Please note that this conference is being recorded. I now hand the conference over to Mr. Devrishi Singh from CDR India. Thank you, over to you, Mr. Singh. Thank you, Neera. Good afternoon, everyone, and thank you for joining us on this call to discuss the financial results of Apollo Hospitals for Q4 and FY 2021, which were announced yesterday. We have with us on this call today the senior management team comprising Mrs. Suneeta Reddy, Managing Director, Mrs. Sangita Reddy, Joint Managing Director, Mrs. Shobana Kamineni, Executive Vice Chairperson, Dr. K. Hari Prasad, President of the Hospital Division, Mr. A. Krishnan, Group CFO, Mr. C. Chandra Sekhar, CEO of AHLL, Mr. Obul Reddy, CFO of 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 discussion may be forward-looking in nature and may involve risks and uncertainties. Please note the disclaimer mentioning these risks and uncertainties on slide number two of the investor presentation shared earlier. Documents relating to our financial performance have been shared with all of you earlier, 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. Thank you, and over to you, ma'am. Thank you. Good afternoon, everyone. Thank you for taking time out to join our call. First of all, I hope you and your family are safe and healthy in these difficult times. I trust that you have received the earnings document, which we shared yesterday. We started this year on a positive note. Post the slowdown which the country had witnessed due to the second wave, the economy would witness a cyclical recovery in the subsequent quarters. Coming specifically to Apollo Hospitals and Quarter Four of FY 2021, we witnessed a revival in patient footfalls in non-COVID occupancy across the network, which translated into a strong financial performance. Overall, the quarter witnessed reduced COVID admissions. Just to give a perspective on this, COVID discharges in Quarter Four FY 2021 stood at 5,460 as compared to 14,616 in the prior quarter. Additionally, COVID occupancy reduced to a mere 426 beds compared to 1,173 beds in Quarter 3 FY 2021. In Quarter 4 FY 2021, surgical discharges continued to gain momentum and grew at a rate of 32% on a sequential quarter basis. The non-COVID discharges during Quarter 4 FY 2021 registered a 31% quarter-on-quarter growth. Sequential quarter growth in IP volumes was at 9%, with mature hospital volumes growing at 10%. Against this backdrop, let me walk you through the financials of the quarter. Standalone Quarter 4 FY 2021 revenues grew by 2% quarter-on-quarter to INR 2,410. Healthcare services grew by 4% to INR 1,291 crores. Pharmacy revenues grew by 1% to INR 1,119 crores. Our new hospitals recorded revenue growth of 16% year-on-year and 1% on a quarter-on-quarter basis, while mature hospital revenue grew by 2% year-on-year and 5% on a quarter-on-quarter basis. Apollo standalone ex-Ind AS 116 EBITDA for Quarter Four FY 2021 stood at INR 336 crores compared to INR 321 crores in the previous quarter, and this after taking a charge of INR 25.2 crores on account of marketing costs for Apollo 24/7. Without this cost, EBITDA growth was at 12% quarter-on-quarter. Healthcare services EBITDA was at INR 280 crores compared to an EBITDA of INR 248 crores in Quarter Three FY 2021, a growth of 13% quarter-on-quarter. Margins in mature hospitals were strong at 24.2%, 234 basis point improvement on a sequential quarter basis. Margins at new hospitals stood at 15.7% for the quarter. Our comprehensive cost optimization initiatives resulted in a saving of INR 343 crores, which were realized in FY 2021. Going forward, we expect to sustain a cost saving of around INR 100 crores-INR 125 crores in FY 2022. Staff EBITDA post Ind AS was at INR 81 crores at a margin of 7.3% compared to 6.6% on a sequential quarter basis. On a combined basis, the pharmacy platform EBITDA was at INR 93 crores at a margin of 6.6%. 118 new stores were opened in the quarter, taking the total to 4,118 stores. Moving on to consolidated results. During the quarter, we have completed the acquisition of a majority stake in Apollom edics Lucknow. Results have been consolidated in Q4 FY 2021. We have also completed the acquisition of the balance 50% stake in our Kolkata hospital renamed Apollo Multispeciality Hospitals. The results of this hospital will be consolidated from Q1 FY 2022. Consolidated revenue grew 4% on a quarter-on-quarter basis to INR 2,868 crores. Healthcare services grew by 7%. Consolidated EBITDA was at INR 412 crores, a growth of 6% on a quarter-on-quarter basis. Healthcare services EBITDA grew by 13%, and healthcare services margins were at 21.1%. Consolidated PAT was at INR 168 crores. This includes an exceptional item of INR 25 crores pertaining to the Apollom edics Lucknow consolidation. AHL recorded an EBITDA post Ind AS of INR 31 crores as compared to an EBITDA of INR 16 crores in Quarter Four FY 2020. The business has recorded a 26% year-on-year and a 7% sequential quarter growth in top line. Net debt as of 31st March 2021 is INR 922 crore. We have a debt-to-equity ratio of 0.44. The board yesterday approved the formation of Apollo HealthCo, AHL, in our transformational journey towards creating India's largest omnichannel healthcare platform. This will be done through a slump sale of identified businesses undertaking, including A, AHL's backend offline pharmacy business, excluding hospital-based pharmacy. B, AHL's digital healthcare platform, 24/7. C, AHL's investment in retail pharmacy business, Apollo Medicals Private Limited, and D, the Apollo 24/7 brand, the Apollo Pharmacy brand, and private labels into AHL's 100% subsidiary, Apollo HealthCo Limited. This proposed reorganization fully protects the economic interests of all AHL shareholders and sets the platform for tapping new pools of investor capital that will enable a rapid scale-up of the digital healthcare platform. At the time of capping date, AHL valuation will reflect current and future growth potential. Now to present this product and the plan for the future in detail, we have Shobana Kamineni, Executive Vice Chairman, and Sangita Reddy, Joint Managing Director, who will walk you through the features of Apollo Health. Shobana and Sangita, over to you. Thank you, Suneeta. I think you clearly articulated what HealthCo is. I will spend the next five minutes answering seven FAQs that we've been hearing. Maybe it will put everything in much better perspective. The first thing is everyone says, why is Apollo doing this? Why did they create it, why should Apollo do it? What are the promoters going to make out of this? Our chairman very early, if you see our mission statement, really talks about bringing international care, affordable care, within the reach of every Indian. It doesn't matter how many hospital beds. This is something we went and introspected and said it doesn't matter how many hospital beds we put, that we'll never be able to satisfy what's required. Is it even necessary in this digital day and age where everything is transforming, everything is being disrupted. Apollo is, let me tell you, the only entity, not just in India, but we can be proud to say in the world, that is in every point of care for the customer. As Suneeta explained, we talk to you every quarter about hospitals, about clinics. We used to talk to you about insurance, but we still have the details. We talk to you about pharmacies. We talk to you about some of the brands we have, the private label brands we have, about different formats of diagnostics. It's all there, the most awesome collection of doctors. It's all there. We said, what can we do to move it out and make choice so simple for you? That's something that we saw. Choice and access was something that we really saw lacking, no point in time as much as during this pandemic with that. The day the first wave struck, almost 3,000 doctors of ours were just sitting at home with this. Patients had no access to them, at many times it was tough for them to come to the hospital. What happened during that first wave, I think it was one of the most fortuitous things that Apollo had already launched Apollo 24/7, which digitally enabled in 45 days, 3,500 doctors were on a digital platform that could touch people every day. We had put out a product of the first Corona Health Check, that health self-assessment scan. 11 million people took it in two weeks. This really gave us a validation that we understood tech, we were agile, and we knew what the customer needed to simplify choice. You've got a slide up there. Sometimes it just defies logic that when your car is spoiled, you don't tinker with it yourself or YouTube or Google it. You say, take it to a mechanic. If you need anything fixed at home, you either call a plumber, or a legal problem, call a lawyer. With health so many torturous ways that we go before we actually come to the right solution. Apollo 24/7 is to simplify that and bring within 15 minutes. Can you imagine? I'm not offering you 100,000 doctors. We are offering you 7,000 Apollo doctors, 24/7, available in 15 minutes. I think leading that proposition, we also are the only people who are able to offer you, and this is something that even Amazon or nobody can do this around the world. In 2 hours, you will get the medicine you need. We realized, what is the point in giving, if a person needs a medicine, an acute medicine, the next day, it's pointless. They can just walk to their nearest pharmacy. Availability and the fact that you can get it in two hours, we realized we have the capability to be the best omni-channel. Apart from that, the diagnostics capability of having an army, literally an army of phlebotomists who can go to the house now. Remember how frustrating it was to get up on an empty stomach and go to a hospital to get your test, or to things that you call another service that you know of. Now you can get an Apollo service at your house. I think these three phenomenal propositions put together with the only health stack, which is backed by data. Just to give you an example, the clinical decision support system that I'm going to ask Sangita to talk about once I finish the FAQs. She's put this together. It didn't happen in one year or four years or five years. This is 30 years of data which gets put together to bring the right solutions and the right answers. That's why the timing is right for something like this. Financial services have been disrupted. E-commerce, shopping has been disrupted. We think that healthcare is the one that actually the customer needs most, and Apollo is the one that can give it to them. What's the potential of this? All we can tell you is that so far, in the last 500 days, through our pharmacy network and digitally, we have served 270 million people to help them through this pandemic. I think that is serious capability. In the first 16 months of our operation, this is what we were called upon to do. The potential for this is really that there will be 100 million Indians in over 700 cities in India, and in towns, and places where they would have just heard of Apollo and thought it's so aspirational, but now it's available on their phone. This is the potential of what a digital healthcare like we are planning to give is there for 100 million Indians. This is the potential of that, what we believe in five years. Thank you for saying it, that there are many forward-looking statements. The revenue potential is close to $2.3 billion. We can assure you that every one of those, because the pharmacy is within this. You have been tracking pharmacy closely. You'll be very disappointed, and our shareholders who own this company will be disappointed if we don't have the stellar performance that we bring to you every year. We continue that. That's a promise, that we'll grow that business 18, 20%. We'll grow it with the margins that you all expect. On top of that, we've created this layer of digital business that will create a hockey stick growth. That is what a digital company can do. That's why so many people asked us, why did you put this into a separate company? The reason that Apollo took as it's not at all a calculated risk, but it is the most intelligent decision because at this point you have to see, are you an Amazon and just put digital somewhere or are you a Walmart? We realized that actually both are the same. This is the age of omni. Unless you can back digital with physical, there is no future or path to profitability. I think as a public listed company, we have a responsibility to many shareholders and diverse investors. This is something that we took seriously. We do expect by year three, year four, we will have EBITDA. By year five, the EBITDA will be significantly higher than if we were just a standalone pharmacy or doing just standalone consults or digital. I think that it became a very interesting point for us. Another slide that you have available with you is about the physical assets of Apollo. You will see that this gives you why we'll succeed. Please tell me if anyone, now that you're convinced that omni is the way to go, there is no other player that has the breadth and strength of physical assets with the brand in terms of hospitals, 70 with 10,000 beds, 4,000 pharmacies, 500 diagnostic centers, 200 plus clinics. The capability of 30 million IP OP that we've managed every year and the digital that we do in managing 5 million + insurance lives. We know this story. For anyone to create the same physical footprint, if it was even possible, would cost them so much that they knew it can never happen. This is available for this company. For Apollo HealthCo, we take all of that and layer the digital on top of it. I think that our business model is superior, and we have the capability and many partners that have already signed up and are working with us, whether SBI Life is one of them, HDFC Bank, SBI Bank. We have serious partners who we will be taking along this journey to make sure that we can service the customer to whatever he wants. This is a new age of digital customer, and this is the platform that you will see that today has a 7% market share of pharmacy retail. In the next five years, we expect that to be close to 30%. In every one of these segments, whether it's the diagnostic segment, whether it's the telemedicine segment, which were already the largest, as we say. Today, we're even larger than 1mg in terms of the number of deliveries we do every day. Whether it's digital, whether it's physical, I think that this will be the defining digital health network, not just for this country, but probably it'll immediately stand out in the world as the most valuable. Sangita, would you be able to explain a little more about the technical part, just the CDSS, or should we wait for questions? Whichever way is fine. Sangita Reddy, please go ahead, Sangita Reddy. Okay. I'll take a brief minute just to say that this transformational journey is grounded on the concept of serving the customer in the most integrated manner of bringing together the assets that we have, but enhancing the capability and the access to those assets using a digital-first approach. I think most importantly, every touchpoint, physical, online, website, call center, will stem from a consolidated user profile. This consolidated user profile, which is grounded in a common unique healthcare identifier, is also collating all data points into a personal health record. This is a journey we've been following for a few years now, which is significantly enhanced by the digital and the combination of the pharmacy retail coming into the hospital database as well. This combination and these touchpoints will evolve into a simple AI and ML-enabled platform of the critical intelligence engine. This engine has a consumer-facing side as well as a doctor-facing clinical decision support. In one line, I would just say that it will enable the latest and the best of healthcare knowledge and information to be available at the touch of a button to all our doctors and all customers who seek our care. This consolidated data point will be available for us to help the user profile get the best possible medical care. I'll stop with this because I'm sure you have a lot of questions. I'll end also by saying that all these are really grounded on the best technology stacks. We have some of the most powerful engineering brains. We validated our path forward with global expertise. Whether it's the platforms we're using from MongoDB to Postgres, to our ability to use React Native for our app and Snowflake for our cloud data warehousing, with all security layers as well as international standards in terms of HIPAA for patient privacy and confidentiality. That's it from me. Thank you. Right now, we will open the line for question and answers. Of course, I have Dr. Hari Prasad, Krishnan, the entire team with me, and the team from Apollo 24/7. Shobana and Sangita will also be here to take all your questions. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone 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. Participants, you may press star and one to ask a question. The first question is from the line of Sayantan M from Credit Suisse. Please go ahead. Yeah, thank you. I have two questions. First one is on COVID vaccine administration. How many vaccines did we administer in FY 2021, and what is the current trend rate? Also, the AHLL primary care segment consisting of Clinics, it seems to have strong margin expansion in the quarter. Is it because of the vaccine administration or are there any other reasons also? Hari and Chandra, please take that. Yeah. Actually, as of now, we've administered more than 2 million vaccines in the last couple of months, and it's been a seamless integration between the different entities within the group. Starting from Apollo 24/7 to the clinics to the home healthcare, which has been administering vaccines because we believe it's the responsibility of the group as the largest provider, and we are already the largest private healthcare provider in terms of the number of vaccinations that we've done. We have a line of sight of enough vaccines for the next couple of months, the existing vaccines. We aim to vaccinate about another 8 million, that is a total of 10 million people in the next couple of months as we move forward. We are looking at this as a very important tool in the control of the pandemic and in prevention of the possible third or fourth waves that are on their way. It is adding to the top line, and we have not added any other additional fixed costs to the vaccination initiative. The staff and the infrastructure is all from within the existing system or it is being provided by partners, so there's no additional cost. Despite the capping which has been done by the government, there will be a margin on the vaccination program. Chandu, you want to take the Phoenix part of it? Yes, please. Sri, I would like to add that Apollo has done more than 45% of all private vaccination in the country. It's actually significant. Yes, ma'am. On the question on AHL, which I'll answer. Q4 did not have much of vaccine income. That doesn't change the profile. It was more of a return back to normalcy and the pent-up demand coming back, especially in electives and also in the primary care segment. We continue to hold our growth in the other important segment in diagnostics. This is a natural growth, we do not have much of vaccine as a trigger for a significant growth in the quarter four. I hope all of you are vaccinated, and if you're not yet vaccinated, please walk into any of the Apollo centers and get vaccinated. Sure. Thank you. My second question is on Apollo 24/7 operating expenses of INR 25 crore in Q4. Is this a run rate that we can expect going ahead into FY 2022 as well? I think that it's a starting run rate. All I can tell you is that it comes also from the competitive pressure and as we continue to grow. What we're looking at is that our cost of acquisition and then the people that really engage within the app are much higher than what we expected. We're running at about 70% of our expenses, and I have Sanjiv Gupta here, who's the CFO of Apollo 24/7. Sanjiv, can you come in with a little insight on some of those figures? Yeah, ma'am. I think what we are looking at here is that as we ramp up our business and the traction that we're seeing and almost we are seeing the users coming in and then doing more and more transactions across all the business segments, we may expect a slight upward movement on the expenses. To that extent, the revenue would also match, overall the unit economics are getting better month-on-month. Okay. Thank you so much. Thank you. Thank you. The next question is from the line of Ankit Agarwal from UTI Mutual Fund. Please go ahead. Ankit Agarwal, may I request you to unmute your line from your side and go ahead with your question. Ankit Agarwal, we are unable to hear you. May I request you to unmute your line from your side and go ahead with your question. Getting no response, we move on to the next participant. The next question is from the line of Madanagopal Ramu from Sundaram Alternate Assets. Please go ahead. Good evening to the team, and thanks for taking my question. First of all, congrats on the excellent platform that you have created. I've used it myself and found it really useful, the Apollo 24/7. My first question is on how do we see this unit economics of this platform? The consultancy, what we pay to the doctors, how is the revenue model for the 24/7 is going to be? If you can explain that, it'll be helpful. Sanjiv Diagnostic. Yeah, I can take this question. Yeah, please. Okay. I think there are two key things that we should be talking about on this. One is that the platform is a feeder to various other entities of Apollo groups. Be it virtual consultation, diagnostic, as well as the pharmacy line. All these ones would support the entire Apollo ecosystem. This will be going to be an incremental business for all the units of Apollo. That is point one. Second, as far as Apollo 24/7 entity revenue side is concerned, this is going to be the commission or the fees that will be charged on every transaction. That is typically what an e-commerce platform does. We will be having arm's length pricing, that would take care of the commission and the facilitation fees that the Apollo 24/7 company will be charging across the group entities. You also referred about the unit economics. I would say that at this stage, we are positive across all the business sectors on the contribution margin level. Okay. Can you elaborate a bit on how does it look in terms of per user, the revenue potential, or where we are right now? Is it too early to discern? Yeah, this is too early, sir, but I think maybe in one or two quarters, we'll come back to you with more details on this. Okay. A related question. Today, how many people have really used Apollo 24/7 so far? We have an hospital database, we have a pharmacy database, and we have given that in year three, we will be probably seeing a negative net result of the scenario. How much this number of users is likely to grow, in your opinion, in your models in the next say three, four years? What we believe is that we should be able to hit 100 million users by FY 2025. We've seen a lot of participation from the customers who have been coming into various entities of Apollo Group, and they have now started using Apollo 24/7 for various services. Obviously, as we stand today with 10 million customer base for 24/7, many of them are coming from the Apollo system, and many of them have come from outside ecosystem. I think from the growth potential, we should be able to hit anything between around 80 million-100 million customers or the users by FY 2025. Current number is 10 million, you said. 10 million, right? Yeah. Okay. Thanks. Yeah. Thanks for taking the question. This is in the last 500 days that we've got 10 million registered users. Thank you. Thanks a lot. Thank you. I request all the participants, please restrict to two questions per participant. If time permits, please come back in the question queue for a follow-up question. The next question is from the line of Neha Manpuria from JPM organ. Please go ahead. Yeah, thank you for taking my question. My first question is on the 7,000 Apollo doctors that are available on the platform. From what I understand from the previous conference calls, we were also planning to induct non-Apollo doctors to sort of get to the 80 million-100 million users or to tap into the non-Apollo customer base. Are we seeing traction in that? Do you think that could be a challenge getting the non-Apollo doctors to probably get onto the platform to consult and generate revenue? Actually, we found them quite eager. There are three cohorts of doctors we have. One is the Apollo doctors, and the next is that we have a lot of junior doctors who are available also. During this COVID time, we have to set up because of the volume. We have that. The last part is the partner doctors. Over the years, pharmacy and Apollo has built relationships with doctors around the country, about 35,000 of them. I think we have that as a tool for us to access as and when. It is about every time we put it out there on this app, it's the quality which is important and to make the choice simple. We'll use that 15-minute parameter, and we'll keep adding capacity, and also, we'll match it to locality. It might be that in certain localities, they like that local doctor who's also a partner doctor. This is the business rationale that we're using in terms of bringing it to what the customer needs. Currently, ma'am, what could be the proportion of the partner doctors? Or currently, it's largely Apollo doctors that are there on the platform. We're able to meet demand. I think that it's really the 15 minutes and having the right choice and having excellent capabilities. It could become very large. If we're going to get 1 million consults a day, if you look at the only comparable Teladoc or Ping An, they have a huge pool of doctors. We're getting smarter in terms of using technology also. Sangita had explained the CDSS, her systems, and the way that we can actually bring the old patient records and bring them together in a cohesive way. All that is part of the experience. Understood. My second question is, you mentioned a $2.3 billion revenue potential. I didn't really catch, is that pharmacy plus digital plus diagnostic teleconsult? What does that include? A second clarification is, the year three, year four EBITDA, is that the EBITDA for the new entity that is HealthCo, or are you talking just about the digital piece? No. It's HealthCo that we're presenting to you as a whole. HealthCo includes all the assets that Suneeta had explained that we're moving into this. That is the ability for us to give a powerful EBITDA in the shortest time possible. Yes, that's what it means. It also means that this revenue, $2.3 billion, is the revenue of all. It's not GMV type figures. It's like you're actually getting revenue into the company and what this company can make. This is by FY 2025, or is there a timeline for this target? Sorry. Offline pharmacy piece is different. The overall potential is $2 billion. That Shobana said was the overall potential of the digital business that we have. Back end, Krishnan. Digital and back end. It's HealthCo. It's HealthCo's business model. It's $2.5 billion in year five. Understood. Okay. Thank you so much. Thank you very much. The next question is from the line of Sameer Baisiwala from Morgan Stanley. Please go ahead. Thank you so much. Good afternoon, everyone. Before I go to HealthCo, just outlook for your core business, which is the hospital business. What's the outlook for FY 2022, and specifically, when to expect the outpatient and inpatients to recover? Sameer, we've had a good Q1 as we speak because obviously Q4 was the best quarter for us. We saw that with the opening up and with non-COVID patients coming in, we saw good realization on the per patient as well. With Q1, of course, we had a good occupancy. The occupancy went all the way to 68%, and then 71% in the month of May. As you know, COVID realization is a bit lower for us compared to the non-COVID realizations that we had across. Because that explained a bit, there would be a bit of a drop of the overall realization per patient. We have done well. We continue to do well, and I think with Q2, we hope COVID doesn't come back. We hope that Q3, the third wave is probably a bit away. We didn't guide you specifically, but we definitely want to believe that we will do much better than the in this year. I think the important learning here is that we've learned how to repurpose our beds, so that while we are looking after COVID patients, we are also looking after the regular patients, and therefore a higher occupancy at 71%. I think this is the learning for this year. How do we repurpose, create the separation of COVID beds, and continue with the regular work by creating the bio bubbles that we have done? Okay, great. Thanks. The question on HealthCo is, I'll just put some of your sub-parts together. Is it the way to think about all the products that you're offering, I guess, is also there in PharmEasy or 1mg? It's a much bigger, broader version of that with a lot of resources that you already have. Second is on your journey to take from 10 million registered people right now to 100 million. Where would you get all these people from? What is going to be a funnel for this? Third is in terms of monetizing the entity, given your strong balance sheet and internal. Would you rather wait two, three years to build it out and then look for a big ticket monetization or you're thinking differently? Thank you. If I can come in and answer. One is that if you look at the names that you mentioned, all those names are now adding on different revenue streams because they lead from a discount model. I don't think in the long term that's sustainable. You will see that they're going through their own challenges. Having said that, for Apollo, the funnel is the people having the single UHID that Sangita Reddy spoke about. Anyone that has been anywhere in the Apollo universe now will have a single UHID that can just populate on this one Apollo 24/7. You can access your records. I think it allows the funnel to open seamlessly and also much larger. If you see the traction today of 10 million in the last 500 days, there's probably only Ping An that can match that velocity. There's no Indian comparable that has been able to do this in such a short time. It's full credit to Apollo, the strength of the name. The strength of the name also has brought us serious partners. You ask where you'll get INR 100 million from. I would think that the INR 100 million, there may be two or three good banks that have good INR 100 million digitally savvy customers. There are only two and a half telecom players. One, of course, is on their own journey. The other one has chosen us. If you look at the Airtel banks, you'll find Apollo. They are huge proponents of our loyalty program, the Apollo Circle. I think that's a serious partnership that will definitely give us the long legs to be able to finish the marathon at INR 100 million. I think at the end of the day, it's really about serving the customer. If we do a good job, and I think that during this time we've done a pretty nice job, customers will find other customers, families will join us. I think the whole health proposition of what Apollo has done will just get multiplied in terms of the name, in terms of the trust. Okay. The last part on monetization. On monetization. That's what you see. If you just take the example of the VC, everyone else has been doing free consults. In fact, please don't ever get started. I think that's one of the worst things you can do. That you give free consults so you can sell your medicines. Apollo will never do that. It borders on being unethical. People actually pay for almost the same price as a physical consult. If you see today, our average is between INR 600-INR 700 for a consultation. I think these are the kind of platforms and monetization. Whether we have an insurance product that we offer with a partner that is currently being filed in IRDAI. We have the agreed wanted product. product. Fortunately or unfortunately, we come from a parent that reports to shareholders. We won't be profligate in spending money, but a large amount of money. We will match dry powder, and that dry powder will possibly come that we look for investors. I think that this entity is so large in itself already that our options are actually enormous of what we can do. We will match the competitive intensity to grow. Okay. Thank you so much. Thank you. The next question is from the line of Damayanti Kerai from HSBC Securities and Capital Markets. Please go ahead. Hi. Thank you for the opportunity. My question is, for target revenue of $2.5 billion for Apollo HealthCo in next five years, what kind of investments has been done so far and what you're looking to invest in near to medium term while we wait for external investors to join? Damayanti, can I just put in your line from your side, please? Thank you. Shobana or Ranjit, can you take, sir? Yeah. I thought, AK, sir, you wanted to answer this question? Yes. I want to know what you have invested so far in the digital platform and what additional investment could be required to reach the revenue target of $2.5 billion, which ma'am has indicated earlier. There are two points. Obviously, the second point to your question, we can't answer it upfront now. To your first point, clearly we have invested INR 200 crores thus far on the product. We have a plan to invest another INR 100 crores, INR 150 crores in the short run. You will see that, as Ms. Shobana Kamineni already said, we have a plan to get large investors, external investors, et cetera, into Apollo HealthCo as a platform. We will take this gradually up. We know that we have a plan to maturity in the next three years. You will see that we will definitely continue to own dominant majority of that HealthCo even when we get the investors. I think some of that investment, I think we'll have to defer it for a later date. Damayanti, do you have any follow-up questions? Yes, sorry, I was in mute. Sir, I was just clarifying, INR 200 crore investment done so far and another INR 100 crore-INR 150 crore, which you might do in the short term, right? That is correct. Okay. My second question is, Apollo backend distribution is one of your key strengths, which is supporting this Apollo HealthCo. Can you a bit talk about what kind of scale and reach you have there on the backend distribution side? As you see that we have almost annual revenues of over INR 5,000 crores as of now. We expect them to grow at about 18%-20% and deliver an EBITDA of over 6%, which will be moving into this new entity, and then that will fund the HealthCo expansion as well. Okay. Anything on the backend side, maybe in terms of, say, your network procurement channels and all? That's a part of the undertaking that we are transferring with the economic interest moving to the Apollo HealthCo, which will serve the front-end retail business and the supply chain activity. Okay, sir. Thank you. I'll get back into queue now. Just to give you a data point, during this pandemic, I think that we are the only group, online and offline, that continued to supply almost at 90%. We were serving 700,000 people a day. Online, offline, it's because of the backend that we were able to create over the last 30-odd years. Thank you very much. A request to all the participants, please restrict to two questions per participant. If time permit, please come back in the question queue for a follow-up question. The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead. The first one on the combined pharmacy platform. The growth for Q4 was 4% year-over-year. Just trying to understand why the slowdown in the growth, and just linking to the previous guidance of 18%-20%. How should we look at that? The Q4, if you have to see the like-to-like growth, you have to see what happened in the last year, March. After the lockdown announcement, we have seen about INR 100 crores of sales coming in the last 15 days of March. If I take out that in the corresponding Q4 of last year, the growth is about 10.5%-11%. Overall, there is a slowdown in the demand coming back in the market, not only for us, in the overall market. Two, three factors that we have seen in our Q4 on the numbers side is about 150 stores, which we operate in airports and corporate in-house premises that have not seen fully back into the regular level of sale. Then we have something roll out. We generally close substantial part of our rollout by December, which will contribute to the Q4 growth. This year, because of six months, we could not roll out these stores. That rollout happened and traveled into the year-end, and these are only two, three factors. Structurally, we are there, and we'll come back on the growth numbers. Got it. Sir, what is the network? Sorry. Four thousand one hundred and- 4,118 operational stores as on 31st March. No, I meant what is the outlook? How many are you potentially adding in FY 2022? Generally, in the last two, three years, if you see, notice that we are adding about 300 to 350 stores. We continue to add that, and maybe with 24/7, we will look at new geographies and speed up that number slightly. Got it. Second question is on some of the metrics for Apollo 24/7. If you look at the annual reports you put out last year, just reading out some of the numbers and if you are in a position to share them as we are today. We had 1 million weekly active users. We had 2,310 consults per day. We had 3.7 million registered users, which you said have got to 10 million. If you could share some of the active users and related entities, that would be helpful. It might be tough for us to share exact numbers. I just want to tell you that these figures have actually gone up. During the pandemic, they went up almost 10x. There was a day that we were doing something like 30,000 orders. Now it is settled at about 5x the number that you saw. Little more than that, 6x. We're tracking smartly with the five-year plan that we've given. Got it. The last, third 1 question. CapEx outlook, what is the CapEx you're planning for fiscal year end? Thank you. Sorry, sir, repeat. Sorry, sir, CapEx. repeat. Sorry, sir, CapEx. Sorry, sir, which one is it? Which business? Sir, all businesses together. Fiscal 2022, what are we looking at CapEx? At Apollo, the hospital level, we are looking at a CapEx of INR 200 crores-INR 300 crores, which is our routine INR 250 crores-INR 300 crores, which is our routine CapEx for the year. That is what we are looking at. As we have said, we have been open for acquisition opportunities, given that we have cash with us, et cetera. At the appropriate time, we'll come back on the right acquisition opportunity that we are looking at, which is a bolt-on acquisition in the markets of our interest. On the HealthCo, we said that the near-term CapEx requirement is around INR 200 crores. Thank you. Thank you. Thank you very much. The next question is from the line of Shaleen Kumar from UBS Securities. Please go ahead. Yeah. Thank you so much for the opportunity. Most of my questions have been answered. In terms of your new HealthCo, do you have any preference towards strategic partner which can come up with more digital capabilities and logistics capabilities? Would you prefer a financial backer? There's no preference? No preference except the quality of what will be best for the consumer and for this company. You will be competing against broad-based e-commerce guys and big corporate houses like the definition of 1mg. Any sense, what kind of quantum you think would be needed for this business to begin with at least? What type of capital goals you think you would be comfortable with? That's more speculative. Unfortunately, we're not able to reveal that at this time. Understood. I think the previous question, the diagnostic business we were talking about during our last call. There will be a kind of investment also towards that or will it be part of this new entity? Sorry, diagnostics is part of Apollo Health and Lifestyle, as you already know. We are ramping up the diagnostics business independently as well as with the digital leads coming from 24/7. As Sanjiv already said, 24/7 will be funneling in patients into diagnostics as well as Apollo Hospitals, independent of themselves doing the virtual consultation as well as the pharmacy. That business will funnel into the diagnostics, which is part of Apollo Health and Lifestyle as of now. That's how it is intended to continue. Will there be any initial CapEx towards that or will it be sort of like it becoming a part of the hospital or there will be an initial contribution we give towards it? Sanjiv, you want to answer about the growth of the diagnostics business and how we are looking at it? Yeah, I think our primary emphasis on the diagnostics growth, we generated nearly about INR 180 crore revenue last year. We hope to hit a INR 300 crore mark this year, but we also are ramping up demand that is coming via the Apollo 24/7 platform and to be able to serve it. Towards which, I think the growth will be largely organic. The CapEx requirements are minimal, except for some regular CapEx as of now. Interesting inorganic opportunities we are open and alive, but at the right valuation. We will be looking at that only when we believe that there is value ahead once we acquire, and it strategically fits in appropriately into our own ramp-up and growth plans. We will be opportunistic on that part with respect to inorganic CapEx requirement. Organic growth is underway and at a prolific pace. Understood. If I can squeeze in last question on the proton bit. When do you think you will be able to achieve cost of capital on that or what kind of return on capital do you foresee on a steady-state basis on that, and how far is it? We think that in FY 2023, we would ideally have to achieve that this year itself. Because of the pandemic, one is the medical value chain, the tourism is not happening, and even people within the country are not traveling so much. We have broken even, as you know. We would ideally want the business to get to at least INR 100 crores of EBITDA next year. That is the plan. This is FY 2023. FY 2022, we would definitely want the business to give us at least an INR 50 crore EBITDA. This is what we are targeting, and hopefully we will achieve. Just to add to that, I think we should not look at proton in isolation. What we have done is to create oncology as a vertical, and we are looking at growth of the entire vertical, which is we're looking at probably an INR 2,000 crore revenue at a margin of 30%. This will include revenue from proton, and that's the way to look at it, not as an isolated one machine. Thank you very much, and sorry to interrupt you, Shaleen. I would request you to come back in the question queue for a follow-up question. The next question is from Rakesh Hathwar from Nippon India Mutual Fund. Please go ahead. Yeah. Hi, everyone. You mentioned you have invested INR 200 crores in the digital business and the planning of INR 150 crores. Can you elaborate what are the areas in which you invested till date and which areas you plan to invest further? Sanjiv? Yeah, essentially, the investment is towards the technology side of the business, the infrastructure, as well as the people. Broadly, it's towards tech. Okay. Is the platform in-house development or this is some third-party platform you have taken and you have worked upon it? It is in-house, yeah. Okay. Who are your technology partners? We've got a couple of vendors working with us, but I think Can I take this? Yes, Sangita Reddy, please do. Yeah. The platform is based on a platform that we had originally created in a standalone company, where the PHR was consolidated and conceived as a federated model where many players can come in. The PHR is the core. There are other critical building blocks and pieces that have been developed by a core technology team, 80% of the work has been done by this core team. This includes people from IIT, those who have returned from Silicon Valley, somebody like that heads the team. We've also had one small external vendor to do small pieces of it to accelerate the pace of development. The integrated concept and design is very much a part of creating this integrated user experience. We are on a Microsoft platform in terms of CRM. However, the rest of the stack is all Google. We're bringing this together, like I said in the beginning, using MongoDB for the documents, other related platforms which are best in class. We have this validated also by international experts. Okay. Next question. Maybe on the future investment, you mentioned that you match up to the competitive intensity of the peers or the competitors. What's your current customer acquisition cost and what kind of limits you stand in terms of future personalization cost? Is that number one particularly you mentioned, is that linked to this thing or that's independent number for future technology uses? Hello, can you hear me? Sanjiv, will you take that? Sorry. I don't want to get into specifics in terms of CAC, because one is that you must understand that our cost of acquisition is possibly the lowest. Please figure it out. If you do the math, no one has ever got 10 million registered users spending, including technology, only INR 150 crores. Having said that, going forward in future, we do understand, we've done several experiments in different channels. Those channels that we've learnt and failed fast, fixed fast, tried new things, have been able to give us new avenues of growth and opening the funnel. Going forward, we think that the customer acquisition cost will always remain about anywhere between 30%-40% of competition. We will be spending for sure on this, we'll find many adjacencies. I cannot give you exact figures. When you mentioned INR 150 crores of investment. It included marketing. Thank you very much. A request to all the participants, please restrict to two questions per participant. The next question is from the line of Prakash Agarwal from Axis Capital Limited. Please go ahead. Yeah. Thanks for the opportunity. Question is on the structure. Just trying to understand, there's a comment on the presentation which talks about slump sale consideration of INR 1,210 crores will be received by AHEL. This is subject to an external capital raise whenever it comes. What is the assumption here in terms of valuation and what% stake sale is being considered? I think valuation is not something that we can share for now. I guess all of you analysts know that the pharmacy business itself is a significantly valued business today. Even if you take 30 x EBITDA of FY 2023, you can also figure out what is just the offline pharmacy valuation. On top of that, you have the online pharmacy, on top of that, you have the digital health business that we are planning. I guess you can definitely figure out that the valuation is going to be quite a good one as and when we do it very soon. We will get this money over the next three to six months. Here you assume some stake sale, right? Sorry, what is it? So- Yes, 3 to 6 months is what we are expecting the money to come in. Yes, there would not be any stake sale, right? Because we're only doing a slump sale of the business there, and we would be getting the money which is due to Apollo Hospitals Enterprise Limited. There is the money which is coming in. That'll be primary infusion, and hence there will be some primary capitaln which should come in, and part of that will be used to pay down this INR 1,200 crores. This INR 1,210 crores will come to the main parent company? That's correct. Okay, understood. You'll have to probably pay some tax. That's fine. Okay. Second one is on the vaccine run rate. You mentioned as of now we did about 2 million +. What is the current weekly, monthly vaccine run rate you are expecting for June, July? In June, as I said, we did about one and a half million. With more government vaccination programs opening up and stuff like that, despite that, we're looking at, as I said, a total of INR 8 million further in the next two, three months. Next two, three months. Do you expect this to be a two, three-month kind of thing? By December, a large part of vaccination should be done, or you expect this to be a long-ended one? I mean, it is very unpredictable, right? We really do not know whether a booster dose is required, whether a new strain will come in, a new vaccine will come in. It is all very uncertain. I guess with the knowledge that we have now, I think by December, for the current pandemic, the vaccination for the country will be on a good platform. Okay, perfect. We are targeting 150 now versus 300 beds. That is the cap. Whatever is the cap prices, that is our target. Perfect. Great. Okay. Thank you. Thank you very much. My next question is from the line of Saion Mukherjee from Nomura. Please go ahead. Thanks for taking my question. Ma'am, on Apollo 24/7, as we increase the number of customers, one of the key differentiators which you mentioned is the entire backend that is available with Apollo. If you have 10 crore people on the platform, what do you think about the backend infrastructure? How many pharmacies would be needed? How many diagnostic centers, how many hospital beds? If you can throw some light in order to match this growth, how much expansion is needed in the Apollo HealthCo business? That's an interesting question, and I think I answered it in what Chairman said, that create access for all Indians affordable healthcare, and it could never be done physical, but the fact that we are matching physical and digital. Just to give you an example, my stores have now the capability of doing almost 30% more because they're also doing online. There are different metrics for different stores depending on sizes and growth. For 100 million customers, we don't need the same number of stores that we had earlier to be able to service them. It can be done as more and more go digital. We can cluster stores, cluster PIN codes, and be able to send this out very intelligently. With video consult, it's even easier, where they can be anywhere and they can consult in the most remote location, and this can be done with a variety of different diagnostics also, as and when we get more into connected devices. I think that Apollo itself is very cognizant. Sangita has given you the framework that we have the best of technology, and as we keep ramping technology, we'll find that we can be more and more asset-light. If I can just add one l ine to that, I think that what is important in this whole initiative is the fact that we are creating a strong digital presence, which is centered around the customer and on strong technology, and that the models are going to keep evolving. We are prepared and ready for this transformation of healthcare which is coming around the corner. Right. Ma'am, this could also mean that you could tie up with pharmacies which are not part of your network or hospitals which are not part of your network. I mean, that's also an option to service a large number of customers. I think in Apollo Health Co, the journey of 100 million customers and giving them what they want will give answers to many of these questions. Okay. Just to add, I think Apollo has headroom for growth. In terms of just the number of beds, there is more than 50% availability. We've moved into Tier 2. We are ongoing Tier 3. We continue to grow the managed beds, which is one way of making sure that the Apollo quality is delivered across the system. The second is with the creation of Apollo Health and Lifestyle, we develop new formats of care. Day care surgery, clinics, and the birthing centers. They are new formats of care, which is, in a way, low CapEx, asset-light. With this, with the current infrastructure that we have, we can certainly grow it to serve 100 million consumers. Okay. Ma'am, if I can ask one more question. This is just on the numbers for this quarter. You have separated out the 24/7 operating cost. This cost would have been there in the previous quarters as well. I mean, to that extent, the cost must be sitting in pharmacy and hospital, which is now separated out. Is that a right thought process there? That might have expanded your reported margins for this quarter for these segments. No, the earlier quarter costs were very low. It's only from Q4 that we really started showing the spending higher on marketing, et cetera. This is why we decided that it's important that we start showing that separately, and so that going forward also, it's available for you as a separate number. Q3, Q2, and all were very small numbers, also in the region of single- digits. CapEx. It was more CapEx in the Q2 and Q3. It was only from Q4 that there were more marketing costs, and Q1 had a bit more higher. Okay. Thank you. Thank you. The next question is from the line of Nitin from DAM Capital Advisors. Please go ahead. Two questions. One is on the diagnostic business. One is diagnostic essentially being at the Apollo 24/7, and our diagnostic presence right now being already limited in terms of footprint. How are we looking at meeting this potential demand and the full demand which can come from this business? Chandra can answer that. On the diagnostic business, I think in terms of we're mapping our own pin code journey and lat-long journey along with what Apollo 24/7 does. We work very closely. Our expansion, we are very well present in South of India, East of India, parts of Central. Our presence in pockets of West and North are what we have already begun to do. We could have done it faster but for the pandemic across the last year. That's why I think the second area, which is very key, and we are ramping up in a very significant way, literally an army, as Ms. Shobana mentioned in our earlier area, is to also build our home collection capability, which will be the demand that will come from Apollo 24/7. That's something that we are ramping up. Lab capacities in most of the currently planned map pin codes are well placed. Some ramp-up required, but that is something part of our organic growth plans. It does not require any significant ramp-up. Third area where we are consistently constant is on hospital lab management, which is a very known model of diagnostics business. Asset-light model of diagnostics business. We are actively ramping up our hospital lab management contracts. Thereby, we acquire not just the capital business of the hospital, but also have a provision to use the lab to service our other customers from outside. These two strategies. Third, I mentioned very clearly that we'll keep our eye open for attractive inorganic strategic fits to come into our play as and when the demand requires us to, and such opportunities arise. Chandra, You did mention a number earlier. What is the growth number that you indicate that we get here on our organic growth number potentially over the next couple of years for the region? We have reached about INR 180 crore, which was the guidance for the FY 2021. We are nearly there, INR 179 odd for the year. We are hoping to reach INR 300 crore in the current year, that is FY 2022. Our move to FY 2023 will be targeting to at least do an INR 500 crore business. That's the number that we are aiming to do. There will be some burn, we'll not yet reach the steady state EBITDA because we have consistent growth-related burn. We'll be looking at covering our INR 500 crore in the following financial year. Just to push on that, FY 2020, INR 120 crore, so we're talking of 4x revenue in a period of three years. Sorry, can you repeat that? I said you have INR 120 crore of revenue in FY 2020. In a period of three years, you're talking of nearly 4x revenue in the run rate business. We should not see the whole cumulative INR 180 crore as the number. If you were to clock the March run rates and the quarter four run rates, we are well poised for INR 300 crore for the next year. On the back of that, we have plans for expanding it to INR 500 crore the following year. The second area, we definitely will gain a lot from this digital push that the group has taken via Apollo 24/7. Our current abilities to serve only need to be ramped up. I think the growth projections are quite realistic. Got it. Just one more question on the value unlock in the HealthCo business. The intent of the value unlock or the primary fundraise that will happen in the business would be towards warranties from a lower customer base so far. It doesn't seem to be a business that will keep taking too much capital. What are we looking to achieve by doing the value unlock at this point for current fundraise in the business, are these sales or acquisitions? If you look at it, there will be ramp-up costs which are going to be there on the digital business, as Ms. Shobana already said. What we spoke to you about the CapEx is going to be there for the near term, and this will be until the investors come over the next six months. There will be ramp-up costs on the digital over the next three years before it eventually becomes profitable, as Ms. Shobana said. Second, we will also be looking at acquisitions, et cetera, on the tech space. If I can just add a line in that, I think it is to do a capital structure which is appropriate for the type of digital company which is evolving. Perfect. Wonderful. Thank you. Thank you very much. Ladies and gentlemen, we will take the last question from the line of Abhishek Sharma from Jefferies India. Please go ahead. Yeah. Am I audible? Yes, sir, you are. Go ahead. All right. Thank you. Basically on 24/7, I just had a related question. I want you to understand, in teleconsultation, will 24/7 have its own doctors or will it only rely on Apollo doctors as well as third-party doctors? Similarly, in diagnostics, will you rely on third-party labs or will you just use Apollo labs only? Similarly in e-pharmacy, order fulfillment will be only from Apollo Pharmacy or will you be using other pharmacy business? Thank you. Hello. Like I had said earlier, I think this is a very consumer-led question. What we are creating is the best of Apollo, that everything that we have requires the stamp of Apollo for quality. If it so happens that right now we have the full diagnostic capacity, and they'll continue to scale I would think that even the pharmacies in PIN codes where they're not available might have partnerships. Diagnostics might have partnerships, but the underlying guarantees of quality and availability have to be from the service provider. Apollo 24/7 is an agile network that will serve the customer. Understood. On teleconsultation, am I understanding correctly? Well, we do have our own doctors. We have our own doctors, but of course, not the level of specialists and super specialists that Apollo has. How many doctors will Apollo 24/7 have out of the 7,000 that you have on board? At this point, we have about 150. How will that come to ramp-up plan as we go forward to the. It would be very difficult to speculate on that. It truly depends on how this will move. If you look at Ping An today, they have 5,000 of their own doctors. For you, these 150 doctors will serve as gatekeepers who can channel the right person. They do that. Right. They do that also. Yes. No, they do that also. That will happen. Understood. The importance is for them to be able to give us experience in 15 minutes, a quality experience in 15 minutes. Got it. Thank you. Thank you. Thank you very much. I now hand the conference over to management for closing comments. Thank you, ladies and gentlemen, for taking time out for this call. FY 2021 has largely been regarded as a period of disruption caused by COVID-19. Looking back, I am truly proud that our team has risen to the occasion. We used this time to launch a well-curated omnichannel offering, moving closer to the consumer and delivering value to all our stakeholders as well as our shareholders. Thank you for taking time again for this call, we look forward to interacting with you next quarter. For those of you who would like to have a meeting with the team, please reach out through Krishna Kumar. Stay safe. Stay healthy. Thank you very much. On behalf of Apollo Hospitals Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.