Thyrocare Technologies Limited (THYROCARE) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the ThyroCare Q1FI27 earning conference call hosted by ThyroCare Technologies Ltd. As a reminder, all participants in line will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchstone phone. I now hand the conference over to Mr. Preet Joshi from Thyrocare. Thank you, and over to you, Preet.

Thank you, Dhanesh. Good evening, everyone, and thank you for joining us today. I am Preet Joshi from the strategy team at Thyrocare. It is a pleasure to welcome you all to our Q1 FY27 earnings call. Joining me on the call today are Mr. Rahul Gua, our MD and CEO, Mr. Rajdeep Panwar, our Chief Commercial Officer, Dr. Ramesh Kirna, our Chief Operating Officer, and Mr. Vikram Gupta, our Chief Financial Officer. I hope you have gone through the results release, the quarterly earnings presentation, and the press release, which has now been uploaded on the Stock Exchange website. The transcript of this call will be available in a week's time on the company's website. Please note that today's discussion may be forward-looking in nature and must be viewed in relation to the risk pertaining to our business. After the end of this call, in case you have any further questions, please feel free to reach out to the investor relations team. I now hand over the call to Mr. Rahul Guha to make the opening remarks.

Over to you, Rahul. Thank you, please.

Good evening, everyone, and thank you for joining us today. As in all my calls, I will begin with a quote from Nelson Mandela in recognition of our foray into Africa. It is in your hands to make a better world for all who live in it. We believe Pyrofair has the opportunity to take its proven business model to Africa and make affordable, high-quality diagnostics accessible to many more patients. Before I get into the quarterly highlights, I would like to briefly step back and share How we continue to build the diagnostics industry and our own journey. Diagnostics today is no longer just a back-end support function. It has become central to clinical decision-making and increasingly to preventive healthcare. A 600-rupee lipid profile can prevent a heart attack which would cause lats to treat. Patients today expect convenience, speed, and reliability as a baseline, while healthcare providers seek trusted partners capable of delivering consistent quality at scale. This evolution aligns closely with ThyroCare's mission of making preventive healthcare affordable, As healthcare continues to evolve, we believe technology will play an increasingly important role in diagnostics. At ThyroCare, we continue to strengthen our digital capabilities across the diagnostic value chain, from patient booking, logistics, laboratory operations, and reporting. These investments are improving operational efficiency today while creating a strong foundation for future AI-led capabilities in preventive healthcare. I am pleased to share that the quarter brought some meaningful external recognition of this work. We received the India's Most Trusted Customer-Focused Diagnostic Brand 2026 Award at the Pride of Healthcare Excellence Award and Summit 2026 in Hyderabad. We were also recognized at the Financial Express Healthcare Awards 2026, where we won Diagnostic Chain of the Year and Pathology Lab Chain of the Year. These reflections reflect the dedication of our teams and the trust our customers and partners continue to place in us. It has been five years since API Holdings has taken over ThyroCare from Dr. Abe Elumani in July 2021. I wanted to take a moment to share with you the journey over the last five years of which I have had the privilege of working with this amazing team. Between FY18 and FY20, our pathology business revenue, excluding COVID, was growing at a CAGR of less than 10%, and volume growth too was in the same range. And of course, during FY21, our pathology business, excluding COVID, hit an all-time low of 3.04, a degrowth of 20% versus the previous year. During the same period, our franchisee base had declined from 4,500 to 2,700 active franchisees during this period. It has been a tremendous effort to build up the business from that base. And I'm proud to say that after a strong growth of 20% in FY26, in Q1 FY27, our pathology business has grown even faster at 26%. This is the culmination of all our efforts and all investments in improving our service levels and quality. I am proud to say today, our active franchise network has grown to over 11,700, a four-fold increase versus when we took over. Our laboratory network has expanded from 17 labs in FY21 to 44 labs today. If you drop a pin anywhere in India, you will find a thyrocare pathology lab within 150 kilometers, and samples don't travel to Mumbai anymore except for specialized tests. Our test menu has increased nearly five-fold to more than 1,375 tests. Alongside this expansion, we have strengthened our quality infrastructure with over 100-plus MD pathologists, all our own laboratories being NABL accredited, well above any competition, and it is important to see the 100% in light of the fact that only 2% of NABL labs in India, 2% of labs in India are NABL accredited. We continue investments in technology and automation to support the next phase of growth. Our home collection network stands at 2,000 phlebotomists, probably the largest phlebotomy network in India with exceptional service levels, with an on-time phlebo arrival standing at 99%. We are now extending the ThyroCare strategy into specialty diagnostics. The next phase of ThyroCare's growth journey. From routine to remarkable, the next frontier of diagnostics. Specialty diagnostics remains underpenetrated with limited accessibility, premium pricing, and fragmented delivery. These are the same structural inefficiencies that ThyroCare successfully addressed in preventive diagnostics. A differentiated operating model built on scale, automation, quality, and affordability gives us a strong right to win in this market. This is not just a portfolio expansion. It is the deployment of a proven execution engine into a significantly large and fast-growing segment. We have commenced this journey with allergy and genomics. While our test portfolio will continue to expand, our focus is on building clinical trust through scientific rigor, consistent quality, and industry-leading turnaround times. We are confident that the same disciplined investments and execution that establish fire of care's leadership in preventive diagnostics will create a durable competitive advantage in specialty diagnostics. Our ambition is to build one of India's most trusted, accessible, and scalable specialty diagnostics platforms, expanding our addressable market, and creating the next long-term growth engine for the company. With that, I will now hand over the call to Rajdeep to take you through our business and commercial performance.

Thank you, Rahul, and good evening to everyone Thank you for joining us today. I'll take a few minutes to walk you through how business performed during the year and the key drivers behind this performance. At an overall level, we delivered strong growth this year with consolidated revenue delivering 24% YOY growth in Q1 FY27, primarily driven by our core pathology business. For the year, our flagship brand, Arogyam continues to lead the preventive healthcare segment. Growing at 21% year-on-year this quarter, complemented by Jaanj, which caters to curative and chronic health news. Though just 2% of overall pathology revenue, it has also grown 36% year-on-year this quarter, and is becoming a strong pillar of our lifestyle offerings. Let me now break this down across our key business segments. In Q1 FY27, franchisee business delivered 27% YOY growth. It has now been almost three years since we implemented the pay-for-performance structure, which has led to renewed energy within our franchisee network to move up volumes and enter higher slabs. Our franchisee base has reached its highest level ever at 11,700 active franchises in Q1 FY27. Equally important, we continue to invest in strengthening our relationship with channel partners. During the quarter, we conducted six structured partner meets across India and Malaysia, providing a platform for open dialogue, feedback, and knowledge sharing. These engagements continue to play an important role in enhancing service levels, shaping future business initiatives, As Rahul highlighted earlier, this quarter also marked the commercial go-life of our specialty diagnostics business, an important milestone in our long-term growth strategy. We believe specialty diagnostics has the potential to become a meaningful growth engine for ThyroCare by complementing our preventive diagnostics business and strengthening our omni-channel Enabling us to become a more comprehensive diagnostics partner while increasing wallet share within our existing network. To support this, we have established a dedicated specialty commercial team, which works closely with physicians, hospitals, and healthcare institutions through scientific discussions, one-to-one engagements, and lab visits, enabling clinicians to experience our quality system and operational capabilities. First hand while building awareness and confidence in our specialty offerings. At the same time, we continue to strengthen our medical leadership and invest in capability building across our commercial and operations team. Our objective is not simply to introduce new tests, but to drive sustained clinical adoption by combining affordability, scientific engagement, and our nationwide network. We believe we can make advanced diagnostics accessible to much larger potential populations while building a scalable long-term specialty diagnostics business. Moving to our partnership business, this continues to be a strong growth engine for us. In Q1 FY27, partnership business grew at 26% YOY. This growth has been led by strong momentum in insurance and health tech segments. Along with continued scaling of existing accounts, our API-based integration are also enabling partners to expand diagnostics offerings across multiple cities seamlessly, which is strengthening our positioning as a preferred B2B partner. Thus, overall, focus has been on building depth across channels, improving partner productivity, and expanding the value we deliver to a wider test portfolio and strong service capabilities. With that, I will hand it over to Dr. Kinnar to walk you through operations and lab initiatives.

Thank you, Rajiv. Good evening and a warm welcome to everyone joining us today. I will focus on three areas today. Our lab network expansion, operational capabilities and research, and how we are improving patient experience. Let me start with our first area of lab network. Our lab network now stands at 43 labs in India and one in Tandanya. This quarter, we expanded our geographic footprint further across India and opened three new labs, each at Mudhapparpur in Bihar, Garnol in Andhra Pradesh, and Prayagra in Uttar Pradesh. Now let us move to the second area, our operational capabilities and research. We further strengthened our specialty diagnostics portfolio with the addition of our FADIA-based energy testing platform and over 20 specialized tests, including histopathology, HPLC, specialized coagulation tests, next-generation sequencing, PCR-like biofire, olexome sequencing, gut microbiome, etc. These launches, especially new genomic tests, build on the foundation we laid on non-invasive reneutral testing, i.e. NIPT, as we continue to expand our genomics portfolio in a faced manner. While genomics remain at an early stage in India, it represents a significant long-term opportunity with the global market projected to exceed US$100 billion by 2030. Our approach which remains measured, introducing clinically relevant offerings, strengthening physician education and scientific engagement, and then scaling adoption over time. We also continue to translate real-world diagnostic data into actionable clinical insights through our fever study and Bharata Arugyam score. For instance, the analysis shows that the rise in non-communicable diseases starts earlier than commonly perceived, particularly for Heart Health and Diabetes. Both conditions show a sharp upstick in the 21 to 40 year age group, with heart risk doubling by the 30s and diabetic risk more than doubling by the 40s. Together, these patterns indicate that health risk builds gradually over time, highlighting the importance of early and regular preventive assessment. Now, coming to the third focus area of patient experience, which is something I care deeply about. Diagnostics is fundamentally a trust business. Every improvement we made this year was driven by simple question. Does this make the patient and doctor feel more confident in us? To maintain credibility, we continually reinforce the four foundational pillars that underpin trust in medical diagnostics. First, accuracy and quality. This continues to be non-negotiable for us. Supported by our NAB Elected Labs and ongoing equipment upgrades. There are 97% samples are processed at NAB Elected Labs. Second, faster resolution. When things go wrong, we strengthened our complaint management channels, reducing resolution timelines and improved proactive communication with patients and continue to achieve six sigma levels in complaint management with the same metric standing at 3.1 complaints per million tests. for quarter 1 FY27. Third, pasture reports. We worked extensively on improving logistics and lab processes, bringing the turnaround time to 3.37 hours in the quarter. And fourth, strengthening trust with doctors, who are often the first point of contact for patients. We host clinician meets at our own laboratories, giving physicians a first-hand view of our quality systems, advanced equipment, and operational processes. We conducted 23 doctor meets during the quarter with participation from approximately 100 doctors, helping strengthen awareness and confidence in thyro case capability while fostering deeper clinical engagement. Thus, overall, our focus has been on building an operations backbone that can support scale without compromising on quality or experience. With that, I will now hand it over to Vikram for the financial performance.

Good evening, everyone, and thank you for joining us. Before we get into the quarterly results, I would like to build on what Rahul highlighted on the operational and financial transformation in the last five years since APA Boarding's acquisition of Favokate. Our strategic priorities, expanding reach, strengthening reliability, and enhancing quality, have been executed consistently, and the results of that are reflected in our performance. We've snapshot of our long-term results are, we are growing 20% percent consecutively over the last eight quarters, and surpassing the industry growth. Key KPIs across the business have consistently strengthened, like panchagi network based, partnership and business, volume growth, lab infrastructure, and a test menu expansion. We are moving from routine diagnostic to specialized areas such as genomics and regi testing. On profitability, excluding COVID years, the EBITDA margin have expanded from 23% in FY23 to 32%. Return on Capital employed has also improved from 15% in F23 to 34% in F23. Importantly, we have achieved all this by continuing to invest in the business with Rs.250 covered costs of CapEx investments and required OPEX investment to execute all the initiatives which we want to ensure strengthen, reach, reliability, and poverty. Now, coming to the quarterly results, I am pleased to report a very strong start to FY27. Building on the growth momentum of last year, we delivered standalone revenue growth of 26.1% and consolidated growth of 24.3% in the first quarter. Our pathology business continued to perform well across our segments, with both the franchisee and partnership business delivering growth of over 25%. Our international Tanzania business also recorded strong transactions, reporting a two-fold increase in revenue over the corresponding quarter last year. In Radio Rosy also, we achieved significant sequential revenue growth of 8% over the previous quarter, indicating our gradual recovery in the business momentum. On a year-on-year basis, goal revenue declined by 4%, primarily due to the consolidation of centers. However, the business has delivered improved profitability, which is affected in the quarterly results. Starting Q1 April 27, we have started presenting a total view of our radiology business, which includes the performance of nuclear healthcare limited and first high tech limited. Now, first such is the significant scale and we feel that we should give a complete view of the radiology segments. This view will provide a more complete representation of our radiology operations. I would like to clarify that first high tech was already being getting consolidated in our Now, let me take you to the key financial highlights of the current quarter. Starting with revenue, over stand-on revenue came in at Rs. 225.6, which is up 26.1% year-on-year, driven by strong growth across franchisee and fundership business. On a consolidated business, revenue stood at 240 growth, reflecting our above 24.3% year-on-year growth. Moving to margins and profitability. Over gross margins at 74.1%, reflecting an improvement of more than 290 basis points over year. This was graduated from better negotiations, down 28% growth in trust volume, and the improved operation efficiency. Employee and other overheads cost increased year one year, primarily due to annual inflation, higher volumes, and investment in new growth areas like speciality and the feed expenses. Our EBITDA margin for the quarter was 32.2% with EBITDA growing 34% year-on-year. Profit after tax stood at UPS 51.3 quote with a bad margin of 21.4%. This also represents a 34% year-on-year growth. Earning per share for the quarter was at UPS 3.23 compared to UPS 2.41 quote in the prior period. Again, an increase of 34% over the last quarter. Overall, our steady performance reflects disciplined execution and focus on profitable growth. We remain committed to delivering consistent financial performance while continuing to invest in strategic initiatives that will support our long-term growth agenda. With that, I will now hand over to Rahul for the strategic advice. Thank you.

Thank you, Vikram. Briefly, I would like to take a few minutes to recap to you our strategic direction, and then I will open it up for Q&A. First, I will reiterate our value proposition to the customer. We will continue to remain an affordable option to all patients with good quality and on-time reports. All our effort on our value proposition is towards ensuring low cost to the patient, assurance on quality of testing through our certifications and engagement with doctors. We have made substantial progress on this, which we have updated in the initial comments and is reflected in the presentation. This will remain at our core and will continue to guide all that we do. Second, our strategy. We continue to maintain our strategy of being the B2B partner of choice to all front-end diagnostic services companies in India, whether it's a small diagnostic center in a semi-urban area, a pharmacy in a metro, a small nursing home, an individual doctor, or a leading online We are happy to work with them to provide low-cost, robust testing solutions so that they can serve their patients in the most effective manner. If they require phlebotomy, we are happy to mobilize our phlebotomy network of over 2100 phlebotomists, including our network partners, to serve them better. This strategy has been working well for us with both our franchise and partnerships business hosting strong growth. As a natural extension of the strategy and in line with our vision to make quality diagnostics affordable and accessible, we are expanding our specialty segment by deploying an on-ground technical sales team to drive deeper doctor-led engagement. Thus, also marking a strong entry into the curative segment, where we are extending the same quality standards that we have already established in preventive diagnostics, while maintaining affordable pricing for patients, further strengthening our position as a comprehensive partner to our network. That, in a brief, is our mandate as management. Thank you so much for giving us a patient hearing. I will once again end with a quote from the Mahatma. Find purpose, the means will follow, and our purpose remains to provide affordable, high-quality testing to the masses. With that, we will open up for Q&A.

Thank you so much, sir. Ladies and gentlemen, we will now begin with a question and answer session. Anyone who wishes to ask a question may press star and 1 on their test phone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Yesh with Unifi Capital Private Limited. Go ahead, Yash.

Yash, you may please proceed ahead with the question.

As there's no response from Yash, we'll move forward to the next participant. Our next question comes from the line of Aditya Chhira with Ingrid Asset Management.

Please go ahead. Aditya, can you hear us? Aditya, can you hear us? I hope there's no issue with the line.

No, sir, we can hear, you know, like there's a problem with the participant. Okay, we'll move forward to the next participant. Our next question comes from the line of Abdul Qadir Puranwala with ISSA Securities.

Please go ahead.

To start with first on your, you know, specialty foray. So, in the next three to four years, you know, how significant could your genomics and allergy testing portfolio could be? I mean, any, you know, guidance on that front would be very helpful.

Sure. See, as I said, we just started on the specialty front. So, it is difficult to give specific guidance so early in the process, but to just give you an indication, our rough estimate is for most of our peer set, specialty forms between 15 to 20 percent of their portfolio. I think our ambition would be to reach the same levels in the 3 to 5 year time frame.

And to roll this out across your, you know, the current lab network, what is the kind of investments you are planning to incur in the next couple of years?

Actually, most of the investments have been already done. See, unlike routine testing, where, you know, you need to deploy the CapEx across all labs, on the specialty front, actually, you can have a more centralized model. So, most of the investments are going into our Mumbai lab or our Delhi lab, which are our central processing labs. That capex is already done. I mean, now it will be mostly expansion capex if the volumes increase far below beyond what we thought. But I don't anticipate a significant amount of capex going into this business at least next year.

Understood. Good. And, sir, your thoughts on the divestment of the imaging business, any timeline you're working with there, and, you know, how should we look at this business?

Yeah, see, I just took approval, as you know, just to give all people on the call the background of this, right? The nuclear business has not been growing and we also have not been investing in the nuclear business. We have been fairly conservative looking at the return on capital profile of that business versus our pathology business. So, we have not been investing. So, therefore, we felt, you know, let us see if there is a partner who is ready to invest into the nuclear Thank you

very much, everyone, and welcome to the call, and welcome to the call and welcome to the So, when I look at your pathology revenue split versus the volumes or the while split, while there has been a significant increase in the franchisee in terms of the value side, but for the partnership business, the volume growth, I could see, is higher than the value growth. So, anything to read there?

Yeah, see, it's a bit of a, you shouldn't look at the B2C business or the what we call partnerships business at a while level, right? If you look at it, tests per patient, right, is what is increasing, right? And so, and as you know, as we add more tests in a, Thank you.

Thank you, sir. And last one, if I may, what would be the ESOP charge in the P&L for the quarter?

I will ask Vikram to take that question.

Yeah, so ESOP charge, so it would be around a three and a half code in the P&L quarter. And now why we have stopped reporting is because now what we think is this has stabilized now. And for any estimate, you can take it as a last four quarter address, which is the three and a half code of this would be a P&L charge in the quarter.

Thank you.

Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address all the questions from the participants, we request you to kindly limit your question to two questions only for participants. Before we have a follow-up question, you may please rejoin the queue. This question comes from the line of Shivam Hane with Purnanta Investment Advisors. Please quote. Hi, sir.

Thanks for the opportunity and congratulations for good sets of numbers. My first question is, what is the logic behind making change in definition of test conducted?

So, I am not able to hear you properly. Changing definition of?

Test conducted.

So, I will explain this. See, what used to happen earlier is in the test volumes, some of the calculated parameters were also put into the test numbers which are normally not built to the patient. It's a small variation, but we felt it would be more prudent to remove those because those don't get filled. And we have only put the, you know, the tests that actually require processing on the machine and billing. The reason we have done that also is over the last six months, we've introduced a number of calculated parameters. And so, therefore, you know, that volume will increase. And so, to give everyone a fair picture, we just decided to remove the calculated parameters and restate the numbers. We have given in the disclosure all the quarterly numbers. There is hardly any variation. So, you know, but we just felt it is important to restate it so that everyone gets a clear picture.

Got it. And second one also on. In this quarter, we have added 900 franchisees, while our yearly target is around 1500 franchisees. So, will we revise this yearly target now?

So, I will let Rajdeep answer that. Go ahead.

I think, yeah, so I think this is, you can call it out, and which we always mention when we discuss about growth, is that the franchisee business, the way it grows, what you see it in today is going to give you results in future. So, if you look at this number increasing is something which has been seated in as a strategy last year, if you talk about even last second half of last year when we increase the team size when it comes to the field sales team. So, this growth what you are seeing is actually blend of both the stores which we open and on a higher side, the numbers are usually the brandest stores which we have started opening. So, I think if you look at the numbers, I think the question you asked about the revision of the number, you can consider it. But to be very candid with you, this is also one of the impact of what additional sales scheme has been built up and geographical increase is what it is showing as a contribution in the numbers for this part. So, this will stay stagnant for the next financial year. The 1500 number which has been taken was kept in mind

Where it is normally we are found between q 2 and q 3 is difficult to expand the base. But yeah, Rajdeep is right. I think you can take this for the remaining.

So, new revised number yearly would be around 2000 franchises.

No, no. 700 plus 500 plus 500.

Okay. Got it.

And last one on. I am sorry to interrupt you, sir, but you may please rejoin. Thank you for more questions. Thank you. Our next question comes from the line of Chintan said with Kirik Kapital, please go ahead.

Yes, hi. Am I audible?

Yes.

Yeah, thank you. Thank you for the opportunity and the conference on the great state of Mumbai. Something on, you know, the franchise we wrote this quarter, right? We have been guiding the last quarter where we'll be growing at mid to high-ping kind of, you know, number that's our expectation for FI27. And because the base for FI24 addition was slow, so that was the precursor to our guidance that we'll be growing, franchisee growth for the current year to be at a 16 to mid to high-ping number. But this quarter, we delivered a very strong set of numbers, both in volume. If you look at volume, it grew almost 20%, 22%, and then we also saw some pricing growth for the current quarter, for the franchise. If you can just highlight, you know, what went this quarter versus what we were expecting, and how should we think through for the remaining part of the year.

Got it. So, look, it's too early for me to revise guidance. You know, if you look at Q1, FY26, we did roughly 180 crores. Q2, 26, we did 200 crores, right? So, you know, we are sitting on a very high base of last year. So, particularly when it comes to Q2. So, I think it's too early for me to revise guidance. I will still hold to the mid to high teens guidance at this point in time. But what I, on your second question on, you know, what we thought and what worked better than expected, I'll hand over to Ranjit to talk about.

Yeah, I think two strategies, and this is the, if I brief you about the franchising network, which was one of the previous questions which was asked, as a strategy is working out for us. And in particular, with the addition of things like what we have added in recent past is the brand ambassador as Madhuri Dikshir, is helping us out in actually bringing in more and more franchises, and also the field team enablement which we have done in last nine So, if you are looking at and what Rahul is also mentioning, see these numbers which may be looking very fancy like 900 as of now, will grow with the same speed earlier the franchisee business was growing. So, in the starting of the business, they may not look so high in the Q2, what is there in the Q1. That is why we are saying that an estimate of a mid to high team will help you to actually do the right forecast for the next quarter. That is the reason for this number, what we are saying. Got it, got it.

And you revised, as explained in the previous comment, that we have revised our test number a little bit lower, which is what we have reported in the past, and that has resulted into kind of reasoning test per patient number for us. You know, if you use the older data, we have kind of sequentially seen a drop in test per patient, but this is not like to like now, right? You have to use the updated patient data. But if one has to look at, you know, while for the franchisee, that remain at around 500, that is the, given the maturity, do you see this number? Further up in the subsequent quarter or the failure?

I, on the question, the first question, I will ask Vikram to address the question. On the second question, I was not able to fully follow the question. Would you mind?

Yeah, sure, sure, sure. So, my question was that the test for the patient, because we have reinstated the number of test numbers, This is what we have historically reported. But if I look at the vial for franchisee, right, that is the key metrics that I typically follow. That has kind of around 500 or 510 or number. But given that, you know, FI24, we didn't add much of the franchisee. A lot of it was added in FI 25, and that maturity level will start hitting in FI 27, where one can expect this number to, you know, start improving further. That was our expectation that, you know, while so franchising will start moving upwards of FI 25, 30 years. Okay.

Got it. Test number is like-to-like, and all numbers in the report are like-to-like. So, you can do the calculations on that front. So, on the while for franchisees, see, what you are observing is two effects. One is, of course, as we continue to add to the base, while the older franchises mature, the newer base comes in at a lower level, so you kind of then stay at the same level, right? So, it's a mix of older franchises maturing, but newer franchises entering at a lower base. And the other is our expansion is now going deeper and deeper into India, right? So, we are now in tier 3, tier 4 markets, right? Where you can't expect the same 500 samples a month in those markets. So, you are seeing these two effects play out in the sample for franchising.

So, my alternatively, what I was looking at, you know, given that we are adding more number of tests, specialty into the picture, one can expect with writing of our test menu, this number should start to kind of reflect in some improvement. Yes, that is the hope.

We continue to be very focused on driving the mix towards higher value tests and that effect you should start to see.

And the blended OHP for the current portal which has seen improvement, we expect this to, you know, play out in the coming, coming portal, that's it?

No, no. See, specialty is a very small base right now, right? So, if I look at it, we have done, you know, almost 55 million tests or 5.5 crore tests, right? The specialty will be not even 1% of that, right? So, I think it will be some time before it reaches a scale where you will start to see the effect in the revenue per test.

Thank you, Chintan. I'm sorry to interrupt you, but you may please rejoin. Thank you for more questions. Thank you. Reminded all the participants, kindly restrict your question to two questions only per participant. Thank you. Our next question comes from the line of Sanyam Jain with Galoth Capital. Please go ahead.

Hello, I'm Audebam. Yeah. So, my question is a bit comprehensive one. I want to ask that Farmeji EPA holdings and Thyrocare as a group, as we know that 100% promoter holding is blessed, and the dividend payout, and also recently, EPA also sold 10% stake in Thyrocare to repay the debt. Right. So, is there any plans of, you know, we also knew that there could be IPO, ETA holding, so there could be reverse merger with ThyroCare. Like, what is the group plan to actually unplace the shares and revive the company, the parent company? Like, what could be the effect on ThyroCare on that? I want to understand the strategy and focus about that. Thank you.

Yeah, see, right now, firstly, the news that floated that EPI is going for IPO is unfounded. That is mostly speculation. At this point in time, there are no plans on that. As the second Sanyam, we have been at API Group reducing the debt quite substantially. We were at 1700 crore debt last year, we are now 1800 crore debt last year, we are now down to 1050. And as you if you have been following, you know, we have been what you call selling non-strategic See what all options are there to monetize to bring down the debt, right? I think API will consider an IPO when it is profitable ex-PyroCare as well as debt-free, right? That is the time when any corporate action will be considered. I think we are at least 12 months away from both those milestones. So, I think right now the API team is just focused on improving the business, getting all businesses to break even and become profitable ex-ThyroCare. And that is the focus. And once that is achieved is when all discussions on IPO and other actions will be under consideration.

And could there be any guidance about dividend of Thiocare for this coming year?

No, we never give dividend guidance. So, I think we will take it as it comes.

Thank you.

Thank you. Our next question comes from the line of Yogesh with Highton Securities. Please go ahead.

Yeah, thank you for the opportunity. My first question is on the speciality front. Thank you.

Yeah, I think I will let Rajdeep take this question. And Rajdeep has come from that background and really setting up the entire infrastructure and team and all of that for that. As far as he is best placed to answer this question.

Yeah, yeah. Thank you, Yogesh. So, I think predominantly pathology as an industry has been conventionally driven via doctors and it's, I always call out it is 90% prescription business, visually. When it comes to fact as a business, definitely preventive is growing much faster, way faster than the kind of prescription business, but the fact remains fact. So, I think it's not something which we have to reinvent. The way it exists in the industry by building up a specialized team who is scientifically enabled, them getting into the field, first is doing the same kind of, I would say, calls or working they were doing earlier for bringing the franchisees. Now, they are bringing the doctors on board, talking to the doctors, giving them scientific understanding about the products which we have, for which we have enabled a proper structure of the team. The other thing, the other way around of doing the same thing is again communicating to our existing network of franchises, which we are quite capable of doing by just uploading communications on our software with which they do test booking. So, there are multiple such kind of initiatives which are not very difficult for us as an organization at this scale. And definitely in the end, we being for a longer time in the industry and in the end, the report finally goes in the hands of doctor. Now, it's not very difficult for us to go back to them and say, sir, now we are also doing these tests, even for us or for the partners to go and do this. So, we are driving it from the both-hands, the conventional way of going back to the doctors and also pushing it via our franchisee network. I hope I answered your question.

Yes, sir. Just to understand, I mean, any target that we have set for ourselves with regards to doctor coverage?

I think it will be very early and this, particularly this segment is at a very nascent stage. We have just started few of the cities out of the overall country. However, we have activated rest of the network for it. But we have not actually set up a target. You can call out and I always communicate in the previous call also I mentioned it is a zero year for speciality. So, considering any numbers, basis of what we are doing, as of now, will be very difficult for me to give you.

Okay, sir. Understood. Second question, again, on the...

Sir, you have asked already two or three questions. You may please rejoin the queue.

Okay.

Our next question comes from the line of Yesh with Unifi Capital Private Limited. Please go ahead.

Yes, sir. Oh, so just wanted to ask, last quarter we had an update regarding change in our MOA, regarding our intention to enter consumable space. So, just wanted to have an update on that, what we have decided, whether it will be kind of backward integration or Thyrocar branded consumables.

Yeah, it will be in the direction of Thyrocar branded consumables, not backward integration. But this is a matter of internal strategy. So, I would request, please be patient. By September, you will see an announcement from us. And I am sure you will be pleasantly pleased with what we are doing. But my request would be, please be patient.

Understood. And just one thing, regarding the franchise addition, which we spoke about, so it is basically 1,700 additions during the current year, right? 500 plus 500 plus 500.

Yeah.

And going forward, it's 1500, the guidances or it's, we are building it to 1700, like for two, three years, medium term.

I think, as I said, it's just the first quarter, guys. So, you know, it's difficult to start getting into, you know, updated guidance and all of that. Let's, let's see through the second quarter. After H1, I think I think I will have more specific guidance for where we think they are going to go.

Understood. Thank you.

Thank you. Our next question comes from the line of Aditya Chieda with Ingrid Asset Management. Please go ahead.

Hi, good evening. Hope I am audible. Congratulations to the management on a strong quarter, and in particular, the board's intent to divest the radiology business, The segment had been diluted to the consolidated return ratios, and stepping away from it does reflect a clear focus on ROC. So, if you can, you know, quantify, if I'm correct, the PAT was roughly 5 crores, and the investment that stands today was roughly 150 crores, if that is the correct understanding so far on that.

I didn't hear your first thing. The investment is, I think, 140 crores. What was your first point?

On the pad that comes along with this business, this segment had been dilutive to consolidated return ratios, and stepping away from it does reflect a clear focus on ROC. That was the comment that I wanted to make.

Yeah. See, first quarter, we did about 1.72 crore pad. I think 6 crore pad is what you can expect for the year, not more than.

Right, right, right. And on the franchisee edition, you know, where are the white spaces? Are we adding more density in existing markets or it will be a pin code expansion as the strategy stands today?

I will ask Rajdeep to take that.

It will be both. It will be blend of also going into the market which are white spaces and also penetrating more deep into the existing ones. So, strategically, it will be both. We will keep on working the way. We are also adding on teams in the new territories and also adding in the existing ones.

Oh, God. Those were my questions. Thank you so much.

Thank you. Our next question comes from the line of Surya Narayan Patra with Philip Capital. Please go ahead. Mr. Patra, you may please proceed ahead with the question. We are not able to hear you again.

As there is no response, we will move forward to the next part.

A next question comes from the line of Chintan Seth with Greek Capital. Please go ahead.

I'm Audible, and thank you for the follow-up. I was asking on the franchisee realization for the quarter, right? We have seen 7% growth this quarter. Past two quarters, it has been slacked. So, just wondering, is there any, you know, effect of specialty getting built into this number, given the contribution is still very low, but is there any, how should one read through it and the realization on the franchise revenue for why? Okay.

Just to understand the question more clearly, you are saying the revenue per franchisee or the while per franchisee?

I am asking revenue per while for the franchisee business.

Achha, okay.

So, realization per while, yeah, on the franchisee.

Okay, you are asking why has it gone up in this quarter, right? Correct, correct. Yeah, it is not because of the genomics and allergy side, but you know, of course, if you look, if you go back four years ago, thyroid used to be 20% of our mix, right? Today, it is no single digits. Thyroid, of course, being the most affordable B2B rate that we have in our overall network. So, there has been substantial movement towards what I would say semi-specialized, not specialized, right? So, instead of thyroid, more lipid profiles, more biochemistry parameters, more markers, you know, dual marker, triple marker, quadruple marker, PCR-based testing in HIV, HPV, all of these areas. So, I would say a lot of the more advanced tests is what is what you are seeing in the realization figure in this year.

Got it. Got it. Because that number has been stagnant around 250. This quarter it marked cross 250. So, that was the question. I think that's all for me. Thank you.

Thank you. Ladies and gentlemen, due to the time constraint, we request you to kindly ask only one question per participant. Our next question comes from the line of Lokish Manik with Valium Capital. Please go ahead.

Yes. Hi, good evening, Rahul and team. Am I audible?

Yes.

Yeah, great. So, Rahul, at the start, it was mentioned that Arogyam has grown 21% YOY. Our pathology revenue has grown 27-28%. So, what has led the revenue other than Arogyam? Would it be a semi-speciality or more of a routine, would you say, from a product perspective or category perspective?

So, I'll take that question. Yeah, you're right. Arogym versus non-Arogym. Arogym has grown slower than non-Arogym. And that is actually linked to the question that I just took, which was, you know, So, Arogyam as a realization, because there are so many tests and all of that, typically tends to be dilutive to the revenue per while that we get from franchisees. Over the last couple of quarters, our focus has been to encourage our franchisee network to also send standalone tests, semi-specialized tests, and newer tests, which are all not part of the Arogyam bouquet, right? The second part is, typically quarter 1 is not a good quarter for Arogyam, right. A lot of the preventive testing happens in quarter 4, right, and that is because many people have their corporate benefits and all of that expiring in March at the end of the fall. But that being said, it's a possible, you know, want to drive the single tests and more semi-specialized tests, and that's what you're seeing in the growth rates, and also the effect of that you're seeing in the realization.

So, have you seen growth in routine tests also?

Yes, yes. It's across the board.

Okay, that's it from my side. Thank you so much.

Thank you. Next question comes from the line of Yogesh with Hightong Securities. Please go ahead.

Yeah, hi. Thank you once again for the opportunity, sir. With regards to the specialty segment, one thing which I would like to understand, I mean, given that your thesis is of segment being underpenetrated, premium pricing, and limited access, I mean, our aim or rationale of entering this segment is whether to gain the volume, similar to our playbook that we did in pathology, preventive care, or whether it is to gain, have an access into high margin speciality segment.

No. So, look, our mission is to make diagnostic testing affordable, right? And that is our guiding principle. So, we will definitely get into this segment with the aim to make it affordable, right? So, just to give you an example, in NIPT, which is non-invasive prenatal testing, we came in at a price that is actually less than half of the existing prices of players in that market. So, we want to make it affordable and capture the volumes. It is not about, you know, getting into the same pricing as what exists, because we really want to make it affordable. That being said, if the volumes come through, the margins are comparable.

Understood. I understood. I appreciate your answer. Thank you very much.

Thank you. Next question comes from the line of Yash with Unifi Capital Private Limited. Please go ahead.

Yeah. I just wanted to know about the previous additions which you have made for the franchisee segment. Because I think our CEO just spoke about additions during the past quarter which led to an increase of 900 franchises during the present quarter. I just wanted to have a brief about that.

So, just to recap your question, you are asking the strength of the field team that is focused on franchisee addition.

Yeah, field team and what is the change? Basically, he said that in last quarter, we added, we have increased our field force. So, just wanted to know the delta, what we have increased, what it was actually and what we have increased.

Yeah, I think this conceptually, this thing of adding more and more franchisee on the ground has been rare, but we have started pushing it more. So, the team size, if you ask about, is around 70 Pan India. The people who walk around, meet with franchisees, meet with the existing lab guys and convert it into. So, this is the team size. Nice. Any other question you had? I just missed the second question you asked. Is this what you're asking?

I was asking basically, like basically you said that last quarter we added an extra field post. So just I wanted to know what a delta.

Yeah, so last year this number would have been 35-40. So I think over the course of the year we have doubled the fielding.

Okay, thanks.

I don't see them being diluted unless we fail completely on the strategy and we don't get volume.

Okay. Okay. Got it. Thank you.

Thank you. Our next question comes from the line of Surin Narayan Patra with Philip Capita. Please go ahead.

Yeah. Thanks for this opportunity. Am I audible, sir?

Yes, sir. Yeah. Go ahead. Yeah.

Okay. See, congratulations for the great set of numbers. So, one thing that I just observed that, okay, there is a 24% kind of growth that we have reported on the company, for the company as a whole, and the franchisee growth itself, 23%. So, going ahead, should not we think that we should surpass the growth of the franchisee addition growth itself?

I was not able to fully follow the question. Our franchise business grew at 27%. At a consolidated level, we grew at 24% and pathology grew at 26%. Correct.

Possibly I was linking the franchisee growth addition, which is the franchisee number count, YY is 23% and revenue growth for the company as a whole is 24%. So that is why I was telling that it is just moving in line with the volume growth what we are franchisee is witnessing. So, should not we think relatively better growth for the company as a whole, while we have been giving a guidance that it should be somewhere like near 20% kind of growth for the business overall?

See, it's a very complicated answer. You know, you can't just look at franchisee growth and say franchisees have grown at 20%. So, the company should grow at 20% because, you know, there are existing franchisees who mature and there are new franchisees that come in on a very low base, right? So, actually, if you look at it, if you add 20% franchisees, in the year that they get added, they hardly add 5% of the overall, you know, to the revenue. And then they mature to 20% only by the third year, right? So, you have to see all these effects to be able to do that. And that is why I have been conservative in the guidance.

Okay. My point was that, see, like, in the last four, five years, since the time of the management change, the growth in the franchisee addition category itself, more than 20%, while revenue growth been sub-20% or at near to 20% level. So, I think, you know, once the franchisees will mature, the overall growth possibly will surpass the addition growth itself, and that will bring in incremental operating leverage, and hence margin improvement. So, whether my thought process is of that luck, really?

Yeah, that thought process is fine, provided, one, all franchisees stay with us, and we don't see any franchisee churn, right? And, yeah, so then, yes, that piece is in there. Okay.

And do you mention in the…

I'm sorry to interrupt you, but you may please reach on the queue. Thank you. Next question comes from the line of Naman Bhavresham with IFL Capital Service Limited. Please go ahead.

Thank you for the opportunity. Just one quick clarification. I'm still concerned on the franchisee additions for the full year FY27.

Is my understanding correct that we are going to add 1700 franchisees from 2QF527 to 4QF527 or just 1700? No, no, 700 in Q1, 500 in Q2, 0 in Q3, 500 in Q4.

We have already added 900 in Q1. So, there

will be some churn in the by the time we reach the end of the year. So, if it does not happen great, then I will have done better than the guidance. But at this point, you should take that not all 900 may stay with us by the end of the year.

Okay. So, that would be a net number. 700 would be a net number. Perfect. Thank you very much.

Thank you. Ladies and gentlemen, that was the last question for today. I now hand the confidence over to Mr. Rahul Gula for closing comments. Thank you.

Thank you, everyone, for joining us and spending the time with us this evening. As always, we continue to remain focused on our strategy, which is to be the most affordable, good quality diagnostic testing partner for anyone in the healthcare business, and we continue to execute on that strategy. We have been investing in improving our quality, improving our reach, and ensuring turnaround time is as close to best in class. And we have made substantial progress on all of this, and that is what is driving the results that you see. I thank you all for your support in this journey, and I wish you all a good evening. Thank you.

Thank you so much, sir. Ladies and gentlemen, on behalf of Thyrocarry Technologies Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.