Vijaya Diagnostic Centre Limited — Q3 FY26

Vijaya Diagnostic Centre Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=J9NS248C0cU Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to Vijaya Diagnostic Q3 FI26 Earnings Conference call hosted by GM 0:08 8 seconds Financial Institutional Securities Limited. As a reminder, all participants line will be in the listenon mode and there will be an opportunity for you to 0:16 16 seconds ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then 0:24 24 seconds zero on your Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Air Chalk from JM Financial. 0:34 34 seconds Thank you and over to you sir. 0:37 37 seconds Thank you. Uh good evening everyone. I'm Air Chalk and on and on behalf of JM Financial I would like to extend a warm 0:44 44 seconds welcome to all of you to the third quarter FY26 earning call of Vijay Diagnostic Center. At the outset, I 0:52 52 seconds would like to thank the management of Vijay Diagnostic for giving us opportunity to host the call. We look forward to having an engaging and insightful discussion on the company's 1:00 1 minute quarterly performance and outlook. From the company, we have with us today Miss Supria Reddi, managing director and chief executive officer, Mr. Ankit Sha, 1:09 1 minute, 9 seconds Chief Financial Officer, Mr. Shivara Maraju, Chief Operating Officer, and Mr. 1:15 1 minute, 15 seconds Dhin Gala, Assistant General Manager, Strategy and Investor relations. With that, I will now hand over the call to the management for their opening remarks. Over to you, ma'am. 1:25 1 minute, 25 seconds Thank you for hosting the call. Good evening and thank you all for joining us on the call today. Firstly, I'm happy to share that we have delivered our highest 1:34 1 minute, 34 seconds ever quarterly revenue of 205 crores in Q3 FI26 reflecting strong execution across the 1:41 1 minute, 41 seconds organization. I would like to congratulate the entire team for delivering robust performance across both the top line and bottom line. 1:50 1 minute, 50 seconds Before I move to a detailed business update, I would like to welcome Mr. 1:54 1 minute, 54 seconds Ankit Sha who has joined us as our chief financial officer. Ankit brings over 20 years of experience in finance including 2:02 2 minutes, 2 seconds more than a decade in the healthcare sector along with a proven track record of leadership. We are confident that his 2:10 2 minutes, 10 seconds expertise will strengthen our financial governance, improve operational efficiency, support M&A initiatives and 2:17 2 minutes, 17 seconds contribute to a sustainable long-term value creation. I'm also very happy to welcome Shiva back as a chief operating 2:24 2 minutes, 24 seconds officer of the company. I don't think he needs any introduction as you all know him very well. We wish him success in this new role. I would also like to 2:33 2 minutes, 33 seconds welcome Mr. Sai Prasad as our new chief technology officer and also Dr. B. Kiran as our lab director. In addition, we 2:42 2 minutes, 42 seconds have strengthened our clinical and corporate functions with key key strategic hires and will continue to 2:49 2 minutes, 49 seconds invest in talent as we believe that building the right leadership and capabilities is critical to our 2:56 2 minutes, 56 seconds sustained success. With these additions, I'm confident that the team will be instrumental in driving our next phase 3:03 3 minutes, 3 seconds of growth. Moving to the business updates, I'm pleased to start on a very pos positive note as we have delivered a 3:10 3 minutes, 10 seconds robust year-on-year revenue growth of approximately 21.4% supported by volume growth of nearly 15% in Q3 FI26. 3:22 3 minutes, 22 seconds Revenues also surpassed Q2 in absolute terms which is notable again that Q3 is typically impacted by festive and 3:32 3 minutes, 32 seconds seasonal softness. This performance underscores the resonance of our integrated business model with a very 3:39 3 minutes, 39 seconds balanced growth across both radiology and pathology. 3:43 3 minutes, 43 seconds Radiology bene benefited from the strong execution driven by our hub expansions over the past few years and the strong 3:51 3 minutes, 51 seconds reception of the Vichya brand in new geographies. Pathology growth was primarily led by the wellness segment 3:59 3 minutes, 59 seconds fueled by rising demand for both preventive health services, favorable seasonality and the ongoing network 4:06 4 minutes, 6 seconds expansion. Turning to PH, we delivered a year-on-year growth of approximately 8%, primarily driven by network expansion. 4:16 4 minutes, 16 seconds Our two new hubs are ramping up steadily and are on track to reach break even within one year in line with our 4:23 4 minutes, 23 seconds guidance. During the quarter, we further expanded our network with the successful commissioning of two new hub centers in 4:30 4 minutes, 30 seconds Fulburn and Diamond Harbor, bringing our West Bengal hub footprint to seven. We also commissioned two new hubs in our 4:38 4 minutes, 38 seconds core markets of Kam and Nandal reinforcing Vijaya's commitment to making worldclass diagnostic services 4:45 4 minutes, 45 seconds more accessible. I'm very pleased to share that two hubs launched in Q1 FI26 in West Bengal. Krishna Naga and Barasad 4:54 4 minutes, 54 seconds have achieved break even within just three quarters ahead of the expected one-year timeline. This highlights the strong demand for quality integrated diagnostic services in the region. 5:06 5 minutes, 6 seconds Looking ahead, a key focus areas will be stabilizing the newly launched hubs, commissioning multiple spokes across our 5:14 5 minutes, 14 seconds network, continuing to invest in the latest technology to enhance the customer experience and strengthening our brand presence in these new 5:22 5 minutes, 22 seconds geographies. With that, I will now hand over to Ankit to walk you through the operationalist and the financial highlights. Thank you. 5:35 5 minutes, 35 seconds Good evening. Good evening everyone and a very warm welcome to everyone joining us on the call today. Thank you ma'am for the warm welcome. I'm delighted to 5:43 5 minutes, 43 seconds be joining the organization at a time when the company has delivered such strong performance and build strong momentum. The timing presents a great 5:51 5 minutes, 51 seconds opportunity to build on this success, further strengthen our financial foundation and support the next phase of sustainable growth alongside the 5:58 5 minutes, 58 seconds leadership team. I will quickly take you through the financial performance and key developments for the current quarter and 9 months ended December 31st, 2025. 6:08 6 minutes, 8 seconds The consolidated revenue for the current quarter stood at INR 205 crores reflecting a strong revenue growth rate 6:15 6 minutes, 15 seconds of 21.4% 4% YI and with strong revenue growth just like previous quarter was 6:22 6 minutes, 22 seconds driven by test volume growth of 14.7% YI balance growth of 6.7% was largely on 6:29 6 minutes, 29 seconds account of change in the test mix coming to the geography wise revenue contribution for the quarter Hyderabad 6:37 6 minutes, 37 seconds contributed 68% rest of AP Telangana contributed 19% Pune 6% West Bengal 3% 6:45 6 minutes, 45 seconds and rest of The geographies contributed 4%. Like the previous quarters, the revenue growth has been driven by both radiology and pathology segments, 6:53 6 minutes, 53 seconds reflecting the robustness of a B2C focused integrated business model. The B2C revenue stood healthy at 92%, our 7:02 7 minutes, 2 seconds radiology business stood at 37%. The revenue per test and revenue per footfall stood at INR 487 and INR 1756 respectively during the current quarter. 7:14 7 minutes, 14 seconds AITA for the current quarter stood at INR 86 crores as compared to INR 67 crores in the corresponding quarter in 7:22 7 minutes, 22 seconds the previous year reflecting a Y growth rate of 28.2%. 7:27 7 minutes, 27 seconds The AITA grow the AITAR margin stood healthy at 41.9% in the current quarter with the improvement of 221 basis 7:34 7 minutes, 34 seconds points. Y the profit after tax for the current quarter stood at INR 43 crores reflecting a strong growth of 22.3% and 7:43 7 minutes, 43 seconds PAT margin also stood healthy at 21%. I will now summarize our performance for the 9 months ended December 2025. The 7:52 7 minutes, 52 seconds consolidated revenue for the current 9 months period stood at INR 595 crores as against 508 crores in the corresponding 8:00 8 minutes previous year reflecting a YI growth of 17.1%. 8:04 8 minutes, 4 seconds The AITA stood at INR 241 crores as against 204 crores in the 9 months of the previous year registering a YI growth of 18.1%. 8:14 8 minutes, 14 seconds Abita margin stood healthy at 40.6% 6% and profit after tax was at INR 125 8:21 8 minutes, 21 seconds crores with a margin of 21%. Coming to the update on capital investment in the current period, we have largely utilized 8:29 8 minutes, 29 seconds a capex uh plan for FI26 with the overall capex outlay of INR 159 crores till date inclusive of the replacement 8:38 8 minutes, 38 seconds capex. for FI27 the cap capex outlay for the new centers C is estimated to be INR 8:45 8 minutes, 45 seconds 100 to 120 crores that's all from my side I would now request the moderator to open the line for the Q&A session thank you 8:53 8 minutes, 53 seconds thank you very much we will now begin the question and answer session anyone who wishes to ask a question may press star and one on the touchstone telephone 9:02 9 minutes, 2 seconds if you wish to remove yourself from the question queue you may press star and two participants are requested to use handsets while asking asking a question. 9:10 9 minutes, 10 seconds Ladies and gentlemen, we'll wait for a moment while the question Q assembles 9:23 9 minutes, 23 seconds to ask a question. Please press star and one. Now the first question is from the line of 9:31 9 minutes, 31 seconds Anil Agraal from MK Global. Please go ahead. 9:35 9 minutes, 35 seconds Hi, thank you for the opportunity and many congratulations on the strong quarter. Uh first question is on the 9:42 9 minutes, 42 seconds Hyderabad region. Uh like you I think ma'am alluded that PH or Pune region has grown by 8%. Uh could you quantify the 9:51 9 minutes, 51 seconds growth in the Hyderabad market on a Y basis? 9:56 9 minutes, 56 seconds until the growth in the Hyderabad market was uh close to 15% on YI basis and this 10:03 10 minutes, 3 seconds was equal across pathology and radiology. 10:07 10 minutes, 7 seconds Got it. Uh and if I'm not mistaken, we've not added any hub centers in Hyderabad uh in the current or in the 10:16 10 minutes, 16 seconds last two or three quarters. Uh so this is purely organic uh as in uh like for like growth uh in the region. 10:25 10 minutes, 25 seconds Yes, from the existing capacity. This is from the existing capacity. 10:30 10 minutes, 30 seconds Would you be able to allude uh as to what has caused this strong growth in the core region? 10:36 10 minutes, 36 seconds I think uh you know during this quarter the season has been favorable uh you know for us on the pathology side in specific you know and what we have seen 10:46 10 minutes, 46 seconds is you know whenever the season is favorable uh Vijaya not only outpaces the industry growth but also incrementally gains market share from 10:55 10 minutes, 55 seconds the competitors also there was a spillover which we saw from Q2 to Q3 because of extended monsoon season and 11:02 11 minutes, 2 seconds also we did benefit from prefestive you know season this time around. So all these factors have led to a strong 11:10 11 minutes, 10 seconds growth of 15% especially in the Hyderabad region and overall as well. Uh in fact uh you know that is one of the 11:17 11 minutes, 17 seconds reason why we say you know healthcare being seasonal it is always uh uh I would I would say better to look at at a 11:24 11 minutes, 24 seconds full year level rather than seeing quarteron quarter. So we had a very good Q1 slightly softer Q2 and then uh you know a very good Q3. 11:33 11 minutes, 33 seconds Sure. So uh the growth on a 9-mon basis for the Hyderabad region would also be somewhere around mid- teens. 11:40 11 minutes, 40 seconds Yes. Yes. Yes. 11:43 11 minutes, 43 seconds Okay. Okay. Clear. Uh second question was on our hub expansion plans for H1 or 11:50 11 minutes, 50 seconds or rather full year FI27. Uh while I understand you guys have presented uh only for the half year period. uh would 11:58 11 minutes, 58 seconds it be possible to share your thoughts around what could be uh the steady state of hub expansion uh over the next two to 12:07 12 minutes, 7 seconds three years? What I'm trying to understand is we have we have opened uh two new geographies in the last year uh 12:15 12 minutes, 15 seconds you know counting Bangalore and probably revamping the Pune cluster. uh would we look at more spoke additions in the next 12:23 12 minutes, 23 seconds 2 years or would it be sort of balanced? 12:28 12 minutes, 28 seconds So FI27 per se you'll be seeing about four to five hubs and uh about 10 to 12 spokes. Uh but if I take FI 28 and 29 I 12:37 12 minutes, 37 seconds think you'll see an optimal mix of spokes and hubs because like you rightly said we added three new geographies Bangalore, Pune and Kolkata. At the same 12:44 12 minutes, 44 seconds time you know uh in by FI28 what also will happen is the existing hubs will stabilize by then we'll be adding few 12:52 12 minutes, 52 seconds spokes and then we will take on the next uh set of hubs. So FI27 it will be more of spokes in FI28 and 29 you'll see an optimal mix of both hubs and spokes. 13:05 13 minutes, 5 seconds Got it. uh and again uh if I understand this correctly spokes would would largely be uh sort of margin accurative 13:15 13 minutes, 15 seconds within two quarters time etc. Even in the non-core region, yeah, it'll take two to three quarters. 13:21 13 minutes, 21 seconds So the break even may happen within two quarters. The margin the positive aida uh you know will uh the spokes will contribute to the positive maybe in the third or fourth quarter. 13:31 13 minutes, 31 seconds Got it. And and any uh any color on what could be the peak revenue potential from a spoke uh again ballpark number uh even 13:40 13 minutes, 40 seconds in the non-core region would it be very similar to a spoke center in Hyderabad? 13:46 13 minutes, 46 seconds uh it'll be in the range of you know in Hyderabad we have spokes ranging from you know one and a half cr to even six and a half crores but then if you see in 13:54 13 minutes, 54 seconds this new regions what we expect is you know these folks will contribute anything between one and a half to two and a half crores of revenue at at maturity 14:03 14 minutes, 3 seconds and maturity would be after 12 months uh about one and a half year 18 months 18 to 24 months 14:11 14 minutes, 11 seconds 18 to 24 months a great just one last booking question maybe I might missed it in the opening remarks. Uh what would be the net cash position as on December? 14:21 14 minutes, 21 seconds The net surplus cash as at 31st December is 260 crores. The total cash is around 305 crores. But we always exclude you 14:29 14 minutes, 29 seconds know deferred capital credit balance. So the surplus cash is around 260 crores as of 31st December. 14:37 14 minutes, 37 seconds Great. Many thanks and all the very best for the coming quarters. Thank you. Thanks. 14:45 14 minutes, 45 seconds Thank you. Anyone who wishes to ask a question may press star and one at this time. 14:52 14 minutes, 52 seconds The next question is from the line of Amed Al from JM Financial. Please go ahead. 15:07 15 minutes, 7 seconds You can go ahead. Yeah. Am I audible now? Yes, you are. 15:15 15 minutes, 15 seconds Yeah. Yeah. Yeah. So, uh the first question I have is basically uh uh we have added several hubs uh during this 15:23 15 minutes, 23 seconds year and uh still in terms of margins, we have been able to expand margins really well. We have delivered something 15:30 15 minutes, 30 seconds like 42% margin. Even for 9 months, the margins looks good. So uh uh like uh 15:37 15 minutes, 37 seconds going ahead like what stops us uh from adding more hubs if there is no impact at such of expansion uh in terms of our 15:46 15 minutes, 46 seconds margin performance or we don't have any uh uh restrictions or basically uh the constraint on the capital side then what 15:55 15 minutes, 55 seconds stops us from adding more hubs going ahead so a expansion plan uh if you see 16:03 16 minutes, 3 seconds internal ally you know we are not saying that we'll add only four or five hubs because of the margins uh it is more about you right last two three years 16:11 16 minutes, 11 seconds there's good capex cycle that we have done we've had multiple hubs across regions right so it is more in terms of 16:18 16 minutes, 18 seconds you know the ground level operational challenges and also sometimes we have to uh give the hubs to stabilize before we take on few more hubs right and we keep 16:26 16 minutes, 26 seconds adding the team locally so that uh you know like if you take Pune right so we have acquired an asset and then we added two hubs and spokes. We have to give 16:35 16 minutes, 35 seconds that geography some time for these centers to stabilize and we also on the ground have to stabilize the operations add more and more bandwidth and they 16:43 16 minutes, 43 seconds then take on the next round of uh uh you know growth. The similar concept you know if you see it worked well for us in Hyderabad right there was a phase when 16:51 16 minutes, 51 seconds we added hubs then two three years of spokes and then again we have taken the next set of hubs it's not uh you know the decision making is not on the 17:00 17 minutes margins it is more on the you know operational and uh you know addition of bandwidth and stabilizing things on the ground 17:08 17 minutes, 8 seconds sure got it and the second question I have uh like for uh this quarter has been good but even for 9 month our volume growth has been around 13% %. So 17:17 17 minutes, 17 seconds is it possible to give how the distribution is in the core and non-core markets for volumes? 17:24 17 minutes, 24 seconds In the core markets uh it has been close to you know 10%. 17:29 17 minutes, 29 seconds 10 10 to 11% and uh in the non-core it has been close to 2 to 3%. 17:35 17 minutes, 35 seconds Sure. And for uh even for mature subs are we seeing a good amount of volume increase in core markets? 17:44 17 minutes, 44 seconds So few of these hubs uh which have hit the capacity right we see anything between 2 to 4% of volume growth but at 17:52 17 minutes, 52 seconds the same time in Hyderabad even in few of the mature assets we're seeing about you know 10 to 12% of volume growth so that is the reason still you know 17:59 17 minutes, 59 seconds Hyderabad as a cluster is growing at 15% for the last uh few quarters 18:06 18 minutes, 6 seconds sure and uh last question I have on the GLP1 uh what plans do we have for the like because from March onwards we 18:14 18 minutes, 14 seconds should cease GLP uh uh generic launches to start happening and the other basically the innovator products are already there in the market. Uh uh have 18:23 18 minutes, 23 seconds we come up with some uh uh plans for the GLP1 opportunity and how do you see it impacting uh volumes as well as revenue per test going ahead? Thank you. 18:34 18 minutes, 34 seconds So uh I may to be very transparent. So as of now we are not seeing much of enquiries but we have all the tests that are required you know uh which will be 18:42 18 minutes, 42 seconds part of this package. They are more routine in nature right. Uh so I think uh maybe in next one or two months like you said once the demand picks up uh you 18:50 18 minutes, 50 seconds know we'll also be ready with our own package. Maybe we'll be able to uh share more information by the next earnings call. 18:58 18 minutes, 58 seconds Sure. Sure. Thank you. I will join back. Thank you. 19:02 19 minutes, 2 seconds Thank you. The next question is from the line of Abin Beni from Jame Financial. Please go ahead. 19:10 19 minutes, 10 seconds Hi, thank you for the opportunity. Uh I'm audible. Yes. Yes. Yes. 19:15 19 minutes, 15 seconds Hi. Uh so my questions are mostly more towards the cluster wise uh performance. 19:21 19 minutes, 21 seconds So uh or to the rather the newer ones uh that we have added. So uh to the Kolkata one uh West Bengal the new ones that we 19:28 19 minutes, 28 seconds added have already broken even within much before the timeline that was anticipated. So any color on uh the 19:36 19 minutes, 36 seconds overall uh like trend that we are going to be looking here because uh the break even has been happening much uh before 19:44 19 minutes, 44 seconds than anticipated last time it happened in Bangalore also. So what is the change in uh outlook on this uh specifically 19:52 19 minutes, 52 seconds for West Bengal and coming to Bangalore uh of the asset that broke even last quarter uh how is that ramping up? 20:01 20 minutes, 1 second So there's no strategy change in this uh because we would still say that we would give it about 12 to 14 months in any 20:10 20 minutes, 10 seconds geography outside of Hyderabad. It's uh probably I think like I said and congratulated the team they've been 20:17 20 minutes, 17 seconds working an extra mile and these centers for Bangalore and Kolkata have broke even in the third quarter it says but 20:24 20 minutes, 24 seconds does that does not probably lay ground to say that we would be able to replicate that across any new geography 20:30 20 minutes, 30 seconds that we open a new hub in uh like I mentioned Kolkata also opened two more centers right now increasing the 20:38 20 minutes, 38 seconds footprint to seven we will have to wait it out and I would still say we would be confident about the 12 to 14 month 20:45 20 minutes, 45 seconds timeline in any geography outside of Hyderabad and when it comes to Bangalore both the centers are ramping up well and 20:53 20 minutes, 53 seconds uh in fact that's a region where we would like to add a few more spokes and hubs also and I'll probably be able to give you a little more light in the next 21:01 21 minutes, 1 second call but they're doing extremely well both the centers so ma'am uh ma'am also in Bangalore are we like nearer to Bangalore are there 21:09 21 minutes, 9 seconds any tier two or tier three new markets it's underpenetrated that we might be looking at any expansion plans in that uh Karnataka market. 21:17 21 minutes, 17 seconds There are a lot of markets but at the moment our concentration is going to be on the city itself and there's a lot of 21:24 21 minutes, 24 seconds room for us to actually open up hubs and join the dots to be able to open up the spokes in your 2829. So the focus is 21:32 21 minutes, 32 seconds going to be opening more hubs in Bangalore and a few spokes going along with that. that will give us room to 21:38 21 minutes, 38 seconds grow further at probably a faster pace in 2829. So you'll see the city being covered first the priority is not on 21:47 21 minutes, 47 seconds tier 2 tier three in Karnataka as of right at immediately. 21:52 21 minutes, 52 seconds Sure ma'am. Uh coming to Pune ma'am. Uh what is like right now it's growing at the PH is growing at 8% Y. So any color 22:01 22 minutes, 1 second on uh apart from network expansion about the other drivers in terms of demand or uh pricing any uh growth levels that 22:10 22 minutes, 10 seconds might be coming into picture that can lead uh to an incremental growth here. 22:15 22 minutes, 15 seconds So both these centers after we've acquired the center the new two new hubs that we've opened those are ramping up well. We're seeing a growth there. 22:22 22 minutes, 22 seconds Traction is happening. This is when the brand visibility is getting created and we'll have to give it a little more time 22:29 22 minutes, 29 seconds and it's only going to see a further traction probably in the few quarters to come. So, it's on track and uh have 22:36 22 minutes, 36 seconds probably we'll continue to do the same in Pune as well. 22:41 22 minutes, 41 seconds Sure man. Thank you. Uh I'll join back to your question for question. 22:47 22 minutes, 47 seconds Thank you. A reminder to all the participants, if you wish to ask a question, you may press star and one at this time. 22:55 22 minutes, 55 seconds To ask a question, please press star and one. Now the next question is from the line of 23:03 23 minutes, 3 seconds Anul Agraal from MK Global. Please go ahead. 23:07 23 minutes, 7 seconds Hi, thank you for the follow-up opportunity. Uh just one question on competition. uh incrementally we are 23:14 23 minutes, 14 seconds hearing even large organized pathology chains sort of uh venturing into radiology/advanced 23:22 23 minutes, 22 seconds radiology. Uh just wanted to get your thoughts around uh you know any 23:30 23 minutes, 30 seconds disruption that we may sort of witness from standalone chains or organized chains uh in our core cluster or any 23:39 23 minutes, 39 seconds other cluster that uh they might sort of venture into. 23:44 23 minutes, 44 seconds Uh so I'm sure so I think especially in diagnostics we keep hearing two things. 23:49 23 minutes, 49 seconds One is the disruption and the consolidation. I think uh uh these are like the objects that we see in the side mirror right they appear to be closer 23:56 23 minutes, 56 seconds but they're very far away uh so you know I think both consolidation and disruption they'll take it it'll take its own time and like you rightly said 24:05 24 minutes, 5 seconds these players uh we also heard that they're starting up with advanced and basic radiology but I think that they're at a very initial stage where they're 24:13 24 minutes, 13 seconds doing a pilot in their home geographies and uh I think this business healthcare is a business where I don't think it'll be prone to disruption 24:21 24 minutes, 21 seconds while technology technology all that will allow us to improve the quality right and then players like Vijay we already equipped with that kind of 24:29 24 minutes, 29 seconds quality and the kind of uh uh the track record that we have and the expertise that we have I think we'll always have uh the edge over the other players 24:38 24 minutes, 38 seconds the differential facial would be uh anybody starting a chain with radiology or being integrated probably would start 24:46 24 minutes, 46 seconds off typically with a wellness segment but when you look at radiology per say in Vijaya it's a lot of work that comes 24:53 24 minutes, 53 seconds in as second opinions or specialized work this is not just to do with your wellness segment that is also the reason 25:00 25 minutes why you see the hubs actually ramping up faster break evens happening faster because the work speaks for itself and 25:08 25 minutes, 8 seconds that's when your uh the system that we bought into place the teley radiology system is creating that operating leverage giving you the profitability 25:17 25 minutes, 17 seconds that you're seeing today is because you have specialized doctors sitting across all of these regions and still being 25:25 25 minutes, 25 seconds able to deliver a very high-end report even in a tier 2 geography. So probably that's a key differentiator to drive and 25:32 25 minutes, 32 seconds ramp up all these centers irrespective of whether being in a tier 2 tier three or the city itself and the work that 25:40 25 minutes, 40 seconds comes in is just not wellnessdriven. So it's a lot more that's also reason why you see the pet cities ramping up 25:46 25 minutes, 46 seconds quickly in both Tripati and Visak. So it's a it's a different kind of model itself. 25:54 25 minutes, 54 seconds very clear ma'am and civa I think what what I gazed was uh uh in addition to the high-end equipment I think uh the m 26:02 26 minutes, 2 seconds lies in uh the radiologist uh network in all of them if you look at it the 26:09 26 minutes, 9 seconds radiologist cardiologist your nuclear medicine specialist it's all a team that is doing work together which is 26:16 26 minutes, 16 seconds integrated both pathology radiology are talking to each other so you're giving an end conclusion a final report to the customer before he walks out. So the 26:25 26 minutes, 25 seconds time that is getting saved on the final diagnosis and treatment also is way shorter. So if we take Rajimandri for example probably they would have had to 26:34 26 minutes, 34 seconds come to the city spend 4 days where able to deliver this report in 4 hours sitting in Rajandry and that's also one of the reason why 26:41 26 minutes, 41 seconds you are seeing uh the faster break evens even in the newer geographies. 26:47 26 minutes, 47 seconds Clear clear. Uh second question on was on the increase in realizations uh on a per footfall or a per test basis while I 26:55 26 minutes, 55 seconds understand it could be because of case mix as as you guys pointed out. wanted to understand would this be sustainable as sort of these hubs ramp up and then 27:03 27 minutes, 3 seconds probably we'll have more of pathology share of revenues come in uh do you expect realizations to again trend down 27:11 27 minutes, 11 seconds going forward uh or would they be maintained in your I I suppose we haven't taken any tariff hikes in the current quarter 27:19 27 minutes, 19 seconds yeah Anel you're right so the tariff uh the hike that we have taken was I think in Q1 right so and it's about one one 27:26 27 minutes, 26 seconds and a half% of the revenue growth uh like you rightly said as the hubs pro you know stabilizes you'll see more pathology work coming in and you'll see 27:34 27 minutes, 34 seconds the average realizations coming uh down but at the same time you know year on year you'll see you know about close to 1 to one and a half% of uh tariff 27:43 27 minutes, 43 seconds increase uh right so I think uh that will be able to take uh the hit uh you know of the you know ARPs diluting 27:50 27 minutes, 50 seconds because of pathology increase so uh I think uh the ARPs will be in the range plus or minus uh you 3 to 4% uh from where they are now. 28:02 28 minutes, 2 seconds Got it. Uh just uh a question uh following up on that uh would this then sort of help us to sort of uh expand our 28:12 28 minutes, 12 seconds AIDA margins because we'll obviously not have the drags from the new hubs as we are just planning to set up more spokes 28:21 28 minutes, 21 seconds in the future and operating leverage kicking in. uh any any thoughts around what how or how could IDA margins expand from the current levels? 28:32 28 minutes, 32 seconds Uh so Anel uh definitely from the existing uh you know network obviously because these centers are breaking even you know much ahead of what we have 28:41 28 minutes, 41 seconds thought there'll be a leverage coming out of uh these centers but at the same time still we want the guidance to be at 28:48 28 minutes, 48 seconds uh you know 40%. The reason being you know we are also doing significant uh investments onto talent and also on uh 28:56 28 minutes, 56 seconds you know few IT initiatives digital initiatives to improve the customer experience right we are going to come up with a very high-end CRM and many other 29:05 29 minutes, 5 seconds uh you know uh investments into digital uh apps like maybe it can be a logistic app you know uh and multiple other 29:12 29 minutes, 12 seconds internal apps so that and we have moved all the all our core applications to cloud which is also coming with the an incremental cost. So considering all 29:21 29 minutes, 21 seconds this, we still want to uh you know guide the margins at 40%, but like you rightly said, if you see at a center level a 29:29 29 minutes, 29 seconds bitter, there'll be a leverage that would be coming because of this faster break event. 29:35 29 minutes, 35 seconds Got it. And depreciation levels, we've obviously seen them short up because of uh hub expansion. Uh would depreciation 29:43 29 minutes, 43 seconds sort of stabilize at at the current quarterly run rate? 29:48 29 minutes, 48 seconds it should uh you know except for that incremental uh hubs and spokes that are going to come in the next financial year and in fact I think with India what also 29:56 29 minutes, 56 seconds happens is if you see last three to four years we have added so many hubs and uh all these are 15- year leases right once you cross you know 5 years of lease 30:05 30 minutes, 5 seconds period you'll see the uh depreciation on India 116 coming down as the liability goes down so uh but yes for 30:13 30 minutes, 13 seconds the next 1 to2 years uh what we should see is we'll uh you the current depreciation plus the incremental the depreciation on account of the incremental capex. 30:23 30 minutes, 23 seconds Sure. Uh would you be able to share the pre-Indas IIDA margin and the uh impact on PAD as well uh because of Indas in 30:31 30 minutes, 31 seconds the current quarter and the 9month period. 30:34 30 minutes, 34 seconds So Aida will be roughly around so Aida would be roughly around 34%. 30:40 30 minutes, 40 seconds And on the PAT it would be closer to 22%. That could be higher than what uh we have reported. 30:47 30 minutes, 47 seconds Correct. This is for the 9 month period or Q3. 30:51 30 minutes, 51 seconds This is for the N this is for the 9month period. 34% and 22% pad much. Perfect. Yeah. Great. Many thanks. Thank you. 31:00 31 minutes Thank you. Uh participants who wish to ask questions may press star and one at this time. The next question is from the line of Gan Tucker from Edel Wise AMC. 31:11 31 minutes, 11 seconds Please go ahead. 31:14 31 minutes, 14 seconds Uh congratulation ma'am for good set of numbers and considering we have a good cash balance. Uh how are what is your M&A strategy going ahead? 31:27 31 minutes, 27 seconds As we mentioned earlier in the earlier calls, M&A is always an option but probably again to find the right asset 31:36 31 minutes, 36 seconds uh which is B2C in nature geography that we are probably comfortable in is something that we always look out for 31:43 31 minutes, 43 seconds and also what comes with it is the valuation has to be reasonable and make sense to all of us. So we're always on 31:50 31 minutes, 50 seconds the lookout. I have nothing to share as good news as of now. Let's hope for the best and uh and we're always on the lookout. So I think we're open to that. 32:03 32 minutes, 3 seconds Okay. Thank you. 32:06 32 minutes, 6 seconds Thank you. A reminder to all the participants, if you wish to ask a question, you may press star and one at this time. 32:16 32 minutes, 16 seconds Anyone who wishes to ask a question may press star and one. 32:25 32 minutes, 25 seconds To ask a question may you may press star and one at this time. 32:32 32 minutes, 32 seconds The next question is from the line of air al from JM Financial. Please go ahead. 32:38 32 minutes, 38 seconds Sure. Thank you so much. Uh so I have one question on the uh uh the new geographies where we are entered like 32:45 32 minutes, 45 seconds Kolkata or Pune. How the competitors have reacted to our entry? Is there any changes in their behavior in terms of pricing, discounts etc? 32:57 32 minutes, 57 seconds Uh uh I mean nothing uh as such. So if you see Pune was an acquired asset right and then we have added uh you know 33:05 33 minutes, 5 seconds centers and in fact if you see in integrated uh next to us I think our competitors have I think hardly one or two like if I take the next two three 33:13 33 minutes, 13 seconds competitors in that market they hardly have one or uh anything between two to three two two to three centers. So we did not see any reaction as such and uh 33:22 33 minutes, 22 seconds at the same time even in other geographies like Kolkata and Bangalore. 33:26 33 minutes, 26 seconds I think uh you know like we don't react immediately and we have not seen uh the competitors also reacting uh you know for on our growth. 33:36 33 minutes, 36 seconds Sure. And uh in terms of our pricing strategy are we at par with some of these competitors or we are still at discount because we are the new player. 33:45 33 minutes, 45 seconds We might be at par or a little discounted. There'll be a mix certain death but it'll be in the range of 1 to 2% not more than that. 33:55 33 minutes, 55 seconds Sure. Sure. And uh second question I have on the uh Medinoa merger. Are there any synergies we have 34:02 34 minutes, 2 seconds realized post this merger in terms of volume or cost or anything? 34:08 34 minutes, 8 seconds In terms of cost but not significant because Medino is having only one single center right uh so now the back end is one u you know we'll have we have some 34:18 34 minutes, 18 seconds synergy but not a very significant number. 34:22 34 minutes, 22 seconds Sure. Sure. Thank you so much. I will join. 34:26 34 minutes, 26 seconds Thank you. Uh participants who wish to ask a question may press star and one. 34:31 34 minutes, 31 seconds The next question is from the line of Ankit Sha from Canara Robiko AMC. Please go ahead. 34:38 34 minutes, 38 seconds U hi uh thanks for the opportunity. Uh firstly I just wanted to understand so our wellness revenues have been growing 34:46 34 minutes, 46 seconds pretty well for the 9 months they are up uh 20% plus. So any incremental measures that we are taking to drive this growth 34:53 34 minutes, 53 seconds and how do you see this uh growth continuing going forward? 34:58 34 minutes, 58 seconds Yes, there has been significant growth in this uh segment. In fact, it's been growing. It was at about 12 13 14 it's 35:06 35 minutes, 6 seconds almost reached 15 now. I think it's also because of people just being a lot more health conscious being aware and you're 35:14 35 minutes, 14 seconds looking at a lot more newer geographies including tier 2 geographies where we see this wellness segment grow which was 35:21 35 minutes, 21 seconds not the case say probably couple of years back postco this is a positive change that I see from tier 2 and tier 35:29 35 minutes, 29 seconds three geographies and in terms of probably what vija is doing yes there's been a lot of effort that's going into 35:36 35 minutes, 36 seconds digital initiatives in fact region based uh wellness uh education and we seeing a 35:44 35 minutes, 44 seconds traction from that and we would continue to do that going forward also so we would definitely look at this segment 35:51 35 minutes, 51 seconds growing in future also on in terms of the corporate wellness what we have seen is more 35:59 35 minutes, 59 seconds companies are offering preventive uh you know health checks so that is also creating a steady revenue for diagnostic 36:06 36 minutes, 6 seconds clear and that's where we have seen good growth in the corporate packages as well. 36:14 36 minutes, 14 seconds And like do you expect this year to continue to grow? I mean any cap you see that you know I'm sorry we can't hear you. 36:22 36 minutes, 22 seconds Hello is it better? Uh so I was asking uh do do you envision any cap for this share 36:31 36 minutes, 31 seconds of revenues or it can grow much further even north of 20% share any thoughts on that? It could definitely grow north of 36:38 36 minutes, 38 seconds 20% and it also depends on your uh geography expansion right so the more number of spokes in fact it's an it's an 36:46 36 minutes, 46 seconds advantage for vija because even the smallest spoke can do a full master health checkup so irrespective of 36:53 36 minutes, 53 seconds whether the expansion is in spokes or hubs you will see an expansion in the wellness segment also 37:00 37 minutes so precoid we were getting 8% of our revenue from wellness so five five years from then to now so from 8 has become 15. 37:07 37 minutes, 7 seconds 15. 37:11 37 minutes, 11 seconds Got it. Uh got it. Uh and uh secondly, I just wanted to check and so now we have presence in uh three additional regions 37:18 37 minutes, 18 seconds in addition to our core markets. Uh any any plans to know scale up in any uh newer markets or even the Gura geography 37:26 37 minutes, 26 seconds where we have some presence. So any new regions we are looking at right now at the moment Angus I think our hands 37:34 37 minutes, 34 seconds are full and we would prioritize and concentrate on the geographies that we're working in. Uh we do not have any plans of looking at other geographies if 37:43 37 minutes, 43 seconds not for some probably a good M&A opportunity that comes in which is large in size and forces us to enter that geography otherwise organically hands 37:52 37 minutes, 52 seconds are full would stay put with these geographies that we would work in at least for the next two to three years. 37:59 37 minutes, 59 seconds Got it. Got it. Thank you. That's it from um all the Thanks. Thanks. 38:06 38 minutes, 6 seconds Thank you. A reminder to all the participants, if you wish to ask a question, you may press star and one at this time. 38:14 38 minutes, 14 seconds To ask a question, please press star and one. Now we have the next question from the line 38:23 38 minutes, 23 seconds of Abin Benny from JM Financial. Please go ahead. 38:29 38 minutes, 29 seconds Uh hi, thank you for the follow-up question opportunity. Uh first one ma'am uh so given the current uh for dollar fluctuation and the GST changes that 38:37 38 minutes, 37 seconds have taken place uh how do we look at the input cost for our current expansion for 27 and other avoid items that might be impacted because of this. 38:51 38 minutes, 51 seconds So you know ain on the pathology so on the pathology front you know all 38:58 38 minutes, 58 seconds these contracts for rental reagents these are long-term in nature and over the last couple of years if we have to 39:06 39 minutes, 6 seconds look into the volume commitment I think they've met uh volume commitments in fact they've surpassed as well so we 39:13 39 minutes, 13 seconds don't foresee any major you know changes happening on the pathology front and on the capex front is there has been a 39:21 39 minutes, 21 seconds little bit of an impact because of the USD INR breaching 90 but then there has been uh GST benefit also from 12% to 5% 39:31 39 minutes, 31 seconds which is more or less offset uh you know the negative impact on account of this increased capex so net net the impact 39:39 39 minutes, 39 seconds even on the capex front is minimal got it uh thank you and uh also uh in 39:46 39 minutes, 46 seconds the earlier opening commentary you had me we had mentioned that the uh growth was also led by seasonal impact and lot of fillover from this uh last season 39:55 39 minutes, 55 seconds right but given that Q4 will be a more non-flu season and there are much not much of seasonality in general to be 40:02 40 minutes, 2 seconds expected what might be the levers that will be leading to the growth year 40:09 40 minutes, 9 seconds uh but it was the same case last year as well so I think uh you know overall even for Q4 uh we will we expect to surpass has the guidance of 15%. 40:22 40 minutes, 22 seconds Okay sir. Uh and any color on the ramp up of the wellness segment in Q4 because I uh believe that this is the time when 40:29 40 minutes, 29 seconds more corporate practices and uh more of the people will be testing for their well overall body checkups right so any improvement that we are looking at here. 40:39 40 minutes, 39 seconds Yeah, generally in the past uh as well we have seen uh you know incremental revenue coming from wellness in Q4 that to post you know mid of from it 40:49 40 minutes, 49 seconds generally picks up from mid of Feb uh until end of March. So similarly we are hoping that you know the wellness 40:56 40 minutes, 56 seconds share as a percentage of revenue in Q slightly higher than what we have seen in Q3. 41:01 41 minutes, 1 second Got you sir. Thank you very much. I'll join Dr. 41:06 41 minutes, 6 seconds Thank you. Uh, anyone who wishes to ask a question may press star and one at this time. To ask a question, please 41:14 41 minutes, 14 seconds press star and one. Now, a reminder to all the participants, if you wish to ask question, you may press star and one at this time. 41:28 41 minutes, 28 seconds To ask a question, you may press star and one now. 41:37 41 minutes, 37 seconds Participants who wish to ask question, you may press star and one at this time. 41:49 41 minutes, 49 seconds A reminder to all the participants, if you wish to ask a question, you may press star and one at this time. 42:04 42 minutes, 4 seconds Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments. 42:12 42 minutes, 12 seconds I would like to thank everyone for attending this call. Uh should you have any further uh clarifications or any other information uh needed about the 42:21 42 minutes, 21 seconds company, please feel free to reach out to us. Thank you. 42:27 42 minutes, 27 seconds Thank you on behalf of JM Financial Institutional Securities Limited. That concludes this conference. Thank you for joining us.