had maybe 10 warehouses in the city of Mumbai which are smaller in size. Maybe then you move to a large warehouse, two, three smaller ones. So then you move from 10 warehouses to for example like.
Prabhat Agarwal
Yes, yes, that, that we have. You know. So we have a large warehouse in Mumbai which is you know catering to large part. And from there we supply to other smaller, you know, places also like Thana and others. Right. So that is. That always happens.
Ronil Dalal
Right. Okay, thank you. I’ll get back in the queue.
operator
Thank you. The next question is from the line of one Solanki from RSP inventures. Please go ahead.
Vansh Solanki
My question seems on a particular on private labels in Chandik and Medtech. So currently how much revenue contribution is from these segments? And after the acquisition of the Anand, what will be the revenue contribution you are expecting from these segments for private labels, generics and Medtech.
Prabhat Agarwal
So Medtech I think we have given that. You know with post this thousand crores coming into our books it will reflect almost 15% of our business. Right. Generic and private label are still very small part of our business. You know, in low single digits.
Vansh Solanki
Okay. And the second is on that our effective tax rate is are continuously lower like 16%, 18% in quarter one and quarter two. And also this quarter also it is 13%. So are we anything getting benefit from Texas and style. Any tax sales or this will continue or we will come to the normal 25% corporate tax level soon.
Prabhat Agarwal
So once currently we have certain losses available to us carry forward losses on account of which currently you are seeing the effective tax rate at about 18%. As and when those losses get completely consumed the tax rate obviously will slowly go up a bit. But for this financial year we are holding on to our 18% of effective tax effect.
Vansh Solanki
It. Okay, can you give me a number how much accumulated losses are there as of now? Or maybe if your number is available.
Prabhat Agarwal
For now then you can give also.
Vansh Solanki
For September if you have.
Prabhat Agarwal
So if. If you look at the losses probably we will utilize all those losses maybe by next year.
Vansh Solanki
Okay. Okay, that will be also helpful. And the last question on the bookkeeping, how much is growth? Growth debt and net debt level? We have as of quarter three.
Prabhat Agarwal
And so net debt is at about 200 crores. And we had cash of about 250 crores.
Vansh Solanki
Okay, thank you. That’s from my Side and all the back.
Prabhat Agarwal
Thank you.
operator
Thank you. The next question is from the line of Swaraj Mehta from Perpetual Capital Advisors. Please go ahead.
Swaraj Mehta
Hi. Thank you for the opportunity. I’m relatively new to the company. I just had one question. What metrics do we look at before acquiring companies? And what is the reason for acquiring companies? Is it scale or reach to clients? Thank you.
Prabhat Agarwal
What do we look at when acquiring companies? And what is the reason to acquire? So we, we acquired distributors to gain entry into those geographic segment and product segment. Right. So we, with any acquisition, what comes to us is basically a portfolio of companies, a portfolio of customers. Right. Operating in a particular product segment or in a particular geography. Did I answer or do you want me to elaborate more?
Swaraj Mehta
Yes.
Prabhat Agarwal
And what metrics do we look at before acquiring company?
Swaraj Mehta
Like what are the key things we look at before acquiring a particular company?
Prabhat Agarwal
So basically the most important criteria we look at before acquiring company is what is that company going to add to us? You know, because we already sitting on a wide network today, right. We don’t want a duplication of our network. So you know, what is it that unique thing that he’s going to add to us which will be more difficult or time consuming for us to build ourselves. So either he’s giving us a new geography that you know, is a difficult geography for us to go on our own or he is getting giving a product segment that is very difficult to build on our own or will take time for to build on our own.
So if you look at last year’s acquisitions, and I’ve given that in one of the slides and rationale for each of those acquisitions. So some acquisition gave US entry into MedTech segment which was not our forte before some people gave us trade generic exposure. One of the acquisition gave us one of the largest presence in Pune as a market, which is a large market. So like that every acquisition has to add something to us, you know, either a new geography or a new product segment like that.
Swaraj Mehta
Thank you.
operator
Thank you. The next question is from the line of Prana Roop Chatterjee from Berman Capital Management. Please go ahead.
Pranay Roop Chatterjee
Hi, good morning. Am I audible?
Prabhat Agarwal
Yes, hi.
Pranay Roop Chatterjee
Yeah. My question is pertaining to the launch of GLP1 products expected in the near term. So and I’m thinking about it from two perspectives. One is you have an existing product which contributes, obviously you put it the other way where you sell 10% of GLP1 products. Based on the numbers I can see at an IPM level that would likely be high single digit to low double digit percentage of your existing business. So it’s a meaningful contributor. One impact would be when these cheaper alternatives come into the market, there could be some hit to your existing business or there could be a cap to further growth because the existing product has been growing tremendously on a month, on month basis.
The other secondary impact is that if there is a new product that is expected to be launched, I would expect that a Pan India distributor to get an upfront disproportionate benefit just for the sake of easier access to the market or wider access before it normalizes. And all the smaller guys also get a piece of the pie. So from these two perspectives, netting off against each other, how do you see your overall throughput expanding over the next, let’s say four quarters simply because of these new products? Logic.
Prabhat Agarwal
Yeah Pranay, we have to look at our base. You know, our base is huge. You know, our base is today more than 7,000 crores annual revenue. Right. So you know, any one particular product is not going to make a very meaningful change in our, you know, growth profile or anything like that. Right. Because even if we are doing, you know, let’s say the GLP1 is still a very small proportion of our sale because we are selling so many other products at the same time. And you know, let’s say by end of March or April, the semaglutide, you know, new players come in, generic players come in and we will continue to sell their products.
Also how much share they will take from the innovator. Because today you know, most of the sales is only from the innovator. Right. So how overall the market is going to expand. So but how much it will impact our own growth? I don’t think so. Any very meaningful part I can estimate right now.
Pranay Roop Chatterjee
Got it. My second question is on, it’s more a hygiene question. If I simply divide your organic like for like growth of 17% by the IPM growth of 12%, it comes to about 1.4. I know it might be a myopic way to look at your business on a quarterly basis but that being said, mathematically this is the lowest quarterly outperformance we have seen. At least since I have started collating the numbers from back in FY23. So is there any one off or we should just ignore this quarterly volatility?
Prabhat Agarwal
I would say just ignore this quarterly one. I mean I was also surprised to see such a huge growth on the IPM side because you know, last 4, 5 quarters the IPM had been growing by 7, 8% and in this quarter, it grew by 12%. Right. So the denominator completely changed. So I wouldn’t read much into it, you know.
Pranay Roop Chatterjee
Got it, sir. Thanks. And all the best. Thank you.
operator
Thank you. The next question is from the line of Binoy Jariwala from Opachia Investments. Please go ahead.
Unidentified Participant
Yeah. Hi. Thanks for the opportunity. Prabhat. Two questions from my side. So one is that you’ve already called out. You know that next 2, 3/4 the focus will be on integrating the acquisitions, improving the margin profile and working on reducing working capital. Is there any target for FY27 that you’d like to call out in terms of cash flow generation as well as working capital day reduction? And the second question is how many more 100 crore plus revenue size acquisitions are actually available now for you going forward? Whenever. Whenever the case you decide to increase the pace of acquisitions.
Prabhat Agarwal
So you know your first question on FY27. I’m not giving the guidance except that I can only say that FY27 is going to far better than FY26 given the fact that lot of work we have done in the second half of FY26, which is going to have a full year impact for next year. Okay. But we will talk about the next year numbers in the next call. You know, when we’ll have the full business plan and everything ready. Coming to your second question in you know how many distributors of above 100 crores are available? There are many available.
So when we want to go back, even today we have so many in our pipeline. So when we decide to go back to the market and shop for more, we would find enough targets.
Unidentified Participant
Just to follow up on this, would you say that whenever you go back to the market you have a pipeline visibility of at least a couple of years?
Prabhat Agarwal
The pipeline is already there with us. You know, there are many people who keep approaching us for, you know, collaboration. So we have the pipeline ready. You know, once, as I told you, next two, three quarters we improve on our our own internal operations, you know, internal metrics. And then we will go and see which of those pipeline are still there and which of those pipeline would make sense to us.
Unidentified Participant
Understood. If I may ask one more question.
operator
Sorry to interrupt you, sir. Can you please rejoin the queue for more questions?
Unidentified Participant
Sure. Welcome.
operator
Thank you. The ladies and gentlemen, you are requested to restrict your questions to one per participant. The next question is from the line of Vineet from Toro Wealth Managers. Please go ahead.
Unidentified Participant
Hi sir. Am I audible?
Prabhat Agarwal
Yes. Yes, you are.
Unidentified Participant
Yes. So my question was with respect to like one of the participants asked you about the other expenses being increased this quarter. Right. But if you can like mention about the few of the line items, few of the top five line items in the other expenses because I didn’t exactly get what Medtech is actually making the other expense to increase.
Prabhat Agarwal
So in MedSec, you know, we are doing demand generation also which means higher manpower because you know, and more qualified manpower as compared to warehouse and delivery manpower in demand fulfillment business. There are other marketing and promotion expenses also there in Medtech. So these are the two big cost items that are there when you do demand generation activity as well that helps you to drive higher gross margins. But at expense ratio they will be higher compared to, you know, pure play Pharma distribution.
Unidentified Participant
Got it. And sorry, like if you can also.
operator
As we have a long queue, can you please rejoin the queue for a follow up question?
Unidentified Participant
This was my second question.
operator
Yeah. But we are restricting to one question per participant to ensure that the management answers all the questions.
Unidentified Participant
Okay, I’ll join with the queue then.
operator
Thank you so much. The next question is from the line of Rishabh from Bastion Research. Please go ahead.
Rishabh Botra
Hi sir, thank you for the opportunity. Am I audible?
Prabhat Agarwal
Yes, yeah.
Rishabh Botra
I have a slightly longer term question about the business. So if you could just explain the levers behind the organic growth, you know, which we have had, you know, 1.5x and more higher than that. So what are the levels? If you could just quantify, let’s say is it the increase of the wallet share of the existing customer, Is it the cross sell that we do to the newer acquired customers via the MN activities? The reason I asking and trying to understand what would be a sustainable growth rate for our business, you know, let’s say five years down the line when we would be, you know, out of having any sizable or meaningful acquisition.
Prabhat Agarwal
Yeah. So, you know, very good question actually. You know, and this is the basically the core of our business. Why should we grow faster than the industry or why should we grow faster than our competitors? Right? And this is totally dependent on the value proposition that we offer to our customers. You know, so what do we offer to our customers? We offer to our customers a very huge product portfolio. Right. Today the pharma market is so fragmented that for any retailer, you know, to run a shop he needs, you know, 6,000 different items. Right. Those could be divided over 300, 400 companies.
Right. We offer him an opportunity to consolidate his buying through one buyer, one supplier. Right. So he gets a huge amount of convenience in terms of getting a large portfolio fulfilled through us. Secondly, you know, our service levels to him in the sense that, you know, we are delivering two to three times per day. We are running our warehouses 24 by 7. So you know, he can place the order right before closing his shop and he gets the goods just before opening his shop in the morning. Right. So he can order on our app so he doesn’t have to, you know, do manual ordering and all that.
So all this is a big value add for a customer and that helps us to gain wallet share at his counter. Okay. And at the same time we also expand our customer base. You know, we keep hunting for new customer, new shop shops that are open in the area. We expand our geographical reach. So you know, we are going from main center in the city, we are also going to the, you know, nearby districts where we offer the same value propaganda because we have, we are sitting on a huge portfolio, you know, the portfolio of products.
And that gives you a huge, you know, advantage over anyone else in business. And that’s the reason why we have been acquiring also companies to build that portfolio because we have the customer. It’s like a two way mode, you know, why do so many companies come to you because you have such a huge customer base and why do so many customers come to you because you have so many products to sell to them or they can buy from you. So that, that mode reinforces itself every time, you know, every time we add companies or every time we add customers.
Rishabh Botra
Can I have a small follow up on this? So can you just give me any guidance for any maintenance capex for our business. So if you could just explain me that. So we have been continuously increasing our overall warehouses. So I’m just trying to understand what is like a peak, you know, asset turns for us or if any color on that part. So it would help us understand better what would be the incremental, you know, return on capital potential for our business given we are continuously decreasing our working capital days and we. What would be further operating leverage benefits for our business.
Prabhat Agarwal
So as you know, our business is not capital intensive, it’s only working capital intensive. So you know, fixed assets point of view, we have a very small fixed asset base because most of the, I’m not most, all of the warehouses are on leases. Right. So the only equipment that we would put there is storage equipment and cooling equipments. Right. To maintain the temperature and stuff like that. So capex point of view, it’s, it’s very minimal compared to the revenues that we generate from, from, from that warehouse. Probably to do one warehouse you would not need more than 30, 40 lakhs of capex.
Rishabh Botra
Understood? That’s it. From my side. Thank you. All the best.
operator
Thank you. The next question is from the line of Pratik Srivastava from Nivish Wisdom. You are requested to limit your questions to one per participant. Please go ahead.
Unidentified Participant
Sure, sure. Madam. Sir, I recently attended one of the con calls for the Ayurvedic healthcare provider. I think they have. They were mentioning in the openly mentioned in the call that they have tied up with you for the distribution of their Ayurvedic products. But they also mentioned that you know for allopathic and other devices the margins are high but for these the margins are low. So is that true? And why are we getting into low margin if that is true? So I want your. You know.
Prabhat Agarwal
What did you say in the last. I didn’t hear that conference call so you’ll have to tell me. What? What? What did they say?
Unidentified Participant
So in that conference call they were saying that they have anyways tied up with Entero for their Ayurvedic, you know, supplements and other products distribution. But they were also saying that you know, it is better for them to tie up and they were saying they are getting that at a lower margin than what typically you charge for other like allopathic sort of products. Like other electronic devices or other things. Right. So is that true? I want your. I want to hear from you also on that. What is the margin? What are the margins in going to be in the Ayurvedic products Distribution, sir.
So.
Prabhat Agarwal
So Ayurvedic products don’t carry lower margins than than other pharmaceutical products. Right. So the normal pharmaceutical product margins are like 10% plus. Right. So it’s in the same line or could be more, it won’t be less.
Unidentified Participant
Okay. All right, sir. Okay. I can ask just one more question, sir. Because on the US now there are other US devices also coming in.
operator
Mr. Prateek, sorry to interrupt you. Please rejoin the queue for if you have a follow up question.
Payal Shah
Okay, sure.
operator
Okay, thank you. The next question is from the line of Sumit from Finserve Analytics. Please go ahead.
Unidentified Participant
Thanks for the opportunity. I have a simple bookkeeping question on data outstanding for more than six months. What is the amount of data outstanding for more than six months as on 20th, December 25th. Hello. Am I audible?
Prabhat Agarwal
So you know, all the debtors, you know which are at different aging profile, they are adequately provided. We are not giving the data aging separately in. In the deck, whatever. You know, as per the accounting Policy of the company approved by the auditors and the board. Whatever you know, provision is required to be made is being made based on the aging profile of the dec.
Unidentified Participant
Okay. I wanted to understand what is the amount of data outstanding for more than six months as of December 21st.
Prabhat Agarwal
We don’t. We don’t give that kind of a data. Why would you need that data? What would you do with that data?
Unidentified Participant
Okay, just for the valuation present to understand how much provision can come in future.
Prabhat Agarwal
Just based on that data you won’t be able to take a judgment on how much provision is required. Right. That. That judgment is being taken by the management.
Unidentified Participant
Okay. Thanks.
operator
Thank you. The next question is from the line of Chintan Seth from Gary Capital. Please go ahead.
Chintan Sheth
Yes. Hi Krabat. Just a follow up and clarification in the cash flow. Sorry to hop on. Hop on it. You mentioned third quarter last year was negative 23 odd corrode and first half I think it was 62 crore negative. So 9 monthly we were down 85 crore and the full year was down 77 crore. And this year we are kind of recovered from 85 negative to negative 8 crore. Already 100 crore delta is largely, you know, has been covered. So is that the numbers? Right? I’m just trying to reconcile that. You mentioned 23 last year it was 62, 85 was nine months negative.
Prabhat Agarwal
Yeah. So Chintan numbers are right. And when you’re looking at operating cash flows. Yes. There has been a significant improvement in Q3. So like Prabhupadaj mentioned earlier we’ve done 49 crores of positive in Q3 itself. And we were 47 negative in Q1, 10 negative in Q2. So we are about 8 as of YTD and we maintain our full year cash flow projections. Operating cash flow last year on a full year basis we were 77.
Chintan Sheth
77 correct. So fourth quarter implied was positive only.
Prabhat Agarwal
Yes. Yes. Last year fourth quarter was positive. Yes.
Chintan Sheth
Got it. Got it. I think. Great. Thank you for the clarification. I’ll jump back. Okay.
operator
Thank you. Ladies and gentlemen, we’ll take this as a last question for today. Due to time constraint I now hand the conference over to Mr. Prabhat Agrawal for his closing comments. Over to you, sir.
Prabhat Agarwal
Well, thank you everyone for joining this call and thank you for your trust in the company. You know, if you have any questions which has been left unanswered please do reach out to SGA or to our IER team. Thank you once again for joining. Bye. Take care.
operator
On behalf of DAM Capital Advisors limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.