Revenue rebound narrows Zota’s loss, but margin remains near break-even
Management said it moderated store additions to consolidate the network, which reached 2,840 Davaindia stores in September.
Filed 28 Oct 2026, 17:47 IST · after market close · Zota Health Care Ltd (ZOTA)
Key takeaways
- Sequential revenue growth of +14.82% outpaced expense growth of +5.98%, lifting operating margin by 8.22 percentage points to 1.54%.
- Consolidated net loss narrowed 40.92% sequentially to Rs 25.96 cr, but depreciation of Rs 28.66 cr and interest of Rs 6.36 cr kept profit before tax negative.
- Zota’s 1.54% operating margin was 19.42 percentage points below the 20.96% median for 20 reported healthcare peers.
Price around the results
Revenue growth improved, but depreciation kept the company loss-making
This was a consolidated quarter-on-quarter improvement: revenue grew +14.82% while expenses rose only +5.98%, moving operating profit from a loss to a profit and narrowing net loss by 40.92%. The benefit did not reach profit before tax because depreciation rose 3.28% to Rs 28.66 cr and interest was broadly unchanged at +0.16%. A Rs 1.14 cr tax credit provided some benefit to reported net profit, but did not change the loss-making result.
Margin recovery still leaves Zota near the bottom of healthcare peers
Operating margin improved 8.22 percentage points from -6.68% in Q1FY27 to 1.54%, as revenue grew faster than expenses. That recovery is not yet reflected in a peer-level margin: Zota was 19.42 percentage points below the 20.96% median of 20 healthcare companies that had reported, placing it second from the bottom. Other income was Rs 4.86 cr, equivalent to -17.93% of negative profit before tax, so it did not turn the quarter profitable.
Management shifted focus from store additions to network productivity
Management said it moderated Davaindia store additions in Q2FY27 after significant expansion in earlier quarters and focused on improving store-level productivity and execution. The company said the network reached 2,840 stores, with quarterly customer footfalls of 66.17 lakh and GMV of Rs 18,791 lakhs. Management also said it acquired a 100% stake in Curexis.
Results were filed after market close
The consolidated results were filed at 17:47 IST on 28 October 2026, after the market close. No post-results stock reaction is included here, so the immediate market response cannot yet be assessed against the stock’s past results-day moves.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹199 cr | ₹174 cr | +14.82% |
| Other income | ₹5 cr | ₹2 cr | +138.24% |
| Expenses | ₹196 cr | ₹185 cr | +5.98% |
| Operating profit | ₹3 cr | ₹-12 cr | — |
| Operating margin (%) | 1.54% | -6.68% | — |
| Interest | ₹6 cr | ₹6 cr | +0.16% |
| Depreciation | ₹29 cr | ₹28 cr | +3.28% |
| Profit before tax | ₹-27 cr | ₹-44 cr | +37.92% |
| Tax | ₹-1 cr | ₹0 cr | — |
| Net profit | ₹-26 cr | ₹-44 cr | +40.92% |
| EPS (₹) | ₹-7.39 | ₹-12.58 | +41.26% |
Operating margin of 1.54% compares with a Healthcare sector median of 20.96% across 20 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- The Davaindia network reached 2,840 stores, with quarterly customer footfalls of 66.17 lakh and GMV of ₹18,791 lakhs.
- Q2FY27 efforts focused on consolidating the expanded store network and monitoring recently added stores.
Expansion
- Davaindia expanded to 2,840 active stores as of September 2026.
- The company acquired a 100% stake in Curexis.
New initiatives
- During Q2FY27, the company focused on improving store-level productivity and strengthening execution across its existing network.
Competition
- Davaindia describes itself as India’s leading private-sector generic pharmacy chain.
Problems & risks
- The company moderated Davaindia store additions in Q2FY27 after significant expansion in previous quarters.
What to watch
- Whether operating margin holds above 1.54% after the network-consolidation quarter.
- Whether revenue growth remains ahead of the +5.98% sequential expense growth rate.
- Whether depreciation stays close to Rs 28.66 cr as the 2,840-store network is monitored.