Ladies and gentlemen, good day and welcome to Apollo Hospitals Limited Q3 FY 2025 earnings conference call. As a reminder, all participant lines will be in the listen-only mode. There will be an operator to ask after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mayank Vaswani from CDR India. Thank you, and over to you, sir. Thank you, Vaswani. Good afternoon, everyone, and thank you for joining us on this call hosted by Apollo Hospitals to discuss the financial results for the third quarter of financial year 2024-2025, which were announced yesterday. We have with us today the senior management team represented by Mrs. Suneeta Reddy, Managing Director, Mr. A. Krishnan, Group CFO, Dr. Madhu Sasidhar, President and CEO of the Hospitals Division, Mr. Madhivanan Balakrishnan, CEO of Apollo HealthCo Limited, Mr. Sriram Iyer, CEO of AHLL, Mr. Sanjiv Gupta, CFO of Apollo HealthCo Limited, and Mr. Obul Reddy, CFO of the pharmacy business. 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 two of the investor presentation shared with all of you earlier. Documents relating to our financial performance have been circulated, and these have also been posted on the 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, Mayank. Good afternoon, everyone, and thank you for taking time to join this earnings call. At last, all of you have received our earnings documents, which we shared yesterday. We are pleased to report a strong performance in the third quarter of fiscal 2025. Our results reflect an all-around growth, with all three business segments reporting mid-teens revenue growth. This has been accompanied by clear progress across key operating metrics and a sharp rise in profitability. While we continue our strategy focused on volume growth, we have strengthened our focus on high-end specialties such as cardiac sciences, oncology, and neurosciences, which all work well for our overall revenue intensity as well as growth in margin profile for the future. Our efforts to provide tailored solutions to diverse patient needs have enabled us to create value across all segments. We have been consistently investing in medical advancements across specialties ahead of years, which provides us with a clinical platform and differentiation across specialties and will enable us to sustain our growth momentum as we build out our new facilities over the next 12 months. Our healthcare services business has delivered a strong 13% year-on-year revenue growth to INR 2,785 crores. Sustained operational progress driven by favorable trends in centers of excellence, case mix, and payer mix has helped partially to offset seasonal trends and revenue from cash and insurance patients for a year-on-year increase of 15%. Collectively, these segments accounted for 83% of inpatient hospital revenue. These outcomes reflect the success of our strategic efforts to optimize our payer mix. We would like to emphasize that this performance is despite a seasonally muted nature of the quarter, as well as a decline in footfall from Bangladesh. Revenue from international patients other than Bangladesh rose by 19% year-on-year, while the Bangladesh drop has resulted in an overall 1.5% drop in revenues. While IP volumes grew by 5% year-on-year, our focus on specialties (cardiac, oncology, neurosciences, gastro-sciences, and orthopedics) represented by the acronym CONGO grew at more than double pace. Volumes grew at 10.35%, with oncology revenues in oncology by 25%, neurosciences 23%, gastro 20%, overall revenue growth of 17% in the specialty segment. This has been achieved through strategic clinician recruitment and clinical program development in key markets. Group-wide occupancy was 68% in quarter three compared to 66% in quarter three FY 2024. Overall, our ARPOB grew by 8% year-on-year, reaching INR 60,839. We believe key levers such as high surgical volume, enhanced clinical case mix, and improved payer mix will continue to drive ARPOB growth in the future. Our financial results are consolidated revenue grew by 14% on a year-on-year basis to INR 5,527 crores. Consolidated EBITDA was at INR 762 crores, registering an increase of 24% year-on-year. Within this, the healthcare services EBITDA was at INR 671 crores, a growth of 14% year-on-year. Healthcare services margins remained robust at 24.1%. Revenues from Apollo HealthCo were INR 2,352 crores in quarter three, growing at 15% year-on-year. Revenues from Apollo Health and Lifestyle also grew by 15% year-on-year to INR 390 crores in quarter three FY 2025. Apollo Health, which reported its first-ever quarterly profit in quarter two, has further strengthened its performance, delivering a PAT of 32 crores in quarter three against a loss of 28 crores in the same quarter last year. Meanwhile, AHLL has maintained its strong year-on-year growth momentum with all growth drivers aligned. We have delivered a 52% year-on-year increase in consolidated PAT, reinforcing the significant potential of our integrated offerings. The offline pharmacy distribution business in Apollo HealthCo recorded an EBITDA of INR 159 crores, representing a year-on-year growth of 19%. The online pharmacy distribution and digital business in Apollo HealthCo recorded an EBITDA of INR 38 crores, excluding 24/7 operating costs, representing a growth of 51%. 24/7 operating costs were at INR 141 crores. Apollo HealthCo has therefore reported an EBITDA of INR 57 crores in quarter three FY 2025, registering a strong improvement from INR 2 crores in quarter three FY 2024. AHLL recorded an EBITDA of INR 34 crores, delivering a 32% year-on-year growth and an improved margin of 8.8% compared to 16.7% in quarter three last year. Consolidated PAT was INR 372 crores, growing 52% year-on-year. Within the healthcare services business, we have delivered an ROCE of 29% with balanced ROCEs across all geographies: the metro, the Tier 2, and the Tier 3s. Private label and generics revenues were at 16.4% of total pharmacy revenue. Our digital platform Apollo 24/7 added 2 million new users. The platform GMV was at INR 760 crores, representing a growth of 11% over the same period in the previous year. The number of daily active users has grown by 25% over the same period last year. As we reflect on our progress through quarter three FY 2025, we are encouraged by the strong momentum and the strategic initiatives shaping our growth journey. Our unwavering commitment to clinical excellence, expansion on high-growth areas, continued innovation in patient care, solidify Apollo Hospitals' leadership in the healthcare sector. With new facilities coming online in the coming year and ongoing infrastructure enhancements, we are well-positioned to capitalize on emerging market opportunities. Alongside these efforts, we remain focused on optimizing operational efficiency and enhancing profitability to drive sustainable long-term growth. On that note, I would like to hand it over to the moderator and open the line for questions. I have Krishnan, our CEO, Madhu Sasidhar, CEO of the Hospitals Division, Sriram Iyer, CEO of Apollo Health and Lifestyle, Madhivanan, CEO of Apollo HealthCo, Obul Reddy and Sanjiv from Apollo HealthCo with me to take all your questions. Thank you. Thank you very much. We will now begin the. Sorry, there's a lot of interference. Were you able to hear us clearly? Because there were some static that we could hear on our side. It was. Yes, we could hear the static as well, but overall, the audio was coming through loud and clear. Okay, so let's go ahead with the questions. Perfect. 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 phone. 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. Our first question comes from the line of Binay from Morgan Stanley. Please go ahead. Hi, team. Thanks for the opportunity. A good set of numbers across our businesses. Broadly, I had three questions. Firstly, on 24/7, now we are also adding insurance to the platform. So what kind of a GMV growth are we expecting? Secondly, on the hospitals, it's a busy FY 2026 for us. If you could talk a little bit about how is the commissioning scheduled, which quarter should we expect what? And lastly, just on the Microsoft partnership that we've announced. Earlier, also, we had a partnership on the cardio side. It seems the scope of this partnership is wider. Which parts of the business do we expect benefits or positives to be seen first? So that's from my side. Thanks. Madhi, you want to take the 24/7? Yes, ma'am. So thank you for the question. We are a bit early at this point of time as far as our insurance forays are concerned. We have got all the necessary approvals from IRDA, such as the entire corporate agency license and certain other security/digital clearances. As of now, our GMV is around INR 3.5 crore for the full quarter because we have been focusing purely as a marketing setup, and the product is only group health insurance. In this quarter, we will be having at least three life insurance companies and three health insurance companies, which will get enabled on our Apollo 24/7 platform. And from April 1st onwards, we expect the numbers to start building up. So the number planning as far as insurance is concerned in terms of GMV is still under process. We will be able to give you the exact numbers around March. It's just a year with us in this quarter, but all the necessary formalities are done, and we should be able to take it up. More than the GMV, this will help our margin expansion in a much bigger way because insurance as a business, because we'll be focusing on retail health insurance and retail term, the margin percentages in these kinds of products are reasonably large. Any commentary on the outlook on future revenue growth or GMV growth for this segment? For the insurance alone? For overall 24/7? Okay. So I might as well handle it right now. So if you remember our last two quarters articulation, our emphasis has been on trying to get a good quality of the business. What I meant by that, and this is primarily from the pharmacy side, e-pharmacy side, we were always dependent on a very marketing-centered kind of growth, which was coming from digital marketing. However, the digital engines are extremely stringent in terms of remarketing abilities, thereby making the cost of acquisition for a customer for pharmacy very highly prohibitive. So over the last two quarters, we've changed our operating model. And as we speak now, our emphasis is on actually acquiring customers who will be with us for a longer period of time, example, chronic moms and babies where we get much stronger recurring revenue. That's what I mean by quality of the business, number one. Number two, there is a much larger synergy between the offline business and the online business, which is resulting in much lower cost of acquisition. We call it the omni business. Over the last two quarters, we have seen the traction going up. So on one hand, our paid marketing has come down. On the other hand, our omni customers are slowly building up. Third, the Circle program, which I spoke to you in quarter one, at the end of quarter one report, is really beaming up pretty strongly. On the offline, the trajectory rate is very high. We have almost five million customers who are paid for a Circle loyalty program, and they are bringing in. Our next challenge is how do we bring them onto the online platform, and that we are seeing happening in a good way. From a predictability perspective, we exited the month of December at INR 120 crores. We believe that around INR 140 crores on e-pharmacy would be our new normal at least going forward, and we intend to build it. But again, I told you, I don't think we will be looking at extraordinary growth. It will be much more sustainable growth with margins because our profitability by the end of Q2, Q3 is what is our primary focus. On the other two businesses, again, for consulting business, for example, it's shown a very nice revenue trend. More than the GMV, we are getting a much positive revenue slope. We hope to sustain it. Maybe in the month of March, post our annual operating plan, we will be able to share with you much greater numbers. With regard to the hospital expansion, we are on track to open three facilities in FY 2025-2026, the second half. By the end of FY 2026, we will open Gurugram and Hyderabad. We do believe that in all of these facilities, we will achieve break-even very quickly because we already have an existing presence, and brand Apollo is well-known. I think the third question was about Microsoft partnership. I can take it if you want me to. Yes, sure. The question regarding Microsoft, I think, was compared to the previous partnership, which was narrow and on cardiac risk prediction. This, as you pointed out, is a much more broader partnership. It aims to bring technology, some of the newest technologies and AI to the bedside. And it's both an efficacy and an efficiency thing. There will be a slight improvement in efficacy due to clinical decision support, better accuracy, better patient quality. But we also expect a substantial improvement in physician and caregiver productivity as a part of these technologies. Thanks, Madhu. Okay. Thanks, team. Thank you. Our next question comes from the line of Neha Manpuria from Bank of America. Please go ahead. Yeah. Thanks for taking my question. Just a little bit on the hospital business. If I were to look at the cluster-wise data, there seems to be a fair bit of moderation or muted trends in both the Tamil Nadu cluster as well as the West cluster. Just wanted to understand the reason for the weaker inpatient volume growth in these two clusters. So in Chennai, one of the important things that you should remember is this Bangladesh effect, right? We have said that as an overall, as well as a company, we have seen a 1.5% effect, 1.5% revenue impact because of Bangladesh. And most of Bangladesh was coming into Chennai and Tamil Nadu. So which is why, if you look at it, that is all at the Chennai level, it's almost a 3+% impact which is there, and which is showing up in that region that you're seeing. Otherwise, if you look at the revenue intensity in Tamil Nadu, it has actually done much better, which is why if you look at oncology, we have grown very well in oncology. Proton has done well. Transplants are picking up well. Some of the high-end CONGO specialties have really helped us achieve higher revenue, right, at 8% compared to the volume. Volume would have again been 3% plus at least had Bangladesh been better. On the Western cluster, again, we did some moderation in the Ahmedabad region. We had some moderation of CGHS cases that we were earlier doing, which is the reason that that's part of the Western region. But going forward, we are seeing a very good uptake happening in Navi Mumbai, and we are hoping that into next year, we should see Navi Mumbai doing much better than what we have seen this year. This year, we have actually done very well, as you have seen in AP Telangana, which is again something that we wanted to focus on, and that's the benefit that we are seeing coming into an existing cluster, which we told, if you remember, last few years, we have been telling you that we are first pruning some of the other cases, and then hopefully some of the paying cases will ramp up, and which you have seen us do, which is the exact plan that we have for Western region. Understood, and in terms of the Chennai and Tamil Nadu cluster, given that it's a fairly high-margin cluster for us, how do we plan to replace this volume loss or lower inpatient flow, particularly given we don't know when that situation is going to normalize? In the past, we had talked about corporate tie-ups, etc., when we added capacity in Chennai. So is there more room for us to tap into those to improve occupancy in the Tamil Nadu-Chennai cluster? Yes. So absolutely. And I think some of that answer was implicit in what AK just told you as well. So we see more capacity in our Chennai cluster. We said some of the synergies between the units and between our group companies can hold this occupancy potential. We will also replicate what we've done in some of the other markets, including the AP Telangana market, which is to continuously drive our case mix towards the more complex cases that require multidisciplinary care. As you know, some of the most complex care in the country is offered through our Chennai units. So we believe this is an opportunity for us to continue to expand with higher case complexity. But having said that, we're also looking at different markets to support growth. Among them are Indonesia, Iraq, Iran, Sri Lanka, and I believe the flow of patients has started to come from these markets and the Middle East and Africa. Understood. My second question is on 24/7. You've talked about the calibrated growth and margin strategy for a few quarters now. At what point do we actually achieve the balance? I mean, at some point of time, shouldn't we start expecting the cost to go up as we're focusing on growth from these new areas? Is there more room for us to actually cut costs to achieve that break-even, or we need to see the GMV growth and the revenue momentum improve for that to happen? Yeah. Thank you for this question, yeah. We will operate on both levels, but I would request all of you to bear with us for one more quarter. By the end of Q3, our recalibrated model of what is the right kind of a cost structure for the next two years would be more or less ready. I believe we would have been ready to give you an answer right now, but the 90-minute proposition that we did in Q1, we started off. In fact, in Q2, we started off Q3. We have rolled it out to four cities. Effectively, this has pushed back our unit economics break-even by maybe around a quarter, and that is why it is actually resulting in reasonably good demand. We are able to get some new customers in these markets. We just need to get our unit economics right. As far as discount story is concerned, I think we have also recalibrated it to a reasonably good number, which I think is sustainable. Maybe another 50 basis points is something which we'll keep working on, so we expect the numbers to start slowly moving up. From April onwards, we will see growth coming in. There is a little bit more of some rationalization that we will end up doing, and like we always stated, by end of Q2 of the next year or positively in Q3, we will be able to break even on the digital side. And if insurance scales up much faster than we anticipated, maybe we'll be able to give you a positive surprise, so growth will come back, but I would say maybe this quarter, you will see Q4 of this year slowly building up, but again, let me also highlight it. It will not be on par with the pre-commerce kind of growth. We will be much more sedate but consistent, and it will be profitable and sustainable growth. Sir, at what level of GMV are we talking about achieving that breakeven in the end of second quarter? In your view, what's that number? Between INR 900 crore to INR 1,000 crore all put together. A big chunk will still come from e-pharmacy. We expect e-pharmacy to validate at around INR 180-odd crore. And between the hospital consult business and diagnostics and insurance, I would say around 900 crore, give or take INR 100 crore, depending upon how we are able to manage our cost structure. So we are already at INR 760 crore, INR 780 crore. We will slowly move forward. That is helpful, sir. Thank you so much. Thank you. The next question comes from the line of Damayanti Kerai from HSBC. Please go ahead. Hi. Thank you for the opportunity. Just coming back to the 24/7 platform. So I just missed it. At what level you will be achieving break-even in terms of GMV? You said INR 900 crores-INR 1,000 crores? No, I would say don't look at it from that perspective. We are committed to deliver it, like I said, either end of Q2 or Q3 of the coming financial year will be a positive, for which I need to have around INR 170-odd crores in pharmacy, in Q3. So around INR 900 crores pharmacy plus diagnostics plus consult put together. By that time, we will have insurance also contributing, not necessarily from a GMV perspective, but more on the margin side. So our revenue side of the story will play out. So I would still say you can take around 900-950 as my primary GMV number, if that is what the benchmark that you want to tell. Sure. So in terms of service, obviously, we are looking at this insurance piece very keenly. But if you can also discuss what other value-added service you can put into this platform apart from what we already have here, which can really help you to improve on scale in coming quarters? No, that's a very good question. Thank you for asking. So see, while insurance will start off as primarily a margin expander because we have a very strong base, we have a reasonably good understanding of the medical record. So unlike other people, we are not going to be pushing insurance. Our intent is to give the right product to the right people. We will start off with that. That's what I meant by saying three life insurance companies and three health insurance companies, which standard products. But by the end of maybe quarter one of next financial year, we intend to get into OPD, which will actually be very much in synergy both with our e-pharmacy business as well as our e-consult business because then this will not only be creating a base which helps us to develop, build a margin structure on the insurance product, but also act as a consistent demand generator for our pharmacy. We have experimented this with one or two corporates, and we believe so that the first value-add is that. The second value-addition that we have been building is what we call as the My Family Doctor, which is a bunch of general practitioners between the hospital, the clinic, and Apollo 24/7. We offer some very base-level services so that we can then refer it back to the hospital. So these two engines will be value-added. So we won't remain as primarily an e-commerce platform which is focused on GMV, but exploring a full comprehensive healthcare. And insurance will be able to support. We are also looking at a few partnerships with financial services institutions like SBI, ICICI, etc., which will help us to get a much larger base of customers without actually incurring a huge cost. So we have had some very good traction in this quarter, and we will be expanding this. So value-added services in the form of insurance OPD, My Family Doctor facilitation, and more partnership with financial services companies that we don't have to incur the cost, but we will have a revenue stream. Okay. Just to clarify, you already have these partnerships with some big corporates, right, which you earlier mentioned. So what exactly offers you are tying up with SBI, ICICI? How it will help your 24/7? The difference, what we are realizing is the difference. The online proposition for pharmacy, given the fact that the overall market is very much driven by discounts, one path is to walk the discount track and keep it impacting the unit economics in a very negative way. But one way is to stick to our core Circle program and work with banks and work with insurance companies to find out whether they would be able to offer additional discounts or additional value propositions which enable them to bring their customers to our platform. This is what I meant. From an earlier contribution of such discount-level partnerships or scheme-level partnerships, which used to be in the range of around 2%-3% of our contribution, has actually moved up to as high as 13%, and we believe it will even pick up further. So for example, we are working on a co-branded card with SBI cards. This will be a big base for us, very similar to the Amazon ICICI card program. Think of a health card. This is going to be called as a health card, which will dramatically help both our offline pharmacy business as well as online, and will have spillover benefits onto our core diagnostics and hospitals as we make the propositions stronger. So these are the kind of propositions, not simple corporate partnerships alone. Okay. Understood. That's clear. My second question is on broader hospital business. So Ma'am mentioned you are looking at other markets to really offset for disruption happening on the Bangladesh flow, but we still are uncertain when things will come back fully. So in meanwhile, some of the new facilities will also come on board next year. So how should we look at the hospital margin trajectory? So right now, I think we are in mid-20s%, but maybe considering these factors, what could be the way ahead? No, sir. For the current period, we're at 24.1%. I think moving on next year, we should only be able to improve our margin. When we open these hospitals, because of the calibrated opening of operating beds, I think the margin impact will not be more than 100 basis points. So net-net, we should be at around 24%. Okay, Ma'am. My last question is a clarification. Yes, sir. Damayanti, may we request you return to the queue for follow-up questions? Okay. Thanks. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please restrict your questions to two each per participant. If you have any follow-up questions, you may rejoin the queue. Our next question comes from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead. Yeah. Good afternoon. Thank you for taking my question. Just on the overall occupancy trends, we did 68% for the quarter. Year-to-date, 69%. We are about 400 beds higher than last year. So if you could help us understand over the medium term where we could likely see it. I know you have an expansion plan as well in 2026 and 2027, but there are headwinds also from Bangladesh on, say, for example, the Tamil Nadu region. So how should we look at occupancy rates over the next 12 or 24 months? Can this still keep trending upwards? So while there are headwinds from Bangladesh, I think we have to remember that Apollo fortunately is present in many markets, and this gives us access to different catchments. Currently, we are at 68%, but we are hopeful that we should improve to 72%-73% before the new beds open out. And by then, we would have found some level of replacement for the Bangladesh revenues and volumes in terms of other foreign markets. Madhu? Yes. So I think to add to what Suneeta said, I would say broadly that occupancy is probably not a perfect metric to measure us by because there are so many numbers that go into it. For example, especially in our top six units where we have a significant occupancy and a bed constraint issue, we work very hard to drive down the length of stay, so the right metric is volume, inpatient volume, and as we've stated before, while the volume overall has grown up by 5.4%, CONGO volume is up by 10.3%, and even though we are doing more complex cases, we've actually, as a group, driven down our length of stay from 3.34 to 3.29, and this is very intentional on our part. A lot of this is the operational efficiency that Ms. Suneeta talked about. Some of this is enabled by health IT. So we'll continue to work on our efficiency so that we operate in the right level of occupancy to make us efficient and for patient experience. That's helpful. Thank you. And just a second question on the ARPOB dynamics, right? So we have seen an improvement in quarter three related to our year-to-date run rate of about 5%. We have seen 7%-8%. So is this now sustainable, we think, in terms of should we go back to our historical 6%-7% kind of CAGR on ARPOB? And And some of the changes that we have tried to either in terms of mix or pricing, will that now sustain in the path forward? Thank you. Yes, Sam, I think that's correct. You should consider it to be around 6 to 7. I think that's the fair number to consider going forward. Understood. Thank you. All the best. Thank you. Next question comes from the line of Rajit Aggarwal from Nilgiri Investment Managers Private Limited. Please go ahead. Hi. Good afternoon. And thanks for giving me the opportunity to ask a question. In your retail health and diagnostics and digital health and pharmacy distribution, just to understand your medium-term plan or strategy, the way you are looking at these businesses, let's say in three years' time, how do you think these businesses would have ramped up retail health in terms of turnover and margins and digital health in terms of margins? I mean, just for my understanding, how to build something for the next three years? I'm not asking for specific guidance as such. So retail health, physical formats is with Apollo Health and Lifestyle. So I'll ask Sriram to start answering that question. And Madhi, to chip in on this shift. Yeah. So Sriram here. So this question is specific to diagnostics or overall retail health? Overall retail health. Yeah. So as you saw, as an AHLL, right, so we have three verticals, right? Primary care and diagnostics is one. Then we have saturated formats, and then that comprises the entire AHLL. So we are growing at about 15% YTD. And I think, as Sunita Madhavan also said, and YTD also with that 15% growth, we look to keep the growth rate between 15%-18% over the next couple of years, primarily driven by the momentum in diagnostics. So diagnostics is one area, along with clinics, where we are betting on for the future. Clinics also has a lot of diagnostic revenue within the setup. And these are the two business units we'll be really pushing a lot to get us to the 15%-18% growth mark for the next few years. That will help us up our top line and also subsequently help us drive better margins as well. Right. Just as a follow-up question on this piece, for us to grow 15%-18%, that would mean adding a good number of centers and clinics. Do you see that kind of an expansion happening? And also on the margins piece, what would be a three-year your aspiration level to reach? Would it be closer to our healthcare vertical, or would it be somewhere halfway up to the healthcare vertical? First is that definitely we'll be adding more centers in diagnostics as we continue to grow. We have an expansion plan to add more labs and open more centers. In primary care clinics as well, we work closely with hospitals to look at opportunity to add more clinics. So these will be the formats we'll be expanding. Currently, coming to your question on margins, currently we are at a 9.2% EBITDA this year. And we definitely, over a longer-term view, should expect a 2 percentage point within a year, at least, to come in. And the primary clinics is driven because of a stronger growth coming in from diagnostics and clinics. And the business is changing more towards primary care and diagnostics. So you said 2% improvement per year? Per year. That's right. Okay. Thank you. Thank you. And on the digital vertical piece? Yeah. On the digital, our aspiration is to grow at an average of 20-plus kind of growth rate. Let me tell you how we intend to do it. Today, most of the businesses that we are doing is primarily coming from the top six cities in our country, which is the top six metros. Almost 80%-85% of our business comes from this. So the reason why we are trying to get our core model in place is to see how we can replicate it in maybe smaller markets. So these are the cities. So over the next two years, we intend to move that 6 to at least around 25 tier-2 markets. And I say 25 really core businesses. That's one way of looking at it, which will result in a 20% kind of a growth. The other way is today we contribute around 15% of the pharmacy business, which is the offline pharmacy. We are up here on 15% of the overall pharmacy business. In the cities that we operate in, we are almost 30%. And as the trend grows more towards digital, we will build it up. So this story will play out again in the remaining 20-year-old markets that we speak about. On the e-consult business of the hospital, we are in the range of around 12%- 15% of the total consultation bookings that happen. We intend to build that up and become a much more integrated partner with the hospital and with the clinics. The diagnostic business has been a bit flat. We hope to again expand that dramatically. So between these three businesses, which are our core business, we are reasonably confident of doing around 20% growth rate. I'll come to the margins separately. The insurance business, which we hope to begin in the coming year, would start maybe a bit slowly, but by the end of quarter three, we should have a recurring revenue, which will be contribution to the margin structure. They might not support us on the growth, but on the revenue side, it would be a big flow. For margin, can I ask Sanjiv as to how the margin structure will play out, please? Yeah. Thanks, Madhi. Thanks, Madhi, Thanks, Madhi, for this. So yeah. On the margin side, I think we have been steadily increasing our margin. If you look at Q3 FY 2025, we are at about 13.8%. And corresponding quarter, FY 2024 equals 10.4%. We strongly believe that as we come closer to quarter two and FY 2026 or quarter three, FY 2026, when we intend to become break-even, and as Madhivanan talked about, insurance and various other value-added services to kick in, we should be hitting anything between 18%-20% as a margin during that quarter to support the break-even intent of the organization. So that is where I would see that steadily we'll be increasing our margin quarter on quarter, and you can expect anything around 18% in the next three to four quarters. All right, sir. Thank you. Thanks, sir. Thank you. A request to all the participants, please restrict your questions to two each. If you have any follow-up questions, you may rejoin the queue. The next question comes from the line of Kunal Dhamesha from Macquarie. Please go ahead. Hi. Thank you for the opportunity. Madhi, we have shared that we'll be opening the new beds in a calibrated manner. If you could help us understand of the 1,737 beds planned for next year for commissioning, what would be a range of beds which would be operationalized to start with? And how should we expect the ramp-up in those as in how should those number of operationalized beds ramp up over FY 2026, 2027 from that 1,700 beds? At a broad level, you can expect 50% of it to come into next year and other 50% to come into FY 2027. We would start, as I said, with Pune and Calcutta and Delhi. Delhi, which is the cancer hospital, those three will start first, followed by Gurugram and Hyderabad. Broadly, you should expect 50% to come in next year and 50% in the year after that. Sure. And is there any operational cost already baked into our P&L with respect to the 50% operational beds that we are expecting for next year? Or will it be coming in? Some of that we have started building in anticipation of some of these beds. Like if you look at Hyderabad and in. And Delhi. We have been adding some doctors, etc., because some of these, we should be able to leverage them even into the new hospital. Sure, sir. And one bookkeeping question. What has been the pharma AOV this quarter? AOV? AOV, average order value for the. INR 1,100 crore. INR 1,100 crore. Okay. Thank you and all the best. Thank you. Next question comes from Nitin Agarwal from DAM Capital. Please go ahead. Question one is A on the hospitals. With the newer capacities coming in, what kind of revenue growth we should look at for the next three or four years now? Let us come back to you on this. Let us come back because there is time. We are clearly looking at mid-teens growth to continue, hopefully, even now. That's the momentum that we are working on. The new hospitals should add on. Let us come back to you on that separately. Okay. And secondly, on the Chennai footfall, the Apollo HealthCo business, on the digital, I mean, we're doing currently about operating costs of about INR 110 crores or thereabouts per quarter. I mean, so these costs, as the scale of the business increases, do they stay around here, or do they also increase proportionately from here? Sanjiv? Yeah. We actually expect it to rationalize a little bit more. Like I told you, the new structure may be a little bit of a tweaking on our manpower cost. And at the same time, we will also be investing into the insurance business. So I would say the degrowth, the rate of the acceleration in cost, will come down. But it's not going to be a straight-line graph. So we can expect that we will try to get a much better return for the cost that we are already incurring. So you said we have to stay more or less around this current level for the revenue ramp-up? Yes. Yes. Yes. More or less around the current level. But I don't intend to spend again on marketing and any kind of variable expenses. So most of the fixed, we will try to spread it out more rather than that. And just one sort of clarification. So the year three target that we put out for the healthcare business in its coming restructured form with an INR 25,000 crore revenue number, what timeframe are we looking at for that to achieve? Sanjeev? Yeah. I can take this question. Yeah. Thank you. So we are looking at about INR 25,000 crores of revenue and about 67% of EBITDA in FY 2027. That's the guidance we have given. And if you notice, earnings call deck, we have also given a model and including Keimed. And you will notice that we are already at a run rate of roughly INR 17,000 crore with 6.5% margin if I exclude the digital losses, given the fact that digital losses would become break-even in next fiscal year, which is FY 2026. So FY 2027, we should be hopeful of hitting from INR 17,000 crore to INR 25,000 crore with a 7%-8% EBITDA line. So that's a fuller number for FY 2027. Okay. Got it. That's right, sir. That's right. Thank you so much. Thank you. Thank you. Next question comes from Prashant Nair from Ambit. Please go ahead. Yeah. Good afternoon, everyone. I just had a question on your expansion projects that you have outlined in your presentation. For financial year 2026, can you give a slightly more granular breakdown as to which of these projects could get commissioned in the first half of the year versus the second half? Yeah. Which is what we said. If you look at the Pune, the first one which is there in the presentation, Pune, this should come in the first half. Calcutta should again come in the first half. Hyderabad will come more closer to the end of the year. Gurugram, again, closer to the end of the year. And Malaysia and Mysore, we're still working on the dates. We have not yet given you the numbers, days on when it will come on. And Defence Colony, Delhi, will come early into next year. That's for cancer hospitals. All right. Okay. And for the ones which are expected over the next three to four years, any of those could come through in financial year 2027 or 2028? These will come in 2025, 2026. So the half of this, as we said, operationally, this will come in 2026, and then other will be in 2027. All of these have large revenue potentials, right? If you look at it, Gurugram, Hyderabad, Calcutta, Pune, all of them have large revenue potentials. The others will take three to four years, as we have said, because we have started work in OMR. We are just about to start work in Worli in the next three months. So from the time we start work in Worli and all, it will take at least three years. So you should look at next three to four years, as we have said, for commissioning all of the others. Oh, so three to four years out from where we are now? That's correct. That's correct. Three years. Yeah. Yeah. Thank you. Thank you. Next question comes from the line of Harsh Dugar from Eastern Financiers. Please go ahead. Hello. Am I audible now? Yes. Yes, you are. Yes. Yes. Just wanted to understand, ma'am, we were talking about the IRDAI license, and we said that in October, we will be receiving that. So what's the update on that? So Madhi, would you take that? Sorry, ma'am. What's the question? IRDA license for insurance booking. Oh, we have already got the license, like I told you. We got it in the last month. But there are other regulations which we have to clear. So we have got that also. So we will be rolling out a product in the month of March to begin with. And like I said, by April, we will have at least three life insurance and three health insurance businesses up in place. Okay. And also on the GMV, so first of all, I would like to understand what exactly GMV is because there are some doubts for me in that. And also, we had the target of INR 4,000 crore of value for the GMV in the 24/7 business. So can you please give me some answer on that? When we started the financial year, we were exploring how to touch around INR 4,000 crores. As we speak from quarter two onwards, as I said, we had a major recalibration in the way we are approaching the business. Instead of GMV, our focus shifted to ensuring that we are able to build an EBITDA-neutral model by Q3 coming financial year. So we have given ourselves five quarters. So we are on course. So let me just explain to you the GMV concept. So GMV is a contribution of three lines of business as we speak. First is the pharmacy, which is a total digital business that we do purely on Apollo 24/7. This is driven by our 19-minute proposition as well as delivering 90% of the medicines within the same day. This forms the biggest component of our GMV. In the month of December, we exited with around INR 150 crores, and we have seen that number tending towards INR 135 crores-140 crores for Q3, so that's the trajectory that way. Our diagnostic business is in the range of around INR 30 crores-INR 35 crores every quarter. We intend that to grow up next financial year, and then we have the consult business, which is predominantly driven by both the outpatient business as well as the inpatient business that we are able to drive. This has been a bit flat this quarter because of muted growth, so all put together, instead of INR 4,000 crores, with a much better quality of business, we will be ending up with around INR 3,100 crores. And we will recalibrate our business on these lines. Like I told you, the emphasis is on break-even, and once the insurance comes in, I think our revenue mix will look much better. Okay. And just one more question on the CapEx that we are planning for INR 1,700 crore. As you said that Pune, Kolkata, and Delhi will get commissioned in HY 2026. Am I reading it correct? But Delhi will get commissioned in HY 2026? Yes. Yes. Yes. Okay. So on that, so for INR 1,700 crore over the CapEx that we are doing, does that also include the working capital for the hospitals that we are talking about? No, not so much. It has got the pre-op expenses in that, but not working. Okay. And just one last question, ma'am. Okay. Harsh sir, may we request you return to the queue for follow-up questions? Sure. Thank you. The next question comes from the line of Kayan Irani, an individual investor. Please go ahead. The line for the current participant has dropped from the queue. We will move on to the next question. The next question comes from Marcel, an investor. Please go ahead. Yeah. Hello. Yes. Hello. Yes. Can you hear me? Hello. Yes. We can hear you. Yes. Yes. Okay. So my question is regarding this online pharmacy. So as we can see, this business is bleeding. And on the top of this, there are a lot of other startups in the market. So it's very difficult to get profitability and get the market share. On the top of this, we are spending a huge amount on the ESOP. This quarter, we have put an expense of INR 26 crore. So we understand that the market dynamic is not in our hand, but ESOP is in our hands. So why don't we stop the ESOP, especially in the pharma business, so that our loss is not increasing much? Madhi, will you take that? Yes, ma'am. So thank you for the question, sir. So first and foremost, I completely agree with you that in the digital e-commerce business, it's a very deep investment business where you are putting in a lot of money, and therefore, there are a lot of startups which are not making money. And that's what we said over the last two quarters. We have recalibrated the model so that we don't have to go for growth at any cost, especially at the cost of the bottom line. So we are very much on trajectory when it comes to building the EBITDA profitability. So as we have told again and again, over the next three quarters, we should at least be into a break-even model and build our model going forward. Number one. Number two, like I said, our business is not just e-commerce. It's actually a combination of a healthcare module where we will be doing all the three lines of businesses: e-pharmacy, which is online pharmacy, e-consult, much more deeper integration with the hospital, and third, on the diagnostic side and radiology, etc., we will expand. So we are reasonably confident of turning around and building it. On your cost structure for e-shop, this business is a very technology-driven business. If you notice, we have only around the 300-400 core team members who are driving this agenda. And as we are recalibrating ourselves, in fact, we will be further trimming down the entire employee force. So from our best way to retain very good tech people at this point of time in the onslaught of quick commerce, whether it be Bengaluru, whether it be Gurugram, is to somehow retain our people. We have given our first ESOP around four years back when the company had started. At the end of the four-year period, there was a small increase that we put because if I lose my employees, that's a big drain. So ESOP is, and it is completely governed by our Nom & Rem committee. This is with a clear-cut intent of retaining our core talent and not losing us. We will build it, and we will be able to make a profit. Sir, what I'm saying, I'm saying that we are giving every quarter for the YTD, we already have an expense of INR 62 crore. So at least put a break on this one. You have given a lot of ESOP on this one. So my point is that please put a break on the ESOP in the online pharmacy business, number one. And number two, how are you sure that within two to three quarters, you will be in there? You will be a bit of a positive. Are you just increasing market share, or are you putting more discount? A lot of things are there. And third, why don't you start the distribution of pharmacy medicine also? Because we can see that in the pharmacy medicine scheme, medicines are available at half price. But the locations of those medicine shops are not nearby. So if we also start the online, if you also cover the pharmacy in online pharmacy, maybe you can get more market share. So we'll take all your suggestions on both. We will work on this very closely. Thank you. So please stop the ESOP at least. We'll certainly consider it. Thank you. Thank you. Thank you. The next follow-up question comes from Harsh Dugar from Eastern Financiers. Please go ahead. Yes. So I was asking on the onco, cardio, and neuro margins. So we know on the overall hospital segment, the margins. But just wanted to understand how our onco, cardio, and neuro segment is doing. I think all of them have seen more than double-digit growth, as we said, even in the overall volume. So the margin of medical, radiation, and surgical that we have. So effectively, generally, the EBITDA margins are north of 35% in this, given that it is a high intensity of radiotherapy, etc., also that we have. Neuro, again, the whole important thing is the ARPP on a neuro is typically higher, the average revenue per patient, which enables us to have a higher operating leverage, resulting in more than company margins. So broadly, some of these are the reasons that if you saw, our overall margins have gone up despite a drop from Bangladesh, which has been a 1% volume and 1.5% impact on the revenue. Right. And just wanted to also understand, so we are seeing many of the hospitals are coming, especially for onco business. And just a follow-up question on the Bangladesh patient also. So do we charge more to the Bangladesh patient, or do we have it in line with the Indian patients? So what's the take on that? So, there has been so to the Bangladesh any foreign patients. We have been having some premium to the normal, which is around 15% premium. So that is how it has been. And 15%-20% premium has always been there for all foreign patients. So that is why we have had this loss on the revenue of 1.5% for those volumes that are down by 1%. But we now think that going we have seen hopefully, we have seen the bottom on that, and we should, going forward, at least continue at the same trend or hopefully increase next year. We'll have to see that. Right. On the brown field that we are doing in Pune, Kolkata, and New Delhi, just wanted to understand, when do you think that the margin suppression will go out of the P&L, and then we'll be able to see some recovery going forward, like in FY 2026 or FY 2027? What time would that be? Kolkata and Delhi, both, we would expect that we should be able to hit a break-even in less than 12 months. In fact, both of them are existing markets, and we are quite the Kolkata hospital is already full at over 80% occupancy. We are starting this at the other side of Kolkata, which is almost 17-18 kilometers away. And we have a very strong brand also there. We are quite hopeful that we should be able to. We have the set of doctors that are going to join in also. There is going to be oncology program as well in the new hospital. We are quite hopeful that we should be able to break even in less than 12 months. Right. Onco, yeah, sorry. It's also in the heart of Delhi. In fact, it's in Defence Colony that we are starting. We know the set of doctors who are going to join us. It's a focused women's cancer center, and we have a clear plan and program in place on how we want to augment that. Thank you. The next follow-up question comes from Damayanti Kerai from HSBC. Please go ahead. Hi. Thank you for the opportunity. Just a clarification. In Q3, you booked other income of around INR 64 crore, which is much higher than around INR 37 crore-INR 38 crore in first quarter and second quarter. Can you explain this, please? There was this interest from mutual funds and also one-off interest which we received from an income tax refund of almost around INR 20 crore. That was the reason. Okay. Otherwise, rate is similar to what we saw in first, second quarter? That's how it should be. Yes. Okay. Thank you. Thank you. Ladies and gentlemen, we would take that as our last question for today. I now hand the conference over to the management for closing comments. Thank you, ladies and gentlemen, for joining this call. As we conclude our discussion on quarter three, FY 2025, we are encouraged by the strong momentum across all business segments. Our comprehensive and integrated healthcare offerings, backed by a robust pipeline of initiatives and a calibrated expansion plan, continue to strengthen our leadership positions. We are excited about the progress we are making in HealthCo, with sustainable and high-quality growth in revenue accompanied by margin expansion. The Keimed merger is advancing well, and the team is on track to achieve break-even in the digital segment too within the next quarter. With strategic focus on driving revenue growth, enhancing profitability, and advancing operational excellence, we remain well-positioned to deliver exceptional value. We sincerely appreciate your continued interest and support and look forward to sharing our progress with you in the coming quarters. Thank you, ladies and gentlemen. Thank you. On behalf of CDR India, that concludes this conference. Thank you for joining us. You may now disconnect your line.