Vasa Denticity Limited (DENTALKART) Earnings Call Transcript & Summary

That will take time. Because in the normal MNC brands, we only have 10% to 15% margin. If their share of sales is high, definitely, naturally, the gross margins will come down and that showed in the last quarter of last year. Now since our own brands and all the research we have done over the years on the right set of products in our brands is coming back, we expect the gross margins to come back to certain level and the EBITDA coming back towards higher numbers

So we have next question from Mr. Rajveer Singh.

It's okay, we can come back to Rajveer later.

Okay. So we have a next question from Mr. Naitik Shah.

Am I audible?

Yes.

Sir, I just wanted to understand, like for FY '25, our -- let's say, when we do a gross profit per order kind of an analysis, that was somewhere about INR 1,360. Now I understand for this year in H2, we faced several issues in terms of our own brand sales. But H1 was fairly, I mean, fair for as rate. So there, we see a gross profit per order roughly about INR 1,200. So why did we see a client growth in terms of revenue per order or gross profit per order, especially in a year where, let's say, on a H1 basis, our equipment sales was much higher, where on a per order basis, the absolute amount of our gross profit or revenue should have been higher?

Okay. sir, I'm sorry, I missed some part of your question. Can you please repeat?

Yes. So let's say, when you look at revenue per order, for FY '26, it was somewhere about INR 3,670. For H1, this number was -- sorry, for FY '25, the number was INR 4,600, and for FY '26, this fell to INR 3,670. So can you help us understand the decline in revenue per order?

Yes. So that was a function of a lot of off-line trading activities as well. Combined together, the off-line trading activity, when we do a B2B trading activity, the absolute value is higher. So combined together, it became INR 4,600. And we stopped trading, as I mentioned in the...

Okay. So trading component had a much higher revenue per order and a gross profit per order as well.

Yes.

Understood. And when did we stop this trading?

Last year, we completely stopped it.

So for the -- so the full year impact is there in FY '26? Or should that continue 2Q?

We have identified that it's not a good long-term journey for us, where we are not adding right value to the interest line. So we decided to focus on the core business of dentalkart.com going forward and with some teams building off-line divisions with minimal bandwidth from the company.

So we have next question from Mr. Nikhil .

Am I audible?

Yes, yes. You are audible.

It's still great to see how the majority in terms of depth of the business and your communication towards the investors has changed over the last few calls. I really appreciate that. I broadly have a few questions mainly on Digital Dentistry. So today, dentists may engage with Vasa for specific products or services. Over time, do you see the opportunity to become an integrated workflow partner across diagnosis, treatment planning, design, manufacturing and practice support? What would need to happen Vasa to become embedded in the day-to-day workflow of a dentist rather than being one of several vendors?

Correct. So I'm trying to build an ecosystem for dentists where the workflow -- anything which a dentist needs is available with us. So that's why we started Digital Dentistry. However, we are not making much money on the off-line division or the digital side of the business. But we are learning to build a workflow for dentists. For example, recently, we set up a whole Digital Dentistry arm of a dental college, where from the point a patient walks into the clinic, to one of the clinics of that college, we take part in diagnosing what kind of problems the patient has. And then that scan goes to an AI engine, which actually reads the scan that actually also reach the CBCT from the customer and then make a differential diagnosis for a patient. And then a process or [indiscernible] or something that sort of is planned, it goes directly to the milling machine or 3D printer, and the final processes comes and then some person has to do some finishing work. And later, it comes back to the doctor to finally see that processes into the patient's mouth. So this is something we are trying to learn with Digital Dentistry right now. And yes, in future to complete that ecosystem which I really want to supply to my customer base, we have to keep on experimenting with all these different arms. And same is the case of Smile Works. That's why we started Smile Works because the same customer base of Dentalkart, also orders processes from a lab. And why not we integrate all of this into one app in future?

Got it, got it. And if we look at India today versus more mature markets, where do you think India is on, on the digital dentistry or adoption curve far? And in general, what are the bottlenecks that you see that is maybe addressing those bottlenecks out of [indiscernible] to the pace of adoption for this?

Yes. So digital dentistry has been there in India for the last 25 years. There has been CAD/CAM machine. There has been metal DMLS printers. There were scanners in the market, I think, for the last 14 to 15 years. But the problem was price point? [Foreign Language] And what we see in Australia in the last 10 years, I think we'll see the same in India. I think before that.

Okay. So basically, a scanner that probably used to charge -- used to cost maybe a couple of 10s of lakh, which has come down to, I think, 3 to 5 lakhs, that's a major breakthrough. And hopefully, that also creates a flywheel for the rest of the product portfolio in Digital Dentistry.

Yes.

And I also happen to note, you've mentioned supplying to some institution or university. Has it been a usual business for Dentalkart before? Or this is a new customer cohort altogether?

This is a new customer cohort. We have never done that before. However, we received a query and we were already learning that you were selling -- in the digital division, we were selling milling, scanners, 3D printers, metal laser, sintering machines. So there's -- further, we combined that workflow and delivered to an institution. And

This does build a sticky demand for consumables as the base for Digital Dentistry picks up. Am I right in understanding that?

Yes, it creates two new demands in the market. Number one is naturally the consumables. And number two is the AMC and CMC or the machine supply.

Okay. Okay. My last question is so, see, many companies can distribute equipment, which India already has a lot of players. But fewer can build long-term relationships with clinicians and labs. So over the next 5 years, what capabilities are you investing in today that you believe will make Vasa a preferred partner for both of these, of which technology platform ultimately will help you win? So in general, how are you thinking about this?

So we are first of all learning how to service these products phenomena. And we are still exploring how we can be a long-term partner to the customers we serve. So we are still new in this segment. It will take us some time to explore.

So we have now investors on repeat, sir.

Go ahead.

Okay. So Mr. Swaraj.

My first question was on the service centers. Now as we increase our own brand sales, servicing those products also become more important. So how are we bridging the gap on service centers for our products and existing products as well?

Yes. For the own brand, small equipment and large equipment, let's divide them into two parts. Own brand small equipment can be serviced in the nearest warehouse. So wherever we have delivered the product, if a doctor wants to claim a warranty, there are two ways to solve it. One is the technical support, where the customer care just does a video call through our software with the customer and try to resolve it. Most of the issues are very easily solvable online. But if it is not possible, then we'll take a video. The product will be reversed from the doctor's clinic, brought to the nearest warehouse. The service cart is generally between 2 to 6 hours and then delivered back to the customer. If the lead time is longer, we try to give us time by unit to the doctor. This is for the small equipment. For the large equipment, it requires on-site service. For that, we are building a service team. We already have 14 service engineers in India. And also, we have channel partners who, for example, in Southern part of India, we have 2 channel partners who service for all the machines they have themselves sold and service the machines which we have sold on chargeable business. That saves a lot of our fixed cost to build a service person everywhere in the country.

Very And so now we are increasing our SKUs from 23 to 35 in the coming years. So what gap are we trying to fulfill through the SKUs?

So recently, we have launched a brand called [ Dental Tech ] that supplies implant accessories compatible with most of the [indiscernible] of the world. That category was not available on Dentalkart earlier. So we are trying to find out categories which are not there on Dentalkart. So idea is not to reach 35,000 just to show the numbers that we are reaching 35,000. We want to add the right category of products which are not there on Dentalkart. So for sterilization, we have the sterilization reels. We have the sterilization power chains, the indicator tapes and whatnot. But recently, 15 different SKUs my team found where we can provide silicon rings on instruments for EV identification. So those products are not easily available in India. We are trying to find out those products and double down on this approach to find more products. And that raises a question that, that will just increase the inventory. But we'll keep less products and see how it works and then gradually increase the inventory. So the next few years will be experimentation on what works in India and whatnot. And if that product works, then we'll scale that product from there.

And what do we mean -- I just wanted to have clarity on what do we mean by unique customers, new customers and customers so on a quarterly perspective and yearly perspective? I want to understand those numbers.

So unique customer is a unique e-mail ID. So sometimes 1 customer places 10 orders in a month. That is still 1 unique customer. Total number of customers are both total unique customers over a quarter or over a year. I'm sorry, what was the third thing in your question?

New customers and customers served, how are they different? And the meaning was quarterly and yearly.

Customers served includes new customers and old customers. New customer is the first time -- first a unique e-mail ID which was never ordering with us before. I have Sandeep also with me. Sandeep, you want to -- do you think you can answer this better?

Vikas, the definition that you're providing is fully correct. New customer is basically the customers are coming that year. and served customers a total customer that we have served in that year.

Sorry, can you repeat the last line?

Total customers are those which we have served in the entire year.

And new customers in those particular quarters whichever new customers we've -- which have neared from us again.

Yes, yes.

Could you give a trend of the -- you've given a retention rate for each quarter as well. And I wanted to understand the retention rates that have been given, how to read those numbers as well.

So suppose you are a dentist. And you order on 1st of January from us. So if you come back on anywhere between Feb 1 to Feb 28, that cohort is a monthly retention rate. So the retention that I've given is with the number of days. So 30, 60, 90, 180. If a customer is not coming back to us from January to June and coming after that, that is not part of 180 days cohort. So the number itself is explanatory that how many days it takes for a customer to come back to us and how many customers are coming back. Okay. I'm sorry if you want to repeat your question, please do.

No, no. I got it. And just the quarterly retention rates, how do we read that?

Yes, it is every 90 days what customers are coming back to us is the quarterly retention rate.

The experience centers that we've launched, how are they doing? And how has the response been?

They're doing okay. We have not highly focused on them. But there are some sales to them. And if a customer is able to see the look and feel of a capital equipment, there's a higher chance of conversion. And that was the idea behind opening the showrooms.

Mr. Rajveer, if you can unmute yourself, please mute. Otherwise, I'm going to ask questions on behalf of you, which you have mentioned in the Q&A box. Okay. So the first question from Mr. Rajveer Singh is what percentage of products are we importing from China? And are we planning to diversify the same by increasing local sourcing?

If it is possible to replace them with local sourcing, we will definitely try to do that because importing a product is tedious and selling it from the local market or doing contract manufacturing from local manufacturers is more convenient. Right now, a large chunk of the imports are coming from China compared to any other country. I don't want to give a particular number to that.

Okay. So the second question is, what are we doing to increase awareness about our portal among dentist community? Do we pay search engines to show our website on top? If someone does a search for online dentist products, I see and [indiscernible]. That came up at our website when I did the same search in Google.

Okay. So that happens from place to place and customers' socioeconomic status and different price points they might be looking at, or maybe certain products, there might be more possibly they'll buy those products. So search engine works that way. Secondly, to show our products or our website and app with the customers, we do SEO, AEO, more recently the AI search, we are doing that. Apart from that, we do social media marketing on products and a lot of other ways of how the tech companies market themselves. Same is the case with us.

Okay. So the last question is, what percentage of our business this FY came from repeat customers? Do we have a sales team on ground which goes to dentists and made them personally to acquire new customers?

Online segment, we don't have a team on ground which requires customers because we think it is costly to do that. And it is not scalable. We can do much better than that online. And what percentage came from repeat customers, we want to keep it proprietary as for now.

So Mr. Rajveer, if you have any other questions, you can mention the same in the Q&A box. Meanwhile, we are taking questions from the next investors. So Mr. Chintan Parikh.

Am I audible?

Yes, yes.

Perfect. So Vikas, my question is on Digital Dentistry result. So I spent a very small stint with [indiscernible] way back in 2002 when they were introducing India intraoral cameras as well as sensors for the first time. I met a lot of dentists across Bombay, small, big, [indiscernible]. The problem I saw, even again -- so I'm currently in Pune. And here as well, what I see is that not -- and I'm not you're not 20 years or 24 years gap between these two . Not all the dentist have adopted in intraoral camera. First one is because of the operational issues where there are only one attendant operating as attendant as well as receptionist. Second is it's a vanity where [Foreign Language] There is a procedure. So there was a lot of challenges for the intraoral camera. But [ RVG ] sensor definitely was a big hit, and now we see that everywhere. The biggest issue, what we found was that all this division is very much tied to the chair that they buy, the first chair or whenever they are upgrading the share. Is there any tie-up that you have done for the Digital Dentistry? , the equipment which you mentioned are very, very high-end equipment, hardly 5% of the vendors will be able to afford it for their clinic. It's my personal opinion. You could correct me.

Okay. You're right, there is a low number of people will adopt the big equipment that I mentioned earlier in the call. But yes, at the same time, while we were discussing faster turnaround of an e-commerce company,now set higher standards in the mind of consumers, similarly, the patients are also expecting faster turnaround of the processes they want. So I suppose you go to get a crown from doctors. There are some doctors in the market [indiscernible] or some other similar machines compared to another doctor who takes 3 days. So there might be preference for the doctor who is delivering faster. So that kind of population or consumer base, we will definitely see growing. Like we are seeing more buyers of scanners, we'll definitely see more buyers of same-day processes is in future.

But sir, does this conflict? Because, I mean, we are one way going toward mass market Tier 3, Tier 4, for our online businesses yes. And at the same time, we are now targeting a very niche market, which requires a lot of in-person service. So it creates a bit of a dichotomy in the sales strategy.

That's not what I meant. Since you started the portion with Digital Dentistry. So I told you that the whole Digital Dentistry workflow only gets completed if we have the larger picture in mind. Yes, we are bullish on the scanners, with relation on the intraoral cameras. I think intraoral camera is a very personal thing to me how my practice got completely revamped or changed after I installed a camera on my chair. So cameras are here to stay, although RVG definitely surpassed all the numbers comparatively. You also mentioned having tie-ups with a particular brand of chair or chairs of the market for having a large number of these equipments related to Digital Dentistry to grow. Our cameras are such that they can be compatible with any dental chair in the market. So the clamps here matter and the kind of connection that clamps provide here matter. So it irrespective of any chair the dentists use.

Okay. Understood. Sir, on the -- so just to, let's say, dissect Q4 financials a little bit further. Sir, I see that there is roughly INR 2 crores of other income. So can you elaborate what exactly is that other income in Q4?

Yes. That is the sale of some financial instruments which resulted in interest income.

Okay. Because sir, if I just look at our Q4 profitability in isolation, the margin becomes 0.34% or something like that if I remove the other income.

Correct.

And again there is a -- while looking at that, and if I look at your statement on the inventory as well as our own product stockout, so that is not making sense to me. Let me explain you why is that. We are saying that in Q4, we had a stockout of our own product, which are high-margin products. At the same time, if I look at our inventory on Page 13, we see that we had a INR 27 crore of inventory increase because of our own product. So what happened? How did we stock wrong products of our own brand and still ended up with stockout? So if you can help me understand the issue and how this will not happen in future.

So first of all, that INR 27 crores is for the whole year. That includes H1 and H2 as well. And we actually missed on some what sellers -- like if you see [indiscernible] on the Dentalkart, which is one of the top sellers, the whole rotary inventory is out of stock. Those are the kind of products where we have good margins and we provide the best value to the customer. So those kind of consumables were not in stock. However, a lot of Digital Dentistry sales happened last year, for which the stocks they had with us and sales also grew. So you can see 85% growth in the off-line segment, while the online did a 25% growth. We feel that such issues have made us more mature for taking care of the denture supply chains of the company. And I also want to admit that the supply chain of many big companies in the market, if they are at level 10, I am at a level 6.5 or 7. I have to work hard on my supply chain and my leadership of supply chain in future.

Okay. Sir, if I look at our inventory turnover, you are guiding that in near term, you want to see it around 90 to 120 days. And we have close to INR 80 crores in inventory currently. At the same time, we to third-party products. So why we have such a massive inventory buildup happening currently where we have discounted other products? If you can help me understand this.

So first of all, we have not discontinued other brand products. We have discontinued off-line sales of other brand products. But yes, having more share of sales of own brands also tells us that we have to import more products. We have to contract manufacture more products. And they come with MOQs, which we sometimes have to keep when we start that relationship with the manufacturer. I've also mentioned in the presentation that 120 to 150 days is what I see my inventory levels in the short term. And when we optimize that, it will be below 120 days. And in the long term, I see it below 100 days. That's what I see as a North Star. Past also during earnings calls, I have mentioned that I want to optimize the inventory [indiscernible] numbers. But sometimes -- last year, we did a mistake because of that taking pressure of inventory from a lot of people in the market and trying to optimize that to a level like where some issues happened and we missed a lot of stock and lost sales as well as some possible customers' wallet share. So we are also keeping that in mind. Inventory is not the main priority right now. Growth and more wallet share of the customer is.

Okay. Sir, regarding our acquisition which we could not do, why took 9 months to realize that there is a lot of overhead on the integration, if you can? Because, I mean, there was a lot of management time which got devoted towards that. So what happened? And why it took 9 months?

Yes. So first of all, it was looking a very good deal for us. We were so happy about it. And when we signed the agreement and we gave a public announcement, we started finding different perspectives of the business. So there was a due diligence earlier on, which was appropriate and things were all good. When we were trying to do the merger, actually, I saw a lot of cultural differences and it took me some time to open up with the promoters of ideas. And when I did, we also bought some more time from each other to look at it again because it was one of the biggest decisions of both of our lives. And it was really difficult for me as such a young company coming back from such a large decision I made and which was public. So that was the time we tried best that we'll be able to merge this. But we ultimately realized that it will take much more time for us, especially me and Sandeep, to give our bandwidth to integrate this cultural difference between traditional supply chain and our tech first company. And secondly, they were doing very good and they are doing very good in the off-line segment. They're doing very good in the laboratory side of dentistry. And since you have been involved with team, you must be knowing what kind of business they are in. So it is a very good business. But at the same time, we are totally different. So some teams have to communicate with each other. And definitely, me and Sandeep also have to invest a lot of time in merging that. We saw that it is really difficult to make that merger soon, and it is really difficult for us to divert our attention outside Dentalkart. So will Dentalkart in mind, we took that decision.

Okay. And sir, if I compare you to another listed company, [indiscernible], how are they able to get such a high operating margin compared to us?

So they are into dental materials, perishable dental materials, which are mostly chemicals, and they are manufacturers of those products themselves. We are into a high-growth segment where we don't want to enjoy such margins, whereas we want to enjoy more wallet share of the customer and larger customer base. So the aspirations of both the companies are different. We have to choose between slow growth and more margins or faster growth or lower margins. So we are trying to balance between that.

Okay. Any plan to go into the similar kind of field which they are operating in? Because you mentioned about contract manufacturing as well, right? We are doing that. So why we are not touching that particular area? If it has a -- you already have a supply chain. You have already a distribution done. It is just about adding certain products into your catalog and pushing it and compete against the price.

We do that. In fact, [indiscernible] is one of our partners in contract manufacturing. So we do that. Internally, brand-wise sales, we have not disclosed and we would not like to disclose. But our share of sales is also significant comparatively in that segment.

Okay. With a similar type of profit margin in those categories?

In that category, yes. Okay.

So we have the last question from Mr. Manish Gupta.

Dr. Vikas, can you hear me?

Yes, sir.

Okay. Great. So Dr. Vikas, I have two questions. My first one is that just listening to the suggestions of various people and also some vision that you have outlined, just one concern I had. And I learned by asking questions. So this is not being prescriptive, it is really just trying to understand. Are we trying to do too much in terms of scope of the problems that we are trying to solve for different dentists? And you've talked about how we missed the inventory in H2. So the question is that would we be better off if we just focused on solving a core issue of dentists first, which is a broader assortment, quick delivery, very responsive customer service, and only when we have completely cracked that, do we move on to the next mountain to climb? I mean, are you trying to climb too many mountains at the same time? And I again reiterate, this is a query. It is not a comment. Just I learned by asking questions. So this is the first question. And after this, I'll ask my second one.

You are right. In the past, there were scenarios that we were trying to do too much and we were trying to climb a lot of mountains together. So the time this majority came, that I also mentioned in my presentation that this year, will be focusing on the core. And the core is dentalkart.com. There are a lot of issues which we need to sort in next couple of years. And by a lot of issues, the topmost are availability of the right SKU, right place at the right time, having responsive customer care which can tackle most of the customer queries almost instantly and then delivering products on the right time to the customer. So this all is the core of the business. I think we have to crack it properly. And only by doing that, I expect a multi-fold jump because don't I see any problem in the demand. There are people coming and requesting products and we were not able to supply in the past. There were people asking us for bulk orders in certain products, we were not able to supply on that. And we still have a very small wallet share of our own customer base where there is a large room, I can say even 10x room for growth in the wallet share in some states. We will definitely focus there first, and that is the mountain me and my team wants to climb first. So thanks a lot for those questions.

So if I, -- just a follow up on this itself. So if you would list, say, what your three biggest priorities are for this coming year, fiscal year '27, what would they be?

I think number one is customer service. Number two is faster delivery. By faster delivery, I don't mean faster everywhere, but in the places where customers are demanding faster delivery and the customer segment which provides bigger wallet share on faster delivery. And number three is better assortment of the inventory categories and brands. Like I mentioned about Dentalkart earlier in the call, we would like to have more categories, which we are currently not supplying. And this new customer base needs those products and they are buying from specialized dealers of those products would like to have those categories in place. So let me sum it up. Number one is customer service. Number two is faster delivery. Number three is the more categories on Dentalkart.

Okay. My second question, Dr. Vikas, is that I note that you're not offering guidance. And personally, I think that's a very good suggestion because it's a very uncertain world. And you offer a guidance and then we all beat you up and you haven't met it without understanding how the world has changed. But hopefully -- we are long-term investors, and I'm sure one day, dental card will reach, say, INR 1,000 crore revenue milestone, hopefully, sooner rather than later. What I'd like to understand, Dr. Vikas is very broadly if -- just the problem ahead of that number is, say, 5 or 6 years out, it could be hopefully sooner. But what I'd like to understand is that at approximately INR 1,000 crores revenue just for Dentalkart in the core business that we have, what would be the different line items where you will have a certain warehousing cost, you will have employee costs. So when you say mid-teen EBITDA, I guess there should be a lot of operating leverage in warehousing employee cost. And again, I don't want to guidance. I just want your hypothesis, that what would those line items be such that the 25% to 30% gross margin that you are talking about drops to a mid-teen EBITDA?

Yes. So thanks a lot. That's also a very good question. I think in long term, I don't see my manpower cost increasing in proportion to the revenue increment. I don't see my warehouse cost increasing like the revenue increment I envisaged. So I think I'll have the -- I've already started having the operating margins leverage. If you see us before IPO, we were not making much profit. And compared to FY '25, we made significant profits. So I think last year was a one-off. Going forward, I expect that the operating leverage will continue to be seen in our business.

So Dr. Vikas, let's say 5, 6 years out, you've got about 7 warehouses today. How many do you think you will have 5 years out?

It is very difficult to predict. But I have a internal [ bond ] and some numbers also back this up that we should have smaller warehouses in small cities of India, all the small cities like Jaipur, Bhopal, Lucknow, where we have only 500 to 1,000 square feet kind of space managed as dark stores and we are able -- and only store the top SKUs required by that state or that city. And that can be 20, 25 or that can maybe 7 only, like it is now?

So actually, I didn't ask the question appropriately. How many warehouses would you need to have to be able to deliver within 2 days?

Okay. We have to explore that. I'm sorry. I'm not ready with an answer.

But what is your personal aspiration? You were a practicing dentist, right? So different people will have different inventory levels. But what do you think from a dentist perspective is a good service level to expect of a vendor like yourself?

It depends on where I practice. So I practice in Delhi. So my expectations will definitely be, if I order it in the morning, I need products by evening or by next day. And if I'm planning to buy something in bulk because of offer, I am ready to wait for 3 to 4 days.

So if, say, you're a dentist in a Tier 2 town, how would Dentalkart want to serve a dentist in a Tier 2 town?

I think 2 days is a good TAT.

Okay. And therefore, for 2 days delivery in a Tier 2 town, how many warehouses would you need across India?

Close to 25, 26.

So why would we not invest in those in FY '27? Why only 7? Why would we not put that investment front?

We can, definitely. But there are more priorities before that. Just if I don't have availability -- I need to have more inventory if I openly announce this. So first of all, I need to optimize what I have right now. And opening more warehouses increases the chaos which might occur. And I'm just coming back from over the last 2 quarters. I don't want to take this decision in a hurry or maybe this financial year or next couple of quarters. However, we will think on this suggestion. And this is a good question raised by you, why not we do it now if we have to build in the now.

Just to push on this point a little further, Dr. Vikas. You mentioned it a bit earlier in the call that you have 10-year demand patterns of various dentists, right? So you should have good data on what customers want, correct?

Yes.

And you have good data on what customers want. You perhaps have good data on what frequency they want and the kind of products they would want. So when you say that you still have to work on assortment, can you explain that a little better because you have the data of what people want. So can you explain that a little better? I mean, you have the data of what people want. You perhaps have it at a micro level by city. So if you have the warehouse, you can actually plan the inventory by city. So can you expand a little bit about what you mean by assortment?

You are totally right. We have the data, and with the use of AI, we can definitely predict it to a good extent. But there are some issues to that. First of all, the products over the last 10 years have changed. The market dynamics changed. The price points changed. The new launches changed. For example, [ automotive ] category, 10 years earlier, there were a lot of demand for traditional automotive braces. Now market share [indiscernible] aligners. So there are products which are accessories to the aligners, which doctors are giving to the patients. So market dynamics also changed. While I'm not giving this as an excuse, but yes, in every state, in every tier of the market, there is different demand patterns. There are different kind of products coming up every year. In fact, every couple of months, there are new products coming up. So seeing all of that, we are trying to build up a recommendation engine. We are trying to build a personalization engine. As some gentlemen also questioned about the search engine of Dentalkart, we have revamped the engine three times in the past and it is much better. It used to be just a plain search earlier on, and now it is a semantic search. And later on, it will be an AI-based search where you can ask anything to the search, and then it will recommend new products. That all will be happening with time. And there are a lot of things coming up and in pipeline. Once they show up, we'll update the market.

If I may just pursue this line of thinking a little bit more, Dr. Vikas Again, I'm just trying to learn. Would 70% of the products that a dentist need really be -- like one needs toothpaste, one needs soap. I mean, maybe this 30% is changing. But wouldn't 70% of base demand be the same?

Yes, it will be the same. Manishji, there is one more thing to that. We try to deliver everything in a box. If we try to split the order in two parts or three parts, it increases a lot of our costs. And our logistic cost is close to 5.5%. We have a target that we will reduce the logistic cost and not let it increase. Due to various factors, it will impact later on. So if I keep 70% of those items in a particular warehouse and 30% goes from my mother warehouse, it will split majority of the orders of that stage into two parts. So by delivering it maybe 1 day or 2 days faster, first of all, I am impacting my customer experience by splitting the order into two. Secondly, I'm also making more expenses. And later on, I have to increase my prices in certain products or certain categories of products in future. So there are a lot of dynamics to any decision we take. And I understand what you're saying. I would also love to make smaller warehouses open, very fast and deliver what we keep there. But a lot of formulation combinations are there for us to take that decision.

So as there are no further questions from the investors, so Dr. Vikas, you can give your closing remarks.

Thanks a lot for, first of all, being there for the last 1.5 hours and listening to every other questions. There are some people who have not asked questions, but they're listening to the whole call. Thanks a lot for being there, trusting in us. I just want to say one thing, that last year was not as I promised earlier. I want to assure that it was a one-off. That was a situation that happened not because of demand. That happened because of the mistakes we have done. And we understand that we are not near perfect. There are a lot of errors we do. And we are learning, like me, me as a dentist and Sandeep as an engineer, see ourselves as the same founders we saw ourself 7, 8, 10 years back. We will learn. We will try to have the right experts in the company who can not let the same mistakes happen that happened in the past. I want to thank my whole team for all the hard work and whatever we have achieved in the past. I want to thank my customers. I want to thank all the shareholders for being there. Thanks a lot, everyone.

Okay. So thank you, everyone, for your time and for your questions and your confidence in the vision of the company. So yes, this meeting is now officially concluded. Thank you.

Thank you, everyone.