Q1 2027 Metropolis Healthcare Ltd Earnings Call

August 5, 2026

Speaker #1: Ladies and gentlemen, good day and welcome to the Q1 FY27 earnings conference call of Metropolis Healthcare Limited, hosted by JM Financial Institutional Securities. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call.

Operator: Ladies and gentlemen, good day and welcome to the Q1 FY27 earnings conference call of Metropolis Healthcare Limited, hosted by JM Financial Institutional Securities. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements do not guarantee the future performance of the company and may involve risks and uncertainties which are difficult to predict.

Speaker #1: These statements do not guarantee the future performance of the company and may involve risks and uncertainties, which are difficult to predict. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Operator: As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Abin Benny from JM Financial Institutional Securities. Thank you, over to you, sir.

Speaker #1: Should you need assistance during this conference call, please signal an operator by pressing star, then zero, on your touch-tone phone. Please note that this conference is being recorded.

Speaker #1: I now hand the conference over to Mr. Abin Beni from JM Financial Institutional Securities. Thank you, and over to you, sir.

Speaker #2: Thank you, Alric. Good morning and a warm welcome to all participants on the Metropolis Healthcare Q1 FY27 earnings call, hosted by JM Financial. Today on this call, we have with us the management: Ms. Ameera Shah, Promoter and Chairperson; Mr. Surendran Chemmenkotil, Managing Director; Mr. Sameer Patel, Chief Financial Officer; and Mr. Mohan Menon, Chief Marketing Officer.

Abin Benny: Thank you, Albert. Good morning and warm welcome to all participants on the Metropolis Healthcare Q1 FY27 earnings call hosted by JM Financial. Today on this call, we have with us the management, Ms. Ameera Shah, Promoter and Chairperson, Mr. Surendran Chemmenkotil, Managing Director, Mr. Sameer Patel, Chief Financial Officer, and Mr. Mohan Menon, the Chief Marketing Officer. I will now hand over the call to Ms. Ameera Shah for her opening remarks. Thank you, over to you, ma'am.

Speaker #2: I will now hand over the call to Ms. Ameera Shah for her opening remarks. Thank you, and over to you, ma'am.

Speaker #3: Hi, good morning, everyone, and thank you for joining us today for the Q1 FY27 earnings conference call at Metropolis Healthcare. I'm joined by Surendran Chemmenkotil, MD; Sameer Patel, CFO; Mohan Menon, CMO; and the rest of our leadership team, along with our SGI Industrial Relations Partner.

Ameera Shah: Hi. Good morning, everyone, and thank you for joining us today for the Q1 FY27 earnings conference call at Metropolis Healthcare. I am joined by Surendran, MD, Sameer Patel, CFO, Mohan Menon, CMO, and the rest of our leadership team, along with SGI Investor Relations Partner. We have uploaded the investor presentations on the exchanges and website, and I hope you have had an opportunity to go through the same. To give you a brief perspective on the broader landscape before I move to company-specific updates, the Indian diagnostics industry is entering a phase of sustained structural growth supported by three reinforcing shifts. First, patients, clinicians, and institutions are moving towards organized, quality-led diagnostic providers as expectations around accuracy, consistency, advanced testing capabilities, and service standards continue to rise. This is accelerating the shift away from non-standardized, unorganized diagnostics and creating an opportunity for trusted branded players with scale and quality.

Speaker #3: We've uploaded the investor presentations on the exchanges and website, and I hope you've had an opportunity to go through the same. To give you a brief perspective on the broader landscape before I move to company-specific updates, the Indian diagnostics industry is entering a phase of sustained structural growth, supported by three reinforcing shifts.

Ameera Shah: To give you a brief perspective on the broader landscape before I move to company-specific updates, the Indian diagnostics industry is entering a phase of sustained structural growth supported by three reinforcing shifts. First, patients, clinicians, and institutions are moving towards organized, quality-led diagnostic providers as expectations around accuracy, consistency, advanced testing capabilities, and service standards continue to rise. This is accelerating the shift away from non-standardized, unorganized diagnostics and creating an opportunity for trusted branded players with scale and quality.

Speaker #3: First, patients, clinicians, and institutions are moving toward organized, quality-led diagnostic providers as expectations around accuracy, consistency, advanced testing capabilities, and service standards continue to rise.

Speaker #3: This is accelerating the shift away from non-standardized, unorganized diagnostics and creating an opportunity for trusted, branded players with scale and quality. Second, India's healthcare ecosystem is expanding beyond metropolitan markets.

Ameera Shah: Second, India's healthcare ecosystem is expanding beyond metropolitan markets. New hospital capacity, rising OPD and IPD volumes, greater availability of specialists, and improving access across tier 2 and tier 3 cities are bringing more patients into the formal healthcare system. Hospitals and institutional partners are also outsourcing a larger share of specialized and high-end testing to providers with strong quality systems, comprehensive test menus, scientific depth, and nationwide reach. Third, treatment pathways are becoming more advanced. The pharma industry's growing focus on targeted therapies, biologics, and biosimilars across oncology, neurology, and autoimmune disorders is increasing the need for precise diagnosis, patient stratification, biomarker-led treatment selection, and ongoing monitoring. This is expanding the role of molecular, genomic, and immunological testing across the patient journey. Together, these shifts are broadening the addressable market for diagnostics and creating a strong structural opportunity in specialty testing.

Speaker #3: New hospital capacity, rising OPD and IPD volumes, greater availability of specialists, and improving access in Tier 2 and Tier 3 cities are bringing more patients into the formal healthcare system.

Speaker #3: Hospitals and institutional partners are also outsourcing a larger share of specialized and high-end testing to providers with strong quality systems, comprehensive test menus, scientific depth, and nationwide reach.

Speaker #3: Third, treatment pathways are becoming more advanced. The pharma industry's growing focus is on targeted therapies, biologics, and biosimilars across oncology, neurology, and autoimmune disorders is increasing the need for precise diagnosis, patient stratification, biomarker-led treatment selection, and ongoing monitoring.

Ameera Shah: The pharma industry's growing focus on targeted therapies, biologics, and biosimilars across oncology, neurology, and autoimmune disorders is increasing the need for precise diagnosis, patient stratification, biomarker-led treatment selection, and ongoing monitoring. This is expanding the role of molecular, genomic, and immunological testing across the patient journey. Together, these shifts are broadening the addressable market for diagnostics and creating a strong structural opportunity in specialty testing.

Speaker #3: This is expanding the role of molecular, genomic, and immunological testing across the patient journey. Together, these shifts are broadening the addressable market for diagnostics and creating a strong structural opportunity in specialty testing.

Speaker #3: However, this opportunity will not accrue evenly across the industry. Specialty diagnostics is an attractive segment, but it is not an automatic right to win.

Ameera Shah: However, this opportunity will not accrue evenly across the industry. Specialty diagnostics is an attractive segment, but it is not an automatic right to win. Success cannot be built simply by adding new tests or investing in advanced equipment. It requires years of investment in scientific expertise, quality systems, clinical credibility, specialist relationships, and a broad high-end test portfolio. These capabilities create meaningful entry barriers and differentiate providers that can participate sustainably in this market. Metropolis has built these capabilities over several decades. Our specialty portfolio comprises more than 2,200 tests across gastroenterology, nephrology, neurology, oncology, and chronic disease categories, including allergy and autoimmunity. This breadth allows us to support specialist-led pathways across diagnosis, treatment selection, and ongoing monitoring.

Speaker #3: Success cannot be built simply by adding new tests or investing in advanced equipment. It requires years of investment and scientific expertise, robust quality systems, clinical credibility, strong specialist relationships, and a broad, high-end test portfolio.

Speaker #3: These capabilities create meaningful entry barriers and differentiate providers that can participate sustainably in this market. Metropolis has built these capabilities over several decades. Our specialty portfolio comprises more than 2,200 tests, across gastroenterology, nephrology, neurology, oncology, and chronic disease categories, including allergy and autoimmunity.

Ameera Shah: These capabilities create meaningful entry barriers and differentiate providers that can participate sustainably in this market. Metropolis has built these capabilities over several decades. Our specialty portfolio comprises more than 2,200 tests across gastroenterology, nephrology, neurology, oncology, and chronic disease categories, including allergy and autoimmunity. This breadth allows us to support specialist-led pathways across diagnosis, treatment selection, and ongoing monitoring.

Speaker #3: This breadth allows us to support specialist-led pathways across diagnosis, treatment selection, and ongoing monitoring. We have also added 36 new tests during the quarter, following 347 additions in FY '26.

Ameera Shah: We have also added 36 new tests during the quarter following 347 additions in FY26, including the integration of the core test menu, further strengthening our capabilities across high-growth, high-value specialty categories. Our scientific differentiation is supported by a 99% EQAS score, which is an external quality assurance score, 99.99% report accuracy, and a lab network in which every lab is either accredited or benchmarked to recognize quality standards. Around 30,000 specialist doctors across the country prescribe tests through Metropolis and every leading hospital, individual, and chain in the country, reflecting the depth of clinician trust built over many years through scientific programs, educational initiatives, sustained engagement, and a deeply scientifically operational culture at Metropolis, which manages the trust earned over years. On the tech and digital transformation front, technology remains a strategic pillar of our long-term growth.

Speaker #3: Including the integration of the core test menu, we are further strengthening our capabilities across high-growth, high-value specialty categories. Our scientific differentiation is supported by a 99% EQUAS score, which is an external quality assurance score.

Speaker #3: 99.99% report accuracy and a lab network in which every lab is either accredited or benchmarked to recognized quality standards. Around 30,000 specialist doctors across the country prescribe tests through Metropolis, and every leading hospital—individual and chain—in the country, reflecting the depth of clinician trust, programs, educational initiatives, sustained engagement, and a deeply scientific operational culture at Metropolis, which manages the trust earned over years.

Ameera Shah: Around 30,000 specialist doctors across the country prescribe tests through Metropolis and every leading hospital, individual, and chain in the country, reflecting the depth of clinician trust built over many years through scientific programs, educational initiatives, sustained engagement, and a deeply scientifically operational culture at Metropolis, which manages the trust earned over years. On the tech and digital transformation front, technology remains a strategic pillar of our long-term growth.

Speaker #3: On the tech and digital transformation front, technology remains a strategic pillar of our long-term growth. We are executing a company-wide automation and digital transformation program spanning labs, customer engagement, vendor consolidation, commercial operations, finance, procurement, and support functions.

Ameera Shah: We are executing a company-wide automation and digital transformation program spanning labs, customer engagement, vendor consolidation, commercial operations, finance, procurement, and support functions. Across these initiatives, we are strengthening data governance and ensuring DPDP-compliant handling of patient data with a clear focus on privacy, security, and responsible use of information. Within labs, automation and in-platform standardization are improving quality, throughput, and turnaround times, particularly in oncology and specialty diagnostics. Beyond laboratories, AI and automation are improving workflow efficiency, strengthening decision-making, enhancing customer engagement, improving inventory management, and simplifying back office operations. Taken together, these initiatives are creating meaningful productivity gains and building a more scalable, data-led and efficient operating model across the organization. This growth continues to be anchored in quality with strong external quality assurance scores, high report accuracy, and a lab network operating under the accreditation and benchmarking standards.

Speaker #3: Across these initiatives, we are strengthening data governance and ensuring DPDP-compliant handling of patient data, with a clear focus on privacy, security, and responsible use of information.

Speaker #3: Within labs, automation and in-platform standardization are improving quality, throughput, and turnaround times, particularly in oncology and specialty diagnostics. Beyond laboratories, AI and automation are improving workflow efficiency, strengthening decision-making, enhancing customer engagement, improving inventory management, and simplifying back-office operations.

Ameera Shah: Within labs, automation and in-platform standardization are improving quality, throughput, and turnaround times, particularly in oncology and specialty diagnostics. Beyond laboratories, AI and automation are improving workflow efficiency, strengthening decision-making, enhancing customer engagement, improving inventory management, and simplifying back office operations. Taken together, these initiatives are creating meaningful productivity gains and building a more scalable, data-led and efficient operating model across the organization.

Speaker #3: Taken together, these initiatives are creating meaningful productivity gains and building a more scalable, data-led, and efficient operating model across the organization. This growth continues to be anchored in quality, with strong external quality assurance scores, high report accuracy, and a lab network operating under accreditation and benchmarking standards.

Ameera Shah: This growth continues to be anchored in quality with strong external quality assurance scores, high report accuracy, and a lab network operating under the accreditation and benchmarking standards. Turning to the current quarter of Q1 FY27, we began on a strong note. We delivered healthy growth in both patient and test volumes, translating into an even stronger financial performance. We exceeded our stated guidance with revenue growing by approximately 17% year-on-year, driven largely by volume growth, while margins expanded through operating leverage and continued efficiency gains.

Speaker #3: Turning to the current quarter of Q1 FY27, we began on a strong note. We delivered healthy growth in both patient and test volumes, translating into an even stronger financial performance.

Ameera Shah: Turning to the current quarter of Q1 FY27, we began on a strong note. We delivered healthy growth in both patient and test volumes, translating into an even stronger financial performance. We exceeded our stated guidance with revenue growing by approximately 17% year-on-year, driven largely by volume growth, while margins expanded through operating leverage and continued efficiency gains. The strong growth in patient volumes are driven by a combination of structural industry trends and focused execution. We further strengthen our presence in tier 2 and tier 3 markets, where awareness of high-quality diagnostics is rising alongside improving healthcare access. We believe this is a good start to our year, and that we can sustain revenue growth outlook of 14% to 15% for the year, which we expect to be primarily driven by volume growth.

Speaker #3: We exceeded our stated guidance, with revenue growing by approximately 17% year-on-year, driven largely by volume growth, while margins expanded through operating leverage and continued efficiency gains.

Speaker #3: The strong growth in patient volumes is driven by a combination of structural industry trends and focused execution. We further strengthen our presence in Tier 2 and Tier 3 markets, where awareness of high-quality diagnostics is rising alongside improving healthcare access.

Ameera Shah: The strong growth in patient volumes are driven by a combination of structural industry trends and focused execution. We further strengthen our presence in tier 2 and tier 3 markets, where awareness of high-quality diagnostics is rising alongside improving healthcare access. We believe this is a good start to our year, and that we can sustain revenue growth outlook of 14% to 15% for the year, which we expect to be primarily driven by volume growth.

Speaker #3: We believe this is a good start to our year and that we can sustain a revenue growth outlook of 14% to 15% for the year, which we expect to be primarily driven by volume growth.

Speaker #3: On the margin front, supported by ongoing operational efficiencies and cost optimization initiatives, we expect an improvement of 100 to 150 basis points on EBITDA during the current financial year. Over this year and the next year, we remain focused on achieving an EBITDA margin of 27% to 28%.

Ameera Shah: On the margin front, supported by ongoing operational efficiencies and cost optimization initiatives, we expect an improvement of 100 to 150 basis points on EBITDA during the current financial year. Over this year and the next year, we remain focused on achieving an EBITDA margin of 27% to 28%. On the inorganic growth front, our other recent acquisitions are now fully integrated and are performing in line with our expectations, with the businesses benefiting from the wider Metropolis network operating processes and commercial capabilities. Core Diagnostics is currently in the final leg of integration. Since it has been a year since the acquisition, it is an appropriate time to reflect on the objectives of the acquisition and the progress we have made against them. Our first objective was to build a strong genomics platform for Metropolis.

Speaker #3: On the inorganic growth front, our other recent acquisitions are now fully integrated and are performing in line with our expectations. With the businesses benefiting from the wider Metropolis network, operating processes, and commercial capabilities, Core Diagnostics is currently in the final leg of integration.

Ameera Shah: Core Diagnostics is currently in the final leg of integration. Since it has been a year since the acquisition, it is an appropriate time to reflect on the objectives of the acquisition and the progress we have made against them. Our first objective was to build a strong genomics platform for Metropolis. When we evaluated the build versus buy decision for genomics, we recognized that while acquiring sequencing platforms and equipment is relatively straightforward, the real gestation period in genomics lies in building scientific expertise, R&D capabilities, and the ability to accurately interpret complex genomic data.

Speaker #3: Since it has been a year since the acquisition, it is an appropriate time to reflect on the objectives of the acquisition and the progress we have made against them.

Speaker #3: Our first objective was to build a strong genomic platform for Metropolis. When we evaluated the build-versus-buy decision for genomics, we recognized that while acquiring sequencing platforms and equipment is relatively straightforward, the real gestation period in genomics lies in building scientific expertise, R&D capabilities, and the ability to accurately interpret complex genomic data.

Ameera Shah: When we evaluated the build versus buy decision for genomics, we recognized that while acquiring sequencing platforms and equipment is relatively straightforward, the real gestation period in genomics lies in building scientific expertise, R&D capabilities, and the ability to accurately interpret complex genomic data. We believe that acquiring Core Diagnostics would accelerate our genomics journey by two to three years, and that has proven to be the right decision. Over the past year, our genomics portfolio has doubled and is now one of the fastest-growing segments within our specialty business. Our second goal of acquiring Core was to strengthen our brand in North India through deep clinician and hospital relationships. We wanted to leverage Core Diagnostics strong relationships with leading hospitals and doctors. Over the past year, supported by our genomics and specialty portfolio, we have significantly strengthened our scientific engagement in the region.

Speaker #3: We believe that acquiring core diagnostics would accelerate our genomics journey by two to three years, and that has proven to be the right decision.

Ameera Shah: We believe that acquiring Core Diagnostics would accelerate our genomics journey by two to three years, and that has proven to be the right decision. Over the past year, our genomics portfolio has doubled and is now one of the fastest-growing segments within our specialty business. Our second goal of acquiring Core was to strengthen our brand in North India through deep clinician and hospital relationships. We wanted to leverage Core Diagnostics strong relationships with leading hospitals and doctors.

Speaker #3: Over the past year, our genomics portfolio has doubled and is now one of the fastest-growing segments within our specialty business. Our second goal of acquiring core was to strengthen our brand in North India through deep clinician and hospital relationships.

Speaker #3: We wanted to leverage Core Diagnostics' strong relationships with leading hospitals and doctors. Over the past year, supported by our genomics and specialty portfolio, we have significantly strengthened our scientific engagement in the region.

Ameera Shah: Over the past year, supported by our genomics and specialty portfolio, we have significantly strengthened our scientific engagement in the region. As a result, North India now contributes 18% of the company's revenue, up from a single-digit contribution before the acquisition, and has emerged as the fastest-growing region in our network. Our third goal was to create shareholder value through disciplined acquisitions.

Speaker #3: As a result, North India now contributes 18% of the company's revenue, up from a single-digit contribution before the acquisitions, and has emerged as the fastest-growing region in our network.

Ameera Shah: As a result, North India now contributes 18% of the company's revenue, up from a single-digit contribution before the acquisition, and has emerged as the fastest-growing region in our network. Our third goal was to create shareholder value through disciplined acquisitions. We acquired a distressed loss-making business of Core at an attractive valuation of less than 2x revenue, with a clear plan to transform it into a business capable of delivering EBITDA margins of around 25% over three to four years from acquisition. Based on the EBITDA that Core Diagnostics is expected to generate in FY27, which is just the second year as part of Metropolis, our effective acquisition multiple would be approximately 10x EBITDA. This demonstrates the value that disciplined acquisitions and successful integration can create for our shareholders. As the Core integration progresses, our focus is increasingly shifting from integration to growth.

Speaker #3: Our third goal was to create shareholder value through disciplined acquisitions. We acquired a distressed, loss-making business of core at an attractive valuation of less than 2x revenue, with a clear plan to transform it into a business capable of delivering EBITDA margins of around 25% over 3 to 4 years from acquisition.

Ameera Shah: We acquired a distressed loss-making business of Core at an attractive valuation of less than 2x revenue, with a clear plan to transform it into a business capable of delivering EBITDA margins of around 25% over three to four years from acquisition. Based on the EBITDA that Core Diagnostics is expected to generate in FY27, which is just the second year as part of Metropolis, our effective acquisition multiple would be approximately 10x EBITDA. This demonstrates the value that disciplined acquisitions and successful integration can create for our shareholders.

Speaker #3: Based on the EBITDA that Core Diagnostics is expected to generate in FY27, which is just the second year as part of Metropolis, our effective acquisition multiple would be approximately 10x EBITDA.

Speaker #3: This demonstrates the value that disciplined acquisitions and successful integration can create for our shareholders. As the core integration progresses, our focus is increasingly shifting from integration to growth.

Ameera Shah: As the Core integration progresses, our focus is increasingly shifting from integration to growth. We are seeing encouraging early signs as we use Metropolis' pan-India network to expand the reach of Core super specialty capabilities, driving higher test volumes, improving network utilization, and creating operating leverage. This further strengthens our specialty diagnostics portfolio and our ability to serve clinicians and patients with advanced testing solutions.

Speaker #3: We are seeing encouraging early signs as we use Metropolis's pan-India network to expand the reach of core super-specialty capabilities, driving higher test volumes, improving network utilization, and creating operating leverage.

Ameera Shah: We are seeing encouraging early signs as we use Metropolis' pan-India network to expand the reach of Core super specialty capabilities, driving higher test volumes, improving network utilization, and creating operating leverage. This further strengthens our specialty diagnostics portfolio and our ability to serve clinicians and patients with advanced testing solutions. We're confident that we'll be able to enhance revenue and EBITDA growth at Core going forward as per estimates given previously. Under the Metropolis 3.0 strategy, as we move ahead in FY27, our focus will be translated into five key execution priorities. Number one, accelerating network expansion. We'll continue to expand our network to improve accessibility, especially in tier 2 and tier 3 towns, and drive higher sample volumes through our recently commissioned laboratories, resulting in better capacity utilization, operating leverage, and profitable growth.

Speaker #3: This further strengthens our specialty diagnostics portfolio and our ability to serve clinicians and patients with advanced testing solutions. We're confident that we'll be able to enhance revenue and EBITDA growth at core going forward, as per estimates given previously.

Ameera Shah: We're confident that we'll be able to enhance revenue and EBITDA growth at Core going forward as per estimates given previously. Under the Metropolis 3.0 strategy, as we move ahead in FY27, our focus will be translated into five key execution priorities. Number one, accelerating network expansion. We'll continue to expand our network to improve accessibility, especially in tier 2 and tier 3 towns, and drive higher sample volumes through our recently commissioned laboratories, resulting in better capacity utilization, operating leverage, and profitable growth.

Speaker #3: Under the Metropolis 3.0 strategy, as we move ahead in FY27, our focus will be translated into five key execution priorities. Number one: accelerating network expansion.

Speaker #3: We'll continue to expand our network to improve accessibility, especially in Tier 2 and Tier 3 towns, and drive higher sample volumes through our recently commissioned laboratories, resulting in better capacity utilization, operating leverage, and profitable growth.

Speaker #3: We aim to open approximately 400 to 500 centers in Tier 2 and Tier 3 towns this year. Strengthening specialty diagnostics is the second. We'll further expand our advanced testing portfolio while deepening engagement with clinicians.

Ameera Shah: We aim to open approximately 400 to 500 centers in tier 2 and tier 3 towns this year. Strengthening specialty diagnostics is the second. We'll further expand our advanced testing portfolio while deepening engagement with clinicians. Growth in specialty diagnostics also drives higher routine and allied test volumes, improving volume share and customer retention. We aim to increase contribution of this portfolio to 45% from the current 40%. Number three, we'll strengthen our TruHealth portfolio through targeted wellness offerings and higher customer engagement, driving increased adoption, customer lifetime value, and market share in preventive diagnostics. We've expanded TruHealth beyond pathology to include basic radiology, vital checks, and consultations. We'll continue to increase the number of our centers to provide all these services under one roof.

Speaker #3: Growth in specialty diagnostics also drives higher routine and allied test volumes, improving wallet share and customer retention. We aim to increase the contribution of this portfolio to 45%, up from the current 40%.

Speaker #3: Number three, we'll strengthen our True Health portfolio through targeted wellness offerings and higher customer engagement, driving increased adoption, customer lifetime value, and market share in preventive diagnostics.

Ameera Shah: Number three, we'll strengthen our TruHealth portfolio through targeted wellness offerings and higher customer engagement, driving increased adoption, customer lifetime value, and market share in preventive diagnostics. We've expanded TruHealth beyond pathology to include basic radiology, vital checks, and consultations. We'll continue to increase the number of our centers to provide all these services under one roof.

Speaker #3: We've expanded true health beyond pathology to include basic radiology, vital checks, and consultations. We'll continue to increase the number of our centers to provide all these services under one roof.

Speaker #3: While this may not become a huge contributor to revenue, this certainly helps increase average revenue per patient and further build engagement with our consumers.

Ameera Shah: While this may not become a huge contributor to revenue, this certainly helps increase average revenue per patient and build further engagement with our consumers. Number four, leveraging technology and AI. Continued investments in digital platforms, automation, and AI will improve customer experience, lab efficiency, doctor and patient engagement, and support long-term profitable growth. Five, pursuing disciplined inorganic growth. With recent integrations progressing well, we are building our acquisition funnel. We'll continue evaluating high-quality, strategically aligned assets that can create long-term value through our proven integration playbook. With this, I hand over the call to Suren to take you through the business performance for Q1 FY27. Thank you. Suren, to you.

Speaker #3: Number four: Leveraging technology and AI. Continued investments in digital platforms, automation, and AI will improve customer experience, lab efficiency, doctor and patient engagement, and support long-term profitable growth.

Speaker #3: And five, pursuing disciplined inorganic growth. With recent integrations progressing well, we are building our acquisition funnel and will continue evaluating high-quality, strategically aligned assets that can create long-term value through our proven integration playbook.

Ameera Shah: Five, pursuing disciplined inorganic growth. With recent integrations progressing well, we are building our acquisition funnel. We'll continue evaluating high-quality, strategically aligned assets that can create long-term value through our proven integration playbook. With this, I hand over the call to Suren to take you through the business performance for Q1 FY27. Thank you. Suren, to you.

Speaker #3: With this, I hand over the call to Soren to take you through the business performance for Q1 FY27. Thank you. Soren, over to you.

Speaker #1: Thank you, Ameera, and good morning, everyone. Quarter one, financial year '27, marks a strong start to the year, with broad-based growth across businesses, geographies, and channels.

Surendran Chemmenkotil: Thank you, Ameera, and good morning, everyone. Q1 of financial year 2027 marks a strong start to the year, with broad-based growth across businesses, geographies, and channels. Revenue grew by about 17% year-on-year to INR 450 crore, ahead of our stated guidance, while EBITDA margin expanded by 210 basis points to 25.2%. Usually, Q1 is not a strong quarter for Metropolis. This year we saw the revenue sequentially increase by approximately 6%, reflecting seasonal momentum, healthy operating leverage, and a disciplined execution. Growth was broad-based across channels, geographies, and test categories. B2C grew by 18%, and B2B grew by 15%. All regions delivered double-digit growth, while routine, semi-specialty, specialty, and TruHealth also recorded high double-digit growth during this quarter. What is particularly encouraging is that the performance was predominantly volume-based.

Speaker #1: Revenue grew by about 17% year-on-year to ₹450 crore, ahead of our stated guidance, while EBITDA margin expanded by 210 basis points to 25.2%. Usually, Q1 is not a strong quarter for Metropolis.

Surendran Chemmenkotil: Usually, Q1 is not a strong quarter for Metropolis. This year we saw the revenue sequentially increase by approximately 6%, reflecting seasonal momentum, healthy operating leverage, and a disciplined execution. Growth was broad-based across channels, geographies, and test categories. B2C grew by 18%, and B2B grew by 15%. All regions delivered double-digit growth, while routine, semi-specialty, specialty, and TruHealth also recorded high double-digit growth during this quarter. What is particularly encouraging is that the performance was predominantly volume-based.

Speaker #1: However, this year, we saw the revenue sequentially increase by approximately 6%, reflecting seasonal momentum, healthy operating leverage, and disciplined execution. Growth was broad-based across channels, geographies, and test categories. B2C grew by 18%, and B2B grew by 15%. All regions delivered double-digit growth, while routine, semi-specialty, specialty, and True Health also recorded high double-digit growth during this quarter.

Speaker #1: What is particularly encouraging is that the performance was predominantly volume-based, despite there not being a price increase over the last 18 months. We delivered 17% revenue growth, supported by 10% growth in patient volumes and 11% growth in test volumes.

Surendran Chemmenkotil: Despite no price increase over the last 18 months, we delivered 17% revenue growth, supported by 10% growth in patient volumes and 11% growth in test volumes, with the balance coming from a richer mix and improved realizations. This demonstrates the strength of our underlying business and structural demand drivers supporting the diagnostic industry. The only industry-wide price increase during this period was for CGHS tests, as you know. This helped other players in the industry as a one-time benefit much more than us. As for us, it is a very small component of the total business. Volume growth was driven by a combination of network expansion and improved productivity across our existing network. During the last 12 months, we added more than 500 service centers, including 300 centers in Q1 2027, and remain on track to add more than 500 centers during the current financial year.

Speaker #1: With the balance coming from a richer mix and improved realizations. This demonstrates the strength of our underlying business and the structural demand drivers supporting the diagnostics industry.

Speaker #1: The only industry-wide price increase during this period was for CGHS tests, as you know. This helped other players in the industry as a one-time benefit, much more than us.

Surendran Chemmenkotil: The only industry-wide price increase during this period was for CGHS tests, as you know. This helped other players in the industry as a one-time benefit much more than us. As for us, it is a very small component of the total business. Volume growth was driven by a combination of network expansion and improved productivity across our existing network. During the last 12 months, we added more than 500 service centers, including 300 centers in Q1 2027, and remain on track to add more than 500 centers during the current financial year.

Speaker #1: As for us, it is a very small component of the total business. Volume growth was driven by a combination of network expansion and improving productivity across our existing network.

Speaker #1: During the last 12 months, we added more than 500 service centers, including 300 centers in Q1 '27, and remain on track to add more than 500 centers during the current financial year.

Speaker #1: We are now operating across 750 towns in the country and are deepening our presence in existing as well as new territories. Our network expansion strategy continues to be a key growth enabler.

Surendran Chemmenkotil: We are now operating across 750 towns in the country and are deepening our presence in existing as well as the new territories. Our network expansion strategy continued to be a key growth enabler. Over the last two years, we have significantly strengthened our presence while simultaneously deepening our footprint within the existing markets. The expanding network is improving accessibility, driving patient acquisition, and increasing sample throughput across our laboratory infrastructure. Our center-to-laboratory ratio improved from a 1:21 a year ago to 1:21 in Q1, and we remain on track to improve this to around 1:30 by year-end, creating meaningful operating leverage as utilization continues to improve. Importantly, our expansion strategy is data-driven rather than opportunistic. Every new center is selected based on detailed market mapping, including population density, healthcare infrastructure, competitive intensity, and our ability to establish a strong market position.

Speaker #1: Over the last few years, we have significantly strengthened our presence, while simultaneously deepening our footprint within the existing markets. The expanding network is improving accessibility, driving patient acquisition, and increasing sample throughput across our laboratory infrastructure.

Speaker #1: Our center-to-laboratory ratio improved from 1:21 a year ago to 1:21 in Q1, and we remain on track to improve this to around 1:30 by year-end, creating meaningful operating leverage as utilization continues to improve.

Surendran Chemmenkotil: Our center-to-laboratory ratio improved from a 1:21 a year ago to 1:21 in Q1, and we remain on track to improve this to around 1:30 by year-end, creating meaningful operating leverage as utilization continues to improve. Importantly, our expansion strategy is data-driven rather than opportunistic. Every new center is selected based on detailed market mapping, including population density, healthcare infrastructure, competitive intensity, and our ability to establish a strong market position.

Speaker #1: Importantly, our expansion strategy is data-driven rather than opportunistic. Every new center is selected based on detailed market mapping, including population density, healthcare infrastructure, competitive intensity, and our ability to establish a strong market position.

Speaker #1: This disciplined approach enables us to penetrate underserved markets while strengthening our brand presence and improving access to quality. We have improved the productivity of our existing network through focused operating initiatives.

Surendran Chemmenkotil: This disciplined approach enables us to penetrate underserved markets while strengthening our brand presence and improving access to quality diagnostics. Alongside expansion, we have improved the productivity of our existing network through focused operating initiatives. We continue to increase throughput at high-potential centers, rationalize underperforming locations, and redeploy resources to more productive markets. Volume growth during the quarter reflected a balanced contribution from healthy growth across our mature centers and the ramp-up of centers added over the last 12 months. Continued investments in micromarketing, deeper clinician engagement, expanded test menus, and the targeted activation of newly launched centers are accelerating growth across both existing and new markets. Taken together, these factors give us the confidence that our growth momentum is broad-based, structural, and sustainable.

Speaker #1: We continue to increase throughput at high-potential centers, rationalize underperforming locations, and redeploy resources to more productive markets. Volume growth during the quarter reflected a balanced contribution from healthy growth across our mature centers and a ramp-up of centers added over the last 12 months.

Surendran Chemmenkotil: Volume growth during the quarter reflected a balanced contribution from healthy growth across our mature centers and the ramp-up of centers added over the last 12 months. Continued investments in micromarketing, deeper clinician engagement, expanded test menus, and the targeted activation of newly launched centers are accelerating growth across both existing and new markets. Taken together, these factors give us the confidence that our growth momentum is broad-based, structural, and sustainable.

Speaker #1: Continued investments in micromarketing, deeper clinician engagement, expanded test menus, and the targeted activation of newly launched centers are accelerating growth across both existing and new markets.

Speaker #1: Taken together, these factors give us confidence that our growth momentum is broad-based, structural, and sustainable. Speaking of our sales channels, our B2C business delivered 18% revenue growth, with a balanced contribution from enhanced revenue across mature centers and the ramp-up of centers added over the last year.

Surendran Chemmenkotil: Speaking of our sales channels, our B2C business delivered 18% revenue growth with a balanced contribution from enhanced revenue across mature centers and the ramp-up of centers added over the last year. Growth was strong across our own centers and across tier 2 and tier 3 markets, with rural centers delivering 36% revenue growth. CLM-led customer engagement, local micromarketing, strong brand pull, and increasing digital adoption all contributed to patient acquisition. Specialty revenue within B2C grew by 21%, while TruHealth and value-added offerings such as body vital checks, consults, and ECG supported higher revenue per patient. Our B2B business grew by 15%, led by a deliberate focus on hospitals, clinicians, and high-quality organized institutions. We are prioritizing relationships where scientific capabilities, specialty portfolio, service quality, and nationwide network create a higher right to win.

Speaker #1: Growth was strong across our own centers and across Tier 2 and Tier 3 markets, with rural centers delivering 36% revenue growth. CLM-led customer engagement, local micro-marketing, strong brand pull, and increasing digital adoption all contributed to patient acquisition.

Speaker #1: Specialty revenue within B2C grew by 21%, while true health and value-added offerings, such as body vital checks, consult, and ECG, supported higher revenue per patient.

Surendran Chemmenkotil: Specialty revenue within B2C grew by 21%, while TruHealth and value-added offerings such as body vital checks, consults, and ECG supported higher revenue per patient. Our B2B business grew by 15%, led by a deliberate focus on hospitals, clinicians, and high-quality organized institutions. We are prioritizing relationships where scientific capabilities, specialty portfolio, service quality, and nationwide network create a higher right to win.

Speaker #1: Our B2B business grew by 15%, led by a deliberate focus on hospitals, clinicians, and high-quality organized institutions. We are prioritizing relationship work, scientific capabilities, specialty portfolio, service quality, and our nationwide network to create a higher right to win.

Speaker #1: Our partner portal and other digital enablement initiatives are making it easier for partners to do business with us, improving visibility, service responsiveness, and access to our wider test menu.

Surendran Chemmenkotil: Our partner portal and other digital enablement initiatives are making it easier for partners to do business with us, improving visibility, service responsiveness, and access to our wider test menu. With a presence of more than 750 towns, we are also targeting additional business from smaller laboratories and hospitals in these markets, giving us significant headroom for growth. Our presence in North India has been strengthened steadily. Revenue from the region grew by 19% on a year-on-year basis and now contributes to 18% of our overall revenue, supported by successful integration of Core Diagnostics, Scientific Pathology Agra, and DAPIC Dehradun. Our strategy over time has been to acquire high-quality assets in a particular geography and then drive sustained organic growth by leveraging our strong brand, deepening doctor engagement, expanding our network, and enhancing our test portfolio. We remain confident of further increasing revenues and market share from north over time.

Speaker #1: With a presence in more than 750 towns, we are also targeting additional business from smaller laboratories and hospitals in these markets, giving us significant headroom for growth.

Speaker #1: Our presence in North India has been strengthened steadily. Revenue from the region grew by 19% on a year-on-year basis, and now contributes to 18% of our overall revenues, supported by the successful integration of core diagnostics, Scientific Pathology Agra, and Rapid Data Tool.

Surendran Chemmenkotil: Revenue from the region grew by 19% on a year-on-year basis and now contributes to 18% of our overall revenue, supported by successful integration of Core Diagnostics, Scientific Pathology Agra, and DAPIC Dehradun. Our strategy over time has been to acquire high-quality assets in a particular geography and then drive sustained organic growth by leveraging our strong brand, deepening doctor engagement, expanding our network, and enhancing our test portfolio. We remain confident of further increasing revenues and market share from north over time.

Speaker #1: Our strategy over time has been to acquire high-quality assets in a particular geography and then drive sustained organic growth by leveraging our strong brand, deepening doctor engagement, expanding our network, and enhancing our test portfolio.

Speaker #1: We remain confident of further increasing revenues and market share from the North over time. The best hospitals and leading specialists trust Metropolis for their specialized testing requirements, while we will continue to build our B2C business in select pockets of North India—markets such as Delhi, Punjab, and Uttar Pradesh, and the surrounding regions.

Surendran Chemmenkotil: The best hospitals and leading specialists trust Metropolis for their specialized testing requirements. While we will continue to build our B2C business in select pockets of North India markets such as Delhi, Punjab, and Uttar Pradesh, and the surrounding regions, we will continue to predominantly run on the B2B markets, driven by our strength in specialty diagnostics and deep relationship with the clinicians and hospitals. Our recent acquisitions in Agra and Dehradun are also performing very well, with both business tracking ahead of the revenue growth and EBITDA. We remain confident of further increasing our revenue and market share in North India over time. Coming to specialty testing and TruHealth. Both our strategic growth engines continue to perform well. TruHealth revenues grew 22%, supported by integrated preventive healthcare offering and targeted digital customer acquisition initiatives.

Speaker #1: We will continue to predominantly run on the B2B markets, driven by our strength in specialty diagnostics and deep relationships with clinicians and hospitals.

Speaker #1: Our recent acquisitions in Agra and Dehradun are also performing very well, with both businesses tracking ahead of revenue growth and EBITDA. We remain confident of further increasing our revenue and market share in North India over time.

Surendran Chemmenkotil: Our recent acquisitions in Agra and Dehradun are also performing very well, with both business tracking ahead of the revenue growth and EBITDA. We remain confident of further increasing our revenue and market share in North India over time. Coming to specialty testing and TruHealth. Both our strategic growth engines continue to perform well. TruHealth revenues grew 22%, supported by integrated preventive healthcare offering and targeted digital customer acquisition initiatives.

Speaker #1: Coming to specialty testing and TruHealth, both our strategic growth engines continue to perform well. TruHealth revenues grew 22%, supported by integrated preventive healthcare offerings and targeted digital customer acquisition initiatives.

Speaker #1: Radiology integrated wellness packages grew by more than 40%, while premium True Health packages grew by more than 50%, led by doctor consultations, body vital checkups, and ECG-led extensions.

Surendran Chemmenkotil: Radiology integrated wellness packages grew by more than 40%, while premium TruHealth packages grew by more than 50%, led by doctor consultations, body vital checkups, and ECG-led extensions. Specialty diagnostic grew by 17% during the quarter, supported by increasing adoption of advanced testing, deeper clinician engagement, and cross-selling of Core Diagnostics, oncology and super specialty capabilities across the Metropolis network. Our genomics capabilities and Core super specialty menu are increasingly complementary. Genomics brings advanced testing and interpretation capabilities, while Core adds a deeper super specialty oncology portfolio and established clinician relationships. We are now taking the Core test menu to our existing clients, prescribing clinicians and service networks across India, expanding access to these tests and increasing our share of specialty testing. With Core Diagnostics in the final leg of integration, we remain focused on accelerating specialty volumes through our nationwide reach and wider clinician network.

Speaker #1: Specialty diagnostics grew by 17% during the quarter, supported by increasing adoption of advanced testing, deeper clinician engagement, and cross-selling of core diagnostics, oncology, and super specialty capabilities across the Metropolis network.

Speaker #1: Our genomics capabilities and core super-specialty menu are increasingly complementary. Genomics brings advanced testing and interpretation capabilities, while Core adds a deeper super-specialty oncology portfolio and established clinician relationships.

Surendran Chemmenkotil: Genomics brings advanced testing and interpretation capabilities, while Core adds a deeper super specialty oncology portfolio and established clinician relationships. We are now taking the Core test menu to our existing clients, prescribing clinicians and service networks across India, expanding access to these tests and increasing our share of specialty testing. With Core Diagnostics in the final leg of integration, we remain focused on accelerating specialty volumes through our nationwide reach and wider clinician network.

Speaker #1: We are now taking the core test menu to our existing clients, prescribing clinicians, and service networks across India, expanding access to these tests and increasing our share of specialty testing.

Speaker #1: With core diagnostic in the final leg of integration, we remain focused on accelerating specialty volumes through our nationwide reach and wider clinician network. Our international business continues to perform well, delivering healthy growth in both revenue and EBITDA.

Surendran Chemmenkotil: Our international business continued to perform well, delivering healthy growth in both revenue and EBITDA. We are the market leaders in two of the five countries in which we operate and rank amongst the top three players in all the markets. While business model is similar to India, with specialized testing being offered to our reference laboratories in India, the operating environment across African markets is quite different. Over the years, we have developed a deep understanding of these markets and built the capabilities required to succeed in them. We remain optimistic about the strength of the brand we have built internationally and are confident of continuing to grow our business across these markets. Coming to margins and productivity, EBITDA margin expanded to 25.2%, an improvement of 210 basis points year-on-year and ahead of our guidance.

Speaker #1: We are the market leaders in two of the five countries in which we operate, and ranked among the top three players in all the markets.

Speaker #1: While the business model is similar to India, with specialized testing being offshored to our reference laboratories in India, the operating environment across African markets is quite different.

Speaker #1: Over the years, we have developed a deep understanding of these markets and built the capabilities required to succeed in them. We remain optimistic about the strength of the brand we have built internationally, and are confident of continuing to grow our business across these markets.

Surendran Chemmenkotil: Over the years, we have developed a deep understanding of these markets and built the capabilities required to succeed in them. We remain optimistic about the strength of the brand we have built internationally and are confident of continuing to grow our business across these markets. Coming to margins and productivity, EBITDA margin expanded to 25.2%, an improvement of 210 basis points year-on-year and ahead of our guidance.

Speaker #1: Coming to margins and productivity, EBITDA margin expanded to 25.2%, an improvement of 210 basis points year on year, and ahead of our guidance. The expansion was driven by healthy, volume-led operating leverage, disciplined cost management, and continued progress on our productivity agenda.

Surendran Chemmenkotil: The expansion was driven by healthy volume-led operating leverage, disciplined cost management, and continued progress on our productivity agenda. A key contributor has been our laboratory transformation program. We are standardizing testing platform across the network, consolidating vendors, increasing automation, and improving procurement efficiencies. These initiatives are at different stages of roll-out. Those already implemented are improving throughput, turnaround time, material productivity, and laboratory utilization, while further benefits are expected as the remaining platform transitions and automation initiatives go live over the coming quarters. Importantly, our organic business delivered healthy margin expansion both year-on-year and sequentially. This was achieved despite the relatively lower margin profile of Core Diagnostics and the impact of advancing annual employee increments from July to April this year. Lastly, over the past 12 to 18 months, we have strengthened our leadership team, completed the integration of acquisitions, expanded our network, and significantly enhanced our operational capabilities.

Speaker #1: A key contributor has been our laboratory transformation program. We are standardizing testing platforms across the network, consolidating vendors, increasing automation, and improving procurement efficiencies.

Speaker #1: These initiatives are at different stages of rollout. Those already implemented are improving throughput, turnaround time, material productivity, and laboratory utilization, while further benefits are expected as the remaining platform transitions and automation initiatives go live over the coming quarters.

Surendran Chemmenkotil: Those already implemented are improving throughput, turnaround time, material productivity, and laboratory utilization, while further benefits are expected as the remaining platform transitions and automation initiatives go live over the coming quarters. Importantly, our organic business delivered healthy margin expansion both year-on-year and sequentially. This was achieved despite the relatively lower margin profile of Core Diagnostics and the impact of advancing annual employee increments from July to April this year.

Speaker #1: Importantly, our organic business delivered healthy margin expansion, both year-on-year and sequentially. This was achieved despite the relatively lower margin profile of core diagnostics and the impact of advancing annual employee increments from July to April this year.

Speaker #1: Lastly, over the past 12 to 18 months, we have strengthened our leadership team, completed the integration of acquisitions, expanded our network, and significantly enhanced our operational capabilities.

Surendran Chemmenkotil: Lastly, over the past 12 to 18 months, we have strengthened our leadership team, completed the integration of acquisitions, expanded our network, and significantly enhanced our operational capabilities. With strong momentum across all growth engines, healthy volume-led growth trajectory, and multiple productivity initiatives beginning to scale, we remain confident of delivering sustainable, profitable growth and continuing to outperform the diagnostic industry over the medium term. With this, I hand it over to Sameer, who will take us through the financial highlights. Thank you, and over to you, Sameer.

Speaker #1: With strong momentum across all growth engines, a healthy volume-led growth trajectory, and multiple productivity initiatives beginning to scale, we remain confident of delivering sustainable, profitable growth and continuing to outperform the diagnostic industry over the medium term.

Surendran Chemmenkotil: With strong momentum across all growth engines, healthy volume-led growth trajectory, and multiple productivity initiatives beginning to scale, we remain confident of delivering sustainable, profitable growth and continuing to outperform the diagnostic industry over the medium term. With this, I hand it over to Sameer, who will take us through the financial highlights. Thank you, and over to you, Sameer.

Speaker #1: With this, I hand the call over to Samir, who will take us through the financial highlights. Thank you, and over to you, Samir.

Speaker #2: Thank you, Surend. Good morning, everyone. Let me briefly walk you through the key financial highlights of quarter one, FY27. Revenue is ₹2,450 crore, registering growth of 17% year-on-year, supported by 10% growth in patient volume and 11% growth in test volume.

Sameer Patel: Thank you, Surendran. Good morning, everyone. Let me briefly walk you through the key financial highlights of Q1 FY27. Revenue stood at INR 450 crore, registering growth of 17% year-on-year, supported by 10% growth in patient volume and 11% growth in test volume. B2C and B2B revenue for the quarter grew 18% and 15% respectively on year-on-year basis. Our focus segment continued to perform well. TruHealth contributed 18% of Q1 FY27 revenue and grew 22% year-on-year. Specialty contributed 40% of revenue, grew 17% year-on-year. While the acquisition of Core Diagnostics was completed March 2025 and was therefore part of the deal for Q1 FY27, the acquisition of DAPIC Dehradun and Scientific Pathology Agra were completed towards end of the Q1 FY27. As a result, Q1 FY27 numbers are now consolidated. With respect to margins, Q1 EBITDA stood at INR 113 crore, growing 27% year-on-year.

Speaker #2: B2C and B2B revenue for the quarter grew 18% and 15%, respectively, on year on year basis. Our focus segment continued to perform well. True health contributed 18% of quarter one FY27 revenue and grew 22% year on year, and specialty contributed 40% of revenue through 17% year on year.

Speaker #2: While the acquisition of Core Diagnostic was completed on March 25 and was therefore part of the base for Q1 FY27, the acquisition of Depic Dehradun and Scientific Agra was completed towards the end of Q1 FY26.

Sameer Patel: While the acquisition of Core Diagnostics was completed March 2025 and was therefore part of the deal for Q1 FY27, the acquisition of DAPIC Dehradun and Scientific Pathology Agra were completed towards end of the Q1 FY27. As a result, Q1 FY27 numbers are now consolidated. With respect to margins, Q1 EBITDA stood at INR 113 crore, growing 27% year-on-year. EBITDA margin expanded by 210 basis points to 25.2%. Q1 PAT stood at INR 57 crore, growing at 26% year-on-year. PAT margin expanded by 90 basis points to 12.6%. With this, I open the floor for question and answers.

Speaker #2: As a result, Q1 FY27 numbers are now consolidated. With respect to margins, Q1 EBITDA stood at INR 113 crore, growing 27% year-on-year.

Speaker #2: EBITDA margin expanded by 210 basis points to 25.2%. Q1 PACC stood at INR 57 crore, growing at 26% year-on-year. PACC margin expanded by 90 basis points to 12.6%.

Sameer Patel: EBITDA margin expanded by 210 basis points to 25.2%. Q1 PAT stood at INR 57 crore, growing at 26% year-on-year. PAT margin expanded by 90 basis points to 12.6%. With this, I open the floor for question and answers.

Speaker #2: With this, I open the floor for questions and answers.

Speaker #3: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone.

Operator: Thank you. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Tausif Shaikh with BNP. Please go ahead.

Speaker #3: If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question.

Speaker #3: Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Tausif Shaikh with BNP.

Speaker #3: Please go ahead.

Speaker #4: Good morning. Thanks for the opportunity, and congratulations on a good set of numbers. My first question is on the patient volume growth of 10% during the quarter.

Tausif Shaikh: Good morning. Thanks for the opportunity, congrats on good set of number. First question is on patient volume growth of 10% during the quarter. Can you give us the split between B2B and B2C separately for the quarter? Also some color would be helpful on the strong volume growth, which we have seen this quarter despite a seasonally weak quarter and a delayed monsoon.

Speaker #4: Can you give us the split between B2B and B2C separately for the quarter? Also, some color would be helpful regarding the strong volume growth we have seen this quarter, despite it being a seasonally weak quarter and the delayed monsoon.

Speaker #2: So, the B2C patient volume growth is about 13.5%, and B2B patient volume growth is about 6%. That's the split between B2B and B2C.

Surendran Chemmenkotil: The B2C patient volume growth is about 13 and a half percentage, and B2B patient volume growth is about 6%. That's the split of B2B and B2C.

Speaker #5: And if you talk about Q1, sort of patient volume growth, you know, I think it's a combination of two things. You know, we also mentioned some of the things that are spurring the industry to progress in general.

Ameera Shah: If you talk about Q1 sort of patient volume growth, I think it's a combination of two things. We also mentioned some of the things that are spurring the industry to progress in general. Obviously part of it is execution in terms of building access in markets in which diagnostics was not frequently prescribed, and creating market categories for tests in which earlier people were not getting diagnosed at all. Part of it is seasonal sort of momentum. While Q4 was a normal quarter, it wasn't an exceptionally strong quarter. We don't know whether there was some overflow from there that made Q1 a little stronger than it normally is. A little difficult to completely dissect the reason, but we have some theories around what it could be.

Speaker #5: But, you know, obviously part of it is execution in terms of building access in markets in which diagnostics was not frequently prescribed, and creating market categories for tests in which, earlier, people were not getting diagnosed at all.

Speaker #5: And part of it is seasonal sort of momentum. While Q4 was a normal quarter, it wasn't an exceptionally strong quarter. And, you know, we don't know whether there was some overflow from there.

Ameera Shah: Part of it is seasonal sort of momentum. While Q4 was a normal quarter, it wasn't an exceptionally strong quarter. We don't know whether there was some overflow from there that made Q1 a little stronger than it normally is. A little difficult to completely dissect the reason, but we have some theories around what it could be.

Speaker #5: That made Q1 a little stronger than it normally is. It's a little difficult to completely dissect the reason, but we have some theories around what it could be.

Speaker #3: That's helpful, ma'am. Ma'am, my second question is related to your strategy in Tier 2 and Tier 3 cities and against standalone labs. We wanted to check whether Metropolis is involved in getting into O&M agreements or regional lab management with the standalone players, where Metropolis starts managing these labs and starts developing franchises.

Tausif Shaikh: That's helpful, ma'am. Ma'am, my second question is related to your strategy in Tier 2 and Tier 3 cities and against standalone labs. Wanted to check whether Metropolis is involved into getting into O&M agreement or regional lab management with the standalone players, where Metropolis starts managing these labs and start developing franchises, and ultimately there's some kind of profit share agreement with the standalone labs and Metropolis.

Speaker #3: And ultimately, there is some kind of profit-share agreement with the standalone labs and Metropolis.

Speaker #2: So, basically, we already have this business of the lab-on-lease model. You know, we have been running it for many years. What happens is, for a seasonal lab run by a pathologist, we just take over the lab completely and bring in all the systems, processes, people, etc., from Metropolis.

Surendran Chemmenkotil: Basically, we already have this business of lab-on-lease model. We are running it for many years. What happens is in a lab run by a pathologist, we just take over the lab completely and bring in all the system, processes, people, et cetera, from Metropolis. This is a model that we have been running it for a few years, and as and when we get the right opportunity, we just continue to explore this. What happens over a period of time after this is some of these cases we look at acquiring them or some places we continue to do the model for a longer duration of time. This is something that is already in working.

Speaker #2: So, this is a model that we have been running for a few years, and as and when we get the right opportunity, you know, we just continue to explore this.

Speaker #2: And what happens over a period of time after this is some of these cases, you know, we look at acquiring them or some places, you know, we continue to do the model for a longer duration of time.

Speaker #2: So this is something that is already in working.

Speaker #3: Is it possible? Can you share the number of labs you have in this model?

Tausif Shaikh: Is it possible, can you share the number of labs you have in this model?

Speaker #2: We, I'll have to come back to you on that, the exact number, because it's spread across the markets and, you know, this is, you know, been in operation for almost about 10 odd years now.

Surendran Chemmenkotil: I'll have to come back to you on that, the exact number, because it has been in operation for almost about 10 odd years now. I need to come back to you exactly on the specific numbers on this.

Speaker #2: So I need to come back to you exactly on the specific numbers on this.

Speaker #3: Thanks. That's helpful. I will get back in the queue.

Tausif Shaikh: Thanks. That's helpful. I'll get back in the queue.

Speaker #2: Yeah.

Speaker #3: The next question comes from the line of Suriya Patra with Philip Capital India. Please go ahead.

Operator: The next question comes from the line of Surya Patra with PhillipCapital India. Please go ahead.

Speaker #4: Yeah. Thanks for the opportunity, ma'am. So first thing is on the true health, which is definitely delivering a consistent performance, strong that too. And recently that you have mentioned, even radiology is also kind of a blended into that, which is also supporting the momentum there.

Surya Narayan Patra: Yeah. Thanks for the opportunity, ma'am. First thing is on the TruHealth, which is definitely delivering a consistent performance. Strong. That too. Recently that you have mentioned, even radiology is also kind of blended into that, which is also supporting the momentum there. Now I think you have taken a new initiative about TruHealth Mind & Body. Can you talk something about that? What is the objective here and what practically that we're trying to achieve through that new initiative, and what growth possible that we can achieve out of it?

Surya Patra: Yeah. Thanks for the opportunity, ma'am. First thing is on the TruHealth, which is definitely delivering a consistent performance. Strong. That too. Recently that you have mentioned, even radiology is also kind of blended into that, which is also supporting the momentum there. Now I think you have taken a new initiative about TruHealth Mind & Body. Can you talk something about that? What is the objective here and what practically that we're trying to achieve through that new initiative, and what growth possible that we can achieve out of it?

Speaker #4: And now, I think you have taken a new initiative about true health mind and body. So can you talk something about that? What is the objective here and what practically that we are trying to achieve through that new initiative and what growth possibly that we can achieve out of it?

Speaker #5: True health is basically got two parts of it, right? One part of it is you're basically trying to check what's happening in the body and mind, sort of start to finish.

Ameera Shah: TruHealth has basically got two parts of it. One part of it is you're basically trying to check what's happening in the body and mind sort of start to finish. In some cases, these are consumers who are walking in saying, "Look, I've not fallen sick, but I just want to find out what's going on." In some cases, these are consumers who are walking in for some illness tests, but are choosing to up-sell themselves to a bigger bundle, and say that, "Look, if I'm going to get pricked, then I might as well do more tests at one time." It's a combination of these two. Metropolis' attempt is to be a health partner to our consumers.

Speaker #5: In some cases, these are consumers who are walking in saying, look, I've not fallen sick, but I just want to find out what's going on.

Speaker #5: In some cases, these are consumers who are walking in for some illness tests, but are choosing to up sort of upsell themselves to a bigger bundle.

Speaker #5: And say that, look, if I'm going to get pricked, then I might as well do more tests at one time. So it's a combination of these two.

Speaker #5: And Metropolis's attempt is to be a health partner to our consumers. To say that, look, any kind of information that you need for your body, whether it's coming through blood or whether it's coming through vitals or it's coming through basic radiology or a test for, you know, your cognitive assessment or your mental health, we are here to sort of provide it for you.

Ameera Shah: To say that, "Look, any kind of information that you need for your body, whether it's coming through blood or whether it's coming through vitals, or it's coming through basic radiology or a test for your cognitive assessment or your mental health, we are here to sort of provide it for you." It's just an attempt to make sure that we are screening every aspect of ourselves. We don't really have any particular targets for individual packages or individual things, but overall, as a TruHealth portfolio, we certainly believe that we'll keep innovating new products and new options and keep growing it in multiple markets.

Speaker #5: So it's just an attempt to make sure that we are screening every aspect of ourselves and we don't really have any particular targets for individual packages or individual things.

Speaker #5: But overall, it's a true health portfolio we certainly believe that we'll keep innovating new products and new options and keep growing it in multiple markets.

Speaker #4: Is it a blend of even genomic and advanced radiology, ma'am?

Surya Narayan Patra: Is it a blend of even genomic and advanced radiology, ma'am?

Surya Patra: Is it a blend of even genomic and advanced radiology, ma'am?

Speaker #5: Radiology, yes. Basic radiology, yes. Things like X-ray, ECG, sonography are sometimes a part of it. But genomics are so far not a part of it.

Ameera Shah: Radiology, yes. Basic radiology, yes. Things like X-ray, ECG, sonography are sometimes a part of it. Genomics are so far not a part of it. That may be something we may do in the future once we become more comfortable with the science behind sort of predictive genomics, which we think at this point of time is more useful and scientifically correct for illness. The predictive genomics for wellness has still not gotten validated in India.

Speaker #5: That may be something we may do in the future once we become more comfortable with the science behind sort of predictive genomics. Which we think at this time point of time is more useful and scientifically correct for illness.

Speaker #5: And the predictive genomics for wellness has still not gotten validated in India.

Speaker #4: Sure. Second question is about the CGHS price revision. What has happened and I think industry is started getting the benefit. Hello. Am I audible?

Surya Narayan Patra: Sure. Second question is about the CGHS price revision, what has happened, and I think industry started getting the benefit. Hello, am I audible?

Surya Patra: Sure. Second question is about the CGHS price revision, what has happened, and I think industry started getting the benefit. Hello, am I audible?

Speaker #2: Yes, yes, you're audible. Go ahead.

Surendran Chemmenkotil: Yes, you're audible. Go ahead.

Speaker #4: Yeah. So the CGHS pricing benefit that is now, that is accruing to competition. So sure, if you can tell that, okay, what portion of our business is CGHS, whether we have seen any benefit out of it?

Surya Narayan Patra: Yeah. The CGHS pricing benefit that is now accruing to competition. Surend, if you can tell that, okay, what portion of our business is CGHS, whether we have seen any benefit out of it.

Surya Patra: Yeah. The CGHS pricing benefit that is now accruing to competition. Surend, if you can tell that, okay, what portion of our business is CGHS, whether we have seen any benefit out of it.

Speaker #2: So our contribution of CGHS to the business, overall business was, you know, almost about a percentage or so. Right? You know, so and hence, you know, we are not getting a huge bump upon the CGHS price increase depending.

Surendran Chemmenkotil: Our contribution of CGHS to the overall business was almost about a percentage or so. Right. Hence, we are not getting a huge bump up on the CGHS price increase depending, but whatever you get it out of that small business we have, we definitely get it. Unlike some of the other peer group companies, our case, the numbers are very low.

Speaker #2: But whatever you get it out of that small business we have, we definitely get it. But unlike some of the other peer group companies, you know, our case, you know, the numbers are very, very low.

Speaker #4: Okay.

Surya Narayan Patra: Okay.

Surya Patra: Okay.

Speaker #5: We are continuing to in panel with CGHS across the country. And while this one-time benefit will obviously not accrue next year, but overall, we believe that this is a business that can continue to grow fast as we keep in paneling.

Ameera Shah: We are continuing to empanel with CGHS across the country, and while this one-time benefit will obviously not accrue next year, but overall, we believe that this is a business that can continue to grow fast as we keep empaneling.

Speaker #4: Sure. You have alluded in the opening remarks of your five strategy for growth. But if you just see, because we have seen the integration benefit flowing in already, and the growth hence can see a moderation in the current financial year.

Surya Narayan Patra: Sure. You have alluded in the opening remarks your five strategy A for growth. If you just see, because we have seen the integration benefit flowing in already, the growth hence can see a moderation in the current financial year for the organic business now. Is it fair to believe that the way that you have alluded, the focus is on the B2B growth and that to tier 3 kind of areas, that is the core area beyond what qualitative or AI-related kind of initiative that we are taking? What would be the kind of real driver here going ahead?

Surya Patra: Sure. You have alluded in the opening remarks your five strategy A for growth. If you just see, because we have seen the integration benefit flowing in already, the growth hence can see a moderation in the current financial year for the organic business now. Is it fair to believe that the way that you have alluded, the focus is on the B2B growth and that to tier 3 kind of areas, that is the core area beyond what qualitative or AI-related kind of initiative that we are taking? What would be the kind of real driver here going ahead?

Speaker #4: Now for the organic business now. So is it fair to believe that the way that you have alluded, the focus is on the B2B growth and that to tier three kind of areas, that is the core area beyond what qualitative or AI related kind of initiative that we are taking?

Speaker #4: Or what would be the kind of real driver here going ahead?

Speaker #5: Just to clarify and then Sureen can talk about the plans. But just to clarify, our current numbers of Q1s, our organic growth, and therefore we believe as we said that the guidance, we believe if possible for the year is about 14 to 15 percent.

Ameera Shah: Just to clarify, then Suren can talk about the plans. Just to clarify, our current numbers of Q1 are organic growth, and therefore we believe, as we said that the guidance that we believe is possible for the year is about 14% to 15% for the year. Obviously, we said that we are expecting a margin expansion of 120 to 150 basis points for this year, which will be driven by lots of productivity and operating leverage. Suren can give you some-

Speaker #5: For the year. And obviously we said that we are expecting a margin expansion of 120 to 150 basis points for this year, which will be driven by lots of productivity and operating leverage.

Speaker #5: But Sureen can give you some.

Speaker #2: Yeah. So just to further, you know, detail this out, you know. So we continue to maintain that our medium-term CAGR, you know, guidance is about 14 to 15 percentage.

Surendran Chemmenkotil: Yeah. Just to further detail this out. We continue to maintain that our medium-term CAGR guidance is about 14% to 15%, and out of the 14%, 15%, about 9% to 10% will come from patient volume growth, and the remaining will come from the product mix. The volume growth actually will happen because of the two initiatives. One is, of course, our expansion into the tier 2, tier 3 towns and increased number of network that we are building. Every quarter we do now about 200 to 250 new centers, and over a period of 2 to 3 quarters, that getting matured and that delivering the numbers. That cycle is actually now sitting for 5 to 6 quarters now. That's now continued to give us the benefits. The patient volume growth will come from that.

Speaker #2: And out of this 14, 15 percentage, about 9 to 10 percentage will come from volume patient volume growth and the remaining will come from the product mix.

Speaker #2: And the volume growth actually will happen because of the two initiatives. One is, of course, our expansion into the tier two, tier three towns and increased number of, you know, network that we are building.

Surendran Chemmenkotil: One is, of course, our expansion into the tier 2, tier 3 towns and increased number of network that we are building. Every quarter we do now about 200 to 250 new centers, and over a period of 2 to 3 quarters, that getting matured and that delivering the numbers. That cycle is actually now sitting for 5 to 6 quarters now. That's now continued to give us the benefits. The patient volume growth will come from that.

Speaker #2: So every quarter we do now about 200 to 250 new centers. And over a period of two to three quarters, that getting matured and that getting delivering the numbers.

Speaker #2: So that cycle is actually now kicked in for five to six quarters now. You know, that's now continued to give us the benefit. So the patient volume growth will come from that.

Speaker #2: And parallelly, what we do is all our existing centers, a lot of initiatives on the ground, digital, and the doctor engagement also, help us to get the patient volume growth from the existing centers.

Surendran Chemmenkotil: Parallelly, what we do is all our existing centers, a lot of initiatives on the ground, digital, and the doctor engagement also help us to get the patient volume growth from the existing centers. Their productivity goes up. That gives me the patient volume growth, and that's why we are saying that about 9% to 10% is definitely doable going ahead. The mix actually is getting better because we already talked about the TruHealth and the specialty growing at around 17% on the specialty and 20% on TruHealth gives us the realization benefits of about 5% to 6%. That's largely the overall growth plans and the way we look at in the days to come.

Speaker #2: You know, their productivity goes up. So that gives me the patient volume growth. And that's why we are saying that about 9 to 10 percentage is definitely doable going ahead.

Speaker #2: And mix actually is getting better because we already talked about the true health and the specialty, you know, growing at around 17 percentage on the specialty and 20 percentage on true health gives us the realization benefits of about five to six percentage.

Speaker #2: Hence, that's the largely the overall, you know, growth plans and the way we look at in the days to come.

Speaker #4: Thank you.

Operator: Thank you. Participants, in the interest of time and fairness to others, please restrict yourselves to two questions. For any more questions, you may rejoin the queue. The next question comes from the line of Sudarshan Agarwal with Axis Capital. Please go ahead.

Speaker #2: Thank you.

Speaker #4: Participants in the interest of time and fairness to others, please restrict yourselves to two questions. For any more questions, you may rejoin the queue.

Speaker #4: The next question comes from the line of Sudarshan Agarwal with Axis Capital. Please go ahead.

Speaker #3: Yeah. Hi. Thanks. So one of the questions that I had was on your center closure. You said you have added around 300 centers, but in terms of the total center count, it has actually come down.

Sudarshan Agarwal: Hi. Thanks. One of the questions that I had was on your center closure. You said you have added around 300 centers, but in terms of the total center count, it has actually come down. I believe you would have rationalized some. These would be in tier 2, tier 3 towns, underperforming. How should we think about it going ahead? Net additions is something that you are saying you will add 500 or attrition will continue to happen?

Speaker #3: So I believe you would have rationalized some. So these would be in tier two, tier three towns, underperforming, and how should we kind of think about it going ahead?

Speaker #3: I mean, net additions is something that you are saying you will add 500 or attrition will kind of continue to happen?

Speaker #2: Yeah. So let me tell you about almost every year, you know, every year to 18 months, we take this call of looking at, you know, low productive centers, and, you know, centers where we have quality issues et cetera.

Surendran Chemmenkotil: Let me tell you about at almost every year to 18 months, we take this call of looking at low productive centers and centers where we have quality issues, et cetera. We just try to knock them off. In some cases, of course, the partner also decided to do something else or move out of the city, move out of the country, do something else in his life. It's a regular process. Every year we take a call on how many of them are not really been productive for us, not worth to put our efforts and energy there. That's why we just knock them off. This time, we knocked it off after almost 2 years, we knocked off these 300 centers. The number that we are talking about, 500 center expansion, is a net number that we are talking about.

Speaker #2: You know, we just try to knock them off. And in some cases, of course, you know, the partner also decided to do something else or move out of the city, move out of the country, you know, do something else in his life.

Speaker #2: So I mean, it's a regular, you know, process. So you know, every year we take a call on how many of them are not really been productive for us, not making, not work to, you know, put our efforts and energy there.

Surendran Chemmenkotil: Every year we take a call on how many of them are not really been productive for us, not worth to put our efforts and energy there. That's why we just knock them off. This time, we knocked it off after almost 2 years, we knocked off these 300 centers. The number that we are talking about, 500 center expansion, is a net number that we are talking about.

Speaker #2: That's why we just knock them off, you know, so this time, you know, we knocked it off after almost two years, you know, we knocked off this 300 centers.

Speaker #2: And the number that we are talking about, 500 center expansion, is a net number that we are talking about.

Speaker #3: Got it. Got it. And on my second question, so when you kind of allude to your tier two, tier three expansion, how is the traction on the wellness side over there?

Sudarshan Agarwal: Got it. On my second question, when you allude to your tier 2, tier 3 expansion, how is the traction on the wellness side over there? Your wellness portfolio, I would guess, is more on your metro cities or core markets, right? Is the traction in the tier 2, tier 3 markets also strong? Do you expect this wellness share to continue inching up over the next couple of years because of your foray into tier 2, tier 3?

Speaker #3: I mean, your wellness portfolio, I would guess, is more on your metro cities or core markets, right? So is the traction in the tier two, tier three markets also strong?

Speaker #3: And do you expect this wellness share to continue inching up over the next couple of years because of your 4A into tier two, tier three?

Speaker #2: Yeah. See, currently, majority of the wellness or a true health is happening in the big cities, you know, tier one and a little bit of tier two towns.

Surendran Chemmenkotil: See currently, majority of the wellness or TruHealth is happening in the big cities, tier 1 and a little bit of tier 2 towns. The second part of tier 2 towns and the tier 3 and beyond, it started to gain traction on the TruHealth. That's why we stay confident that there is an opportunity, there's a headroom available to build the TruHealth portfolio further. As and when a new center, a new town comes up, and basically the routine and semi-specialty, and then the specialty kicks off, and then later comes the TruHealth. That's the sequence in which the wellness gets built up. Currently we have a lot of opportunity to build the TruHealth portfolio from tier 1 and tier 2 towns, and we are just on the job on it.

Speaker #2: And you know, the tier two and the second part of tier two towns and the tier three and beyond is started to gain traction on the true health.

Speaker #2: Now that's why we stay confident that, you know, there is an opportunity. There's a headroom available to build, you know, the true health portfolio further.

Speaker #2: So as and when a new center or a new town comes up, you know, and basically the routine and semi-speciality and then the specialty kicks off and then the later comes the true health.

Surendran Chemmenkotil: As and when a new center, a new town comes up, and basically the routine and semi-specialty, and then the specialty kicks off, and then later comes the TruHealth. That's the sequence in which the wellness gets built up. Currently we have a lot of opportunity to build the TruHealth portfolio from tier 1 and tier 2 towns, and we are just on the job on it.

Speaker #2: So that's a sequence in which, you know, the true health, you know, the wellness gets built up. So I mean, currently, we have a lot of opportunity to build the, you know, true health portfolio from tier two and tier two towns.

Speaker #2: And we are just on the job on it.

Speaker #3: Got it. I have more questions. I'll get back in the queue. Thank you.

Sudarshan Agarwal: Got it. I have more questions. I'll get back in that case. Thank you.

Speaker #2: Yeah. Thank you.

Surendran Chemmenkotil: Yeah. Thank you.

Speaker #4: The next question comes from the line of Samit Bhaskar. From Kotak Institutional Equities. Please go ahead.

Operator: The next question comes from the line of Samit Bhaskar from Kotak Institutional Equities. Please go ahead.

Speaker #3: Yes. In the line of the five to six percent realization growth, which we had there in this quarter, was that entirely led by the true health and specialty exchange?

Samit Bhaskar: Yes. In the line of the 5% to 6% realization growth which we had there in this quarter, was that entirely led by the TruHealth and specialty mix change? Because if I look at the revenue growth and contribution on a YY basis, that the revenue growth was more or less in line with the company top line growth, and contribution was also roughly flattish. Just wanted to understand if there was any element of price hikes included here.

[Analyst] (Kotak Institutional Equities): Yes. In the line of the 5% to 6% realization growth which we had there in this quarter, was that entirely led by the TruHealth and specialty mix change? Because if I look at the revenue growth and contribution on a YY basis, that the revenue growth was more or less in line with the company top line growth, and contribution was also roughly flattish. Just wanted to understand if there was any element of price hikes included here.

Speaker #3: Because if I look at the revenue growth and contribution on our YY basis, that the revenue growth was more or less in line with the company top line growth.

Speaker #3: And contribution was also roughly flattish. So just wanted to understand if there was any element of price acts included here.

Speaker #2: No, there is absolutely no price increase during this quarter. In fact, it's last time we increased the prices was January 25. So there's no price increase after that.

Surendran Chemmenkotil: No, there is absolutely no price increase during this quarter. In fact, last time we increased the prices was January 2025. There's no price increase after that. We just talked about the CGHS price increase, which is a very insignificant part of our business. That really didn't help us too much. Most of it is driven by the organic growth, both in terms of volumes as well as the realization. Like you mentioned, the realization growth has come on the back of TruHealth and specialty growing at 21% and 17% respectively.

Speaker #2: And we just talked about the CGHS price increase, which is a very, very insignificant part of our business. So that really didn't help us too much.

Speaker #2: So most of it is driven by the organic growth, you know, both in terms of, you know, volumes as well as the realization. And like you mentioned, the realization growth has come on the back of true health and, you know, and specialty growing at 21 percentage and 17 percentage respectively.

Speaker #3: And what is our stance on price acts in the near to medium term? Are we planning any?

Samit Bhaskar: What is our stance on price hikes in the near to medium term? Are you planning any?

[Analyst] (Kotak Institutional Equities): What is our stance on price hikes in the near to medium term? Are you planning any?

Speaker #2: In the near future, we are not contemplating a price increase at this stage. I mean, you know, at the right appropriate opportunity, whenever the market is conducive to absorb a little more on the price, we will definitely would like to, you know, you know, do that.

Surendran Chemmenkotil: In the near future, we are not contemplating a price increase at this stage. At the right appropriate opportunity, whenever the market is conducive to absorb a little more on the price, we will definitely would like to do that. Definitely, the agenda is to at least pass on part of the inflation that may come on to us, to the consumer at the appropriate time.

Speaker #2: And definitely, you know, the agenda is to at least to pass on part of the inflation you know, that may come on to us to the consumer at the appropriate time.

Samit Bhaskar: My second question is on our medium-term margin guidance of 27% to 28% over the next couple of years. On one hand we are witnessing an improving productivity at some of our mature collection centers and labs. On the other hand, we are also expanding into tier 2, tier 3 towns where the margin profile is relatively a bit lower. Also in the context of the ongoing geopolitical situation, RM pressures. Could you split the margin guidance, maybe what kind of a drag we would be facing on this cost pressures and deteriorating geographic mix, and what kind of benefits from the productivity improvements?

[Analyst] (Kotak Institutional Equities): My second question is on our medium-term margin guidance of 27% to 28% over the next couple of years. On one hand we are witnessing an improving productivity at some of our mature collection centers and labs. On the other hand, we are also expanding into tier 2, tier 3 towns where the margin profile is relatively a bit lower.

Speaker #3: My second question is on our medium term margin guidance of 2017 to 28 percent. Over the next couple of years, so on one hand, we are witnessing an improving productivity at some of our mature collection centers and labs.

Speaker #3: On the other hand, we are also expanding into tier two, tier three towns, but the margin profile is relatively a bit lower. And also in the context of the ongoing geopolitical situation, RM pressures so how do could you split the margin guidance?

[Analyst] (Kotak Institutional Equities): Also in the context of the ongoing geopolitical situation, RM pressures. Could you split the margin guidance, maybe what kind of a drag we would be facing on this cost pressures and deteriorating geographic mix, and what kind of benefits from the productivity improvements?

Speaker #3: Maybe what kind of a drag we would be facing on this cost pressures and deteriorating tier deteriorating geographics and what kind of benefits from the productivity improvements?

Speaker #2: Yeah. So see, we have not now further expanding beyond the 750 towns. I mean, we are deepening our presence in 750 towns. So we have our network.

Surendran Chemmenkotil: Yeah. See, we are not now further expanding beyond the 750 towns. We are deepening our presence in 750 towns. We have our network, we have our logistics system, and we have our collection centers, we are going further deeper into 750 towns. We are not exposing to beyond 750 towns to add further cost at this point of time. Secondly, we have also halted the lab expansion agenda that we had on almost last five quarters. We have not really went on with the lab expansion. These two things will make sure that we don't further have any stress on margin because of the new towns and new labs. Right?

Speaker #2: We have our logistics system and we have our collection centers. So we are going further deeper into 750 towns. So we're not exposing to beyond 750 towns to add further cost at this point of time.

Speaker #2: And secondly, I mean, we have also altered the lab expansion agenda that we had on almost last five quarters. We are not really went on with the lab expansion.

Surendran Chemmenkotil: We have not really went on with the lab expansion. These two things will make sure that we don't further have any stress on margin because of the new towns and new labs. Right? Increasing productivity from the existing centers and the new centers coming up, we will continue to be the agenda and that is where we are confident about getting our margins to 27% and 28% on the back of the operating leverage and some of the other cost initiatives that we have already taken.

Speaker #2: So these two things will make sure that, you know, we don't further have any you know, stress on margin because of the new towns and new centers, you know, new labs, right?

Speaker #2: And increasing productivity from the existing centers and the new centers coming up, you know, we will continue to be the agenda and that's where we know we are confident about getting our margins to 27 and 28 percentage on the back of the operating leverage and rather some of the other cost initiative that we already taken.

Surendran Chemmenkotil: Increasing productivity from the existing centers and the new centers coming up, we will continue to be the agenda and that is where we are confident about getting our margins to 27% and 28% on the back of the operating leverage and some of the other cost initiatives that we have already taken.

Speaker #1: Just to add to that, the tier two, tier three cities do not have worse economics than the metros. So expanding to smaller markets does not mean that the margin profile you know, becomes in a worse situation.

Ameera Shah: Just to add to that, the tier 2, tier 3 cities do not have worse economics than the metros. Expanding to smaller markets does not mean that the margin profile becomes in a worse situation. We've actually seen the margin profile to be fairly strong in strong branded markets, and therefore we are not worried about those economics changing significantly.

Speaker #1: We've actually seen the margin profile to be fairly strong in strong branded markets. And therefore, we are not worried about those economic changing.

Speaker #3: Okay. Thank you.

Samit Bhaskar: Okay. Thank you.

[Analyst] (Kotak Institutional Equities): Okay. Thank you.

Speaker #4: The next question comes from the line of Shyam Srinivasan with Goldman Sachs. Please go ahead.

Operator: The next question comes from the line of Shyam Srinivasan with Goldman Sachs. Please go ahead.

Speaker #5: Yeah. Good morning. Thank you for taking my question. Just the first one is on B2B revenues, which have after I think 15 percent organic growth last year, we have maintained that sorry, 15 percent in quarter four.

Shyam Srinivasan: Good morning. Thank you for taking my question. Just the first one is on B2B revenues, which have after, I think, 15% organic growth last year, we've maintained that. Sorry, 15% in Q4, we've kind of maintained the same in Q1. Thank you for dissecting it between volume at 6%. Just want to understand from the 9%, how should we look at-- Is it TruHealth plus specialty that's increasing faster and that's leading to higher realizations? If you could just explain some of the dynamics around B2B and maybe a note on competitive intensity as well, please.

Speaker #5: We've kind of maintained the same in quarter one. And I also thank you for dissecting it between volume at 6 percent. So just want to understand from the 9 percent, how should we look at, you know, is it true health plus specialty that is increasing faster and that's leading to higher realizations?

Speaker #5: If you could just explain some of the dynamics around B2B and maybe a note on competitive intensity as well, please.

Speaker #2: Okay. Let me just, you know, update you on the number. Like, you know, quarter four when we said 15 percentage B2B growth, you know, that was largely organic.

Surendran Chemmenkotil: Okay. Let me just update you on the number. Q4 when we said 15% B2B growth, that was largely organic. We did not consider the new acquired entities like Core, et cetera, on the denominator. This time when we are saying that 15% B2B business growth, the Core revenue is also on the denominator, right? At least in terms of the number wise, just one clarification that I would like to give you. Most of the business that we have on B2B is on specialty. Because at the end of the day, who is our B2B customer? B2B customers are smaller labs, hospitals, and institutional business, et cetera. We get more and more specialty from B2B hospitals and B2B labs.

Speaker #2: You know, we did not consider the new acquired entities like Core, et cetera on the denominator. But this time when we are saying that, you know, 15 percentage B2B business growth, the core revenues also on the denominator, right?

Speaker #2: So that's the I mean, at least in terms of the number wise, you know, one clarification that I would like to give you. And most of the business that we have on B2B is on specialty.

Speaker #2: Because at the end of the day, who is our B2B customer? B2B customers are smaller labs, hospitals, and then of course institutional business, et cetera.

Surendran Chemmenkotil: Because at the end of the day, who is our B2B customer? B2B customers are smaller labs, hospitals, and institutional business, et cetera. We get more and more specialty from B2B hospitals and B2B labs. Of course, our corporate and the other institutional business that we have, that's the only place that we have things beyond the specialty business. Largely, you must assume that it's specialty business.

Speaker #2: So we get more and more specialty from B2B hospitals and B2B labs. But of course our corporate and the other institutional business that we have, that's only place that we have things beyond the specialty business.

Surendran Chemmenkotil: Of course, our corporate and the other institutional business that we have, that's the only place that we have things beyond the specialty business. Largely, you must assume that it's specialty business.

Speaker #2: So it's largely you know, you must assume that it's specialty business.

Speaker #1: So on the competitive dynamics, like Soreen said, your B2B labs are your customers, but it depends on which kind of lab you go and add, right?

Ameera Shah: On the competitive dynamics, like Suren said, your B2B labs are your customers, it depends on which kind of lab you go and add, right? For example, across the country, there are something like three lakh labs, and only about 10% of them are run by MD pathologists. 90% are run by technicians. Therefore, what lands up happening is the kind of tests that they are able to do locally and the kind of tests they are able to refer are different, because the doctor who's referring to them is different. Usually, it's the GP who's referring to the technician lab, and therefore treating more common illnesses which may or may not require a specialized test. Therefore the technician lab will process a few routine tests themselves and outsource what we call a semi-specialized test.

Speaker #1: So for example, across the country, there are something like 3 lakh labs. And only about 10 percent of them are run by MD pathologists.

Speaker #1: 90 percent are run by technicians. And therefore, what lands up happening is the kind of tests that they are able to do locally and the kind of tests they are able to refer.

Speaker #1: Are different because the doctor who's referring to them is different. So usually it's the GP who's referring to the technician lab. And therefore, treating more common illnesses, which may or may not require specialized tests.

Ameera Shah: Usually, it's the GP who's referring to the technician lab, and therefore treating more common illnesses which may or may not require a specialized test. Therefore the technician lab will process a few routine tests themselves and outsource what we call a semi-specialized test. It is the MD pathologist labs, the hospitals, and the nursing homes who traditionally will have some specialists with them, who will then treat more complex diseases.

Speaker #1: And therefore, the technician lab will process the few routine tests themselves and outsource what we call a semi-specialized test. It is the MD pathologist labs and the hospitals and the nursing homes who traditionally will have some specialists with them, who will then treat more complex diseases.

Ameera Shah: It is the MD pathologist labs, the hospitals, and the nursing homes who traditionally will have some specialists with them, who will then treat more complex diseases. Therefore, while the hospitals and the MD labs will do the routine tests in-house, they will outsource more specialty tests. A lot of this is about selecting the kind of customer that you want business from, and therefore, Metropolis goes to those type of customers who actually have the ability to outsource specialized tests, and we actually help them grow by creating the market for them as well. On the competitive dynamic space, we've seen nothing irrational happening. I mean, the normal competitive intensity in the diagnostics industry, which we have seen for 10 to 15 years, continues to be there, where obviously everybody is jostling for their piece of the pie.

Speaker #1: And therefore, while the hospitals and the MD labs will do the routine tests in-house, they will outsource more specialty tests. So a lot of this is about selecting the kind of customer that you want business from.

Ameera Shah: Therefore, while the hospitals and the MD labs will do the routine tests in-house, they will outsource more specialty tests. A lot of this is about selecting the kind of customer that you want business from, and therefore, Metropolis goes to those type of customers who actually have the ability to outsource specialized tests, and we actually help them grow by creating the market for them as well. On the competitive dynamic space, we've seen nothing irrational happening.

Speaker #1: And therefore, Metropolis goes to those type of customers that we are actually looking who actually have the ability to outsource specialized tests. And we actually help them grow by creating the market for them as well.

Speaker #1: So on the competitive dynamic space, we have seen nothing irrational happening. I mean, the normal competitive intensity in the diagnostics industry, which we have seen for 10 plus 10 to 15 years continues to be there.

Ameera Shah: I mean, the normal competitive intensity in the diagnostics industry, which we have seen for 10 to 15 years, continues to be there, where obviously everybody is jostling for their piece of the pie. However, we have seen that obviously not everybody is succeeding the same way. It's easy in our industry to pick up samples and just to build distribution. The unit economics of those samples, the quality of that business is what really differentiates one player from another.

Speaker #1: Where obviously everybody is jostling for their piece of the pie. However, we have seen that you know, obviously not everybody is succeeding the same way.

Ameera Shah: However, we have seen that obviously not everybody is succeeding the same way. It's easy in our industry to pick up samples and just to build distribution. The unit economics of those samples, the quality of that business is what really differentiates one player from another. Usually we've seen that a lot of the entrants who've come in are going after volumes at high servicing costs, and therefore are not able to make money in this industry. Most of them are able to get to INR 50 crore, INR 75 crore a year by doing this, and then they realize that they're not making money, and then they understand that actually this is a little harder a business than originally thought. Maybe start stagnating a little bit. To scale profitably is really the challenge and the goal in this business for everybody.

Speaker #1: It's easy in our industry to pick up samples and just to build distribution. But the unit economics of those samples, the quality of that business is what really differentiates one player from another.

Speaker #1: And usually we've seen that a lot of the entrants who've come in are going after volume. At high servicing costs, and therefore are not able to make money you know, in this industry.

Ameera Shah: Usually we've seen that a lot of the entrants who've come in are going after volumes at high servicing costs, and therefore are not able to make money in this industry. Most of them are able to get to INR 50 crore, INR 75 crore a year by doing this, and then they realize that they're not making money, and then they understand that actually this is a little harder a business than originally thought.

Speaker #1: So most of them are able to get to 50 crore, 75 crores a year by doing this. And then they realize that they're not making money.

Speaker #1: And then they understand that actually this is a little harder business than originally thought. And then maybe start stagnating a little bit. So to scale profitably is really the challenge and the goal in this business for everybody.

Ameera Shah: Maybe start stagnating a little bit. To scale profitably is really the challenge and the goal in this business for everybody. All people are not able to do it unless you have the right domain and the right scale opportunities, and the ability to build trust with doctors that gets you a full-price patient walking in and specialty tests.

Speaker #1: And all people are not able to do it unless you have the right domain and the right scale opportunities and the ability to build trust with doctors that gets you a full price patient walking in and specialty tests.

Ameera Shah: All people are not able to do it unless you have the right domain and the right scale opportunities, and the ability to build trust with doctors that gets you a full-price patient walking in and specialty tests.

Speaker #4: Thank you. The next question comes from the line of Abin Benny with JM Financial Institutional Securities. Please go ahead.

Operator: Thank you. The next question comes from the line of Abin Benny with JM Financial Institutional Securities. Please go ahead.

Abin Benny: Thank you for the opportunity. I hope I'm audible. My first question is regarding that, if we have to think of in terms of the next cycle of potential acquisitions, let's say in future. Ma'am, what would be the newer geographies and capabilities where we would want to focus on? Any white spaces that we might want to fill up?

Speaker #3: Thank you for the opportunity. I hope I'm audible. My first question is regarding that if we have to think of in terms of the next cycle of potential acquisitions, let's say in future, ma'am, what would be the newest geographies and capabilities where we would want to focus on any white spaces that we might want to fill up?

Speaker #1: So there are still many, many markets across all parts of India. That we may not have a strong consumer brand in that particular sector or that particular market.

Ameera Shah: There are still many markets across all parts of India that we may not have a strong consumer brand in that particular sector or that particular market. I think we would continue to be open to bolt-on acquisitions where following the same path we have in the past, where you are acquiring a strong consumer brand, which is based on ethical practices, strong science, and positive unit economics. The people behind the scenes matter as well because they continue to work with you, therefore them having a good reputation, and all of it coming at a disciplined valuation. That combination is not always easy to find, but we continue to search for those kind of deals for us.

Speaker #1: So I think we would continue to be open to bolt-on on acquisitions where following the same path we have in the past, where you're acquiring a strong consumer brand, which is based on ethical practices, strong science, and positive unit economics.

Speaker #1: The people behind the scenes matter as well because they continue to work with you. So therefore, them having a good reputation and all of it coming at a disciplined valuation.

Ameera Shah: The people behind the scenes matter as well because they continue to work with you, therefore them having a good reputation, and all of it coming at a disciplined valuation. That combination is not always easy to find, but we continue to search for those kind of deals for us. We are also open to doing larger deals if finally there is an accruance of value for our shareholders, which is EPS accretive, and we are able to get at the right prices and potentially turn around.

Speaker #1: So that combination is not always easy to find, but we continue to search for those kind of deals for us. We are also open to doing larger deals if finally there is an accruish, you know, an accruance of value for our shareholders, which is EPS accretive.

Ameera Shah: We are also open to doing larger deals if finally there is an accruance of value for our shareholders, which is EPS accretive, and we are able to get at the right prices and potentially turn around.

Speaker #1: And we're able to get at the right prices and potentially turn around.

Speaker #3: Got it. And the second question, so the GLP trend that we are now seeing is going down in the pharma industry. So what is the kind of trend that we are observing on the diagnostics end?

Abin Benny: Got it, ma'am. The second question. The GLP-1 trend that we are now seeing is going down in the pharma industry. What is the kind of trend that you are observing on the diagnostics and any color regarding the current way the industry is shaping up for us now?

Speaker #3: Any color regarding the current way the industry is shaping up for us now?

Speaker #1: You mean specific to GLP?

Ameera Shah: You mean specific to GLP-1?

Speaker #3: Yes, ma'am. GLP and like diabetic industry.

Abin Benny: Yes, ma'am. GLP-1 and diabetic industry.

Speaker #1: See, the tests that are required for a pre-screening or pre-prescription GLP are fairly common tests. And while we have created packages for you know, pre-GLP testing, doctors are maybe writing their own prescriptions and not necessarily only writing the packages.

Ameera Shah: See, the tests that are required for the pre-screening or pre-prescription GLP-1 are fairly common tests. While we have created packages for pre-GLP-1 testing, doctors are maybe writing their own prescriptions and not necessarily only writing the packages. Some of these tests are fairly common for other diseases or illnesses or areas as well. It's quite difficult to sort of separate whether it is meant for GLP-1 or not. That could be a contributor to the growth as well, in the organic growth, it's possible, and not be sort of specified under GLP-1 itself. I think it's still early days, because while people are taking injections and drugs as we've seen, I think this will play out a little longer over time.

Speaker #1: So some of these tests are fairly you know, common for you know, other diseases or illnesses or areas as well. So it's quite difficult to sort of separate you know, whether it is meant for GLP or not.

Ameera Shah: It's quite difficult to sort of separate whether it is meant for GLP-1 or not. That could be a contributor to the growth as well, in the organic growth, it's possible, and not be sort of specified under GLP-1 itself. I think it's still early days, because while people are taking injections and drugs as we've seen, I think this will play out a little longer over time.

Speaker #1: So that could be a contributor to the growth as well. It you know, in the organic growth, it's possible you know, and not be sort of specified under GLP itself.

Speaker #1: But I think it's still early days. Because while people are taking injections and drugs, as we have seen, you know, I think this will play out a little longer over time.

Speaker #3: Got it, ma'am. Thank you very much.

Abin Benny: Got it, ma'am. Thank you very much.

Speaker #4: The next question comes from the line of Kunal Tanvi. With Banyan Tree Advisors. Please go ahead.

Operator: The next question comes from the line of Kunal Thanvi with Banyan Tree Advisors. Please go ahead.

Speaker #5: Hi. And thanks for the opportunity. So I had two questions. One was on you know, Ameera's Ameera, you had made a comment about you know, the three reasons for you know, accelerated growth for us and the industry.

Kunal Thanvi: Hi, thanks for the opportunity. I had two questions. One was on, Ameera, you had made a comment about the three reasons for accelerated growth for us and the industry. One of them was about share of organized players improving more and more. Can you put more light on this? What are the trends that you're seeing, and is there any unusual increase that you've seen in the last 18 months or so? Or it is the usual slow share that we have been taking through? Second question was, when we see our growth and when we see all national players, the larger ones, we've seen an uptick in the base rate growth for all of the large players, including Metropolis. Of course, it has been slightly higher than your stated guidance for this year.

Speaker #5: One of them was about you know, share of organized place improving over an organized. Can you put more light on this? You know, what are the trends that you're seeing?

Speaker #5: And what is is there any unusual you know, increase that you have seen in last 18 months or so? Or it is the usual slow share that we have been taking through?

Kunal Thanvi: Or it is the usual slow share that we have been taking through? Second question was, when we see our growth and when we see all national players, the larger ones, we've seen an uptick in the base rate growth for all of the large players, including Metropolis. Of course, it has been slightly higher than your stated guidance for this year.

Speaker #5: Second question was you know, when we see our growth and when we see all national players are larger ones, we have seen an uptick in the base rate growth for all of the large players, including Metropolis.

Speaker #5: And when and of course, it has been slightly higher than your you know, stated guidance for this year any thoughts on on the guidance like like when we say putting 15%, are we being conservative?

Kunal Thanvi: Any thoughts on the guidance like, when we say 14% to 15%, are we being conservative or you feel this quarter growth was slightly one-off, and from Q2 it will go back to the base rate for us and for the industry? It is like now three quarters in a row when we've seen, apart from Metropolis, other players also inching up in terms of their base rate growth. These are the two questions. Thanks.

Speaker #5: Or it is you know, you feel this this quarter growth was slightly one-off and from Q2 it will you know, go back to the base rate for us and for the industry.

Speaker #5: Because it is like now three quarters in a row when we've seen you know, apart from Metropolis, other players also inching up in terms of their base rate growth.

Speaker #5: Yeah, these are the two questions. Thanks.

Speaker #1: So I mean, I think on your first question, look, there is no third-party industry-level data to provide you about movement of unorganized to organized.

Ameera Shah: I think on your first question, look, there is no third-party industry level data to provide you about movement of unorganized to organized. I don't have any data points. I can only tell you anecdotally. When we speak with vendors in the industry, we sort of get an assessment of their providing services to smaller unorganized sector, products and services, and providing to larger. The anecdotal data that we get from them is that the volume growth at the smaller labs and the unorganized sector is slower, as they are buying less materials from them. It is faster at some of the organized players. That is one anecdotal sort of evidence that you get. The same thing happens when we are engaging with our B2B customers on the ground.

Speaker #1: So I don't have any data points. So I can only tell you anecdotally when we speak with vendors in the industry, and we sort of get an assessment of you know, their providing services to smaller unorganized sector products and services.

Speaker #1: And providing to the larger the anecdotal data that we get from them is that the volume growth at the smaller labs and the unorganized sector is slower.

Ameera Shah: The anecdotal data that we get from them is that the volume growth at the smaller labs and the unorganized sector is slower, as they are buying less materials from them. It is faster at some of the organized players. That is one anecdotal sort of evidence that you get. The same thing happens when we are engaging with our B2B customers on the ground. You get a sense that the price increase for them is difficult, volume increase is marginal.

Speaker #1: They are buying less materials from them. And it is faster at some of the organized players. So you know, that is one anecdotal sort of evidence that you get.

Speaker #1: The same thing happens when we are engaging with our B2B customers on the ground. You get a sense that you know, price increase for them is difficult.

Ameera Shah: You get a sense that the price increase for them is difficult, volume increase is marginal. Therefore, you also find some very small ones shutting down. You can definitely see some green shoots or early trends of organization of the industry. It is a slow and steady pace. There is no catalyst which is causing it to now transform from 10% to 15% organized industry to suddenly a 30% that you're going to see a very marked change. I think every year, as we've been seeing, we'll continue to see it sort of scraping away and consolidating, but it is a slower journey. It is not going to be a super fast journey. I think on your.

Speaker #1: Volume increase is marginal. And therefore, you also find some very small ones shutting down. So you can definitely see some green shoots or early trends of sort of you know, organization of the industry.

Ameera Shah: Therefore, you also find some very small ones shutting down. You can definitely see some green shoots or early trends of organization of the industry. It is a slow and steady pace. There is no catalyst which is causing it to now transform from 10% to 15% organized industry to suddenly a 30% that you're going to see a very marked change. I think every year, as we've been seeing, we'll continue to see it sort of scraping away and consolidating, but it is a slower journey. It is not going to be a super fast journey. I think on your.

Speaker #1: But it is a slow and steady pace. It is not something which is there is no catalyst which is causing it to now transform from you know, 10, 15 percent organized industry to suddenly a 30 percent that you're going to see a very marked change.

Speaker #1: So I think every year as we've been seeing, we'll continue to see it sort of scraping away and consolidating. But it is a slower journey.

Speaker #1: It is not going to be a super fast journey. I think on your.

Speaker #2: Second question is whether your projection for the.

Surendran Chemmenkotil: Second question is whether your projection for the-

Speaker #1: For the guidance. Look, I think none of us have a crystal ball. And the reality is climate change is changing everything for everybody. Weathers are unpredictable.

Ameera Shah: For the guidance. Look, I think none of us have a crystal ball. The reality is climate change is changing everything for everybody. Weathers are unpredictable, and our business is heavily influenced by weather. The conditions which then impact and create diseases and then require testing. It's quite difficult to predict. I think we would like to stick to our guidance for 14% and 15%, because as you have seen over the last 2 quarters before this, we have been able to deliver that number. We don't want to focus really on the seasonality of quarter by quarter because life is very difficult to predict that way. I think over the overall year, I think we feel fairly comfortable in sort of getting to a 14% to 15% number.

Speaker #1: And our business is heavily influenced by weather. And the conditions which then impact and create diseases. And then you know, require testing. So it's quite difficult to predict.

Speaker #1: I think we would like to stick to our guidance for 14, 15 percent. Because as you have seen over the last two quarters before this, we have been able to deliver that number.

Ameera Shah: I think we would like to stick to our guidance for 14% and 15%, because as you have seen over the last 2 quarters before this, we have been able to deliver that number. We don't want to focus really on the seasonality of quarter by quarter because life is very difficult to predict that way. I think over the overall year, I think we feel fairly comfortable in sort of getting to a 14% to 15% number.

Speaker #1: So we don't want to focus really on the seasonal seasonality of quarter by quarter. Because life is very difficult to predict that way. But I think over the overall year, I think we feel fairly comfortable in sort of getting to a 14 to 15 percent number.

Speaker #5: Sure.

Kunal Thanvi: Sure. Thank you.

Speaker #4: Thank you. The next question comes from the line of Tarun Bhatnagar. With Rebecca Investment Partners. Please go ahead.

Operator: Thank you. The next question comes from the line of Tarun Bhatnagar with Tribeca Investment Partners. Please go ahead.

Speaker #5: Hi. Thank you for taking for taking my question. My question is on the pricing. One of your large peers has mentioned that they are really looking at pricing.

Tarun Bhatnagar: Hi. Thank you for taking my question. My question is on the pricing. One of your large peers has mentioned that they are relooking pricing. My question is whether you think the industry is more conducive to price increases, and what factors will determine whether you take a price increase? The second question is if you can guide us on the CapEx for the next few years. Thank you.

Speaker #5: So my question is whether you think the industry is more conducive to price increases? And what factors will determine whether you take a price increase?

Speaker #5: And the second question is if you can guide us on the capex for the next few years. Thank you.

Speaker #2: So you know, Metropolis we have seen the last two, three years, you know, every year we have taken a price increase. You know, last three years, if you look at it, you know, this is a year we haven't taken a price increase.

Surendran Chemmenkotil: Metropolis, you have seen the last two, three years, every year we have taken a price increase, last three years, if you look at it. This is a year we haven't taken a price increase. That's largely because of the GST benefits that has come into the industry, and we thought it's passing on to the consumer is the right thing to do. That's the reason we have not taken the price increase. Otherwise, there's always a cost of inflation, and we would like to build that on the price increase. This year, then we didn't do it for the reasons I mentioned. As you go forward, of course, part of the inflation will have to be passed on to the consumer. Wherever that need to be done, we will definitely do it.

Speaker #2: I mean, that's largely because of the GST benefits that has come into the industry. And we thought, you know, it's passing on to the consumer is the right thing to do.

Speaker #2: That's the reason we have not taken the price increase. But otherwise, there's always a cost of inflation. And you know, we would like to build it that on the price increase.

Speaker #2: So this year, then we didn't do it for the reasons I mentioned. You know, as you go forward, of course, you know, part of the inflation will have to be passed on to the consumer.

Surendran Chemmenkotil: This year, then we didn't do it for the reasons I mentioned. As you go forward, of course, part of the inflation will have to be passed on to the consumer. Wherever that need to be done, we will definitely do it. As far as the CapEx is concerned, I think last year we did INR 65 crores of CapEx last year, and I think our CapEx requirement for this year will also be in the similar lines. I'm saying for the group, including all the acquired entities, everything put together.

Speaker #2: So whenever that need to be done, we will definitely do it. As well as the capex is concerned, I think last year we did 65 crores of capex.

Surendran Chemmenkotil: As far as the CapEx is concerned, I think last year we did INR 65 crores of CapEx last year, and I think our CapEx requirement for this year will also be in the similar lines. I'm saying for the group, including all the acquired entities, everything put together.

Speaker #2: You know, last year. And I think our capex requirement for this year will also be in the similar lines, you know. I'm saying for the group, including all the acquired entities, everything put together.

Speaker #5: Thank you.

Tarun Bhatnagar: Thank you.

Speaker #2: Yeah.

Surendran Chemmenkotil: Yeah.

Speaker #4: The next question comes from the line of Anshul Agrawal. With MK Global Financial Services. Please go ahead.

Operator: The next question comes from the line of Anshul Agrawal with Emkay Global Financial Services. Please go ahead.

Speaker #6: Hi. Thank you for the opportunity. First question is on network. Is our network customization planning done with are we going to rationalize more centers going forward?

Anshul Agrawal: Hi. Thank you for the opportunity. First question is on network. Is your network rationalization planning done with? Are you going to rationalize more centers going forward?

Speaker #2: No, Anshul, I think I told you know, this exercise we carry out in you know, once in 18 months, 24 months, only if there are centers which are not productive or not meeting our our you know, quality requirements.

Surendran Chemmenkotil: No, Anshul, I think I told you this exercise we carry out in once in 18 months, 24 months, only if there are centers which are not productive or not meeting our quality requirements. Of course, if any of the partners choose to move out, et cetera. Please understand also that this rationalization, we have done this without impacting any revenues because there's hardly any revenues coming from these centers which are very low productivity numbers. This is not going to happen every quarter. It could happen only once in 12 to 18 months time.

Speaker #2: You know, and of course, if any of the partner choose to move out, et cetera. So please understand also that, you know, this rationalization we have done this without impacting any revenues.

Speaker #2: Because there's hardly any revenues coming from these centers which are very low productivity number. So this is not going to happen every quarter. It could happen only once in 12 to 18 months time.

Speaker #6: Got it. So very clear. Just to understand the math behind the target that we gave of having 30 centers being servicing one lab. By the end of the year, if I just add about, say, 500 med admissions or gross admissions going forward, the lab network sort of diminishes.

Anshul Agrawal: Got it, sir. Very clear. Just to understand the math behind the target that we gave of having 30 centers servicing one lab by the end of the year. If I just add about, say, 500 net additions or gross additions going forward, the lab network sort of diminishes. Is there some rationalization that is expected to happen at the lab network as well?

Speaker #6: Is there some rationalization that is expected to happen at the lab network as well?

Speaker #2: So if you look at it, our lab numbers in the last two quarters only coming down, right? I mean, when we acquired core also all the core labs, wherever we have common labs, we have just shut them down.

Surendran Chemmenkotil: If you look at it, Our lab numbers in the last two quarters are only coming down, right? When we acquired Core, also all the Core labs, wherever we have common labs, we have just shut them down. I think largely there is no further opportunity for us to rationalize the labs per se. The ratio will go up largely on the back of the centers that we will add up. Right. If I add up another 500 centers during this year, net number, that will take the ratio another five per lab. That's why it's coming closer to that 30 number.

Speaker #2: So I think largely there is no further opportunity for us to rationalize the labs per se. So the number the ratio will go up largely on the back of you know, the center that we will add up.

Speaker #2: Right? So if I add up another 500 centers during this year, net number, I mean, that will take the ratio another five one you know, another five per lab.

Speaker #2: That's why it's coming closer to the 30 number.

Speaker #6: Got it, sir. That's it from mine. Thank you so much.

Anshul Agrawal: Got it, sir. That's it from my end. Thank you so much.

Speaker #4: The next question comes from the line of Raman Kevi. With Cequint Investments. Please go ahead.

Operator: The next question comes from the line of Raman KV with Sequent Investments. Please go ahead.

Raman Venkata Kerti: Hello sir, can you hear me?

Raman KV: Hello sir, can you hear me?

Speaker #5: Hello, sir. Can you hear me?

Speaker #1: Yep.

Ameera Shah: Yeah.

Raman Venkata Kerti: Sorry if this is a repetitive question, I joined the call a little late. Can you specify what was the revenue from CGHS during the quarter?

Raman KV: Sorry if this is a repetitive question, I joined the call a little late. Can you specify what was the revenue from CGHS during the quarter?

Speaker #5: Sorry for the if this is a repetitive question, I joined the call a little late. Can you specify what what was the revenue from CGSA CGHS during the quarter?

Speaker #2: I have mentioned that, you know, for us, you know, the CGHS is about a percentage or so of the total revenue, you know. So that's not a big number.

Surendran Chemmenkotil: I have mentioned that, for us, the CGHS is about a percentage or so of the total revenue. That's not a big number.

Speaker #5: Understood. And sir, also with respect to core diagnostic and true health, I just want to understand how are the average revenue per test for the portfolio of core diagnostic and true health versus Metropolis.

Raman Venkata Kerti: Understood. Sir, also with respect to Core Diagnostics and TruHealth, I just want to understand how are the average revenue per test for the portfolio of Core Diagnostics and TruHealth versus Metropolis, and what's the margin difference between both of them at full utilization? Like what will be the incremental margin difference when we compare the Core and TruHealth portfolio versus the standalone Metropolis portfolio?

Raman KV: Understood. Sir, also with respect to Core Diagnostics and TruHealth, I just want to understand how are the average revenue per test for the portfolio of Core Diagnostics and TruHealth versus Metropolis, and what's the margin difference between both of them at full utilization? Like what will be the incremental margin difference when we compare the Core and TruHealth portfolio versus the standalone Metropolis portfolio?

Speaker #5: And how are the margin what what's the margin difference between both of them at full utilization? Like, what will be the incremental revenue margin difference when we compare the core and true health portfolio versus the standalone Metropolis portfolio?

Speaker #2: See, core is a separate unit altogether. And true health is a you know, business vertical for us, you know, just to clarify that point.

Surendran Chemmenkotil: See, Core is a separate unit altogether, and TruHealth is a business vertical for us, just to clarify that point. TruHealth, our ticket size is currently about INR 2,500, is the ticket size. Right. The margins are largely in line with the company lines of margins. That's what it is. Core Diagnostics is overall part of the B2B segment for us, whatever we talked about the B2B revenue per patient, is the revenue per patient from a Core Diagnostics as well. The margins of Core Diagnostics, we already mentioned that in the last quarter and this quarter we are high single digit margins from the Core Diagnostics business.

Speaker #2: And you know, true health are you know, ticket size is currently about 2500 is the ticket size. Right? And the margins are largely in line with the company lines of margins, you know.

Speaker #2: So that's what it is. And core diagnosis is overall, you know, part of the B2B you know, segment for us. And you know, so whatever we talked about the B2B you know, revenue per patient is the revenue per patient from a core diagnostics, you know, as well.

Speaker #2: And the margins of core diagnostic, we already mentioned that, you know, last quarter and this quarter, we are you know, high single digit you know, margins from the core diagnostics business.

Speaker #5: So can can we assume that at full utilization of the full integration at of core diagnostic and once it picks up, let's say, about a year or two from now, both core and true health will have a better margin than your average margin of 22 24 percent?

Raman Venkata Kerti: Can we assume that at full utilization of the full integration of Core Diagnostics and once it picks up, let's say about a year or two from now, both Core and TruHealth will have a better margin than your average margin of 22% to 24%? Or will they have the same similar kind of margin profile? I just want to understand from a margin perspective, how much incremental margin difference is there between a regular test portfolio and a comprehensive specialized test portfolio from that point?

Raman KV: Can we assume that at full utilization of the full integration of Core Diagnostics and once it picks up, let's say about a year or two from now, both Core and TruHealth will have a better margin than your average margin of 22% to 24%? Or will they have the same similar kind of margin profile? I just want to understand from a margin perspective, how much incremental margin difference is there between a regular test portfolio and a comprehensive specialized test portfolio from that point?

Speaker #5: Or is it will they have the similar kind of margin profile? I just want to understand what's the in terms of from a margin perspective, how much incremental margin difference is there between our regular test portfolio and a comprehensive specialized test portfolio?

Speaker #1: Just to just to step in there. I think this this any data I give you will actually not answer that question. Because it is not as simple it's not a it's not a product where you're saying that a comprehensive testing portfolio has this margin and this.

Ameera Shah: Just to step in there, I think any data I give you will actually not answer that question because it is not as simple. It's not a product where you're saying that a comprehensive testing portfolio has this margin and this. A comprehensive testing portfolio also has many different tests which all have different margins. Broadly, we mentioned that when we did the acquisition of Core, we have said that within three to four years of acquisition, we would like to bring the Core margin to the 25%. That's the direction we are moving in. For example, at the end of the first year, last quarter, we saw approximately 8% margin for Core. This year, that will obviously move up in this direction.

Speaker #1: Because a comprehensive testing portfolio also has many different tests which all have different margins. So it depends on the combination of tests you have in that portfolio.

Speaker #1: But broadly, we mentioned that when we did the acquisition of core, we had said that within three to four years of acquisition, we would like to bring the core margin to the 25 percent number.

Speaker #1: And that's the direction we are moving in. So for example, at the end of the first year, last quarter, we saw approximately 8 percent margin for core.

Ameera Shah: That's the direction we are moving in. For example, at the end of the first year, last quarter, we saw approximately 8% margin for Core. This year, that will obviously move up in this direction. It will take us, like we said, three to four years to get to that number. TruHealth portfolio, as Surena mentioned, is already at the company level of margin. Therefore, both of these will continue to be in line and will be accretive to our EBITDA growth in the next year.

Speaker #1: And this year, that will obviously move up you know, in this direction. But it will take us, like we said, three to four years to get to that number.

Ameera Shah: It will take us, like we said, three to four years to get to that number. TruHealth portfolio, as Surena mentioned, is already at the company level of margin. Therefore, both of these will continue to be in line and will be accretive to our EBITDA growth in the next year.

Speaker #1: True health portfolio, as Soren mentioned, is already at the company level of margins. And therefore, both of these will continue to be in line and will be accretive to our EBITDA growth in the next four years.

Speaker #4: Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing remarks.

Operator: Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing remarks.

Speaker #1: Thank you to all of you for joining us for this call for Q1 FY27 today. As you heard from our comments, there's a management team remain extremely optimistic for what's to come in FY26, 27 for Metropolis.

Ameera Shah: Thank you to all of you for joining us for this call for Q1 FY27 today. As you heard from our comments, as a management team, remain extremely optimistic for what's to come in FY26, FY27 for Metropolis. We believe that we have all the levers, not only for a strong growth this year, but also for margin expansion strategy. We have our 3-year strategies in place that really continue to drive the business in a very positive direction organically. We continue to obviously scout for the right deals with the right people, not just for the sake of adding revenue or for the sake of doing deals, but for the right strategic direction. Those will continue to be on top of whatever we do organically. The industry continues to have the structural trends in the positive direction.

Speaker #1: We believe that we have all the levers not only for a strong growth this year, but also for margin expansion strategy. And we have our three-year strategies in place that really continue to drive the business in a very positive direction organically.

Speaker #1: We continue to obviously scout for the right deals with the right people, not just for the sake of adding revenue or for the sake of doing deals, but for the right strategic direction.

Ameera Shah: We continue to obviously scout for the right deals with the right people, not just for the sake of adding revenue or for the sake of doing deals, but for the right strategic direction. Those will continue to be on top of whatever we do organically. The industry continues to have the structural trends in the positive direction. We all look forward to a great Q2, just as we had a really good Q1. Thank you all for joining us, we'll chat with you next quarter.

Speaker #1: And those will continue to be on top of whatever we do organically. And the industry continues to have the structural trends and the positive direction.

Speaker #1: And we all look forward to a great Q2 just as we had a really good Q1. Thank you all for joining us. And we'll chat with you next quarter.

Ameera Shah: We all look forward to a great Q2, just as we had a really good Q1. Thank you all for joining us, we'll chat with you next quarter.

Speaker #4: Thank you, ma'am. Ladies and gentlemen, on behalf of GM Financial Institutional Securities, that concludes this conference call. Thank you for joining us. And you may now disconnect your lines.

Operator: Thank you, ma'am. Ladies and gentlemen, on behalf of JM Financial Institutional Securities, that concludes this conference call. Thank you for joining us, you may now disconnect your lines.

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Q1 2027 Metropolis Healthcare Ltd Earnings Call

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Metropolis Healthcare

Earnings