Ladies and gentlemen, good day, and welcome to Dr. Lal PathLabs Q2 FY25 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand over the conference to Mr. Siddharth Rangnekar from CDR India. Thank you, and over to you, sir. Thank you, Yusuf. Good evening, everyone, and welcome to Dr. Lal PathLabs Quarter Two and H1 FY 25 earnings conference call. Today, we are joined by senior members of the management, including Honorary Brigadier Dr. Arvind Lal, Executive Chairman, Dr. Om Prakash Manchanda, Managing Director, Mr. Shankha Banerjee, Chief Executive Officer, and Mr. Ved Prakash Goel, Group Chief Financial Officer and CEO of International Operations. I would like to share that some of the statements made on today's call could be forward-looking in nature, and actual results could vary from these forward-looking statements. A detailed description in this regard is available in the results presentation, which is available on the stock exchange website and has been separately circulated to all of you. I would now like to invite Honorary Brigadier Dr. Arvind Lal, to share his perspectives. Thank you, and over to you, Dr. Lal. Good evening, Siddharth, and thank you, Siddharth, and good evening, ladies and gentlemen, and a very warm welcome to all the participants on today's call to discuss our Q2 FY25 performance. I will commence by discussing the evolving market dynamics and our key achievements. Our ability to maintain our market position in the highly fragmented and competitive Indian diagnostics industry is a testament to our strong brand, exceptional service, and extensive network. We are leveraging these strengths to penetrate deeper into underserved Tier 3 and 4 regions by offering affordable, high-quality diagnostics to the patients. Dr. Lal PathLabs has scaled up nationally into a well-done operation with an extensive franchise base. Consistent delivery of high quality and affordable diagnostic reports to our patients has earned us this position. We believe this to be a core factor why patients have faith in our brand. In today's evolving healthcare landscape, digital integration has become imperative, and we are actively leveraging technology to enhance patient experience and operational efficiency. Currently, we are also starting our home diagnostic services to meet the growing demand from patients who value convenience. We are committed to achieving these objectives without taking any price hike and focusing on driving patient volume, growth, and efficiency gains. India has a vast, unserved, and underserved population in terms of healthcare and diagnostics. The headroom for growth, therefore, is very much there. Together with policy impetus, tech innovation, and growing propensity to avail of quality and accurate diagnostics, the share of national brands like ours is rising. We continue to benefit from our scale of operations and brand recognition, both of which are crucial factors to seed consolidation at the industry level. In the interim, our focus remains on building out organically while evaluating inorganic options that fit our objectives and values. As we celebrate seventy-five years of excellence, it is an opportunity to reflect on the past, celebrate achievements, and look forward to the future. We remain committed to serving the patient community through consistent service and quality of diagnosis. At this point of time, I would like to apprise you of a development. As you are all aware, that Dr. Om Manchanda ends his term on March thirty-first, two thousand twenty-five. He will be stepping down from his position as managing director into an advisory role. We personally thank him for all the contribution he has made in building Dr. Lal PathLabs into the leading and best diagnostic company in India. Nearly twenty years of his operational and management excellence has helped the company in achieving this goal. We wish him the very best in his new role and look forward to his continued guidance and direction. Thank you, and I would now like to hand over to Dr. Om. Over to you, Om. Thank you, Dr. Lal, and a very warm welcome to all the participants on this call. So, first things first, as Dr. Lal mentioned, that my term ends on thirty-first March, twenty twenty-five. Post that, I shall transition to my new role as an advisor to the company. Incidentally, I also turn sixty next year, and this milestone coincides with end of my term. I thought this is the best time for me to transition into a new phase of my career from an operating role to an advisory role. A large part of my executive role is already transitioned to our CEO, Mr. Shankha Banerjee. I shall further transition to him during the remaining period of my term. Now let me shift to the business and industry insights. I think very important insight that I have picked up, and which we've been talking about last few quarters, that is the concept of bundle test packages, has become a very, very firm trend in the industry. In my view, it is having the following impact: Number one, it is leading to higher realization per patient, resulting due to higher number of tests per patient. And this is further leading to slight improvement in the industry margins, is the trend that I notice. Second, important impact of this trend is that the business processes are getting very simplified in terms of whether it's ordering by the patient or collection of blood samples and even in the lab operations. Our bundle test program, which is SwasthFit, continues to do well and is now almost 24% of the company's overall revenue. As we reach out to wider patient base, the growing contribution from such bundled offering, both in routine, semi-specialized, and also specialized testing, will further add to our performance going forward. The second point that I want to make is that our effort in building West region platform has started yielding results. West business is now nearly 15% of our total revenue. That is nearly INR 100 crore in a quarter. It is a very unique business in nature, as 60% of the turnover is inorganic. This quarter, West region has delivered better growth than overall company growth. It will be a great learning platform for us as we build out our hybrid strategy in non-core markets, that is West and South. We are continuously investing in our capabilities, not only in technologies that drive growth and efficiencies, but also on the cybersecurity aspect, further solidifying defense around patient data. Going forward, we are also investing towards organizing and analyzing data better, so that it helps in raising quality of our offering. With that, now I'd like to hand it over to Shankha for his thoughts. Thank you. Thank you, Dr. Om. A warm welcome to all participants on this call today. Let me share the business and operating highlights with you. The positive momentum and performance has continued, with revenue and profit after tax growing by 9.8% and 18.1%, respectively, in the second quarter of FY 2025. This performance is a testament to our strategic focus on both expanding our service network and meeting evolving patient needs. The growth in revenue is driven by sample volumes, which stand at 23 million. Our patient volumes came in 7.8 million. Sample volume growth for Q2 FY 2025 is 8.6%, and patient volume growth is 3.9% over Q2 FY 2024. Our Q2 FY 2025 revenue per patient stands at INR 844, an increase of 5.7%. The realization improvement does not have any price increase impact. Rather, it is due to product and geography mix. We are happy to share that in Q2 FY 2025, Suburban has delivered revenue growth in double digits in line with our plans. It has started contributing positively to our overall and West region growth. Our ongoing expansion initiatives are taking concrete steps. As indicated earlier, we will be opening 15 to 20 additional labs in this financial year and are accelerating the addition of collection centers to support these labs and meet incremental demand. These developments are crucial in widening our footprint across Tier 3 and 4 markets and deepening our presence in core regions. To align with our long-term vision, we are expanding our services to include bundled testing for non-communicable diseases beyond Tier 2 markets. This addresses the increasing demand for healthcare services, particularly in managing chronic illnesses. Our commitment to reaching underserved markets remains steadfast, and we are also strategically strengthening our footprint in key clusters, particularly in West and South India. We are undertaking targeted brand campaigns in selected cities to increase visibility and stay connected with local communities. In addition, we are driving several initiatives to foster loyalty, to encourage patient growth within our core audience. We remain confident in realizing growth organically, backed by network outreach and investments in communication and technology. As we have the benefit of scale, we are in advantageous position to benefit from positive trends shaping the diagnostic landscape. I would now like to hand over the call to Ved, who will walk you through the financial performance. Over to you, Ved. Thank you, Shankha, Shankha. Good evening, everyone, and a warm, warm welcome. I will be sharing the key financial highlights for Q2 and first half of FY 2025. Revenue for Q2 FY 2025 came in at INR 660 crore, compared to INR 601 crore in the same quarter last year, reflecting a growth of 9.8%. First half of FY 2025 revenue stands at INR 1,262 crore, a growth of 10.5%. Revenue per patient for Q2 FY 2025 is INR 844, 5.7% higher compared to INR 798 in Q2 FY 2024. Tests per patient for Q2 FY 2025 is 2.94 versus 2.81 in Q2 last year, registering a growth of 4.5%. EBITDA for Q2 FY 2025 came in at INR 202 crore, compared to INR 178 crore in Q2 FY 2024, registering a growth of 13.9% with an EBITDA margin of 30.7%. EBITDA for first half of FY 2025 stands at INR 372 crore, versus INR 324 crore in FY 2024, registering a growth of 15% with EBITDA margins at 29.5%. PBT for Q2 FY 2025 came in at INR 183 crore, registering a growth of 20.3%, with a PBT margin of 27.7%. PBT for first half of FY 2025 stands at INR 333 crore, with a margin at 26.4%. PAT for Q2 FY 2025 came in at INR 131 crore, compared to INR 111 crore in the same quarter last year, registering a growth of 18.1% with a PAT margin of 19.8%. PAT for first half of FY 2025 stands at INR 239 crore versus INR 194 crore in FY 2024, registering a growth of 22.8% with a margin of 18.9%. Improved profitability is on account of operating leverage and strategic initiatives to optimize costs by using technology. Earnings per share for Q2 FY 2025 is INR 15.5, compared to INR 13.2 in Q2 FY 2024. First half FY 2025 EPS stands at INR 28.3, as compared to INR 23.1 in FY 2024. Net cash as on September 30th, 2024, is INR 1,095 crore. The DSO as on Q2 FY 2025 is 25 days, and we are still enjoying negative working capital of 22 days. Further, I am pleased to share that the board of directors of the company have approved a second interim dividend of INR 6 per share for FY 2025. With this, I conclude my opening remarks, and I would now request the moderator to open the forum for Q&A. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question is from the line of Amey Chalke from JM Financial. Please go ahead. Yeah, thank you so much for taking my question, and congrats to the management on good set of numbers. The first question I have is on the Suburban, the improvement in the overall performance quarter on quarter. Is it possible for the management to clarify, like, the margins are improved to 30%? Last quarter it was around 14%. So what were the drivers during this quarter? Is it only the operating leverage which got played out or something else which we should watch? Thank you, sir. Yeah, Amey, you are right that operating leverage is playing, and there are certain strategic and, you know, initiative which we are taking with use of technology, with back-end efficiency, productivity enhancement and so on and so forth. So I think that is the result where Suburban margins is inching up. Sure. So going ahead, how should we think the trend for the following quarters for Q3 and Q2? Because the Q3 could be stronger, but again, there could be a weaker quarter. So, like, how should we think about our full year? So, yeah, this is Om here. I think, I still will continue to maintain that we should not focus too much on margin in Suburban. Our intent is to drive growth rate even further, and in any case, our overall company margins are pretty healthy, so I would rather invest in driving growth at the moment than worry about improving the margins. So I'll sacrifice some margins to drive growth in Suburban. That's the way I look at it. If we get leverage benefit, no problem, but I think our eyes are focused more on top line right now. Okay. And the second question I have, is it possible for the management to give a growth region-wise for the quarter, or if at least how much the growth was in North and East of North? I don't think we actually share region-wide growth on quarterly basis, but one thing I can share with you that, interestingly, it's uniformly spread across the regions, maybe couple of percentage higher and lower here and there. As I mentioned in my comments, West is slightly better. I also get a sense that West region had higher incidence of fever this year, this time, maybe rest of the region. But I think overall, our growth rates across all regions is uniformly spread. Sure. Thank you so much. I will join back in. Thank you. Thank you. Next question is from the line of Tauseef from BNP Paribas Exane Research. Please go ahead. Good evening, and congrats on a good set of numbers. So I have two questions, mainly on your expansion plan in Tier 2 and Tier 3 cities. Can you throw some light how are the realization in these cities and how is the volume ramp up? Are they slower compared to the metro cities when you open a new lab? Yeah. So, you know, our Tier 3 and Tier 4 city expansion is predominantly in our core geographies of north and east. And, and in these geographies, you know, we are going deeper. So, so the realization is our pricing in these geographies is quite similar. We don't operate any, you know, in the contiguous market. It's not, the pricing is not lower, so realizations are similar in terms of the contiguous geographies that we are going into. In terms of ramp up, it takes the normal usual time that one would take to ramp up. But you know, the throughput of these labs is managed in a way that you know, it gathers slightly bigger radius to ensure that the volume throughput per lab is taken care of. Also, what kind of challenges do you see in these kind of cities? Is it fair to assume the unorganized player offer a pathology and radiology mix business, so that's some kind of challenge which these kind of players like Dr. Lal face challenge, whether it's a pure pathology player? So in all of these markets, the predominant task is converting the unorganized to organized. And I think challenges are more or less similar, whatever we have, we have seen in our previous years as we have done it in other geographies. You know, there is always a mix of players offering path and non-path, as well as pure path. So those are not really challenges which are different than what we have done in the past. I think differential challenge to that extent isn't something which is very different. It is more or less similar. It's just that, you know, it's a smaller town that we're reaching out to today. Yeah, I think I may just add what Shankha just mentioned. I think it's true not only for diagnostic, but for all healthcare sectors. Even hospitals also, I'm sure, must be facing same challenge. As we go in smaller towns, there are very strong relationships between patient and doctor and between the doctors also. So for any brand which is slightly global or national in nature, to penetrate to in that relation becomes very, very challenging. So it's a very slow process, gradual process. So you have to really communicate your proposition very well, so that you can overcome the power of those relationships with the kind of service that you offer. So but once you reach that tipping point, then I think the whole shift happens from unorganized to organized. And it takes a little bit of time, but as we build scale, this, my sense is the time it takes now is much lesser than what it was taking before. Thank you. That answers my questions. Thank you. Next question is from the line of Karthik Chellappa from Indus Capital Advisors, Hong Kong, Limited. Please go ahead. Yeah, thank you very much for the opportunity, sir, and congrats on the quarter. My first question is, if we were to look at our volume growth, at least on samples, for the last four quarters, it has been somewhere in the range of about 8-9%, and it is backed by very healthy margin expansion. So I'm just curious to see whether there is scope for us to reinvest some of these margins to drive a higher volume growth. And in your opinion, what needs to happen for volume to, you know, to kind of move up to a more sustainable double digit level? That's my first question, sir. Yeah, I think, so firstly, let me try and answer the question that, you know, the sample growth is driven by also, you know, improved contribution, which is coming through SwasthFit. And we are seeing even in the non-SwasthFit portfolio, the test per patient is slightly up compared to, you know, what we were seeing maybe years before. So that is what is driving sample per patient, and therefore our overall sample growth. Now, I think investing back into growth is something that we are continuously doing. Like I mentioned in my opening remarks, you know, this year we are planning to open, you know, higher number of labs. So between 15 to 20 labs, we will be adding this financial year. Also, you know, we are doing investment in terms of communication in key cities very strategically, wherever, you know, we feel that that adds value to our brand and our position. We are also, you know, strengthening our market connect and our sales teams, and, you know, those kind of investments are continuously being made. So it is not as if whatever is the investments to be done, that are being held back. Because if you see our A&P spends, our A&P spends are actually inching up every quarter when you compare with the same period last quarter. So those are definitely there. And whether it will be a double-digit patient volume growth or not, I think that's something which we'll have to come back to. I think that's an aspiration, but not really in the near future, because there is a mix of two things. One is the existing patient volume getting impacted because of, you know, more SwasthFit. And also, you know, on the balancing factor, the outreach we are doing to newer geographies and newer Tier 3, Tier 4 towns, and the activities we are doing there, which is adding new patients. So it's still under churn. When does it reach double digit? Is something which, you know, maybe we'll come back to that a bit later. Okay, got it. Sir, my second question is, as far as competition is concerned, let's say compared to your commentary a quarter ago or even two quarters ago, has there been any change either for the positive or negative, either in the form of pricing, discounting, or number of players or any other attribute that you measure? No, I think, our commentary is exactly very steady. First is, I think you all know that our numbers should be viewed, with the backdrop that we have not taken any price increase. Many of our competitors have taken price increase, and, we also have adverse impact of higher base as well. So from that perspective, we always said that we'll try and meet or slightly beat our last year performance, which I think at first half level, our growth is about 10.5%. Yeah. So compared to what we did last year, full year at 10.4. 10.4. Last year, ten point four was had an impact of nearly 3% of price increase. This year, we have not had that, and despite that, not only revenue, but we've also improved our margins a bit as well. We continue to maintain that steady sort of a commentary as to what we have been saying. I think if you, if you really want to know about competitive intensity, I think general perception in the market is that competition is less. I don't think that is true. Competitive intensity is still there. I think what is not there is irrational pricing, promotion, discounts, that those are happening. But competitive intensity, to my mind, still continues to be there. I think many of these young, new age players, they are looking for path to profitability. My sense is they have stopped deep discounting their promotions, et cetera. But definitely one competition from hospital is on the horizon, because I continue to see hospitals trying to move into retail pathology business. So to my mind, intensity is still there in the market. It's just that irrational competition on pricing reduced. Got it. My last question, sir, is, as far as the management succession is concerned, once Dr. Om steps down in March 2025, how is the succession going to be planned? Will it be someone internally, or are we going to look for somebody externally, or could you give us some color or thought on that? So it's if you look at, we in any case have full-time CEO, which is Shankha Banerjee. We split this position a few years back, and large part of my role has already been transitioned to Shankha, and he will stay right as far as the internal management is concerned. And along with that, Ved is there as a group CFO as well as the international CEO. That's the way it is. So as of now, there is no other plan as far as succession is concerned. Got it. Thank you very much, sir. I wish you and the team all the very best for the remaining quarters. Thank you. Yeah. Next question is from the line of Prakash Kapadia from Spark PMS. Please go ahead. Yeah. Couple of questions from my end. You know, on SwasthFit, if you could give us some sense how much of this is doctor-recommended, how much is directly? And, you know, is there a scope to increase this contribution in Tier 3, Tier 4 cities also? That's my first question. Given the work we've done, you know, over the last two years now in Suburban, so is it fair to assume now Suburban will continue to grow higher than the company average from here on? And, you know, lastly, from a higher revenue growth perspective, if I were to just guess the drivers in the medium term, will it be market share gains from smaller players? Will it be higher number of patients, or will it be more revenue from patients, or you see Tier 3, Tier 4 contribution increasing? So what could be the pecking order in terms of, you know, just trying to assess the potential revenue over the longer term? Those are my questions. Thank you. All right. Thanks for the questions, Prakash. Let me try and answer them to the best possible degree. I think firstly, on the SwasthFit contribution from direct patient versus, you know, a doctor prescription. So we don't have, you know, accurate data on that, but one would assume that, you know, quite a bulk of it is also, you know, upgrading prescriptions. They may not directly be a SwasthFit prescription, but some prescriptions get upgraded, so quite a bulk of our, you know, SwasthFit kind of comes through that. We may not have exact numbers, but that is one bit. Secondly, on, you know, whether we are taking it to Tier 3 and Tier 4, I think that's something which I mentioned in my opening comments as well, that we are actively taking SwasthFit packages into our Tier 3, Tier 4 markets. And we are also seeing some traction build up in those markets on SwasthFit, which is giving us the confidence that the, you know, the growth trajectory we are seeing on SwasthFit still has the legs to run on. So, you know, that from your SwasthFit. I think on Suburban, yes, a lot of work has been done in the last few years, and I think we have now started seeing results, on that. So independently, we definitely feel that, or we believe that, you know, Suburban growth rates are going to be sustained or better as we keep moving forward. Will it be always better than the company? Actually, my expectation would be even the other part of the company should grow faster. So to me, those two remain independent. But yes, Suburban growth, we should be able to now sustain double digit and grow maybe even faster than that. Your last question in terms of, you know, how will the future growth come and what are the drivers? Yes, we continue to look at, you know, newer geographies, which is the Tier 3, Tier 4 expansion. I talked about new labs. We are opening more, you know, sales headquarters, reaching, you know, more directly to more clients. ... across, you know, more of geography that gives, you know, wider average. And in south and west, we continue to focus on our core cities and core clusters and, you know, building our brand and riding on whatever we have built in the past, getting higher throughput in our existing infrastructure. So those will be the key drivers and also, you know, the bundled test portfolio growth continuing. I just want to add, one more thing about Suburban point, that, while we track Suburban performance separately, but to my mind, we don't look at that number in isolation. We look at, in fact, as I mentioned, that 60% of our business is coming from inorganic in West region. It is not only Suburban, it is also coming from the small subsidiary company that we have, PathLabs Unifier. So, we actually look at this as a driving network effect of labs, collection center of all the brands put together in the region. So we track first is West region, the entire region's growth first, and then look at each component separately. So as long as we are able to drive region growth, which is significantly better than company, I think we probably would have achieved our objective. Right. Right. Understood. And, you know, lastly, Shankha, you mentioned about, you know, the growth drivers for a, you know, higher, kind of a revenue growth. So, you know, historically, we had seen, you know, post-COVID, a lot of these new labs had sprung up. So any sense on, you know, these unorganized or these players getting marginalized? Because I guess over the mid to long term, that also would aid growth, and now it should, you know, translate or show into higher growth. So is that happening on the ground, not happening? If you could give us some sense, that'd be helpful. It's a bit of a mixed feedback there. You know, COVID, the COVID period, actually, you know, created a bit of a cushion for a lot of the single operating labs, because, you know, a lot of them made quite a bit of money. So therefore, you know, some people have tried to expand or they are sustaining their businesses and still continuing to run their operations. So that is at one end. At another end, we also see people who may want to be exiting or wanting to, you know, close their businesses. So, but yeah, it is a bit different than what we were seeing pre-COVID. There is still some a bit of, you know, aggression that we see in the local lab networks. But we have our eyes and ears open. I think the situation should improve in terms of consolidation as we move forward. Okay. Understood. Thank you. 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 per participants. If you have any follow-up questions, you may rejoin the queue. Next question is from the line of Anshul Agrawal from Emkay Global. Please go ahead. Hi, good evening. Thank you for the opportunity. My first question is on network expansion. So is our target of adding 50-70 labs in the current year more back-ended in nature? As in how many labs have we added in H1? Yeah. So, although we don't maybe share the number, but one can say that we are on track. 50% of these labs have already been added in H1. Sure. The reason I ask this is, we have only incurred a CapEx of about 10 crores in H1, if I'm not mistaken. So would that mean that our CapEx numbers would be materially lower than what we had incurred last year? So Anshul, wait here. I mean, most of these CapEx are, in, you know, happening in second half of the year. Though we have started the, you know, labs, but the real operation will start, maybe most of the real operation will start in second half. That's why the CapEx is low in... And, you know, historically also, if you see the CapEx in first half is always low. Okay. So, our CapEx guidance of roughly around INR 50-INR 60-odd crore would stay as is. And secondly, the moment we sort of commission these labs, would our margins also get impacted in the second half of the year? Yeah. So, yeah, I think good question. I mean, that's why I always say that, don't look at margins for quarter on quarter basis, but on an annual basis, I think, I mentioned on the last call as well, that, we are hoping that we can do slightly better than last year, but, our margins will be, you know, sustained, as, as last year. So this quarter two is always have higher margin, because of operating leverage and efficiency, and due to, you know, all the investment, most of the investments are in, second half. So that's why I think overall, margin for Q2 will be lower than first half. H2. H2, sorry. Yeah. Sure. Clear, sir. Second question is on SwasthFit portfolio. If you may, throw some light on this, what percentage of the SwasthFit portfolio would be in this system? ...What percentage of SwasthFit is? Sorry, can you repeat the question? Would be illness, and what percentage would be wellness? I think somebody in the past also asked this question, how much is own versus patient, you know, prescription of period? We don't have any accurate data to say that, but it, one can look at, you know, it will be a size the illness part will also be sizable component. Got it. Thank you. Just if I can squeeze in one last question: What are our plans for the cash that we have on books? I mean, I'm sure we don't have any CapEx sort of requirement. Do we plan on giving out increasing dividend payouts? Or, what basically is your thought process around the cash that we have on books? See, obviously, our first priority is to use this cash for growth with purpose, and growth consists of both organic and inorganic. Those efforts will continue. While organic, we have better control on how we expand, inorganic is very difficult to time it, but consistently, we've been also paying our dividend, that will also continue. I think it's a combination of all three, organic, inorganic, and dividend, and we will continue to progress as we have been doing in the past. So our effort on inorganic continues. If we can't use this cash, then obviously dividend will be paid out. Great. Many thanks for answering my questions. Thank you. Before we move to the next question, participants, please restrict your questions to two per participants. Next question is from the line of Nancy Yadav from Allegro Capital Advisors. Please go ahead. Hi, sir. Congratulations on great set of numbers, and thanks for the opportunity. I wanted to ask if we can give out any numbers on the IND AS adjustment that we have made for this quarter? I mean, Nancy, IND AS adjustment is not new. I mean, it is implemented, three, four years back, and, there is no exceptional in this quarter. I would say it's very much comparable as last year. All right. All right, so it's comparable to last year, and also, sir, if it's possible to give any sort of exact numbers for the Suburban labs, like if we could get a percentage of exact growth from the previous quarters or any numbers that you will be able to provide? Suburban growth this quarter is about 11.6%, and margin, EBITDA margin is about 20%. All right. That's very helpful. Thank you so much, sir. Thank you. Next question is from the line of Saion Mukherjee from Nomura. Please go ahead. Yeah, good evening, and thanks for taking my question. This strategy of, you know, not taking price increase, unlike, your competitor, I think historically, you know, Dr. Lal used to take low single-digit price increases. I'm just wondering, is this a strategy for a year, or you think you should sustain this from a, on a slightly longer term perspective? And, you know, generally, we see inflation across everywhere. So does this 2-3% price increase is something where the volume sensitivity is very high? How do you assess the strategy of, you know, keeping or not taking any price increase? So we are not averse to taking price increase, so I don't think it's our stated strategy that we will not take price increase. As our effort is to go down to Tier 3, Tier 4 towns, as all of us are aware that those are the markets that require affordability. And to achieve that, if you continue to take price increases, then we don't achieve that objective. As long as we are able to achieve this without diluting our margins, that's the reason why we resist to take price increases. But it's not that if inflation is higher than what we can absorb through this leverage, then we will obviously be forced to take a price increase. But our intention is to make sure that our proposition appeals to wider footprint, otherwise we can get narrow down to large cities. Understood. The second question I have on this employee expense in the quarter, it seems to have gone up almost 18% year on year, much higher than the revenue growth. If you can throw some light on the dynamics there. One is obviously, you know, every year we give some increments, and as Shankha mentioned, we are in the process of opening these 15-20 labs, so new additions, new manpower and so on and so forth. There is nothing which is exceptional here, but these are all where some increment every year we give to the employees and plus additional manpower, which we are adding. Okay. And finally, if I can ask one more question. Now, you have guided for, you know, more than 10.5% growth this year. Now, as you look forward with the lab expansion, Suburban picking up growth, and possibly, you know, some price increase, are you expecting an acceleration in growth as we go forward, or you think, you know, low double digit is the, is a level that we should sustain from a slightly medium-term perspective? We've been saying, you know, equal to or better than last year's growth, which is 10.4%, and first half now, you know, we have delivered 10.5%, so therefore, you know, our guidance still remains the same from that point of view. I think the point about Suburban growth coming through and, you know, price increase, like, price increase isn't something this financial year, definitely we may not be taking price increases like even Dr. Om mentioned. It's we continue to evaluate. If we feel that we need to take a price increase, we will take a price increase, but definitely not to drive revenue growth. That is not going to be a reason to take price increases, because we like to be as broad-based as possible. So as of now, we'll stay with the revenue guidance that we have given in the past few quarters. Sir, I was just looking at, let's say for FY 2026, are you expecting growth to accelerate from, let's say, 10.5% this year, or it would more or less remain at the current level? You see, our next year financial plan, we'll start thinking once we are through with Q3, and maybe we'll be in a better position to start talking about that, a quarter or four or five months from now. Also, please keep in mind that our base is much higher than many of our competitors. Understood. Yeah. Thank you. Thank you. Next question is from the line of Prashant Nair from Ambit Capital. Please go ahead. Hi, good evening, everyone. Just one question. So related to how you plan your network, you know, as you go into the future. So in the past, say, when five, six years back, you had a certain hub-and-spoke model with a certain ratio of collection centers to labs, you know, which has served you well so far. Now, as you go into Tier 3 markets increasingly or into newer markets, would that change in any manner? So I'm talking more about number of collection centers in relation to number of labs. Would you be able to do with more collection centers related to labs, or would you need to set up more labs? How do you think about the network as you go, say, into your next phase of development? So, you know, over the last few years, we've been steadily increasing the number of collection centers per retail lab that we have. And, you know, we've reached a reasonably a good number of almost twenty-eight, twenty-nine labs. You know, in last financial year, we recorded, I think, close to the twenty-nine collection centers per retail lab. I think that kind of a ratio we should be able to sustain even with our expansion into Tier 3 and Tier 4 models. So the broad hub-and-spoke model remains in place. It is just that we are now going into as closer to the consumer as possible, even in the hinterland. But the overall model is not really changing. Yeah, thank you. Thanks a lot. That's it from me. Thank you. Next question is from the line of Bino Pathiparampil from Elara Capital. Please go ahead. Hi, good evening. I think looking at this fifteen to twenty labs this year number, is that going to be a strategy going forward as well? So can we look at a similar number of lab additions, for the next few years per year? So if you see our historic trend, you know, typically we've added between maybe ten to fifteen labs. You know, if you go back pre-COVID, that kind of run rate we usually had. In the last two or three years, there has been a bit of a slowdown in terms of, you know, the number of labs that we have added. So this year is also a bit of a catch-up in terms of, you know, doing fifteen to twenty labs. At best, this rate may be sustained for one more year, but chances are we'll start, you know, going back to what our normal pre-COVID level of lab addition would be in a given year. Understood. Yeah. And, sir, just one question to you. Our depreciation expense has actually come down a little bit year- over- year. Is it going to be like this at the given level of CapEx, or will this change and start moving up again? No. So first half, depreciation is about seventy odd crore, which is similar as last year. I mentioned that most of the CapEx is usually in second half, so I think depreciation will be higher in second half compared to first half. Yeah, but year-over-year comparison, will it be similar or will it keep going up? Yeah, it is similar unless until we are doing large CapEx, because there is a depreciation, there is addition, so net-net, you are finding that this is the impact. Okay. So for the current level of CapEx that you are doing, depreciation should be kind of stable at which you're doing for it? Yeah. Understood. Thank you. Thank you. Next question is from the line of Sumit Gupta from Centrum Broking. Please go ahead. Hi, good evening. Thank you for the opportunity. So just want to understand on the margin guidance that you guided 27%. However, let's say for second half, then it comes out to be around 24.5%-25%. Just want to understand, where will those investments be largely, since 50% of the lab addition has been done? So just want to understand on the investment part and what kind of returns that you can generate. So Sumit, as I mentioned, I mean, though we have started and you know, opened few labs, but the real impact will start coming in second half. So that is number one. Second, you know, historically also, if you see our Q3 and Q4 is always. Q3, particularly if you see our margins are quite different than Q2. So overall, I'm saying, margin we can do slightly better than last year, but it is not something which is like you have seen in Q2, which is not a representation of the full year. No, I understand, sir. It's just that want to understand the majority of the breakup of the CapEx that you will be investing, apart from the lab side. So there are investment in the, you know, technology, digital. There are higher in, you know, spending on A&P. We are going deeper, we are going newer markets. So there are investment, you know, awareness and so on, so forth. So there are logistic expenses which will go up when you added new infra. You have to add newer routes and so on and so forth. So there are expenses which are coming along with this new infra. It is not only the CapEx, but the running expenses will also go up. Understood. Understood. And sir, what kind of margins can we target for Suburban, let's say, over the next one year or so? So as Dr. Om mentioned, right now the focus is to drive top line rather than to, you know, see margins. Having said that, I, and naturally, whatever efficiency we can generate, whether it is, you know, yeah, maintaining the, you know, efficiency or improving the efficiency. So I think, it is as quarter two is 20%, it is not representation of the full year, as Q2 is always higher. But you can, you know, overall basis, maybe, you know, you can take 16%-17% kind of, steady margins for the suburban. Also, I think it will be important or, you know, one thing would be to look at company total margin and that guidance. I think that will be a much more stable indicator, because our key thing for Suburban will continue to be how to drive top line. So margin profile of Suburban can fluctuate, but I think the important thing would be to keep looking at the company total margin guidance. I think margins can fluctuate because we are also investing heavily into IT systems there, so some quarters your growth costs may come- A&P as well. A&P as well, so I think my reading is that let's, let's focus on top line, because overall company margins are taking care of Suburban. Understood. Understood, sir. And just lastly, on the geographical side, for Delhi NCR, still contribute around 30-32%? I think so. Yeah, Delhi NCR contribution is still at 31% for quarter two. Okay, sir. Thank you. Thank you. Next question is from the line of Siddhesh Raje from ICICI Prudential Mutual Fund. Please go ahead. Yeah, thanks for taking my question. So, I have two questions. One is, we have seen this number of patient volume growth of 3.9% YOY, and, SwasthFit revenue is growing by more than 20%. So is it fair to assume that, this new patient volume growth would have come largely because we are selling, or people are taking the SwasthFit, packages? And in that context, where can the SwasthFit, contribution settle down at company level? Which is question one. And second, in the last few calls, you mentioned that company will look to reinvest back margins into, you know, business so that even competition, incremental competition, getting their attractive rate. So in that context, when we say that we may do better than last year in terms of margin, can it, you know, incrementally attract more competition? So I think firstly, to answer the first bit, where is it likely to settle down? I think in one of the previous calls also I had mentioned that, you know, we are seeing traction in terms of the newer geographies, even in Tier 3 and Tier 4, as well as, you know, the source of revenue coming or these packages even coming from, you know, patients who come with prescription. So therefore, the scope of SwasthFit is much, much wider than only wellness. So we still believe that there is a reasonable headroom for it to continue to grow at this level and improve contribution further. What that number would be is something which I don't think, you know, we are looking at putting a figure on right now. We'll see how that evolves. Also, in terms of overall market requirements, you know, the incidence of non-communicable diseases keeps going up, and that also, you know, is a driver for some of these health packages being utilized by patients. So that's one. I think on the part about you know margins attracting competition, I think competition is there from multiple sides. I think Dr. Om mentioned in his comments. Now we are seeing you know a competition emerging from you know the hospital players wanting to get into retail pathology, and they are driven by a very very different thought process than just pure what is the retail or the margin profile that we see. So I think, and as an industry, I think again, Dr. Om had made a remark in his opening comments that overall in industry, we are seeing, improvement in the margin profile... So those things are happening, whether it will be, attracting more investment, I’m not too sure whether that’s something I’ll be able to comment on right now. Dr. Om, do you have any comment? So obviously, I think the broad factor is the volume improve. People like to become aggressive in growth. So competitive intensity does grow in the industry. It has healthy margins. I think I'll wait for this quarter results for other players. But my reading is that your industry might just show slightly better margins than last year, mainly on account of higher contribution of bundle packages. So too, with that also, aligns well with our strategy of not trying to unnecessarily take a price increase and be a loser in our proposition. Thank you. Thank you. Thanks for answering my questions. Thank you. Next question is from the line of Bhavya Sanghavi from Phillip Capital. Please go ahead. Yeah. Good evening, sir. I just have a single question. So in our presentation and annual reports, we talk about offering close to four thousand and a hundred tests. So I just wanted to get a sense as to how many of these tests are outsourced, and how many of these are conducted in-house? And if you could just give a sense of the percentage contribution in revenue from these outsourced tests. I don't think that's a data that is something we share or we would like to share, but it can suffice to say that you know our predominant tests are all in-house. Okay. And over the last five years, the trend would be the same, right? The percentage contribution from these outsourced tests, or it has changed? No, so I think over the years, we are in fact converted some of the tests in-house rather than sending out. So... and it's a very small number of tests which probably we are sending out of India, and that's all. Okay, thank you, sir. Thank you. Next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead. Yeah, good evening, and thank you for taking my question. Just the first one is on the Suburban acquisition we announced three years back, and now I think this quarter you started giving us more granularity. So just some of the learnings is what I was looking, not just generally from a Suburban perspective, but also just from an M&A perspective. What are some of the key learnings, maybe even some color around the Mumbai market? You know, that is my first question. Yeah. No, I think it's a good question, and we have actually done about, I think, twenty M&As. Of course, Suburban- Twenty-eight. 28 M&As of different sizes and scale. Obviously, Suburban is of a different scale. I've actually got many learnings out of this, and fundamentally, I think most important learning that I have is to really understand the business post-acquisition as to how in our lab it will look like. I think if you are able to assess the restated financials, restated infrastructure is very important because sometimes those challenges we tend to underestimate. Like, say, for example, in Suburban itself, I would say that large part of Suburban infrastructure before acquisition was own infrastructure, and that was actually causing. That was one of the reasons why their margins also were lower, because you know, like, LPL actually has grown out of entrepreneurial behavior of partners, and franchising does help. Now, Suburban was not like that. So this whole transition as we made, so we ended up actually sharing revenue share with our partners. That caused little bit of a stress. So to me, I think I would sum it up, our ability to visualize a scenario that post-acquisition, what is the state of the business? Is one learning that I have out of this. And that really then helps in all the negotiations, evaluations and operational challenges one may face post-acquisition. Got it. Very helpful, Dr. Om. And the second question, just for data keeping on the 11.6% growth, how is that split by, say, volume and price for Suburban again? That probably, Shyam, we have not really shared- We haven't. On that granular. I would say as of now, I think, let our data. This data probably as the time comes, we'll start sharing it, but as of now, I would say that we are not fully there yet because of the system integration et cetera. But there is no price increase, Shyam, in Suburban. This has not come out of price increase. Got it. Thank you. Thank you, and thank you for all the insights over the years, Dr. Om. Thank you so much. Thank you. Thank you. Next question is from the line of Vaibhav Saboo from Nippon AIF. Please go ahead. Hi, thank you, and good evening. Good evening. So just one question from my side. So in the, if I look at the, you know, the material cost, and if I evaluate the gross margin, for Q2 last year, the gross margin was around 79.7%, which was 80.2% in the previous quarter and 80.7% in the current quarter. Now, considering we have not also taken any price increase, is this, can you give any insight, you know, as to how we are able to increase the gross margin just from the material side, and whether, you know, this is something which is, sustainable going forward, or was it something like a one-off? ... Yeah, I think I have an answer for that. Maybe I think, again and again, we are talking about this is what is leading, bundling is leading to. And if you study most of the bundle packages of various companies in the industry, they consist of a lot of routine tests. And relatively routine cost, routine test cost is lower as a percentage of top line, compared to higher end tests. So, and SwasthFit is growing nearly, what, twice the rate of our company growth, that tends to reduce the consumption cost. It'll obviously stabilize at some point. It can't really keep going down again and again. So I would say your question is, is it sustainable at this number? I get a sense, yes, right? In shorter term, yes. Yeah. And obviously, there is impact of higher top line in those quarters where top line is growing quite. But on a yearly basis, I would say they are sustainable. Understood. And, just, one second thing, that, in the terms of Suburban's contribution, while we have been able to, you know, while it has increased, on a year-on-year basis, but if I look at it, in the quarter one, it stood at 25%, whereas for the current quarter it stands at 24%. So, like any particular, insight for that? Can you help me? What was the last contribution? Okay. You know, historically, the trend is that the Q2 contribution is lower than Q1, and it's because of the overall base number going up due to a lot of you know, seasonal fever, et cetera. Even if you see quarter on quarter, last year, Q2 contribution was lower than last year Q1 contribution for SwasthFit. Understood. Yes, thanks, everyone, and wishing you a very happy Diwali! Happy Diwali. Thank you, and less pollution. Thank you. Ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to the management for the closing comments. Thank you, everyone, for being with us on this call today. We express our gratitude for our continuous trust and for your continuous trust and support. I hope we are able to answer all your queries. Please, please feel free to reach out to us in case you have any further questions or queries. And once again, thank you and wish you a very, very happy Diwali and rest of the festival. Thank you. Thank you. Thank you. Thank you. On behalf of Dr. Lal PathLabs, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.