pharmaceuticals to Optival Health Solutions Private Limited. Nova Sud Pharmaceuticals Private Limited is the holding
company of all our companies that are engaged in distribution of pharmaceutical, wellness and FMCG products, namely, Sai
Sridhar Pharma Private Limited, Venkata Krishna Enterprises Private Limited, Shri Banashankari Pharma Private Limited,
Deccan Medisales Private Limited and Sidson Pharma Distributors Private Limited, including to Optival Health Solutions
Private Limited. We acquired Kalyani Meditimes Private Limited in 2019, and through which we own and manage a software
used to transcribe doctor’s prescriptions into e-prescriptions. Our subsidiary, Clearancekart Private Limited does not have any
significant operations as on date, and our subsidiaries, Wynclark Pharmaceuticals Private Limited and MHS Pharmaceuticals
Private Limited are involved in contract manufacturing of private label pharmaceutical, wellness and FMCG products and
supply of these products to Optival Health Solutions Private Limited.

Within our pharmacy retail business, our product mix primarily comprises of branded pharmaceutical products, private label
pharmaceutical products, branded fast-moving consumer goods and private label consumer goods. For the financial year 2021
and the six months ended September 30, 2021, over three-quarters of our revenue was derived from the sale of branded
pharmaceutical products (76.8% and 74.9%, respectively), with private label pharmaceutical products including trade generics
(5.6% and 6.7%, respectively), branded fast-moving consumer goods (12.9% and 11.6%, respectively) and private label
fast-moving consumer goods (4.8% and 6.9%, respectively) constituting the rest.

Our stores

As of September 30, 2021, through our subsidiaries, we operated 2,326 stores in 261 cities across the states of Telangana,
Andhra Pradesh, Karnataka, Tamil Nadu, West Bengal, Maharashtra and Odisha, with an aggregate retail space of
approximately 1.36 million square feet. Our store network is spread across urban and rural areas, with stores located in corporate
campuses, retail parks, malls, high streets and corner stores. Over 95% of our stores are operated and managed exclusively by
us, with the rest through a franchisee-network, as of September 30, 2021.

A detailed break-up of our store count is set out below:

 

 

 

 

 

 

 

 

 

 

State Number of stores as of September 30, 2021
Telangana 474
Andhra Pradesh 297
Karnataka 546
Tamil Nadu 475
West Bengal 224
Maharashtra 221
Odisha 89

Total 2,326

 

 

 

Store opening framework

We follow a cluster-based approach to store network expansion and prefer to establish our presence in densely-populated
neighbourhoods. As part of our establishment, in every such neighbourhood, we aim to establish a primary warehouse at the
centre of the city, with larger stores that operate as hubs in the surrounding areas and smaller stores in the periphery, thereby
enabling us to penetrate neighbouring regions as well. Each cluster of stores in the peripheral and rural areas is serviced by the
nearest hub, and in the event there is a larger demand at any store at any given point that the nearest hub is unable to fulfil, we
cater to such demand directly from the nearest warehouse. This model helps us ensure that we are able to fulfil a significant
number of orders received by us from our customers, thereby ensuring customer satisfaction and retention in the areas in which
we operate.

Over the years, we have developed a data-driven model of identifying and opening new store locations, thereby increasing our
penetration and reach to the end-customer. The selection of suitable locations for our stores has been critical to our expansion
plans, and in order to facilitate a smooth expansion process, we have developed an elaborate and centrally managed framework
that is used for all new store openings. This process is operated and managed through our in-house “Shutter App” which
integrates the entire store opening process. The application also includes a feature whereby our employees have the ability to
contribute towards our expansion activities by making a posting about any potentially suitable location that they might have
come across in the neighbourhood in which they are based. This is the first stage of our framework where all relevant details of
a potential store location are posted on the “Shutter App” following which, a designed area manager visits the location to
analyse its suitability through a predictive analysis tool. Once reviewed and validated by our regional business development
team, we enter into negotiations with the landlord of that property on commercial terms. Following a vetting process by our
regional manager and head office, a final decision is taken by our chief retail officer that is responsible for releasing the security
deposit to secure the lease for the property. Through this comprehensive application-driven process, we ensure that we are early
movers in our target markets and can take advantage of the opportunities offered by the under-served regions in which we
operate.

155
