Thank you. Good afternoon, everyone, and welcome to Dr.

Lal PathLabs Q3 FY26 earnings conference call. Today we are joined by senior members of the management team, including Honorary Brigadier Dr.

Arvind Lal, Executive Chairman, Mr. Shankha Banerjee, CEO, and Mr.

Ved Prakash Goel, Group CFO and CEO International Business. I would like to share our standard disclaimer.

Some of the statements made on today's conference call could be forward-looking in nature, and the actual results could vary from these forward-looking statements. A detailed statement in this regard is available in the results presentation which has been circulated to you and also available on stock exchange website.

I would now like to invite Dr. Lal to share his perspectives.

Thank you, and over to you, sir.

Thank you, Nishid, and good afternoon, everyone, and thank you for joining us for the third quarter and 9-month earning call for fiscal 2026. Healthcare in India is undergoing a profound transformation.

We are witnessing a steady rise in lifestyle-related and chronic diseases, an aging population with evolving care needs, and a growing awareness among consumers about the importance of early detection and preventive health. These shifts are redefining diagnostics from being episodic and illness-driven to becoming an essential, continuous part of long-term health management.

At the same time, access to high-quality diagnostics remains uneven across the country, reinforcing the relevance of organized, technology-enabled players who can deliver reliable and standardized service at scale. This is where our purpose at Dr.

Lal PathLabs remains deeply aligned. We are committed to building an accessible, dependable, and clinically rigorous diagnostic ecosystem for every Indian.

This quarter, we made meaningful progress on several strategic priorities. First one was launch of Swavaca, our personalized preventive healthcare platform.

A major milestone in this direction was the launch of Swavaca. Operating under the philosophy of Science Behind Wellness, Swavaca represents a strategic pivot from traditional disease detection towards science-led disease prevention.

By integrating high-end diagnostics and AI-supported imaging with curated programs, we are directly addressing the rising demand for personalized preventive care in India. Next is the expansion of specialized and advanced testing capabilities.

We continued strengthening our offering in high-end diagnostics, including oncology, genomics, advanced infectious disease testing, and investments in our reference labs and collaborations with global technology partners remain key enablers of this strategy. Next is deepening our presence in underpenetrated markets.

Our scalable franchisee-led model continues to help us expand into Tier 3 and Tier 4 markets. Improving diagnostic access in semi-urban and rural India remains our core long-term priority.

Together, these initiatives reflect our integrated approach, that is combining a robust physical network, deep clinical capability, and digital innovation to serve India's evolving healthcare needs while driving disciplined and sustainable growth. With that, I would now like to invite our Chief Executive Officer, Mr.

Shankha Banerjee, to share the key performance highlights for the quarter. Thank you, and over to you, Shankha.

Thank you, Dr. Lal, and good afternoon to you all.

I am glad to connect with everyone today to walk through our Q3 FY26 performance. Our Q3 FY26 results reflect sustained growth and operational excellence.

We delivered strong financial performance this quarter, with revenue rising 10.6% year-on-year, resulting in 10.8% growth for the 9-month period. Patient volume growth was lower than our current trend at 2.7% in Q3 due to unexpected decline in our seasonal fever portfolio.

The YTD patient volume growth is 4.4%. Our YTD sample growth remains robust at 9.6%.

In Q3, we continued the journey of significant clinical advancement with introduction of more than 15 new tests, including more than five which are first in India. These additions were across multiple portfolios, further strengthening our high-end complex testing capabilities.

Our technical team had five international journal publications with one award-winning paper in the area of using ML for rapid acute leukemia diagnosis. We have upgraded our enterprise IT infrastructure to next-generation technology, which has an AI-enabled environment at compute and network layer.

We have rolled out a new agentic bot for patients at multiple touchpoints and a clinician-facing digital tool in pilot mode. We have enhanced our patient experience at walk-in labs and home collection with faster reporting standards in Delhi-NCR.

All these initiatives and more in the pipeline are aimed to enhance the patient and clinician experience with the brand. Our recent launch of Swavaca preventive wellness program model also reimagines the patient experience with diagnostics.

Together, these developments solidify our position not just as a laboratory service provider, but as a comprehensive high-tech partner in our patients' long-term health journey. During the quarter, Swasthfit contributed 26% to total revenue and continues to play a primary role in our B2C market growth.

We are scaling this affordable preventive health model to Tier 2 and below towns to capture an untapped preventive testing market. The transition from unorganized to organized diagnostics in India is sustained as patient priorities shift towards clinical reliability.

Our competitive edge lies in stringent quality protocols and superior service architecture. Beyond the test itself, our differentiation is defined by the end-to-end patient experience, from seamless sample collection to digital report delivery.

Ultimately, these superior service levels are the primary drivers of patient acquisition and brand loyalty. We are scaling through expansion in newer markets, innovative offerings, and digital enablement.

This approach cements our diagnostic leadership and enables long-term profitable growth. With that, I will now hand over the call to our Group CFO and CEO International Business, Ved.

Over to you.

Thank you, Shankha. Good evening, everyone, and a warm welcome.

Thank you for joining us today. I will take you through the key operational and financial highlights for quarter three and 9 months of FY26, followed by our year-to-date performance.

Let me begin with some key operating metrics. Revenue per patient for Q3 FY26 stood at ₹927, representing a 7.7% year-on-year increase over ₹861 in Q3 FY25.

This improvement was driven primarily by favorable test mix and geographic mix rather than pricing. Test per patient increased to 3.11 in Q3 FY26 compared to 2.97 in the corresponding quarter last year, reflecting our continued focus on menu expansion and preventive healthcare offerings.

As part of our commitment to strong governance and customer-centric practices, the company has gladly passed on the benefits arising from reduction in GST on reagents and chemicals from 12% to 5% through price reduction for patients. While this had a modest impact on realization, we believe it strengthens our long-term trust and demand sustainability.

Overall, our growth continues to be volume-led, with realization improvement coming largely from mix enrichment, which we believe are structurally sustainable drivers. Revenue for Q3 FY26 came in at ₹660 crore compared to ₹597 crore in the same quarter last year, reflecting a year-on-year growth of 10.6%.

For the 9 months ended December 2025, revenue stood at ₹2,060 crore versus ₹1,859 crore in YTD FY25, registering a growth of 10.8% driven by steady volumes and operating leverage. During Q3 FY26, we incurred a one-time cost of ₹30 crore related to implementation of new labor code, which has been reported as an exceptional item.

This is a non-recurring adjustment and does not impact the underlying operating performance or steady-state cost structure of the business. EBITDA before exceptional item for Q3 FY26 stood at ₹179 crore compared to ₹154 crore in Q3 FY25, reflecting a growth of 16.3% and EBITDA margin of 27.2%.

For the 9 months ended December 2025, EBITDA before exceptional item came in at ₹596 crore compared to ₹527 crore in the same period last year, registering a growth of 13.1% with EBITDA margin of 28.9%. Profit before tax for Q3 FY26 after taking the hit of labor code was ₹124 crore compared to ₹138 crore in Q3 FY25 with a PBT margin of 18.8%.

For the 9 months ended December 2025, PBT stood at ₹509 crore versus ₹471 crore in YTD FY25 with a margin of 24.7%. Profit after tax for Q3 FY26 after taking the hit of labor code stood at ₹91 crore compared to ₹98 crore last year, resulting a PAT margin of 13.9%.

For the 9 months period, PAT was ₹378 crore compared to ₹337 crore in YTD FY25 with a margin of 18.3%. Earning per share for Q3 FY26 was ₹5.4 compared to ₹5.8 in Q3 FY25.

For the 9 months ended December 2025, EPS stood at ₹22.4 compared to ₹20 in the previous year. Our balance sheet remains robust with net cash and cash equivalent of ₹1,411 crore as on December 31st, 2025, providing us significant flexibility to support organic growth, calibrated inorganic opportunities, and shareholder returns.

I'm pleased to share that the Board of Directors has approved an interim dividend of 35%, amounting to ₹3.5 per share on enhanced equity share capital post 1:1 bonus issue. Our capital allocation priorities remain unchanged: investing in growth, pursuing M&A opportunities, and returning surplus capital to shareholders while maintaining financial prudence.

Overall, we remain focused on delivering sustainable growth and healthy profitability while continuing to invest in quality, compliance, and customer experience. With this, I conclude my opening remarks and I now request the moderator to open the forum for question and answer.

Thank you.

Thanks for the opportunity. A couple of questions from my end.

Shankha, at a time when industry revenues have been growing in the 7% to 8% range, our growth, if I look at last 11, 12 quarters, has been 10.5% on an average. What am I missing?

We have brand, we have technology, we have franchisee network, we have reach, we have doctor empanelments, sales force, low cost of test, on-time delivery. What is the missing factor which is leading to this kind of a growth?

Because if I look at some of the other listed players, they've been reporting higher growth. That's the first question on revenue.

Secondly, on Swasthfit, it has been growing almost 2x of our company revenue. How is the journey been?

Is it now a Tier 2, Tier 3 phenomenon also? Is that also contributing there?

What's the journey in Tier 2, 3 cities? Is it movement from basic diabetes and thyroid to some of these packages?

Is there any possibility that Swasthfit is cannibalizing some repeat usage or revenues at the company level? Those are my two questions.

Thanks.

Right, thanks, Prakash. I think on the first one in terms of revenue, I think we've been consistent in trying to say that right now we are focusing only on organic revenue growth.

If you remember about 2 years back, we had slipped to about a 7% organic revenue. We were quite clear that we want to build the organic momentum back across the organization, and that is what the team has been working on.

Simultaneously, the building blocks of how to take the next jump forward are being put in place. Revenue growth in the future, we are obviously working towards making this better than whatever we have now.

The stability that you see is kind of designed to at least bring the organic growth trajectory at a level that we are comfortable. I think we've been saying 11% to 12% organic growth for this year, and even as of now, we are confident that we should be able to deliver between 11% to 12% for the year.

Once the whole base kind of comes to that level, I think other initiatives which are already being laid out should help us step up going forward. On the second question on Swasthfit, yes, I think even in some of the previous calls, I had mentioned that Swasthfit now, with our expanding reach, we ourselves are able to now put Swasthfit into more geographies, including the smaller towns, and we are definitely seeing offtake or acceptability of this in the smaller towns.

Also, even in the urban centers, we are seeing not only direct consumer or patient pickup, but like I mentioned, in some cases, we're even seeing doctor recommendations coming for the portfolio. Those levers are still in play, and that's what is helping us maintain the growth momentum on Swasthfit.

Okay. In some of the initiatives which you've been calling out over the last few quarters, be it distribution, be it new product development, be it enhancing the menu, I think increasing the sales force, where will that trajectory come in?

Matlab, now is FY '27 going to get us there? Because I think last call you had hinted Suburban has stabilized, the IT issues are done, Bombay reference lab has stabilized.

Will West and South contribute more meaningfully to that? Where will see that delta or incremental revenue coming through us?

What's the tipping point? Or what, as analysts and fund managers, we should focus on, that this is what it is, and we are there?

I think for a size of organization and the scale that we are running, I don't think one single city, geography will really help in kind of taking the overall number higher. What has to work for us is slightly different strokes in different geographies, but all geographies will contribute towards a higher growth momentum.

I would say starting Delhi-NCR, North, East, West, even South, I think all of these geographies, international as well, all of these geographies put together will contribute to the higher growth trajectory that we are aiming for. It is unlikely that one geography will help the overall number of the organization to go to the level that we wanted to move towards.

Understood. From next year, we should see some better growth?

Is that the path we should expect?

That's the trajectory that all of us expect, including me.

Sure, that's helpful.

Thank you.

All the best.

Thank you.

Thanks thanks for the opportunity. In the opening remarks, you talked about that the quarter has been also impacted by, or the volumes have been impacted by adverse season.

Is it possible for you to break it down how the seasonal volumes or the fever-related volumes have grown in this quarter or how the specialty or semi-specialty test-related volumes have grown in the quarter? Thank you.

Yeah. I don't think we'd get into that micro detail.

Quarter 3 is usually not a thing where we discuss season or fever or things like that, but it has been an unexpected quarter in the sense that we have seen our seasonal fever portfolio has got negatively impacted. We have declined on that portfolio.

Yes, that has resulted in lower patient volume numbers and even to a certain extent the lower sample volume numbers.

Understood. Basically, it has declined, right?

Approximately what is share of this portfolio in overall patient volume? Approximately, actually any ballpark number?

You see, the share is different by quarter, I'm not too sure. That's not something which we focus upon.

I'm not too sure that's a data we would want even any of you to be focusing upon.

No problem at all. Sir, another question is, if you look at the patient volume growth, right?

Although this quarter has been impacted, but even if we look at the 9 months, it's around 4%, 5% kind of growth. This is despite that you are pushing significant growth as far as in the Tier 2, Tier 3 town, expanding the network and all.

Is it the right way to look at that your core markets, like for example, Delhi-NCR or the Tier 1 markets, is there any kind of structural slowdown as far as the growth is concerned or how to put it? Thank you.

I think the patient volume numbers are seeing a steady growth. I think quarter-to-quarter fluctuations are there.

If you at least see in the last 2, 3 years movement from an annual low of almost 2.7% or 2% 2.7% that we saw 2 years back, we are going upwards. I think, at the scale of patient volumes that we do, expecting this number to suddenly go up by 3%, 4% in one calendar year or one financial year may not be the right expectation.

Yes, there is a slow and steady improvement that we are trying to build on the patient volume number. That you will see in the YTD number this year also.

We have obviously this impact right now in this quarter, but we are seeing some increase in the patient volume numbers this financial year as well.

Thank you, Shankha. That is from my side.

Thank you very much.

Hi, thank you for the opportunity. Hope I am audible.

Yes.

Great. The first question is on margins.

I think generally we see a dip in margins in the current quarter and we had previously indicated that H2 margins would also be lower than H1 owing to network investments and other expansion projects. Are the current margins, I'm talking about 9-month ended margins, sustainable at around 29% going forward?

Anshul, Ved this side. I think if you see, H1 margin was higher.

This quarter, if we take out the impact of labor code, it is 27.2%. Later part of the year, we said key it will be lower than first half of the year.

Overall, earlier we said similar number around 28% kind of margin. We are confident that we can achieve in this financial year between 27%, 28% even after this impact of labor code.

Got it. Now going forward, the margin trajectory would remain firmly around this 28% is what I'm trying to understand, despite us passing on those GST-related benefits, etc.

and all that stuff.

I think we are hopeful that we can maintain the trajectory between 27%, 28%.

Got it. Second question I had was can you provide us an update with the advanced radiology pilot project that we had undertaken in Delhi?

Is there any update that you can share with us with regards to traction or any plans to sort of expand on that?

The traction on the advanced radiology is that we were running a one-center pilot in Delhi-NCR, and we are looking at it and it is kind of going as per the plan trajectory that we have. We're just started another center in Delhi-NCR on advanced radiology because you want to now see how replicable is our first pilot in another location, which is geographically apart.

That's the status as of now.

All right. This would be an advanced center only, sir, right?

It will include MRI and CT scan machine.

This is another center with MRI and CT scan. Got it.

Just one last bookkeeping question from my end. Can you help us the capex number for the current quarter and any full-year guidance incorporating these high investments in radiology and even Swavaca preventive wellness program?

Anshul, this year, we have made two investments, which is one, we bought one property which is for our precision diagnostic center

and

of course, this Swavaca, which we have just started. We are roughly will be spending about ₹150 to ₹160 crore kind of capex in this year.

Normally, we spend about ₹50, ₹60, ₹70 crore on a operating kind of capex. These radiology center, which, let's suppose if we take one center, it takes away about ₹15, ₹16 crore kind of investment.

If we take, let's suppose going forward, one or two more, then accordingly, someone can factor in this two more investments.

Right. Sustainably, capex could settle at around, say, around ₹60, ₹70 crore of operational capex plus two-center capex on this radiology, about ₹100-odd crore could be the right

plus? Plus some new initiative or new investment.

Near to time, maybe you can see between ₹100 to ₹150 crore kind of capex, someone should assume.

Great. That's it from my end.

Thank you and all the very best.

Thank you.

Hello, sir. Can you hear me?

Yes.

Sir, I have two questions. One is, sir, can I get the total test volume for the quarter?

Total test volume?

Number of tests conducted, not the sample collected.

Number of tests.

We have done 22.2 million samples in this quarter.

That is the sample collected, right? I just want to understand the number of tests performed on those samples.

Raman, we generally give sample number. What you are talking about the parameter where let's suppose if we do one test, which is

TFT,

LFT, let's suppose, and within that, there are so many parameters which report directly. These are not reported.

We generally give sample numbers

only. Understood, sir.

Sir, my second question is with respect to Swasthfit. I just want to understand the margin difference between Swasthfit and the rest of the portfolio.

This is where I'm coming from. I just want to understand if once your contribution of Swasthfit improves further, will it aid margins or will it be a pressure on margins or the margins will remain flat?

Realization is, of course, higher in Swasthfit because of bundle and packages. Same time, we provide discount because these packages are at discounted rate.

Obviously, we get operating leverage and overall, net-net, it is not very different. Yes, realization is higher and operating leverage is always coming, be it consumption, be it other operating overheads.

Somebody should not factor in that higher contribution from Swasthfit will give very high margins, that one should not factor in.

It is not margin-dilutive.

Understood, sir. Sir, my third question is with respect to the newly launched Swavaca.

Can you just elaborate what are the tests with the company will be performing or under this?

Swavaca is a very new conceptual setup. It's focused on preventive wellness testing only.

If you want more details, you can go on to swavaca.com, which is the website dedicated to Swavaca. You can type s-o-v-a-a-k-a, swavaca.com, and you will get details.

It is all preventive health checkup. These are packages which are kind of, there's a pre-consultation with a doctor and depending upon individual condition, family history, etc., packages are suggested and finalized, and then the testing happens and report consultation and diet consultation post that.

It's a wellness and preventive focused testing only.

Understood, sir. Sir, B2C share during the quarter, is it still 75% or has it increased?

B2C share is still around 75%.

Okay. Thank you, sir.

Thank you.

Hi, good afternoon. Can you hear me?

Yes.

Great. Sorry about last time.

A couple of questions from my side. On one side, we have seen a sharp depreciation in INR, and at the same time, we have seen this European Union trade deal which cuts tariffs.

Does either of this favorably or unfavorably affect our cost base and can it impact margins?

Thanks, Bino. Yes, I think dollar is moving up, we all know.

Most of our reagents and chemicals are imported. Indirectly, we are also impacted.

We are able to absorb that inflationary cost because of our volume. Right now, we don't have any which is directly linked to dollar because we buy from Indian companies.

On the other side, this EU trade deal is very early to comment on. Definitely, there may be some opportunity in future which can come, but right now, it is too early to comment on that.

Okay. Sir, in case these reagent prices actually go up, do you think we can pass them on without impacting volume growth?

We have long-term contracts with most of our large suppliers. Right now, we are we are not having that.

Yes, of course, if dollar dollar trajectory is upwards like this, then definitely we have to review and review our pricing again.

Understood. Sir, and one question on the radiology plan.

You mentioned that going as per plan. In the normal course, if it goes as per your plans, when can we see a significant ramp-up on that strategy?

Would it be in couple of years or would it be in 5 years?

Radiology contribution to our business is less than 5% and even a significant ramp-up may or may not immediately impact the overall fortunes of the company. Having said that, we are definitely understanding the business model around high-end radiology in brand-strong urban markets.

Then we will also maybe try and understand in some other markets and then figure out our long-term strategy. Having said that, in terms of time horizon, like you said, it is unlikely to be a significant contributor to top-line growth at least not in the next 2-, 3-year scenario.

Understood. Thank you.

Thank you.

Hi. Good evening, and thanks for taking my question.

Sir, you mentioned about the patient volume growth at 4% to 5%, which you think can increase going forward. It may not be a step-up, but it can go up.

If you can share your thoughts as to what we should look at, what would drive that. Also acquisition, small, big, is that a possibility you see in the current environment and can that emerge as a driver for you?

Right. For the organic patient volume growth, there are one or two obviously quite clear levers that I think we've spoken about earlier.

The most important one is the spread and the access that we are increasing for patients. You see the number of new testing labs and the collection network expansion that we have stepped up over the last 2 years is aimed at getting more wider geographic spread and therefore ability to access a larger population and give more access to population to come and use our brand for their diagnostic needs.

I think that's number one. Then primarily over and above that, even through our existing network, there are patient acquisition activities that we keep doing from time to time.

Our Tier 3, Tier 4, and rural push that we have been undergoing for over, I would say, maybe 4- to 5-year journey that we have had on that is also going to help us get the organic volume. On the inorganic side, definitely there is appetite for us to be looking at in organic opportunities.

We are on the lookout for suitable inorganic opportunities which can fit into our portfolio and our strategic growth areas.

Sir, are you looking at how should I say, like, is it like a mid-sized chain, big chains, or individual labs? What kind of acquisition are most likely?

I think it's not that we look at all kinds of options because it is geography-specific. I think the South market is something where we would definitely like to have something which is reasonably large, at least maybe a top three, top five player in a given city with a slightly larger platform play, which we can then adopt and grow.

Whereas in some of our other North, East, maybe even some parts of West, we are open to doing standalone lab acquisitions, which gives us maybe access to some micromarket or some other benefit which we are maybe not able to get through our normal organic business.

Understood. Sir, on the pricing front, I understand it's been 3 years, there has not been any price increase.

In fact, you mentioned there has been the GST cut on inputs were passed on. What is your view on pricing?

When do you plan to take some price increase? Can we expect this year or next year?

Any thoughts around that?

Like Ved mentioned, we have just taken a decision to do a price cut to pass on the GST benefit. That cycle has to run for some time before we consider a price increase.

Therefore, I definitely don't see a price increase on the horizon, at least not for the next 2 to 3 quarters. Okay.

Okay. Sir.

I have more questions. I'll just join back.

Thank you.

Thank you.

Good evening. Thank you for taking my question.

Just one on the realization part again. I'm just calculating revenue per patient from your revenue numbers and the patient numbers.

That's come up by 7.5%. You mentioned, I think, the GST cuts have not come in Q3, I'm assuming it's in Q4.

What would be some of the enablers of this? Would it be higher Swasthfit?

Can you just explain that? Or has the environment from a competitive standpoint been a lot more easier, you think?

The GST price cut was taken in Q3, but it was maybe towards the end of Q3. Obviously, the full impact is not really reflecting in the RPP of Q3.

To that extent, you are right. It is a combination of test and geography mix that we are seeing in terms of RPP.

As we said, Delhi-NCR continues to grow double digits. We all understand that Delhi-NCR is a higher RPP market for us compared to the rest of the country.

We are also have some test mix benefits that are there. Those are the major contributory factors for the geography and the test mix for the RPP increase that we see.

That's helpful, sir. Just a second question is on, you alluded to higher growths over time.

Are we talking about not the 11% to 12%, but are we talking about higher than that, you think? At some point of time, if it's 3, 4, 5 quarters later, we are looking at price increases, could we then go beyond the 12% on a medium-term basis?

I'm not holding you to a specific year, but just want to understand, is the trajectory looking up at any point of time?

I think the thought process that you are saying is reasonable. We are looking at 11% to 12% is what we've been saying for this financial year.

Going forward, if that becomes our baseline, we obviously would like to be slightly better than that. And 3, 4 quarters down the line, the price increase window may open up again.

What would be a trigger for a price increase? I'm just curious.

We have not done it for many. Anything that you think will then say, this prompts us to take prices?

Is there something that we monitor closely? Is it inflation?

I'm just curious. What would trigger a price increase?

I think there are two triggers we look at. One is obviously internal cost is one thing which we continue to look at, how much we can absorb or what is it that can't get absorbed, etc.

Second would also be the external pricing table because we don't want to get into a situation where we seem to be falling off the pricing premium table because there are quality connotations associated with price in our country still.

Got it. Thank you and all the best here.

Thank you.

Thanks for the opportunity, sir. My first question is on the Sovaka initiative.

Swavaca.

Swavaca.

I just wanted to understand, sir, how is this different from the Swasthfit and whether this would be complementing Swasthfit growth? Another point here is that can this Swavaca initiative be scalable and scalable beyond NCR?

Swavaca and Swasthfit are very different in their idea and execution. Swasthfit is a pathology-only and widely distributed and accessible testing portfolio, which we said not only do we do in urban centers, it also goes into Tier 2, Tier 3, Tier 4 towns across the country.

Swavaca is a personalized, customized wellness, preventive wellness setup, which integrates pathology and imaging, including high-end imaging, and is a specific center-driven touch-and-feel experience for people who are looking at really in-depth understanding of their individual health status. This is kind of center-driven.

As of now, it's the first center that we've launched. Again, this will be on a mode where we will see how we are scaling this, the patient footfall, the walk-ins, etc., and the build-up of this center.

I think only basis that will we decide how do we scale it. There could be possibly multiple modes or models of scaling.

The scalability is way beyond Delhi-NCR once we get the model right.

Okay. Is it fair to believe this way, sir, Swasthfit is a kind of annual testing mechanism, while Swavaca would be a once-in-lifetime or once-in-10-year kind of thing?

Both are annual. It's just that the type of testing is different and the offering is very different.

Both are annual in nature from a preventive side.

Sure.

Surya, just on the Swasthfit, it is not only preventive wellness, but it is, in our case, most of the time it is upselling maybe patient who are coming for individual test, they are trying to take this package because it makes sense and avoid multiple visits where they can get a lot more tests in single visit. It is not always preventive wellness, while Swavaca is purely preventive and wellness kind of thing.

Swasthfit is always where we have patient who comes in need also.

Okay. Thank you for that, sir.

This is helpful. Yes, one more on the whether we do get any benefit out of this Ayushman Bharat Digital Mission success what we have seen?

As of now, we are enabled to incorporate ABHA IDs into our system. Whosoever is giving us their ABHA IDs, we put it into their records, the ABHA IDs.

Primarily ABDM is still focused on the hospital care. Diagnostics as of now, we haven't yet seen any reasonable thing to believe that this can become a key driver of growth for us right now.

Sure, sir. Thank you.

Thanks a lot.

Thank you.

Hi, thanks for the opportunity. My first question is on the extent of utilization of both the Mumbai and Bangalore reference labs.

Given that we continue to open about 600 to 800 collection centers annually with greater focus on the high-growth non-markets ex of Delhi, how do you plan to ramp up the utilization of these two specific reference labs?

The reference lab capacity by design is very high. Okay?

Because it depends on what type of machine modularity that is currently deployed, and there is obviously ability for us to keep deploying more. A lab is designed with a life which says we are looking at maybe a 10-, 15-, 20-year outlook on a reference lab kind of a setup.

I don't think that kind of correlates with the structure of network collection that is going in other parts of the country. The reference lab actually helps in building the tier-wise hub-and-spoke model that we work on.

We've got reference lab, then hub labs, then cluster labs and satellite labs, and then front-end we have the collection network. It's about putting a certain test menu in the market and then our ability to really build that test menu with the local prescribing community in the catchment area and our ability to deliver that timely reports and the quality report from the reference lab that we have for that geography.

That is an independent task and does not necessarily correlate with saying that more collection network will suddenly mean more capacity utilization at a reference lab.

That is helpful, sir. I'll just ask one more question.

Given that we follow a revenue-sharing arrangement with our franchise network and that in markets ex of Delhi, we end up sharing more than 25% of our revenue with the network, don't you foresee incremental margin dilution given franchisee-led growth? If not, how much more bandwidth do we have on expanding our EBITDA margins via process efficiencies and leverage, given that all of our growth has been volume and price led at least over the last 2 years?

I think Ved will add to whatever I say. I think one must understand that when a franchisee is given a margin, there are certain tasks of the whole process which also get outsourced.

There is a certain benefit that we also get because of accumulation of samples and on top of that, we get an independent entrepreneur who's also kind of really running after generating business for us. There are multiple reasons why the franchisee footprint works for us, and we've been able to really develop a very strong mechanism of franchisee management.

If you see, besides Delhi-NCR, the model of franchisee revenue share is different in certain other geographies depending upon how the competition, etc. is.

We've been able to manage it quite well till today in terms of our overall portfolio margin, and we don't see any reason why that can't be managed going forward as well. Ved, you want to add anything to that?

No, I don't think it is dilutive because, first of all, this model of having franchisee is because of scalability and not putting fixed overhead on our head because there is an entrepreneur who always drive and it's a variable model where you share out of your revenue share instead of incurring on your own infra cost. In spite of you see our contribution has increased so much, we are not diluting our margins.

In fact, we are getting operating leverage because we already have testing outlets, we have already capacity which is available and we can leverage on that. I don't think this will dilute our margins.

Sure, sir. Incrementally, another way to ask this is what is the dream state EBITDA margin asset that you kind of look at?

I think we are very near the dream state, if you ask me, because we feel that we are in a position to generate more margin, I would rather see how can it be deployed back to generate growth, sustainable growth over the long term. I think the margin profile that we run, 27% to 28% EBITDA, we are maybe in the quote/unquote what you say dream state.

Sure, sir. Very helpful.

Thank you and all the best.

Thank you.

Hello?

Yeah.

Yeah.

Sir, basically, my question was the molecular diagnostic player, like 3B BlackBio, Mylab, Molbio, they are coming into the industry, like Molbio filed their IPO DRHP. Basically, are we a competition or are they a supplier to us for kits, and how is that molecular diagnostic industry doing?

Can you give a color on that?

Molbio is a vendor, is a supplier. They aren't really into front-end retail pathology as far as I'm aware.

That is one question. Molecular testing obviously is seeing increase over time, and PCR testing, etc.

I think that part of the portfolio should increase. I think maybe more traction will become on that portfolio, also because of the oncology testing, etc.

happening. I think that portfolio will see.

I think the second thing which Dr. Lal is also mentioning is that we see genetics again another area where quite a bit of traction we foresee will come in the market.

Basically, can you give the reason why that kind of portfolio is doing well and such extensive tests are taking market share from this simple testing?

I don't think it replaces simple testing. Please understand what is happening is when you get into genetic testing or molecular testing, these are more personalized, customized, and more deeper testing.

That doesn't take the need away of routine or regular testing. Actually, on the contrary, as people get diagnosed with more difficult or complex conditions, for therapy and the patient management, routine testing is required, and that need may actually go up.

I don't see it to be a replacement, rather, it is more about building and helping build your clinical superiority as well as the trust with the clinicians of our ability to really solve the complex diagnostic problems. I think that is where these portfolios also play a role in our business.

This is Dr. Lal.

We are also acutely aware of the increase in testing for all these non-communicable diseases, NCDs. Which are basically basic diseases in our jargon, but at the same time, the numbers are humongous, led by diabetes, high blood pressure, and lipid profiles, and, of course, cancers catching up, liver, kidney.

All these are a very large set of diseases which we club under NCDs. There's a remarkable improvement or performing because 65% of the Indians are dying from these diseases every day, non-communicable diseases, lifestyle diseases.

Of course, infectious diseases have not left us, they're about 35%, but right now, NCDs is catching up.

Yes, sir. Good evening to the team.

Sir, just one clarification I needed. The new initiative of Swavaca, would you say this is more like a D2C foray, direct-to-customer foray, versus our established model where the doctor and the lab setup may not exactly be in the same premises versus a Swavaca which would be in the similar premises with obviously more advanced testing and advanced services product portfolio?

Would that be a correct assessment?

Swavaca, like I was mentioning earlier, is a preventive testing and a wellness testing-driven platform. To that extent, it can see more self-generated tests, but it does not mean that there is not going to be clinician-referred testing here as well.

I think even annual health checks which people do, they may end up showing it to a clinician after that. Therefore, it is not an either/or.

Compared to the standard diagnostic lab testing where primarily much more prescription-driven testing is happening, in this situation, we might see slightly more self-driven testing as well.

Right. This would be company-owned, right?

This would not be a franchisee or channel partner.

This is company-owned, fully company-owned, yeah.

Even when you plan to scale, it will be company-driven model, it will not be outsourced to a franchisee?

The scaling model we will enumerate later because once we have the experience of running the center, obviously, many more details will be with us for us to then decide. The flagship store is company-owned.

Got it. That's it from my side.

Thank you so much.

Thank you.

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