Dr Lal Path Labs — Q4 FY26

Dr. Lal PathLabs Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=RMhPYQwKdwc Published: 13 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Dr. Lal Patlabs Q4 FY26 earnings conference call. As a reminder, 0:10 10 seconds all participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation concludes. Should 0:18 18 seconds you need assistance during this conference, please signal an operator by pressing star and then zero on your Touchstone phone. Please note that this conference is being recorded. 0:30 30 seconds I now hand the conference over to Mr. 0:32 32 seconds Nishit Soleni from CDR India. Thank you and over to you sir. Thank you. Good evening everyone and welcome to Dr. Lal 0:40 40 seconds Patlab's Q4 FI26 earnings conference call. Today we are joined by senior members of the management team including 0:47 47 seconds Mr. Shanka Banerjee CEO and Mr. V Prakash Goyel group CFO and CEO international business. I would like to 0:55 55 seconds share a 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 1:02 1 minute, 2 seconds these forward-looking statements. A detailed statement in this regard is available in the results presentation which has been circulated to you and 1:10 1 minute, 10 seconds also available on stock exchange websites. I would now like to invite Mr. 1:15 1 minute, 15 seconds Shanka Banerjee to share his perspectives. Thank you and over to you sir. 1:20 1 minute, 20 seconds Yeah, thank you Nishid and good evening everyone. I am pleased to join you today to discuss our performance for the 1:27 1 minute, 27 seconds fourth quarter and full fiscal 2026. We conclude the year on a strong note maintaining a steady growth trajectory. 1:35 1 minute, 35 seconds Our FI26 performance underscores the resilience of our business model and the continued preference of patients towards 1:43 1 minute, 43 seconds clinically reliable organized diagnostic providers. We achieved revenue of rups 703 crores in quarter 4 fi26 with a 1:52 1 minute, 52 seconds growth of 16.6% and rups 2763 crores in fi26 with a growth of 12.2%. 2:00 2 minutes This performance has been primarily driven by growth in sample volumes. A significant highlight this quarter was the successful hosting of med luminina 2:09 2 minutes, 9 seconds 2026 a firstofits-kind international medical conference from Dr. Lal Pathless. This landmark event brought 2:18 2 minutes, 18 seconds together over 500 clinicians and global thought leaders to deliberate on the new era of diagnostics specifically focusing 2:27 2 minutes, 27 seconds on high complexity domains such as encogenomics, transplant imunology, infertility, autoimmunity and rare 2:35 2 minutes, 35 seconds genetic disorders. By creating a platform over two days of scientific dialogue and collaboration, we are not only reinforcing our scientific 2:44 2 minutes, 44 seconds leadership and brand equity among the clinician community, but also accelerating the adoption of high-end specialized testing. 2:52 2 minutes, 52 seconds This initiative underscores our position as a vital clinical partner deeply integrated into the precision medicine ecosystem. To build further on our 3:01 3 minutes, 1 second scientific leadership, we have started a wide-ranging R&D program. It encompasses tie-ups with leading academic institutes 3:10 3 minutes, 10 seconds with specific research projects, international companies and startup ecosystem collaborations as well as in-house research projects culminating 3:18 3 minutes, 18 seconds with publications in reputed medical journals. On the operational side, we successfully executed our expansion plan 3:25 3 minutes, 25 seconds for the year, adding 14 new labs and more than 1100 collection centers. These additions coupled with the integration 3:33 3 minutes, 33 seconds of cutting edge AI diagnostic tools and specialized testing platforms ensure that we are well positioned to meet the 3:41 3 minutes, 41 seconds rising demand for highquality accessible healthcare across the country. Our preventive healthcare brand swast 3:48 3 minutes, 48 seconds contributed 27% to our total revenue in FI26 providing proving to be a critical lever 3:57 3 minutes, 57 seconds for B2C growth. Sustained growth in swast fit continues as we deepen market penetration and offer a wider range of 4:04 4 minutes, 4 seconds packages. An important milestone of our strategic journey this year has been the launch of SOAKA in the premium wellness 4:11 4 minutes, 11 seconds space. SAKa is not just an addition to our portfolio. It represents a foray into AI powered precision health 4:19 4 minutes, 19 seconds screening. Unlike traditional diagnostic models, SOAKA offers a holistic concage-led experience that bridges the 4:27 4 minutes, 27 seconds gap between high-end diagnostics and personalized health management. In parallel, the larger healthcare ecosystem is also expanding with many 4:36 4 minutes, 36 seconds hospitals adding new infrastructure and capabilities. Thus, it is not surprising that diagnostics are also growing alongside this expansion. This further 4:45 4 minutes, 45 seconds opens opportunities for better integration, stronger linkages and expansion of super specialized testing over time. We are entering FI27 with 4:54 4 minutes, 54 seconds strong operational momentum, a strengthened digital infrastructure and a clear pathway towards sustaining early 5:01 5 minutes, 1 second to mid- teens revenue growth. I will now hand over the call to V to discuss the financial metrics in more detail. 5:10 5 minutes, 10 seconds Thank you Shanko. Good evening everyone and a warm welcome. Thank you for joining us today. I will take you 5:17 5 minutes, 17 seconds through the key financial highlights for the quarter and the full year 2026. 5:23 5 minutes, 23 seconds Revenue for Q4 FY26 came in at rupees 703 cr compared to rupees 603 cr in the 5:32 5 minutes, 32 seconds same quarter last year reflecting a growth of 16.6%. 5:38 5 minutes, 38 seconds Revenue for the full year stands at rups 2763 cr against rupees 2461 cr in FY25 a growth of 12.2%. 5:51 5 minutes, 51 seconds Driven by sample volume growth of 12.9% in Q4 and 10.4% in FY26. 5:59 5 minutes, 59 seconds Revenue per patient for Q4 FI26 is rupees 956 up by 7.8% 8% compared to rupees 887 in Q4 FY25. 6:12 6 minutes, 12 seconds This is mainly due to improvement in test and geographic mix. 6:17 6 minutes, 17 seconds Test per patient for Q4 FY26 stood at 3.21 compared to 3.07 in Q4 last year. 6:28 6 minutes, 28 seconds A bida for Q4 FY26 came in at rupees 187 cr compared to rups 169 cr in Q4 FY25 6:36 6 minutes, 36 seconds registering a growth of 10 and a half% with an aida margin of 26.6%. 6:44 6 minutes, 44 seconds The full year Aida stood at rupes 752 cr compared to rups 696 cr in fi25 6:51 6 minutes, 51 seconds resisting a growth of 8.2% with a margin of 27.2%. 6:57 6 minutes, 57 seconds PBT for Q4 FI26 came in at rupes 160 cr compared to rups 154 cr in the same period last year with a margin of 22.8%. 7:09 7 minutes, 9 seconds Full year PBT stood at rupees 669 cr against rupees 625 cr in FY25 with a margin of 24.2%. 7:20 7 minutes, 20 seconds Pad for Q4 FYI26 came in at rupees 132 cr compared to last year 156 cr in Q4 with a pad margin of 18.8%. 7:34 7 minutes, 34 seconds Full year pad stood at rupees 5 uh 510 cr against rupees 492 cr in FY25 with a margin of 18.4%. 7:44 7 minutes, 44 seconds EPS for the full year is rupees 30.2 2 compared to rupees 29.2 last year. 7:53 7 minutes, 53 seconds Please note that the results for this quarter and the full year have some exceptional item. 8:00 8 minutes Number one, onetime cost of rupees 30 cr related to the new labor code which was accounted for in Q3 FY26. 8:11 8 minutes, 11 seconds Number two, there was an additional benefit of rupees 41 cr in Q4 FY25 on account of voluntary liquidation of suburban diagnostic. 8:21 8 minutes, 21 seconds Excluding these one time and exceptional item, a bida margin for FY26 is 28.3% with a growth of 12 and a half%. 8:33 8 minutes, 33 seconds And pad margin is 19.3% with a growth of 17.9%. 8:40 8 minutes, 40 seconds We continue to maintain a strong balance sheet with our net cash and cash equivalents standing at rupes 1,526 8:47 8 minutes, 47 seconds cr providing ample liquidity for future growth and M&A. 8:54 8 minutes, 54 seconds Our commitment to operational excellence is reflected in our lean working capital which is negative by 26 days. 9:02 9 minutes, 2 seconds Further I am pleased to share that the board of directors have approved the final dividend of 40% that is rupees 4 per share taking the total dividend for 9:11 9 minutes, 11 seconds the year to rupees 20.5 per share that is 280% after adjustment of bonus issue of 1 is 9:20 9 minutes, 20 seconds to1 in Q3 FI26 with this I conclude my opening remarks and now request the moderator to open 9:27 9 minutes, 27 seconds the forum for Q&A thank you thank Thank you very much. We will now begin with the question and answer session. 9:36 9 minutes, 36 seconds Anyone who wishes to ask a question may press star and then one on their touchstone phone. 9:42 9 minutes, 42 seconds If you wish to remove yourself from the question queue, you may press star and then two. 9:49 9 minutes, 49 seconds Participants are requested to use handsets while asking a question. 9:54 9 minutes, 54 seconds Ladies and gentlemen, we will wait for a moment while the question Q assembles. 9:57 9 minutes, 57 seconds Again you may press star and then one to ask a question. 10:03 10 minutes, 3 seconds Your first question comes from the line of toss from BNP Pariba. Please go ahead. 10:09 10 minutes, 9 seconds Uh good evening and thanks for the opportunity. Uh couple of question on the recent asset acquisition of Shabbazkar in Mumbai. Uh just wanted to 10:18 10 minutes, 18 seconds know miss uh what is the business mix over there? What's the share of uh radio and pads uh 100% of revenue considering 10:25 10 minutes, 25 seconds walk-in patient and what has been the rational of acquiring Dr. Dr. are acquiring this asset 10:33 10 minutes, 33 seconds right so uh the I'll take the last part first so the the reason we have acquired this asset is this uh is a quite an old 10:43 10 minutes, 43 seconds operating lab it has got a legacy of over 45 years in that geography and uh you know it's in a micro market in 10:51 10 minutes, 51 seconds Mumbai where where we actually with uh either Lalab or suburban don't really have a significant presence 10:59 10 minutes, 59 seconds So this is going to add to our uh portfolio in that market given that you know we are looking at uh really 11:08 11 minutes, 8 seconds building our uh presence strongly in Mumbai and the west region. So that is the reason why we've acquired this uh uh 11:17 11 minutes, 17 seconds entity. Yes, it is a it is a business which has radiology as well as pathology but but I think the exact mix is not 11:25 11 minutes, 25 seconds something which uh we are readily uh kind of disclosing. 11:30 11 minutes, 30 seconds So largely it is a pathology but having a basic uh basic radiology which is sonography and you know x-ray but not 11:37 11 minutes, 37 seconds high-end radiology. So largely it is a pathology business. 11:43 11 minutes, 43 seconds Understood. And what be the margin profile for this asset? 11:48 11 minutes, 48 seconds Uh so we we have not disclosed the Aida margin uh uh uh for as of now. So uh we 11:56 11 minutes, 56 seconds we have disclosed this uh it's about a 6 cr kind of turnover topline. It's a small asset. So large. 12:04 12 minutes, 4 seconds Okay. And does this asset have scope to further grow in that micro market that Dr. L can scale up over there? 12:11 12 minutes, 11 seconds Yeah. So idea is it obviously gives us access to that micro market and you know over a period of time uh you know as we 12:17 12 minutes, 17 seconds deploy uh some of our um our products and marketing uh techniques we we would expect this uh this geography to grow. 12:29 12 minutes, 29 seconds Uh that's helpful. Uh any color on this quarter volume growth it looks better compared to previous quarters? 12:37 12 minutes, 37 seconds Yeah. So this quarter uh volume growth has come at 8.2%. But uh you know even in the last quarter I had mentioned that 12:46 12 minutes, 46 seconds uh you know quarter to quarter even on volume is is not really u a very uh 12:55 12 minutes, 55 seconds uh I would say you know a robust way to look at it. But if you look at the annual uh progression of the patient 13:03 13 minutes, 3 seconds volume growth, you know, we have steadily increased uh over the last 3 years and and we uh feel that you know 13:11 13 minutes, 11 seconds going forward also we should be able to uh inch up further in terms of patient volume growth with our new uh you know 13:19 13 minutes, 19 seconds access points, labs and collection network that we are increasing. You know we should see some increase in that number as well. 13:28 13 minutes, 28 seconds That's cool. I'll get back in the queue. Thank you. 13:33 13 minutes, 33 seconds Thank you. The next question comes from the line of Air Chalk from JM Financial. Please go ahead. 13:41 13 minutes, 41 seconds Yeah, thank you for taking my question and congrats to the NASA good number. 13:45 13 minutes, 45 seconds So, one question I have on the margin side. Uh this quarter we have seen a sharp jump in the other other expenses. 13:52 13 minutes, 52 seconds uh I understand that second half is generally marketing heavy but uh even this uh jump looks much sharper even on 14:00 14 minutes 3Q uh how sustainable it is and if you can also give color on margin uh for 14:06 14 minutes, 6 seconds next year uh in line with that thank you so I mean this quarter uh you know we 14:14 14 minutes, 14 seconds have spent a little bit extra uh as we said uh we are investing in the business uh we have spent 14:22 14 minutes, 22 seconds extra amount on our infra uplifting of infra including Delhi and NCR as well. 14:28 14 minutes, 28 seconds Second is uh we we are spending uh more amount on&p which is you know while we are going or 14:37 14 minutes, 37 seconds uh you know deeper or spreading across other geography. So spending on the&p is also step up. Uh so these are few of the 14:46 14 minutes, 46 seconds expenses where we have done in this quarter. uh while uh for the next year uh as we we are closing uh this year uh 14:55 14 minutes, 55 seconds you know 27.2% even after taking the one-time charge of uh 30 cr on account 15:01 15 minutes, 1 second of new labor code. So we are hopeful uh for next uh you know next year also we are looking something similar margin like between 27 to 28%. 15:15 15 minutes, 15 seconds Sure. So you don't expect margin to expand next year. what uh you're telling 15:22 15 minutes, 22 seconds so uh yeah so that's why I'm saying uh I mean we are uh we are expecting this margin in the range of uh uh 27 28% and 15:32 15 minutes, 32 seconds the reason because we are investing in the business uh be it infra be opening new labs if you see in last two years we 15:40 15 minutes, 40 seconds have added 32 labs uh you know this year also we have added 14 laps and uh we'll 15:46 15 minutes, 46 seconds continue to add few more laps uh uh in next year also. So those investments are going in the business and that's where 15:55 15 minutes, 55 seconds we we are looking to maintain the similar margins. 15:59 15 minutes, 59 seconds Sure. And also I wanted to understand I believe last two quarters we have also given an indication on the price hike 16:06 16 minutes, 6 seconds which we have not taken over last three years. Um any uh thoughts on that? If also if it is going to come, shouldn't 16:14 16 minutes, 14 seconds that also will help you to improve margins in the coming year? 16:20 16 minutes, 20 seconds So uh so the uh price hike we have we have said that you know we have completed three years since we took our 16:27 16 minutes, 27 seconds last price increase. uh but we also said that you know um we will kind of wait and watch especially because we had 16:36 16 minutes, 36 seconds taken a decision to pass on the GST related benefit. So you know a few quarters uh we will wait and watch and 16:44 16 minutes, 44 seconds and see how the market is reacting and you know what position we are in how is the how is our business uh growing how 16:53 16 minutes, 53 seconds is the competitive situation looking like I think basis that uh maybe we'll decide whether we need to take a price 17:00 17 minutes increase or not uh but definitely it if it is there it is a few quarters away it's not something which is immediately 17:08 17 minutes, 8 seconds on the cards and on the margin front uh you know the the overall margin that we 17:14 17 minutes, 14 seconds see 27 to 28% we feel is a quite a healthy margin anything extra that we feel can be generated or if it is 17:22 17 minutes, 22 seconds available for us we will invest back into the business for growth sure sure thank you so much sir I will join back 17:30 17 minutes, 30 seconds thank you thank you next question comes from the line of Anchul Aaral from MK please go 17:38 17 minutes, 38 seconds ahead Hi, thank you for the opportunity. I just wanted to confirm the FI27 revenue guidance that you mentioned sir. Is it early to mid- teens? 17:49 17 minutes, 49 seconds Yeah, early to mid- teens. 17:52 17 minutes, 52 seconds Great. Uh so that that that suggests that the volume growth that we have delivered in the current quarter seems to be sustainable for the entire year. 18:01 18 minutes, 1 second Is there any particular geography or channel which is sort of uh disproportionately contributing to this growth? Uh your thoughts uh and some 18:11 18 minutes, 11 seconds more color on this uh you know I'm guessing we're growing faster than industry here. 18:17 18 minutes, 17 seconds So, so I think uh I would not uh kind of correlate it to a quarter alone because again if I am I'm talking about let's 18:25 18 minutes, 25 seconds say if you look at the annual trajectory and that's a much better way to judge because between quarters there could be 18:32 18 minutes, 32 seconds you know some movements and uh you know seasonality and other impacts which can happen. So best way to look at is the 18:39 18 minutes, 39 seconds annual number. If you look at the annual number, the patient uh volume growth is is at a 5.3%. 18:47 18 minutes, 47 seconds Which is better than 4.2 and uh and you know we have we have given let's say a 12.2% 18:54 18 minutes, 54 seconds uh overall annual revenue growth. Now if we move move up obviously there is a there is some part of it will be through 19:02 19 minutes, 2 seconds the patient volume but we are also seeing you know samples per patient increasing. So the sample volume growth is another factor and you know because 19:11 19 minutes, 11 seconds of geography and test mix we are seeing a revenue per patient also going up. So all of these three will finally 19:18 19 minutes, 18 seconds contribute to the overall revenue delivery. So uh so the 8.2% uh patient volume growth that we see in this 19:26 19 minutes, 26 seconds quarter uh is is something which I wouldn't hastily built into the plan for next year. 19:35 19 minutes, 35 seconds Got it. Clear. uh what I wanted to probably understand uh you know just a follow up on this uh was whether 19:42 19 minutes, 42 seconds realization for patients which have improved as well I understand Vij mentioned that it is because of geographical and test mix uh this is 19:51 19 minutes, 51 seconds despite us increasing contribution from tier three geographies uh how well I'm trying to understand 19:59 19 minutes, 59 seconds again here whether you know tier three geographies are dilutive in nature or accative in nature to our baseline 20:05 20 minutes, 5 seconds realiz izations. Uh yeah, your thoughts on this. 20:09 20 minutes, 9 seconds So I think I think this is a this is a discussion we've been pondering in the last quite a few of these calls and you 20:17 20 minutes, 17 seconds see close to 39% of our revenues is now coming from three or three plus geographies and we have 20:25 20 minutes, 25 seconds uh a realization which is in front of you. So, so uh so obviously it can't uh be dilutive and I think I've tried to 20:34 20 minutes, 34 seconds explain it in the past as well. Uh the way we run our pricing is actually in clusters. So it's not as if I move from 20:40 20 minutes, 40 seconds a from a city like Lucknau to let's say uh a city or a town which is smaller nearby the pricing is going to change. 20:51 20 minutes, 51 seconds So the pricing in that cluster is actually the same. So uh so it isn't as if you know if I'm going to a tier three 20:59 20 minutes, 59 seconds market naturally means that uh pricing is going to be different the cluster pricing remains the same uh and uh and 21:08 21 minutes, 8 seconds and parallelly uh you know um there are uh even when I'm going into the tier 21:15 21 minutes, 15 seconds three tier four towns with more access we we will be able to sell our health packages preventive checkups and all of 21:22 21 minutes, 22 seconds those which even at a revenue uh on a revenue side uh you know is uh or a revenue per patient side is slightly 21:31 21 minutes, 31 seconds higher revenue. So I think there are those factors there. So uh so as of now it has not been dilutive and we don't believe it's going to be dilutive going forward as well. 21:42 21 minutes, 42 seconds Great. Clear. uh could you help me with the capex guidance for FI27 and the B2C contribution B2C revenue share uh in the current year. 21:54 21 minutes, 54 seconds So so Anul for capex I think uh we are planning to be in the range of 100 to 22:01 22 minutes, 1 second 120 cr uh kind of capex for the next year the B2C contribution this year is about 75%. 22:11 22 minutes, 11 seconds Great. So I just if I can squeeze in one more uh VI this capex guidance uh I would suspect uh there are incremental 22:19 22 minutes, 19 seconds capex uh in addition to sort of the lab infrastructure. Uh could you call out whether uh are there any radiology 22:28 22 minutes, 28 seconds projects planned which are built in this capex number? 22:33 22 minutes, 33 seconds Yes. Uh so uh we are uh we are planning to have uh you know uh one or two radiology center. So that that's 22:42 22 minutes, 42 seconds includes in this 100 120 cr is one is maintenance capex obviously another is uh you know we are opening like we open 22:51 22 minutes, 51 seconds 14 labs in this year. So next year also we are looking 12 to 15 labs uh 22:57 22 minutes, 57 seconds uh uh another labs and one uh you know another uh investment we are making in our uh precision uh lab. 23:07 23 minutes, 7 seconds So so those are the additional investment in in addition to maintenance capex. 23:14 23 minutes, 14 seconds Great. Many thanks for all the very best. Thank you. 23:18 23 minutes, 18 seconds Thank you. Your next question comes from the line of Abdul Kadir Puranwalla from ICICI securities. Please go ahead. 23:26 23 minutes, 26 seconds Yeah. Hi sir. Hi. Uh thank you for the opportunity. So my first question is with regards to uh you know uh uh the 23:35 23 minutes, 35 seconds FI27 revenue growth guidance. So if you look uh you know postcoid uh you know our run has been around 10 12% kind of a 23:43 23 minutes, 43 seconds growth and we guiding for you know early to mid teen. So just wanted to understand you know what are the kind of structural tailwinds you are seeing into 23:51 23 minutes, 51 seconds the business and uh and secondly if I look at your FI26 performance it's been you know quite broad-based across 23:59 23 minutes, 59 seconds regions so if you could also highlight you know when we talk about tier three tier four which are these geographies exactly you know contributing uh to the growth. 24:11 24 minutes, 11 seconds So uh uh so you know the uh the confidence behind the early to mid- teens is is driven by the work which has 24:20 24 minutes, 20 seconds been happening in the last uh you know 2 years. I think the the continuous uh you know expansion of of lab infrastructure 24:29 24 minutes, 29 seconds and the collection network if you see over two years we've added close to about 32 labs and almost close to 2,000 24:37 24 minutes, 37 seconds uh collection centers. Now we all know that these infrastructure you know matures with time. So so typically you 24:46 24 minutes, 46 seconds know that that is is what is going to be building up for us. Uh number one. 24:50 24 minutes, 50 seconds Number two, you know, we have a quite a bit of a focus back on on Delhi NCR, you know, which is our stronghold and we've 24:57 24 minutes, 57 seconds been able to sustain the double-digit growth in Delhi NCR and and we believe that even going forward, we'll be able 25:05 25 minutes, 5 seconds to sustain a double-digit growth in Delhi NCR and our uh west region, our suburban uh business in the last quarter 25:14 25 minutes, 14 seconds as we had spoken earlier has started picking up. we are seeing uh you know better growth uh trajectory coming back 25:23 25 minutes, 23 seconds to suburban. So those are the those are really helping us uh you know project a number uh that uh we should be able to 25:32 25 minutes, 32 seconds do um early to mid- teens. So u so that's uh that's uh uh the place you had 25:41 25 minutes, 41 seconds a second part to the question. What was that exactly? 25:44 25 minutes, 44 seconds Yes sir. So second part to the question was uh you know when I look at your FI26 growth to 12%. Uh and you know in the 25:52 25 minutes, 52 seconds PPT when I refer to the revenue split you know across the region it's quite identical uh to what it was in fiscal 26:01 26 minutes, 1 second 25. So you know when we talk about uh the much of the growth coming from tier 2 and tier three cities uh you know how 26:10 26 minutes, 10 seconds does that pan across uh the regions in which we operating? 26:15 26 minutes, 15 seconds So most of our tier tier three plus uh towns are in our uh stronger brand 26:22 26 minutes, 22 seconds markets in north uh and east. Uh uh so that is where you know uh the most of 26:31 26 minutes, 31 seconds them are but but there are there are uh tier three towns that we operate in in 26:38 26 minutes, 38 seconds west and south as well. uh so so all of them are are showing growth and like I said you know some of the metro areas 26:46 26 minutes, 46 seconds like uh you know suburban business is also showing a uh per cup and Delhi NCR 26:54 26 minutes, 54 seconds also uh is doing well for us so it is quite broad- based understood and just one last one if I 27:03 27 minutes, 3 seconds may uh yeah so sir I mean if you could also highlight on the soaka centers you 27:10 27 minutes, 10 seconds know how many centers we have and you know when we talked about next year uh kix guidance uh you know what are we factoring and uh you know what is the 27:19 27 minutes, 19 seconds revenue generate across the centers now soaka we have launched one center which 27:26 27 minutes, 26 seconds is which was launched in January I think it's a it's a new concept uh uh and uh 27:33 27 minutes, 33 seconds and even I think in the last call I think we had highlighted this that you know we would first like to 27:41 27 minutes, 41 seconds stabilize the center before we work out the expansion plan. So immediately in the next financial year we aren't really 27:50 27 minutes, 50 seconds looking at uh more centers which are like SOA but but there are other integrated you know high-end radiology centers that we've opened in Delhi NCR. 28:00 28 minutes So so we may open in Delhi NCR. We may also try and see if uh you know the same model can be can be operated in uh maybe 28:10 28 minutes, 10 seconds a tier 2 town in north. Uh so you know those are some of the things we will try but Svaka is one center and and there is 28:17 28 minutes, 17 seconds no plan to add centers in the next financial year. Next financial is more about building that center up and and we 28:26 28 minutes, 26 seconds you know being very sure about the uh expansion uh uh plan after that. 28:35 28 minutes, 35 seconds very clear sir. Thank you. Thank you. 28:39 28 minutes, 39 seconds Thank you. Your next question comes from the line of Binoiparumpil from Ara Capital. Please go ahead. 28:48 28 minutes, 48 seconds Hi. Um good afternoon. Congrats on a good set of numbers. Um it's a question on the the Middle East war and the raw 28:56 28 minutes, 56 seconds material price inflation. Do these things uh have any impact on our operations in terms of uh availability 29:05 29 minutes, 5 seconds or cost of reagents etc. 29:10 29 minutes, 10 seconds Uh so you know yeah as of now uh no uh because we we are uh you know obviously 29:20 29 minutes, 20 seconds we have ample sufficient inventory for the next 3 4 months and uh we have long-term contracts as well. 29:28 29 minutes, 28 seconds uh having said that uh I I can't comment I mean what happened after 3 4 months if this war continues obviously there will 29:36 29 minutes, 36 seconds be some impact u may come on our uh you know supply chain I mean because we import most of 29:44 29 minutes, 44 seconds our reagents and uh consumables also there are uh linkages with oil and all 29:51 29 minutes, 51 seconds that stuff but as of now we are able to maintain uh but yes in future I I I don't have visibility right now. 30:02 30 minutes, 2 seconds Got it. 30:03 30 minutes, 3 seconds Uh just a couple of bookkeeping questions. One, um this entity have acquired uh does that have just one lab or is it a few labs? 30:14 30 minutes, 14 seconds No, see this shabaskar is one lab. It's a single lab. 30:20 30 minutes, 20 seconds Okay. And uh the tax rate consolidated tax rate for the year is a bit lower than previous years. So this 2122 30:30 30 minutes, 30 seconds you're looking at or will it swing back to 25 tax rate? No, no. Tax rate is similar because uh I as I explained in my 30:38 30 minutes, 38 seconds opening remarks last year we got you know some additional benefit due to uh you know suburban uh uh liquidation and 30:46 30 minutes, 46 seconds that's why 41 cr was the exceptional benefit which was there last year but tax rate are same. 30:55 30 minutes, 55 seconds Um so the current year range will stay for next year as well because the current year is a bit little below 25 to 23 range. 31:04 31 minutes, 4 seconds Yeah. 31:06 31 minutes, 6 seconds Yes it is it is in the same range which is around 25%. Oh thank you. 31:15 31 minutes, 15 seconds Thank you. 31:17 31 minutes, 17 seconds Thank you. Your next question comes from the line of Rajat Balva from Kizuna wealth. Please go ahead. 31:26 31 minutes, 26 seconds Yeah. Hi sir, thank you for giving me the opportunity. So my first question is on the acquisition side which is 31:32 31 minutes, 32 seconds required named Shabasata Benefit Center of 20 K about 3.3 31:40 31 minutes, 40 seconds of 6.11 Kling in Mumbai but given that cloud Mumbai's clouded lab market like Metropolis as 31:50 31 minutes, 50 seconds there are many standalone labs. So what was the competition intensity there and is this a merely two-hole acquisition or 31:58 31 minutes, 58 seconds the first of multiple bolt on Maharashtra? 32:04 32 minutes, 4 seconds So I think like I was explaining to one of the uh questions uh earlier. So 32:11 32 minutes, 11 seconds within Mumbai there is a micro market uh where you know uh we don't have a presence either through the suburban 32:19 32 minutes, 19 seconds brand or through Lalpath labs. So this acquisition kind of fills that gap for us and uh you know every every large 32:28 32 minutes, 28 seconds market has a lot of opportunity and not only is the opportunity because of uh you know uh there will be large labs 32:36 32 minutes, 36 seconds present but there are lot of unorganized labs also in those markets. Plus the overall demand in these these markets 32:45 32 minutes, 45 seconds are also growing. So, so the opportunity for growth is is available in these markets and and we definitely want to 32:52 32 minutes, 52 seconds participate uh and grow our business uh in in Mumbai city as well and that's really the rationale behind the acquisition. 33:03 33 minutes, 3 seconds Great sir and there is any plan on radiology side doing three four year growth plan specifically on radology. 33:12 33 minutes, 12 seconds So our our uh plan is a very slow and calibrated uh as of now on radiology because we are still working on uh you 33:21 33 minutes, 21 seconds know that how we will be able to replicate one center success to more and you know we are we need to work that out 33:29 33 minutes, 29 seconds on a very organic basis. So it will be very slow and calibrated. We have not set any ambitious targets for us on 33:36 33 minutes, 36 seconds radiology growth uh in the next four five year the way you are suggesting. Okay. Great. Thank you. 33:45 33 minutes, 45 seconds Thank you. 33:47 33 minutes, 47 seconds Thank you. Before we take the next question, a reminder to all the participants, you may press star and then one to ask a question. Our next 33:56 33 minutes, 56 seconds question comes from the line of Rishiesh Tulle from Tokai Investors. Please go ahead. 34:03 34 minutes, 3 seconds Hi, good evening. Uh could you please share how uh you are prioritizing your investments in new labs uh versus the 34:10 34 minutes, 10 seconds old uh collection centers and and also uh what kind of uh ROI thresholds and 34:17 34 minutes, 17 seconds the payback periods that you typically look at when you are trying to expand in these. 34:23 34 minutes, 23 seconds So I didn't get your question uh investment in lab versus collection center. 34:30 34 minutes, 30 seconds What was the question? So uh okay let me uh step back uh so how how are you going 34:36 34 minutes, 36 seconds to uh so let's talk about uh capex right uh you talked about how your uh there is maintenance capex and growth capex could 34:44 34 minutes, 44 seconds you please elaborate on your growth capex how you're going to spend it so I think uh we have talked about it so 34:52 34 minutes, 52 seconds there are new uh satellite labs that we are going to open up right then then 34:58 34 minutes, 58 seconds there is uh you know maybe a few uh high-end radiology uh setups that we 35:05 35 minutes, 5 seconds will we will uh we will do plus we have acquired a uh uh you know an asset to set up a 35:14 35 minutes, 14 seconds precision diagnostic lab so that uh you know uh which has kind of high-end 35:22 35 minutes, 22 seconds complex testing and those kind of machines equipments etc will be there. 35:27 35 minutes, 27 seconds So uh all of these are uh part of our part of our uh capex plan for next year. 35:36 35 minutes, 36 seconds All right. Uh great. Uh thank you. Thank you. 35:42 35 minutes, 42 seconds Thank you. Once again to ask a question please press star and one. Our next question comes from the line of Praash Kaparia from Kaparia Financial Services. 35:52 35 minutes, 52 seconds Please go ahead. Yeah. Thanks for the opportunity. 35:58 35 minutes, 58 seconds Congrats to the team. You know after a long time we've seen uh you know growth being broad-based across most of our 36:05 36 minutes, 5 seconds geographies on an annual basis. So the good sign is Delhi NCR has uh really 36:12 36 minutes, 12 seconds done well this year. So that that's good. So if you could give some insights is it you know focusing on existing 36:20 36 minutes, 20 seconds customers some quicker turnaround high-end test what is you know leading to Delhi NCR growth and uh you know if I 36:30 36 minutes, 30 seconds look at the quarter uh growth is finally you know come above 15%. Now channel check suggests you know it is lesser 36:38 36 minutes, 38 seconds competitive intensity across the board. There are you know selective uh price hikes in 36:47 36 minutes, 47 seconds some of the packages which is also you know leading to this growth. So you know you mentioned in your remark shanka you 36:57 36 minutes, 57 seconds are pretty confident of uh you know growth being mine. So you should expect 37:03 37 minutes, 3 seconds higher growth in suburban and you know some of the other geographies which is just started to continue which will give 37:10 37 minutes, 10 seconds us you know steady state 14 15% growth in the coming quarters. Is that the aspiration we are working 37:18 37 minutes, 18 seconds right thank you Prakash for the question. Uh so I think firstly on on Delhi NCR I think it's a it's a lot to 37:26 37 minutes, 26 seconds do with uh maybe all the things that you said because you know we've got a very strong uh brand equity and presence. So 37:34 37 minutes, 34 seconds we have just tried to activate uh all our channels including our own uh own uh 37:42 37 minutes, 42 seconds infrastructure our partners as well as you know improved our service levels. uh I think I had mentioned in one of the 37:49 37 minutes, 49 seconds previous calls we've also added u uh you know a few testing locations in Delhi NCR to improve the turnaround time uh 37:59 37 minutes, 59 seconds and yeah a lot of work is happening on the specialized uh portfolio as well. So you know it's a it's an all round uh 38:07 38 minutes, 7 seconds effort which is uh which is uh carrying on and then we are seeing results and uh 38:13 38 minutes, 13 seconds and and that's how Delhi NCR growth at double digits is getting sustained. Uh going to the other question about 38:22 38 minutes, 22 seconds guidance for next year. Uh uh uh so uh so the so when we say early early to 38:30 38 minutes, 30 seconds mid- teens I'm talking of a range what could be between 13 to 15 and uh and basically you know uh annually we have 38:39 38 minutes, 39 seconds already seen that we've been able to deliver 12 uh 12.2 two two and one quarter one quarter which is uh 38:47 38 minutes, 47 seconds which is quite good the last quarter but like I said one quarter is not the way we we kind of judge the business uh but like you know there are 38:56 38 minutes, 56 seconds a few things which are which are working for us uh so our our uh lab and network 39:03 39 minutes, 3 seconds expansion that we have been able to deliver you know that's going to accumulate uh each year as we move 39:10 39 minutes, 10 seconds forward you know that cumulative benefit will will uh will flow through uh Delhi NCR growth is sustained and uh and we 39:19 39 minutes, 19 seconds also are seeing uh suburban uh business uh now picking up in terms of in terms of growth rates. So uh so all of these 39:29 39 minutes, 29 seconds are are going to be uh contributing and and helping us uh you know uh add uh few percentage points to our growth rate. 39:39 39 minutes, 39 seconds Great. and and suburban any sense if you could give uh is it going to be packaged driven is it going to be individual 39:47 39 minutes, 47 seconds tdriven and you know when we talk of the overall 28% revenue coming from packages is suburban also included in this or it 39:56 39 minutes, 56 seconds is just the source width of Dr. parallel which comes under this in terms of the contributions. 40:02 40 minutes, 2 seconds No, no, even suburban packages are included in that. 40:06 40 minutes, 6 seconds Okay. Okay. So, suburban also has you know some of these packages and and that's a decent portion of suburban revenues. Is that right understanding? 40:16 40 minutes, 16 seconds Yeah, it is uh it is a decent portion of suburban revenues as well. 40:21 40 minutes, 21 seconds Okay. Okay. Fine. Thank you. All the best. I'll join back if I have more questions. Thank you, sir. Thank you. Thank you. 40:29 40 minutes, 29 seconds Thank you. Your next question comes from the line of Anik from Smiths. Please go ahead. 40:41 40 minutes, 41 seconds An your line is unmuted. Please proceed with your question. 40:46 40 minutes, 46 seconds Yeah, thank you the opportunity. I guess in starting you mentioned the acquisition cost of Shabaskar. So can you please repeat that? 40:55 40 minutes, 55 seconds What of shabaska to the operation? Okay. 41:00 41 minutes So total uh deal size is about 20 CR um for this this asset. 41:09 41 minutes, 9 seconds Okay. And what would be the capex for overall capex for f 27 and 28? 41:17 41 minutes, 17 seconds So as I said uh 100 to 120 cr for next year. Okay. Okay. Yes, that's it. 41:26 41 minutes, 26 seconds Thank you. Thank you. 41:30 41 minutes, 30 seconds Our next question comes from the line of Rashi Modi from RDM Advisory LLP. Please go ahead. 41:37 41 minutes, 37 seconds Hi Shanka. Can you hear me? Yes, please. 41:41 41 minutes, 41 seconds Yeah, I just uh wanted to get your understanding on suburban. You mentioned that the last part of the growth contributor has been suburban. I 41:49 41 minutes, 49 seconds understand one would be that operations normalized after that software update that you all were talking about. U so 41:57 41 minutes, 57 seconds there would be a portion of lost revenue which has turned normal but beyond that also 42:04 42 minutes, 4 seconds is there uh growth which has come from either market share gains or like what has led to that if there is 42:13 42 minutes, 13 seconds [clears throat] significant growth from that piece as well. 42:17 42 minutes, 17 seconds Yeah. So I I don't think I mentioned it's a significant growth uh from suburban. I think what I saying is that 42:25 42 minutes, 25 seconds the growth has been very broad-based and uh and which includes you know uh 42:32 42 minutes, 32 seconds suburban business had not been really doing very well for one or two you know about three odd quarters. So I think 42:40 42 minutes, 40 seconds that's uh something which we are now seeing in the last quarter uh coming back and therefore you know that 42:47 42 minutes, 47 seconds momentum we will be able to carry forward into our next year uh uh you know business as well. 42:56 42 minutes, 56 seconds All right. So could you just help me with the numbers for suburban revenue like this quarter versus Q3 and say last 43:03 43 minutes, 3 seconds year Q4 so I just get an idea of what runway to expect for FY27 on suburban. 43:11 43 minutes, 11 seconds So Vishi we are not uh now reporting separately these numbers these are our part of our west uh number which has 43:19 43 minutes, 19 seconds been given uh in the split geographical plate because now suburban is no more a separate entity it is merged with main 43:28 43 minutes, 28 seconds parent company okay all right I'll pick it up from the western region numbers 43:35 43 minutes, 35 seconds all right thank you thank you next question comes from the line of Rahul Salvi from Franklin Templeton. Please go ahead. 43:45 43 minutes, 45 seconds Yeah, thanks for the opportunity. Uh I had a question on uh improvement in volumes if any uh are we seeing because 43:54 43 minutes, 54 seconds of say the GLP1 launch in the last 40 days. So is there any patient volume acuation happening on that front and 44:03 44 minutes, 3 seconds which are the tests basically which are which these patients are choosing any insights on that will be helpful. 44:10 44 minutes, 10 seconds So the uh so the patient volume growth to a certain extent u is also a factor 44:18 44 minutes, 18 seconds of the improved uh collection network and the lab network uh that has been put 44:25 44 minutes, 25 seconds into place. It is definitely not driven uh through GLP and uh uh and like I said 44:33 44 minutes, 33 seconds that you know this is just one quarter uh performance because there are sometimes you know the base numbers can 44:42 44 minutes, 42 seconds be slightly different in different quarters. So the best way to look at the patient uh volume growth is uh at an 44:50 44 minutes, 50 seconds analyze level. So which is better than last year and and we believe that uh you 44:57 44 minutes, 57 seconds know going forward um we should be able to do slightly better on the patient volume number as well in the next financial year. 45:06 45 minutes, 6 seconds But as I understand you will not attribute the FI27 growth even to a slightest extent to patients uh who are 45:14 45 minutes, 14 seconds opting say for GLP and the doctors prescribing them those test right. So I 45:21 45 minutes, 21 seconds would not ascribe any differential impact due to due to GLP. 45:28 45 minutes, 28 seconds Thank you. That is helpful. 45:32 45 minutes, 32 seconds Thank you. Your next question comes from the line of Gor of T from Ambit. Please go ahead. 45:41 45 minutes, 41 seconds Yeah. Hi, good evening and thank you. Uh so question is on the incorporation of the subsidiary in uh Dubai UAE. 45:51 45 minutes, 51 seconds So uh can you share what are your plans from a you know build out business buildout in these geographies and what 46:00 46 minutes you know percentage of capital or capex of 120 kil penny is allocated to this geography as well in FI27. 46:09 46 minutes, 9 seconds Yeah uh thanks Koro for asking this. I mean uh this is in line with our you know as I mentioned in on the last call 46:17 46 minutes, 17 seconds as well that uh we are making end road to our international expansion. It's not something immediate but uh over a period 46:24 46 minutes, 24 seconds of let's next three to two years uh 3 to five years we we are looking to expand 46:31 46 minutes, 31 seconds few of the geography right now we have on ground presence in Nepal and Bangladesh but we are looking some of 46:39 46 minutes, 39 seconds the geography or new geography on ground operations including Middle East and this is uh this incorporation is line 46:48 46 minutes, 48 seconds with uh in line with that uh expansion So uh no thank you for that. So uh would 46:57 46 minutes, 57 seconds would you know the strategy be open to you know you have you know significant cash from balance sheet would uh you 47:05 47 minutes, 5 seconds know inorganic opportunities be also explored in you know uh the Middle East or Dubai UAE markets over the next you 47:13 47 minutes, 13 seconds know two to three years. Would you be open to that? 47:18 47 minutes, 18 seconds So, so right now I think the uh the idea is to incorporate uh a holding company 47:24 47 minutes, 24 seconds kind of or a company in uh uh in Dubai which can also maybe operate as a holding company for the region. Now uh 47:33 47 minutes, 33 seconds you know in terms of our expansion plan uh M&A opportunity can also be evaluated 47:40 47 minutes, 40 seconds that is always on the cards but uh uh yeah I think both organic and inorganic can be looked at. 47:50 47 minutes, 50 seconds Got it. Got it. Uh some accounting questions. So I think uh 47:58 47 minutes, 58 seconds I think uh we you have kind of you know uh reallocated some costs from I think 48:05 48 minutes, 5 seconds to collection centers or employee to other expenses this quarter. So uh what was the primary reason for that? 48:14 48 minutes, 14 seconds So, so this uh this cost was in the nature of you know uh career and transportation cost which was uh grouped 48:22 48 minutes, 22 seconds under employee benefit which has been re uh regrouped as per the nature of the expenses. So this is the cost uh which 48:31 48 minutes, 31 seconds has been uh regrouped from employee benefit to other expenses. 48:36 48 minutes, 36 seconds So if you look at the reclassified employee expense you know for OQ we're seeing a jump of almost 19%. 48:45 48 minutes, 45 seconds Is that you know some part allocated to you know the revision in the labor code and you know restructuring of you know the uh compensation structures. 48:57 48 minutes, 57 seconds Yeah. So regrouping is nothing to do with this uh new labor code. But having said that uh as I mentioned 30 cr is the 49:05 49 minutes, 5 seconds additional cost which is reflected in this year uh on account of new labor code that was in Q3. If I just look at 49:14 49 minutes, 14 seconds employee expenses in Q4 this year which was you know close to 129 crores versus 108 crores in Q4 last year. So that's almost a growth of 19%. 49:26 49 minutes, 26 seconds So this is uh because uh you know as we mentioned that we have added intra which is 14 labs and this is more uh towards 49:35 49 minutes, 35 seconds the you know end of I mean Q3 and Q4 mostly and plus we have uh started 49:42 49 minutes, 42 seconds operations in Swaka. So those are the you know expenses which is uh also factored in here in Q4. 49:51 49 minutes, 51 seconds Sure. Sorry, last question you know just a previous uh you know uh uh colleague 49:58 49 minutes, 58 seconds or peer had also asked this. So this quarter you know tax expense or tax rate is closer to 17%. 50:06 50 minutes, 6 seconds So uh uh any any benefit that we realize this quarter on the effective tax rate. 50:14 50 minutes, 14 seconds So there is a reversal of deferred tax uh in this quarter on account of uh you 50:21 50 minutes, 21 seconds know uh on account of some uh income tax assessment has been done which which has been uh uh you know we got the refund 50:30 50 minutes, 30 seconds and accordingly we have reversed but as I mentioned tax rate is uh same which is which is around 25% uh nothing changing. 50:41 50 minutes, 41 seconds No thank you all the best. I'll run back to you. Thank you. Your next question comes from the 50:48 50 minutes, 48 seconds line of Hai Patil from Ask Investment Managers. Please go ahead. 50:53 50 minutes, 53 seconds Hi sir. Uh congratulations on the good set of numbers. So my first question is around uh the ongoing transition of uh 51:01 51 minutes, 1 second suburban connection centers from inhouse to a franchise model. So to what extent has uh that been completed and secondly 51:10 51 minutes, 10 seconds uh in terms of the epic margin profile of uh suburban I think the last quoted figure was somewhere around the high teens range. So has that uh kind of uh 51:20 51 minutes, 20 seconds you know is that kind of improving towards the upward trajectory and kind of reaching the company level margins or is there further scope of uh improvement there? 51:30 51 minutes, 30 seconds So on the uh collection network now I think the transitions that uh were to be made have mostly been done. So now the 51:39 51 minutes, 39 seconds suburban expansion is also happening uh mostly through a franchised uh setup. 51:47 51 minutes, 47 seconds However there will be certain geographies where there will be company owned collection network also that we will consider. uh but primarily that 51:56 51 minutes, 56 seconds whole transition uh uh towards having more centers to franchises is is already 52:04 52 minutes, 4 seconds kind of underway and mostly done. Uh so so that's one I think on the uh margin 52:11 52 minutes, 11 seconds maybe V can answer. Uh so on margin as I mentioned uh we are not uh you know tracking separately as uh you know 52:20 52 minutes, 20 seconds because this is no uh no more separate entity um but uh you know margins obviously for different geography 52:29 52 minutes, 29 seconds different margin structure u even uh let's suppose uh west as a whole if we compare Delhi NCR versus west obviously 52:38 52 minutes, 38 seconds margins are different but in spite of that we are looking margins on overall basis as a company is is in between of 52:47 52 minutes, 47 seconds uh you know whatever 27 to 28% margin understood sir so just a small clarification there so I mean why you 52:56 52 minutes, 56 seconds may not disclose this specific uh you know number there but uh the margin that you kind of have on the west uh 53:02 53 minutes, 2 seconds geography has suburban reached up to that scale or is there further scope for improvement if you could just add on that no so as I said I mean 53:12 53 minutes, 12 seconds you know margins for west including suburban uh there are still rooms to improve because uh obviously it's not a 53:20 53 minutes, 20 seconds one-time activity it's a ongoing where we continuously you know have some levers where we can optimize our cost 53:29 53 minutes, 29 seconds and uh that's why improvement in margins uh for few geographies are possible 53:37 53 minutes, 37 seconds understood sir thank you and all the best thank you thank Thank you. As there are no further 53:44 53 minutes, 44 seconds questions, I now hand the conference over to the management for closing comments. 53:51 53 minutes, 51 seconds Uh thank you all for your participation today and for your continued trust in our vision. We trust we have addressed 53:59 53 minutes, 59 seconds all your questions comprehensively. If you have if you require further clarification or have additional 54:05 54 minutes, 5 seconds queries, please do not hesitate to reach out to us. We look forward to engaging with you again next quarter. Thank you once again and have a good evening. 54:16 54 minutes, 16 seconds Thank you. Thank you on behalf of Dr. Lal Patlaps. 54:23 54 minutes, 23 seconds That concludes this conference. Thank you for everyone for joining us and you may now disconnect your lines. Thank you.