Afternoon, everyone. Thank you for joining us on this call to discuss the financial highlights of Apollo Hospitals for Quarter Three and the nine months of financial year 2021, which were announced yesterday. We have with us on the call today, the senior management team comprising Mrs. Suneeta Reddy, Managing Director, Dr. Hari Prasad, President of the Hospitals Division, Mr. A. Krishnan, Group CFO, Mr. Chandra Sekhar, CEO of AHLL, Mr. OB Reddy, CFO of the Pharmacy business, and Mr. Sanjiv Gupta, CFO of Apollo 24/7. Before we begin, I would like to mention that some of the statements made in today's discussions may be forward-looking in nature and may involve risks and uncertainties. Please note the disclaimer mentioning these risks and uncertainties, which is on slide number two of the investor presentation that has been shared earlier. Documents relating to our financial performance have been shared with all of you, and these have also been posted on our corporate website. I would now like to turn the call over to Mrs. Suneeta Reddy for her opening remarks. Over to you, ma'am. Thank you. Good afternoon, everyone, and thank you again for taking time out to join our call, even on a Saturday. I believe that all of you have received the earnings document that we shared yesterday. Calendar year 2021 has begun on a very positive note, with substantial breakthroughs achieved on COVID-19 vaccines. This pandemic, which created disruption to normal life in Quarter 1 and Quarter 2, has now started receding substantially in India. As the impact of the pandemic wanes, the economy in general and the healthcare industry is now gradually progressing towards normalcy. This recovery was evident in our performance in Quarter 3 FY 2021, which witnessed an ongoing uptick in patient footfalls and occupancy across the network. We saw substantial improvements on all metrics. On a quarter-on-quarter basis, healthcare services revenue grew 17%. Surgical volumes grew at 54%. Overall, IP volumes for the group increased by 21%, and occupancy improved to 63% from 56% in Quarter Two. We had allocated 2,300 beds for COVID across the hospital network during the pandemic, and have now reduced the allocation to 1,500 beds as of December 2020. In Quarter Three FY 2021, COVID contributed to 15% of net revenues, with a 25% share of occupied beds. COVID-related healthcare services revenue has now begun to taper off and is being effectively substituted for non-COVID revenue. However, since there has been limited resumption in the airline and rail traffic across the country, out-of-state and international business continues to be affected, especially on the OP front. OP is at around 65%-70% of normal levels, and we expect that progressive resumption of travel will bring back older levels of volumes, and are in parallel investing additional effort in strengthening local market share. Against this backdrop, let me walk you through the financials for the quarter. The company recorded standalone revenues of INR 2,367 crores and consolidated revenues of INR 2,760 crores. On a like-for-like basis, revenue growth was at 6%. The pharmacy platform as a whole reported double-digit revenue growth of 17%, while healthcare services revenue de-grew by 4% during the quarter. Our new hospitals recorded revenue growth of 7%, while mature hospitals revenue de-grew by 8% year-on-year. Margins in mature hospitals were strong at 20.6%, up from 5.3% in Quarter Two, an increase of 830 basis points. I'm happy to share that our margins in new hospitals were at 13.8%, a strong improvement from 8.81% in Quarter Two, and more than 350 basis points on a year-on-year basis. Three, Ind AS EBITDA for Quarter 3 FY 2021 stood at INR 301 crores compared to INR 201 crores in the previous quarter, a growth of 50%. With this, healthcare services EBITDA was at INR 229 crores, 101% growth compared to an EBITDA of INR 114 crores in Quarter 2 FY 2021. EBITDA after giving effect to Ind AS 116 was at INR 322 crores. Our comprehensive cost optimization initiated in Quarter 1 FY 2021 continued into this quarter as well, and we recorded a savings of INR 40 crores. As guided earlier, we expect to sustain a cost saving of INR 100 crores-INR 125 crores in FY 2022. As most of you closely tracking us are aware, the frontend pharmacy business was separated into Apollo Pharmacies Limited in Quarter 2 FY 2021, with effective date as September 1, 2020. AHEL now has pharmacy distribution as its business segment, continuing to hold 25.5% stake in Apollo Pharmacies Limited. The pharmacy platform that is including the front-end retail portion delivered a strong revenue and EBITDA growth in quarter three FY 2021. The pharmacy platform reported a growth of INR 1,440 crores in quarter three FY 2021, registering a 17% year-on-year growth. AHEL, which continues to be the exclusive distributor for Apollo Pharmacies, reported revenues of INR 1,126 crores in quarter three FY 2021, and INR 73 crores of EBITDA at 6.46% EBITDA margin. AHLL recorded EBITDA of INR 11 crores as compared to INR 5.7 crores in quarter three FY 2020. The business has recorded a 6% year-on-year growth in top line. Net debt as of 31st December 2020 is INR 2,598 crores. We have a debt-to-equity ratio of 0.71. In January, AHEL has raised equity capital of INR 1,170 crores via QIP. We are delighted with the response from marquee investors and pleased to share that the book was oversubscribed by 12.5 times. Part of this capital will be deployed towards acquiring the balance 50% stake in Apollo Gleneagles Hospital in Kolkata. Additionally, the proceeds from the fund raised would also enable AHEL to seek inorganic opportunities and further develop its digital platform, Apollo 24x7. Our board has approved the scheme of amalgamation of our wholly-owned subsidiaries, that is Apollo Homecare Limited and Western Hospitals Corporation with itself. The amalgamation of these two companies with the parent is expected to deliver significant synergies. I am happy to state that we have partnered with the government in the world's largest vaccination program, and have commenced vaccination of healthcare workers in 27 Apollo vaccination centers across the country. To conclude, we believe that things are moving in the right direction, and this quarter has helped us to gain momentum on the inpatient and surgical front. We have been able to cement our position as the safest network of hospitals providing world-class care for our patients during these trying times. Our initiatives to optimize and streamline the business have placed us in a good position to capitalize on the future growth potential over the medium and long term. I now have Dr. Hari Prasad, Krishnan, Obul Reddy, Chandra, and Sanjiv from 24x7 with me to take your questions. Thank you. Thank you very much. We will now begin the question and answer session. The first question is from the line of Neha Manpuria from J.P. Morgan. Please go ahead. Thank you for taking my question. My first question is on the ARPOB. Our ARPOB continues to surprise on the upside, seeing strong growth. While I understand the surgical volumes are going up, how should we look at the sustainable ARPOB growth from the current levels? Should we look at the current year as an elevated number which will normalize going forward? The ARPOB growth is clearly because the surgical volumes have gone up, also because the COVID ARPOB, which we showed in quarter two, quarter three, has come down. This has been reflected in the ARPOB, which is currently at INR 40,000. Next year, ma'am, would we be able to grow on this number as surgical continues to normalize on the 40,000? Two things which are important for you to understand is our new hospitals have been doing well also, as you have seen. The new hospitals ARPOB has also increased well. In this overall mix that you're seeing by cluster, we are aware that the new hospitals as a segment was around INR 32,000 ARPOB last year, and that has gone to INR 36,000 now. The new hospitals ARPOB, and we all know that the COVID ARPOB is only around INR 28,000 or whatever that is, around that number. Clearly, the new hospitals ARPOB is continuing to do well, and that we expect should be hence it's a sustainable number going forward. If you look at Tamil Nadu, et cetera, clearly, we still have ability to push the ARPOB because we still don't have some of the high-end surgeries and some of the international patients. We still have a potential to get Tamil Nadu higher and some of the other places like that higher as well. Can the new hospitals get to INR 40,000 ARPOB over time? Would that be possible? We would probably for now look at it at around 36 or 38. We are now at 36. We probably will look at 36 to 38 as the first milestone there, and then take it up. Okay. Understood. My second question is on the cost side. Again, I know Ma'am mentioned that we'll be able to sustain about INR 100 crore to INR 125 crore of cost saving in FY 2022. What was the level that we've achieved in this quarter? Should we look at this INR 100 crore to INR 125 crore as incremental, or this is the base on which our cost will increase? How should we look at the operating costs? It should be based on the FY 2020 base when we said INR 100-125 crores. It will be based on the FY 2020 base. Clearly, some of that is already baked into the numbers. That is incremental opportunity for cost savings since we've achieved only 40. No. Yes, broadly, if you ask me a bit of incremental opportunity is there for now. I wouldn't want to still guide that there is significant opportunity. 100 to 125 will continue to show the current EBITDA is something that we would like to sustain and grow. Let me put it like that. Understood. Thank you so much. Thank you. The next question is from the line of Anubhav Agarwal from Credit Suisse. Please go ahead. Yeah. Hi, good afternoon. One clarity on the previous question. When you say INR 40 crore saving, this was saving in this quarter, right? Which annualized is about INR 160 crore. How is that saving, saying that INR 100 crore-INR 125 crore is sustainable for 2023? Yeah. Of the INR 40 crore saving, there is also INR 10 crores in Delhi, which is not getting consolidated in our results. Clearly the INR 30 crores is the number that we have in the quarter, which is consolidated. The annualized number of that is INR 120 crores, and which we said we continue to say INR 100-125 crores. Which is why I said that the current EBITDA is something we can sustain and grow. Okay. Very clear. Second clarity on the ARPOB number. Even when you look at mature hospitals, here, I think the ARPOB that you've done this time is the highest ever we have done. I just want to understand, is there a big difference in the payer mix right now that ARPOB is significantly higher right now? This ARPOB is highest ever and still includes a good contribution from COVID. Clearly something has gone different in the non-COVID ARPOB. Clearly the tertiary care work and the quaternary care work have picked up. Earlier, I think a little bit of the COVID pandemic fear lingering on. People have not really come for all of the elective surgeries which were lower ARPOB. For example, some of the orthopedic work, and some of the general surgical work. What we have done is to look at the intensity of the case mix, and this has really changed in terms of, we're looking at more of transplants, we're looking at more of onco, and we're looking at more of the high-end cardiac and high-end neuro. This is really reflected in the ARPOB. You're saying that it was not the payer mix difference, it was largely the case mix difference which is resulting in this? Yes. Okay. Just two, three questions on the Apollo 24|7. When you have started this ProHealth thing, what exactly in layman's terms it means? Does it simply mean that if someone comes for the teleconsultation platform, rather than him choosing the doctor himself right now, the AI platform will help him suggest some of the options the doctor can go for? No. I think there's a little bit of confusion here. ProHealth is our preventive healthcare checkup. Which is, along with the COEs we promote like onco, et cetera. We believe that there's a potential to really reach INR 1,000 crore of revenue from preventive healthcare itself. The preventive health product has AI inbuilt into it. It also has gene sequencing and understanding, doing a genetic analysis. It is coupled with AI. It's a very high-end product, which is focused on well-being. It's preventive healthcare and well-being, and this is where we've launched it, and we believe that we can scale this up to about INR 1,000 crore of revenue in the next 36 months. This is part of 24/7 or is this outside 24/7? No. It's part of AHLL, but 24|7 will be used to actually funnel patients into ProHealth. It will be both. Okay. Just one or two more questions on 24/7. One is you announced the HDFC Bank partnership. What's been experience here so far? I know it's early days, but still trying to get some experience on top of partnership. Any other partnerships that you've also done apart from this? Sanjiv, you want to talk about the HDFC partnership? Yeah. Thanks, Akrit. Thanks for the question. HDFC partnership, yeah, it is early days, but we are seeing a lot of momentum. HDFC has got a very large customer database, and HDFC Bank as a service on the health side, we want to promote this amongst the entire user base. We are seeing a good traction as far as HDFC and Apollo 24|7 partnership is concerned. Apart from this, we are also in the dialogue with couple of more corporates. The corporates who have strategic tie-ups, and with time we'll talk about that also. At this stage, early, but we are seeing good results. Okay. Thank you. I'll join back the queue. The line of Sameer Baisiwala from Morgan Stanley. Please go ahead. Thanks so much, and good afternoon, everyone. Is it possible to talk about the overall occupancy? How we should see this going forward? I think it was 63% now, and pre-COVID it used to be 68%-69%, especially with the COVID patients moving out. Currently it is at 63%, and I think the main factor in that is, as we mentioned earlier, that travel had not yet opened up. These are mostly a reflection of our increase in local market share. We truly believe that when the road and air travel opens up completely, that the occupancies will move up significantly. We are seeing very healthy trends in all our new hospitals, some of which are in Tier 2, where healthcare has become localized and people are using these facilities. Our mature hospitals are also starting to do well. I think the reason that we believe that next quarter we should be able to see a pickup in occupancy with travel and roads opening up. Okay, great. Is it a possibility that COVID patient-related revenues move out faster than the core business? Quarter to quarter, we would actually trend down. 17% is the revenue from COVID, and I'm not talking about occupancy. I think that this will be balanced when the international patients come in and like I said, all the travel, et cetera, opens up. Plus, there's still a little bit of a lingering fear that do we really need to go to a hospital for surgery? As I said, our ARPOB is a reflection of the intensity of case mix that we're getting. We'll also get the high-margin secondary care work coming back. Net occupancies will go up. Okay. Thanks for this. Great job on the cash flow and net debt management. Is it possible to talk a bit more on the QIP fundraise, as to how do we break up between Gleneagles and then how much you want to invest in 24 by 7 and other inorganic opportunities? We raised INR 1,170 crores. We will use INR 410 crores for Gleneagles. Another INR 150 crores has been allocated for use for 24 by 7, and another INR 150 crores for our diagnostics. Really we are going to grow the diagnostics place in AHLL. Currently we have over 650 diagnostic centers, and we believe that in the next 24 months, we must be the strongest diagnostics player in the South, moving on to the East as well as the North. We have in use for INR 700 crores. The balance will be used to reduce debt and strengthen the balance sheet. When required we will have the ability to do some bolt-on acquisitions that we are looking at to strengthen our presence in certain markets. Okay, great. Thanks so much. If we have permission, one last question from my side. Sure. Apollo ProHealth seems to be a great step, Seema. Anything you can share on adoption? I know you've given the revenue target of INR 1,000 crores on next three years. Just on monetization, what's the revenue model? Are there any international benchmarks which we can use as case study? When we started out, we looked at iKang. I don't know if you've heard of it. It was a Chinese company that was doing these run-of-the-mill checkups. The chart was around two hours. When we looked at what Apollo stood for, we said we just can't do these checkups. If you look at a lot of these people who are checking blood, they are doing their own version of a checkup. We said the Apollo one has to be more meaningful. It has to have lifetime value. Keeping this in mind we've created ProHealth, which is a package that looks after well-being. It looks at markers that include stress, anxiety, besides the other things which are normal, the cardiac. Looks very closely at neuro issues. Having said that, since we launched it just last month, we have 12,000 people who have undergone their checkup. We have case studies where people have reduced weight and where we've managed to keep their blood sugar at normal levels. Yes, I think the feedback has been very good. We are getting ready to launch it on an all-India basis. Especially at this time when people are looking at OP and saying your ops have fallen away. I think this is something that will bring back the ops. Okay, great. Thank you so much. Thank you. The next question is from the line of Nikunj Agarwal from DAM Capital. Please go ahead. Thanks for taking my question. Ma'am, on the Apollo Gleneagles Hospital, with the recent changes, the insurance scheme which the West Bengal government has started, does it have any implications? What implications do you think it has for the business over there? This was something that was always there. It's a state insurance scheme, which has always been there. They have been pushing that, the funds available in the government kitty is not as high as the push which is there from the government. Some of this, we'll have to look at it as pre-election push. We don't see that this is going to impact us negatively. We are fine, whatever is required to be done on the government cases, we continue to do that. We should be able to navigate this well. This should not be a source of any potential concern around the West Bengal market share. No. Okay. Secondly, with the cost savings and all that we've introduced, managed to achieve in the business, what should be a sustainable EBITDA margin for our mature hospitals now going forward? We used to target 20% earlier. Is an aspirational target now higher 24%, 25%, even higher, sort of, in terms of where we can get to in the mature business? Where can the new hospitals really get to with this increased tailwind of these cost savings? Yeah. At the mature hospitals level, the first target is to get to 2023, 2024 in the next year. That is what we would like to get to. Clearly the business needs to come back, because some of the earlier businesses of international, et cetera, is also important for us. You are right that our cost effort that we have taken allows us to achieve that a bit faster if the business comes back at the same pace over the next one, two quarters. We are hoping for the same because clearly there is some kind of comfort in the patients' minds and the consumers' minds to come back. We are seeing patients are also coming, traveling from Bangladesh to Chennai. We have also seen patients traveling from Assam and West Bengal to Chennai. We have seen that all of that, in fact, 60% of our pre-COVID levels, even from out of Chennai, has started coming back, which is definitely good. If that comes back, you're right, we should be able to see beyond 24 in the next two years. Lastly on this one, the new hospitals have also had a very spectacular improvement in EBITDA margins. Is this sustainable, this 14.93% EBITDA margin level? This is the threshold, the level to really work with from here on. We have been guiding that we should get to 15% in the next 12 to 18 months, if you will. Right. This is what we continue to work on. Of course, this 13.8 is something that we have got for this quarter. Some of that is also enabled by high-end surgeries. As some of the other surgeries come, we still think we should be able to get close to 15% next year. If I speak my last one, you mentioned about the investment in the diagnostic platform. What would be your three-year goal for this business? Currently, it's like a INR 160 crore, INR 170 crore analyzed business from a net revenue perspective. Is that fair? Two, where do you see this same business really heading to over the next two to three years, given the fact that a couple of the large Pan-India players have become very aggressive in terms of making very large-scale investments in Southern India, which is our primary footprint at this point in time. Chandrasekar, would you answer that? Yes, ma'am. Our strategy will be to strengthen in our existing markets, which is essentially South and East, and opportunistic entry into some of the larger markets. As you rightly pointed out, we are tending to INR 170 crore to INR 180 crore for FY 2021. We are hoping to have a significant growth in FY 2022, combined by very few new market, but largely consolidating existing markets. We are looking at a three-year horizon two to three-year horizon where we want to hit the INR 100 crore mark. The next year's direction should be upward of INR 270 crore. Mr. Chandrasekar, how do you view the increased competitive intensity in the market with the two large Pan-India players really increasing their investments in this business, in this area in a meaningful way? It is not new capacity creation. It is organizing the unorganized. From that perspective, the pie in terms wouldn't change much. Yes, competitive intensity could change with more corporate behavior. I guess from an industry perspective, it is still 85% unorganized. The headroom for growth for organized players is only going to continue to be bullish. The brand acceptance in these markets of Apollo is very strong, especially in the southern markets, which, as you said, if someone is looking at consolidating and growing, we have a very strong brand acceptance in these markets which we are already present in. If Chandrasekar has a plan to grow, which he has, clearly we will see that we should be able to get the market share as well. If it is clear, Kushal, does it lead to a meaningful escalation in pricing competition in this market in your view? When unorganized moves to organized, I think price actually gets corrected upwards because the price from the unorganized is where it is lower. I guess it's a good place going forward for a few more years for the organized players, even from a price perspective and consolidation perspective. We have not mentioned this. We are definitely also starting to see significant amount of work that is starting to come by our 24|7, and certain leading diagnostics and diagnostics booking itself coming directly. As the digital platform ramps up, I think the ability to serve via strong presence and good phlebotomist home collection capabilities is what we are focusing and building on. We are very bullish about the future opportunity coming via digital as well. Got you. Thank you very much, and best of luck. Thank you. The next question is from the line of Shantanu Basu from SMIFS Limited. Please go ahead. Good afternoon. Thanks for the opportunity. I would like to know the COVID occupancy versus the non-COVID occupancy in Q3. If you can break up your overall occupancy into COVID and non-COVID. COVID occupancy. We had brought down the number of beds of COVID to 1,600 levels in December, and we have brought it down even further, the overall COVID beds, which we had actually classified. If you look at the COVID occupancy, out of the 1,600 that we had, in Q3, we were at 73% occupancy, which is 1,173 beds were occupied by COVID. Non-COVID occupancy was 60%. 60%, right? 60% for Q3. Again, it's important, since I give you this color, in that 60%, December was 67% of non-COVID. Clearly, while the quarter was 60% on non-COVID, December has already gone to 67% on non-COVID. In the COVID, while quarter was 23%, December was 48%. Okay. Would it be right to assume that we are inching close to our long-term 69% mark? No, I think it will probably take Q1 before we get back. It's not something that we can say, because the number, if you look at the beds, we have a COVID bed also, which we will now start releasing and putting it back to non-COVID. It's also a factor of classification of those beds. Because once we reclassify that and get that inventory back to non-COVID, our occupancy overall will probably show a bit of a dip, but our revenues will still hopefully be okay as we get some of the non-COVID revenues come back, which will bring a higher ARPOB. Right the 67% and 69, we'll have to think of it as Q1, Q2. Okay, great. What's the number of COVID beds that you have currently in hand? Now it's coming down to how much? It's now further down. January, we have. January. Jan is around 800 beds. January, 800. Okay. Inventory is around 800. The occupied bed is even lesser. Okay. Right. It is coming down drastically, right? From 1,500, 2,000. Yeah. Yes. Okay. Thank you. Thank you very much. Thank you. The next question is from the line of Prakash Agarwal from Axis Capital. Please go ahead. Hi. Thanks for the opportunity. First question on this Apollo Kolkata. Here, what I understand is the consolidation will start from February. I'm trying to understand, the ARPOB has increased already. When do we expect normalcy in occupancy, A, and how do we improve the margin from the previous peak and what is the management planning to do here, if that can be highlighted. Firstly, we won't consolidate that from February. It will probably be March or April because we've still not completed the transaction and we can consolidate it only after the transaction. We will complete the transaction over the next 30 to 45 days. It will probably be March or April. Overall, Kolkata, if you look at FY 2020 levels, et cetera, we should go back in FY 2022 to INR 400 crore-INR 450 crore opportunity on revenue for the next year, with at least INR 75 crore-INR 80 crore EBITDA, which is what we think we should be able to get in next year. I was trying to understand your medium-term plans in order to optimize the margins. I mean, first goal obviously would be to achieve the older occupancy and margins. How can we go beyond is what I wanted to understand. That is correct. What we've done is we've really recruited a few more surgeons and doctors. We are strengthening our Centers of Excellence. In terms of cardiology, orthopedics, oncology, and neuro we have very strong offerings. With this, I think we should see higher ARPOBs and better margins. We've already recruited these doctors. You would have noted that even Sourav Ganguly chose to come to Apollo Gleneagles. It's being positioned as a very high-end clinical care center. Okay. We are pushing it for a INR 40,000 ARPOB in the next year itself. Got it. Perfect. Secondly, for Medics Lucknow, I understand consolidation has already started. Would it come under the new hospital cluster, and would that be the reason for the margin spike in that segment? Which one you're saying? Medics. Medics has not yet come. It's only going to come ahead going forward. Going forward. Okay. This would further improve the margin levels? Yes, it will. There are going to be 3 areas which we see significant margin improvement in the next year also, even beyond this quarter. One is, as you rightly said, Kolkata. Second, Medics, because Medics is also going to be significant. If it's doing very well, they'll do over INR 250 crores of revenue hopefully next year, and will be at least INR 40+ crores of EBITDA. They're already at a INR 10 crores run rate on EBITDA, and they don't have much of COVID. In fact, almost negligible COVID in Lucknow as we speak. The third thing is Proton is also something that we are quite excited about because we are seeing that January, we are seeing a good spike coming from patient inquiries. We are already at INR 100 crore run rate on Proton. If you look at Q3, that's at a EBITDA negative and EBITDA break even. We should see significant accretion in the overall EBITDA from Proton as well into the next year. Okay. May I add something? Sure. No, I said Lucknow is already at 18% margin. Yeah. The strength for us in Lucknow is the fact that we are probably one of the best tertiary care hospitals. Our ICU beds, which are about one-third of total beds, are at very high occupancy. The potential to move to a higher ARPO definitely exists in Lucknow. Understood. Fair enough. Last one from my side is on the pharmacy business. I understand, given the restructuring, the margin had a step-down, but my understanding was step-down would be about 100 basis points. We see it's more than that. What is the outlook and the reason for the same? On a combined basis, if you see the accounts between AHLL is only consulting the back-end result. On a combined basis, we are at the same level. Last quarter, we are at 6.4% of the EBITDA on the overall sales, and this quarter is about 6.3%. As you know, when Dilip Med City is assisted, there is some cost adjustment between the two entries. The growth is about 17%, 18% of the overall sales against the previous quarter, 25%. There are some 24/7 costs also which are there, which is something which has been absorbed by the pharmacy business, as you know. Otherwise, if you exclude that, maybe the like-for-like EBITDA margin should have been 6.7%, 6.8%. Okay. What would be the outlook, sir, going forward next year? We should be back with normal growth rates. We have Apollo 24|7 growing up, that will also contribute to the sales and margins. We'll see that. It would move forward, right? I mean, the margin trajectory would inch up to 7% plus mark? If you notice that we are at 6.3%, 6.4% now, we should be closing between 6.5%-6.6% and move next year to 7%. Okay. Thank you. All the best. Thank you. Thank you. The next question is from the line of Damayanti Kerai from HSBC Securities. Please go ahead. Damayanti, your voice is breaking. I request you to move to an area with network or if you're on a hands-free, request you to use the hands-free. Sorry, Damayanti, we can't hear you. We seem to have lost the line for Damayanti. We move to the next question. Next question is from Prateek Mandhana from Nomura. Please go ahead. Thank you for the opportunity. My first question is on Apollo 24/7 business. I just wanted to understand that the revenues that we say that we will get from Apollo 24/7. Will we get directly into Apollo 24/7 or is it more of a concierge for diagnostics and Apollo ProHealth? As you said that they will funnel the patients into Apollo 24/7 and diagnostics, you will book for diagnostics. Where will the revenue get booked? Will it be in AHLL or Apollo ProHealth or the e-pharmacy or teleconsulting? Just update on that. How will the revenue get booked and how much of revenues do we expect? No problem. Clearly, if you look at the pharmacy, we will ensure that the pharmacy business revenues is booked in the back end of 24/7. That is something that we will continue. Back end pharmacy business will still continue to be at Apollo 24|7, we will start showing that eventually as Apollo 24|7 scales up. On the other parts, whichever is diagnostics, et cetera, the way we are looking at it is that business it will get pushed on to the Apollo Diagnostics for revenue booking, there will be a revenue share. It will get as a margin or a commission, which will get booked by Apollo 24|7. Once Apollo 24|7 starts scaling up, we will obviously have to figure out how we start reporting GMV, et cetera, so that the perspective of GMV of Apollo 24|7 is understood. It is again something that we will plan in the next year. Sanjiv, do you want to add anything? Yeah, I think AK already gave the right answer. The entire revenue accounting with respect to the pharmacy being delivered or the diagnostic services being offered by 24/7 or as a matter of fact, any other services. Those things will go to respective Apollo entities like APL, AHLL, or AHLL. As far as the GDP part of it is concerned, I think we'll work out some mechanism to also highlight that so that there is a right perspective available with everyone. Okay. To add on to that, again, there will be multiple divisions. What kind of contribution from each division can we expect into the revenues of 24|7 Diagnostics, ProHealth, ePharmacy, and consulting, if you could just highlight some? Currently now, we will probably take it forward as we start doing it. Broadly, within your guideline, I think 15%-20% margin is what we expect to do on both diagnostics and teleconsult. Is that fine, Sanjiv? Sorry, I think I was not able to convey my question clearly. What I was asking, sir, the revenue that they say INR 100 million revenue for Apollo 24|7. How much of it do we expect to come from each division, like from Apollo Diagnostics and teleconsulting and ePharmacy? How much revenue contribution from each segment? Which will be the biggest contributor to Apollo 24|7? We have about eight health products coming into the platform. Some of them are yet to start and go online. Next year, and we'll have a better view going forward, and we'll be back with those numbers Q1 of next year. It's not a product. When we look at the target, we have been saying that when we get to the overall target spread over the next three, four, five years, 50% of that will be coming from the pharmacy business. The other 50% will be a combination of what we spoke now. Teleconsults plus diagnostics plus condition management and some insurance. Got it. Then, sir, any numbers you want to highlight currently, how much you are running for Apollo 24|7 revenues? If you can highlight that. One or two products are in the phase that we will be coming out from next year with specific numbers. Okay. Just one last question from my side, if I can ask that on the number of pharmacies, what is the number of present pharmacies that are now there? We have 4,000 pharmacies operational as of 31st December, we have added about 252 stores during the year. Most of them were added in Q3. We are on track. There was delay in the schedule of opening because of the COVID environment. We will be opening about 300 stores as we speak, 300-plus. Got it. Thank you, sir. That will be all from my side. Thank you. Thank you. The next question is from the line o f Vivansh Kalra from HSG Venture. Please go ahead. Hello. Thank you, sir. My question is, I just wanted to understand the split of inpatient and outpatient business from hospitals and what are the normalized levels and what was the result, what was happening in Q3? Any update in Q3? Thank you. Can we get offline on this because we don't have the exact split of the OP and IP revenues as of now. Sir, normalized level historically would be fine. Rough estimate. 20. 20 is outpatients. That's right. Okay. Were we seeing any divergence in last quarter? Decrease in last quarter of OP. Outpatients. Okay, OP increase in last quarter. Okay. Ma'am, you said something in your opening remarks that international business only was very much affected. OP business contributes significantly in terms of international patients. My question is, I'm just trying to break up domestic patients versus international patients. What was the ratio of inpatient and outpatient breakup for international patients, yeah. Just to see it, international is probably just less than maybe 10% of the total volume. I think what was significant is that we didn't get even within India, patients were not able to travel. We believe that when that comes back, the OP will definitely pick up. International is about 10% of that. Okay. This is normalized level, 10% IP, OP, and 90% IP is a normalized level for international patients. Am I correct? 10% OP is correct. Okay. A normalized level. Thank you very much. Thank you. The next question is from Harit Dhiman from Kotak Realty. Please go ahead. Good afternoon. Thanks for the opportunity. I'm looking at the employee cost for the quarter. There's a 15% quarter-on-quarter decline and a 26% year-over-year decline. What's driving the sharp reduction? Is it the front-end pharmacy transaction, or is there any other reason for this? Yeah, the front end, as you rightly have assessed, the front-end pharmacy business has been separated out, and it has been put into Apollo Pharmacies Limited. The full quarter impact of that is clearly visible in the reported numbers. That's what you can see. Of course, as we said, as Suneeta already said, the overall cost savings otherwise for the quarter was INR 40 crores and INR 30 crores in the consolidated numbers for the quarter. In the INR 30 crores embedded would be almost around INR 15-INR 20 crores of manpower. otherwise it is the Apollo Pharmacy Limited, which has got shifted out completely because last quarter you had only one month impact of Apollo Pharmacy Limited, whereas this quarter you have the 3 months impact of Apollo Pharmacy Limited. Okay, got it. My second question is on ALM. We've been in a consolidation phase over the last 18 months, and that's reflecting in significant margin improvements over this period. When we think of further network expansion here, what are our plans? You mentioned about diagnostics. On the other formats, can you give us some detail on our next medium-term expansion plan? Chandra? Yeah. We spoke about diagnostics being the primary area of focus, and that's going to consume over 70%, 75% of our focus in terms of expanding within and consolidating within existing markets, as well as some opportunistic expansion into other new markets. Importantly, the second focus will also be on going up the value chain in terms of our high-end test menu. That's two areas through which we will make both investments as well as marketing efforts to get into more and more higher-end test menu. I mean, to say areas of genomics and a few other areas that we have outlined. The growth primarily subsequently is in primary care network, will be on closer to communities is the initiative that we'll do. It will have ramifications also for diagnostics in terms of as we get closer to communities. That's the third area of network. We are not looking at growing the secondary care network significantly, barring a small growth that we will do to assess the regulatory tailwinds that seem to be emerging in, let's say, space of IVF. That will be a small growth, which we will carefully plan. IVF as a space is attractive, but we are mindful of the fact that it is predominantly unorganized. There are some very good regulatory tailwinds that are likely to help organize play. There is a small focus on growing that. Besides all of this, we are looking at some exercise growth models, including expanding our franchisee network in the primary care. Okay, got it. Thanks for that. Last one on the Proton Centre. You're now clocking annualized revenue run rate of over INR 100 crores and you broke even at the EBITDA level. This, I presume, is without much of international patient volumes. Should we think of a significant ramp-up going into FY 2022 once international patients come back? How should we think of Proton from here on? Our hope is definitely to double down on both domestic and international. Even the domestic opportunity on proton is high, because clearly it is, as Mr. Nitin has been always saying, it's now become a gold standard in radiation globally. A lot of doctors have got comfort around embracing it and also suggesting this for patients and specific audience like head and neck, pediatric, et cetera, where we have seen significant help and support being given to the patient. We are quite hopeful that this should ramp up quite well in the next two years. We should see good ramp-up in EBITDA as well, because as you know, the EBITDA margins on this business is north of 40%, 50%. Got it, sir. Thanks for being in touch with me. Thank you. The next question is from the line of Sameer Baisiwala from Morgan Stanley. Please go ahead. Yeah, thanks for the follow-on. Just thinking about the higher ARPO, was there any pricing action that was meaningful in the quarter, cash market, insurance and corporate side? No. No. Okay. Anything that you're planning over next three, six months? Next year maybe, not for now. Yes. Insignificant this year. Okay, great. The second is for the digital platform, 24 by 7. Are you looking for any sort of equity dilution over there to either raise new capital or to access patient access? We have said that we have plans for that, and we have always been saying that at the right time it will unlock value in the overall pharmacy business also. So we are open for all options there, and we will come back to you as we have better clarity around the same. Okay, great. How are you thinking about the ALOS going forward? I think it's gone up from 3.8 to now good 4.3, 4.4. 4.4, I think reflects the COVID occupancy. We can hope to see something below four in the next quarter and an improvement in the beginning of next year. Okay, great. That's on the side. Any thoughts on COVID vaccine being available on the private market? Well, we have a plan on rollout. We have a cold chain, logistics, and everything prepared to roll it out, but we're just awaiting government approval. You think it can take a couple of months or longer? I think within maybe mid-March, end of March for sure. I see. Yes. Mid-March. Okay. Okay, great. That's very helpful. Thank you. Ayush Pansari from Allegro. Please go ahead. Hi. Thanks for the opportunity. My question was, what is it like you like pharmacy revenue and EBITDA as to de-structuring? 17% has been the growth overall for the pharmacy platform for this quarter. The EBITDA margin, as Sobhu said, was 6.3 to 6.4, in that range. What we have reported on the back end is 6.5. 78, you said, right? What is it? Sorry, I missed the number. What is the growth number? 17%. Okay. Thank you. Thank you. The next question is from the line of Girish Bhat from Goldman Sachs. Please go ahead. Thank you for the opportunity. On the pharmacy, the quarter's EBITDA growth is lower than the year-to-date growth. Any thoughts there? You're talking about which quarter? Any reference, specific quarter? No, this quarter, the like-to-like pharmacy EBITDA growth is 20%, and I think year to date is in the range of 15%. We have a robust Q2, and that has contributed to the higher sales and higher EBITDA. This is overall in the same range that in the last two quarters, 6.4 in Q2 and 6.3 in Q3. The 6.3 is coming on the back of absorbing some online pharmacy costs. Okay. During the QIP meeting, we had requested some more KPIs on 24/7, so I was expecting probably this quarter to see some metrics around that in terms of traffic, user engagement. When can we see those disclosures? Because typically your disclosures are very good. We'll take a couple of quarters before getting that because there is a high level of competitive intensity around this business, as you know, and there's a lot of competitor interest also. Unfortunately, all of them are unlisted, and we are the only listed players. We have to keep that in mind also. We know that our transparency levels have been good, and we will get back to that over the next two quarters shortly. The traffic increase quarter-over-quarter for your online pharmacy offering or the consults, can it be shared right now for this quarter? Just on the teleconsults, let me say that we've already done 250,000 teleconsults. We are tracking about 2,000 a day. More importantly, if you look at our telemedicine platform setup for the government, we do about 7,000, 8,000 a day. We really believe that there is a potential to ramp it up. Just going forward, we will. The reason that we're seeing a slight slowdown in teleconsults is that doctors are moving back to the offices. That's the reason. At the same time, Apollo 24|7 is increasing the number of doctors on this platform. It was 6,000 last month, and they have a plan to really double the number of doctors, and with that, the teleconsults will significantly increase. Plus the adoption of teleconsults by our senior doctors will take a little bit more time. Definitely there is a huge opportunity and the plan is there. We think that post our March quarter, we will be able to share numbers with you. Anything on the monthly and daily active users you can share? There are certain external app traffic monitoring sites where we are seeing some decline in terms of the traffic activity. No. We said that with post-COVID, a slight decline because doctors had moved into their offices and started seeing patients. We believe that again it will pick up because we are onboarding more doctors, and we're also onboarding senior doctors who have not been used to the telemedicine platform. Okay. We will share numbers with you post the March quarter. Okay. That'd be very useful. Just one more housekeeping thing. The impact of AS116, it's seemingly lower this quarter as it is the last two quarters. Any asset that has gone out- Pharmacy front end. The pharmacy front end has been shifted out. Part of the retail intel moved into the pharmacy front end entity. That is the main reason. Understood. Thank you for taking my question. Thank you. The next question is from Akhilesh Gupta of DAM Capital. Please go ahead. Hi, thanks for the call. Ma'am, on the hospital business, when you look at capital allocation over the next two, three years, barring the Gleneagles investment, how are you thinking about it? Is it more greenfield, more brownfield, more M&A, which is your primary drive CapEx? What stage are you looking to reach your CapEx investment? Post the Kolkata acquisition, the way that we're thinking of growth is one is definitely a focus on existing assets and improving asset utilization. The second is to grow our clusters and basically to have a presence in the Delhi market where we have one hospital. Yes, we look at something in Delhi. The way that we will do this is through bolt-on acquisitions. We've not clearly looked at greenfield. We're not looking at greenfield. We're also looking at revenue share options. It's an asset-light growth strategy. Is there any sort of firm capital number in mind in terms of how we sort of approaching this? Because the concern with the hospital business in the past has been exceptional sort of capital navigation phases at different points in time. Do Do we see the same discussion emerging for us at some point in time? I think that if you look at the debt to EBITDA, we will keep it within 2 to 2.5 and debt-equity currently at 0.71 coming down to 0.5. Our upward comfort level is 0.8. I don't think we'll ever compromise the balance sheet, nor will we impact the free cash flows that we hope to see. Some of the bolt-on acquisitions will be funded by free cash flows. Right. The second one on AHLL. We talked about the different aspects of growth on the business, but how are we looking at, say, a three-year picture on the business? There are obviously the AHLL businesses is made of two or three very different pieces of businesses which have limited synergies with each other at one level. Structurally, how are we looking at the business when we take a long-term view? How do we independently invest in growing those businesses? Do those businesses need individual capital? Are there opportunities to get individual capital for those various segments? Chandrasekar. Yes, ma'am. There are opportunities on individual different areas of interest within the platform per se, but I think our preference is to keep the platform intact and seek investments at the platform level. Growth in a three-year horizon, we are looking at growing year-on-year. In diagnostics specifically, we are trying to grow 30%-35% kind of growth rates, which we are factoring in organically. On the overall numbers, we're tending to see at the platform level, we will hope to reach about, in three-year timeframe, we want to reach there about INR 1,800 crore-INR 2,000 crore and have a steady state of 12%-14% EBITDA margin. Okay. Thank you. Thank you. The next question is from the line of Anubhav Agarwal from Credit Suisse. Please go ahead. Yeah, thank you. Sorry, sir. Two, three questions from me. One, because of COVID patients, the ARPOB is low at INR 25,000-INR 28,000, but what would you think the average is, right? My sense would be the margins should be higher here, like continues for the next year. What do you think? Similar margins is what we have. The margins would not be lower. It won't be higher. You're saying 27, so INR 5,000-INR 6,000 per bed per day, something like that? That's what. It actually varies from state to state. What we would say is, I know that it's mostly about 14%. Sorry. You're saying 14%? Yeah, 14. What I said was that it varies from state to state. Governments are capping on COVID prices, so it would not be more than 14%. You're saying INR 2,000 today is the revenue, which is very similar to competition in the hospitals that you have right now. Yes. Yes. It's diluted. When you have a COVID in a major hospital, it's diluted. That's correct. Okay. Second question is on the CapEx for the 2027, in the sense of that you were talking about QIP money being part of the INR 100 crore being used there. Can you talk about what you're going to do with that over there in terms of hard electric capital expenditure? Which areas are you looking to strengthen over there? Clearly, the two areas that we would like to spend more money on is, one is the teleconsult and second is the condition management. These are two areas that we believe is going to be more long-term sustainable. Clearly from our perspective, the way we look at it is, we have to be the only platform or app that a patient should use. The pharmacy is not the differentiator. It is something that you will clearly use the app, provided you know that you have the ability to reach to the doctor, take care of your health, and also ensure that you do condition management and we are able to manage diabetes, have a health counselor for you, stuff like that. There is a lot that we are preparing around that. Many of that streams are already on. There is a separate tech team which is working on this. You will see significant improvement in some of these over the next six to nine months and not really quarter-over-quarter, which is why somewhere we are not able to give some of these quarter-on-quarter matrices also. These are some of the plans which we have, which you will see showing up shortly. Just a clarity on this. When you say more spend on teleconsultation and condition management. As a user, what I see, what's happening? Are we getting more cloud space when we are sending that incremental money here? Using more AI here? What is changed here? One is trending of hardware at the back end. That thing is in terms of 18 months. Where would you say the bulk of the money is going? Both user experience. Sanjiv, you want to talk about that? User experience and AI and what are we building on those products? Specifically you want to guide, Sanjiv? Yeah. Typically the money which is going to be spent out is going to be on the technology front. When I'm talking about technology, we are talking about the AI and its role in condition management and various bots that could help users experience while coming into the app as well as that could also help service them much better. Primarily at this stage, money that is being spent in Apollo 24|7 is towards the technology build only. I think three quarters from now, you would see that technology-enabled Apollo 24|7 app which provides a very good user experience and executes many problems. It provides solution across many problems in one app. It's going to be technology-based app than just pharmacy kind of a thing. We see that a lot of AI and ML play in Apollo 24|7 app. Primarily money is spent towards technology build-up. Thanks. That's helpful, Sandeep. If I can ask one last question on Apollo ProHealth initiative. Nitin, your target of INR 1,000 crore. I was a little confused with that because even the large companies which are listed today in the diagnostic space they do not have this preventive health revenues more than INR 150 crore, INR 200 crore, each one of them. You are targeting INR 1,000 crore. That one is a very steep target in three years. Secondly, can you also talk about where are you targeting 1% from corporate individuals segment and what are the CapEx if, let's say you reach your target of INR 1,000 crore, what would have been CapEx there? Yes, you're right. Currently we're already at INR 262 crore in terms of what we are doing in terms of preventive healthcare. We do believe there's a large opportunity with corporates. We've tied up with many corporates to look after the health of their individuals. As you know, COVID showed us that the importance of looking after your health, which is why we're very focused on launching this product. The third part of it is most of the retail consumers who use these products on the app, they never really have a physical interface with the doctor. Wellbeing is all about not just taking blood markers. It's not just doing the exercise and following the diet. It's a combination of everything. That's why we believe that Apollo ProHealth is an offering that is differentiated from the rest. Finally, the layer of AI. With Microsoft, we have done this cardiac risk score. In that we had many learnings on how we can improve cardiac health. Through Sugar, we had looked at condition management for diabetes. It brings in cardiac, it brings in condition management. Overall, it looks at improving the wellbeing, including things like sleep, reducing anxiety, the impact of it on your overall wellbeing. Yes, we have a plan to double the revenue five times. Just think of Apollo. We have 70 hospitals, we have 200 clinics. We have 24 by seven that will be acting as a funnel to allow people into this program. I believe that we have the ability to do it, and this is really a space that we need to occupy. What CapEx? Around INR 50 crores over the next three years. Wow. With INR 50 crore CapEx, you can almost take increment of INR 750 crore. I'm assuming this will be at least 30% margin business. Clearly, there is a lot of existing assets which will be sweated significantly on this, as Ms. Suneeta said. The utilization of our labs in our hospitals, et cetera, are 50% today. We have significant plans to sweat existing assets. If you look at the assets which are already there in the lab space within the hospitals, this is over INR 500 crore. There is significant amount across our business which we will be using to increase the scale. As Ms. Suneeta said, it's a clinically designed product, and it's not something which is just a diagnostic product. Thank you very much. Thank you. The next question is from the line of Krishna Prasad from Franklin Templeton. Please go ahead. Thank you for taking my question. I have a few. First, you mentioned the kind of growth you've seen in the home care segment. I assume part of it is COVID-led. Can you talk about what kind of ambitions you have there and how this can scale up? Currently, clearly COVID has opened up the customers' minds in redoing transactions on home care. Earlier it was a lot of nursing care that we were doing on the home care side. With COVID, we were able to really manage a lot of people remotely. That was a very strong product which got accepted by the consumer. This is something that we are now figuring out how we can use remote care to take care of the patients, over using a product for the same, like a weekly call, a monthly call, et cetera. These are things that we are trying to do also health counselors, et cetera, which we are also putting on the home care side of things. It is already doing INR 60 crores of revenue per year now, home care. We believe that with time what will happen is the handoffs from the hospitals to the home care will also start happening. We have to work on some of these over the next one, two years. Clearly we are seeing that some of these opportunities will play out well where after an orthopedic surgery, we say that we really are able to send home a patient in two days as opposed to really keeping them for an overall allowance of four, five days. Some of these will start lending itself, and we have also started doing ICU management, especially with COVID. We were able to set up ICUs at home as well, although it is a handful of cases, maybe 20, 25, but still we were able to do that effectively. It is lending itself to a lot of opportunities. We'll have to work on it. Wearables are also going to be important as we keep collaborating or keep ourselves open for collaborating on that front with some of the other players. People like Siemens, Philips, all of them are thinking of some of these, and we will have a rollout planned on some of these over the next six months. Sure. Thank you. My second question is, within AHLL, I would have presumed that day care would have actually got a boost because of COVID. That doesn't seem to be the case. I'm just wondering, is that the case at all? Satheesh sir. No, actually the quarter three daycare surgery work has come back. Quarter one and two was very poor. Quarter three, we are seeing all the book blocks getting back. Right. Finally, on the disclosure side, I have a request. If you can provide the front-end, if you have free cash flow data on the front end, on a quarterly, that will be very helpful for us to assess the numbers. Sure, we will. Thank you. Thank you once again. Thank you very much. We'll take that as the last question. I would now like to hand the conference back to the management team for closing comments. Thank you again for joining us. As we look ahead, we continue to focus on vaccination. We did have a challenging three quarters where we were busy dealing with the pandemic. However, we believe that we've actually emerged stronger in the sense that we've rationalized costs, we've created focus around improving occupancies, we've created a renewed focus on asset utilization, and more importantly, a focus on clinical differentiation, which is really all about Apollo's DNA. How do we do clinically differentiated products for our people? I think that all of this will result in better ARPOB as we move into the future. Our strategy on growing market share, ARPOB, and improving the offerings that we have from Apollo in terms of the verticals, which is Apollo Health & Lifestyle, where we want to go diagnostics, improving pharmacy metrics, improving hospital delivery, and launching Apollo 24|7 in a way that is meaningful, are things that we will focus on, and we are so glad that you've been part of this journey. We look forward to your continued support. Have a great weekend. Stay safe, and stay healthy. Thank you very much. On behalf of Apollo Hospitals.