Q3 20/21

Jan 29, 2021

Ladies and gentlemen, good day, and welcome to Doctor. Lalpath Labs' Q3 FY 'twenty one Earnings Conference Call. As a reminder, all participant lines will be in listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Nishit Solanki from CDR India. Thank you, and over to you, sir. Thank you. Good afternoon, everyone, and welcome to Doctor. Lal PathLab's Q3 9 months FY 'twenty one earnings conference call. Today, we are joined by senior members of the management team, including Honoree Executive Director Arvind Lal, Executive Chairman Doctor. Om Prakash Nandantra, Managing Director Mr. Bharat, CEO Easterbase Prakash Goyal, CFO and Mr. Rajat Kalra, Company Secretary and Head of Investor Relations. Let me share our disclaimer here. Some of the statements made on today's call could be forward looking in nature, and the actual results could vary from these forward looking statements. A detailed statement in this regard is available in the results presentation, which has been circulated to you and is also available on the Stock Exchange website. I would now like to request Doctor. Abengal to share his perspectives with you. Thank you, and over to you, sir. Thank you very much, and good afternoon, ladies and gentlemen, and thanks for joining us today. My best wishes for the New Year. I wish 2021 brings in prosperity and good health for everybody. The global pandemic has reached a crucial phase, where several vaccines have been developed by leading players across the world, and many of them are getting approvals everywhere. India, too, has approved various vaccines, and accordingly, inoculations have started. We wish this brings hope and business momentum gets fully restored for the broader economy. Overall, we have witnessed a steep decline in the number of new COVID cases across the country and a sharp improvement in recoveries. In line with this, we have seen our business make further progress in returning to normalcy, and our non COVID business has seen a sharp recovery. While COVID tests continue to be significant contributor to our performance, we are making further inroads to grow our non COVID business through menu expansion, deeper penetration in existing markets and selective inorganic acquisitions in newer markets. I believe this is working well for us, and we remain confident and realize our growth objectives. Time and again, we have ensured that as a leader, we constantly improve our processes to provide top quality diagnostics and seamless experience to customers. Our digital infrastructure is helping us to continuously innovate as well as simplify processes, thereby keeping costs in check and giving us an edge over our competitors. This pandemic has made people more aware of the importance of good health. With increase in spend on preventive tests, the diagnostic industry in India is ripe for growth, and organized states such as Doctor. Lal Pat Labs are very well placed to carve out substantial market shares for ourselves. Providing our patients with quality, timely, accessible and affordable diagnostic services by leveraging technology will continue to be our top priority, which will help to maintain our position as market leaders. With that, I would like to hand over the call to Doctor. Omen Chanda to share his thoughts. Thank you very much. Thank you, Doctor. Lal, and good afternoon, everyone. I take this opportunity to share my thoughts on the industry, our company initiatives and how our strategy is evolving to steer our brand forward. The country is gradually returning to normalcy in many ways. India's health care services sector, too, is also on the same trajectory. Right from the beginning, our effort of keeping simultaneous focus on both non COVID and COVID business is paying off. This quarter, we have seen growth in our non COVID revenue, and we believe that the growth trajectory of non COVID revenue is back on track. Despite freeze of price reductions of RT PCR tests, we remain focused on optimizing cost structure and purchase realization by way of managing revenue mix, thereby ensuring the sustainability of COVID testing. Early months of this quarter, that is quarter 3, October November months experienced sharp rise in COVID testing. However, now we are seeing declining trends, especially from December onwards, which has contributed by both lower realization per test as well as lower patient volumes. The current trend suggests that the contribution from COVID tests is continue to will continue to decline. Our efforts to broad based revenue mix between various geographies continue to lead the results. Contribution from rest of India, that is ex Delhi NCR, has gone up from 59% to 64% on YTD basis. We continue to strengthen the self-service delivery, especially in the area of home collection through our franchisee partners. We have concurrently augmented our online assets in order to enhance accessibility for patients. With an integrated technology backbone in place, we were in a position to manage consumer shifts from direct walk ins to home collection and franchisee network. As an industry leader, we try to stay ahead of the curve when it comes to technology and innovation, which is geared towards improving the quality of services for our patients and providing them with a seamless experience. We continue to stay focused on filling few strategic gaps in our business that I have spoken even earlier as well. One of them is expanding our footprint in South and West of India. Our initiative of acquiring few small sized labs through our subsidiary, PAFLABS Unifiers, has gathered momentum and has achieved a meaningful scale as of now. We also plan to further increase our footprint in these markets by rolling out full stack of infra and capability, including 2 reference labs, 1 each in Mumbai and Bengaluru. We will continue to build Sreedhar network of collection centers and satellite labs, both through organic and inorganic means, to support these reference labs. With that, I conclude my opening remarks and would now request Bharat to take you through the operating performance of the company. Thank you, Doctor. Romp. Hope all of you are safe and in good health. In Q3 FY 'twenty one, we built upon our recovery trends, especially in the non COVID business. We recorded a total revenue of INR452.4 crores, serving 5,500,000 patients. This number is inclusive of INR 98 crores derived from the COVID portfolio of tests, including IL-six, D dimmer and antibody, apart from the RT PCR test. In Q3 FY 'twenty one, we did around 5.3 LIT RT PCR test. Our non COVID business came back to growth curve with an encouraging 8.3% growth over Q3 last year. Our Delhi NCR non COVID business has now equalized last year's revenue, and rest of India shaped up well on both volume and value matrices. Our growth in non COVID business was led by Swastvik bundle test portfolio and our super specialty test portfolio. Our digital matrices are also registering robust growth. We are focused on building upon these further and reaching our pre global growth rates as soon as possible. As we look forward, we continue to remain focused on executing our geographic expansion plan, accelerating further capability build up around high end test portfolio and digital. To sum up, I would say that we are getting back to pre COVID level kind of business momentum and expect this to possibly continue as this activation program has commenced. We, at our end, will remain committed to providing the best possible diagnostic service at affordable prices to all our patients in an efficient manner. I would request May to give an update on the financial performance. Thank you, Bharat. Good afternoon, everyone, and thank you for being on this call today. I will now share with you some of the important financial highlights. Revenue for Q3 FY 2021 is at INR452.4 crores as compared to INR327.9 crores in last year's same quarter, a growth of 38%. Revenue contribution from COVID RT PCR antibody and Allied tests in Q3 FY 2021 is at INR97.5 crores, which is 21.6 percent of total revenue of Q3. Revenue realization per patient for Q3 FY 'twenty one is higher at INR8.24 as against INR 6.88 for Q3 FY 'twenty. The higher realization was aided mainly due to COVID contribution. Normalized EBITDA after eliminating the impact of stock based compensation and CSR expense in Q3 FY 2021 stood at INR144.6 crores as compared to INR 88.9 crores reported in Q3 FY 2020, a growth of 62.7%. PBT for Q3 FY 'twenty one is at INR 128.9 crores as against INR 73.4 crores in Q3 FY 'twenty, a growth of 75.6%. PAD for Q3 FY 2021 is at INR95.9 crores as against INR54.9 crores in Q3 FY 2020, a growth of 74.7%. Cash FB Investment in mutual funds as at the end of Q3 FY 2021 is at INR 932.6 crores. Basic EPS for Q3 FY 2021 is INR 11.44 per share versus INR 11.44 per share versus INR 6.56 in the same quarter last year. I am pleased to share that the Board of Directors of the company have approved a second interim dividend of INR 6 per equity share. This is in addition to earlier interim dividend of INR 6, which has already been paid in last quarter this year. As disclosed on our last Q2 call, the company's wholly owned subsidiary, Pathlab Unifier Private Limited has acquired 100% business in Vindish Diagnostic Laboratory, Yamnagar and 70% stake in Chenwein Laboratory Private Limited, Bengaluru. Both the deals have now been completed. That brings me to the conclusion of my opening remarks, And I would now request the moderator to open the forum for question and answer. Thank you very much. We will now begin the question and answer session. The first question is from the line of Chandra Mohli Muthaya from Goldman Sachs. My first question is on the non COVID trajectory. So I think the non COVID business seems to be up about 2% to 3% on a sequential basis quarter on quarter. And if I look at if I back out what the non COVID realizations are, those also seem to be sort of flat quarter on quarter. So just trying to understand your non COVID volumes, is it fair to assume that they're up about 2% to 3% sequentially? Yes. I just want to highlight one thing that Q3 normally is the lowest quarter for us. If you look at earlier trends, Q3 always used to be lower than even Q2. So it's probably the first time we are seeing some sequential growth in Q3 over Q2. So that's one point. In terms of the numbers that you mentioned, these numbers are correct? Yes, I think, yes, these numbers correct. Got it. Got it. That's helpful. And my second question is on home collections. So I'm just trying to understand from what you're seeing at your end in your physical location, is there still some kind of aversion for patients coming to the physical location to give you examples? Is home collection still a large part of it was 9% to 10%, I think, of your total revenues last quarter? Just trying to understand what is home collections as a percentage of the total mix in the context that whether patients are still pressuring home collections or they're happy to start coming back to the physical locations? So I'll try and give you a bit of a qualitative answer on this. Whether people are still hesitant to come back come to the lab, answer is yes. Whether the extent of reduction, what we saw earlier and what we are seeing now, there is a revival in that. It's still not back to normal. There is some increase in our working patients, but still not to the level where it used to be. So it's fair to say that there is some reluctance for people to come. Number 2, where is that business gone? It is actually in our assessment, it has gone to 2 different channels. 1 channel is of home collection and another channel is to our franchisee collection centers. And probably our hypothesis of franchisee collection centers is that it may further be split in 2 parts, their home collection as well as their walk ins. I get a sense that their walk ins have gone up because there is not too much of overcrowding in our collections as well because it's a very small place and you can actually form a queue, only few guys are waiting. And plus, they have also started doing home collections. So that's the fundamentally the way I see consumers shift. Now as far as the home collection as a percentage of business is concerned, you must know that a lot of collection actually driven by home collection or driven by government business because we were not entertaining, to a large extent, a walk in business of a COVID. Now since COVID actually has sharply declined, one may see that home collection as a percentage of turnover also has sharply declined. So I think what we should analyze is that what is happening to home collection for non COVID might just give you an idea to what extent the shift has happened. Maybe Bharat, if you can highlight what is a non COVID home collection shift? We have seen about a 40% increase in pre- to post COVID era and home collection for non COVID. So if I was doing 100 home collections earlier, now that number has gone up to 140. And this is taking out the COVID impact because COVID obviously has shot off home collection. I want to take that out so that we get a good analysis of where the home collection is shifting. Got it. Got it. And just a follow-up on this, the non COVID home collections, what would that be approximately as a percentage of protein non COVID business? Just give us a second. Sure. About 6%. For the quarter. For the quarter. Got it. Got it. Thank you very much and all the best. So COVID then convert to the Khaira. We are deliberately trying to take that out so that we don't want to give a long answer. Understood. Thank you. Thank you very much and all the best. Yes. Thank you. Thank you. The next question is from the line of Raki Prasad from Alda Capital. Please go ahead. Hello. First of all, congratulations on a good set of numbers. I just wanted to follow-up on this home collection part, wherein you did say it's currently at 6% of the non COVID business, the non COVID home collection that is. Where do you see this trending towards over the course of the next couple of years? Is that something that we're trying to focus on to build that channel? That is Yes, yes. So if you look at trend perspective, I have a feeling that home collection as a percentage of business with time will keep on moving up. And I also get a sense that this business will keep going up only for those players who are established, branded and trusted players because if it's an unknown brand, one customer may not be very comfortable in calling that person home. So it is advantage actually established regular well known brands. The shift to home collection will only happen through a trajectory if that person has experienced your either as a walk in customer or as a customer or a franchisee collection center. So point number 1, home collection will keep growing. Will it become belly of the market? I have my doubts whether overnight it will become a very large business. The reason for that are 2. 1 is the brand experience in home collection. To provide that consistently, it is going to take quite a bit of time for many of the players to achieve that. 2nd is what is likely to happen is that people will try and finish those jobs which can be done online. Say, for example, I can book online, I can pay online. Maybe I just come to the facility to give my example and walk out. So the length of stay for any customer in an outlet may just sharply reduce and the rest of the activities will move digital is what I feel going forward will happen. Okay. So the other question I had was on rest of India. So you did mention that rest of India is about 64% of the business now. So what would have is this a result of volume growth or realization growth? If you could give some color around this increase in the share of rest of India. Right, right. It's actually largely due to volume splits or volume led only? It's primarily volume led because our realizations in rest of India relative to Delhi are lower. So the volumes have to grow much faster to give us this number. So it's primarily volume led. Led. The next question is from the line of Rahul Agarwal from Incred. Congratulations. Again, good set of results. I had two questions. Firstly, it seems like if I just reduced the RT PCR volume number from the total number of patients, it looks like the volume growth has been quite low, low very low single digits, 1.5%, 2%. I don't really have the antibody test number with me. But so could you provide some more color as in what's really happening with the non COVID recovery? You mentioned in the remarks that it's quite sharp, but though my sense is it's more driven by realization, which is more driven by allied COVID activities plus the higher share of home collections. So could you give some more understanding on how should one think about the non COVID recovery in 4Q and going forward, please? Thank you. That's my first question. Actually, when I use the word sharp, I used it for a sharp decline of COVID rather than sharp recovery of non COVID. I would say non COVID has recovered. You're probably right. If you look at last three quarters' trend, 1st quarter non COVID digits was down almost 30 where is the number? 62%. Almost 38% in the first quarter. Yes. The second quarter, I think in the last call, we had mentioned that it was down about 2%. But what we have done is that we have taken out a light test from this calculation because we found that IL-six and D dimer are 2 tests where the trends are moving up. So it was not really the right comparison. So we have taken that out into COVID numbers. So our non COVID business was down minus 5 in Q2. That business now has is up by 8.3%. And your observation is that the volumes are almost flat, right, for this quarter for non COVID? Yes. The observation is right, but we hope to see that in Q4, the trend wise, there is a recovery which is happening. And probably your inference is correct that it is more due to revenue per patient going up in Q3 for non COVID. And I think it's also important for me to mention here is that the business is also moving a lot towards packages rather than single tests. So there are lots of these innovations that are happening around post COVID packages, health checkups, etcetera, which have much higher realization. So you will see the value growth. My sense is value growth would always be a little higher than the volume growth going forward. Right. But it seems like the 1st fit was a lower percentage to non COVID, right, I mean overall basis quarter on quarter? Like 2nd quarter, it was 17, this quarter it was 13, is that correct? On the 13, I think it's calculated because we've included COVID base into the 1. If you take out COVID out of the base, then the sales will be 17. Okay. Okay. So some of this COVID is actually altering these ratios percentages. So one has to little be careful when we compare these numbers. So if I take out COVID from the base, the contribution of Swarthvik to non COVID is still 17%. Perfect. Got it. And secondly, one question on the service network and clinical labs. What's really happening in terms of how's the progress on lab additions and service center additions in 9 months? Could you give some color qualitatively on how have you progressed on that? Obviously, first half was suffering because of lockdowns. But how did the 3Q went? And what's the plan for 4Q? Along with that, if you could just highlight the CapEx numbers, it will be helpful. Thank you. So I'll answer this question in 2 parts. I think one of the part is that it may not actually be visible to the outside world, but we have been through a very, very high level of operational stress in the last 9 months. One stress has been to manage this COVID load, which was primarily at home collection and that, too, also dealing with a lot of anxious customers. So that was one stress at one level. 2nd stress was that as a company, a lot of our resources are deployed to cater to walk in business, which suddenly shifted to either network or shifted to home collection. So and the home collection customer is actually very digitally savvy customer because they are expecting you to the comparison is not with any other health care player, but comparison is with any other e commerce companies from any other sector. It's not just health care. So I think operationally, a lot of us were very busy in setting that right. And I'm happy that despite those approvals, we have actually been able to manage our business reasonably well. 2nd is you asked about expansion. We also have seen that this whole COVID situation has benefited us organically in some markets. Normally, we don't share reason why split, but there are certain reasons where we have seen much higher growth rates compared to what we used to see earlier. So I'm seeing that COVID has benefited in some markets for us where we were not that our market share was not that high. So taking a cue from that trend, we have now decided to go a little more aggressive on organic in South and West, And we are going to open 2 central labs, 1 in Bangalore and 1 in Mumbai. And we want to build a feeder network of collection centers and few satellite labs in these markets, which might take another 5 to 6 months of time, and that is what our capital expenditure plan is going forward. Thank you. Just a smaller question. Dave, if you could help me just with the antibody revenues or realization or volume number, please? Thank you. Just a minute, listen. You have not given the split? So we have given the split. We have given the split in the earnings TPD. Just a minute. So if you look at in the earning presentation, this time deliberately we have split RT PCR antibodies and IL-six and D. COVID aligned, yes. So it is COVID aligned. COVID includes both participants here and the COVID number. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Yes. If you could just split that in the COVID number. So I'll give separately. I don't have No problem. Okay. No problem. Thank you, sir. We'll give that. It's clearly detailed stuff, but we have those numbers with us. Okay. Thank you. Thank you. The next question is from the line of Nikhil Chaudhary from Chris B. Mais. Please go ahead. Yes. Good evening and congratulations on the next set of numbers. But I'll just one question. Could you just like split the home collection and like the normal walk in on the operational parameters like how does the cost vary for us and if it would be? P. Vijay Kumar:] You made more papers? P. Vijay Kumar:] So okay, let me take a crack on this question. Home collection cost actually has one major impact compared to, let's say, the walk in patient. A phlebotomist, when he's sitting in a lab, on an 8 hour shift basis, he can collect, let's say, for example, 40 samples in a day. The same person in a home collection setting can only collect about 8 a mile or the average would be 8 patients. So you're talking about a productivity drop of roughly from 40 patients per day per person to about 8 patients per day per person. So to cater to the same customer number, I need to deploy 5, at least 4 more, Klebotanists. Now the challenge in that is not only just economics, but challenge also is of operational because the brand experience that Flaboo can provide versus now a new Flaboo that I hire in home collection, actually your brand experience has dropped. That is where the challenge lies. And since these are COVID times, lot of our phlebotomists are also very hesitant to go to home collections, and then it becomes a little more challenging and because we end up paying them more. So that is one cost that goes up when you shift from walk in to a home collection. But there are a lot of savings also come in because walk in business has real estate cost, this does not have real estate cost. Walk ins has a lot of these walk in area, customer care counters, etcetera, this may not have it. But here the challenge is because we are a legacy traditional brick and mortar setup, now we are in a transition to become a digital company. So we are now moving into those consumer apps, people are booking online, paying online, all that stuff. So there is a transition that is going on. So on balance, I would say if you lose a customer on walk in, you also save a lot of cost of servicing that customer because servicing a walk in customer is nearly about INR 250, INR 300 per patient. Now that number in a home collection setting would actually drop because you're only incurring a cost of that home collection buoy, and that normally is about INR 100, INR 150 per this one. But you have to set the system right to provide the same brand experience that you normally provide in a working setup. I think that is, to me, the biggest challenge than the financial challenge. Got it, sir. That was pretty detailed. Thank you, and all the best for coming. Thank you. The next question is from the line of Sunil Punia from HDFC Bank. Please go ahead. Hi, sir. Good evening. Just wanted to have a sense on the non COVID revenue based on a split in the special routine and wellness. So have you seen any definitely wellness or some wellness revenue which is currently non capped or do you see the recovery unit? See, on a percentage basis, Swast Fit is 17% of the total business. So from a contribution, we don't see any Swast Fit revenue there. The second is on the higher PSR, we are yet to do a detailed analysis. But this time, we have seen marginal increase in revenue per patient, and that actually is flowing from our contribution of high end business going up. So we do believe that in these times, high end business is growing faster than, let's say, a normal The next question is from the line of Sriram Rathi from ICICI Securities. Please go ahead. Yes. Thanks a lot, Pwasekita. So firstly, I mean this COVID alight test, particularly the DRAMR and all. So I mean, is it fair, isn't that some part of this is actually recurring also in the moment of action and without COVID also? I think it's a good question. We also do not know. But if I were to pick up last 1 month trend, I do believe that as RT PCR and other tests are dropping, so is our unithic retimer as well. In fact, when we saw that dipping trend, we decided to split it and show it separately. But there is definitely a question to be asked that are there any tests post COVID likely to come up, which right now it may be hidden in normal routine tests, etcetera, but definitely IL-six and D dimer micelles will also follow the same trajectory as RT PCR. Decline may not be that sharp, but definitely it's going to decline as well. Okay. Got it. Got it. And secondly, I mean, in terms of any potential acquisitions, I mean, we have not done any de acquisition as of now. I mean, we recently saw that one of the last players have done some acquisition in the South India. I mean, what I mean, did we also evaluate that particular asset? Or I mean or what is keeping us, I mean, flowing this way? Yes. So I think we definitely evaluated that asset. So it's not that we were not evaluating it. There's nothing holding us back. Our strategy for inorganic sale continues. And for that, we have specially created a vehicle of unifiers. And I'm happy to share that today on exit rate basis, we have a very meaningful turnover that has emerged in that vehicle. And so we were very conscious of to what extent we go. According to us, that asset, we had certain figure in mind, and we just stick to that, and that's how it happened. Okay, okay. Got it. Got it, sir. And so lastly, only I mean, this quarter, of course, we have seen like 8% growth in the base business. I mean, is this I mean, possible to share like exit run rate like in the month of December, what kind of growth it would have in next 15% plus or minus something like that? For you mean to say non COVID or COVID? Non COVID, non COVID, normal seasonal. We could not really highlight month figure because these numbers on a month basis sometimes can be misleading. The reason being in 2019, winters are very severe. So suddenly, if I tell you a number, it may have a base benefit also. So I would hold on to a month figure. It's better to actually see a little longer term. All I can say is that relatively a trajectory of non COVID recovery is promising. We'll have to wait and watch what is our industry trends and what their results are out. But overall, we feel confident that because COVID is on a decline, we want to stay focused on non COVID recovery as much as possible. As we are sitting right now, we are feeling confident that we are probably back on track. Okay. Perfect. Thank you so much. Thank you. The next question is from the line of Bhagwan Chaudhry from Suniti Securities. Please go ahead. Thanks for the opportunity, sir. So when you said that there was a sharp decline in COVID testing, rates, so can you quantify that 50% 60% now, what is the amount? I think it's about if it was 100%, now it's almost 40%. Okay. And how do you see that That decline, I'm seeing actually on a weekly basis also. So that's why it may be even lower. But I think it's about onethree of the business, what it used to be at peak level. And do you think so that some portion of it is going to stay for the next year, given that manageable growth is working that COVID is going to stay? Stay? This is Doctor. Lal here. Bhagwan, I can tell you that many senior doctors in India have predicted that there can be a resurgence of COVID anytime around February March. And that is one of the reasons that they have said that please do not throw caution to the winds. Please maintain all those kind of precautions, which you all know of. And they are expecting it. And in foreign countries, if you have noticed, whether it is a different strain or something else, but these are continuing. So you cannot throw your defenses down. This is quite capable of bouncing back. Got it, sir. So my second question related to the non COVID business, you suggested that we are seeing a promising recovery. So you think so that whatever has been because of this COVID, are we going to get some benefit out of these COVID conditions into the non COVID business side for the longer term perspective? I think it's a little difficult to comment on that. I think when I say our non COVID recovery is promising, the one major advantage that I see is that we are able to cover up lot of our fixed costs from the gross margin that we create from non COVID because COVID pricing has gone down so low that I just have to survive on gross margins. So the reason why we want to see non COVID recovery as fast as possible because it helps us manage our P and L better. Otherwise, at the current COVID pricing, it may unnecessarily strain our bottom line. If you're saying in terms of whether current situation will help our non COVID business, I think Zuri is still out. I believe probably it's very difficult to comment right now because there are reports at times I keep reading and hearing that post COVID complications are also on rise. So I just don't know how it happens, but we are focused on the operations as much as possible. I think if we get that piece right, obviously, whatever happens in the environment will flow back to us. Got it, sir. Thank you. Thank you. The next question is from the line of Anurag Purohit from Anurag P. M. S. Please go ahead. Good evening and congratulations on a good quarter. My question is regarding the prospective reference lapse of Mumbai and Bangalore. In comparison to your Delhi and Calcutta, how big would these nets be? And what would be the CapEx and the time line for sale? Yes. Hi, this is Bharat here. CapExes will be broadly what we're trying to do in these two labs is to create a new model of reference lab, which is slightly different from what we have in Delhi and Calcutta. That is part 1. Part 2 is from a time line perspective. We do look forward to these labs going on stream, let us at least one of them by first half of this year, if not early part of the second half of the coming year. Number 3 is that in terms of capability, this lab will compare very well to what we have today in Calcutta. It will not necessarily mirror exactly what we have in Delhi because of various other reasons, but our intent is to build it towards a Delhi kind of model. That is what I can share at this point of time, but we are very excited that we are going to launch these 2 labs and their whole suite of satellite labs, collection centers and the whole stack of market activation program to be building these geographies. Okay. So when you see a new model compared to the existing reference labs, would it be in terms of the test menus or possibly operational or in terms of what? The operational angles because we got a lot of automation going, we got a lot of design thinking going into these labs. And that is something to possibly meet and watch a bit more of time. Sure. Jake and thanks and all the rest. Thank you. Thank you. The next question is from the line of Subram Rajgariya from Wedbush Capital. Please go ahead. Thank you so much. Firstly, congratulations on a great set of numbers. My question is regarding market share. So you mentioned that home collections might be favorable for the ones who have a brand name. Do you think that has in the recent time, that has led to gain in market share for the organized players? And even within organized players, has it led to gain of market share for Doctor. Lal? Indeed, on both counts. If you go back to our previous investor calls also, we have said that because of our ability to service the market through better operational matrices, we have gained share in the past, and we believe that it will continue in the future as well. Understood. Unorganized settlement. Sorry, I actually stepped out for a minute, but I want to add why it was just repetition. I think there are 2 thought processes which are going in my mind. One is that with COVID coming in, legacy businesses, old businesses are undergoing some kind of disruptions. As a company, our DNA is to grow the business organically and be a little bit nimble and very agile to change our processes to suit the new environment. So just putting all our just depending only on one thing of just inorganic in South and West, I we just decided that we want to pursue both, and that's why we have decided to now put more effort behind organic as well in South and West. Keeping that in mind, we are opening these 2 labs, and our experience of East has been very encouraging, and we feel a little more confident now than what we were before. Great. Thank you so much. Congratulations again. Thank you. The next question is from the line of Hari Taemath from Spark Capital Advisors. Please go ahead. Hi, good evening. Thanks for taking my question. As you entered the phase of vaccination, do you expect volumes of certain tests like antibody testing or checking antibody titers, these kind of tests gaining prominence in a post vaccine world? Are you seeing any such trends? Or do you expect any of these tests gaining volumes? I think antibody testing post vaccination sounds very natural to go up. My view is it will happen in multiple ways. I think first, it will be in a surveillance format, where you may want to check-in large scale to prove that, yes, immunity is developing. And that, to my mind, actually would be more driven by certain agencies rather than private players. There could be individual patients like you and me curious to know whether I have built antibodies or not. To that extent, I presume it should go up. It also will go up if you and I want to go for a health checkup, if somebody is saying, okay, antibody test, because the same sample, which is actually going to do your health checkup, and you might as well say, I'll just do this antibody also for me. I think overall antibody testing will go up. Whether it will translate to a big upside on revenue, I'm not so sure because it will just get consumed in overall record oil of testing is what I feel. The second is antibody testing. Maybe Doctor. Lal can add to this. I think it's more amenable to point of care test as well. A lot of rapid tests tend to come up. It's also much more democratized than, let's say, RT PCR testing, which is only done by fewer labs, while antibody testing can actually be done with wider number of labs. So it will be much more spread out. So I think banking on seeing a big upside on antibody may be a little bit misplaced at this stage. Yes. And if I may add, Doctor. Ali here, Harit. Scientifically speaking, what you are saying is makes sense. But once the vaccine has been given, well, people will be in a different kind of a mood, where they would say, okay, now we can step out and that deja vu or with happiness comes, etcetera, etcetera. So my take on this is that though antibody tests are technically feasible, they should be done. But the people may not they said, okay, now let's forget about it. Very few people like very highly trained doctors, they might say that let's go and find out if this vaccine has been of any effect, etcetera, etcetera. But I think it's going to be a closed call of thereafter once the vaccine has been given. I think it's also a bit behavioral if you look at you and I have been through vaccinations, but I don't know whether I ever checked my antibodies after that. Yes, yes. And on your point that these tests are more democratized and how is the pricing holding up? Have you seen a pressure on that front because more labs are offering antibody tests? Or are you able to hold on to the pricing? Actually, my reading is antibody is not a way of life. So it's a sketchy sort of a thing. I think we there is no nobody is actually giving probably any length from government side to look at what's the pricing on antibody except maybe, say, a few states. I think people are it's just the market pricing, which is prevailing in antibody testing. It's only RT PCR where there are notifications coming in. Okay. And my last question, looking at the RT PCR volumes for Q3, we've seen a significant jump versus the Q2. So just trying to understand what drove this increase? Is it greater higher number of cases in our focus markets? Or is it that we got more aggressive or we focus more on RT PCR test? So what exactly drove the sequential increase in RT PCR volumes? No, no, no. Actually, it's basically outside yield driven. We have not tried to influence this flow. And you if you remember, Delhi saw a surge in the month of October November. I think that led to this increase. So now it has settled down, so it's just back to it's mainly market driven because there was a surge in Delhi that time. Okay, okay. Got it. Thank you. Thank you. The next question is a follow-up from the line of Rahul Agarwal from INGRED. Please go ahead. Yes. Hi. Thanks for the follow-up. Just one quick question on this code of Social Security. So essentially, my understanding is applicable starting 1st April 21. Any rough cut estimate? How does the staff cost actually behave next year? Generally, we have about INR 2.70 crores of staff cost annually. So will this number will have a major impact there? What about wage code, right? Yes, yes, yes. Yes. So Rahul, though these rules are there now in place, we are in the process of evaluating what will be the impact, but certainly there will be impact and this is not for us, everybody, because there are some dramatic changes in the definition of wages particularly in terms of gratuity or leave and some fear of kind of impact will come, but we are in the process of evaluating this. But could it be like a major impact like 10%, 15% incremental to normal increments you give? Actually, we don't know, honestly speaking, because there is a onetime impact which will come and there is also recurring impact. I don't think we are fully prepared to give you a number. But all we can say that there will be impact, which is not only for us as a company but for entire entire system, right? Yes, yes. Yes. All right. Thank you so much. All the best. Thank you. Ladies and gentlemen, as there are no further questions, I now hand the conference over to the management for closing comments. Thank you, everyone, for being with us on this call today. I wish everyone stay safe and healthy. Now I would now request the moderator to close the call. Thank you very much. Thank you. Ladies and gentlemen, on behalf of Doctor. Lal Patel Apps, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.