Aakaar targets under-130 debtor days via distributor network

Aakaar aims to reduce debtor days to below 130 by moving payment responsibility to distributors in H2FY27. The target follows an increase from 160 days in March 2025 to 219 days in September 2026, while Aakaar completed its Novacare migration, established CFA operations and appointed 40 distributors during H1FY27.

Why is Aakaar moving collections to distributors?

Aakaar is moving payment responsibility to distributors because its H2FY27 action plan identifies that change as the mechanism for reducing debtor days to below 130. The company supplies aesthetic products, devices and consumables to dermatologists, aesthetic physicians, clinics and chains through a business-to-business-to-consumer model.

The collections change supports Aakaar's broader plan to route more sales through stockists. Direct-to-doctor sales through PISPL and Aakaar represented 23% of sales, while 77% reached doctors from stockists through Novocare. Aakaar said it was moving to more than 90% of sales through stockists in FY26-27, with local distributor control over overdue accounts intended to improve trade receivables.

Aakaar's product mix makes the collections mechanism relevant across much of its sales base. Aesthetic products accounted for 87% of revenue and device consumables for 5%, which the company describes as recurring business. Owned brands represented 34%, while devices and consumables together formed the remaining 13% of the company-at-a-glance revenue mix.

How much did Aakaar's debtor days rise?

Aakaar's debtor days rose by 59 days, from 160 in March 2025 to 219 in September 2026. The measure increased at each disclosed date, reaching 188 days in September 2025 and 206 days in March 2026 before the September 2026 reading.

The below-130-day target is at least 89 days lower than the September 2026 level. The presentation does not provide an interim debtor-days target or a timetable for reaching the threshold, but says the benefits of the H1FY27 network migration are expected over the next 12 to 18 months.

Trade receivables stood at Rs 54.21 crore at H1FY27, compared with inventories of Rs 25.94 crore and cash and bank balances of Rs 1.06 crore. Aakaar reported total current assets of Rs 85.13 crore and short-term borrowings of Rs 18.89 crore at the same point. The presentation provides no earlier receivables balance, so it does not support a rupee comparison with March 2025.

What distribution network supports Aakaar's plan?

Aakaar reported more than 40 stockists and said it appointed 40 distributors nationwide in H1FY27 to support the revised distribution model. The company also reported coverage of more than 5,000 dermatologists and clinics, more than 100 medical representative executives and more than 1,000 pharmacies.

Aakaar completed its migration to Novacare and established clearing and forwarding agent, or CFA, operations during H1FY27. Management expects the network changes to improve collections, reduce debtor days and enhance last-mile delivery over 12 to 18 months. Its stated stockist strategy also targets delivery in less than 24 hours.

The company identifies tier 2 and tier 3 cities including Nashik, Raipur, Agra, Varanasi and Dehradun as sources of incremental nationwide revenue. Aakaar uses contract development and manufacturing organisations for manufacturing, while focusing on formulation and marketing, and has invested in manufacturing and research and development facilities for Xelix FUE hair-transplant devices, for which it said a test licence had been applied.

How did Aakaar perform during the distribution migration?

Aakaar's revenue from operations increased 72.6% to Rs 43.72 crore in H1FY27 from Rs 25.32 crore in H1FY26, while earnings before interest, tax, depreciation and amortisation, or EBITDA, turned to a Rs 5.43 crore profit from a Rs 0.23 crore loss. Profit after tax, or PAT, moved to Rs 3.54 crore from a Rs 0.78 crore loss.

Gross margin declined to 51.40% in H1FY27 from 54.78% in H1FY26, despite the revenue increase. Employee benefits expense rose to Rs 8.07 crore from Rs 7.26 crore, while other expenses increased to Rs 8.97 crore from Rs 6.85 crore. Aakaar attributed H1FY27 spending to higher marketing investment for consumer awareness, the existing business-to-business channel and demand ahead of upcoming e-commerce sales.

H1FY27 followed H2FY26 revenue of Rs 41.64 crore, EBITDA of Rs 10.93 crore and PAT of Rs 7.42 crore. Aakaar said H2FY26 procurement was tied directly to demand visibility and confirmed orders, and remaining year-end inventory was cleared in April. It described H1FY27 as business as normal under its historical trend shift, with momentum continuing from H2FY26.

Conclusion

Aakaar is changing both delivery and collections after debtor days increased from 160 in March 2025 to 219 in September 2026. The plan shifts payment responsibility to distributors while increasing the stockist share of sales from 77% toward more than 90% in FY26-27. The approach is being introduced alongside H1FY27 revenue of Rs 43.72 crore and Rs 54.21 crore of trade receivables.

The next disclosure to watch is whether the 40 distributors appointed in H1FY27 produce the collection and last-mile-delivery benefits management expects within 12 to 18 months. In H2FY27, Aakaar plans to pursue incremental business and improve productivity by brand and doctor while targeting debtor days below 130. The presentation gives no interim milestone between 219 days and that target.