SastaSundar Ventures Limited Q3 FY26 Earnings Call Summary

Summary

SastaSundar Ventures Limited - Q3 FY26 Earnings Call Summary Monday, February 09, 2026 4:00 PM IST

Event Participants

Executives 2 B.L. Mittal (Chairman and Executive Director), Lokesh Agarwal (CFO)

Analysts 8 Abhishek Singhal, Amit, Aryamann, Athar Syed, Avnish Tiwari, Dhairya Trivedi, Jatin Jadhav, Pulavarthi Sai Kiran

Financials & KPIs

Geographic & Segment Commentary

• Retailer Shakti (B2B): Reached EBITDA break-even in January 2026; management expects 1% EBITDA margin for FY27. It serves as a digital distributor with next-day delivery and zero-credit terms, aiming for a 30% CAGR over the next 5-10 years.
• SastaSundar (B2C): Achieved positive contribution margins in January 2026; targeting full PAT positivity by FY28-FY30. The segment is scaling back to revenue levels seen prior to the Flipkart deal (approx. ₹510 crores) within 12 months.
• Regional Expansion: Operations currently focus on Eastern India (scaling to Bihar, Odisha, Jharkhand) and North India via Noida. New fulfillment centers (FCs) are planned for Lucknow, Udaipur, and Guwahati over the next two years.

Company-Specific & Strategic Commentary

• JITO Private Label: Launched generic-generic brand JITO to leverage the 65,000-retailer network. Management targets JITO to contribute 2% of revenue in FY27, scaling to 10% in 3-4 years with 25% contribution margins.
• Asset Efficiency: Management emphasizes a “Capital Efficient” model, with only ₹83 crores in net capital deployed to build internal IPR and platforms. Treasury income currently exceeds the burn rate for futuristic tech investments.
• Retail Air Launch: Planned AI-driven SaaS platform for retailers to be launched in 3-4 months (₹10 crores investment). The tool will provide free inventory management and automated billing to deepen retailer stickiness.
• Corporate Restructuring: The company is changing its name to “Health X Platform Limited.” A merger of the healthcare entities and a demerger of the NBFC (Microsec Resources) is planned for FY27 to simplify the structure.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Restructuring & Buybacks

• Question: Is there a plan for cash distribution via buybacks given the high treasury? (Abhishek Singhal)
• Answer: Current priority is the merger of subsidiaries into the holding company. Post-merger (expected in 2 years) and completion of tech investments, the board will consider buybacks. (B.L. Mittal)

Business Model Differentiators

• Question: Why doesn’t SastaSundar pay for distribution rights like peers? (Praneeth)
• Answer: Peers pay approx. 30% of revenue for rights. SastaSundar secures direct pharmaceutical relationships via “goodwill,” 100% timely payments, and high-quality, climate-controlled FCs. (B.L. Mittal)

Growth Bottlenecks

• Question: Does the “no credit” policy hinder expansion against traditional distributors? (Aryamann)
• Answer: It is viewed as a USP. Retailers prefer transparent pricing and higher discounts over expensive credit. SastaSundar is already a market leader in West Bengal and Guwahati using this model. (B.L. Mittal)

Working Capital & Technology

• Question: What is the long-term working capital target? (Pulavarthi Sai Kiran)
• Answer: Aiming for negative or 10-day working capital. AI algorithms will keep inventory at 22-23 days, fully funded by vendor credit. (B. L. Mittal)

Key Takeaway

SastaSundar Ventures demonstrated a pivot toward profitability in Q3 FY26, with 9-month PAT turning positive at ₹11 crores. Revenue grew 22% YoY to ₹341 crores as the company overcame previous automation-related bottlenecks. Strategically, the firm is transitioning toward a high-margin private label model with the launch of “JITO” and is optimizing its B2B segment, Retailer Shakti, which achieved EBITDA break-even in January 2026. Management remains committed to a capital-efficient “zero-credit” distribution model, supported by a ₹500 crore treasury that offsets current tech spending. The upcoming corporate restructuring into “Health X Platform” and the demerger of its NBFC arm in FY27 are intended to unlock shareholder value. The company expects to maintain a 30% growth trajectory while reaching sustainable positive operating cash flows by FY27.