Ladies and gentlemen, good day and welcome to the Vijaya Diagnostic Centre Limited Q4 FY25 conference call hosted by JM Financial. 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 touch-tone phone. I now hand the conference over to Mr. Amey Chalke. Thank you, and over to you, sir.
Hi, thank you. Good evening, everyone. I am Amey Chalke on behalf of JM Financial. Welcome you all on the Q2 FY25 earnings conference call of Vijaya Diagnostic. At the outset, I thank the management of Vijaya for giving us the opportunity to host the call. I'm looking forward to having insightful interaction on the quarterly earnings and outlook here on this. Today, from the company, we have with us Mr. Suprita Reddy, Managing Director and CEO; Mr. Siva Rama Raju, Vice President, Operations; and Mr. Sion Dalla, Assistant General Manager, Strategy and Investor Relations. I now hand over the call to the management for their opening remarks. Over to you. Over to you, ma'am.
Thank you, Amey, for hosting the call. Good evening, everyone, and thank you for joining us today. I will begin my address with the updates on our expansion plan. I'm happy to announce the successful launch of six hubs in the last two months, two each in Pune, Bengaluru, and West Bengal. Additionally, the execution of three more hubs in West Bengal is progressing as planned and expected to commence operations within the next three to four months. We have also finalized leases for two hubs in tier two locations of AP and Telangana, which are scheduled to become operational in H2 FY26. With the recent launch of two very large state-of-the-art hub centers and two spokes in Pune, combined with our investment in cutting-edge technology, we are confident that this will enhance the visibility of the Vijaya PH brand in the Pune market.
We are now well-positioned to establish a distinct identity and gain strong traction in this region going forward. We have ventured into the Bengaluru market with the launch of operations at both our hub centers in April. Given the strong potential of the market, we're actively looking at a few more strategic locations for our hub expansion to strengthen our presence in this region. In continuation to our updates on the leadership team, we have recently onboarded a CTO who comes with 25+ years of experience in leading technology-driven companies, and his addition strengthens our capabilities and is likely to help fast-track our IT initiatives. In addition, we have also made a few more mid to senior-level hires across business functions to support our parallel expansion into new geographies.
Now, I quickly take you through the financial performance for the current quarter of the 12-month end date 31st of March 2025. The consolidated revenue for the current quarter stood at INR 173 crores, reflecting a growth of 12% at the consolidated level and a 13% growth being driven organically, once again majorly driven only by test volume. EBITDA for the current quarter stood at 69 crores as compared to 63 crores in the corresponding quarter in the previous year. The EBITDA margin stood healthy at 39.8% in the current quarter. The profit after tax for the current quarter stood at 35 crores with a margin of 20%. Come to the full-year performance, the consolidated revenue stood at INR 681 crores, reflecting an impressive year-on-year growth rate of 24%, with a 19% growth being organic contribution. EBITDA stood at 273 crores, registering a year-on-year growth of 24%.
EBITDA margin stood healthy at 40.1%, and PAT was 143 crores with a margin of 21%. After a strong performance in FY25, we had a promising start to the new financial year with a notable increase in both the footfalls and revenues across our network. Moving forward, our key areas of focus would be stabilization of the newly launched hubs and building strong brand equities in these new geographies, commissioning additional new hubs in West Bengal and core geographies, investment in technology, and strengthening our talent pool across critical departments. With that, I would like to conclude my address and request the moderator to open the line for the Q&A session.
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star, then one on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star, then two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, please press star, then one. Our first question comes from the line of Anshul Agrawal from Emkay. Please go ahead.
Hi. Thank you for the opportunity. I hope I'm audible?
Yeah, you're audible.
Great. So I have a few questions. First question, is there any particular reason why our gross margins have contracted despite strong growth in wellness in the current quarter?
Anshul, actually, it is because of wellness because I think wellness has contributed 15% of our revenue. And generally, whenever wellness grows, you'll see some contraction in gross margin, right, because this wellness is at a discounted price. So that's one of the primary reasons. And yes, to a certain extent, not a significant value. Some value has increased because of the increase in the input cost.
Okay. What I wanted to check was, is this on the back of any rupee depreciation which could reverse in the coming quarters, or should we structurally consider this to be the new normal in gross margins?
So you should structure it to be the new normal, right? And it is majorly because of wellness. And since there is an increase in the input cost, like we were discussing the last two, three quarters, right? So we have expected there'll be an increase, not just for the rupee division, but multiple other reasons that's happening in the international trade, right? So that is the reason there is an increase. But with wellness, generally, Q4, generally, we see the higher contribution coming from wellness. But again, if wellness comes to 14%, then the gross margin will improve a little bit.
Got it. My second question is on the hubs that we had commissioned in November at Nizamabad. So have we broken even in Nizamabad and Ongole?
Ongole, yes. We've broken even. In fact, two months back, more or less from the last three months, revenue is crossing the break-even number, right? In terms of Nizamabad, we launched a soft launch that happened in November. The actual launch of MRI happened in December.
Is it just me, or the voice is echoing at Siva's end?
Nizamabad was launched formally in December, Anshul. And what has happened also is Nizamabad was only functioning with high-end imaging and blood work for almost two to three months because it was awaiting the PCPNDT license. It has still not come, in fact. And we still anticipate that, as promised, it will break even in the first year from whenever we started operations. And Ongole has broken even a couple of months back.
Yes. And Nizamabad also, Anshul. So it is almost closer to break-even. So maybe in a quarter's time, that should break even.
Great. Do we have any targets, ma'am or sir, for the new hubs that we have commissioned in Pune, Bangalore for break-even, or?
So the Pune centers, we've opened two centers, that is Ambegaon and Kalyani Nagar. Ambegaon has become operational from April. Kalyani Nagar, even though it is ready and can start operations, we're waiting on starting off because the team is under training, and we're starting to build a team for Pune separately. So probably another week to 10 days, you will see Kalyani Nagar open for operations. Both of these centers, as mentioned earlier, will break even in a year of opening. Likewise for Bangalore and Kolkata.
So like we guided before, Anshul, all the centers outside of.
Outside of Telangana and AP, we normally take a buffer of two months or three months. That's why one year is what we say. But even though the target is to get them up and running in the first few months itself.
Perfect. So the break-even targets are intact.
Yes.
Great. Ma'am, a question on the Bangalore market. So what will be our go-to-market strategy here? Because this seems like a more corporate hospital-friendly market versus probably Pune. And any comments on pricing out here? Will it be similar to what we charge in Kolkata or Hyderabad? How should we look at it?
So Anshul, if you ask me, this market probably is not at all like Pune. Pune is more the corporate kind of market. And Bangalore has a lot of standalone integrated centers. You look at the largest lab player has been Anand for ages now. So they are independent players region-wise, also keeping the traffic, the congestion, and all of that in mind. So these two centers that we've chosen, in fact, are two different corners of Bangalore. It's also to test out whether our go-to-market strategy in Hyderabad works likewise in Bangalore. And I should definitely say that it's looking very positive. Both are running. Both are operational. We're very confident on a one-year break-even here. And the pricing is more like Hyderabad and definitely not like Pune or West Bengal.
Great. Great. Thanks for your comments. One more question, ma'am. With the bunching up of these new hubs, can we expect a steep dip in margins in FY 2026 with a possible recovery in 2027?
So like we said before, Anshul, so first two to three quarters till the time these centers break even. And like we also said, there are three more hubs that are going to come in Kolkata in four to five months' time, and then two in Andhra and Telangana. We should see some dip to the extent of 1%-2% on the EBITDA front. But as we move forward, these centers will start contributing to the revenue, and then the next set of centers will come. I think by end of FY26, we should be back to our regular margins.
Got it. Just one more, if I can squeeze in. Given the nature of lease accounting and due to these hub additions, do we expect depreciation and amortization expenses to outpace the growth by which our network is expanding in the next two years?
Yes. For the first two to three quarters, at least you'll have that. And I think once the centers break even, I think we'll be more or less sorted. But for the first two to three quarters, you'll have that.
Great. Very useful. I have other questions. I'll fall back in queue. Thank you so much.
Thank you. Our next question comes from the line of Alekhya from Athena Investments. Please go ahead.
Hello. Am I audible?
Yes.
Yeah. Thanks for the opportunity. So my question is, as we see hub additions, so what's your CapEx plans in FY26?
Yeah. So as we just said, so we are going to, we have already opened five centers. Even though there are six centers, one center technically fell at the fag end of March, which was accounted in the last financial year. But considering the other five that we've opened now and then five more which we are going to open, so you should roughly see a number closer to, say, INR 145 crore-150 crore kind of a CapEx for this financial year.
Okay, so do we have any plans in entering into dialysis kind of businesses?
No. As of now, no. We are purely into only diagnostics.
Okay. Thanks.
Thank you. Next question comes from Chirag from Keynote Capitals. Please go ahead.
Yeah. Thank you for the opportunity. I would like to know what is the mix of revenue for FY25 in pathology? Could you just differentiate between routine and specialty tests?
First, coming to radiology and pathology, it is more or less the same. Across the quarters, we are seeing pathology anything between 62-65% and radiology from 35-38%. So at a year level, more or less, it is the same. It was in the same mix. Coming to routine and specialized, like we always say, the definition differs across player to player, right? But considering our own definition of specialized and routine, within radiology, 35%. So 20% is from advanced radiology and 15% is from the basic radiology. But again, within basic radiology, you have a few advanced tests. But going by our definition, I'm telling you these numbers, right? Coming to pathology, out of the 65%, close to 15-20% is specialized, and the rest is routine. But again, this definition differs from player to player.
It would be great if you can just explain your definition once.
So basically, anything that comes in volume that we do on a daily basis, like your fasting thyroid, lipids, hormones, everything you call.
So you say all of that comes under basic for us?
Basic for us.
Anything above, upwards of an AMH or fertility panel, histopathology, all of that gets categorized as special?
Because few players even consider thyroid hormones as specialized, but we consider them to be basic.
Fair enough. Fair enough. My second question is related to understanding that we are. Are we still on the trajectory to think that we would be growing at 15%-16% CAGR growth for the next three years?
Yes. Absolutely, yes.
This is a mix of volume and a percent of 1% or 2% value growth, correct?
Yeah. 1% to 2% of value growth and the rest is volume. Yes.
Fair enough. And could you just give some comments or highlight how things are panning out in the industry at this moment, what kind of growth the industry has, and because of CapEx, are we outpacing the growth? Could you just highlight that point?
So coming to the growth of the industry, again, different research reports give different numbers. So the number that we keep hearing, which we are not very sure, is about 11%-12% is something that we hear from multiple research firms, right? Definitely, if you see the last one year of growth for Vijaya, it is not just the new centers of the capacity addition. Even the older ones, we have seen double-digit growth from even the older lot, right? I think coming to Vijaya, the best strategy, even if you take for Hyderabad or the outside Hyderabad, right, one thing is the centers that we are launching are breaking even ahead of our timeline, of our targeted timeline. And also the existing centers within Hyderabad, while every year we think that Hyderabad gets matured, but within Hyderabad, we are inching market share year on year.
If you take player number two, three, four of Hyderabad, they are not growing at the same pace in spite of we not adding any capacity in the last two years in Hyderabad, we are growing at a much faster pace than them. I think it's the capacity that we have built, the quality that we are delivering, the name we have built, right? So these are helping us to grow at a faster pace, and also because you have the entire gamut of diagnostic services.
Right. Just one more question from understanding perspective of industry. Apart from brand and accredited labs, what are the ways for a company like Vijaya to make sure that they keep on gaining market share into a newer region? Is it just to do with the technology, or is it something else too? And secondly, being a leader in Hyderabad, I just wanted to understand what is the way for us to keep defending the kind of market share we have from the players who have been in the market? Plus, some of the Pan India players are focusing to get into southern markets now as they are trying to tap the new market. So just wanted to know how can we make sure to defend our market shares too?
So basically, if you see, right, so there are three, four important basically parameters for our business, right? One, we have to make the customer who is paying us happy. It's basically they're coming for a diagnostic service with trust. But at the same time, the way you maintain your centers, one, you're giving them very good infra, right? Then the technology, then the kind of doctor talent you have. Because all this will help us in churning out a quality report. So ultimately, and when this report goes to a clinician, even a clinician has to trust the report, right? So when you are basically taking care of everything and then pricing it same like the market, I think that is something which we were doing for years and that allowing us to gain that market share year on year, right?
It is basically you have everything under one roof. That is basically the differentiator for Vijaya. So that's one of the reasons when we are venturing into newer geographies. Like if you take the example of Tirupati, even though it is part of Andhra, Telangana, it is much closer to Chennai. And by the time we went into Tirupati, there were already about 7-10 MRI machines, right? What made us stand out? Because you are giving quality. To give quality, you need equipment and doctors, good doctor talent pool and technicians, right? The kind of infra you are providing, nobody else in the market is providing that. And on top of that, you're not charging anything extra. You're just matching the market, right? This is allowing us to basically gain that name. And you have everything.
You have few players in radiology, few in pathology, but we are delivering both. So it's a convenience for the patient. So I think since you're able to take care of all these things, that is allowing us to grow at a much faster pace.
Fair enough. Fair enough. Thank you. Thank you. I'll join back the queue.
Thank you. Before we take the next question, a reminder to all the participants. If you wish to register for a question, please press star, then one. Our next question comes from Sumit Gupta from Centrum. Please go ahead.
Hi. Am I audible?
Yeah, you're audible.
Hi. Good evening and thank you for the opportunity. So what volume growth can we expect from the addition of the new hubs? Like incremental volume growth?
So Sumit, so whenever we add hubs, so initially, the trend that we have seen in the past is that we start off very well with advanced radiology and slowly the other volumes get built, right? So basically, what we expect is that the growth in this current financial year, again, some 3%-4% of the growth from the new centers because we've just launched these centers, and the existing centers will give us the rest of the growth. So you should, but since, again, these will be dominated because of the advanced radiology, if these centers give us a 4% contribution to the overall growth, you may expect the volume to be somewhere around 2%-3% in the current financial year. Because they may do a good number, but the volume initially will be lower.
It is because of the advanced radiology they pick up, and then slowly the other volume gets built.
Okay. And regarding the EBITDA, on the standalone basis, it is nearly flat on a sequential basis and just 7% growth on a variable basis. So majority of the growth is coming from the PH side. So just want you to understand on that. And what were the margins this quarter for PH?
The margins for PH during this quarter were close to 29%.
Okay.
And if you look at this quarter, and including last quarter, we had stated that there is a GST regulation, right? So because of that, the impact has been close to 0.3%. So basically, Sumit, this quarter, even for PH, if you look, the number will look slightly off because there is one-off expenditure which we charge to the P&L. Otherwise, the margins were closer to 35%. And this was because Pune, the expenditure has started for these new centers, right? So we have taken people, training, all that is hitting the P&L, but the revenue has not actually started. So if you exclude that one-off expenditure and if you see the EBITDA for Q4, it was close to 35%.
In the earlier quarters, it was about 39%-40%, but because of the incremental cost on hiring of new talent for these new upcoming centers, you have seen that because the balance sheet size itself is very less, it generates only about INR 11-12 crores. Now, all of a sudden, we've added two hubs and two spokes, right? So I think we should give two, three quarters time to see the actual EBITDA for Pune. And coming to the general at a company-level EBITDA, Sumit, I think because we have also added resources at corporate level, right? We have taken multiple digital IT initiatives, right, where we have moved servers physical to cloud. And some significant investments we have done on digital marketing, which was not the case earlier, right?
In spite of incurring all this expenditure, the EBITDA is intact because of the leverage that we are getting from the existing network.
Right. So going forward for PH in particular, the margins would decline. Or how should we see the trajectory of PH?
Yeah. So optically, it looks slightly off, Sumit, because PH as of date is a fixed center. You see 95% coming from.
I'm sorry, sir. You're not audible. The voice is being offered, so.
Is it clear now?
No, sir.
Even right now, there is a magnetic disturbance which comes.
Is it okay now?
This is better. Yes.
Right. So what I was saying, Sumit, so basically, if you see Pune, right, 95% of the revenue comes from six centers, three hubs and three spokes, right? And all of a sudden, we've added two hubs and two spokes. That means we have increased the capacity almost close by 70%-75%, right? So obviously, initial days, the cost will kick in, but the revenue will take some time, right? Optically, if you see PH as a standalone center, PH as a standalone company for the next two, three quarters, optically, the EBITDA will look low. But otherwise, I think we have to wait for that one year where these centers will start breaking even.
Once the centers stabilize and also the hubs stabilize, and then you're probably going to see normalization happen then.
Then, yes.
By FY27, we can see stabilization and improvement in margins as well as return.
Yes, but if you see Vijaya Company as a whole, it will not impact much. Like we said, for this year, the first two to three quarters, you may have that hit of 1%-2% on account of all the six hubs starting at a time.
Understood.
Thank you.
Thank you. Your next question comes from the line of Gaurav T. from Antique. Please go ahead.
Hi. Good evening. Any reason for the lower year-on-year growth for the quarter on the revenues? We've been growing upwards of 20%, excluding PH, be it test volumes or overall revenues. However, this quarter, growth has slowed down a bit. So any insights into that?
Yes. So if you see at like 90% at the earlier level, I think excluding PH, organically, we've grown by close to 18%, right? And yes, Q4 was slightly soft. In fact, within Q4, if you basically break up in three months, February month, which has pulled down the entire average. So February month, particular month, where we have grown only in single digits, which has pulled down the entire quarter's average.
Sorry, sorry, sir. Again, it's not very clear. I'm not following you clearly.
Is it clear now?
No, sir. Again, there is the same magnetic disturbance which is coming.
Is it coming now?
No, ma'am. It is still there.
What about now?
This is slightly better.
Slightly better, right?
Yes.
So basically, in Q4, February month, which was softer, right, which has pulled down the entire quarter average, so we have grown only by a small percentage. Generally, Q2 and Q4 for healthcare are the better quarters, right, and generally, what we have seen in the past is that Feb, in spite of being only 28, 29 days, doing a better revenue than Jan, that was the trend in the past, but for different reasons, the season was slightly off. Sometimes healthcare is all about seasonality, and that happened only in the month of Feb, so while we tried to see reasons for that, but we don't have any concrete reason while the season was low and it was also attributed to some of the festivals and other events that happened across India, but otherwise, if you see again from April, right, post Q4, the numbers are intact.
There's an incremental increase in both footfall, volume, across all of the centers in Hyderabad and rest of Telangana. So Feb was a month which was also odd to us. But like Siva mentioned, it was purely seasonal and a lot of factors affecting it. It was also a time when there was a lot of travel, the Kumbh Mela, and lots of things happening. So I did not see numbers coming in through the month.
Sure, sure. Thank you. If we look at overall FY25 revenue growth, regional split, and outside of Hyderabad and Andhra Pradesh, Telangana, the non-core markets excluding PH, we're seeing revenue growth of only five% for FY25, which kind of is low given our penetration and all the other initiatives we're taking. Were there any one-offs in this as well? Probably Kolkata and Barasat or some other reasons?
No, Gaurav. In fact, so if you see other than PH, right, even other than Hyderabad, if you take rest of AP, Telangana, and even for that matter, Kolkata, right, if you club all that together, excluding PH and excluding Hyderabad, it is upwards of 20%, the growth rate. The contribution is 5%. Contribution is 5%, yes.
But the growth is upwards of 25% almost.
Okay, okay. Maybe that's comforting. Thank you. So we're adding largely hubs this year. We expect they would break even in three to four quarters. Any insights? What can be the planned expansion for FY27? Significantly higher number of spokes and significantly lower number of hubs there?
It also depends on the geography. Because if you look at Bangalore, you've opened two hubs in two extreme corners of the city, and until Bangalore gets a minimum of seven to eight hubs, you cannot connect them with spokes, so Bangalore would probably take longer to open up spokes compared to East India. Kolkata will definitely see a lot more spokes come up in 2027 because we have already opened three now, VIP plus two more, and you're opening another three coming up, so another two hubs will give Calcutta a chance to open up spokes in 2027. Pune, of course, you will see a lot of spokes coming up from now on. After stabilization of these two new hubs that have opened, that's when we will start opening the spokes in Pune.
In rest of AP, probably you will see more of hubs coming in because after separation, there are about three or four more places, markets that we've not gone into. Those are the four key primary markets that are of interest where we will go in and open those hubs, and that is when probably PCPNDT traction at most there.
Sure, sure. No, thank you for that. Coming to gross margins, are you sharing the split for gross margins for radiology and pathology for Q4?
No. Basically, we show it as a single number, Gaurav. But generally, what we see in radiology is closer to 10%, right? So 90% is the gross margin.
91% is the gross margin for the radiology segment. And generally, for pathology, it is anywhere between 85%-86%.
It doesn't change much, actually.
Got it. Got it. Last, if I may, just last question on the balance sheet. On the other current financial assets and other current financial liabilities, I'm seeing quite a large increase year on year. What would be the nature of this?
So basically, capital creditors. So if you see, we have opened, say, three hubs in the last financial year. And also, in fact, we have added a few of the advanced radiology equipment in our existing centers, like Gurgaon, and we have added one more MRI in Kurnool, right? We have added a cardiac CT in Tirupati. So basically, with our vendor, we have a deferred payment option as part of our negotiation, right, where we'll be due for that payment in the next two to three quarters. So that's the reason you see capital creditors of, I think, close to INR 70-75 crores. Yeah, yeah. That's the reason. So if you see the net cash, right, on the balance sheet, you look, the cash is about close to INR 280 crores.
But if you remove this capital creditors, and if you see the net cash, it's close to 200+ crores.
Got it.
It's purely as part of negotiation. That's all.
No, that's helpful. No, thank you. Thank you. All the best.
Thank you. Our next question comes from Rishi Modi from Marcellus Investment Managers. Please go ahead.
Yeah. Hi. Am I audible?
Yes, Rishi.
Yeah. Yeah. Hi. I might have missed this, but what is the exceptional expense that we have recorded in this quarter?
It's basically on account of this merger of Medinova with Vijaya.
Okay. Okay. All right. Apart from that, in the Hyderabad front, right, so I see we have 10% growth, and our wellness business has come to a 20% growth YoY. Just wanted to understand, is there like a, I think you said some Kumbh Mela thing, but apart from that, anything else that flows into that number?
So in terms of wellness, Rishi, there are two reasons here. One, if you take Pune as a geography, right, slightly wellness share is high in Pune. In the last year, it's not fully consolidated. It was only consolidated for three months. This year, we have consolidated for the full year. There is slight effect because of Pune, because in Pune, with the corporates all being present, the wellness portion is upwards of 15% that we do there. And other than that, naturally, with the kind of efforts that we are putting digitally, all that, the wellness share in the current financial year across the quarters have inched a little bit for us in the core geographies. Not only just in Hyderabad, even in the tier two geographies of Andhra and Telangana.
No, so I meant that till Q3, we were growing healthily, organically at 20% plus 25% plus. That's come down to 20% in our EMI in that insurance-led quarter. So that's why I'm just checking whether there's anything which is structural in that, or it's just something which we.
I think it's the same reason, Rishi. Overall, we have seen the season to be dull. It is across the modalities, and also, if you see March, right, so basically the entire festive season, which was supposed to be a bit of April, has come into March. The entire season of Ramadan, and then you had Ugadi, everything within March, so we are guessing that because of these reasons, the season was slightly dull.
Okay. All right. On the Pune piece, right, Q4 versus Q4 last year, given the split of revenue that you all have provided, my numbers come out to be a decline on a YoY basis. Now, some sequential year in there, it might be different, but it's not grown is the point. So just wanted to understand, is it something which is intentional, and if it is, what's happened there?
So it was again conscious decision. So basically, if you see at the overall year, I think we are at the same with a marginal growth, right? But in Q4, like you rightly said, there is a dip in the revenue of, I think, close to 5%, right? Majority of which, I would say almost of it is because of B2B. We have to consciously close a few B2B ties because those were not.
We are actually doing a lot of aggregator business, Rishi, and we also gave it some time to understand that market and what kind of business is actually coming in, and when we're actually only making sure that tests are coming in, payments were becoming an issue, it was a conscious decision to hold off some clients, wait and see, and that's, I think, the minimal dip that you're seeing, but that's a conscious decision that we've taken.
Okay. So now, if we are reducing the B2B spend, should we assume that margins in Pune can go beyond that 39% levels that it has been?
You've also heard me saying that Pune, the organic six centers that we acquired have capacity issues. So there are two reasons for this. One is a conscious decision of an aggregator business coming in at a lower cost and not getting paid and creating capacity probably for a B2C client to come in. That is one bit we'll have to wait and watch this quarter. And the second one is definitely try to increase the direct walk-in and create some capacity in these geographies since we're not adding new centers in these places where they already exist. Both of these centers that we've put are in areas where there's no presence of PH earlier.
Okay. All right. Great. Yeah, that's it from my end. Thank you.
Thank you.
Thank you. Our next question comes from Chirag from Keynote Capitals. Please go ahead.
Yeah. Thank you for the follow-up. I wanted to know what are the break-up for the number of centers, 151 centers that we have. Could you divide it in the number of geographies?
So basically, across so in.
Pune will have about 16. No, not 16. Now it's become 18.
18 centers in Pune. Then you have two in Kolkata according to as of 31st March, right? So you have about.
127 centers in AP and Telangana combined.
And then one in Karnataka. And one in Gurgaon. This is as of 31st.
31st March. Yeah. Okay.
So earlier, we used to give it Hyderabad and the rest of AP and Telangana. Could you just divide that?
Hyderabad is closer to 94 centers, so the rest are from other than AP and Telangana.
Got it. Got it. My second question is, what are our thoughts related to branding spend for the coming years? Is it like an absolute number in your mind, any ballpark, or would it be variable with the revenue that we are doing?
It depends on the geography also because if we are looking at geographies where we are opening centers in Calcutta, I don't think digital works in places like Krishnanagar and Barasat, which are typically outskirts of Calcutta. Whereas Pune, you will see a lot of digital spend happening. It depends on the geography, the clientele, the age group. Even in Hyderabad, amongst these 95 centers, there are different ways of marketing that we try to do. There are certain areas where we only market wellness. There are certain areas where we do a lot of diabetic camps. So it depends on the geography. Probably cannot put an exact number to it, but depends on where we're going.
Fair enough. And last one from my side, could you let me know what is the size of our phlebotomist team and how much collection in pathology do we do from home collection?
In home collection, we are 2.6%. 2.6% is the revenue that we get from the home collection at overall revenue, which will be almost close to 4% of our pathology revenue. Coming to phlebotomist, we have close.
For the two teams, if you're asking, the home collection team is completely different from our in-house phlebotomy team.
600 plus.
It's almost, yeah, more than 600. We wouldn't know the exact number, and home collection team would be around.
35-40 people. Yes.
Fair enough. Thank you. Thank you.
Thank you.
Yes.
Our next question comes from the line of Harshil Patil from Mirae Asset Capital Markets. Please go ahead.
Good evening, sir, and thank you for the opportunity. So just have two questions more from an understanding perspective. So we've been mentioning about commissioning quite a lot of hubs recently in the past two months, and a few lined up over the next two to three months. So sir, my question was basically, at what point in time after setting up the hubs, would you probably take up or start thinking about setting up the spokes in those respective areas?
So again, like ma'am just said, so it depends on the geography, right? So in Kolkata, we already have two hubs present, and then we just launched two more, and we're going to launch another three. It all depends on the geography. So now Kolkata from next year will give us a chance to put spokes because already two centers got stabilized. Whereas for a geography like Bangalore, we just ventured into that market. We launched two hubs in two different corners of the city. We'll have to add up a few more. You'll see only spokes after two years.
Seven, yeah.
Yeah. And in coming to Pune, because already it's an acquired network, right, because they have the mix of hubs. We have launched recently two hubs and two spokes parallelly, right? It all depends on the geography, right, and our presence in that geography.
Sure. Got that, sir. So just the second thing would be with respect to our growth thing. So we've been alluding to like 1%-2% of a growth going ahead, probably driven by pricing action or volumes. I believe that would be more based on an assumption of a favorable case mix that would drive the growth. So that's one thing. But if I have to kind of just analyze about the revenue per test, over the past two years has been almost like kind of a flattish thing that we are reporting. So is there a contemplation of any pricing action apart from the inflation or the case mix that would be driving the overall revenue per test or something like that?
So basically, like you rightly said, it's a function of earlier. At least in the last two years, it was a function of more of case mix and very little bit of pricing. But the only reason why you are seeing the average realization per test to be flat was because the capacity that we have added in the last two to three years was more in tier two locations where the pricing is slightly lower than what we see in Hyderabad, right? But going forward, you are seeing the capacity building in cities like Pune, Bangalore, and Calcutta where the pricing is more or less in line with Hyderabad, slightly 5% here and there than compared to Hyderabad, right? And coming to the price increment, yes, definitely, this year we will take a price increment.
But again, only price, if you see, it will not be more than 1%-2% of the total revenue. But since we also mentioned the input cost of a few of the consumables have increased, that's the reason we have seen a dip, slight dip in gross margin. We will take the pricing increase on a few tests, but at the.
Sorry to interrupt, sir. There is a magnetic disturbance coming from the line again.
How about now?
It's still there.
It's still there?
No, sir. It is still there. Sir, the disturbance is still there. What I'll do is I can disconnect and I can reconnect your line. Just give me a moment.
Yeah.
No problem. Ladies and gentlemen, please stay connected while we reconnect the management. Ladies and gentlemen, we have the line for the management reconnected. Yes, sir, please go ahead.
Is it clear now?
Yes, sir. It is clear now.
It's clear, right? Yeah. So basically, we are going to take a certain price increase, but it will be close to 1%-2% of our total revenue. It is not a major increase, and it is only for some certain tests.
Okay. Okay. Got that, sir. So sir, ideally, the price increase of 1%-2% would be complementing the possible changes due to case mix also.
Yeah. So it's.
Would that be a right assumption?
So case mix more or less will be the same. Only it's because, yes, you have opened more hubs, you may see slight increase in average realization per test because of the advanced radiology. But otherwise, in terms of the actual case mix in the existing centers, that may not change much.
Okay. Thank you, sir. That's it from my side. All the best, sir.
Thank you.
Thank you. Before we take the next question, a reminder to all the participants, you may press star, then one on your touch-tone phone. Our next question comes from Hiru Tejwani from Motilal Oswal Financial Services. Please go ahead.
Yeah. Good evening, management of Vijaya. Superb results, I must say, for last quarter. So my questions are three. First, any future guidance that you would like to give on FY26, keeping in mind that you already delivered good results in the last year? Second, I see a lot of obviously, 72% of the geographical contribution comes from Hyderabad. So when you are saying that now you have opened six hubs in Kolkata, Pune, and Bangalore, will this number stay same or it will maybe increase or decrease? And the third is, any specific digital investments or infrastructure that you have set up? Because other diagnostic centers and other peers are actually moving on a lot of digital investments. So how do you see that? Anyone can answer. Thank you.
Yeah. So first, coming to the geographical mix, right? So because since you rightly said, we are doing significant investments outside Andhra and Telangana, and definitely these investments will grow at a much faster pace than the existing other way. You will see while Hyderabad is still going to grow in terms of contribution, you will see Hyderabad coming below 70% with the investments that they are making outside Hyderabad. And coming to the digital initiatives or the digital marketing bit, so in fact, like all the other players, in fact, we started investing in, and in fact, we are also going to get one new CRM in place, which will get implemented in this current financial year. So that's the first project that our CTO is taking on, right? You will see these digital spends also growing slightly in the current financial year and going forward as well.
And then coming to our guidance, so like we always say consistently because since we have done these investments, so next two to three years, we are confident that we'll be able to grow at that 15% plus CAGR.
Okay. Okay, sir, one last question. What is the ratio of corporate and B2C? We will have tie-ups with corporate as well in Hyderabad and other locations and retail. So I mean.
Level and B2C business is about 93%-94%.
So corporate is lesser than. Okay. Great.
Yeah. Corporate and other B2Bs are about 7%.
Okay. Great. Great. Thank you. Thank you, management. Thanks. All the best.
Thank you.
Thank you.
Thank you. Our next question comes from the line of Amey Chalke from JM Financial. Please go ahead.
Yeah. Thank you so much. So ma'am, in the initial one of the questions, we said that in Pune, basically, we had cut down some of the B2B contracts because of the profitability issue. But going ahead, whenever we as a diagnostic company enter into newer geography, there is always a tendency as a new player to add more B2B contracts to increase the utilization. So for us, is that a bit different? We would continue to focus on B2Bs from day one itself?
The key differentiator between other diagnostics and Vijaya has always been that we do focus on B2C. We invest in infrastructure, larger facilities with both advanced and basic imaging with basic and advanced labs because you want to make sure that you offer everything under one roof. And then you also want a direct contact with the customer who walks in. And P.H., when it comes to P.H., is an acquired company, was already a mature 25-plus-year-old company with a 95% B2C. It basically had the same ethos as what Vijaya believed in. But certain old customer base is probably that P.H. would have had as B2B clients. They were payment-related issues where there wasn't realization coming in. Now, when we come in, it was only December that we took over P.H.
To understand that, probably send out enough number of reminders, and then we realized that those payments are probably not going to come is when we take a call that we do not want to service them anymore. That's the slight dip that you're seeing. Even in the main company, the 7% of what we were mentioning can probably be a corporate, can be a B2B client, can be somebody I'm servicing in a hospital. These all come on anything that the customer is not coming in, we categorize as B2B. So if you ask me any new geography, whether it is Bangalore or Calcutta, the strength of Vijaya is to showcase what it can offer to a customer who walks into the center.
I would not like to be an aggregator or a distributor model where I would like to pick up a sample and probably generate a lab report and go through a third party. So that's also the reason why you will see a lot of initiatives that are done by our direct marketing group who go into societies, give out privilege cards, invite customers to come into the centers. Because seeing is believing. Technology has to be looked at, seen, felt. Doctors have to be probably spoken to. That's when you're on top of the mind. You will come back as a customer. So building that relationship is typically what we get that one year or two for breakeven. Otherwise, there are multiple ways in how we can probably fast forward that.
But no, we would like to take that time, bring them into the center, showcase what we can do, invest that time into a conversation, and build that brand out. And that's how the model has been worked out well. And we also plan to continue to do it that way. It's a tried and tested model.
Sure. So then basically, despite Pune being a corporate hub for many of these companies, you would try to avoid those kind of corporate contracts?
We serve all of the corporates. We have a separate tariff for a corporate. When it comes through a corporate, it either comes through a corporate directly or through a TPA. You will also see a lot of B2B business categorized such as a small unorganized player, a lab opening up and probably collecting a sample at a full MRP and then deciding to give it to three players depending on a price that they give. That is not the model that we typically believe in or we do. What we do is we absolutely would want every corporate to come in because they would come in to get their entire annual health check done. They're going to be probably looking and touching all of the touchpoints in that center. So corporate business is something that we, in fact, have people engage in, go meet different corporate HRs.
There's a separate team that does it. And all of that falls into the 7% that you're looking at. It does not come into this B2C.
Sure. The second question I have is on the wellness test package. Is this package anything different than what generally a standalone pathology offers? Do we have any advantage being an integrated player here?
Absolutely. Like we would have mentioned earlier, now everybody's lifestyle is different. Somebody who probably has a very lazy lifestyle comes in for a checkup in an integrated player, not just with us. Any integrated player is where you will get to do a stress TMT by a cardiologist. If he's a smoker, chest X-ray. If they have gastric issues, ultrasound. All of these tests which I've mentioned are part of a simple master health checkup where you are meeting a cardiologist, you're meeting a radiologist, you're meeting a general physician. You're correlating both of these results with pathology, with radiology, and cardiology in one single package. That's also a reason why a lot of large corporates prefer to go ahead only with integrated players with a wide network because you would want to be closer to where they live.
Amey, if you see our website, right, you have multiple packages starting in Hyderabad, starting anything between INR 1,900 up till, say, INR 15,000-INR 16,000. So all these packages have some amount of radiology and cardiology in it. We don't have any single package with only a pathology test.
Got it. And you are seeing that share growing basically in overall revenue pie. So generally, when we see this with a standalone pathology player, their commentary is because this share is growing, GM might be affected, but overall, EBITDA margins are improving because of that. So do we see a similar trend for us as well?
So generally, with wellness, that's the case, Amey. So gross margins will get affected, but then the rest of it directly flows into the EBITDA, right? So it's the same center which is also servicing this customer. So that will be the general case. Whenever wellness increases, the gross margin will reduce, but it will help EBITDA.
Sure. And just third last question, we are sitting on like INR 200 crore cash. I understand we are spending, but still the operating cash is going to be significantly higher than our CapEx which we have planned up. So we will have a good enough cash even after two years or three years. So inorganic expansions still remain into a focus area, or you think that because organically it's too much right now, the amount of organic expansion we are doing?
Inorganic acquisition, there has always been on the top of the mind. Like we've told you, there are certain factors that probably even let us evaluate that asset, whether it's a B2C, whether it is able to match our vision and the geography of interest, a lot of things. We've always been open to looking at assets, discussing if it comes in a reasonable valuation, so if everything falls into place, we're more than happy to take up anything that comes in these areas where we're already there, not a new geography again.
Sure. Sure. Thank you so much. I will join back.
Thank you.
Our next question comes from the line of Neeraj Shah from Perpetuity. Please go ahead.
Hi, ma'am. Can you give me the guidance for revenue, EBITDA margins, CapEx, retail? Yeah. It's all.
Neeraj, like we just said, the guidance is about that high double digit of 15% plus for the next three financial years. Coming to the CapEx, since we are opening about close to 10 hub centers in this current financial year, so it will be somewhere around INR 140-150 crore on the CapEx. Coming to EBITDA, like again, we just opened six hubs, right, at the same time, and we are going to open five more in this current financial year. For some two to three quarters, you'll see some drag on EBITDA till these centers start becoming closer to either breaking even or closer to breakeven. We are expecting a drag of 1%-2%. That's the guidance for this current financial year.
Okay. Thank you.
Thank you. Ladies and gentlemen, that concludes our question and answer session. I would now like to hand the conference over to the management for closing comments.
I would like to thank everyone for attending this call. Should you need any further clarifications or any other information about the company, please feel free to reach out to us. Thank you.
Thank you. On behalf of JM Financial, that concludes this conference. Thank you for joining us. You may now disconnect your lines.