Zota Health Care Ltd (NSE: ZOTA) Q3 2026 Earnings Call dated Feb. 05, 2026
Corporate Participants:
Unidentified Speaker
Moksha Zota — Managing Director
Himanshu Zota — Whole-time Director
Analysts:
Unidentified Participant
Ajit Mishra — Analyst
Chintan Sheth — Analyst
Swaraj Mehta — Analyst
Manan Shah — Analyst
Parikshit Kabra — Analyst
Presentation:
operator
Sa. Sa. Foreign. Ladies and Gentlemen, Good day and welcome to Zota Healthcare Limited Q3FY26 earning conference call. As a reminder, all participants lines 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 the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ajit Mishra. Thank you and over to you.
Ajit Mishra — Analyst
Thank you. Good afternoon to all the participants. I’m Ajit Mishra from Ernst and Young Investor Relations. Before we proceed to the call, let me remind you that the discussion may contain forward looking statements that may involve known or unknown risk uncertainties and other factors. It must be viewed in conjunction with other business risks that could cause future digital performance or achievement to differ significantly from what is expressed or implied by such forward looking statements. Please note that we have mailed the press release presentations, results and the same are available on the Exchange and company website.
In case if you have not received the same you can write to us and we’ll be happy to send that same over to you to take us through the results and address your questions. Today we have the top management of Zota Healthcare Limited represented by Himanshu Zota, Founder and whole time Director, Moksha Zota, managing director and Dr. Sujeet Paul, group Chief Executive Officer. We will start the call with an opening remark on brief overview of performance for the quarter gone past followed by question and answer session. With that said, I will now hand over the call to Mokshish Zota.
Over to you sir.
Moksha Zota — Managing Director
Good afternoon everyone. Thank you for joining us today for Zota Healthcare Limited Q3FY26 earning call. I am Moksha Zota, Managing Director of Zota Healthcare Limited. We appreciate your time and continued interest in the company as we walk you through our performance highlights and key development for the quarter ended 31st December 2025. I trust you have an opportunity to review our Q3FY26 financial results and investor presentation. Q3FY26 was another quarter of strong execution for Zota Healthcare marked by continued momentum in the expansion of our Dhava India retail pharmacy network. During the quarter the company continued to accelerate the expansion of its Dawai India retail pharmacy network adding 276 new stores including 231coco and and 45fofo stores.
This took the total Dawa India footprint to 2331 stores as of 31st December 2025 reinforcing our national presence. This expansion reinforces our presence across India and reflect the scalability of our Fuko and COCO operating models. A key milestone during the quarter was the successful completion of INR350 node QIP with the participation from a diverse set of institutional investors including foreign portfolio investors, alternative investment funds and mutual funds. The capital raised significantly strengthen our balance sheet and provides long term financial flexibility. The proceeds from the QIP will be primarily utilized to accelerate the rollout of company owned company operated Daha India stores, support working capital requirement and meet general corporate purpose.
In line with our strategy to build fully integrated scalable retail pharmacy ecosystem, the Board approved the incorporation of a new wholly owned subsidiary, KMSP Ventures Ltd. With an initial paid of capital of 10 lakh rupees, this entity will engage in the marketing and trading of pharmaceutical products enabling greater control over sourcing, distribution and margin optimization as the network scales, further strengthening our internal ecosystem, the company increased its investment in Davao India Healthmart Limited its wholly owned subsidiary, through additional equity subscription during and subsequent to the quarter. These investments are aimed at supporting the expansion of cocoa stores and meeting working capital requirements, ensuring seamless execution at the subsidiary level as store additions are accelerated.
Additionally, as a part of our broader strategy to expand our footprint in retail, generic and specialty pharmacy segment, the company acquired 100% equity stake in Q Rexis, a retail pharmacy platform operating under the brand name Skia. Skia offers a comprehensive portfolio spanning pharmaceutical, nutraceutical, cosmetic, Ayurvedic and OTC products. Collectively, this strategic initiative reinforces our confidence in achieving our medium to long term objective of crossing 5000 Dawa India stores across India by March 2029 supported by fresh capital from the QIP and steadily improving cash flows from our maturing store network. Looking ahead, our priorities remains clear to continue scaling the Dawah India Network with a sharper focus on unit economics to drive operating efficiencies and sustain profitability and to deepen access to affordable high quality generic medicine across the country.
With that, I would now like to hand over the call to Himanshu Zota to take you all through financials and. Operational performance of the quarter.
Himanshu Zota — Whole-time Director
Thank you, thank you Moksha Good afternoon everyone. I will now take you through the financial and operational highlights for the quarter ended 31st December 2025. Starting with the financial highlights console, revenue from operations 2 to 14,295 lakhs in Q3FY23 26 registering a strong bio y growth of 98.2% compared to 7212 lakh in Q3FY25. This growth was primarily driven by continued store addition and improved scale across the Dawai India network console. Gross profit increased to 8,670 lakhs up 113% YoY from 4,029 lakh in the corresponding period last year supported by operating leverages and high volume and scale benefits.
Subsequently operating profit and EBITDA moderate during the quarter. This was primarily on account of higher operating expenses linked to network expansion as a company had over approx 400 plus stores under the development or in non life stage where manpower rental and other pre operative costs have already come in. As a result, company reported a consolidated EBITDA to 123.7lakhs for the quarter. In terms of revenue contribution, Dawa India contribute to the core growth driver accounting of 80% of Q3FY26 ceremony followed by domestic at 11%, export sales at 6% and everyday herbal group at 2%. Moving operation performance network expansion remains reboot during Q3FY26 we added 276 Dhawai India store taking the total network of 2,331 stores as on 31st December 2025 comparing 1438 Coco and 8934 stores.
So in 9 months current financial year we added 586 cocoa stores. Our geographic presence now spans to 23 states and 5 union territory reinforced the national footprint of Dava India across both OPPO and FOFO models. Quarterly customer Footfall increased to 49 lakh in Q3FY26 up from 27 lakh in Q3FY25. Quarterly GMD rose to 12,172 lakh nearly doubling bio wide reflecting improved store productivity and network scale. Additionally, Q3FY26GMB had GST impact of 5.15%. Average wallet spend remained stable underlying the steady consumer behavior and value propositioning overall while near term margin have been impacted by expansion of LEED investment, we believe that these costs are transitory and position to company well for improved operation, leverage, margin normalized and profitability growth as newly added store matures.
We will now open the floor for question and answer. Our team will happy to address any question you may have. Thank you.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on the Touchstone telephone. 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 Chintan Sheth from Girig Capital. Please go ahead.
Chintan Sheth
Hi Aman Subhai. Thank you for the opportunity. The question I had was related to employee cost during the quarter. You mentioned something about pre operative expenses for the 400 stores which are in pipeline. Is there any. If you can fill it out how much is you know pre operative cost increase Pre operative cost because of. Sorry, sorry about the background noise. I cannot avoid it. So basically I’m trying to understand if you can fill out quantify the pre operative cost during the quarter that is one and second is on the GMV to revenue. Revenue to GMB for the current quarter for the total DA India is 95%. But if. If you recollect when we discussed in the past The Focus Store GM revenue to GMV typically ranges between 55, 50, 55%. Then I’m trying to understand why the revenue to GMV for the current quarter or even in the previous quarters were high relative to, you know, to the revenue.
These are the two questions and I’ll turn back into.
Moksha Zota
Sure. Yeah sure. Thank you. First of all pre operative expense basically employee roughly 231 store open. 231 store open or already charged for store in process day as on 31st December. So employee cost console level pay to 38 Karod roughly. So more or less employee cost. So next one and next partner that is your first question answer. Second is GMV to revenue. Which is not gmv. Fee which is our Dhamma India revenue or second thing. For example. Next month May and next. That’s why especially. Say you give buying Jatakarth franchisee revenue invoice. That’s why that difference happened.
Chintan Sheth
Sure, I’ll jump back into. Thank you.
operator
Thank you. The next question comes from the line of Harsha from Seven Rivers Holding. Please go ahead.
Unidentified Participant
Hello. Good morning. Good afternoon sir. Sir, if I. If I look at the average revenue for the cohort which are more than two years old. So it has sort of flattened out. Maybe two year has come to around 3.9. Last quarter maybe it was almost 3.99 lakh per store. But if I look at the stores which are more than three years old, it has come down from 7 lakh to 6.85 lakhs. And even 12 to 1224 months have come down from 2.39 lakhs to around 2.33 lakhs. So somewhere is it happening that the unit economics that we were envisaging is not happening as the stores are maturing.
Moksha Zota
For example first code 7.02 q3 may q2 7.2 y. Apple to Apple compare 5.15% GST impact. So already already. For example. 4% growth, percent annual growth, Five percent work. So is clearly a GMB automatically.
Unidentified Participant
Okay, understood, understood. And another thing.
Moksha Zota
Side by 7.2 4.86 actual GMVA as per old GSC.
Unidentified Participant
Okay, okay, understood, understood. And so another thing is I was just tracking footfall per day per store. Johamara Seven quarters say it is somewhere around 2830 on an average. So what is happening there? I mean why football per store.
Moksha Zota
Next. Three quarter May. So out of 14. For example. That is a basic idea. More than two years old. Normally. For example. 80 to 100 kb.
Unidentified Participant
Okay, Okay. Were there any store closures?
Moksha Zota
No, not single store close. Zero closure in this quarter.
Unidentified Participant
Okay. And sir, I was looking at the. Employee cost average for this quarter. Our average store count was somewhere around 1325 or May 60,000 rupees. I think of the per store employee cost is around 60,000 rupees per month. So calculate 24 crore employee cost for the COCO business. But overall employee cost, if I look at it 53 crore. So 30 crore cost for other business. I mean why is that employee cost so high?
Moksha Zota
Extra employee cost will be roughly about 65 70,000 rupees per store. Here 60,000 years. Roughly about 65 70,000. Second non life storage. Employee cost will be as on Q3 May year, roughly 8080 5000. Including non live and non live store or other expenses. For example corporate salary, Salary, cost.
operator
Mr. H, join the queue for follow up question. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit yourselves to two questions. Should you have any follow up question, you may rejoin the queue. The next question comes from the line of Siraj Mehta from Perpetual Capital Advisors. Please go ahead.
Swaraj Mehta
Hello. Congratulations on a good set of numbers. I wanted to understand what are a steady state EBITDA margins at a company level. So store level margins you said would be around 25 to 30%. But what would it be at a company level going down the line? And recently COCO stores the gross margins for around 60%. You said it will be around 60%. But this quarter I think it is around 67%. So how much more expansion in gross margin Is possible? Or 67 is also a steady state gross. Thank you.
Moksha Zota
So in terms of margin you last quarter maybe Amara 66% margins are uplifting. On an average 60% margin model again it is more than 60 67% or a third quarter may a 0.5 to 1% up to 70% maybe it may reach to 70% down the line. So margin second is mature store level store level EBITDA will be somewhere about 25, 30% store level or complete level. So company level EBITDA will be somewhere about 20% 1717 to 20% if entire all store are mature subject to.
Swaraj Mehta
Okay and also wallet spent it has been in a fixed range so how do we see it going forward? So will it be in this range or it will go up.
Moksha Zota
Initial phase the wallet spend below 200 below 200. So.
Swaraj Mehta
Okay, we’ve acquired a brand name called Skia. So what are the plans with this?
Moksha Zota
So so primarily what we intend is that if you really see the prognosis journey of Dawai India, we are trying to command the the country in totality towards affordable healthcare engineering medicines. So SKIA has been a new entrant for us where we would be kind of ensuring that to block any forecasted competition that can come to the country. And with that perspective we have acquired the same and this would also help us at a group level to spread the generic medicine retail concept and also to further engulf the market in totality and kind of build a very strong brand equity for us at a group level.
Swaraj Mehta
What will be our offerings under skia? So will it be similar to Dawa India or.
Moksha Zota
It would be similar but there would be certain differentiators from the consumer perspective. But yes, it would be similar to Davaindia in terms of generic medicine, health and wellness products as well. But in terms of differentiation from the consumer experience perspective and certain other perspectives, there would be a difference when they enter Skia.
operator
Mr. Swaraj, you may rejoin the queue for the follow up question. Ladies and gentlemen, in order to ensure that the management is able to address all the question from the participants, you may limit yourselves to two questions. The next question comes from the line of Manansha from Moneybee Investment Advisor. Please go ahead.
Manan Shah
Yes. Hi sir, thank you for the opportunity and congratulations for good set of members. Sir, my question was on our marketing strategy. So it has been almost eight to 10 months since we’ve appointed our two brand ambassadors. So what is the strategy from here going forward or what strategy are you planning for the upcoming year? What sort of budget are we planning? Are we planning any TVC campaign or anything? If you can just highlight on these points.
Moksha Zota
Right. Yes, we have two brand ambassadors for us definitely Mr. Shetty, one of the very strong links in Bollywood and been renowned Fitness and Mr. Dhoni. So we have started an extensive BGL campaign around both of them which is more of a neighborhood campaign that have already been initiated across the country. In terms of your other questions for tvc, we have already gone ahead and done the TVC shoot with Sunil Shetty that’s already been initiated which you would see already being surfaced across the leading cinema halls across the country along with large number of taxis in Maharashtra primarily and certain other parts of the country.
We have also gone ahead and done a TVC shoot with Mahendra Singh Dhoni this week which would be kind of ready in the next two weeks time. In terms of television broadcast, we have already initiated certain television broadcasts surfacing our brand ambassadors. The recent New Zealand match was well visible and many others in similarity. However, going forward the TVC’s would also get surfaced in the televisions as the months ahead.
Manan Shah
And in terms of budget, what sort of budget are you planning for the upcoming year?
Moksha Zota
We are really careful about our spending budgets and the reason for the carefulness of the spending budgets is that the money would have to be well utilized towards spreading our cocoa stores as what has been mentioned. However, as judiciously required, the budgets would be spent in direct relations to the growth of the organization.
Manan Shah
And are you seeing any positive traction in terms of say higher footfalls or new customers or new customer acquisition at your store level as a result of the campaign that we’ve already done?
Moksha Zota
See, brand ambassadors, if you understand are only brand ambassadors. The positive traction is a combination of multiple things. However, if you see the data points in terms of average wallet spent and footfalls we have seen for both, there is an increase. So the data have been surfaced right from the sheets that you have seen and the quarterly footfalls. So there have been quite a movement. But that is not the only outcome for the brand ambassadors. That is only one of the derivatives of it.
Manan Shah
Sure. Thanks. I will get back in the future.
operator
Thank you. The next question comes from the line of Umesh Laddha from Nirmalpang. Please go ahead.
Unidentified Participant
Hello, I’m audible.
operator
Yes sir, you are audible. Please proceed with your question.
Unidentified Participant
Yeah, thank you for the opportunity and congratulations for the good set of numbers. So sir, my first question is on the store expansion front. So is there. Is there some reduction or reduction in the guidance for FY27 as we are planning to open almost 1000 stores. Sorry, how much store in FY27?
Moksha Zota
We are planning to open 1000 cocoa stores. So is there some reduction in that guidance or it is. It will be the same. So that is my first question. Yeah, so it is near to them. Exactly. We are planning thousand stores. It is not yet decided.
Unidentified Participant
Okay, sir, understood. And also sir, second question. Are we comfortable in giving some revenue or maybe a bit guidance for FY27 or maybe say FY28?
Moksha Zota
No, that guidance become aggression mode. Ma’ am Jar or the aggression mode majayaging revenue guidance then Abhati Muskilojayaga you can see the trajectory of.
Unidentified Participant
Got it, sir. And sir, last question. What are step. What are the steps which we are taking to you know, increase the wallet spend of the say customer. I mean patients in the cocoa stores? Because the wallet spend has been pretty much stable. So anything, any color. If you could give on those lines.
Moksha Zota
See if you really see the wallet spend and okay, what is the wallet spend derivative output. If we are not expanding, then there is one mathematical formula that you have to put. If we are expanding then the mathematical formula is different. For example, if we have opened the number of stores that we spoke about and in spite of that the wallet spend is 231. It means if you put the formula then what it means is that we have actually grown because there are bunch of new stores that you have right. Where the actual wallet spend is low.
Am I making sense for you? So if that be true and in spite of that your wallet spend is at 231. So now you put the formula and. See basically you are at a accelerator mode.
Unidentified Participant
Okay, got it. That’s it from my side. Thank you so much.
operator
Thank you. The next question comes from the line of Armand from Blue sky fintech. Please go ahead.
Unidentified Participant
Yeah. Congratulations sir. First of all for a very good set of numbers. I just one clarification and one follow up clarification is that like COCO stores mature ones will give us 25 to 30% margins. Right. And what will be the focal store? Mature. Mature four stores margin.
Himanshu Zota
Yeah. So. Ebitda margin will be the gross margin will be the ebitda margin. Fixed number of margin Unko provide Garcia. Gross margin will be somewhere about 40 to 45%. 17 to 20% Gaspas come margin EBITDA margin already investor presentation. Blended margin. Definitely forefront considerably lower right. Around 16%. Yes. Yes. So fy28 percentage. 1718.
Unidentified Participant
So yeah, definitely you you say definitely that that will definitely possible. Okay. Okay. Easily. Okay. Okay. 82 lakh per annum or EAB pandran still. Okay. Potential hair growth.
Himanshu Zota
Yes. Double digit growth still. So. Is very high.
operator
The next question comes from the line of Parikshit Kabra from Peak Day Advisors llp. Please go ahead.
Parikshit Kabra
Hi, thank you for the opportunity and congratulations on your rapid expansion. Employee cost as you’re expanding employees add Karthio even before the revenue comes in. But I have looked at historical numbers and generally overhead costs. Overhead employee costs. Approximate number of the number of stores that you are operating in Cocoa number of stores the number is not adding up. The employee cost is overshot a lot. So unless.
Moksha Zota
As on 31 December. Last quarter so roughly. Roughly roughly or plus Tomar and air store opening Baki Malabin Process as on 31st December or DOSO existor Amna last quarter May Kole Jobi already Last quarter maybe 70%. Employees. See I tell you, you have to understand certain dynamics. So you take employees, you train those families, then you will need the license to apply then. So there’s a whole process around it, right? So towards, you know, running through the. Entire chain of process. You have to take the employees well in advance and then you have to park those employees, get into a full fledger of training to ensure that there’s no dispensing error etc etc. And subsequently their existing license have to be free from the existing place. You have to get the license, you have to send to the drug department, get it endorsed. So there’s a whole process to run the entire chain.
Parikshit Kabra
No, you’re absolutely right sir. And I’ve been tracking your company for a while now, so I appreciate that. It just seems like this time around the jump is higher than you normally is. So unless the speed at which you’re opening stores has increased materially, it does not justify that. So unless you’re going to see a massive spike in the next quarter is. What I’m asking basically exactly what I was telling you. So in the current quarter which is January, so there would be substantial numbers of store openings that you would see subsequently. Got it sir. That’s all. Thank you.
operator
Thank you. The next question comes from the line of Zoheeb from Swing list. Please go ahead.
Unidentified Participant
Hi. Hi. Am I audible?
operator
Yeah, yeah.
Unidentified Participant
So I just have one couple of questions.
operator
Sorry to interrupt. Sorry to interrupt. There is a background noise from your end which is creating a distance. Yes, there is a background noise from your end which is creating a distance. Can you speak some line again?
Unidentified Participant
Hello. Hello. Hello. Now you can proceed. Yeah, so I had one question about the, you know, resolution passed in AGM which said that there is a commission for the whole time Director totaling up to 1.1% if of the annual consolidated turnover. So is it. I just wanted. It’s. It’s in 0.2, 0.2 and 0.2 and 0.3. So I just wanted to know is it a part of minimum remuneration or is it, you know, there is a condition for that. I just wanted to know that.
Moksha Zota
No, it is a part of minimum remuneration.
Unidentified Participant
Okay. So around 1.1% of the consolidated turnover would be given as minimum remuneration. I mean that is a huge number. If we see. And apart from that it came along with the remuneration increase of about 42, 43% hike and the fact that we are on a consolidated basis we are making a loss. So is it. I mean the ideal case would be, you know, linking the incentive with the net profit so that the management works towards the profitability of the company. Isn’t it?
Moksha Zota
So this is a minimum remuneration you give. Promoters are since founder and since last 30 years of experience of this business. So minimum remuneration here it is not big or it’s a gross margin. 60%, 66% gross margin. The 1% is not a big amount.
Unidentified Participant
And sir, this would be continued till 2030. Am I right?
Moksha Zota
Yeah.
Unidentified Participant
Okay. Okay. Okay. Answer. What is the process? You know, update on the warehouse we are planning to open in Delhi.
Moksha Zota
Yeah, warehouse is already open. Yes.
Unidentified Participant
Okay. Okay. That’s it. From my side. Thank you.
operator
Thank you. The next question comes from the line of Nishita from Sapphire Capital. Please go ahead.
Unidentified Participant
Yes, hello. Am I audible?
operator
Yes.
Unidentified Participant
Yeah. Yeah. So I’m looking for at this company for the first time. So I’m sorry if my question would be very basic. So I just wanted to understand that you mentioned at once the cocoa shows are mature we can have an EBITDA margin of 17 to 20%. And from 44 shows we have the EBITDA margin which translates from gross margin of 45%. So on a consolidated company level, why is our margin in 3 to 5% range? Because like from DA India our revenue contribution is 80%. Sorry. I can.
Moksha Zota
I cannot understand your question.
Unidentified Participant
So I just wanted to understand that from Dhawa India our revenue contribution is 80%. And from that only the from cocoa stores we have at mature level we can get an ebitda margin of 17 to 20%. And from 44 shows we can have an EBITDA margin of 45%. So shouldn’t we have a higher margin on a consolidated company level as well? Because from what I see we have an Overall ebitda margin of 3 to 5% range only.
Himanshu Zota
Great gross margin. You can see the gross margin. Gross margin will be already 55% company level. So 60% increase. So gross margin. Down the line. So gross margin will be increased. You can see water on quarter, even quarter on quarter. Gross margin will increase. So in two, three years can we see the EBITDA margin in the range of 15 to 17% on an overall consolidated level. Same store for example. For. Let’s say example. Or more than that.
Unidentified Participant
Okay, understood. Thank you so much.
operator
Thank you. The next question comes from the line of Bhaskar Kandar from three Hat Capital. Please go ahead.
Unidentified Participant
Hello sir.
Moksha Zota
Yes. Working capital store opening. Most of the TCP or most of the monies are in the Dawah in the development. First thing second thing due to non life stores. For example December say Naya store in line.
Unidentified Participant
Okay, sir. Thank you sir. Second question is sir, stall level take which inventory. See.
Moksha Zota
Okay see what happens is that. You will at times, you know find that. Okay, maybe you know, you may have sometimes you know this medicine not available and they come back after some time. It is a continuous process of efficiency. There is like. Please listen to. Please listen to me. It is a continuous process of efficiency development. Yes, you are right. Sometimes there may be one or two medicines which may not be available in the store. And this is a continuous process to ensure that you know the inventories are continuously improved. As simple as that.
operator
Rejoin the queue. The next question comes from the line of Neil Joshi, an individual investor. Please go ahead.
Unidentified Participant
Hello, Good afternoon team. So Mera basically question. Mainly. Expansions or promoter Automatic. Operational profit generate business may involve. Okay. For next two years start from 1st January 1st, April 2026. We don’t require any fund, any outside fund or. Internally. Next fundraise requirement 9. Maybe it is possible to. Are we planning to planning to launch any Dhawa India IPO or. Well, when it can be possible in future to launch that.
Moksha Zota
It is too early to say internally planning. Right now there is not many thought process.
Unidentified Participant
Got it. Thank you so much, sir. Thank you.
operator
Thank you. The next question comes from the line of Chintan Shah from Girig Capital. Please go ahead.
Chintan Sheth
Thank you for the opportunity for the follow up question I had was one clarification. The EBITDA margin which you are talking about is post rental EBITDA margin or India’s EBITDA margin. That’s one and second on the employee cost. Again harping on it. So sir, we have been opening stores 100, 150, 200 stores for last many quarters now. Right.
Moksha Zota
That’s the aggression we have been aggressive expansion we have been into. But the 400 stores, what you are planning for the next couple of quarters. That has been the case for previous quarters as well when we were opening 200 stores every quarter. So the question is why the sudden spike in this particular quarter. And even if you say that it will normalize say 2, 3, 1 or 2 quarters down the line. But the plan for, for the futures, you know store expansion to reach 5,000 stores, we will keep you know the pipeline heavy for at least next a few few years.
You know, every quarter we will have this 300, 400 store pipeline to be opened in the subsequent quarter. Then why should you know the the employee cost should normalize at least if that is the case this quarter. And last question. On the, on the advertisement side, the marketing budget side this quarter we don’t. We haven’t seen that bumpiness with which one would have expected post the endorsement. So if you can, if you can if that lumpiness will expected in 4Q and next year. That. That’s the last question. Thank you.
Himanshu Zota
So. Currently we have guidance for 800134 or 221 store, 355 store or Italian. We have closed our target for Italy last quarter. For example next year Quadra in process Dalna Paraga is part of aggression process by rank ni. Second thing, second question. So EBITDA will be pre rent pre index under pre index EBITDA B separately PPT already. So.
Chintan Sheth
Got it, got it. And the last one on marketing if you can.
Moksha Zota
So your last question was that you know, you anticipated that you’ll see a boom in the advertising with the new brand number sellers. Is my understanding right? Correct. Correct. In the third quarter when we announced last quarter that we were roping in. So I was expecting some bumpiness this quarter and in the second half basically. But that has not getting reflected so far. The cost has been managed pretty well. Yes. So we have managed the cost well. Absolutely right. So what happens is that you know, when you run an organization you have to plan the right timing to ensure that the entire costs are optimized and managed. And that’s exactly what we are doing. I have also given a slice of the answer to one of the previous questions on similar lines that we have rolled out with both the brand numbers. Yes, yes, I gave an answer on that and we have initiated huge detail exercises with them because it is not only that you need to flush the offline ATL televisions Et cetera.
It is that where you have to utilize the money judiciously. That’s more important.
Chintan Sheth
So any budget on his fellow. If you can spell out what was the budget for this year next, if.
Moksha Zota
You can spell out it would be as the. As per the need of the expansion and the organization. And that is a precise reason why you say. Okay, let me add on one more line on this. You’ll see many organizations, they put a marketing budget and based on that they kind of force themselves to spend that money. But we don’t feel that very appropriate. You have to spend it judiciously towards ensuring that you know where you can calibrate rightly towards the organizational growth. And I feel that the right approach.
Chintan Sheth
Sure sir, thank you for the answers and all the very best.
operator
Thank you. The next question comes from the line of Harsha from Sevy River Holding. Please go ahead.
Unidentified Participant
Hello. Yes, I just, just wanted to understand on cohort basis how many of the stores above two years would not be making losses. Sorry, how many, how many stores which. Are more than two years old and would still be making losses.
Moksha Zota
Two years plus on an average. Basis.
Unidentified Participant
Average. I understand but in, in specific terms. In specific terms, how many stores? So I think more than two years we have 135 stores. Of that, how many would be. Would be. Would there be any store which would still be making losses.
Moksha Zota
Not more than 5%, not more than 2 to 5%. Revenue below 2.5 lakhs. 2.25 lakh maybe not more than 2 to 5, not more than 5%.
Unidentified Participant
Okay. Okay. And stores which are between one to two years, which is like 358 stores.
Moksha Zota
Already almost nearly individually store count already.
Unidentified Participant
Okay, okay. Got it, got it. Sure. Thank you sir.
operator
Thank you. The next question comes from the line of Zohai Brasheed from swing list. Please go ahead.
Unidentified Participant
Hi. So thank you for the follow up and I just, you know a lot of question regarding employee cost already been asked. Just I wanted to make sure that though you have already stated the, you know, valid reason behind the rapid store expansion and all. But coming back to the remuneration part as the whole time director remuneration have increased from couple of whole time directors from 42 lakhs to 60 lakhs per annum. That is a growth of approximately 43%. So don’t you think that would also constitute to, you know, some addition to the employee cost? And the second thing I wanted to ask is about the commission.
So when we would be taking out this is it monthly basis or a quarterly or Annual basis you would be taking the 1.1% commission and where in the line item would be it be deflected? That’s what I wanted to ask.
Moksha Zota
It is a part of the seller. Employee expense is all. All are in part of employee expenses.
Unidentified Participant
So sir, isn’t that you know affecting the employee cost in. In totality? Because it is applicable from October. It.
Moksha Zota
It is applicable, yeah. It is not more than 1 1% or commission or as my remuneration it is not 1 or 2% max to maximum impact. Nay.
Unidentified Participant
If you see sir, 1% is approximately 1.4 crores in this particular quarter. So yeah, I mean that would be adding some few percentage in the employee cost. Right. And that is most of the question was around because they saw a good spike in the employee cost. So that would be a factor which would be affecting that. I wanted to say thank you. Thank you, sir.
Moksha Zota
That will not affect. Employee cost. Not more than 2, 3% employee.
Unidentified Participant
Yeah. Yeah. Okay. Okay. Thank you. Thank you so much.
operator
Thank you. A reminder to all the participants that you may press star N1 to ask question. Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to Dr. Sujeet Paul for closing remarks.
Unidentified Speaker
Thank you so much. On. Thank you for your questions. I trust that you have got the answers of as many. We as an organization we stand committed towards spreading affordable health care across the country. We believe that that’s one critical parameter that we are committed to towards ensuring the same on the journey of this the spreading ourselves in urban and rural India in deep penetration towards ensuring that most of the therapeutic segments are covered with a focus on diabetics, cardio, gastropetes, obscy, so on and so forth. This is the need of the hour for India that India really needs and to make a better Bharat.
I thank all of you for the trust and confidence level and the massive expansion, the aggressive expansion that the organization is into needs lot of hard work and toil from the employees. It’s not easy. And with this I stay committed along with the entire group, the teams, the promoters, the investors and all of our colleagues to stay focused onto the mission to spread affordable health care in India. Thank you so much.
operator
Thank you on behalf of Zota Healthcare Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines. It.