Please note that this conference is being recorded. I now hand the conference over to Mr. Devrishi Singh from CDR India. Thank you, and over to you, sir. Lisa. Good evening, everyone, and thank you for joining us on this call to discuss the financial results of Apollo Hospitals for the Q1 of the FY 2022-2023, which were announced earlier today. We have with us on the call today, the senior management team, comprising Mrs. Suneeta Reddy, Managing Director, Mr. A. Krishnan, Group CFO, Mr. Sriram Iyer, CEO of AHLL, Mr. Ashish Maheshwari, CFO of AHLL, Mr. Obul Reddy, CFO of the Pharmacy Division, 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 that was shared with all of you earlier. Documents relating to our financial performance have been circulated. 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. Oh, sorry. Good evening, everyone. Thank you for taking time for this earnings call. I trust that all of you have received the earnings document. We are pleased to commence FY2024 on a positive note with a strong Q1, characterized by continued growth in top line, improved volumes and payer mix, meaningful network additions, and further growth in the user base for our digital offerings. Our healthcare services witnessed a robust 13% year-on-year growth in Q1 FY2024, even as IP volumes were 6% higher than year-on-year. Within this, the self-pay and insurance volumes grew by 10%, while revenues grew 21% year-on-year. Insurance revenues now contribute 44% of our total IP revenues. Overall, occupancy across the group was at 62%, mature hospitals at 63%, and new hospitals at 60%. ARPOB on an overall basis has increased by 11% year-on-year to INR 57,760. Against this backdrop, let me walk you through the consolidated financials. Consolidated revenue grew by 16% on a year-on-year basis to INR 4,418 crore. Healthcare services grew by 13% to INR 2,294 crore. Mature healthcare services grew by 10%, while new hospitals grew by 23%. Revenues from Apollo Health stood at INR 1,805 crore in Q1 FY2024, a growth of 22% year-on-year. Combined pharmacy grew by 24% on a year-on-year basis. Apollo Health and Lifestyle revenues registered 19% year-on-year growth at INR 319 crore in Q1 FY24, excluding the COVID impact. Consolidated EBITDA was at INR 509 crore, registering an increase of 4% year-on-year. Within this, the healthcare services EBITDA grew by 12%, and healthcare margins were at 23.6%. Margins in mature hospitals were at 26.8, as against 26.4 in Q1 FY23. Margin at new hospital was at 16.7 for the quarter, as against 17.7 in Q1 FY2023. The drop in margin was account of a few factors: an increase in overall surgical discharges, resulting in higher material consumption, increase in marketing expenditure for the new hospitals, and focused investment in clinical talent in these hospitals for future growth. The pharmacy distribution business in Apollo HealthCo recorded an EBITDA of INR 125 crore, year-on-year growth of 13%. Operating costs and ESOP charges were at INR 204 crore. There is a INR 13 crore lower than costs in trailing quarter of Q4 FY2023. EBITDA loss in the company was at INR 57 crore, down from INR 72 crore in the trailing quarter. This is in keeping in mind our commitment to reduce costs in this vertical. The business is on track to achieve operational break-even in Q4 2024. AHLL recorded an EBITDA of INR 23 crore as compared to an EBITDA of INR 29 crore in Q1 FY2023. The drop in EBITDA is due to investments in network growth and specialized manpower. The margin profile is expected to improve with revenue ramp-up from the network, as well as focused initiatives to drive process efficiencies. Consolidated PAT was at INR 167 crore. Healthcare services PAT was at INR 264 crore, a like-for-like growth of 19%. In substance, this was a strong quarter across several dimensions and metrics, which we have identified in areas of focus. Within the healthcare services business, we have delivered an ROC of 25%. We've balanced ROC across all our geographies, the metro, the Tier 1 and the Tier 2. We believe we have the most diversified footprint in portfolio and significant headroom for growth. We have continued to improve our payer mix with visible results in our RForm. The diagnostics vertical with AHLL, recorded core revenue growth of 48% on a year-on-year basis, and surpassed a revenue run rate of INR 100 crore for the quarter. Clinics core revenue grew by 23% year-on-year. Margins were impacted due to investments in network expansion, as well as specialized manpower. Several initiatives are underway to improve diagnostic margins, including platform changes and improved asset utilization. Private label and generics business contributed 16.02% of total pharmacy revenues. This was an improvement of 168 basis points over the same quarter last year. Our digital platform, Apollo 24|7, added 2 million new users this quarter. The platform GMV was at INR 623 crore, a growth of 189% on a year-on-year basis. We have achieved this GMV while reducing cash burn and are well on track to achieve operating breakeven in this vertical in Q4, FY24. This quarter has signaled that the investments and strategies adopted by us are gaining traction and are largely playing out to the plans that we had. We remain firmly committed to building the strongest integrated omni-channel healthcare network, with the consumer at the center, ensuring access to high quality healthcare across the value chain. We will do this while achieving a healthy EBITDA margin and strong ROCEs. We believe we are building a sustainable and value-enhancing platform, guided by fiscal responsibility, a unique consumer value proposition as our dual objective. I would like to take this opportunity to introduce our new Chief Revenue Officer of Apollo Health and Lifestyle, Sreeram Iyer. He was previously Chief Revenue Officer at Metropolis and brings 25 years of retail experience to that, to the table. On this note, I would like to hand over to our moderator and open the line for questions. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may enter star and one on their touchtone telephone. If your questions have been answered and you wish to withdraw yourself from the queue, you may enter 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. We have the first question from the line of Harit h Ahmad from Avendus Spark. Please go ahead. Good evening. Thanks for the opportunity. My first question is on Apollo 24|7. I'm looking at the GMV for the quarter. There's a 11% quarter-on-quarter growth. When I look at the revenue that you've disclosed for the online pharmacy distribution, Apollo 24|7 segment, there's almost a 20% quarter-on-quarter decline. Can you help us understand this disconnect? Yeah. Yeah, thanks for this question. My name is Sanjiv. I'll pick up this question. I think there are two important, you know, things that have happened in the quarter. I would first refer to the Q4 earnings call, wherein, you know, we started, we discussed about that, how in the platform, we've reduced our discounts to sub 15%. At that point of time, January and February month was the time when the discounts in the pharmacy vertical were as high as about 17%-18%, and we dipped it down to sub 15%. One impact that has happened during the quarter is that a lower discount of roughly 13.7% that we're running in Q1, has impacted certain top line. I think it is a conscious decision by the management to let go, you know, those value seekers onto the platform who were looking out for only the discounts. In fact, you know, as, as, you know, we have been continuously, you know, working on the model, our discounts have always been lesser than the market. Yeah. First, in fact, that has happened to be, quarter one, you know, impact on a lower 5% growth, fusion, which is known on the GMV or the lower revenue to GMV ratio is on account of discounts being lower. That resulted into lower pharmacy sales. Second thing, what we did is that we also looked at those orders which are not profitable at all, and orders which were less than INR 200 of bill value, are those orders which we have let go from the system, and we are not fulfilling them. Apart from the fact that there are certain pin codes, you know, where logistic cost or the fulfillment cost of the last mile is so very high that it does not make any sense to take those orders. I think what, what we did is that, you know, while we improved our unit economics and the cost line, and majority of that benefit will also accrue in Q2, and some benefit has accrued in Q1, this has resulted into about 7%-10% dip in our pharmacy revenue. That is the reason you would see that revenue to GMV ratio, which was about 43%, 42%-43% in Q4, has come down to about 33%-34%. Slowly and steadily, as we see July month and as we see, you know, this quarter, I think we'll this will further improve. The essential reason behind a lower revenue to GMV ratio, 5% growth in GMV in Q1 versus Q4, is only to make sure that the business is more viable, more profitable. Is this the revenue to GMV ratio that we should be factoring going forward? This around 10%-30%. I think it, it should be better. You know, what happens is, you know, whenever you do a structural change to the business, you know, there is a, there is a fall that we see, you know, on an immediate basis. July, we witnessed a little bit, but, but I think August is tracking very well. I think we should be moving up from this 33% to 35%-40% in this quarter at least. Yeah, okay, got it. The second question is on your guidance of INR 10,000 crore of revenue and 6% EBITDA margins for the combined pharmacy business. Firstly, I wanted to clarify if the 6% is a post-indebtedness margins guidance that you've given? Sanjiv, will you take this or Obul also here? Obul? Hi, this is in line with our, you know, combined business, which we have seen, and, you know, this can be sustained. Yeah, you know, there is, there is obviously a, when you, when you're thinking of the post-indebtedness margins, there is a indebted benefit as well. That's in the past, been around 300-350 basis points. This is at the business level. This is at the business level. Yeah, yeah. Understood, understood. When I, when I deduct the indebted benefit here, the combined pharmacy EBITDA margins are maybe in the 2.5%-3% range. This is lower than what we used to have in the past. I understand there's a higher level of discounting, but, you know, you talked about some additional costs in the front-end pharmacy level in the past, in the last few quarters. How are we tracking on those, and how should we think of margins in the combined pharmacy level? We have the same cost continuing. In fact, if you look at it, the discounts have slightly moderated versus last year in Q4. However, you know, the, the network cost in terms of the store additions and, almost about 20% of our stores are yet to reach breakeven. It may take a quarter or two more. In Q1, we have that cost coming in and impacting the profits. Otherwise, we will be back to normal level. You have to remember, this is the combined business, which includes the online as well. Yeah. You know, online is where there is higher discounts. If you look at offline versus online, offline would be higher in this in this mix. All right. Thank you, sir. I'll get back to you. Thank you. Before we move to the next question, we would like to request participants to restrict their questions to two during the initial round. We have the next question from the line of Saurabh Kapadia from Sundaram Mutual Fund. Please go ahead. Thanks for the opportunity. Any region-wise operation parameters, it looks like Tamil Nadu and the other region, the inpatient volume as well as outpatient volume has been muted. Any specific reason for this? There was a 6% growth in inpatient, outpatient as well. For Tamil Nadu region, the reason for that is clearly, you know, one, it was holiday season. The second is that, let me say, travel to Tamil Nadu was restricted because of train logistics as well as air. Some of the airlines canceling that route. Now it's reinstated, and July is looking very good. Okay, similar case for the, the other, market, where we saw the outpatient volume down by 15%? The last year was, the previous year had the RTP, RTPCR test, which was COVID test, and therefore the OP looked high. Now, without COVID, it has grown. On a like-to-like basis, there is growth. Okay, yeah. Thank you. Thank you. We have the next question from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead. Yeah, good evening, thank you for taking my question. Just one on overall occupancy. 62%, I know you're comparing with 60% a year ago, but that may have been impacted because of COVID and other stuff. Just want to understand the level of occupancies, and this is not only you, right? Even other companies. I know there's a seasonal issue here in Q1, but has been below expectations, right? Is there an element of either pent-up that's not coming back or, you know, you generally think this is just a seasonally slowest quarter in the year and things will pick up? Just your color on yourself as well here. No, it's definitely picking up. This has happened, you know, more in the south. I think, you know, we were impacted. It was a very hot summer, it was vacation season, and like I said, travel was restricted to one of our networks, which was Chennai. I think it is seasonal, and July is looking extremely good. It's, you know, clearly because of some of the things that happened in the first 3 months. Okay. When we had the aspiration to reach 70% and over time, 75%, is there any impediments to reaching that numbers? You think, you know, over time, our network-... will be able to get there. Is there an issue of, say, cannibalization in the sense that people from, who are earlier traveling to Chennai are no longer able to travel, or they're going to another network hospital of yours? Are you seeing those dynamics which will prevent us from reaching historical high occupancies, you think? Chennai is clearly is there now. People are still traveling to Chennai for quaternary care. What is good is that, you know, as our Tier 2 hospitals also are doing much better. There was a, you know, there is a 17% growth in Tier 2, which, which I think is a very good signal for... It's rewarding to see that our geographic footprint and the impact on ROC has validated this strategy. Okay. This is my last question. I'll keep it brief. you know, we added, I think, 900 stores last year. We have added 30 stores in the Q1. Just want to understand, what's our target for this INR 10,000 crore? Don't we need additional stores, or we think we are gonna have a much lower run rate this year? We have factored about 500-600 stores to be added during the year. Q1 consciously we slowed down because in the, you know, Q4 last year, we added about 38, 370, 380 stores, and in the last month of March, about 150 stores. We want to give that space to stabilize those stores, and Q1, we are back to our normal store openings. We expect to be there between 500-600 for the year. Got it. Thank you, and all the best. Thank you. We have the next question from the line of Damayanti Kerai from HSBC. Please go ahead. Hi, thank you for the opportunity. My question is again on Apollo 24|7. Sanjiv, you mentioned unit economics are improving, you are reducing losses, et cetera. GMV growth has been, I'll say, slow compared to what we are expecting in last two quarters. Earlier you have set a target to double up GMV in 2024 compared to 2023 levels. Do you think you can still achieve that, or you're focusing more on reducing losses? I think it is both the things. First important thing is to ensure that the businesses, only those transactions on to the platform are done, which are making some economic sense to the business. While also looking into the fact that we have a target in our mind. We did about INR 1,650 crore in the previous year, and then obviously we guided for INR 3,000 crore. We did INR 622 crore in Q1, and I think the run rate itself is INR 2,500 crore. While we taper down certain volumes in Q1, started March to till end of June. But I think we've got various other initiatives to ensure that, you know, we fill the, fill the gap quickly with new set of customers, new offerings, and, you know, we increase the average order value. In fact, our average order value has also gone up in spite, you know, if you to look at it, you know, INR 845 the previous year versus INR 935. I think we should be able to hit the target of 3,000. Very early in the stage to kind of say that, you know, we'll not be able to hit. I think INR 622 crore is a decent number for Q1, and we should be meeting our targets. you know, this is what I would say at this point of time. Okay, want to understand the discount part better. Do you suggest, like, there, there has been some, like, seasonality here also? You mentioned there were higher discount in Feb, and March, that's why a bit of more v- volume, but now it has reduced. Can you talk bit, like, how your discount work for, say, offline orders and online orders, across the year? Like, what are the patterns, or how do we see things moving there? I think as far as the discount strategy, if I just talk about, discount strategy has always been, you know, a delta between offline and online to the extent of about 150 basis points to 200 basis points. At no point of time, this gap was higher, you know, if I look back in last 6 months. You know, prior to that, obviously, it was a very different ballgame where, you know, we were also giving a discount of about 18%-20%, and offline was steady at about 10%-11%. As we move more into only play, as more and more customers have started transacting on both the platforms, obviously we had to, at some point of time, rationalize the entire thing. Looking into the scale, looking into the right time, this is what we did somewhere in March month. That more and more Omni players started happening across the channels, it is to the interest of the customer that we should not confuse him or her, you know, with differential pricing. That is where we curtailed down our discounts. This is a good move as far as the customer side is concerned. Obviously, it does give benefit to the company. As far as the current year is concerned, we are running at about 13.7% for Q1. I think this will continue to be in this range for Q2, and I don't see any reason that we should be inching up in Q3 or Q4. Maybe 10-20 basis points here and there. It could be max, max 14%, if not 13.25-13.5. Something in between. I guess as far as the offline business is concerned, they will continue to be around 12-12.5%. Only, only a gap of 100-150 basis points. I think directionally, all of us should look into these discounts for the rest of the year. Samir said 12%-14% will be the broader range for discount. Yes, yes, ma'am. Okay. Yes. Thanks. My last question is, if you can, provide, this question is for Suneeta ma'am. Ma'am, volumes are a bit muted, but you have, continued to perform well on ARPOB growth, etcetera. How should we look at, ARPOB growth outlook for, say, next, one-two years? Just one thing on the ARPOB growth, there's been over 10% improvement in ARPOB, 11%. This is a function of both case mix and tariff increase. I think, you know, this year, this 11% is the INR 57,000 moving to maybe up to INR 60,000, is something that we can sustain. In terms of how do we look at occupancy, I think that is the important question, that we have headroom for growth, and that in places like Chennai, we're already, you know, 41% of total market share, and we see we are growing this. With this, you know, I think it's going to be, you know, as we go forward, this was asked earlier, it is going to be higher occupancy, resulting in, in higher EBITDA and also higher EBITDA margins coming from the cost, you know, fixed cost being met. Therefore, we are quite, quite confident that, that this is the way forward. The other thing which has also happened is that, you know, if you look at the case mix, the case mix has also improved for the better. We have seen that the complex case mixes are going up, which is all the high-end cases that we are doing, which is the other reason that ARPOB is high. You know, secondary care cases have also gone up because, you know, clearly with the insurance and the payer mix helping us, you know, there is a tailwind in insurance, which we believe is here to stay for the next several years. We have, we have just started seeing the traction in insurance, which is good. Clearly, you know, now, we are seeing that a lot of people also are coming for secondary care into the hospital, which is why ALOS is down. ALOS being down is also a matter of, you know, if you look at the overall volume, volume growth is 6%. If you look at insurance and self-pay, the volume growth is actually 11%. We had let go, as you know, last year, you know, by Q4, we had let go of a lot of CGHS patients across the system. Which is why when you compare Q1 to Q1, you look at, you know, Q1, which has a, which has a CGHS and institutional volumes, but now the volume doesn't have that, but still we have grown 6%. With that, because of the... Which is why insurance and self-pay, when you look at the 11%, is the volume growth, and that on revenue growth is actually 20% on the IP side. You know, we are showing a 13% overall revenue growth for the quarter, but we know that, you know, the, the overall mix of the cases that we have are very good. Yes, occupancy is something that we are working on, and we will see that also go up because it is, as Suneeta said, you know, Chennai is higher. It is some of the, you know, some of the business, some of the units outside of Chennai, like Madurai, Trichy, where we have some lower occupancies, but ROIs are all good, you know. It's headroom for growth exists. We have to figure out how to fill it up now. We are working on that plan as well. Broadly, I think, you know, structurally, if you look at the PNL, structurally, the PNL is quite strong, and it results in higher ROIC also because of that. Occupancy is something I guess over the next two years, it's, you know, it's, it's, it's like we, we look at it in the from opportunity perspective. Okay. So ARPOB, we should be sustaining at healthy level? Yeah, I'm just clarifying. Yeah. Okay, thanks. Thank you. A reminder to participants, please restrict your questions to two during the initial round. We have the next question from the line of Kunal Dhamesha from Macquarie. Please go ahead. Yeah, thank you for the opportunity. The first one on the 24|7, it seems that, you know, in order to kind of improve the profitability, we have put some filters, you know, in terms of our strategy to refine our user base. How would that have impacted our TAM, you know, when we look at what our strategy a year back versus now, you know, and, you know, how much reduction we would have seen in TAM because of this? You are referring to what, right? Cost of acquisition? Not cost of acquisition. Just because let's say we are putting a filter that, you know, below $2,000, you know, order, we would generally not take. In that case, that would also reduce our total addressable market based on the affordability, et cetera, right? How, you know, TAM calculation would have changed for you? INR 200. INR 200. INR 200. Okay, I misheard that. Okay. Yeah, that's, that's INR 200. I think, see, so we also need to understand, you know, at times what happens is that customers have a habit of, you know, breaking their entire, you know... Normally, you know, any, any e-commerce player would like to, you know, have a basket shoppers into the platform versus the, you know, pop-up shoppers. Now, chronic customers are supposed to be, you know, taking medicine at least for the whole of the month. If not, at least, you know, it should be for two weeks or three weeks. Over a period of time, we also saw certain pin codes and certain customer behavior, given the fact that we've got the analytics behind, you know, now we are in the 4th year. We've got three years of experience there. We found out that there are certain geographies, there are certain set of customers who are good shoppers, but they have a tendency to reduce, you know, their shopping cart by, you know, as low as, you know, INR 200, INR 150, and they continuously, you know, order. What we have actually done is that, you know, certain customers who are actually only giving us a total value of about INR 600-INR 700 in the entire month, those are the ones, you know, which we believe, and if they are not chronic, are those set of customers to whom we let go. Major impact has started coming in from the value seekers, the people who had a tendency to take the orders, you know, where the discounts are very high. I think that is the time that we are now no more in that particular stage, or rather phase two of the company is in a very different, where, you know, we would like to have, you know, those set of customers which are chronic and are associated with the company, you know, for a little longer, and also cross-pollinating between the other verticals, the consultation or the diagnostics. I think as far as the overall canvas is concerned or the future potential is concerned, I think, you know, online business has got a vast thing and, you know, in the market, and in a true spirit, Omni, Omni is actually giving us a larger wallet share of every customer. The analysis suggests us that, you know, customers who are becoming Omni is giving us 30% more wallet share versus when they were not Omni. I think from the strategy point of view also, it's good to have those set of customers which are chronic, which, you know, will give us a high repeat. Our repeat for Q1 has been about 27% versus 21% in the previous year, same quarter. That is also a very good metric. I think we are running into a right direction from the strategy and the execution point. Sure. The transacting user number that you have given, you know, for this quarter and comparable quarter, would you be able to share the number for Q4? Which specific number are you looking at it? transacting user, right, which is 11.4 lakh, which is what is written in our transacting user base. Yeah, that's right. In the previous quarter, the Q4 you were referring to, it was about, INR 9.9 lakh. 9.9. Okay, perfect. The second question is, is on the payer mix. I think we have shared that insurance is around 44%. Would we be able to share the other channels as well? Let's say we have been doing this payer mix refinement, you know, for last one year. Let's say when I look at from a two to three-year perspective, you know, pre-COVID, let's say, you know, FY19 or FY20, how would our payer mix look then from there, you know, how much we would have done in terms of refinement? I think self-pay pre-COVID, pre-COVID self-pay was almost around 45%. Now, if you look at self-pay as a percentage of revenue, it is 40%. Insurance is the, is where we have had significant increase, where it was close to 25%-28% pre-COVID. That has come to 44% of our revenues now. Clearly, between insurance, private pay and insurance, self-pay and private sector, we have almost around 80% of our, of our revenues coming from that, 80%-82%. You know, this is... What, what has happened is, we have definitely been able to focus on bringing down some of the government and some of the low-paying cases across. This is the new normal that we would like to believe we will continue to go into as we proceed as well. IPS is an area that will, will, will further grow, because IPS growth for the quarter has been good. You know, our, you know, hopefully, once we get our presence in Delhi also in the, in the next 18 months, we should be able to get higher IPS growth, because Delhi is one of the places where IPS is high. In, in, in our consolidated results, we don't provide IPS, because otherwise IPS is today 7% of our revenue here, whereas in Delhi it is 15%. That is the other area that we would hope that we should be able to tap into as we move forward, which should change a bit as later. Otherwise, you know, this is the new normal. Sure. Mr. Dhamesha? I'm sorry- Yeah. You'll have to come back in the queue. There are participants waiting. Sure. Thank you. We have the next question from the line of Lavanya Tottala from UBS. Please go ahead. Hi. Thank you for the opportunity. I just wanted to check that healthcare revenue growth is driven by ARPOB largely, but sequentially, our margins are broadly similar for both mature and new hospitals. Why is the ARPOB not translating to higher margins? In both, you know, there are different answers for both mature and for new. In mature, one of the things that we have seen is, you know, we have seen good increase in the surgical mix, which actually occurs well from a longer perspective. The surgical mix increase has resulted in a higher cost of materials in the mature hospitals. This is obviously aided by higher insurance. As I said, the, you know, someone who's covered more by insurance has the propensity to come to a better quality hospital or is definitely choosing us over some of the others. This is one of the reasons that we are seeing a high-end cases as well as secondary care cases go up. Cost of surgical material costs have gone up. What we have also seen is that, you know, the doctor fees related to that went up a bit in this quarter. As we move forward, we, you know, we had taken some tariff correction in the middle of the quarter. We think that will start paying off, and into the next quarter, et cetera, we will see the margin go up on mature....In the new, we have added doctors, because, you know, one of the things to which we have also done is as to focus on the utilize the occupancy. We had seen doctor gaps in places like Navi Mumbai and some of the others, like Vizag, where we have added doctors on guarantee money fees. This we believe will start, start paying off over the next two quarters. Then that margin should also come back. We are quite. These are the reasons for both these segments. Got it. Some bit of marketing cost has also gone up in, you know, we did spend a bit of marketing in the new hospitals as well. Okay, got it. This should sequentially also we should see improvement in margins of both mature and new hospitals. Yes, that's correct. That's, that's our hope. On Apollo 24|7, can you give the split of GMV for this quarter, like in terms of pharma and diagnostics? Yeah, so pharmacy we did, roughly, you know, INR 350 crore for the quarter, and diagnostic was roughly INR 30 crore. The remaining was coming in from consultations and the entire IP-OP business. Okay, what would be the, the split for a previous quarter, like, Q4? Q4 was for pharmacy was INR 375 crore, and diagnostic was INR 42. Diagnostics went up by about 16%-18% for the quarter. Pharmacy, as I said in the previous question, that, you know, we took certain decisions to, you know, let go those volumes which are not profitable to the organization, and that is the reason you see that this happening in Q1. Got it. If I may ask one question- Miss Lavanya- What is the tax rate? Miss Savanya, I'm sorry, you'll have to come back. We have participants waiting. Okay, thank you. Thank you. I'll just answer that question which she actually was raising. The tax rate is 25% overall for the company, and in the standalone it is 25%. What happens in consol, you see it at a higher number. That's because there are losses which comes from Apollo HealthCo and Apollo AHLL, where there is no tax, which actually skews the tax rate to close to 32%. The tax rate that the company is today operating in at the standalone is 25. Some one or two of our subsidiaries is that, still at that older tax regime, like Bangalore. Bangalore will move into the new tax regime next year. I think the same is the case with Lucknow. These are the two which are in that older tax regimes. They will also move to the newer tax regimes in the coming fiscal. Next question. Thank you. We have the next question from the line of Rishabh Tiwari from Allegro Capital Advisors. Please go ahead. Yeah, hi. In the previous quarter, you issued both a combined pharmacy EBITDA, and someone previously asked that it was not reported, as well as, we are expecting some ramp-up from the recently added stores. If you could please tell the combined pharmacy EBITDA. Second question is regarding the Ind AS impact on the EBITDA, there used to be a slide on this, if you could give a ballpark guidance on that. On the combined pharmacy EBITDA, as I explained to you, that last year we added over a thousand stores, and it will take about one year, you know, 12-15 months for the break even. Those, a higher number of stores contributing to the losses has impacted, and we will be back in the next two-three quarters. On the... On the Ind AS to post Ind AS, I'm sorry, that was a missed in the slide. I think we have not sent that. We will add that and put it back there. you know, I think, that's the same number as what was there last quarter. Pre Ind AS to post Ind AS, I think INR 30 crore at the healthcare services level and INR 20 crore at the AHLL level. We'll put it back out there, and that slide we will add and send it back. We will upload it on the website. Sorry about that. Okay, just a clarification. So there is no EBITDA improvement on the combined pharmacy? Combined pharmacy, not- That's true. Any specific improvement? No, it will be through the volume and, you know, cost cutting next to 2 quarters, and improved profitability on the new stores. Okay. Thank you. Thank you. We have the next question from the line of Naushad Chaudhary from Aditya Birla Sun Life Asset Management. Please go ahead. Thanks. Firstly, on the occupancy side, the target which we have 70%, can we reach and sustain that 70% for the long period of time? Or do you think it will be like touch and then plan for a sizable CapEx? No, that 70% will not require any CapEx, but it will take us a little time to get to 70%. We're already trending, you know, it's probably, you know, we reach close to 70%, but, while we do have a target of 70%, we will not be able to deliver it, and it will require no CapEx. No, no, I'm asking, can we sustain... Once, once we reach there, can we sustain 70% for a long period of time? Yes, yes, we can in those regions. Overall, as a company, maybe not, but I think in each of the regions where we've started 70, we should be able to sustain. Yeah. To also add on to your point, you know, as we said about the new hospital plans, which we are doing 200, you know, the 2,000, 2,000 beds and 3,000 grows over the next three years. The first stock of beds are coming into two regions where we are more than 75% occupied. One is one is one is Calcutta, and the other is Bangalore, which we are looking at, looking at. You know, these are the two that will start off, and we also are looking at... We are looking at Gurgaon, which will follow in the year after that, where again, our occupancy is over 75%. We are, we are quite clear about how we are looking at the strategy of expansion. Those are new markets. These will not impact our existing occupancies at all. I understand. I'm just trying to understand on the blended level, 70% is doable on a sustainable basis or not, on a blended level? Yes, at this level. The new hospitals will take time, right, to get to 70%. Any new hospital that would come. Up to 2026, yes. Yeah. Without compromising on the future growth? Yes. Yes. Lastly, in terms of scalability of your healthcare business, if you hypothetically, if you think of doubling your healthcare revenue, from current base, what are the challenges comes to your mind? I think, you know, when we are looking at doubling, yes, we're adding beds, which show that we have beds to fill. More importantly, again, you know, it's the fact by increasing 20% occupancy, we're actually taking up our, our revenue by another 40%. Clearly, there is headroom to grow. Do have plans, and I think that there is strong traction in the hospitals division. This, this quarter should be a very good quarter, and I think you could look at it next quarter. I'll cap my thank you. Thank you so much. Thank you. We have the next question from the line of Nitin Agarwal from DAM Capital. Please go ahead. Thanks. I had a couple of questions on 24/7. Can you only... Mr. Agarwal, we cannot hear you clearly, sir. Hello, can you hear me? Yes, we can. On the 24|7, in terms of the operating losses, which, the expenses which are there at INR 175 crore for this quarter, I mean, what is the relation that we should keep in mind, the GMV for these expenses? Yeah. I think this is how we also generally look into. If I look at Q1 FY24, the expenses reduction about 28%, which was roughly 66% in the same quarter previous year, and Q4 was about 32%. The target for the current year, which I talked about in the previous call, was also to have between 20-22%. This is one thing. Secondly, I think many of the initiatives that started working in the organization, which we had thought through, debated, and started executing, we had INR 189 crore of expenses in Q4, and INR 15 crore already been reduced in Q1. It is down to INR 175 crore. This is a structural changes, so obviously INR 60 crore worth of cost reduction has already happened. As I see July month numbers, I'm sure that, you know, Q2 numbers are also going to be lesser than INR 175 crore as we see it next year in, you know, during the quarter. I guess really the way to look at this thing is this, INR 175 crore number is a, is a top-ish number. It keeps probably coming down with the costs or reduction as we go forward. The EBITDA to GMV conversion, the EBITDA, especially with the GMV growth, keeps going up, which, which starts to, I mean, that's how the losses begin to narrow in this business. Absolutely, sir. Absolutely. That's, that's, that's the direction that we have started working on to. you know, in the next couple of years, when the GMV goes to close to $1 billion and all that you talk about, I mean, at what levels the operating expenses begin to peak out, or sustain at around the, you know, at when we start get to $1 billion in GMV? This is a little tricky one. But I think, you know, the way we look at it is that, you know, whatever level of expenses we have it in the digital segment itself, you know, those expenses which we look to, you know, easily get out of the commission or the caseload, and we have it in the, you know, on the GMV. Yes, the expenses have started going down. In the future, it depends, you know, which, you know, which particular verticals we intend to invest. You know, this is a little bit of data over there, but otherwise, the thought process, the digital alone, it takes $1 billion to be able to take care of the expenses and the caseload. As far as the current quarter is concerned, I think, with the, this one, it's been down to 125 this quarter. Current quarter, which is Q2, I think will also be, lesser than 125% also. Okay. Just getting the last one on that. How should we see the EBITDA% improving with relation to GMV over the next two years? ... I think, today, if I look at, you know, the margin mix, you know, my margin mix is also steadily going up. It used to be about 6%-7%. 6.6% was the, you know, the margin to the, the revenue in Q1, FY2023. It went up to 7%, 9%, and 9.7% was the previous quarter. This quarter it is 10.89%. I think, the next two-three years, for sure, it is going to be more than 20%. Okay, thank you. Thank you. Thank you. Thank you. We have the next question from the line of Siddharth, an investor. Please go ahead. Yeah. Hello, am I audible? Yes, please go ahead. Yes. So my question was regarding our inter- associate company, Indraprastha Medical. Last couple of quarters, we've been seeing improved business performance. What has led to this turnaround? Is there any operational changes that we have taken? Yes, clearly, you know, we have got very good doctors on boarded, and, and this has resulted in, in better performance and very high occupancy. Okay. Can you highlight what is the current occupancy right now? 32%. 32, okay. Regarding the lease, which is due this year, what is the progress on that front? We'll inform you at the next, at the next quarter. Okay. Since our occupancy is around 70%-72%, are we looking to do further CapEx on that land? There will be some CapEx on the land. Apollo Hospitals is also looking at expansions in the region, leveraging the networks that we've built. On the same land on, which, Indraprastha is there? There is some expansion on Indraprastha itself, but beyond Indraprastha, we are looking at expansion in the region. Okay. Okay. Okay, ma'am. Thank you. Thanks. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference back to the management for closing comments. Please go ahead. Thank you, ladies and gentlemen, for joining this call. As I conclude, I would like to emphasize that everything that we do in Apollo Hospitals is centered around the consumer and the patient. A big focus on clinical care, as shown in our complex case mix. Our technology absorption, the fact that we have now 25 robots that are being used, demonstrates that we are rolling out an all-India network, and it also demonstrates that we have the ability to meet all challenges that may come in our way of future growth. We are quite confident that this could be a very good year for us. Thank you, ladies and gentlemen. Thank you, members of the management. Ladies and gentlemen, on behalf of Apollo Hospitals Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.