Apollo Hospitals Enterprise Limited (APOLLOHOSP) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to this conference call organized by Apollo Hospitals Enterprise Limited to discuss an update on Apollo 24/7. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Mayank Vaswani from CDR India. Thank you, and over to you, sir.

Thank you, Margaret. Good afternoon, everyone, and thank you for joining us on this call to discuss the update on Apollo 24/7 shared earlier. We have with us on the call today the senior management team, represented by Mrs. Shobana Kamineni, Executive Vice Chairperson; Mrs. Suneeta Reddy, Managing Director; Mrs. Sangita Reddy, Joint Managing Director; Mr. A. Krishnan, Group CFO; Mr. Antony Jacob, CEO of Apollo 24/7; and Mr. Sanjiv Gupta, CFO of Apollo 24/7. Before we begin, I would like to mention that some of the statements made in today's discussion may be forward-looking in nature and may involve risks and uncertainties. I would now like to turn the call over to Mrs. Shobana Kamineni for her opening remarks. Thank you, and over to you, ma'am.

Good afternoon, ladies and gentlemen. Thank you for this opportunity. We -- this is pursuant to yesterday, we -- post a Board meeting. We sent a notification to the stock exchange saying that Apollo Pharmacies, an associate company of AHEL, will list its pharmacy products on Amazon India. So before I give you the contours of what this relationship is about, I would like to take a minute or so 2 minutes to actually talk to you about 24/7. Apollo 24/7 is Apollo's foray into digital health. From its inception, we had the belief that, a, healthcare is required to transform and move to a much digital as we could, so -- but however, it could not be completely in the digital world. So Apollo Hospitals and the entire group of companies that form AHEL decided to create one of India's largest omni-channel platform, which meshed our digital capabilities and our physical capabilities. I'm happy to inform you all that in the last 2 years, we have; a, shown the sustainability and the reliability of building such a business model. We have leveraged the 4,500 Apollo stores that we have -- pharmacies that we have. We've leveraged not just with 7,500 specialist doctors in Apollo Hospitals, but we reached out to another 15,000 doctors, who work with us in our clinics and its partners, and we're bringing them into the network. And we also have the capability of more than 640 phlebotomists from the Apollo clinics and almost a pan-India presence in diagnostics. Using these capabilities, we have been able to grow -- in the last 2 years, we've been able to grow this platform 500%. And I think this is the fastest growth towards -- we have 13 million registered users. This is the fastest growth almost among any digital health channel in the world as we continue to measure ourselves not just in performance parameters, but in actual customer experience. And I'm very happy to tell you that your company that Apollo Hospitals is ahead on all fronts, in terms of technology, in terms of the ability to deliver medicines in 2 hours, which is unheard of anywhere in the world. We're able to do this in almost in 150 cities, especially and even during this COVID time. We've consistently been able to perform. And from that evolve, we've been able to grow. We've done over 850 teleconsults. And I think doctors within the group, who are using this, definitely believe it is the easiest channel, but it allows the patients to continuously stay within the Apollo system. So we've been able to -- please understand that we're also -- as a customer retention, this has been the most exciting tool that Apollo has ever put across I think, in the last decade, and we will continue to strengthen that model. Having said that, I would like to concentrate for 1 minute before we get into the Amazon relationship. I think it's very important for group of investors to understand where we are investing beyond the physical capabilities and the digital. It's the technological -- it's the technological excellence. And leading this discussion, I'd like to invite our joint MD, Sangita Reddy, to not just talk about our technology excellence, but also a very unique partnership that we have an MoU with this. Sangita, may I hand over to you?

Yes. Hello, good afternoon and good evening for people from different parts of the world. It's really an exciting pleasure to share with you some of the things, which we're doing on Apollo 24/7, which is truly -- this is more than a Apollo going digital. And it's also -- it is our going closer to the customer and building an omni-channel, multifaceted, multi-services customer engagement model. So we're doing this back on this comprehensive vision of being best-in-class, high quality and using every latest digital technology. So to enable this, we have, of course, the e-commerce platform. We have a very powerful repository of the personal health record, but we're also using some of the latest tools in NLC and multiple and AI to bring the appropriate insights for patients, customers and doctors. And I'm very happy to share with you that we have the technology support understanding with Google, because they are coming forward with engineers and the ability to use some of their latest tools in UI UX, in customer journeys and omni-channel, as well as on their existing platforms, whether it is on Google Maps or on YouTube. So these will enable us to go further in our vision of just being closer to the customer, sharing appropriate health information, and enabling an omni-channel journey.

Thank you, Sangita. And now I would like to move on to describe and maybe answer some of the questions you might have on this relationship with Amazon. First of all, I think it's important for us to address that is this is not just a seller arrangement, because the seller arrangement would be -- would just take less than 72 hours to do. It was clearly an understanding and a relationship that we said that took almost 6 months for us to have discussions and understanding of what would be best for probably the most awesome e-commerce channel in the world and definitely the best pharmacy network in the country. So what would be the right mix for both of these? And in that partnership, I'm sorry, please disregard the word partnership. I think in this relationship, what we would bring first is for us, we could have done this with the 2-hour hyper local delivery. But for us -- and today, our availability is 97%. From Amazon, their capability is at 99%. So I think the learning of the expertise, the ability to understand how to serve more PIN codes and more people around the country and use this. To give you practical examples. Today, on a home delivery model, we do about 21,000 on our online channel 24/7. We do another 24,000, 25,000 from the -- from our off-line via home delivery. It's about 45,000. That puts us at about #2 in the country. Adding Amazon, we are sure that within the next -- and this is forward-looking, but we do believe that we have the capability to be the largest online pharmacy delivery channel in the country. In terms of omni-channel, we do -- we service about 200 million prescriptions a year. And we believe that we have the capability to easily go 50% more next year or in the next 2 years. But to do this, we also have to add the capabilities, the engine to generate. And I think this partnership is a first to be able to help us leverage and to be able to use the network that we've created over the years and optimize it much, much better. So for us, as a commercial relationship, it made perfect sense for us to be able to -- for us to be able to enter into this relationship. We also hope that in doing so and as we go forward and build a relationship, the opportunity is truly that while Amazon is uniquely focused on a complete e-commerce relationship, and medicine is just a small part, Apollo Pharmacy, Apollo 24/7 is only focused on health. And we believe that this will serve Amazon Prime customers very well to have a deeper engagement and in doing so, the first step is to be able to list and make medicines available. So this is a relationship that took 6 months to craft. And I think that it is -- that we believe it will be the best-in-class to service many more Indians than we are currently doing. And I'm happy to -- I'm happy to take questions at this point, and our team is available. We have our CEO, CFO of 24/7 and of course, the Apollo team is here.

[Operator Instructions] The first question is from the line of Anubhav Aggarwal from Credit Suisse.

Just trying to understand this relationship better. So let's say, between off-line and online, we are very close to about $1 billion revenues right now from the pharmacy business. This relationship with Amazon in next 3, 4 years, what kind of extra revenue can it add? I'm just like -- can it add another $0.5 billion, $1 billion revenue as well?

We have -- in our forward-looking statements, that's the intent, because we do believe that while we will continue to grow our business to -- our online and offline together, we grow compounded 30% plus. We believe that the upside from this will continue our growth trajectory even higher.

But would you want to get some indication to us like what kind of incremental revenues is possible with some time frame here?

We have a stated intent of doing at least $1 billion of business together in the next 3 years.

And that will be largely on top of the guidance that you have given of $2.3 billion for your online offering. So this $1 billion will be on top of that?

I think some of it will be cannibalized. So I don't want to -- at that point, give you what it would look like. But the first statement I would say is that it de-risks our existing -- the forward-looking statements that we gave you on 24/7 about $2.3 billion. It de-risks that. But over and above, we certainly believe that there's going to be a serious upside.

Okay. That's helpful.

This is just beginning, and we hope to start next month. So I think you need to give us a little time on that, but it's definitely going to provide an upside.

And just to clarity on the margins. I suppose we make -- I'm just putting a number at, let's say, 5% margin on the end-to-end delivery, everything controlled by us, on 24/7. Same medicine when it's, let's say, being sold, being delivered by Amazon, what kind of margins we're talking about? 200 basis points lower, 300 basis points or do you want to give some rough idea here versus 24/7 versus Amazon?

So I think that this is very dynamic, both from Amazon and from us, and it's evolving, it's also case sensitive. So anything that I give you now is too preliminary, because even as we see it now, discounts that are out there might not be the discounts that you get 3 months from now or during the season or it's such a dynamic stage at this point. All I can tell you is that we have the wherewithal to be able to compete very effectively in this market. And I think that's the important thing to focus on.

Okay. Just last question, then I'll join the queue back. Do you get access to the customer data, let's say, customer goes and buys Apollo medicine on Amazon platform? First of all, do we see that is it -- will be visible that he is buying that from a store of Apollo. Is he buying Apollo medicine, will he be -- customers realize that?

So as of now, the e-commerce laws for -- in pharmacy, make it mandatory that it has to -- that the pharmacy has to be listed. So every customer has to have the billing of where it's coming from, because -- and I think that's important for us also, because we need to keep those records for 10 years as per law, 7 years as per law.

Okay. So customer will know that he is buying Apollo medicine on Amazon platform. But will you get the complete customer data that there is his mobile number, his location, et cetera, because Amazon is doing the delivery, that's the reason I'm asking that.

Legally, we have to.

Okay. And how the fulfillment will be done? Like, if I'm located near Apollo store, will Amazon delivery boy will pick up the medicine from the Apollo store and deliver to me, but if I'm not located near the...

That is their cost. That is their cost.

Yes. Just trying to understand the fulfillment model. So will they deliver from the central warehouse, would you have certain of your pharmacists, we are in central with warehouses and managing that? Or will Amazon [indiscernible] completely?

So you can't have -- the reason that Amazon is very excited about this partnership, is that we have the ability to do hyper local. We have large warehousing, all this. So you use a multitude based on what the SKU is, So it's not a -- it's not 1 answer fits all.

The next question is from the line of Prakash Agarwal from Axis Capital.

Again, some math here. So you mentioned already done 500,000. So what is the current base?

So the current run rate that we have -- let us come back to you, it'll be is -- during the earnings call, I think at that point, it will be audited and shown.

Okay. No, I was just trying to understand ballpark based where we are operating today, and that would be only health core, right? So -- and in the past, you have said that we are investing more than what we are making. Would that statement still hold good?

I'm sorry, I didn't get that question.

No, no. In the past, you said that on the health core platform that we are making, given the software cost and expansion costs, we are marginally losing money is what I remember. Would that be correct?

I think that in a growth phase, most e-commerce would go through that kind of...

Yes. Yes. So what I'm trying to...

So I would only say that we, of course, by being an omni are highly mitigated. The kind of losses you see that will go on forever are not what we are -- is not what's happening on our platform.

Understood. And with this deal happening, how should we think about the margins? Like in the past, for the matured, we have talked about 10-plus, for the new and the blended is about 6%, 7%. How do we think this margins -- how much we share with Amazon for this deal?

So I think that it is -- you should look at it as our BAU, and this is additional. So whatever we're getting in terms of how we look at it additionally, it's the growth factor that you have to look at it being in this space. And like I said earlier, highly dynamic and case sensitive. And for me to give you [indiscernible] at this one would be -- would actually be wrong. And so I think that we -- what you have to understand is that our stores at a store level will continue to have -- define the business segment and this is over and above that. So we're looking at it as a business opportunity.

Okay. Last question here. So growth part is totally clear as it adds on to the additional distribution channel where Amazon has large PIN codes, et cetera, where they service to. What I was trying to understand of the retail margin and the distribution margin, do we have to share some bit with Amazon or...

As always, it's a channel relationship. So definitely, we share the loss, and we share the profits.

Okay. And you are saying what you were ending probably is that with the growth that is coming and the operating revenue that would add, it would be at least company level strategy -- is that -- how should we think?

Definitely in the future, because we are not -- I think that Apollo is too cautious to do long-term business at a loss. That will be -- that will not be in the interest of the shareholders. So we'll grow -- we'll grow this business, large, agile, dynamic, but we will do this on the terms that are value-accretive for all Apollo shareholders.

The next question is from the line of Chirag Dagli from DSP Mutual Funds.

I have 3 questions. That it's conceptually, when you look at this deal, should one think about it that Amazon essentially gets paid for customer acquisition and for delivery, while Apollo's value addition continues to remain to manage the back end and the front end?

If I was Amazon, I would look at it like that. If I was Apollo, I would look at it like I'm getting a lot more business. And so I'll continue to gain from that, and also have the ability to sell a lot of by private label on their channels. And I think that's another growth channel and also the opportunity to create other healthcare services.

Understood. Can you share, do we pay anything for customer acquisition, either to Google, Amazon at the moment on our business that we currently do have? What is the kind of customer acquisition fee that we must be paying, ballpark range will help ma'am?

Yes. The current CAC, Sanjiv, I think that the current run rate is CAC?

Yes. So current cost of acquisition for us is about INR 150 per user. And yes, this is the direct answer.

And this is blended, because many of our channels, there's hardly any cost of acquisition. And as we go along, this figure has really been coming down.

So by virtue of having this deal, so let's say, assuming hypothetically, you get access to all these customers, would this number of INR 100 or INR 150, whatever per user, this be materially lower for the Amazon customers?

No, because I think that the Amazon customers are their customers. We will find areas for us to have a relationship. But it is not in our -- I mean, it doesn't behoove us as a partner to use their data, which is -- we keep it only for regular billing. So in future, we can use this as a joint relationship to leverage a deeper engagement within the Apollo ecosystem, but that is completely with Amazon and Apollo together.

So we -- so the way we should think about this is that we'll continue to pay this INR 150 for every incremental customer that comes through the Amazon?

We don't pay them. Sorry, we just -- I think that the question that you asked is what is our current CAC in -- for us.

No, no, I understand, madam. No, no, I understand, madam. But there will be a blended way of -- I mean they would be -- the deal will be structured in such a way that they get paid this kind of a money, right?

No, no, no. The deal is just -- if a customer order comes, we fulfill the order with that. Look at it as more of a fulfillment engine with this. So it's slightly different. They don't come in, like -- they don't come in as our customer. Unless in future, we have a joint program where they join our loyalty program for other things that get included as a old health channel. So I don't think the question of CAC, and all comes into this relationship.

Understood. Okay. Okay. Fair point. And does this...

This is an opportunity for us to do a $1 billion business in pharmacy.

I understand. I understand madam. Okay. That is helpful. But does this also mean that we don't need now any capital because there have been media discussions around there being a strategic -- are you looking for a strategic partner or et cetera. So is the capital raise out of question now?

No, 100% we're on the capital raise. Because our $2.3 billion, which we are looking for -- from the healthcare requires that kind of investment. So we'll continue to invest in growing this channel from -- in all, not just pharmacy, but also in diagnostic capability and insurance capability and in credit consults and also the condition management, which is -- so we think that, that continuum of care is the way that we've continued to function. So 24/7 is -- as a channel will -- is on the fund raise and we use that money to deepen its engagement with customers across the country.

Understood. That is helpful. And just the last question. Clearly, back-end distribution is a very, very critical component of this scale up that you are hoping to achieve. Our distribution remains in the promoter's book. Is there any change in thought of bringing this into the listed entity or into the structure, which can sort of have no uncertainty in the future around this aspect?

It's an interesting thought. At this point, we will be aligned with whatever is best for the -- whatever is best for the Health Co moving forward in future.

The next question is from the line of Sameer Baisiwala from Morgan Stanley.

Just first question is, what's going to the rollout plan for Amazon? I mean, is it going to be pan-India? Would it be piloted for us, what's the time frame? And is the deal exclusive for both sides?

Amazon is a marketplace. But I think that the ability to have the kind of availability, presence and the capability, there are not many choices for people to be on that -- on a marketplace, as sensitive as pharmacy. Because this is -- it's to do with a lot of regulation and with a lot of the way that you look at it. So I think that Amazon also will be cautious. But it is a marketplace, so they will, by and large, they have the ability, just as we do. We think that the Amazon channel is a great channel for us to be able to de-risk our ambitions and to grow. And if there are such opportunities that present in future that we might be open to those also. And Amazon when we start, we're looking for somewhere mid Feb and definitely, it will be in -- we'll start with the pilot, and we will keep opening up geographies just as Apollo and Amazon normally do in their other business cases.

Okay. So if I've understood correctly, it's not exclusive on both sides. They can get more, and you also have an option. That's what it is?

Absolutely, but the choices as so limited.

Of course. Fair enough. Very clear. Second is, how do you see the evolution of online industry -- online pharmacy industry in India? I mean, the market is worth, give or take, $20 billion, $25 billion, the retail drug market. And I think right now, what has probably gone online is maybe 4% or thereabouts. So if you take a 5-year view, where do you think the market is headed?

Very frankly, one day, it will all converge, because -- and online is just a capability. At the end of the day, it's a customer getting a medicine. And you can't do it unless you're omni. So it's only the capability. So it's just like Amazon setting up stores or Walmart becoming online. It's the same in this space. So the very fact that we're starting at probably the highest and I keep telling people. For us, we're already doing 180 million -- 200 million prescriptions a year. All I have to do is double. And that itself will be -- and that would be around a 20% market share. Whereas everyone else, which is starting with such -- from such a low base of this thing, just imagine how long their journey is. So they will have to go omni. They'll have to go through the pain of trying to open stores or to partner and a franchisee when it becomes even more slightly painful. Because then you don't know what quality that you're getting because at the end of the day, you have to stand behind that customer. And I would only -- I think that Apollo is so fortunate that we had that runway and sorry to pontificate about it, but we've been in there for the last 40 years almost. So we have that runway. We have -- we actually have that ability to do the right thing for the customer. And so while everyone else will do all this stuff, ultimately, they'll come down to our model. So we just have to become the super best at it.

Okay. Great. And one final from my side before I get back in the queue. Is -- what I understand is Amazon has probably not taken this route in other countries and other markets. I think it acquired PillPack in U.S. mail order business and then that sort of gets pharmacy. So is this very differentiated a different route that Amazon is taking in India versus other markets?

I think in many cases, we have to respect what India is. And it is a different market. So -- and Amazon has realized that they have to do it by Indian rules. And it is the Indian promoters, it's the Indian business model, which they have to work towards. And we saw a lot of flexibility. We saw by -- they were very real sticklers for the rules just as we are. And I think that was the fundamental of a good business model that they understood this is a way to do business in India, and they respect whatever Apollo brings to the table. So at this point of time, I think that our minds met there, because one thing that we certainly respect them for is the excellence in what they do.

Okay. With your permission one last, if I may. See, right now what you do is from the key meds is the back end. It been supplies to your SAP business, the offline model, and then it goes to the walk-ins for the customers. So in this case, I'm not so sure how does the back-end supply chain works? Will it be same key meds to -- or to your retail pharmacy and pharmacies where Amazon pickup boys will pick up and then deliver? Or is this going to be any different?

Same route. Same route and all the advantages that come and thankfully during COVID, having such a secure back-end really helped Apollo pharmacy. I think that our availability never came down below the 95%, 96%, unlike other pharmacies around the country. But -- and having such an awesome back end with those kind of partners. It's again a model, which everyone is trying to replicate.

The next question is from the line of Damayanti Kerai from HSBC Securities and Capital Markets.

Ma'am, I want to understand one point clearly about your relationship with Amazon. So you mentioned, obviously, Amazon gives you a huge platform in the e-commerce space. So -- like, what is the investment from your side, like you will be just paying a fee for each delivery done through Amazon or you need to deploy some capital or investment from your side?

I think in the beginning also, I was clear that it optimizes our existing investment. I've made huge investments. Anyone trying to replicate 4,500 stores and the kind of back end that we have, would have to spend billions of dollars. We have it. We're just optimizing it, and we think that Amazon's business is [indiscernible] to investment.

Right now, I'd say you are optimizing your current investment and it will be just some fee sharing what is it with Amazon. We are not expecting any capital investment for this relationship.

No capital related [indiscernible] -- I mean no capital investment, but we'll continue to open. We open 400 stores a year. We'll continue to do that.

Okay. So that's on your own business part, which you mentioned will go as usual, right?

Yes, absolutely.

Okay. And ma'am, with this relationship, should we expect that 24/7 should achieve breakeven much faster than what we earlier indicated. I guess you earlier mentioned within 2 years or so, we should be achieving the breakeven? Can it come much faster?

I didn't say 2 years, I think I said 3 years. So you're saying that I should be breaking even this year, that's going to be kind of tough. So let's just give it some time and let's see. And when we say that we are going to breakeven, it's something that no other e-commerce platform has ever said in their lives. So the fact that we are actually talking such sweet words is so important. So just let us do it at our timeline. So it's growth and profitability, which will continue to be our focus.

The next question is from the line of Shyam Srinivasan from Goldman Sachs.

Just going back to some press articles of November 2020, when there is a -- there was a talk of Amazon Pharmacy themselves, and it talks also about them giving up to 80% off on generic prices, 40% off on the brand. So does this relationship now subsumes that? Or is that -- the work about their own plans of a Amazon Pharmacy, is that now not there? If you can clarify that?

We can't comment on it.

Sorry, I think you should ask them.

Okay. Okay. So let me rephrase the question then. In terms of Amazon, I think has been under the scanner from regulators on predatory pricing. The way they approach pricing has been probably lower than what maybe regulators would like. Now in a dichotomous world where you're doing Apollo 24/7 through your platform, Amazon does whatever it wants in terms of pricing. Is there a challenge where we're looking at cannibalization from your platform to theirs, because they could be cheaper?

I think that in the short term, there will be cannibalization as there is -- I mean there are so many platforms that are offering crazy pricing. Now the customer can get anything anywhere, because they're all using your money to fund their discounts. But sometimes when all that goes away, the last man standing will be the one, who gives the best service and who has the best network. So I think those are the things that while we'll continue to play it intelligently, and I'm not saying that we won't give great discounts, but we are not going to give a blanket. And what Amazon does is for Amazon to do, just like other platforms do their own. But at this time, I think the pricing is to incentive business.

Sure. Okay. That's helpful. The second question is around how does this pan forward in terms of, I think, the relative question on competition. So think others can also lift there. And I don't think there is any strategic stake that Amazon is taking, right? So this is -- you started to think it's not a buyer-seller relationship, but how is this different than to any other listing that we do?

So first of all, we chose not to need their money. And I think that's important that we just felt that our relationship with best served if we went down and said that we have this capability. And so if Amazon can find someone at the level of efficiency that we are, I mean, of course, they should. But I think in most of the PIN codes, if you see the PIN codes that we are resident, we'll definitely be the pharmacy of choice. And even in India today, we don't want to be the only player. Why? There'll be many pharmacies. There's 600,000 pharmacies and all of them are there with this, anyone that gets a good -- that does a good job, will continue to survive. So we're not being monopolistic at all about this. What we do we need is that our market share will definitely be the highest, because we deliver that trust and efficiency.

The next question is from the line of Kunal Randeria from Edelweiss.

Ma'am, if you can just expand a bit more around discount, please. I mean the e-pharmacies, which are offering, let's say, 18% to 20% kind of discount. So if Amazon, let's say, doesn't get the kind of number of orders they just expect. Do they sort of pressurize you to give more discounts on their website? And how do you solve this issue, ma'am?

So first of all, with Amazon it's a business relationships, they don't pressurize us to give more discount. Whatever that they are getting in terms of the business arrangements will there and that will happen. It depends on volume that it happens dynamically. And they'll continue to do whatever. Maybe they are from where they'll have to fund their losses like others are doing. And in some level, we might have to increase our discount for certain use cases. But I don't think that this is a blanket world that we can just generalize. Definitely, the whole industry is -- e-commerce industry is under pressure of pricing. But they are also getting really safe. So I do believe that, that cycle in the next year or 2, when we meet again, that won't be the crux of our conversation, the discounts. It will start getting a lot more rationalized. So we want -- we really want to take a long-term view on everything, whether it's the relationship, whether it's the way that we -- that we entered into investing into online, the way that we're going to do our omni-channel and the way that we're building 24/7 that's long-term index.

Sure. Fair enough. And then just as a follow-up, I mean, how long do you think 18% to 20% kind of discount can sustain?

I think it's the case mix. It's the way that it is the way that the industry evolves. And there might be certain areas where you can give those. There will be areas where you definitely can't. And so it's very case sensitive. So I can't make broad statements like this.

Sure. And second question is around -- so does this deal pave the way for you to offer other services also on Amazon, maybe in future, let's say, something like diagnostics where once you have the back-end capability to handle a lot more orders, do you sort of do this in future also?

That is forward-looking, but I can't agree or deny. But definitely, the -- what we're building is a relationship to having concession. We have the finest loyalty program in India with Apollo CIRCLE that really encompasses everything for a patient. So anyone, whether it's an insurer, whether it's a platform like Amazon, it behooves them to get into -- to give this to their customers. It just is such a better customer experience.

Sure, ma'am. Sure. Understood. And just one more around any sort of delivery timeline commitments that Amazon has shared or -- because, I mean, you also [indiscernible] to have right, and which is probably the best in the industry. So I'm just wondering whether Amazon is quite difficult to beat. So I mean, how would Amazon be doing it? Maybe it within the day to find customers? How are they going to fulfill this?

Amazon is the king of delivery. If we -- if we've set the bar at 2 hours, they might also try to do it within 2 hours. But 1 thing they will definitely beat us at and which we learn from them, is they have the finest courier of inter-city. Intracity we're fantastic, but we still have a learning curve on inter-city. and Amazon has that courier network across the country. So there will be some places where we are much better than them places where they're better than us, and we'll continue to have that learning. So for us, I'm very excited about the opportunity to offer customers this enhanced experience.

The next question is from the line of Abdulkader Puranwala from Elara Capital.

Just -- I wanted to know under the 24/7 platform, what would be the number of PIN codes, which you have been serving this over 200 million prescriptions and with Amazon coming in, how would this range get expanded?

Right now, we are serving over 18,000 PIN codes.

Okay. And...

Amazon, of course, I think they have a slightly different capability. They're definitely better than in West than we are -- in the Mumbai region.

Yes, sure. And just last question. On -- as you mentioned in the opening remarks that the discussion took well over 6 months. So just wanted to know that what were the challenges for the deal, and it looks like a more like biosimilar agreement on the platform. So why did the discussion take so long, could you just highlight what were the challenges...

I couldn't hear you at all. It was really distorted.

Is it better now?

Yes, slightly.

Okay. Okay. So, my question was basically on the challenges for this deal. As you mentioned in your opening remarks that the discussion which took well over 6 months. So just wanted to know, I mean, on the face of it, it more looks like a buyer-seller agreement. But what were the challenges faced from both the sides to come into a formal agreement for this deal?

Did I use the word challenge? I used the word understanding. Because it's 2 big organizations. So we were looking at it more as organizations meeting, it doesn't really happen. My god, how long has India taken to do one WTO agreement? So treat it as that almost 2 nations talking to each other. It takes time for a relationship to happen. And I think that was the thing. So no challenges as such. It was just the whole understanding that -- and the comfort level and how we'll go. Because like I said, we want to operationalize this in the next 30 days.

Any other question Mr. Puranwala?

Not there.

The next question is from the line of [indiscernible] Shah from Akash Ganga Investments.

Good afternoon, ma'am. I don't have any question, but I have a suggestion actually for Apollo Pharmacy. So can I give that? Or should I come on the Concall only for Q3 offline?

I would love to hear this offline. And I will make sure that you get my e-mail. Please, any suggestion is super welcome.

Actually, I have a different sort of business model, which we can do it in a better way. So that the Apollo can get a better traction, and can get a -- can get a better whole ecosystem over this. So I mean love to mail you the whole prospect of what I'm thinking of.

Don't share it with prospective -- don't share it on this platform, then come and tell us. KK is there, you have his e-mail ID. We'd be more than forthcoming to hear your suggestion. Thank you so much.

Actually, I would love to meet you, but I think due to your trying to understand, I couldn't believe that would be any possible to offline it, I will sure come to you.

The next question is from the line of Amit Taneja from ICICI Prudential.

So ma'am I wanted to ask on the tech support that you talked about on Google. What are we going to do with the insights that we get and what kind of insights are we trying to get out of customers? And what exactly would we be doing with it? And is there any issue of data security that thing?

Sangita, are you still on the call?

I'm sorry, ma'am. Her line just got disconnected. I'm calling.

No, no, no. So let me answer that for you. I think that would that like to -- this is another great advantage we have. We have the greatest longitudinal data for customers, whether it's from pharmacy or being in the business for the last 40 years, hospitals all this. And that longitudinal data once it's -- once it's actually codified into our data link where actually -- now we're able to understand disease patterns. We're able to do prediction analysis. A simple use case for you is that when you -- that we're able to actually standardize the doctor experience. If we ask like 10 questions, then the probability of what you would have is almost 80%, if we can get it to that. So that clinical intelligence engine is something that very few people around the world have. And this is something that would be the insight or a patentable technology. So everybody says what does TikTok to do, which is so much more brilliant than others. So every day at Apollo 24/7, we think what is our technological advantage. What is the move that we continue to create and these are the things that we are investing in and having people like the best partners with us? The finest of Google's engineers, it's just 1 part to it, apart from the great engineering support we have. With just pharmacy, we would not invest that. We have -- we have 600 people today at 24/7. So I think the ability for us to be able to create this advanced health -- digital health network is really something that for the future will definitely be -- will give us that a huge advantage over anyone else.

Understood. Second question would be what's in it for Google, right? The data part of it? Or is there -- like what is the relation tiebreak?

Again, Google is something that we'll continue to work the relationship. So they said they start with us like this. And then after that, they look at it in different ways. So while they continue to work with many players across the world. They are a little choosy like in the U.S., they have Mayo. They've worked with us over the years. So they like -- they tend to pick up big healthcare networks that -- so that collaborative experience. So whether it's in Google Defines or whether it's in Google Health or any one of these, we are able to tap into that engineering expertise. So I think that together, we -- it's the beginning, and we think it's a small beginning, but it does give us -- it opens the door to greater possibilities. And we'll continue to forge these relationships, again, it's not an exclusive. We will have that capability with many others.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.

Thank you all for being on this call. It's a bit unusual not to discuss earnings and numbers, but to actually have a call that discusses a lot of new business possibility that an engaged room has embarked on. And I welcome all the questions that you've given. I think that we've taken it very seriously in consideration. And I hope that going away that you will take away from this is that Apollo is investing in building a customer experience, which will be unparallel. And in doing so, we will be able to service many more Indians than what we have -- than what we have done in the last 40 years. So we're using this to broaden our reach. We're using this to go deeper, faster, larger. And I think that this will be the growth engine that will continue to propel our group for the next decade or so. And so we're very excited about this -- about what it brings, and we will always keep -- while we look forward and grow exponentially, we'll do so with a long-term view that it has to be sustainable also. So thank you so much for the insights, the opportunity to be able to interact with you. And we will always be ready to share this kind of -- I look forward to future to such dialogues. Thank you.

Thank you. On behalf of Apollo Hospitals Enterprise Limited, that concludes the conference. Thank you for joining us, and you may now disconnect your lines.