Thyrocare Technologies Limited (THYROCARE) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the ThyroCare Q4-FY26 Earnings Conference Call, hosted by ThyroCare Technologies Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Preetj Joshi from ThyroCare. Thank you and over to you, sir.

Thank you, Swapnali. Good morning, everyone, and thank you for joining us today. I am Preetj Joshi from strategy team at ThyroCare. It is a pleasure to welcome you all to the Q4 FY26 earning call for ThyroCare. Joining me on the call today are Mr. Rahul Bhuwa, our MDN CEO, Mr. Rajiv Panwar, our Chief Commercial Officer, Dr. Ramesh Kinnah, our Chief Operating Officer, and Mr. Vikram Gupta, our Chief Financial Officer. I hope you have gone through our results release, the quarterly earnings presentation, and the press release, which has 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 Guha.

Thank you, Preet. Good morning and welcome to the call. Thank you for taking out time from your busy schedules to join us this evening. As in all my calls, I will start 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 ThyroCare can take its business model to Africa and make affordable, high-quality diagnostics accessible to all. Before I get into specifics, I want to take a step back and talk about how we see the diagnostics industry evolving. In today's healthcare landscape, diagnostics is no longer a back-end support function. It is central to clinical decision-making and increasingly to preventive health management. Patients today expect convenience, speed, and reliability as a baseline and are actively looking for trusted partners who can deliver end-to-end diagnostic solutions seamlessly. This shift aligns closely with our own mission at ThyroCare to make preventive healthcare easy to deploy, consistent in quality, and accessible to all. Against this backdrop, FY26 has been a year of meaningful progress for us, not just in terms of growth, but in terms of strengthening the foundation of the business. We are very proud of some of the key milestones that we achieved in FY26. CyroCare was certified as a great place to work, a recognition by the Global Authority on Workplace Culture, reflecting our commitment to fostering a positive, inclusive, and empowering environment for our people. We were recognized as the fourth National Diagnostic Forum and Award by Voice of Healthcare with two prestigious awards. Best Diagnostic Lab Chain of the Year, National, and more importantly, Patient-Centric Diagnostic Company of the Year, National. During the year, we onboarded Madhuri Dixit as the brand ambassador for ThyroCare, which is an important step in strengthening brand recall and consumer trust at a national level. Our diagnostic portfolio continues to do well, Arogyam growing in line with the company growth rate, but the highlight was Jansh, which grew at 66% this quarter year on year, showing the move towards more specialized disease-specific testing, even in the annual health checkup space. We expanded our diagnostics portfolio significantly into the specialty space. One key addition was allergy testing, which was introduced using the Fadia platform and currently has over 250 SKUs. We started our foray into genomic testing on May 1st, a segment that is nascent but directionally significant for Indian diagnostics. The global genomics market is projected to exceed $100 billion by 2030, and India, with one of the highest burdens of genetic disorders, including thalassemia, sickle cell disease, and hereditary cancers, represents a structurally underpenetrated opportunity. Carrier screening, pharmacogenomics, and cancer predisposition panels are seeing early but accelerating demand, particularly amongst urban, health-aware consumers. With a franchise network of almost 11,000 collection points and a deep brand trust in preventive testing, TheroCare is well positioned to bring genomic testing to a broader patient base at accessible price points, democratizing a category that has largely remained confined to metro hospitals and specialty clinics. We are approaching this methodically, starting with defined panel offerings, particularly non-invasive prenatal testing, building clinical validation, and layering physical education before scaling it aggressively. We now have more than 10,800 franchisees. As a result, we processed 210 million tests in FY26, which grew by 23% year-on-year. It's important to contextualize that this volume is higher than some of our biggest competitors combined. We served 19.2 million patients in FY26, which increased by 15% year-on-year. As we continue to scale, our focus remains anchored on delivering high-quality diagnostics with consistently faster turnaround time. In Q4 FY26, 97% of our samples are processed in NABL-accredited-owned laboratories, with every report being reviewed by qualified MD pathologists. We have also made significant progress on our quality metrics, with complaints reducing to 3.06 per million tests, thus sustaining a Six Sigma level of performance. Also, during the quarter, we delivered an average turnaround time of 3.43 hours from sample receipt, supported by our laboratory operations and a strong, well-integrated logistics background. This allows us to ensure timely access to critical diagnostic information across the country. Thus, overall FY26 has been about building scale with consistently, while continuing to invest in capabilities that will drive the next phase of growth. With that, I will now hand it over to Rajdeep to take you through the business and commercial updates.

Thank you, Rahul. Thank you, Rahul. And good morning to everyone joining us today. I'll take a few minutes to walk you through how the 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 21% year-on-year growth in FY26 and 20% year-on-year growth in Q4 FY26. Primarily driven by our core pathology business. For the year, our flagship brand Arogyam continues to lead preventive health care segment, growing at 20% year-on-year this quarter, complemented by Jaanj, which caters to curative and chronic health needs. Though just being 2% of overall pathology revenue, Jaanj has also grown at 66% year-on-year this quarter and is becoming a strong pillar of our lifestyle offering. Let me now break this down across our key business segments. In FY26, in FY26, franchisee business delivered 18% YOI growth and in Q4 FY26, 21% YOI growth. It has now been almost three years since we implemented the pay for performance structure, which has led to renewed energy and motivation within our franchisee network to move up volumes and enter higher slabs supported by this renewed energy along with strong brand equity and market demand. And our franchisee base has reached its highest ever level of 10,800 active franchises in Q4FY26. To further accelerate growth, we have expanded both our field and central teams, enabling us to penetrate deeper into India and open high-transisting stores more quickly. The activation of our specialty division will complement our broader growth strategy by strengthening our omni-channel presence, enabling us to become a one-stop solution for our partners and drive higher wallet share within our existing network. To further strengthen engagement and relationship with our franchisees, we regularly conduct structured interactions. This year, to further drive franchisee engagement, we hosted 13 franchisee meetings across different locations in India. With the healthy participation from our franchisee partners, we are 774 partners attending. Insights and feedback from these interactions directly inform how we strengthen process, service delivery, and quality outcomes. Moving to our partnership business. As we know, this continues to be a strong growth in for us. In FY26, partnership business grew at 32% year-on-year, and in Q4 FY26, the growth was 23%. 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 offering across multiple cities seamlessly, which is trending our positioning as a preferred B2B partner. In Q4F by 26, growth at 23% in our partnership has been lower than expected versus previous quarter in this financial year. But it is important to note that this is a one-off dip. This dip is primarily because last year we had a one-off boost in our partnership business primarily due to an aggressive push on camps, especially during the Mahakum period. And the initial investment to build traction in the insurance segment as this year, we have normalized our pricing into the insurance segment, and therefore, the growth has been slower in this segment. And of course, the scale of camps this year has been much lower. The extent of the one of was approximately 4 crore in Q4 F by 25. And normalizing for that, the partnership segment still grew at 32%, which is in line with the historical growth across the previous three quarters in the year. Thus, our overall focus has been on building depth across channels, improving partner productivity, and expanding the value we deliver through a wider test portfolio and stronger service capabilities. With that, I will hand it over to Dr. Kina to walk you through operations and lab initiatives.

Thank you, Rajiv. Good morning and a warm welcome to everyone joining us today. I will focus on three areas today. First, our lab network expansion. Second, operational capabilities and research. And third, on how we are improving patient experience. So let me start with our first area of the lab network. Our lab network now stands at 40 labs in India and one in Tanzania. This year, we expanded our geographic footprint further across India and opened seven new labs, each at Bhagalpur, Mandi, Roorkee, Kashmir, Devangiri, Vijayawada, and Guadal. This helped us expand our reach in significant geographies and add capacity there, where nearby lab's capacity was about to get exhausted and meet better tax commitments. But beyond capacity, lab expansion plays a much larger role. It builds patient trust at the first point of contact, especially in tier 2 and tier 3 markets, driving repeat usage and referrals. It also strengthens our B2B proposition, making us a more compelling pan-India partner for corporates, insurers, and hospital networks. And finally, our hub-and-spoke model ensures strong economics, allowing incremental volumes to flow into existing infrastructure, driving better utilization, and operating leverage as a network scale. Now, let's move on to the second area of operational capabilities and research. During the year, we continue to strengthen our test portfolio and operational capabilities, including the addition of Fadia-based energy testing platform and other 20-plus specialized tests, Including histopathology, a new HPLC platform, specialized co-evolution test, next-generation sequencing, and the BioFire PCR platform to the portfolio. Our genomic expansion is underway with a strong focus on building a comprehensive specialty test portfolio. Starting with NIPT, we are adding tests in a structured phase manner to enhance clinical depth and drive growth in physician diagnosis. We also continue to translate real-world diagnostic data into actionable clinical insights. For example, our fever study based on approximately 3 years of data from our Josh Fever panels revealed that 1 in C-fewers are linked to more complex infections such as dengue, typhoid, malaria, and influenza. This reinforces the need for timely and comprehensive testing, which we address through our Josh Fever profiles. One more example is our Bharat Arugyam's core study, which is based on the data collected between 2023 and 2025 from over 1 lakh patients. Over the country, we have 96% of individuals exhibit risk for at least one health condition, indicating that very few people have completely optimal health parameters. 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 a simple question. Does this make the patient feel more confident on us? To maintain credibility, we continually reinforce the four foundational pillars that underpin trust in medical diagnosis. First is accuracy and quality. This continues to be non-negotiable for us. Supported by our Anywhere Accred Labs and ongoing equipment upgrades, whereas our 90% samples are processed at Anywhere Accred Labs. Second is faster resolution when things go wrong. I agree no service is perfect every time, but what sets a trusted brand apart is how quickly and transparently it resolves the issues. We strengthened our complaint management channels, reduced resolution timelines, and improved proactive communication with the patients. This year, we achieved 6 Sigma levels in complaint management, with the SAIT metric standing at 3.06 complaints per million tests for Q4 FY26. Third is faster reports. We have worked extensively on improving logistics and lab processes, bringing our turnaround time to 3.43 hours in the quarter. And fourth, strengthening trust with the doctors, who are often the first point of contact for patients. We continue to deepen our engagement through multiple forums, meetings, and on-ground interactions. During the year, we conducted nine doctor meets with participation from approximately 300 doctors. Additionally, we recently started invoking doctors to visit our labs, where 256 doctors had visited our labs across India, Where we showcased our quality systems, advanced equipment, and strengthened quality control processes, while also addressing awareness gaps around our capabilities. 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 financial performance.

Good morning, everyone, and a warm welcome. Thank you for joining us today. I am pleased to report that we have delivered another strong quarter, along with our solid full-year performance for Rv26, driven by consistent revenue growth. We continue to deliver growth in the Rv20s, with all of our key strategic drivers performing well. Our stand-on business remains strong and continues to grow higher than industry average. Both our franchisee and partnership business continues to execute very well. On the international front, over-Tanjani operations, though small in base, but has also gone by 75% for us year on year. In radiology, as covered in earlier course also, we undertook some strategic consolidation of centers during the year. While this has temporary impact on the growth, the overall financial performance has improved with the stronger bottom line. Overall, our study performance reflects discipline execution and we remain focused on delivering consistent growth going forward. Now, let me take you through the key financial highlights for the current quarter. Starting with revenue, our stand-all revenue came in at Rs. 210 crocs, which is up 21% year-on-year, driven by a strong growth across franchisee and partnership business. On a consolidated basis, revenue stood at 2.24 crores reflecting a healthy 20% year-on-year growth. Moving to margins and profitability, our consolidated gross margin has improved to 74.7% and increase of over 113 basis points year-on-year. This was RGD1 by better negotiations and a strong growth in test volumes, which has helped improving operating efficiency. And why another overhead score has increased year-on-year, primarily due to annual inflation, higher volume growth, and continued investment in the new growth areas like speciality. Our EBITDA margin for the quarter was 34%, with EBITDA growing 31% year-on-year, supported by strong revenue growth and improved gross margins. Profit after tax to debt rupees 48.7 crore, with a pet margin of 21.7%. This represents a 128% year on year growth. Now moving to a full year performance. For April 26, standout revenue reached Rs. 774, while consolidated revenues stood at Rs. 829, reflecting a strong 21% year on year growth. Pathology revenue grew by 22% in April 26, while radio agency revenues are defined as 6% during the year. On profitability, in absolute terms, EBITDA for the year stood at UPS 262 crores and profit after tax was UPS 163 crores. We are cutting strong growth of 38% and 81% year-on-year. Earning per share adjusted for last year bonus issue came in at UPS 2.99 which is up by 64% from UPS 1.82 last year. Our balance sheet remains strong with the net cash and investment of UPS 230 towards first and zero debt as on 31st March 26. On the cash flows, we generated UPS 203 towards from operating activities after tax during the year. Before I hand over, I would also like to share that Board of Directors has recommended a final dividend of UPS 7 co-equity share for the year ended March 31st March 26. With that, I now hand over to Rahul for the strategic updates. Thank you.

In the meantime, if Rahul is unable to connect, can we ask Rajiv to update the strategic piece on behalf of Rahul?

Rajiv sir, your line is unmuted. Please go ahead.

Yeah, I will take it from here. So, thank you, Alok and thank you, Ikran. Briefly, I would like to take a few minutes to recap to the strategic direction and then I will open it up for Q&A. First, I will reiterate our value proposition to customer. We will continue to remain an affordable option to all patients with good quality and one-time reports. All our efforts 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 I updated in my initial comments and is reflected in the presentation as well. This will remain at our core and will continue to guide all that we will do. Second, our strategy. We continue to maintain our strategy of being the B2B partner of choice to all front-end diagnostic service companies in India. Whether it is 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 diagnostics platform, and health tech marketplaces, we are happy to work with them to our genomics expansion underway, with a strong focus on building a comprehensive specialty. And we are ensuring to provide a low-cost, robust testing solution 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 2000 phlebotomies, including our network partners to serve them better. This strategy has been working well for us, with both our franchisee and partnership business hosting strong growth. As a natural extension of this strategy, and in line with our vision to make quality diagnostics affordable and accessible, we are expanding our specialty segment, that is allergy and genomics, by deploying an on-ground technical sales team to drive deeper, doctor-led engagement, thus also making our strong entry into the curative segment, Where we are extending the same quality standards 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 brief is our mandate as management.

If I am back, I will cover the last one.

Please, Rahul.

Thank you everyone 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 very much. We will now begin with the question and answer session. Anyone who wishes to ask a question, may press star and then 1 on the Deathstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants, you are requested to use answer while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all, you may press star and 1 to ask a question. We will take the first question from the line of Sukrit D. Patil from iSight Pintered Private Limited. Please go ahead.

Good morning to the team. I have two questions. The first question to Mr. Guha is a forward-looking one. How do you see ThyroCare growing over the next few quarters in diagnostic and preventive phase? What are the main priorities on your table, like adding new tests or using digital platforms and improving customer trust? You know, out of these, what do you feel will help the company stay ahead of the competition and build a stronger position in the market? This is the first question. I'll ask the second question after this. Thank you.

Sure. Our strategy remains more or less the same. So, you know, the key drivers of growth for us are franchise expansion. If you see over the last four years, we've been able to maintain a 25% CAGR on our franchise expansion, culminating in almost 11,000 franchises by the end of this financial year. And if you go through the disclosures, we've also shown how, you know, an FY22 franchisee matures, a FY23 franchisee matures, 24, and so on, right? Right. So actually, if you look at the next four quarters, you know, it's actually work that has been done almost two years ago, because those are the franchises that were added two years ago that will start contributing to the growth in this financial year, FY27 to speak. Now, the franchises that we are adding now will contribute in FY28 and FY29. Right. So franchise expansion remains at the core of our, you know, execution. The other is our partnerships, right? We, as I had mentioned earlier, if you look at every major health tech player, we work with them. If you look at every major, what we call wellness provider, we work with them. But we have just started to scratch the surface on insurance and, you know, other allied segments. So I believe there's a lot of work to be done to capture the opportunity in that business because there are many players now who are in the health tech or health care space that also want to offer their patients diagnostics, right? And ThyroCare being a B2B partner is actually the only partner who offers them that ability to expand their portfolio of offerings in health care to their patients. So, I think those two have been our traditional drivers of growth and will continue to remain the traditional drivers of growth. The only new element that we have added for FY27 is specialty, right? As Rajdeep had covered and I had covered, we have made quite a few investments in genomics, allergy, histopathology, and other areas more towards moving the mix of ferrocare into the specialty space. Of course, FY27 will be our first year of the foray into specialty. So, it will be on a very small base. But definitely, if you look at three-year out horizon, specialty will be a very large component of our growth going forward.

Thank you.

And maybe before I hand over to Vikram, I'll just give you a little bit of our operating philosophy, right, which is more like, you know, Warren Buffett kind of operating philosophy, which is, you know, first savings, then expenditure, right? Right. So we or in our case, first margin protection, then expenditure. Right. And so what I have always been guiding is that any operating leverage that comes out of the growth, you know, obviously, we're growing at 20 percent plus and, you know, your cost doesn't increase that much. Any operating leverage that comes out of the business is what we invest in growth, but we try our best to preserve the base margin. So, very much a philosophy of, you know, first margin preservation and then surplus goes towards investment, towards capex, growth, new initiatives, and so on. So, that's at a philosophy level, but I'll let Vikram take it at a more detailed level.

I think you have covered it all. So basically we are, though we are investing into new things, but as I said, we are very calibrated into the investments, what we are doing into the new things. Let's say for the genomics, we are starting with the top 10 cities over India. So we are calibrated in the investments which we are doing. And plus on the separation also as you covered, let's say you have seen that our gross margin has improved by under the 13 basis point over the last year. So, the benefit of scarce continues to come and we continue to invest that thing into the call. So, we will protect our margin, whatever operating risk that will come, that is going to be a guiding factor for the investments which we will do into the new things.

Thank you and best wishes.

Thank you. We will take the next question from the line of Raman KV from Sequent Investments. Please go ahead.

Hello, sir. Thank you for the opportunity and congratulations on good set of results. I have just two questions. One with respect to the margins. We are seeing during the quarter there is a strong uptick in the gross margin. Can you just help us understand the reasons for the gross margin expansion and is this the new normal? And can you also help us understand that whether the Tanzania business has breakeven, which led to the contribution towards the higher gross margin, as well as the diagnostic business has rebounded with sharp margins during the quarter. So can you also throw some light on that aspect? Understood.

See, on the margin front, you know, a large part, if you look at quarter on quarter, I think margins are more or less stable, right? So I think if you look at it going forward, I think margins will be in that, you know, 73 to 74 range. It's a mixture of basically, you know, good negotiation with the vendors to be able to realize volume benefits from the volume that we are able to purchase, as well as last quarter, there would have been some, how do you say, catch-up effect of the ROU, but, you know, that is now fully baked into Q424. So I think you can expect, you know, the steady state margins for the business to be around 73 to 74, barring any, you know, abnormal price hike in reagents that may come out as a consequence of the war or, you know, the supply chain side. But otherwise, it should be in that range. I forgot your second question, actually.

Sir, the follow-up on that was whether the Transgenia business has break-even, which contributed to the higher margin. And also, from the PPT, I can see that even though your diagnostic business, when you decline by 9% to 10%, your margin has increased in the diagnostic business. So, with the latest acquisition, which you announced, think diagnostic, are you planning to expand your diagnostic business as well?

Yeah, see, we still haven't broken even in Tanzania, right? So, it's, I would say we've been in Tanzania now about 18 months odd. And, you know, we still haven't broken even. So, that is not the reason, though the Tanzania losses are minimal. I think it's less than one crore is the, you know, the overall Tanzania quarterly losses. So, to that extent, we have come down quite a bit on the Tanzania front. And if you look at it overall, I think our gross margins, as I said, have sustained because this year has been a fantastic year in terms of test volume growth. And we were able to get a significant amount of volume discount from our vendors.

Understood. So, and so my last question is, there has been a huge uptick in there. So, is this because there has, have you been seeing any GLP-1 traction starting from this quarter? And going forward, can we expect the same, like, 15% test volume growth in the coming year, for the coming year?

Yeah, I think, look, this quarter, the test volume growth was a bit of a strategic investment. So, we, for the quarter, I think we delivered almost 29% test volume growth. And that comes largely from, you know, we received actually some good deals on the biochemistry side. And we were able to, as a result, you know, reduce our prices a little bit on the biochemistry side. And we became very competitive in biochemistry. Just for background, ThyroCare was always known for thyroid, which is a particular technology called immunoassay, and we've been very, very strong in that space. But this quarter, because we were given some good offers in biochemistry, we launched a set of biochemistry parameters at an attractive price, and actually, we were very pleasantly surprised by the test volume optic that we saw.

And the second part of the question, whether this will be the new normal, like 15% test volume growth in Applied 27, can we expect that?

See, we always try to, you know, overall guide to a mid-teens kind of number and mostly from volume and mix. I think this year, we are now reasonably confident to, you know, revise it marginally upwards. I'm, of course, very cautious. I would say a mid to high teens is a good growth expectation for next year, of which I expect volume growth to be the maximum driver, right? I would say almost 75% of the revenue will come from volume and maybe about 25% from mix. We have no intention at this point in time to increase prices.

Okay. Thank you, sir.

Thank you. We will take the next question from the line of Yash Toshi from Unify Capital Private Limited. Please, go ahead.

Yeah. Congratulations for a good set of numbers. Actually, while going through your press release, I found that you had mentioned that you will be venturing into allied business of consumables and diagnostics. So, maybe can you just clarify on that which type of segment we are planning to enter in near future?

I would like to keep it internal to the company for the next one or two quarters because we are just working on the overall launch plan. So, I think it will become clear to you by June or July of what segments we are entering into, right? But I will tell you, the strategy is we have realized in many, many segments, we are a large consumer of, you know, allied diagnostic tests, right? And sufficient that we can also launch our own brand. And so we are planning to launch in that space. I can't share too many details because it's just in the launch phase. If I could request if you can be patient till June-July, it will become very clear which areas we are entering by then. Okay.

Understood. So, basically, it's kind of, if I infer, it's kind of some backward integration as we are consumers of those consumers.

You could say to some extent that. Just think of it as in the allied services space.

Understood. And another part I want to know is, during the quarter, samples, I think in the presentation it was not mentioned, how many samples have we processed?

During the quarter, we would have processed, I have, it's there in one of the disclosures. We processed 80.3 lakh samples in Q4 of FY2-D. Okay.

And another part was a speciality segment. Can you throw a light on the investments made, the field costs, how many people have been employed, and what is the strategy around basically communicating to the franchises, doctors? Just a light on the speciality segment, can you tell us?

So, see, the capex investments would not be much. They would be in the tune of about 5 to 8 crores, right? The real investments are on the OPEX side. We've put a team of, I think, about 40 people on the specialty side. You know, their effective job is to go out and explain to doctors that TheroCare is in the specialty space. This is our test menu. And of course, we always approach it with our philosophy of good quality testing made affordable to all. Right. So I think that's the extent of investments that we have made. The large investment, of course, is, you know, on the pricing side. We always come in with a disruptive pricing. So to that extent, you know, the percentage gross margin in specialty will be lower. But, of course, given, you know, our realization per test is only 30 to 40 rupees, a specialty test can be in the thousands, right? The absolute gross margin per test is, of course, much, much higher, and the overhead costs are not to that extent. So, we should get a decent amount of operating leverage, but we will be very aggressive on price.

Thanks. Sorry to interrupt in between years. I would request you to kindly rejoin the queue for more questions.

Thank you.

Thank you. We will take the next question from the line of Chintan Sheet from Giddick Capital. Please go ahead.

Hi, thank you for the opportunity and congrats on a good set of numbers. So, my question pertains to, you know, we are trying to expand test menu, getting into the specialty, The increase in the share of allied tests, which you guys will be working on over the course of next year. How do you see wilds per franchisee move? Because when I look at our past few quarters, we have been in the range of 450 to 550 kind of number wilds per franchisee, right? With this test menu, does that entail, you know, that number to inch up linearly upwards going forward, given that we have expanded our test menu over there? And if you can spell out, you know, how this scale-up happens between the mature, from the new franchisee to mature franchisee, how that, you know, wise per franchisee number moves? And if you can spell out, you know, what is the current mature's wild number which they consistently doing? And is there any seasonality to it as well? That will be my question. Sure.

See, franchisee addition, I expect to remain at 500 per quarter run rate, right? Some quarters will be good, some quarters will be bad. But seasonality-wise, during the festive season Q3, typically people do not open franchises, whereas in Q1 and Q4 is when, you know, people open up franchises. And so, therefore, we see a good boost, typically, you know, Q4 to Q2, and then, of course, it slows down in Q3 and then picks up again in Q4. But I expect about 500 per quarter is because we have resourced that way, right? The constraint is not the demand side. The constraint is our ability to onboard and scale up the franchisees to make them successful. So, I believe, you know, we are resourced for 500 a quarter. I think that's a good run rate, you know, to be able to maintain. Okay. Now coming to your second question, which is, you know, with the new test menu expansion, right? I expect our average revenue per franchisee to go up, but I don't expect a huge increase in the franchisee count, right? If you look at it, ThyroCare has always been a routine and semi-specialized company, right? And so, many of our franchises, they will not turn away a customer because ThiroCare doesn't have the particular test in the menu. They will give it to someone else, right?

So, it is our hope that by launching these tests in our network,

right, that these franchises now will not give it to someone else, but actually now move it to ThiroCare. And so, therefore, the benefit will be in the average revenue per franchisee, not in virgin franchises who have never worked with ThiroCare coming in. Right. To your last question on the scale-up, actually, in the presentation, we have shown exactly how the scale-up works.

Right.

If a franchisee gives us X in year one, it gives us two and a half in year two, three and a half in year three, four in year four, and five X in year five. So, one, two and a half, three and a half, four, five. And that number has stayed pretty stable over the last four years, right? And that goes to my opening comments where I said, look, the work that we are doing in ThyroCare and Franchise Edition is not for this year. It's for next year and the year after, right? The benefit we are getting in FY27 is the work that was done in FY25 and FY26. And so, that momentum continues. We haven't seen a decline in that. And I'm hopeful that, you know, as the franchise addition quality increases, that number will only get better.

Got it. And this 500 seems to be a little higher than what we earlier guided, around 1200 annually, 1500 annually. Actually, now we are targeting 2,000, means we are kind of aggressively trying to onboard and penetrate the market. That could be the right reading.

No, see, you should pay 500 into 3, which is about 1,500. Because in Q3, there is no addition. So, to that extent. So, against 1,200, I think we are now comfortably achieving 1,500. So, that is what we are saying.

Got it, got it. And this quarter, I am seeing tests per while to inch up to 7.5 versus 6.77 historically. Is this the new normal? There is some, you mentioned some, you know, some scheme you guys have run in the test menu, which will lead to higher tests this quarter. So, it will normalize to 7 per vial. That should be going ahead number.

Yeah, just to clarify, at least it is my impression that it is closer to 10 in this quarter.

So, I am just dividing the test by vials, number of vials. Oh, by vials.

Okay. That is on the higher side. Because, see, the test per patient is about 11, right? Right, right, right. And typically, it's about two and a half vials per patient.

So, I don't know that calculation where it comes from.

Okay, I'll check with the patient.

Yeah, it should be closer. See, if you take 80 million vials and 209 tests, it's roughly three tests per vial, which is kind of where I caught the figure.

Okay, okay. I'll check and confirm. I'll turn back in. Thank you.

Thank you. Next question is from the line of Surya Patra from Philip Capital. Please go ahead.

Yeah, thanks for the opportunity, sir. And congratulations for the great set of numbers. My first question is on the investment priorities. If I see for FI26, the CAPEX number looks really low, while we have already invested into genomics the way that we have been talking about, and also talking about the new specialty areas. So, hence, what is the CapEx likely to be for FY27 and what investment priorities that we would be having for the next year?

All right. On CapEx, I think there is, you know, some up and down because of the ROU. So, I will ask Vikram to explain it fully, right? Vikram, you can just take that on the CapEx.

So, Suyan, that 20 code is the CapEx payout number, which is you are looking in the cash flow. So, there is there was some opening capital advance and the opening civic number approximately 15. So, the total capitalization during the year is around 45 crores besides the machines which we have taken on recenter. So, to answer you we have invested into the capex for the capacity also and we have opened new 7 labs also. So, there is no conservatism or there is no investment in the capex. We will continue to invest into the capex as per the requirement. Okay.

So, in fact, that is also relatively low looking at the kind of operating cash flow that we are generating, sir. Because we know this is a business where cash requirement is limited. Rather, it is a cash-throwing business. So, hence, also, it indicates that, okay, the kind of investment that we would be making, that will be indicating the quantum of growth that we can see. So, from those angles, any investment plans and priorities that we would be having in the quantum, if we can share for next year.

So, let me take that, Vikram. Just to explain, see, the growth of this business is actually not determined by CapEx, right? We have sufficient lab capacity. We are present all over India with 40 labs. Our average lab utilization is roughly about 65%. And you drop a pin anywhere in India, you will find a CairoCare lab within 150 kilometers, right? So, from that point of view, our growth driver is not LabCount and, you know, CapEx. Our growth driver is actually franchise addition. And that is very asset light, as you know, because we don't have any company-owned stores. It's all franchise-owned, franchise-operated, right? So, to this business, it has always been asset light. Maintenance capex is roughly about 40 crores with new expansion and all of that. We expect the capex to be in that range. And as a result, the cash flows to be available ex the capex as well. Our major focus is franchise addition. Yeah.

So, the second question is on the kind of specialty area that you have mentioned, particularly the genomic investments and genomic opportunity that you have highlighted in your opening remark. So, is it possible to kind of give a sense that what is a quantum or what is a kind of business mix or test mix that we can anticipate, let's say, three years down the line in the area for genomics? Well, or specialty as a whole, because you have also mentioned in your presentation about the immunocab, biofile panels, and all those kind of things. So, what is the share of test mix from the specialty side, let's say, in the next three-year time, considering FY26 as a base year?

Yeah.

See, our competitor's specialty mix is roughly about 15 to 20 percent, right? Right. I anticipate in three years reaching that levels within ThyroCan as well.

Okay. In regards to genomic, the kind of sense in terms of the revenue potential that you have mentioned, so it is significantly under-penetrated as of now it looks like, mainly because of the price point. Is that understanding right, sir? That's correct. And just one question, bookkeeping question about the financial year. See, what is the kind of lab number that we are currently having? What is the wellness mix? And also, if you can share, what is the mix of your franchisee in terms of the urban and non-urban region?

Understood. I missed the middle question. We have 39 labs plus one in Tamsanya. I missed the second question.

A wellness mixer.

Wellness mixer. Preventive arugium. Arugium will be about 33% of our overall mix, right? And year-on-year growth, it would have grown at about 19-20%. So, that is the wellness mix. Janj is also, in my opinion, considered wellness. That is only 2% of our revenue today, but grew at 66% year on year. So, I think these are our two major wellness brands. And then on the mix of franchises, I would say we are roughly about 20% urban, metro tier one, and I would say 80% tier two and beyond.

Surya, I request you to join back the queue, please, as we are participants waiting for their turn. Thank you.

Yeah, sure.

Participants are requested to restrict two questions at a time, please. Next question is from the line of Lokesh Manik from Valum Capital. Please go ahead.

Hi, good morning, Rahul and team. Am I audible? Yes, please go ahead. Great, great, great. Rahul, just a clarification on, you know, capacity and lab expansion, just to understand it better. So, for a given capacity at a lab, as you are seeing your test per patient increasing from, you know, 8th, 9th, and 11th touching this year, you know, the number of patients served then reduces for a given capacity. Either that happens, then you need to open a new lab, or you have the technology present in the current lab to accommodate even more patients at an even higher test per patient rate. So, if you can just clarify on that, because you mentioned 65% capacity utilization, but I'm just seeking a clarification from you on this. Sure.

See, the driver of capacity in a lab is the tube, not the number of tests in the tube. Because once you load a tube in the machine, whether the machine has to process one test or 10 tests, right, the capacity doesn't vary that much, right? Right. My capacity is largely linked to how much time it takes to load a tube into a machine and unload a tube from a machine and take it to another machine. Right. If you see, actually, our revenue or our tests per patient has increased. So, in a way, tests per patient actually doesn't consume any additional capacity or very marginal. Right. So, to that extent, we are good on the capacity front.

Understood, understood. Raoul, my second question was, you know, since you're pouring into speciality now, do you foresee an increase in, you know, test, revenue per test, because the speciality will be at a much higher pricing? You won't take price highs, but they'll be at a price higher, so your blended revenue per test will increase? Would that be a fair understanding?

Yes, and that is something we are all tracking to see how that mix moves. But yeah, one would expect a material movement in revenue per test over the next couple of years.

So, how much can any ballpark rough figure, how much in a percentage term increase that we can expect?

Difficult at this point to speculate. Give me one or two quarters, then I will come with a concrete number.

Sure, sure. That's it from my side. Thank you so much.

Thank you. Next question is from the line of Binnu Patiparampil from Milara Capital. Please go ahead.

Hi. Good morning, gentlemen. Congrats on a great set of numbers. Just a follow-up on the Middle East situation and the impact on reagents. In an earlier comment, you highlighted that as a risk. As of now, what's the situation? Are you seeing any availability issues or significant price increases?

No, availability has not been a concern as of now, because, you know, the supply chain actually doesn't route via the Middle East. It routes mostly from Europe this side. So, to that extent, yes, it has taken a little longer, but we always carry two to three months of inventory. So we haven't faced any disruption on availability front. Of course, with the dollar being where it is, many of our vendors have come back requesting for price increases. But given our volume growth, we have been able to mitigate a large part of that. But, you know, should the situation continue, I think, you know, definitely raw material prices will increase, and then we will have to evaluate how we pass it on.

Thank you. Participants are requested to restrict to one question at a time, please. Next question is from the line of Yash Doshi from Unify Capital. Please go ahead.

Yes, sir. So, just on the bookkeeping question. So, currently, as you see, your tax rate has been around 23-24%. So, I get to know that it's based on deferred tax benefits. So, can you just enlighten me on what are components of deferred tax? And another is, going forward, whether your tax rate will be close to 27-28%.

I'll let Vikram take this question. Vikram.

Yes, yes, that is because of the deferred tax timing difference. And going forward, we expect our tax rate of 28 to 29 percent.

Thank you. Yes, I request you to join back the queue, please. Thank you. Next question is from the line of Ibrahim, an individual investor. Please go ahead.

Hi, I just want to know the market opportunity for the specialty testing and the allied services, which we are going to announce in. So, what is the market opportunity in the next two to three years? How big is the opportunity?

See, specialty testing, overall pathology market is estimated to be between 50,000 and 60,000 crores, right? And of that, roughly 15 to 20% is estimated to be the specialty space, right? So, if you do that, we are talking about a 7,000 to 10,000 crore market, right? That's a top-down estimate of the overall industry.

Thank you.

And what about the allied?

Ibrahim, only one question, please. Thank you. Next question is from the line of Shubham Harnay from Purnatha Investment Advisors. Please go ahead.

Hello. So my question is on insurance business. How insurance business has done in past year and what are your growth expectations for next year?

Yeah, our insurance business overall, you know, has done very well. If I look at the year-on-year growth for the insurance business, we started very aggressively last year, but year-on-year, we've grown at almost 45%, right, in the insurance space. Insurance is of two parts. There is pre-policy medical checkup and annual health checkup. Typically, a lot of insurance companies offer a free annual health checkup with their policy, right? And Thyrocare serves both these business lines. It's, of course, on a very nascent size of business. As I said, we are just scratching the surface. And as you know, insurance policies itself has grown by about 25%. That being said, we still managed to grow this segment by about 45%. And this continues to remain a focus area for us.

And what are your plans for next year, expectations?

I don't comment on individual segments. As I said, I have given an overall revenue guidance, right? At an individual segment, there will always be plus minus, you know, depending on execution.

Thank you. We'll take our last question from the line of Yash Doshi from Unify Capital. Please go ahead.

Yes, sir. What will be the EBITDA margins going for? It will be close to 33-34% or due to speciality segments, we expect a margin expansion?

See, specialty segment will be, you know, at a nascent stage, right? So, I don't expect and I will not build any major upside from the EBITDA margin side on the specialty, say, in FY27. We can discuss in FY28 and onwards, but then till then, I think, you know, it will be difficult. For the full year, I think we delivered roughly about 32% reported EBITDA and a normalized EBITDA at around 34%. I expect that to be stable into the next year. As I mentioned, any further operating leverage that we get, we will continue to invest in growth, right? So, I would expect if you take full year FI 26 as a base, we anticipate to maintain that EBITDA margin.

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

Thank you, everyone, for joining us and spending time with us this day. My apologies for having had to cancel the conference call at the last minute on Thursday. That was because the board meeting took longer than expected, and therefore, we did not have enough time to upload the presentation and the results, so we had to reschedule. Thank you for being patient with us and joining us this morning. 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 our turnaround time is as close to best in class. And we've made substantial progress on all of this, and that is what is driving the results that you see. I am also very happy to see Rajdeep Panwar, our new Chief Commercial Officer, Dr. Ramesh Kina, our new Chief Operating Officer, and Vikram Gupta, our CFO, leading the call and driving the strategic direction for the company. And I am sure with this core team fully in place, we will continue to drive the exceptional execution that you have seen in the last two years. Thank you for all your support in this journey, and I wish you all a good evening. Thank you.

Thank you. On behalf of PyroCare Technologies Ltd., that concludes this conference. Thank you for joining us, and you may now disconnect your line.