Please note that this conference is being recorded. I now hand the conference over to Mr. Mayank Vaswani from CDR India. Thank you. Over to you, sir. Thank you, Neerav. Good afternoon, everyone, thank you for joining us on this call to discuss the financial results of Apollo Hospitals for Q4 and FY 2023, which were announced yesterday. We have with us on the call today the senior management team, comprising Mrs. Shobana Kamineni, Executive Vice Chair; Mrs. Suneeta Reddy, Managing Director; Dr. Hari Prasad, President of the Hospitals Division; Mr. A. Krishnan, Group CFO; Mr. C. Chandra Sekhar, CEO of AHLL; Mr. Obul Reddy, CFO of the Pharmacy Division, 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 2 of the investor presentation that was shared with all of you earlier. Documents relating to our financial performance have been circulated, and these have also been uploaded on the corporate website and the websites of the respective stock exchanges. 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. Good afternoon, everyone. Thank you for taking time off to join our earnings call. I trust that you have received our earnings document, which we shared yesterday. Before we get into the details of our quarterly and full year performance, I would like to take a few minutes to re-emphasize our vision and journey towards creating Asia's largest integrated healthcare ecosystem, with the consumer at the center. While high-quality healthcare has always been our core offering, we have systematically, over the years, created several thousand touchpoints of care through offline pharmacies, multi-format clinics, diagnostics, and now a comprehensive digital health platform, Apollo 24/7. This health infrastructure is formidable in terms of footprint and scale. Key to us being able to be the most trusted healthcare partner for discerning customers across the value chain. We are confident that the investments we have made and the solutions that we are working on, whether it's AI for clinical decision-making or digital therapeutics and condition management, will result in providing consistent and seamless hybrid customer journeys. This will be a key differentiator, and it will give us the right to win a disproportionate share of the health wallet spend of affluent households. All our efforts are oriented towards unlocking network effects, and we are sure that we are building strong upstream and downstream funnels. Against this backdrop, let me take you through our financial results, which reflect the strength of our core business and the potential of our investments for future growth. We have reported a very strong fourth quarter, with the healthcare services business witnessing a robust 18% year-on-year growth in quarter four, FY 2023, driven by growth in volume and supported by pricing and case mix gains. During quarter four, FY 2023, occupancy across the group was at 5,041 beds or 64%. Mature hospitals were at 65%. New hospitals were at 62%. This was planned and achieved after the sustained reduction in low-paying institutional business over the last six months. This has resulted in a lower reported occupancy. Has visibly strengthened our margins. Alongside the trend of increasing insurance business, which continued, which is currently 43% of revenues and 40% of volume contributed by this channel in quarter four. This was less than 30% pre-COVID. ARPOB increased 10% year-on-year to INR 53,232. Consolidated financials for the quarter are: consolidated revenues grew by 21% on a year-on-year basis to INR 4,302 crores. Year-on-year basis, healthcare services revenue grew by 18% to INR 2,195 crores. Mature healthcare services grew by 18% to INR 1,519 crores, while new hospitals grew by 16% to INR 676 crores. Revenues from Apollo HealthCo stood at INR 1,799 crores in Q4, against INR 1,375 crores, representing a growth of 31%. AHLL revenues stood at INR 309 crores in Q4, FY 2023, with a core revenue growth, excluding COVID and vaccination, of 23% in Q4. Consolidated EBITDA stood at INR 488 crores. Without the effect of the operating cost of Apollo 24/7, the EBITDA was actually at INR 706 crores. Within this, healthcare services EBITDA grew by 31% to INR 535 crores. Healthcare services margins expanded by 24.4%. Offline pharmacy distribution EBITDA was at INR 121 crores, the margin remaining very healthy at 7.8%. Net EBITDA loss in Apollo HealthCo was at INR 72 crores. AHLL recorded an EBITDA of INR 26 crores, compared to an EBITDA of INR 37 crores. The decline was owed to a drop in COVID-related revenues and increased costs to expand the high-end testing and the phlebotomy network. Healthcare services PAT was at INR 257 crores, a growth of 46%. Consolidated PAT was at INR 145 crores, a 60% growth on a year-on-year basis. We closed FY 2023 with consolidated revenues of INR 16,613 crores, a growth over 13% over FY 2022. EBITDA was at INR 2,050 crores, and PAT was at INR 819 crores, after accounting for higher operating costs of Apollo 24/7, and due to the non-recurring revenues from COVID and vaccination. The financial performance of the core business is robust, the margins are healthy, and the operating indicators continue to improve. Our focus on the tower specialties of cardiac sciences, oncology, neurosciences, gastroenterology, and orthopedics, have ensured that they now contribute 60% of the hospital revenues. Our ALOS was at 3.39 days for quarter four. It is the best in class, considering the severity and acuity of our mix. In terms of inorganic expansion, we have made significant progress on implementing our plans to add 2,000 beds at an outlay of around INR 3,000 crores over the next four years in key metros. Alongside this, we are on track to improve hospital occupancy to 70% by the end of FY 2024, and unlock margins by revenue and cost optimization. We serve over INR 7 lakh footfalls a day in our offline pharmacies. Over 15% of revenue in this vertical now comes from private label and generics. We are there making sustained efforts to increase this number consistently. Our investments in the future are also yielding results. I am happy to report that Apollo 24/7 achieved a GMV of INR 1,643 crores for FY 2023, delivering on our commitment to exceed a GMV of INR 1,500 crores this fiscal. The platform has over 25 million registered users. The committed trajectory of GMV and revenue growth is on track. Breakeven achievement at an entity level in Q4 FY 2024 is well on target. In AHLL, the non-COVID diagnostic business has grown by 45% year-on-year, and is currently at a run rate in excess of INR 100 crores for the quarter. We expect to grow this to INR 500 crores for FY 2024, and to INR 1,000 crores in three years. This should be accompanied by an expansion in EBITDA margin from 5% at the present, to about 10%-12% in the next 2- 3 quarters, as we focus on expanding the test menu to include specialty high-end testing modalities and genomics, while recording an increased utilization of our phlebotomy network. The structural strength of healthcare services and offline pharmacy, combined with the potential of our growth verticals, gives us immense confidence in the impact that we can make in shaping the healthcare ecosystem of this country, and delivering high-quality care to our consumers in the most seamless, ubiquitous way and value-add distinction way. We acknowledge the short-term concerns around the cash burn in Apollo HealthCo. Several measures have been initiated that will reduce costs by INR 125 crores to INR 150 crores in this fiscal. We would like to assure our stakeholders that we are on the cusp of change, and we are building a platform that is sustainable and value accretive, with fiscal prudence and distinctive consumer value proposition as our twin goals. I would like to hand it over to our moderator and open the line for questions. I have Shobana, Dr. Hari P rasad, our CFO, Krishnan, Obul Reddy, Chandra Sekhar from AHLL, and Sanjiv from 24/7, with me to take all your questions. Thank you. 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 Damayanti Kerai from HSBC. Please go ahead. Hi, good afternoon, and thank you for the opportunity. My question is on Apollo 24/7. You recorded GMV of INR 5.9 billion for fourth quarter, which has seen 9% sequential growth. Although like you have beaten your earlier expectation for full year, but for next year, I guess you have earlier indicated that you would like to double up your GMV compared to FY 2023 level. From this level, like, how do you see GMVs picking up in coming quarters so that you can almost double up GMV in FY 2024 versus the FY 2023 level? Fourth quarter growth seems a bit low, I'll say. I'm happy to take this question. This is Shobana Kamineni, which is on growth. We'd like to tell you that we've initiated, many programs. Hello, am I audible? Yes, ma'am, you are. Okay. The plan here, the plan very clearly is that we have tailored our growth to achieve a 100% increase from the last year. We will finish this FY 2024 with INR 3,000 crores. Most of this will come from pharmacy and while keeping our marketing spends at the same level. What we've seen in Q4, which is the early shoots of how we would do this for the following year, is that we've been seeing a lot of retention. Our monthly customers, they keep coming back to our platform, has actually increased. People who make three transactions. It used to be in the range of less than 500,000 people last year. This is inching up towards 1 million +. I think that this is very significant to people as we continue to get traction of the doctors that continue to come on. Please understand that what we've done is that we're also, like Suneeta said, our journeys within is especially within the offline and online, we have not been able. All these years, we've just been creating the pathways. Now we are actually seeing traction, where in community by community, we're able to get more and more people coming back to our pharmacies that shop on me. The thing is that we've actually opened up a new age group of customers, that it is not of healthcare users, many of who are digital first. The 25 registered who are digital first, many of them, the almost 2 million of them, they shop, not just themselves, they shop for, you know, someone else in their family. These are very interesting cohorts that we've seen. We've also accelerated the ability, like, if you look at our figures, we have now one in four of them actually doing another service. Mostly it's a diagnostic service that they take. I think that this kind of traction is what we'll be able to build throughout this year. Yes, 9% was muted, but that was largely because if you see during that period, everyone pulled back in terms of discounts. That short period of, you know, going 3% less in discounts with all this, all the high value seekers just moved out, and which is good for the business, because now we have much more traction of serious customers engaging. Okay. Ma'am, this discount part, you said you're offering a 3% less discount versus most of other, peers. Is that? No, no. Most of them have moved down, but yeah, we continue to stay at least 1% less than the others. Okay. My second question is, AHLL spend seems to have plateaued during the quarter. Are we going to see similar run rate ahead? If you can elaborate where all the spend has gone in various buckets, that will be helpful. Sanjiv, please. I think it's question. I think, there are two, three things, you know, if you look at, in Q4, our AHLL overall EBITDA is at -INR 72 crores, versus Q3 of INR 63 crores. There is a one-off, marketing and tech integration tier cost, with insurance and corporate, health, benefit platform. This is for the distribution and servicing medical insurance, policyholders. I think with this, one-off, tech, integration, we would be well, positioned to start, taking B2B, which is the corporate, side of the business, as well as the, insurance side of the business. As far as the spend side is concerned, I think, as stated in the last earnings call also, we don't see any difference as far as Q2 versus Q3 is concerned. About 30% of the expenditure goes into product and tech side. We've got around 25% of expenditure into the op side. The marketing, which is the brand communication, connecting with the customers, content, so on, so forth, is roughly about 20%. The call center and the other lines, tele sales and all that takes about 15%, and the remaining 10% is towards support and other things. I would also like to state one more point, that, you know, we have a line of sight for at least INR 20 crore-INR 25 crore of reduction in losses by the end of H1, and we should be seeing this INR 72 crore of Q4 losses to come down sub INR 50 crore, you know, by H1. S orry, you said INR 25 crore-INR 30 crore cost reduction by H1, that's what you're aiming for? Yes, right. We have a line of sight for INR 25 crore of, you know, bigger improvement or the loss improvement. More work is going on. We will brief you in the next earnings call with respect to this year. Okay, thank you. I have more question. I'll get back in the queue. Thank you. Next question is from the line of Prakash Agarwal from Axis Capital. Please go ahead. Yeah, hi, good afternoon to all. Just, you know, carrying on with the last participant, the voice quality was not clear. You were saying your spend from INR 189 crores would come down by INR 25 crores-INR 30 crores, which means you'll be doing INR 150- odd crores per quarter, starting first half, quarter one onwards? I could not get this. I think, what we suggested is that, you know, as a company, we are into the endeavor of ensuring that Q4 is breakeven for the company. Q4 of the current fiscal year should be breakeven for the company. As far as the last quarter is concerned, we made a loss of INR 72 crore. The line of sight that we have is to for the next 2-3 months, suggests us that by H1, this INR 72 crore of loss should be around INR 45-50 crore. There will be reduction in losses by about INR 25 crore from the current level in next 3-4 months. Okay, that is clear. This loss reduction is by higher sales, or you plan to reduce this INR 189 burn rate also? Absolutely. That's a good point, and you know, we have taken a couple of areas, you know, where we can. As suggested by Shobana, ma'am, that, you know, there is a reduction in the discount by about 3%. We were at about 18%-19% in Q4. Down to in the current quarter, we are at about 15%, apart from the fact that we've got 20% reduction in the logistics. There's a lot of headcount, rationalization and productivity coming out of the automation, which would also support us in the expense reduction. There are certain areas where action has already been taken, and those actions were taken in the back end of Q4 and early April. That is the reason we couldn't see anything in Q4. Indicative numbers for April and May suggest that there will be reduction in the operating cost as well. Okay, understood. One more, if I may, on the HealthCo. If you see the offline pharmacy, YOY is pretty soft, 12%. Any particular reason, was it due to any COVID base last year, or how to think about that? Yeah. You are right. Last year, first Q1 and Q2, we had a huge COVID sales. If you adjust for that, our offline growth is in the range of about 19%-20%. Q4, sir, not Q1 and Q2. Q4 of last year. Q4 of last year to Q4 of last year, we say there is a 21% growth. On the offline pharmacy platform, right? Yeah. That's right. Okay. Understood. Yeah, just Q1 of last year, there is a 19%. Got it. Second question on hospital business. Glad to know we are on track of the 70% occupancy levels. This quarter, I heard on that, you know, the ARPOB and case mix actually have been the focus has been to improve that. Typically, the season is strong, Q4. Did we see any seasonally soft quarter or? What is the bridge to move from 65% - 70% by end of this year? Thank you. If you look at occupancy, you know, we've reduced the number of institutional people, that patients that we usually get, and with this, the occupancy dropped by at least 3%. This is why you also saw the ARPB increase by 10%. Yes, our case mix has also improved, but it is a combination of both these that has led to an ARPB increase. Despite this, thing, improvement in the, you know, case mix and institutional going down, you expect 65% to move to 70%? Yes, this will come from, you know, the program that we have to recruit new doctors, which is already happening across the system. The second is to really look at what our network funnel is going to bring us. We have started getting patients from 24/7, and we believe that we have created a strong funnel. The third lever that we're using is really to look at how we leverage our corporate relationships, our corporate relations, as well as international. We are looking at this. Currently, if you look at our payer mix, 45% is retail and, another 45% is private insurance. That is really going to contribute to an increased occupancy. Finally, for the Tier 1 cities, international patients, currently we're at about 7%. We're moving this to 10%, so that should add another 3% in terms of occupancy. Got it. Lastly, on, you mentioned there is a reasonable progress on your, you know, inorganic initiatives of adding 2,000 beds. Last time you mentioned 3- 4 locations. If you could just highlight any particular location, any particular development, that would be helpful. We should be in a position to come back to you in the coming quarter, hopefully on this, Prakash. You know, we have line of sight across all of these. We know we are progressing on Delhi and Mumbai, Delhi and Chennai, as you already know. We are working on Bangalore. We are working on Mumbai as well, and Calcutta. Hyderabad also, we are working on. There are multiple options. By the coming quarter, you should get a clarity. Okay, I have more question. I'll join back with you. Thank you. Thank you. Next question is from the line of Gina Kim, from Schroders. Please go ahead. Hi. Hello, Suneeta, and everyone. Just I don't know if this is a minor point, but on page 15 of your presentation, it's the financial performance for the fourth quarter of AHLL. But everything, you know, makes sense, but specialty care side, it, you know, EBIT sales is all growing, I guess, except for PAT. PAT has, you know, Well, losses have ballooned, it seems, in the fourth quarter of last year. Can you explain why? Yes. Chandra Sekhar, will you take this question? We have higher depreciation because of new centers. Specialty care includes a lot of the tertiary centers which are opened in the year before, and all of these, the depreciation and the effect of depreciation in the index treatment also has affected that. Sorry to interrupt. On the depreciation, that would have been if reflected in EBIT, right? EBIT grew from INR 1 million - INR 64 million, if you look in the line above, but only PAT went the opposite direction. There was also a deferred tax asset reversal in this quarter, which is a one-off, which will not recur from the next quarter. There was a INR 12 crores deferred tax asset reversal. Yes. That's a charge to the P&L, which will not recur from next quarter. That's for the specialty care. That's a one-off. Yeah, got it. Okay. just and just generally, I guess, I mean, you've mentioned some sort of guidance, some in bits and pieces, occupancy of 70%, your CapEx plan, HealthCo revenue growth. Can you provide an overall picture of what you expect for this year, FY 2024, as a group? Healthcare services, we are looking at 15% growth coming from higher occupancy and therefore, better EBITDA. This quarter, we showed an increase in EBITDA margin by 249 basis points. We believe that, you know, we can improve this by another 100 basis points, this will come, you know, from occupancy, covering fixed costs and making sure that, you know, higher occupancy is better EBITDA and therefore higher profitability. Moving on, I think, 24/7, Sanjiv or Shobana, would you like to talk, and Chandra Sekhar on, AHLL? Yeah, I can take it. Hi, Sanjiv here. I can take it up for the Apollo 24/7 on the digital front. On the digital front, we are looking at about 100% growth on platform transactions. We did roughly INR 1,640 crore last year. We're looking at doubling it. On the pharmacy side, we are looking at about 29% growth, 28%-29% growth in the current fiscal year versus the previous year. Over to Chandra Sekhar for the AHLL. Yeah. On AHLL, I think we have had a base reset kind of a year. The one-offs on COVID, etc, completely reduced this year. Optical view shows a flat year to a minor degrowth. AHLL core revenues on a year-on-year basis have grown by 28%. Diagnostics continues to grow at a pace, but again, optically shows a 4% degrowth, but that is because of a very high component of COVID testing the previous year. Non-COVID diagnostics, excluding COVID testing, and COVID-alike testing, actually grew 63% year-on-year. That's the flavor that I think we are carrying forward. The overall growth at the AHLL level from an INR 950- crore odd number to an INR 1,280 crore number, approximately, is a reflection of about of a continued growth path. The growth has been driven by the core business. Now, on a future outlook, primary care had a one-off significant INR 185 crore revenues on account of vaccination the previous year, which has subsequently, obviously, has fallen off. These were the flavor of the year and the overall year's performance. We remain bullish about the continuing the growth at a 40% odd growth rate that we have demonstrated in the non-COVID segment. For the previous year, it was approximately INR 250 crore, which has moved up to the INR 384 crore number, representing about a 44% growth in terms of the non-COVID testing. We are making investments on adding and changing our mix from routine basic to semi-specialized, specialized and super specialized. Towards this, we are taking additional costs by way of both skilled doctors, specialized sales forces. We're also investing continuously, and we are yet to receive the complete benefit of the ramp-up of our phlebotomist capacity because the consumer demand and something that we are very committed to is to serve the home collection requirements. These will compress our margin for a little while there in diagnostics. However, our growth rates will continue to be at the 40%, 35%-40% level. We would like it to be even higher further, so that is the plan that we're taking on the growth path. On the other segments, we continue to have growth rates, which I think we will sustain and add. A few centers in the Cradle segment are being added, which will again cause a slight gestation-based depression in margin, will continue to give us benefits. Cradle is operating on a high 18%-20% EBITDA margin at this level, that will continue to be useful. IVF, which is fertility, is a more newer line of business for AHLL. We have made investments in during the midst of the COVID years. The last year has seen a significant growth year-on-year. We are yet to come to a level of, you know, completely utilizing the potential of the infra we have created. Without any new center additions, we are going to grow the utilization at IVF. That's I think the broad plan. Our diagnostics division margin has been at the 7.5% in aggregate, annual level. We are making efforts to take it up 10%-12%, and progressively aiming to take it to the 15% level. There can be quarters of slight fluctuation because we are making investments. Most of the investments for expansion are operating expenses initially. That's the broad outlook for initial. Thank you. Gina, I'll request to come back for a follow-up question. I request to all the participants, please restrict to two questions per participant. The next question is from Shyam Srinivasan from Goldman Sachs. Please go ahead. Good afternoon, and thank you for taking my question. Just some of the metrics that we track on Apollo 24/7, little confused. Daily active users, I'm looking at the last four quarters. June 2022, INR 6.5 lakh daily active users. It became INR 10.6 lakh in September, December, INR 7 lakh, and now fourth quarter, again, INR 7 lakh. Some of the comments that was made on us dropping discounts and some of these value customers moving away. Did that happen two quarters back or, you know, I'm just trying to map it to the trajectory of daily active users? Yeah. I think, as far as the, you know, the upload movement from, you know, June to September and some bit of October was on account of, you know, the kind of campaigns that we were running across, you know, the Pan-India, and those campaigns were more of a broad-based than of a, you know, kind of a very, very particular opportunity for, select catchments. One is that we shifted our campaign from broad-based to more data analytics presented. That in any case, we believe, would result into a lot of active users, you know, which only come for, you know, kind of a comparison between the between various websites, they won't come in. All the value seekers will start dropping in, and in any case, you know, we never wanted to have a value seeker coming into our platform. This was one of the conscious decision to ensure that value seeker does not land into the platform and more of a chronic, more of a customer who's looking out for a continuum of care and various other offerings of Apollo ecosystem. This is one conscious decision. Now, between December and March, I think, you know, one of the reasons, and you rightly pointed out, could be ascribed to the discounts being, you know, lowered. Discounts in Apollo 24/7 have always been about 2%-3% lower than the market. You would recall that somewhere in FY 2022, discounts were 22%, 23%, and last year they came down to 18%, 19%, 20%, and we were always less. Somewhere in March, April, we have brought it down to some 15%, apart from the fact that, you know. I think one reduction could also be attributed to lower discounts being offered by platform. Plus, you know, we are also not looking at, you know, those orders which are, you know, less than INR 200, because, you know, that distorts the entire economics of the pharmacy delivery. I think these are the two reasons, plus, you know, value seekers going out of the platform, could be the third reason, you know, resulting into daily active users to be constant between December and March. Current quarter, we see a placement as far as the now is concerned. That's helpful, Sanjiv. I'm just a little worried about, like, active as a percentage of registered users, right? Registered users have gone from 14 million last year to 25, and we are at the same level of active users. Am I reading it too much, you think, or you know? I think, the way to look at it is that, I think the metrics which we need to look at it is that, to what an extent, you know, repeat percentages are flowing through the platform between the two endpoints. One is that the repeat percentage is as high as 40% for the last year for the company, which was probably about 22%-25% in FY 2022. One is that more and more repeats are coming into the platform. As far as the overall base versus daily active, please note that, you know, chronic customers, or as a matter of fact, any customer, will open the app only when a service is needed. Not necessarily, we never expect that, you know, 25 million customers to open the app every day and become a daily active user. We would have only as many active users onto the platform who are coming to consume either a product or a service, and service could be content also out here. I think, this is to be seen from this perspective, that whether your active user base is increasing, your repeat percentage is increasing, and your total platform transactions are increasing year-over-year. If I look at it year-on-year, we have about 266% growth in the platform transactions. I think, this is how I would sum up that, you know, we should look at the numbers. Got it. Last question for me. Just the divergence in GMV, QoQ growth, I think, 9%, like I think one of the other participants asked. Revenue has grown 44% to about INR 2,539. Just trying to understand, say, if I use revenue to GMV ratio, that's bumped up. Also, if you could help us with the split of the GMV in the different services that we share. Thank you. Okay. In the last earnings call, also we had a question regarding GMV to revenue ratio, to what an extent because we could look into as a stable number. Last quarter, we had 42% as 42.9% to be precise. As a revenue, as a percentage to GMV, I think pretty healthy. We continue to look at this number in the range of about 45%-50% between current quarter to the next quarter, so it should stabilize somewhere there. As to the, you also checked on what is the distribution of INR 593 crore between various verticals. In pharmacy, we did about INR 375 crore, which is roughly 74%. Diagnostics will be INR 22 crore, which is 16%, and remaining 10% is on the consultation side. Thank you. Thank you. Next question is from the line of Tushar Manudhane from Motilal Oswal. Please go ahead. Thanks for the opportunity. Just on this, number of offline stores, for the quarter, there has been a bit of slowdown, while for a full year basis, the number has been quite aggressive compared to FY 2022. If you could throw some light on the number of stores that could be added in the coming years. Obul will take that. Last quarter, we added about 300 stores. There is a bit of higher closure. That is why net addition is less. We are on track with the new opening. For the year, INR 1,100. For the full year, we have opened about 1,050 stores. Next year, we are planning to be in the range of about 500, 600 stores, then see what next. Any particular reason for this while, in terms of slower pace of addition of stores? We want to focus on the productivity, and, that is the reason, we want to add lesser stores. At the same time, certain incremental cost has come up. For FY 2024, how to think about the offline pharmacy distribution margin? Right. we expect to be some, offline, about, Distribution. 7%. That's a structured business, which is the range of 7%, about 0.5%, maybe around 7.5%-8%. That will be the range. Understood. On the hospital side, the operational beds has been pretty stable, in 23 as well. While the occupancy can increase to 70%, but the bed addition will happen only after the major CapEx clear, or is there a scope of adding beds at the existing sites? There are some beds which will be added, but it will probably be in the year after next. It is, particularly in Bangalore and Mysore, which is where we are looking at some additions. Mostly after next year. Thank you. Tushar, sorry to interrupt you. I'll request to join the queue again for a follow-up question. A request to all the participants, please restrict to two questions per participant. The next question is from the line of Aneesh Deora from Nomura. Please go ahead. Hi. Thanks for the opportunity. Firstly, a clarification on the private label contribution that we've reported. This quarter, it was 15.5% of the total pharmacy revenue, whereas in the previous quarter, it used to be in the range of around 11% or so. Have you club private label and trade generics in this quarter as for the reporting? That's right. In a pure FMCG, private label is about 11%. With generics, it is about 16%. There were a set of people who were asking for this number, you know, after the last call, and which is why we decided to include this as well. The generics is basically of the other players. It's not, I mean, Apollo manufactured, or like, it's the trade generics of other places? We have few SKUs Apollo manufactured, and we will be adding further into that, even on the generic side. Okay, all right. Secondly, on the hospitals ARPOB, basis the clusters. If you look at the ARPOB increase, it has been a bit diverse across the clusters. Like, certain clusters have seen a very healthy ARPOB growth during the year, while certain have been flat. Any particular reason, and any particular trend that we can see out of this particular thing? Let me first say that it is a function of case mix as well. I think we have done some tariff increases across the board. Across the hospital division, there was an increase in ARPOB. Do you want to. We are, you know, we would be, we have seen a good increase in ARPOB, and as we go into the next year, we are say, also, you know, that the one division that didn't see some increase was the AP Telangana region. We also had, you know, we have also Vizag, etc, which was there in this region. While Hyderabad, the ARPOB has increased, given that it's the region that you're looking at, there is, it's not showing an increase there because given that it's not a Tier 1 metro, that ARPOB is a bit lower, and that occupancy as it goes up, it impacts the overall ARPOB, more from a mix perspective. Otherwise, all the other regions, we are fine. You know, others, there's also, something that we are hoping that in this coming year, we should see a 5%-6% increase in ARPOB. Understood. I can just please one last, and just a clarification on the share of profit from the joint ventures and associates that we report. Last quarter, there was a loss of about INR 20 crores that was reported, in this quarter, there's a INR 3 crore profit, it has been fluctuating quarter- to- quarter. Any particular reason for this, and how should we be looking at this number going forward? Thanks. Let me come back to you on this, because there was nothing specific that, yeah, last, you know, so nothing. I'll come back to you offline on this, because I have to just look at that reasoning, reason for the same. maybe there was a one-off last quarter. Let me come back to you. All of them are currently profitable. Thank you. Thank you. The next question is from the line of Shaleen Kumar from UBS. Please go ahead. Yeah, hi. Thanks for the opportunity. Just one understanding here. As we have improved our payer mix, you know, moved out of CGHS kind of a scheme, I, sequentially, our margin should improve. Is there any one-off cost, etc, line in the fourth quarter? This is, margin should improve. On hospital services, you were not clear in the beginning. Is this hospital services? Ye s, ma'am. Hospital services, healthcare services. I mean, sequentially margin, I mean, so I'm just wondering if there's a scope for margin to improve here. Payer mix work started only barely five months ago. You will see that there has been a 249 basis points improvement, where at 249 basis points improvement at 24.6% EBITDA margin. This tells, clearly there is an improvement. I was basically comparing, last quarter, Q3 versus Q4. Just wondering if there's more that we can have, you know, just in case there's any one-off costs here, in Q4? Nothing specific. Nothing specific. Okay, sir. Sir, sequentially, again, the physical pharmacy revenue has not grown, or rather, margin will be declining. Is it because of rationalization of the store? It should pick up? Occupancy store. No, no. Physical stores, you know, in the back end, it's a structured margin which stays around 7.8%. Growth is 31% sequentially. Sequential growth, you know, this quarter we have a slightly slower growth compared to. Generally, our Q2, Q3 will be the best. Q4, we generally have a muted growth, and that is the reason. Otherwise, even we are at a growth of 2% sequentially. I think I'd have to state that across the board, if you, January is traditionally a month of many holidays in the south. If you're comparing sequentially, yes, there was, in terms of both, occupancy and hospital utilization, as well as maybe pharmacy, there could have been a lower growth. If it's sequential, there was also a mild COVID wave, which was only resulted in people taking paracetamol. You would not have seen huge growth in the fourth quarter because of this mild COVID wave, and because the south hospitals and pharmacies in the south really didn't see much traction because of the many holidays. Thank you. Shaleen, sorry to interrupt you. I'll request you to join the queue again for a follow-up question. I request all the participants, please restrict to two questions per participant. Next question is from the line of Nitin Agarwal from DAM Capital. Please go ahead. Thanks for taking my question, ma'am. On the hospital services EBITDA, if just reconfirming, you guided to a 15% growth in the EBITDA for the hospital services for this year? So yeah, it should be higher. The growth in EBITDA is what you're saying, right? Yes. Yeah, it should be higher than that, because we are hoping that, you know, the overall growth is closer to that, 13%-15% on revenue, and EBITDA should be higher than that, because of the expansions that we are planning on both operating leverage as well as cost cuts. Okay. Sir, you know, when you look to beyond the first year, I mean, beyond FY 2024, if I take, like, a three-year view of the hospital services business, at what rate, I mean, what's the broad range in which we think we can grow our EBITDA from FY 2023 base? I think you should continue to look at the same number, because it is possible to grow at the similar number. The advantage that we have is that we have existing capacity. Without investing too much, we are going to increase occupancy. Of course, in 2025, 2026, we will have new beds coming up. Right. Ma'am, you talked about the occupancy going to 70% for FY 2024 versus 64%, which is a very large increase. I mean, it should ideally lead to a much disproportionate increase in profitability for these hospitals, if we can get this kind of occupancy increase for the year. Yeah, I think, you know, we should set our targets high, and really we have the potential, and this 70% is by Q4. Like I said, we are working on these initiatives, including improving our international patients mix. With this, you know, we should be able to get 70% occupancy by Q4. It won't happen overnight, but definitely in Q4. Thank you. The next question is from the line of Sayantan Maji from Credit Suisse. Please go ahead. Thanks for the opportunity. My first question is on the EBITDA for pharmacy segment. Our back end, you know, when we had done the deal, the guidance was that 80% of the EBITDA will be captured in back-end pharmacy, but you know, over time, it has been, you know, sort of almost equaled or higher. This quarter as well, INR 148 crore was captured in the front end, out of which INR 145 crore was captured in the back end. When does it go to 80%, or is it something that, you know, our back-end EBITDA margin will always be at 7.5%-8%? What are the additional costs that are being incurred at the front-end pharmacy? As you appreciate, you know, the back end pharma business is a structured business. As an EBITDA percentage, it will be in the range of about 7.5%-8%, depending upon the cost and other, you know, sales movement during that quarter. It remains largely in the range of about 78%-82% versus the front-end business. As you are aware of it, this year, we added about 1,000 stores in the front-end network. We have higher one-time and infrastructural costs. To that extent, as a percentage, it might look little slightly different, but we will be back in the current year. By end of the current year, we expect that to be in the same range as we explained earlier and as we planned. For an online order, what are the additional costs that are being incurred at the front end? We don't have any additional costs other than the delivery costs associated with that, because the inventory is coming from the store inventory and only logistics handling costs. There is a set of, you know, dedicated employees, so we are largely manageable within the overall cost structure. Okay, got it. My second question is on 24/7. In 24/7, we have guided for INR 20 crore-INR 25 crore reduction in costs. This INR 189 crore, if I just look at the operating costs, that is expected to go down to INR 170 crore. What is the next set of investments, you know, that we have to do in FY 2024? Are we mostly done with the product? Hello, am I audible? Yes, yes. Okay. What is the next set of investments that you invest in 24/7, in FY2024, even at, say, INR 170 crore quarterly run rate? I think, I think as far as the, you know, the platform, is concerned, I think more or less the entire second product investment has happened. We don't see that, you know, while we have a target to grow our business by 100% in current year, I'm not seeing any potential investment into the business, other than the fact that, you know, we had a one-time second product development for the insurance and B2B corporate side of it. There is a clinical intelligence engine, CI, you know, which, which is taking a bit of investment, but I guess that, you know, that is something which we can absorb within the various cost initiatives that we have planned for the company. There should not be an incremental cost, but having said so, the way we look at, is that, you know, what is our expense as a percentage to GMV? If you look at it, even at start of the previous financial year, FY 2022-FY 2023, we were at 7.66%. Our expenses as a percentage to GMV, which started coming down to 52% in Q2, and by Q4 as we end, it is 39%. Basically, INR 189 crore divided by INR 593 crore, which is about 32%. The target for the current year, which is FY 2023-2024, is to bring this down to a range between 20%-23%. I think, from that sense, we are into very, we have defined the entire activity in such a way that, you know, if there is an incremental cost on any of the technologies that we need to put in, that could be the only recent area where investment will go. At this stage, we don't see any material investment into the product and tech side, apart from ongoing costs. Thank you. Ladies and gentlemen, we'll take the last question from the line of Rishabh Tiwari from Allegro Capital Advisors. Please go ahead. Hi, thank you for taking the question. My question is regarding the hospital services business. Once we reach the occupancy level of, say, 70% by this year, what are the number of beds that we are looking at adding over the next 2- 3 fiscals? Because as a group, my understanding is we are seeing AHLL and HealthCo as a growth lever. Within the healthcare services, what are the in the short term, near few years, what is the growth that we are looking at? We have 2,000 beds planned, which, you know, by 2027. Every year, we'll add a new hospital into the system. And close to around 700 new beds after 2024. just to confirm, we are adding around 700 beds per year after April 2024? Yes. Minimum, yeah. We continue to look at brownfields and we continue to look at acquisitions. Okay, these acquisitions would be focused on Tier 1 cities? Yes. Okay, thank you. Thank you. I now hand the conference over to the management for closing comments. Thank you all for taking time off today. It was a pleasure answering your questions. Krishnan and Sanjiv, and the entire team would be happy to take any other further questions. You may email them. Let me promise you that we are committed to not only growing this enterprise, but towards delivering outstanding world-class clinical care, which is the crux of really what Apollo means for everyone. Let me also reassure you that we continue to improve in terms of market share, in terms of clinical leadership, and our commitment to our patients. Thank you all. 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.