Metropolis Healthcare Limited (METROPOLIS) Earnings Call Transcript & Summary

Good afternoon, everyone. Request everyone to be seated, please. Thank you all for joining us today. It is a pleasure to welcome you all to the Investor and Analyst Meet of Metropolis Healthcare Limited. We are delighted to have you, and we appreciate you taking out the time. From the management team, we are today joined by Ms. Ameera Shah, Promoter and Executive Chairperson; Mr. Surendran Chemmenkotil, Managing Director; Mr. Sameer Patel, Chief Financial Officer; Mr. Mohan Menon, Chief Marketing Officer; Mr. Pinakin Shah, Chief Information Officer; Dr. Nilanju Sarma, Head R&D and Academics; and other members of the leadership team. [Operator Instructions] Without further ado, I would now like to invite Ameera ma'am to take the proceedings forward. Thank you. Over to you, ma'am.

Good evening, everyone, and thank you so much for taking out the time on a slightly rainy day to be here with us. Metropolis is a outcome -- as a company is an outcome of 3 things: not only passion for health care and taking care of people, but then the idea of business and most importantly, values. And what we would like to share with you today is a little bit of the journey, where we are today and most importantly, where we are going. So, if I just come to our present and -- just before I come to the present, if I talk a little bit about the history of how we got to where we are today. While we've been building Metropolis, it started off with Dr. Sushil Shah's lab as a single lab. And in the last, I would say, about 25 years, we've really grown from a single lab to the multicenter chain that we are today, not only across towns in India, but all across multiple other countries internationally as well. And while a lot of you from the financial markets will focus a lot, obviously, on the financial outcomes, this organization has been built with a lot of love. It's been built with a lot of care. And most important for us has always been the patient in the center of it. We've always -- our philosophy has always been that you treat every sample like it's your own mother's sample. And that has been the logic with which we've always built the business to say that [Foreign Language] is not good enough. It has to be perfection. Just dealing with it like a factory or a manufacturing facility is not good enough because you're dealing with real people and real lives. And so, therefore, it has to be done with a sense of passion and compassion. And at the end of the day, while all of this is great, it has to result into a successful profitable business that makes money. We keep reinvesting with innovation and good things for the future. So, governance and values has been important for us as well. But coming to where we are today, so while we say 45 years, obviously, really the growth only started happening about 20, 25 years ago. Until then, we were obviously a single lab. But currently, we have 209 laboratories and 5,000-plus centers. It's easy to build labs. It's not hard to build labs. That's not the moat in the business. And as we go along, I'll explain to you what the moat for Metropolis is. We operate in 750 towns in India alone, plus 5 international markets where we actually have our own labs and our own people. Then there are many other countries who outsource specialized testing to us where we use our assets in India. And including these 5 international countries, they send about 30%, 40% of the samples to India, and we sweat our assets in India. So, these are not operating separately. These teams are actually quite integrated, and they make a lot of sense belonging together. We ended last year with a revenue of INR 1,646 crore, which is coming from B2C and B2B. And this is if you see the distribution by region for the people who can't see at the back, West contributes about 50%, South 27%, North 18% and East 5%. As we saw last year, our North India contribution was less than 10%, about 7%, 8%, and we've managed to move this up by 10% in a year's time because we did some interesting acquisitions last year, and we're using that as a base to grow North India very quickly. By the way, in Q1, I think North India was the fastest-growing region for Metropolis. So of this entire business, about 57% of our revenue comes from B2C. And B2C, the way we define it is when we engage with the patient. It is not us dealing with the sample, but it is us dealing with the patient. And B2B is where we deal with the sample. So, we may not meet the patient, but somebody else is sending their sample to us. A lot of this revenue of B2C actually comes through our own operated centers. Some percentage of it comes to our franchise centers as well, but majority of the B2C revenue comes from our own operated centers. And this allows us to actually have significant influence over the customer experience going back to what I told you around dealing with compassion and care and training and not dealing with them just like they're a number, but actually a human life. And therefore, you will find the NPS scores of Metropolis, probably the highest in the industry because it's something that we spend a lot of time and attention on. B2B volumes keeps the labs full, right? You get volumes across and we're doing almost about 4,500 varieties of tests. So, to keep the labs full for every variety of tests means you need to get the volumes through different channels and B2B allows us to do that is to have a minimum volume to keep processing the test. But where you build your brand and where you build your even bigger profitability is obviously on the B2C side. We currently have 30,000 prescribing specialists. Now I'm not talking about -- it's not our entire database of doctors who prescribe to us. That database will be much higher. But these prescribing specialists are people who are sort of your gastroenterologists, neurologists, gynecologists, oncologists, sort of very high-end doctors. I'm not talking about sort of GPs and other doctors in this list at all. So, you -- if your doctors across India are customers of Metropolis and every leading hospital chain is a customer of Metropolis. Now today, a lot of the thought usually is a hospital has the best of everything. And therefore, hospitals have the ability to be able to compete on everything in pathology. The reality, however, is opposite that hospitals are generally generalists, right? They are focused on treatment. And while they do have cath labs inside their hospitals, these are not necessarily equipped with the entire range of the tests that we have or the specialists, the kind of doctors or pathologists that we hire or the kind of expertise and machines required. So, usually, all hospital chains land up outsourcing to companies like us for all the top 20% to 30% of the specialized tests. So, one, if I just go back for a minute, when I was telling you about the moat and what is the moat really here, is it easy to start one lab? Yes. Is it possible to pick up volumes in a lab and fill it? Yes. So, what is the difficulty in this business? If you actually see, and we'll come to the industry a little bit, the difficulty in this business is, one, to scale beyond a hyper local market. So, you can build success in one market, but to really then translate that into another is very difficult. It's very difficult to earn trust of doctor by doctor. You can do it in 1 test, but to do it across 4,500 tests, very difficult. To be able to deliver quality result for millions of patients every year is very difficult. Why? Because if you look at -- if I look at pharma as an example for a minute, pharma is producing and manufacturing somewhere else. You're spending months and months on producing a good standard product, going through all kinds of quality narratives. But then when it's put in the pharmacy, it's all ready, and there's no change. In pathology, from the time you go to give your blood to the time you get your report, it's maybe about a 6-hour journey. We are real-time producing that high-quality manufactured product within that period, including transporting it from the collection center to the lab. And there are about 149 steps that we have counted that have to go correctly for just something as simple as a blood sugar. For most of us who think our blood sugar AI, you just put the sample and you get the report. That's not how it works. Because in pathology, most labs can give you a 90% accurate report. But the 90% accurate report doesn't give you the ability to make decisions. Because when you go to the doctor, the doctor will say, I don't know if this is abnormal or normal, right? Is it 190? Or is it 210 when the cutoff is 200. And if you're not close to the cutoff, the precision, you will not know whether you're abnormal and therefore, you should get medicine and treatment or you're normal and you don't need. So, 90% quality is not good enough in pathology, you need 99%. And that's the difficulty to do 99% across 209 labs, across 4,500 varieties of tests across 750 cities when for every test, there are so many things that can go wrong, including the number of times you shake the sample, including the cold chain in which you transport the sample, including the people who do the test, the people who are actually sitting there and watching the transcription of IT and data and manual work, there are so many things that can go wrong. So, that really is the moat in this business. Do you have the culture and the team and the promoters and the management who understands all of these things and therefore, is able to build. And after doing all of that, are you able to build profitably? We have seen in the last many years, a bunch of companies coming in from the health care space, some pharma, some hospitals, some other things. But most of these companies are still not in the space where they make money. The question is why? Because even if you are able to understand how to put the machines and hire the people, if you don't understand the intricacies of the unit economics of the business, which channel contributes how much, which test contributes, what kind of diversity of product mix do you need? All of those things lead to a profitable business. So, to scale this business in a quality fashion and profitably is the hard part. So coming to just the industry and the market generally. We already know this is an unorganized market, nothing new I'm telling you. But currently, where we are at about $11 billion, we're expecting over the next 8 years, this should move to approximately a $28.5 billion at about 11% CAGR. So this is not a business in which we need to be doing something crazy, Maverick and innovative every year. This is a business in which we need to deliver consistently year-on-year, outpacing the industry growth, and you automatically will land up making good returns in the future because the structural flow for the industry is so strong where less than 6% of Indians have ever been diagnosed. So you have such a large demand. And as affordability increases and as access increases, we will only see these numbers increasing. So if Metropolis can continue to compound over these next 8 years at faster than industry in the unit economics direction that we are talking, automatically, you will end up creating a significant shareholder value. Now 60% of all the mortality does not come from noncommunicable diseases. What are noncommunicable diseases? Communicable diseases are basically your diabetes, your hypertension, et cetera, right? But majority of your -- sorry, your noncommunicable diseases are exactly like your cholesterol, your diabetes, your heart tissue, et cetera. And a large number of the mortality is actually now coming from there. It's not coming from necessarily only the acute infections. So we are looking to play across these product categories where you're able to take care of patients when they're an acute problem like a fever, like an infectious disease at that moment, like we know there's a lot of typhoid going on. There are a lot of viral fevers going on, H1 going on in Bombay as we speak. But also the second part of it, which is about the heart disease, the hypertension. And then there's the third part, which is the fastest-growing area, which is oncology, which are cancers and brain diseases, neurological diseases, which are the fastest-growing therapeutic areas for the next 10 years. So Metropolis is across all of these categories. And we are seeing the movement from unorganized to organized. A lot of investors ask us, oh, why don't we see a sudden movement up now if the industry is organizing? Because it is organizing, but it's organizing gradually. It's not one shift that is going to suddenly move the industry from completely unorganized to organized. So every year, you'll see a chipping away of the unorganized industry moving to organized. Now this is happening primarily for 3 reasons. So #1, as more people land up going to better known hospitals, brands, better quality doctors, more organized health care, I'm saying aside from pathology, automatically, even diagnostics will end up getting organized because those doctors, which have got a more structured way of treating you will prefer branded players in your treatment and in your diagnostics. And therefore, automatically, as hospitals and as daycares as all single specialty starts to organize, diagnostics will benefit from that. The second is, of course, going beyond metros, right? Originally, if I look at it 10 years ago, a large percentage of our business came from the top sort of 10, 12, 13 cities across India. And while still those 13 cities contribute a good amount, the reality is we are far beyond that, right? You have moved now to Tier 2, Tier 3, Tier 4 towns. And as we open up that and as hospitals create capacity and access in those markets, automatically, their need for specialized tests and their need for more complicated diagnostics increases. So 1 is the preference for brand in all markets. Second is the preference for now requirement for specialized tests in smaller markets. And third is as diseases become more complicated, right? There used to be a time when we used to use a single cholesterol to diagnose heart disease. Then a cholesterol was not enough, you needed a lipid profile. Now a lipid profile is not enough. You need a lipoprotein A and apolipoprotein A and B. So as diseases become more complex, you need more complex tests to diagnose a problem. And that's the third lever where Metropolis has an R&D system that keeps functioning, producing hundreds of tests per year, which are more and more complicated, but which allow doctors to diagnose you earlier and more efficiently to the point where now we can even tell you what drug will work on your body so that you don't have to waste time in trying different drugs, right? So these are all the different benefits and levers that will come out of the expansion of the market. Now when we talk about specialty testing, a lot of times, players who come into the market say, "Oh, we can also do specialty, we'll add the machine, we'll add the person." Again, not so simple. It's not about the production alone, which is the challenge. The question is to have production moving, your facilities to be able to do specialty tests, you not only need the right equipment, more importantly, you need the right people. Because today, for example, let's say, cancer. There's nothing like a cancer pathologist anymore, right, or a histopathologist who sees all cancers anymore. Now we have specialty skin biopsy specialists. We have lung biopsy specialists. We have breast cancer specialists. We have prostate cancer specialists. So every doctor has become a subspecialist just for different kinds of cancers. And within those cancers, there'll be super specialties as well. Now for any normal hospital or for any other normal chain to get this kind of talent and expertise within the system is not possible because, 1, you don't attract that kind of talent because you need an R&D, academic, very scientific environment for these doctors to thrive in. And second of all, you need the volumes to afford these kind of expertise and these kind of doctors, which all these lab chains don't have. So specialty is a combination of being able to not only produce the highest quality of precise reports and then go to the best doctor in India and convince them that you have the best quality of reports, and therefore, they should send their patients to you. The ability to do both these things is the moat in building the specialty piece. Now today, if we look at it, Metropolis has approximately, I think 40% to 42% if I'm not mistaken of our business coming from specialty. And our goal is to keep building this out because this business is very, very hard to replicate. And when you go and get this business, by the way, and a patient comes to you to give their blood test, they also give you their routine test, right? Because the patient is not going to say, I'm coming to you for this, and I'll go somewhere else for cholesterol. If you're being bled, you're going to give all your samples to one particular lab. So when you're going in from the specialty angle, automatically, the other routine stuff comes to us as well. So out of the 4,500, we have about 2,200-plus tests in just oncology, neurology, nephrology, allergy. Just in the last year and the quarter of this one, we've added almost approximately 380 more tests, which are in the specialty portfolio. Now this next number is very important. What is this 99.99%. So every year, the bodies that accredit us, which are not only the Indian bodies, but global bodies, which are the golden standard in testing globally, it's called CAP, College of American Pathologists. They have been coming and auditing our facilities. It's like the U.S. FDA for pharma, for example, they come and audit our facilities since 2005, every year or every 2 years, but it's not as simple as just 1 audit. Every month, they send us samples, blind samples. And they tell us, you please do the test and send us the reports. We do the test and we send it to them. This is called external proficiency testing. And when we send them the results, they then tell us where we stand from a quality perspective. Are we in the top 1% of labs in the world? Are we in the top 3%? Is there a discrepancy from where our results were versus what they wanted us to have. So we have been doing this now for 20-plus years. This is a huge accomplishment. We are probably one of the first labs chains in India to get CAP. So we have the longest history. And even today, we have a 99.9%, right, EQAS score, which means that we are very much in the top 1% of labs in the world when it comes to our quality. That is no insignificant achievement. If I just look at the mathematics for a minute, and I look at the last 3 years, right, we've obviously grown fairly consistently the last 3 years. We've had a 17.6% CAGR from a revenue perspective. And of course, in FY '26, we had 23.6% CAGR. Our EBITDA has also grown at about 18.6% CAGR for 3 years and last year was 23%. And the same thing with PAT, very similar numbers. And while the margin was 24.4% last year, actually, it was 25.9% because the organic margin -- EBITDA margin of Metropolis because it showed a little bit lower because of the acquisition we did last year, which was a breakeven acquisition of Core Diagnostics, which we knew that we are paying a lower price for to buy a company which has got a breakeven margin because we know we have the ability to turn it around and bring it to a 20%, 25% margin in 3 to 4 years. And we wanted to create that value for our shareholders rather than paying that value to the existing shareholders of Core. So that, while it's showing it's suppressing the margin by 1.5%, obviously, as the losses of Core have now gone and we've moved into profit-making zone, that gap will keep narrowing as we move forward. And most of this growth has been volume led, right? It is -- we do some price increase. We were doing it every year for about 2%, 3%. And of course, there was a revenue per patient increase that happens out of the product mix change. But broadly, this has been a volume-led growth. This is the team, obviously, that runs, and we would encourage all of you during the high tea and the Q&A to please interact with the team. We have many of our leaders here today, the Chief People Officer, Diya. We've got Sameer, the Chief Financial Officer. We've also got Mohan, the Chief Marketing Officer; Glen, who runs the customer success. A bunch of our team members are here. So please -- and of course, Suren, is here as well with me. So please feel free to interact with us post the high tea for any discussion specifically on any functions. But I can tell you the real moat in this business is finally culture and talent. It's all about getting the right people together, getting the alignment and building the culture of doing what's right for the patient because we fundamentally believe if we do what's right for the patient, the patient will be happy, the doctor will be happy, and they will go back and tell another 10 people, and they will come to Metropolis. There is nothing like word of mouth. There is no marketing tool in the world in health care that can replace the quality of word-of-mouth recommendations for a brand. Because if you think about your own self, when any of us makes health care decisions, we are not going by the hoarding that we see on the street. We're really going by at the end of the day, who's the best doctor, which is the best lab, where is the best hospital that my mother, father, myself can recover really quickly. This is what I was mentioning. We've got about 6,000 people. And of course, we've been working a lot on productivity per employee as well, which was up by about 15% last year. We have a whole program of skilling for our people, a lot of training and a lot of skilling, and we have a program called MiLES, where we do a lot of skilling for our people with certifications, et cetera. Behind the scenes, while we have 30,000 prescribing specialists all over India, we also have a medical advisory board of about 60 experts and a whole range of counselors, molecular pathologists and bioinformaticians, all of which create the moat for the business. And while people can poach and can hire individuals, what you cannot poach is the culture that you actually create in an organization that allows these people to thrive and succeed. Just a little bit on the Board. While obviously, all the basic things, but this is the current promoter holding, the institutional holding, we don't have any private equity overhang. So everything is a fairly diversified cap table. We recently did the bonus issue of 3:1 sort of a split bonus that we did, and we usually do a dividend. Last year, we did a dividend of about 22% of PAT. While the business is obviously run day-to-day by the professional team, and I've purposely built a team that I feel echoes the values of Metropolis. Finally, my job as the promoter as the Executive Chairperson is to have the long-term vision for the business, stay obsessed with it, stay excited about it, keep thinking of the new things that we can do around really leveraging the brand, really leveraging the opportunity, which is huge in our industry and in our country. And that's really how myself and the team work very closely together in a very aligned fashion to be able to really maximize this opportunity we see. If I look at our industry today, we are the only organization where the promoter and the team work so closely together with all our energies, minds applied at how to maximize the business. And like the best businesses in India, whether they were the Ambanis, the Adanis, the Kotaks for any of these, we've seen that model of a promoter-led professionally run team actually work the best in our country. And that's what we are trying to build. We don't have a vision of a 3-year journey alone. We have a vision of a much, much longer time. And we believe the kind of opportunity that we have in India is so massive in health care that what we already have is a leadership position. But if I was to look at this 20 years later, this is going to be a far more consolidated industry where we will continue to see the existing leaders thrive and grow. And honestly, your ability to build success over the next 20 years is not linked to any disruption in the market. It's really linked to structural excellence in execution and being able to really continually drive that execution and ensure that you have good word-of-mouth recommendations. And if we're able to consistently do that, I have no doubt in my mind of the kind of value that we will continue to create for all our shareholders. Lastly, I just want to say that while we've been a public company for about 6, 7 years, many of you as shareholders have been extremely patient, supportive shareholders over many years. The first 5, 6 years of Metropolis journey have not been an easy one because COVID came in, stock prices went crazy, it fell. We had all kind of rumors about us, about promoters wanting to sell the business. We had CEO change. We had leadership change. We had a bunch of external issues and challenges that hit us. And while we fully recognize it has been a road which has been challenging the last 4, 5 years, we have always stood tall, been very open to always having very honest and transparent conversations with all our shareholders. And I think because people know we have good intent and good execution, I think most of the shareholders have stuck by and been supportive. And I think we are at the phase where now the team has got full control of all the internal execution pain points. We've exited some of the businesses which we thought were not good and not aligned to us. And we have come to a stage that we feel extremely optimistic about the next few years. We look forward to interacting with you a little bit more today, and thank you so much.

We have a short video. [Presentation]

All right. Good afternoon to all of you once again. You've just seen a glimpse of the -- how the whole science works in Metropolis. I'm going to talk about the strategy, the long-term strategy of Metropolis, the growth levers and the margin opportunities, science, technology and a few more things. And I'll be joined by some of my colleagues, Sameer, who is our CFO; Mohan, who's our CMO. And we'll also have Dr. Nilanju, Dr. Priyadarshini, who heads the science as well as the medical marketing part of the business, and they all will be joining in the course of delivering the next part of the presentation. So let me start with what's the strategy for Metropolis going forward. In bits and pieces, we spoke about during some of our investor meetings in the past. If you look at it, the whole strategy for Metropolis come from the distinct identity that we have as an organization. And what's our identity? I mean I just want to reemphasize that our identity is all about a technology-led company, differentiated by science and of course, profitable and sustainable growth, which is creating investor value creation. So that's largely the identity of Metropolis as a brand. And of course, our strategy, there are 3 clear business commitments in the strategy. And also you will find 2 cultural promises from our side, right? And the business commitments that we make are definitely one is the strategy is led by technology. Every opportunity that we get to automate, digitize the process in the organization, we do that. And in the process, the process efficiency gets better, the customer experience gets better and also the productivity improvements happen. So going forward, maybe in the next 3 years' time -- 2 to 3 years' time, Metropolis will be a fully technology company, technology-enabled company. And wherever we could get the AI intervention, we'll definitely keep working on that as well. And as far as the second tenet is concerned, which is about the science as a differentiation. Metropolis has always been a science company. Science has always been the differentiation -- differentiation for this company, and we will keep strengthening it further. The quality of the report, the accuracy of the report, the quality of the team that we have is not easily replicable by anyone in the industry. So science will continue. We have 4,500 test menu, which is the largest test menu that we have in the industry and the turnaround time and the quality commitment is 1 of the best in the industry. So science will always be our differentiator. And I mean, you saw some numbers of the past last 3 years, particularly about the growth aspiration. So we would like to run the business absolutely profitable and as well as sustainable growth. That's the commitment as far as the business is concerned. Now on the cultural side, first one is what is the brand promise. And there are 3 key stakeholders in our brand -- in the brand scheme of things. One, of course, is our customer who is the heart of the [ old ] brand. And our promise to the customer is it's good to be sure when it comes to the test report from Metropolis, the quality of the report. That's what our promise to the customers. And the clinicians who work very closely with us and who trust us for their diagnosis, our promise is about good to be sure about the science. I mean that's what we keep, I mean, engaging with the doctors. And of course, our employees, who is the core strength of this organization. And our promise to the employees is that good to be sure about the workplace. Those are the things which is a definite promise from our side to the key stakeholders. And as far as governance is concerned, we believe in a very strong governance, which is leading to highest quality of compliances, completely uncompromising quality of compliance is what we always strive for. When it comes to prioritizing compliance versus anything else in the organization, we prioritize compliance. So that's largely the 5 tenets of the 3-year strategy that we have in the organization. I mean, what are the growth engines? We have very clearly distinctly 5 growth engines as far as the business growth is concerned to deliver the sustainable and profitable business growth. First one, of course, is a network. Ameera spoke about that we work in 750 towns. Our aspiration is to go in the next couple of years' time, our aspiration is to go as deep as possible in these 750 towns before opening up new towns for business. And today, for any lab, we have roughly 24 collection centers and about 50 B2B client partners. That's roughly the ratio that we have at this point of time. We plan to take this ratio from 1:24 to 1:35. That meaning we will go more and more collection centers, either through the franchisee or through the direct collection centers, right? That's how we are going to improve the network. And also all the existing centers that we have, 5,000 centers that we have, we are working on different methods to improve the productivity of these centers. So that's largely about the network. And a little later, I will give you some more information about the network. And second lever is about TruHealth. Today, the overall awareness about health and the affordability is getting better. And hence, TruHealth has now become a very significant part of the portfolio. We have roughly close to 20% of our business is today TruHealth, right? And TruHealth is nothing but bundled packages, whether it is illness bundles or it is wellness bundles. That's what is actually TruHealth. Now largely in the last 2 years, we are seeing the growth coming in TruHealth from the metro and Tier 1 cities. But gradually, we are seeing the awareness and the importance of TruHealth even moving into Tier 2 and beyond cities, Tier 3 cities as well. We started getting -- a huge opportunity is opening up when it comes to TruHealth. And further, the TruHealth, we're also making it more consumer-friendly in the sense that adding more and more products into it, like the basic radiology product, doctor consultation, and other services like adjacency services like diet consulting or consulting or obesity and things like that. So we are making actually the TruHealth portfolio much richer because we have your test records available. It's easy for us to suggest to you what's the best way to go forward in your health journey. And of course, specialty, Ameera spoke about specialty. It's not an easily built business. It's a very strong business portfolio in our case, and we continue to add test menus every year. The last 15 months, we added close to 400 tests. So I mean, at the end of the day, specialty makes all the difference because routine test will tell you what is the problem. The specialty test will tell you why is this problem. And it helps the clinicians to basically diagnose this deeper and prescribe the right medicines, right? So specialty, we are already seeing -- the hospitals are adding the beds and the big hospital chains are moving to Tier 2, Tier 3 towns and the specialty doctors are moving to smaller towns of this country. So all this is actually improving the opportunity and increasing the opportunity for giving the specialty business. So specialty business today is 40 percentage. We would definitely like to keep growing this disproportionately to the overall growth of the company. And technology, while one side of the technology will fix my all platforms and architecture, the other side of the technology will also help me to get my digital agenda of direct-to-customer getting better. Today, 25 percentage of my business actually come from digital initiatives. And digital platforms are like my app, my website, my customer data platform and so on and so forth. So we keep investing disproportionately in getting the consumer through the direct-to-consumer approach because that also gives you much seamless customer experience. So we'll continue to work on improving the overall technology and keep that as one of the key growth engines for us. And lastly, of course, inorganic. And you know that Metropolis is a company an amalgamation of almost 25-odd companies. And every time we did an acquisition and we did an integration, we did it well. And today, we have a playbook when it comes to bringing in inorganic business. So these 5 will remain as a key engines of business growth going forward in the next 2 to 3 years. And on bottom, if you look at it, our science and quality, uncompromising and highest standards and the accuracy of the reports have been much appreciated by all the clinicians across the country. And then people and talent is something which we keep investing and making it better. So I think the combination of these things is really the right mix for the business growth. Well, as I said some of the things, I'll just elaborate a little more. Let me talk about one of the things that we are attempting to do. Today, we have about 700 centers of our own. While our total centers is 5,000, there are about 700, 750 centers, which is owned by Metropolis, largely in the top 7, 8 towns. So our business is largely from morning 6:30 to about 10:30, 11:00. That's where 80 percentage, 90 percentage of the consumers actually comes in. But we are looking at opportunities how to utilize this real estate from 10:30, 11:00 till end of the day. There are many other allied services we are looking at as an opportunity, which we can bring in definitely in the area of health care and hence, productivity of this center can be even maybe double over a period of time. So we are exploring opportunities and looking at how can we just blend this into our overall retail strategy. That's going to be one great opportunity. While our organic distribution system will take my centers to lab ratio from 24:35. We are also looking at how can I disproportionately work also this, so at least create entire distribution machinery, which can bring in the collection centers and maybe the B2B smaller clients and faster so that at least I can achieve some of these numbers much earlier than what I'm thinking at this point of time. So that's another opportunity, which we can actually get explore in the days to come. And the third thing is the radiology business. Yes, that's what I'm saying. So I can use the 700 centers to go beyond giving the diagnostic services. Maybe like I can have some clinicians coming and sitting there. I can have the general practitioner giving what you call consultation to the patients who's walking in. So we're looking at opportunities, like I said, the 700, 800 centers that we have, which may expand to maybe 1,000 centers in the next couple of years to go beyond diagnostic services using this real estate from beyond 10:30 to the rest of the day. So we find an opportunity to really multiply the productivity in these centers. So we are just thinking about it, working on it. And when it comes to a complete package, we'll start experimenting this in the market and then, of course, go full blown. I've already talked about opportunity for to accelerate distribution beyond the current -- distribution machinery that we already have it. And we are also looking at the radiology, about 100-odd centers in the country, which can be converted into mini hubs. And what I say by mini hubs, of course, the entire plethora of services on pathology will be there. And then there could be the basic radiology, which is your x-ray, ultrasound and 2D echo and services like that so that at least I can service also to the consumer who's coming to me with the radiology prescription and also work with some of the corporates who is looking at a regular corporate health checks, et cetera. So we found this opportunity, and we'll come up with about 100 labs in the next couple of years -- 100 mini hubs in the next couple of years. And of the 100 that we are talking about, about 50 of them are upgrading the existing centers because geographically, they fit into servicing these kind of clients and the corporate. And then remaining, maybe we will set up brand-new centers. So that's another opportunity that we have. And then, of course, we have the other growth engines like merger and looking at more acquisitions that I will talk about a little later. So if you look at it, I mean, the current level of growth can be further accelerated when I keep adding some more of these initiatives in our scheme of things. So I'll just now request Mohan to come and talk about in the next few initiatives that we are talking about, and then I'll come back.

Thanks, Suren. I'm Mohan, the CMO of the company, and good evening, everybody. So on the channels per se, what I think both Ameera and Surendran specified on both B2C and B2B, B2C is roughly 57% of the revenue share of the company. And that also is at a very good growth. In the last quarter, it was around 18% growth. What is next happening in this and how do we accelerate growth in this particular channel? What we have, what Suren currently spoke about, the 1,000 own centers in the next 3 years, as we amplify this and grow this to another 1,000-odd centers, and we go beyond pathology, and we add vitals, we add diet, we add consults, we add somewhat correlated services with the health care sector itself. And we add that from the same capacity, utilize the same capacity and use it for those services and products. So between the 2 channels, both channels are supposed to do some specific jobs that we've sort of outlined in specific focus areas. One is clearly TruHealth, the wellness portfolio, the package portfolio. And that now from 18% needs to move to a 25%, and we have some levers already aligned on that. I detailed that out in the next slide there. The other is the channel of home collection. That's roughly around 11%, 12% of our revenues today. But that, again, has a huge potential to be increased. We service around 200-odd pin codes that are there. And the D2C, the digital piece around that ensures that we have a lower acquisition cost of acquiring the customers as well as almost 2x of the LTV of a regular lifetime value of the regular customer coming through our offline channels. Why? Because the customer coming through the digital channels with us is far more engaged, comes to us, we are able to reach out to that customer far more number of times and have them transacting far more with us. The 100 mini hubs that Suren talked about are the ones where we're going to add asset-light radiology, whether it is ultrasound, TMT, echo, all of these services will be part of these particular centers. 50 current centers will be upgraded and 50 new centers will be put up with these particular services. Now what that does is it also opens up the opportunity for corporate and insurance to be really scaled up. The same asset without much additional CapEx will also get utilized for corporate servicing as well as for insurance because they also need a whole sort of package to be done or a whole health checkup to be done at the same center. On the B2B side, what is also adding up and what is aiding the growth of B2B, I mean, the last quarter was 15-odd percent is the addition of Core test menu. After the acquisition of Core Diagnostics, now the menu that is available for onco, the strength that is coming with Metropolis and Core coming together is that same set menu is now reaching a much bigger network through our own channels as well as through the B2B accounts and B2B hospitals and B2B labs that we have as well as a set of clinicians who've been prescribing to us. So that has the way to go to 45% of the revenue. And what we're focusing on, as Ameera also pointed out earlier, is largely margin-accretive accounts. We've done up with the cleanup that we had 2 years back. We had done all of that. Now it's about adding accounts and adding volumes to the labs and capacity that we've already created. TruHealth, which is not just about bundles and packages and preventive bundles, but also adding up the more adjacency services to make the TruHealth more wholesome. So it's not just about bundling a set of tests together. But as you see to go beyond diagnostics. And what you see here are the modalities of diabetes, obesity, nutrition and preventive. What we've launched very recently is also a diet consultation. Now typically, a lot of people would have diets based on what they see on Instagram, what they see online or what they hear from people or what they would be reading online, right? But this is like a first time ever that the diet is being prescribed based on your blood work. So if your sodium is high, if your electrolytes are high, if you're high or low on particular parameters, the nutritional advice of the diet gets created based on that particular parameter or that particular blood reading of yours, an expert speaks to the customer and advises and also the variety of the cuisine that one can select is based on the cultural nuances. So it's a very novel facility. So facilities like this is what we are adding to TruHealth, which are related and can amplify the plain blood work part of it. Obesity obviously flows naturally because what we launched was a vital checkup, which was largely about having the full body composition, a noninvasive test to have a full body composition of the individual and based on which is body fat, body mass index, the whole lean mass, all of that put together. And based on that recommendation being made on nutrition being made on other parameters. So all of these, which are lifestyle diseases about having metabolic panels or testing for each of these, what this does is it also makes the business far more recurring. Customers who have -- or patients who have diabetes or are looking to reverse obesity or looking at nutrition, they are more prone to come back more frequently for the testing and have the business with us. On specialty, we have around 30,000-odd prescribing specialists that we highlighted earlier, but also has a plethora of other doctors who are prescribing, which is your pulmonologists, your GPs and other consultants who are also prescribing tests now. And they are also prescribing some very specific tests as they look at their patients. What adds to the specialty business is not just the trust of the doctors, but also the fact that we are able to add some of these new age tests each time, new age test launches. We have a test for Alzheimer's. Now Alzheimer's used to be a test, which used to be a very difficult test to do because it used to be done on the spinal fluid, a very tricky one to take out from a patient. Now what we've launched recently is a blood-based test where patients can just give their blood and we can test for Alzheimer's risk. So a lot of patients -- a lot of people who may have a higher risk in their family of Alzheimer's, they can today get that test and the reach and access of that test completely amplifies. The other is hereditary cancer panel. People -- cancer is very -- it's actually become very common. I mean we know of people either in our family or somebody known to us who's had an episode with cancer. Now as cancer increases, as cancer incidences may grow in the family, it's very important for also to check whether you're carrying the genes, which put you at a higher risk for hereditary cancer for cancer, right? So some of these innovative tests are what are really -- what is really amplifying the specialty revenue. On the other side, this whole addition of Core test menu and bringing the oncology menu of tests, which is around 350-odd tests as well as around 2,000-odd doctors who are connected, oncologists who are connected with Core into our menu of testing, that is what is really amplifying the specialty work. And specialty really doesn't come on its own, the prescription has multiple tests with it. So when a doctor is prescribing a specialty test, they're also prescribing a couple of routine tests. So all of that work also comes to us. With Core, they were more focused on the specialty side of it, but now the full menu, the full prescription gets tested at Metropolis. What is adding up to the specialty, adding to specialty is also genomics. And that's the new age thing that you saw in the AV as well. You also heard in the AV of how and why clinicians are prescribing to us. It is the trust, it is the report quality and the fact that they can reach us or we can reach out to them when we want to discuss a patient because for a doctor at the end of the day, it's the benefit of the patient and for them to be able to diagnose really well what the patient is going through. And Metropolis is really the starting point for them for their treatment journey, for the patient's treatment journey, right, for them. So it is very important for them to be able to diagnose this really well. So talking more about genomics, I'll invite Dr. Nilanju to speak about this.

Good evening, everyone. I'm Dr. Nilanju. I head the R&D Molecular Genomics at Metropolis. So now when we see about genomics, so this is the era of genomics. Now Metropolis, how we can add on that? So we are always a specialized, I mean, testing lab, but adding on genomics, now it gives the impetus to go beyond that. How we can, I mean, go there? I mean, we have seen that there 2x growth in Genomics in the last 1 year. Secondly, why we can do that? To have the instrument is one thing, but to have the specialist, I mean, inside the team is another one. So we are having a team having onboarded medical geneticists, onboard genetic counselors. Now we have seen one of the videos on the doctor, why she is so happy with Metropolis? The reason being they can reach out to us. That is one of the most important part in genomics. It's a very complex test. Once the clinician gets the report, how to interpret the report and what to do with that report to the patient, which is very important. In that sense, we are very much reachable to the clinicians. Now that's what differentiates us from the players which are in the market, right? So I mean, on technology front, we have got the best technology that is available in the country right now. So we have got, I mean, NovaSeq X system, which is the best technology-wise, having the highest throughput as an instrument. And secondly, the most important part is that we have a dedicated patient support vertical that none of the organizations have at this moment, where the clinician can reach out to us once the test is sent to us. That is one of the important points that we have. Secondly, we are the only lab in the country having 2 CAP-accredited genomics lab, one in West, one in North. So from that point of view also, that shows the quality that we follow. Now one more important point in Metropolis is that the orthogonal testing. Now what do I mean by orthogonal testing? That we start from histopathology till genomics. That means anyone wants to have a confirmation with what the test has shown in the beginning and what the end test shows. So we have all covered under one roof. So that is one of the advantage that is why Metropolis is having. And second, the most -- I mean, the precision medicine works in 2 segments, even though it works mostly into oncology and neurology, but in reproductive medicine also. So this is a very important add of genomics, where if there is infertile couple, why the infertility is there? Now genomics can give the solution to that. In earlier times, there are only one test that is karyotyping. Now the days have come, where we can give the solution to the couple, why there's a couple they have lost pregnancies 2, 3 times. Now in Metropolis, the advantage is there. So we have starting from karyotyping till genomics. So everything is under one roof. So that is the advantage in Metropolis. And with the addition of, I mean, the number of clinician base that we have, we can definitely say that genomics is where our specialty will be. Yes, thank you, thank you so much.

Good evening. My name is Pinakin Shah. I'm the Chief Information Officer. I take care of technology. So the history goes that, before COVID, Metropolis has largely been working manually. So in terms of technology, the processes were manual. COVID forced us to actually digitize, automate many of our processes. And in the last few years, if you see, we have our digital presence with web and app, and we acquire customers via those channels. We also have our home visit apps where a customer can book and we can go and collect samples from there. So as we speak, we have done a lot of work on getting that digital presence to the B2C segment. At the same time, we are kind of offering the same kind of experiences to our B2B partners. So for example, at the hospitals, the labs, the doctors, we are kind of making the same experience available to them with the help of partner portal and other mechanisms. Now what we want to do now going forward is to make this experience more engaging, add more value to it. So if you look at some of our plans in the coming future, basically, we are doing a lot of things on AI. For example, giving the report summarization. Now unlike what we normally see a Claude or a ChatGPT gives, as far as the Metropolis is concerned, we are very careful about the output that we generate out of it. So what we are trying to do, we are going slow, but what we want to ensure that the reports are accurate, whatever comes out of Metropolis is accurate and precise whenever the outcome comes. The other adjacencies on AI, we are also doing some AI on basically the diet guidance and all of it. One of the things that we spoke about, we are doing a lot of things on Specialty. Now we have our own internal team and the culture where the doctors and the clinicians can reach out to us. Now how do we scale that? Now as we grow this business, how do the doctors actually reach out to us? So we are bringing in something called as Talk to an Expert. So anyone, any clinicians or any doctors, we are bringing in that ecosystem where via the app, via the Metrobot, they should be able to reach to our doctors very easily. Now we're making it more scalable. Apart from that, while we are making the partner portal where the partners can go and check their reports and all of it, we are now customizing that experiences for the different types of customers. For example, for a doctor, they want to see more from Metropolis. For the example, they want to see the disease trends, which will help them, in fact, do better diagnosis. So all of that we are bringing in future. In case of -- this is actually the front end of our digital journey. As far as the back end is concerned, we are working on improving our productivity. We are working on automating all the processes out there. A lot of work is being carried out right now in terms of AI. So for example, we are using AI in order to reduce the number of call tickets that we have. So we are also ensuring that the TAT at which if some customer calls, how can we resolve that issue in less time in 50% of the time. So all this is going on. And the one way we are changing the scheme is we are building a team in-house. So the entire piece where it was vendor dependent, what Metropolis was doing by the vendors in terms of technology, we are building a team in-house where also because recently, one of the -- with the AI and all that the development times are all shrinking. So what we are confident is that the number of projects that we can take up in this coming year will be much higher. And next year, when we go to the next year, I think we will see the results of what all we are doing in this year. So that's all on the technology part. Thank you.

All right. There are a couple of more levers of growth that I've been mentioning in the earlier session. So acquisitions definitely is a strength of Metropolis. If you look at it, we have done almost 25-odd acquisitions in the past. So geography-wise, acquisition and integrating that to our business, we have been succeeded and many of our partners today very happily do business with us as a consultant as an employee in the organization, but their business got integrated with our business. And big size-wise, big business, Hi-Tech is an example, and CoDiagn is an example. So we have the ability not only geographically, but big businesses, we can acquire and integrate. And also, we have seen that not only geography acquisition, but also test skill basis, for example, CoDiagn is an example, where we acquired a skill set which we did not have completely. So I think what I'm basically trying to say is that every kind of business, every geography, irrespective of the size of the business, we have done acquisition and very successful integration. And today, we have a clear playbook available. Whichever kind of acquisition that we do, we can very successfully integrate it and quickly turn it around and make it bigger and create more value for the shareholders. I mean, if I just mention about Core Diagnostics, for example, some of the figures are given here. 1 year back, 2 years back, this business was not making money. One year after acquisition, this is high single-digit EBITDA. And we are now -- I was guiding everyone that maybe year 3, we will be close to the company levels of EBITDA. So that's the strength of the team that we have, that the strength of the process that we have. We can turn around even the diseased business, which is as far as the fundamentals are good. But we have certain clearly defined strategies before we go and acquire. We want acquisitions on those geographies where we really want to acquire, where we are currently not been very present very significantly, that's the geography that we will acquire. And secondly, we also will acquire wherever we have a skill set, which we currently have, and it will take time to organically build it. And also, there are many opportunities coming up in the adjacency areas when it comes to acquisition. These are some of the things that we are looking at. But at the same time, very important for us, we will only acquire very clean business. We only acquire places where the brand that we are acquiring, the lab that we are acquiring has got good credibility in the market. They have the record of providing good services in the market. Quality has not been compromised. So these are some of the philosophies we go on doing acquisitions. And acquisition will continue to be a big lever for growth for us going forward. And also one more lever that we are looking at in the international business. I think some of you know about it. We operate in 5 countries with labs. We have about 24 labs in 5 countries. And out of the 5 countries that we operate, Kenya and Zambia, we have clearly become the leaders now. It took a while for us to reach there because the change journey that took a little more longer for us to establish our processes. But 2 markets, we're clearly the leader. And the rest of the 3 markets that we have, we are in Ghana, we are in Uganda, and we are in Tanzania. We're in the top 3 operators in that country. And a couple of things which is important for me to mention here. One is we have a very, very strong leadership team in each of these countries. People have gone from here 5 years, 7 years, 8 years back and currently become very tall leaders. So the management time that is spent by running the international business is very, very minimal. And second important point to mention here is that there is no capital that's been flowing from the Indian operations to international operations to build business there. They are generating their own money, and that's what is getting invested in the business and making it bigger. So that's what our overall plan in these 5 countries, we want to go further deeper. At this point of time, that's what the plan looks like for the next couple of years. I just wanted to mention this last meetings in the investor meeting or the earnings call, we mentioned that over the medium term, we are talking about a 14% to 15% guidance. Then definitely, this is without any price increase. And also, please remember, I mean, we didn't have any benefit of the CGHS price increase because our CGHS business was very low and almost negligible earlier. But some of the other operators have got huge benefit, which anyway will start fading away from the quarter 3 onwards because last year, quarter 3, the CGHS rates got increased. For us, we are not going to have that impact from quarter 3 onwards. So 14%, 15% guidance we suggested without any price increase, but we delivered 17% in the last quarter. And we will clearly see opportunity because for us, both B2C and B2B engines are firing, both in Specialty as well as TruHealth is firing. All the 4 regions are doing well for us. And the Tier 1, Tier 2, Tier 3, all the geographies are doing well for us. So it's largely a broad-based growth that we are seeing in this year. So there are definitely some market dynamics, which is helping the industry. But the best thing is that we have kept our systems and strategies in place so that at least we are able to get the benefit of all the dynamics happening in the industry. We clearly believe that 14%, 15% is definitely the guidance that we've given on the basis of the best estimate at that point of time. But we clearly see that the days ahead, the growth should be faster than what we have done in the past. If you look at the last 5 years CAGR, we have done, I think, about 12%, 13% growth. And we're already giving a guidance of 14%, 15%, but we saw quarter 1 at 17%. And there are clear opportunity that we are coming. Of course, one is on the back of the network utilization. We said 2 years, 3 years, we expanded the lab network. And now we are concentrating increasing more and more centers. And there is a regular addition of 250 to 300 centers every quarter. We have a plan to further accelerate this, as I mentioned some time back. We have an opportunity to get my own 1,000 centers, 800 to 1,000 centers getting more productive. So clearly, a network utilization has become one of the important priority area for us, which is really going to fuel the growth beyond that, what we think that is happening in the last few quarters, years. And Tier 3, clearly, we are seeing a great opportunity market now. It was good that we made those investments in those labs in Tier 3 and 750 towns, we can service it today with a number of labs that we already put in. We don't have to add more labs. We only want to get more and more centers in these towns. So that's another great opportunity that we are clearly seeing is coming on our way. And then Specialty growth. I think my colleagues, Mohan and Dr. Nilanju spoke about all the Specialty portfolios, opening up of the more beds in the hospitals, the hospitals going into Tier 2, Tier 3 towns, et cetera. So we clearly see Specialty is going to be the next big opportunity, which can really get disproportionate growth in the days to come. Acquisition, of course, we'll more add on the 14% to 15% guidance that we provided doesn't include acquisitions. So all the time, we keep working on opportunities on acquisitions and acquisition is a very integral part of our overall strategy. So that can further make our growth story much better. And then, of course, all our key cities, we have seen different kinds of competitions coming in different points of time. At some point in time, it was health tech players, some other players, some pharma companies coming to diagnostics. But our share of the market in the key towns like, let's say, Mumbai or Chennai or a Pune remain intact. In fact, we start doing better in these towns. So our big town business continue to be stable, and we will do everything possible and maybe more to make sure that doesn't get diluted. So we clearly see an opportunity to have the growth story getting better as we go forward. I'll now request Sameer to talk about our plans around the margin improvement.

Yes. Good evening all. Thank you, Suren. So I think you all heard about our growth ambition and the key growth engine across network expansion, Genomics, Specialty, TruHealth and inorganic growth, technology. And let me put this all together and think from a -- talk about the financial perspective about it, okay? This, when we put together, how this growth is going to improve the margins, how it is going to give a stronger cash generation and how it's going to create more shareholder value. So if you see most of our growth will be coming from the assets and the capacity that we have already built in. So it creates a clear path for us for a structural and execution-led improvement of margins. Our ambition, if you see the ambition is to improve our EBITDA margin from 24.4% to 27% to 28%. And what are the key drivers for it? The key drivers for that is certainly bettering the mix towards Specialty and Genomics, improving productivity through digitalization and automation. And also it will be improving the utilization of our existing network, which will happen through increasing our center-to-lab ratio. That will help us to improve the productivity of our centers. Also, this supported by the consolidation of our vendors platform standardization will help us to improve the margins. Yes. And so in short, if you have to see the mix improvement, the mix improvement, the density and the productivity is our 3 pillars to improve our gross margins, to improve our overall margins. Important is not only about the P&L improvement, but also what we are looking at improving our operational performance that can translate into a better cash generation and better return on capital. We would remain focused on disciplined capital allocation. We are looking forward to automate our receivables management, automate our supply chain with the vendors. We are looking towards automating the processes, which will help us to improve the productivity in the system and improve our working days. Our aspiration is to take our working capital to a single digit from currently the double-digit working capital. Also, we intend to remain capital investment light. So that's what we'll continue to do that. We will improve our asset turnover by improving the productivity at the center level. And our focus is to improve the return on capital employed. We would like to maintain regular dividend payouts. So in short, if you have to see our focus would be to improve utilization of our centers, which will improve the margin, improve the working capital, improve the -- being disciplined capital allocation. It will help us to ensure that the return on the shareholder value can be improved. Yes, thank you.

Okay. So we talked about the growth story, the margin story, the technology, the science and all that. And if I can just put everything together into one slide, what is going to happen in the next 2 to 3 years for the company. Clearly, volumes are going to drive the growth and utilizations are going to drive the margins, right? And I mean, give the detailing of all how the volumes are going to come in, where it is going to come from Tier 3, from Tier 2, from Specialty and from TruHealth and also by adding more and more centers in the days to come. So I think clearly, the journey going forward on the growth side will be on the volume led. And of course, as the utilization improves and gets better, with number of labs remaining same and more and more centers are coming and the lab utilization is getting better and our margins will clearly be much more better than what we are having today, 27%, 28%, I think in the next 2, 3 years, we are looking at and then maybe after that, we'll come back with the next set of plans that we have. And also, as capital has been better utilized and your revenue leverage is getting better and more delta CapEx utilized has been very minimal. You clearly see that our ROCE also getting stronger in the years to come. So that's all that we have to share in our presentations today. But then, of course, we can have a Q&A sessions and more anything that we missed out, anything we did not clearly emphasize or anything more that you need to know about the business and the strategy, et cetera, more than happy to take your questions and answer and whatever time available, maybe our next 45 minutes, we can use it for Q&A. And after that, along with the high tea, we can continue the discussion until the end of the program. So thank you very much once again for taking out the time very patiently listening to all of us today and also keeping your trust in Metropolis and with Metropolis all these years. Thank you very much and really appreciate that. Thank you.

Thank you, sir. I request the management team to please be seated. We will begin the Q&A now. [Operator Instructions]

My name is Kunal Thanvi from Banyan Tree Advisors. I had 3 set of questions. One was if you can talk about the KRA and KPIs for the top management team? Because you spoke about a professionally run and promoter-led business. So we'd be keen to know that. Second question was from a longer-term perspective, when you look at this gross margins, they are 80% plus, right, like 78%, 80%. What kind of operating margin one should think from a really longer-term perspective? I understand we've been investing all this while. We'll keep on investing for the next 5 years or so, as you said, 10 years out, the industry can get more consolidated. And with the share of specialized test and whatever innovations we are doing on the TruHealth, how should one think about the margin profile? And the last question is in terms of, we spoke about beyond diagnostics. If you can double-click on that, like what are the plans? How do one think about it? Like are we already doing some pilots? And like what kind of opportunity you see there from a longer-term perspective?

Thank you. Good questions. So just to start with, I mean, I think for the management team, I think we broadly break it up into 3 buckets, right? One obviously is, look, there is importance of the presence here and now as well. So obviously, a direct linkage to not only AOP, but also the stock value that we are able to generate for shareholders. So I think here and now, which is this year, what have we accomplished, have we achieved our margins, et cetera? The second one is slightly more long-term projects. So are we also working innovatively to sort of fuel our long-term ambitions? So we'll pick up some strategic projects, which we want to work on and put some milestones and say, look, let's accomplish part of it in year 1, part of it in year 2. So there has to be some work done in that direction as well. And the third one is usually we'll pick up something which is around, something which is important at that point. So for example, if we feel, let's say, controls and governance needs to be the focus of the year, then that becomes sort of an area. Or let's say, we feel that it's becoming a very competitive year and people and culture needs to become important. So you may sometimes put a combination, sometimes you may pick one. That depends on the year and what's going on from a nonfinancial metric perspective. But broadly, I would say these are the 3 buckets that we built it out. As far as your second question around -- your third question around other services and what are we thinking? See, I think the broad vision is this, that generally, if you look at health care today from a patient or a consumer angle, and I'm not talking about all of us who are sitting here well, 95% of the market is illness. It's only 5% of us who are well and we are saying, okay, let's check once a year, what's going on. But for the 95% also who are ill, everything is very dislocated for them. And often, there is a lack of credibility because you used to have a GP, that GP is not really that predominant in the system anymore. And we are really wanting to be sort of a health partner to people in their health. So really, how can we position Metropolis that you not only trust us for your diagnostics, but there are other services that we could potentially provide to you scientifically, not commercially, not because we are pushing things down your throat, but because they are helping you understand what's happening in your body. And can we be that provider that provides them? So really keeping the patient as the focus. We find often in our industry, people look at pathology as more of a manufacturing facility. You just pump volumes through. For us, like we said, it's the patient who's the focus. So what is it that we can do around them? I don't want to name services today because we are still working on what we believe those services could be. But they'll be all allied health care services, like Mohan mentioned, asset-light, but the idea of helping you understand your body better and therefore, being able to treat things a little bit faster. That may lead to subscription programs. It may lead to other ways of looking at the market and really making the customer engage with you more frequently. And sorry, what was your third question?

Margins.

Long-term margins. See, in any industry, like I mentioned, we have, in my mind, a 10-, 20-year structural journey ahead. Can we continue to build operating leverage? Can you continue to keep building margins out? Of course, you can because there is a natural operating leverage in our pathology industry with economies of scale that can build in. But every few years, you will have to keep reinvesting. Either you will reinvest in new equipments and technologies that are coming, you'll reinvest in starting 100 more labs. So you will keep going through these phases. So the way we are looking at it is, right now, we are in our phase of sort of reaping the fruit. Because you sort of invested from '21 to '25 in all these labs. '26 to '29 is really the period for us to reap the fruit of all of this. Then there will be, I'm sure, another investment journey that will go. And now also like we did Core last year, which diluted our margin short term. Now finally, I'm looking at this business 20 years. So should I say, I'm not going to do this business because it's diluting our margin percentage, but I also know it's going to add a lot of EBITDA in the future. So I think keeping in mind a long-term vision for the business, I don't think the goal is just to keep maximizing profit margin. The goal is to stay relevant, innovative, tech-enabled and obviously finally become the #1 player, diagnostics player in India, which means you have to keep investing. So I'll be very happy with the steady-state margin, which is close to where we are looking at and then to keep reinvesting back in the business to expand the size of the industry.

This is Tausif Shaikh from BNP Paribas. I have 2 questions. First question, in your presentation, you have mentioned that you have identified 100 labs or centers that you plan to set up radiology business and other services. What kind of CapEx you have planned? And what one should expect the revenue contribution in next 2 to 3 years from these new businesses?

So well, see, these centers can be brought up by 2 different methods. One is by investing in the CapEx, and there are also today opportunity to go in an OpEx model. So we're just evaluating both from a long-term perspective. That's the first thing. But if at all, I have to invest on a CapEx here, what is that I need to buy? I need to buy an X-ray machine, an ultrasound machine and then maybe a treadmill. And then maybe in some places on a DEXA scan and stuff like that. So roughly about INR 35 lakhs, INR 40 lakhs per investment would be good enough for us to run a good mini hubs to start with. But we are very clear once we make these investments and then also we loop in the corporate business around it and provide the corporate health checks, et cetera, the productivity of this center can definitely go up by 2x or 3x even. So that's the opportunity available here in this business. So we will experiment with first maybe 50 centers in the year 1. We've done all the math and what important from here is the location of the place, the services in these places, et cetera. That's what we are currently focusing on and making sure this come out with a very good customer experience. And then maybe we do the next 50 centers in maybe another year or so.

Yes. That's helpful. My second question on the growth guidance where you have highlighted for FY '27, how one should look at FY '28, assuming at some point of time, you will take a price hike and the radiology business kicks in?

Well, I think the best time to answer that question is by the time we end this year, we get more clarity about what's the opportunities on price side. And some of the accelerators that we talked about in terms of available with us, we will be ready with those solutions really being integrated. But I think I would suggest at this point of time, keep the guidance and maybe in the next 3, 4 quarters at 14%, 15%. I mean, without price increase and also, I mean, this accelerator is actually not playing in. So I think by the time we come another 1 quarter or 2, we'll be able to provide more clarity about how could be the '28 will be spanning out. Yes. But we definitely see that the acceleration will continue and make things maybe better than what it is today.

My name is Ronak from Awriga Capital. Two set of questions. One is on your M&A strategy. You did allude to the fact that consolidation is bound to happen in this industry. How do you look at consolidation? Because when we see these assets, a lot of these assets have issues in terms of kickbacks, et cetera. So what is that addressable opportunity in terms of assets which are available for someone like Metropolis? The second is the acquisition which we did in Chennai a few years back that really solidified our position in that market. Will we see more of those kind of acquisitions or we'll see more of like Kolhapur and Dehradun or Agra kind of acquisitions?

So like you rightly said, there are a lot of businesses available for sale, a lot of deals in the market, but many of them don't fit within our requirements, our boundary criteria for what suits us. Look, consolidation in our mind is not just about revenue aggregation. You don't -- we are seeing some private players who are just going and buying every business available, not thinking about the future, not having the ability to integrate and buying them at 18 multiple, 19 multiple. And I can tell you, having sat on boards of pharma companies and having been in diagnostics, I can tell you very clearly that when pharma companies acquire other pharma companies, you can still afford to pay maybe 18 multiple because the kind of synergy at the back end is so tremendous from a factory perspective that you can justify it and get a payback. That is not doable in pathology. In pathology, the price you pay is a very critical piece of it. So unless you can get tremendous synergy value, those kind of prices don't make sense. So we are being disciplined about it. We do see opportunities there, but I think the kind of opportunities we think are more likely are businesses which have been built in the last 10 years with people thinking we can scale it and they've realized that this is now not so easy. These are suboptimal businesses from a margin perspective, but they could make money and decent good money within a system like ours, but stand-alone, like they're probably not going to make money. I think those kind of opportunities, if we could get at decent prices and then put our energy to turn around and create that value for ourselves in markets ideally we are not in, would be perfect. Now of course, if they happen to come in markets where you're already in, but there are still markets which give you a good IRR, then sure, we would consider that.

Fair. My second question is on when you talk about going beyond diagnostics and one of the things which we spoke about is can we have a GP right now sitting in a center and kind of addressing some of these customer needs. Globally, these formats have been scaled up really well, and these have become cash cows in markets like U.S., et cetera. Do we see an opportunity to really become a differentiator in the industry where you become a chain of, let's say, clinics over, let's say, 5, 7 years? Is there something you guys really think about? Or this is more like a tuck-in thing where you just want to optimize on the real estate and not think of this as a very serious business?

So look, I think the initial idea generated from saying, hey, we have space customer base available. What is it we can do there? And I think as we are thinking about it, obviously, we believe that these can become bigger businesses. But I don't think we today have a clear blueprint yet to be able to present it to you to say this is exactly what we're going to do. We are playing with 3, 4 different ideas to see which one has the biggest opportunity, which one has the right to win, which one has the maximum IRR possible. So I think we'll still be probably a couple of quarters out. But I do certainly see, if I look at it from a 5-year basis, we're not going to do something that's just going to give us an additional INR 20,000 rent for our property per month. The idea is to build a business out of it and a serious business, which we can win in. Now how big that business can be, what margins it can be, we'll have to come back.

My name is Lokesh Manik from Vallum Capital. I have 2 clarifications. One is, when you mentioned network centers, does the revenue mix include B2B and B2C? And second, your foray into radiology, is it an independent strategy? Or are you looking to capitalize on the recent government budget announcement where they mandated most corporates to have health checkups done for employees aged over 45 years? Or this gives you a kick or the confidence that you can do 2x, 3x more productive? Just these 2 clarifications, that would be great.

See, the collection center that we are talking about are purely B2C largely in all the cities that 750 cities that we are, towns we are talking about it. So broadly, broadly, these are all walk-in customers coming to the centers. But let's say, in a smaller town in a Tier 3 town, if that partner -- because in Tier 2, Tier 3 towns, of course, the centers are driven by the franchisees. If that franchisee choose to go and tie with a small lab there, I mean, that may be quite possible. So maybe the last 2%, 3%, 5% of this business can come from the B2B. But broadly, it's a B2C business, we talk about it. And coming to this mini-hub radiology centers, we really wanted to make it very big. And we have seen that some of the centers, though they are not big chain across the country, et cetera, wherever there are radiology services, basic radiology services in some places even to the next level like a CT scan and MRI, et cetera, has been done. There is a good walk-in. There's a good business model out there. It really makes sense to do that. So we are very serious about that part of the business, and we are not only doing this just to do another 1 or 2 more add-on services. Otherwise, we will not come, I mean, talk about 100 centers. And these 100 centers we are talking about is maybe top 5, 6 towns. As opportunities pan out, we'll just look at this. This makes this is a very big opportunity.

So we'll expect the mix to be the same, roughly 50-50 going forward as well?

B2C, B2B mix you're talking about?

Yes.

Yes. Currently, it is 60-40, 59-41 to be precise. The center acceleration will really go in faster than what we are currently doing. That's one great opportunity for B2C as to get better. And also, what is aiding B2C is the digital agenda that you're talking about, direct-to-customer, home visit, et cetera. That's also helping. So we clearly see the B2C is growing faster than B2B. But now what's happening is with our improvised and better specialty menu, test menu and faster service and quality reports. I mean, we are also seeing a lot of traction from the B2C clients and the hospitals to come and associate with us. And that's why in the last 2, 3 quarters, if you look at it, B2B and B2C are working together. It's not one behind the other. But specific focus, I think we definitely, like I said, to enhance and speed up the B2C agenda. But the mix may be around that, I think, 60-40 because both the businesses are growing. But while our most of energies will be spent on further taking the B2C percentage up.

This is Ashutosh from Mirabilis. Just 2 questions. First, I wanted to understand, as you progress beyond metros and Tier 1 towards Tier 2 and beyond cities, how is the test mix and the unit economics of your centers evolving? Because a lot of the hospitalization requirement beyond Tier 2 still happens in metros in the large-scale hospitals. So is your testing mix beyond Tier 2 still largely routine? Or how does it evolve between semi-specialized, specialized and then eventually TruHealth adoption? And along with that, the economics of the centers in those areas?