Thank you so much sir. Ladies and gentlemen we will now begin with the question-and-answer session. Our first question comes from the line of Yash 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 with the next participant. Our next question comes from the line of Aditya Chheda with InCred Asset Management. Please go ahead. Aditya can you hear us?

I hope there's no issue with the line.

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

Sure. See, as I said, we just started on the specialty front. So it's 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% of that portfolio. I think our ambition would be to reach the same levels in the three to five year timeline.

And so to rule this out across your -- the current lab network, what is the kind of investments you're planning to incur in the next couple of years?

Actually, most of the investments have been already done. See, unlike the routine testing, where 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. So 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 the significant amount of capex going into this business at least next year.

Understood. And sir, your thoughts on the divestment of the Imaging business. Any timeline you're working with there? And how should we look at this business?

Yes. 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 haven't been investing. So therefore, we felt -- let us see if there is a partner who is ready to invest into the nuclear business and grow it and give us better dividends than how it is right now. I anticipate the process will take 6 months, right? But we don't have any definitive what you call buyer at this point in time. So it's difficult to comment, but I anticipate it will be at least 6 months approval.

Okay. Understood, sir. And sir, just a couple of questions on your results. So when I look at your pathology revenue split versus the volumes or the vial 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 could see is higher than the value growth. So anything to read there?

Yes. See, it's a bit of a -- you shouldn't look at the B2C business or what we call partnership business at a vial level, right? If you look at it, our tests per patient, right, is what is increasing, right? And so -- and as you know, as we add more tests in a per patient, the vial still remain the same, right? So to that extent, you will see some price erosion because we discount the incremental tests to encourage patients to do a more comprehensive panel versus the few initial tests that they thought about. So that's the effect you see when you look at it at vial level, but at the test level, it's more or less in line.

Understood, sir. Sir and last one, if I may. What would be the ESOP charge in the P&L for the quarter?

I'll ask Vikram to take that question.

Yes. So ESOPs charge -- so it would be around 3.5 crores in the P&L quarter. And now why we have stopped reporting is because now what we feel is this has stabilized now. And for any estimate, you can take it as the last four quarter average which is with this INR3.5 crores would be the P&L size in the quarter.

Got it sir. Thank you.

Thank you. Our next question comes from the line of Shubham Harne with Purnartha Investment Advisors. Please go ahead.

Hi sir. Thanks for the opportunity and c ongratulations for a good set of numbers. My first question is what is the logic behind making change in definition of tests conducted?

Shubham. So I'm not able to hear you properly, changing definition of?

Tests conducted.

The test number s. So I'll explain this. See, what used to happen earlier is in the test volumes, some of the calculated parameters who are also put into the test numbers, which are normally not billed to the patient. It's a small variation, but we felt it would be more pr udent to remove those because those don't get billed and we have only put the tests that actually require processing on the machine and billing. The reason we have do ne that also is, over the last six months, we've introduced a number of calculated parameters. And so therefore, 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's hardly any variation. So -- but we just felt it's important to restate it so that everyone gets a clear picture.

Got it. And second one was on, in this quarter, we have added 900 franchisees, while our yearly target is around 1,500 franchisees. So will we revise this yearly target now?

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

Well, I think -- yes. So I think this is -- you can call it out and which we always mentioned when we discuss about growth is that the franchisee business the way it grows, what you see in today want to give you results in future. So if you look at this number increasing is something which has been seeded as a strategy last year if you talk about even last -- second half of last year, when we increased the team size when it comes to the full 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 branded 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 impacts of what additional sales team has been built up and geographical increase is what it is showing as a contribution in the numbers for this quarter. So this will sta y stagnant for the next financial year. The 1,500 number which has been taken was kept in mind with the yearly growth what we do as a business. So to answer your question specifically, the revised number may go as per the way we have performed in this quarter. So you can consider 500 to 700 as an average addition every quarter.

With the exception of duty where it is normally we have found between Q2 and Q3, it's difficult to expand the base. But yes, Rajdeep is right. I think you can take this for the remaining quarter.

So new revised number yearly would be around 2,000 franchisee. Is that correct?

No, no, 700 plus 500 plus 500, so.

Okay got it. And last one on.

I am sorry to interrupt, sir, but you may please re -join the queue for more questions. Our next question comes from the line of Chintan Sheth with Girik Capital. Please go ahead.

Yes, hi. Am I audible?

Yes.

Thank you. Thank you for the opportunity and congrats on the great set of numbers. Talk based on the franchisee growth this quarter, right? We have been guiding the last quarter that we'll be growing at mid to high teens kind of number that our expectation for FY 27. And because the base for FY24 addition was lower. So that was the figures that you were guiding that we will be growing franchisee growth for the current year to be at a mid to high teen number. But this quarter, we delivered a very strong set of numbers, both on volume, if you look at volume grew almost 20%, 22%, then we also saw some pricing growth for the current quarter for the franchisee. If you can just highlight what went bad this quarter versus what we were expecting? And how should we think through for the remaining part of the year now?

Got it. So look, it's too early for me to revise guidance. If you look at Q1 FY26, we did roughly 180 crores. Q2 '26, we did 200 crores, right? So 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 -- on your second question on what we thought and what works better than expected, I'll hand over to Rajdeep to talk about it.

Yes. I think two strategies, and this is the -- if I brief you a bout the franchise network, which was one of the previous question which was asked, as the 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 Dixit is helping us out in actually bringing in more and more franchisees and also the field team enablement, which we have done in last financial. So, if you are looking

at and what Rahul is also mentioning, the 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 teens 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. And you revised as explained in the previous comment that we have revised our cash number a little bit lower versus what we have reported in the past. And that has resulted into kind of reasoning test the patient number for us. If you use the older data, we have kind of sequentially seen a dropping test per patient, but this is what like to like now. You have to use the updated patient base. But if one has to look at -- for franchisees has remained at around INR 500, that is -- given the maturity, do you see number further upping in the subsequent quarter or or the full year?

On the question -- the first question, I'll ask Vikram to address the question. On the second question, I wasn't able to fully follow the question. Would you mind...

Yes, sure, sure, sir. So, my question was that the test per patient , because the number of test numbers versus what we have historically reported. But if I look at the value per franchisee, right, that will be the key metrics that I typically follow. That has kind of around 500 or 510 odd number. But given that, you know, FY24, we didn't edit much of the franchisee. A lot of it was got edited in F Y25 and that maturity level will start hitting in F Y27, where one can expect this number to start improving further. That was our expectation that while for franchisee will start moving upwards of FY25, FY30.

Test number is like-for-like and all numbers in the book are like to like. So, you can do the calculations on that front. So, on the file per franchisee, see, what you are observing is two effects. One is, of course, as we continue to add to the base, while the older franchisees mature, the newer base comes in at a lower level. So, your kind of then stay at the same level. So, it's a mix of older franchisees maturing but new franchisees entering at a lower base. And the other is mention is now going deeper and deeper into India. So, we are now in Tier 3, Tier 4 markets, where you can't expect the same 500 samples a month in those markets. So, you're seeing these 2 effects play out in the sample per franchise.

So alternatively, what I was looking at, given that we are adding more number of tests patiently into the picture, right, one can expect with a widening of our test menu, this number should start to kind of reflect in some improvement. That is better…

That is the hope. We continue to be very focused on driving the mix towards higher -value tests and that effect, we should start to see.

No, no. See, specialty is a very small space right now . So, if I look at it, we have done almost 55 million tests or 5.5 crores test, right? The specialty will be not even 1% of that. 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.

No, I was looking at franchisee where…

I'm sorry to interrupt you, but you may please rejoin thank you for the questions. Our next question comes from the line of Sanyam Jain with Valowth Capital. Please go ahead.

So, my question is a bit comprehensive one. I want to ask that as a Group. As we move that 100% promoter holding is pl edged and the dividend payout and also recently, eBay also sold 10% stake in Thyrocare to repay the debt, so is there any plans of -- we also knew that there would be IPO of API Holding, or they would be reverse merger with Thyrocare? Like what is the group plan to actually unpledge and revive the company, the parent company? Like what would be the effect on Thyrocare on that? I want to understand the strategy and focus about that.

Yes. You see -- right now, I -- firstly, the news that that floated that A PI 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 INR1,700 crores debt last year. We are now INR1,800 crores debt last year. We are now down to INR1,050 crores. And as you -- if you have been following, we have been, what you call, selling nonstrategic assets, seeing what all options are there to monetize to bring down the right? I think API will consider an IPO when it is profitable ex -Thyrocare, as well as debt free. 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 breakeven 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 give any guidance about dividend of Thyrocare for this coming year?

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

Next question comes from the line of Yogesh with Haitong Securities. Please go ahead.

My first question is on the Specialty front. Given that our legacy business model has been of preventive care, now that we are moving into the Specialty segment, which is primarily a prescription-driven business. So, what kind of efforts are we making to get the prescriptions from the doctors to get the doctor coverage? And what kind of target have you set for ourself to have a coverage of certain amount of super specialists and specialist doctors.

Yes. I think I will let Rajdeep take this question, and Rajdeep from that background and really setting up the entire infrastructure and team and all of that for that as well , and he's best placed to answer these questions.

Yes, thank you, Yogesh. So, I think predominantly, pathology as an industry has been conventionally driven by our doctors. And it's -- I always call out it is 90% prescription business when it comes to PAT as a business. Definitely, preventive is growing much fa ster, 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, cost 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 t hing is again, communicating to our existing network of franchisees, which we are quite capable of doing just uploading communications on our software with which they do test bookings. 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've been for a longer time in the industry and in the end, the report finally goes in the hands of doctors. Now it's not very difficult for us to go back to them and say, but 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 ends, 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 what -- 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 a few 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. Yo u can call out, and I always communicate in the previous call also I mentioned, it is a zero year for specialty. 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. So, my second question ...

Sir, you have asked already 3 questions. Our next question comes from the line of Yash Singhee with Unifi Capital Private Limited.

Yes. It will be in the direction of Thyrocare 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'm 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 franchisee addition , which we spoke about, so it is basically 1700 additions during the current year, right? 500 plus 500 plus 500.

Yes.

And going forward, it's 1,500 the guidance or it's -- we are upgrading in to 1,700, like for 2, 3 years, medium term.

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

Our next question comes from the line of Aditya Chheda with InCred Asset Management. Please go ahead.

Yes. Congratulations to the management on a strong quarter. And in particular, the Board's intend to divest the radiology business. The segment has been dilutive to the consolidated return ratios. And stepping away from it does affect a clear focus on ROC. So, if you can quantify, if I'm correct, the PAT is roughly INR 5 crores and the investment that stands today was roughly INR150 crores, if that is the correct understanding. So far on that.

I didn't hear your first thing. The investment is, I think, INR 140 crores. So, what was the first point?

On the PAT that comes along with this business, this segment has been dilutive to consolidated return ratios. And stepping away from it does reflect the clear because of ROC. That was the comment that I wanted to make.

See, first quarter, we did about INR 1.72 crores PAT. I think INR6 crores PAT is what we can expect for the year, not more.

Right, right. And on the franchisee addition, 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'll just Rajdeep to take that.

It will be more. It will be a 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'll keep on working the way. We are also adding on teams in the new territ ories and also adding in the existing ones.

Our next question comes from the line of Surya Narayan Patra with PhillipCapital. Please go ahead.

We'll keep on working the way. We are also adding on teams in the new territories and also adding in the existing notes.

Our next question comes from the line of Surya Narayan with PhillipCapital. We are not able to hear you again. As there's no response, we'll move forward to the next participant. Our next question comes from the line of Chintan Sheth with Girik Capital.

I was asking on the franchisee realization for the quarter. We have seen a 7% growth this quarter. Past quarter, it has been flat. So just wondering, is there any effect of specialty getting built into this number, given the contribution you've seen very low, but is there any -- how should one read through it and the realization on the franchisee revenue provide.

Your -- just to understand the question more clearly, you were saying the revenue per franchisee or the vial per franchisees.

I am asking revenue per vial for the franchise business. Yes, on the franchisee side.

Okay. You're asking why has it gone up in this quarter, right? Yes. It's not because of the genomics and allergy side. But of course, if you look -- if you go back 4 years ago, thyroid used to be 20% of our mix. Today, it's low single digits. Thyroid, of course, being the most affordable B2B rate that we have in our overall network , there has been substantial movement towards , what I would say is semi specialized, not specialized. So instead of thyroid, more lipid profiles, more biochemistry parameters more markers, 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 test 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 240. This quarter it marked cross 250. So that was the question. I think that's all from me.

Next question comes from the line of Lokesh Manik with Vallum Capital.

Hi good evening Rahula and team. Am I audible? Yes, great. So at the start, I would mention that Aarogyam has grown 21% Y -o-Y. Our pathology revenue has grown 27%, 28%. So what has led the revenue other than Aarogyam. Would it be semi specialty or more of routine would you say, from a product perspective or category perspective?

So I'll take that question. Yes, you're right. Aarogyam versus non-Aarogyam . Aarogyam has grown slower than non-Aarogyam. And that is actually linked to the question that I just -- which was Aarogyam 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 stand -alone tests , semi specialized tests and newer tests, which are all not part of the Aarogyam bouquet. The second part is Typically, quarter 1 is not a good quarter for Aarogyam, right? A lot of the preventive testing happens in quarter 4.

And that's because of many people have their corporate benefits and all of that expiring in March at the end of the financial year . But that being said, we want to drive the single test and more semi specialized tests, and that's seeing in the progress and also the effect of that you have seen in the realization.

So we've seen growth in routine tests also?

Yes, yes. It's across the board.

Next question comes from the line of Yogesh with Haitong Securities.

Hi thank you once again for the opportunity sir. With regards to the specialty segment, one thing which I would like to understand, given that your thesis is of segment being underpenetrated premium pricing and limited access. Our aim or rationale of entering the 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 specialty segment?

No. So look, our mission is to make diagnostic testing affordable . And that is our guiding principle. So we will definitely get into this segment with the aim to make it affordable . So we -- 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 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 appreciate your answer. Thank you very much.

Thank you. Next question comes from the line of Yash with Unifi Capital Private.

Yes. And I just wanted to know about the field additions which you have made on the franchisee segment regarding. I think our CEO just spoke about additions during the past quarter, which led to an increase of 900 franchisees during the current quarter. So 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...

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

Yes. I think this -- conceptually, this thing of adding more and more franchisee on ground has been there, but we have started pushing it more. So the team size if you asked about is around 70 in 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. Any other question you have? 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 extra field force. So I wanted to know the delta.

So last year, this number would have been 35, 40. So I think over the course of the year, we have doubled the field team.

Thank you. Our next question comes from the line of Mohammed Patel with Edelweiss Public Alternatives.

So if the specialty share goes to 15%, 20% in the medium term, does it impact the overall EBITDA margin?

No. It will actually be more or less in line with our current EBITDA margin. So I don't see them being dilutive unless we fail completely on the strategy and we don't get volume.

Okay. Okay. Got it. Thank you.

Our next question comes from the line of Surya Narayan Patra with PhillipCapital.

Thanks for this opportunity. Am I audible, sir? Okay. See, congratulations for the great set of numbers. One thing that I just observed that there is a 24% kind of growth that we have reported on the company -- so the company as a whole. And the franchisee growth, you've said 23%. So going ahead, should not be seeing that we should surpass the growth of the franchise, the 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 a franchisee growth addition, which is the franchisee number count Y-o-Y, it is 23%, and the revenue growth for the company as a whole is 24%. So that is why I saying that. It is just moving in line with the volume growth, what we -- our franchisee is witnessing. So do we think relatively better growth for the company as a whole, while we have been giving a guidance that we should be somewhere like a near 20% kind of a growth for the business overall.

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

Okay. My point on that is, say, like in the last 4, 5 years since the time of the management change, the growth in the franchise addition CAGR itself more than revenue growth been sub- 20% or at near to 20% level. So, I think once the franchise es will mature, the overall growth possibly will surpass the addition al growth itself. And that will bring in incremental operating

leverage and hence, margin improvement. So, whether my thought process is off the tracks really.

Yes. That thought process is fine provided: One, all franchisees stay with us, and we don't see any franchisee churn, right? And yes -- so then yes, that thesis is correct.

Sorry to interrupt you, but you may please rejoin the queue. Next question comes from the line of Naman Bagrecha with IIFL Capital Services Limited.

Thank you for the opportunity. Just one quick clarification. I am still confused on the franchisee additions for the full year FY '27. Is my understanding correct that we are going to add 1,700 franchisees from Q2 FY '27 to Q4 FY '27.

No. 700 in Q1, 500 in Q2, 0 in Q3, 500 in Q4.

So 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 doesn't 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 will be a net number. Got it, got it. Thank you very much

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. Thank you, and over to you, sir.

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 health care 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 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 Thyrocare Technologies Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.