Apollo Hospitals Enterprise Ltd
NSE:APOLLOHOSP
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
5 366.8
7 424.85
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Apollo Hospitals Enterprise Ltd
You don't have any saved screeners yet
Good afternoon, everyone, and thank you for joining us on this call to discuss the financial highlights of Apollo Hospitals for quarter 3 and the 9 months of financial year '21, which were announced yesterday.We have with us on the call today the senior management team comprising Mrs. Suneeta Reddy, Managing Director; Dr. Hariprasad, President of the Hospitals Division; Mr. A. Krishnan, Group CFO; Mr. Chandra Sekhar, CEO of AHLL; Mr. Obul Reddy, CFO (sic) [ CEO ] of the Pharmacy business; and Mr. Sanjiv Gupta, CFO of Apollo 24/7.Before we begin, I would like to mention that some of the statements made in today's discussions may be forward-looking in nature and may involve risks and uncertainties. Please note the disclaimer mentioning these risks and uncertainties, which is on Slide #2 of the investor presentation that has been shared earlier. Documents relating to our financial performance have been shared with all of you, and these have also been posted on our corporate website.I would now like to turn the call over to Mrs. Suneeta Reddy for opening remarks. Over to you, ma'am.
Thank you. Good afternoon, everyone, and thank you again for taking time out to join our call even on a Saturday. I believe that all of you have received the earnings document that we shared yesterday.Calendar year 2021 has become, on a very positive note, with substantial breakthroughs achieved on COVID-19 vaccines. This standard mix, which created disruption to normal life in quarter 1 and quarter 2, has now started receding substantially in India. As the impact of the pandemic reign the economy in general and the health care industry is now gradually progressing towards normalcy. This recovery was evident in our performance in quarter 3 FY '21, which witnessed an ongoing uptick in patient footfalls and occupancy across the network.We saw substantial improvement on all metrics. On a quarter-on-quarter basis, Healthcare Services revenue grew 17%. Surgical volumes grew at 54%. Overall IP volumes for the group increased by 21%, and occupancy improved to 63% from 56% in quarter 2. We had allocated 2,300 beds to COVID across the hospital network during the pandemic and have now reduced the allocation to 1,500 beds as of December 2020. In quarter 3 FY '21, COVID contributed to 15% of net revenues, over 25% share of occupied beds. COVID-related Healthcare Services revenue has now begun to taper off and is being effectively substituted with non-COVID revenue. However, since there has been limited resumption in the airline and rail traffic across the country, out-of-state and international business continues to be affected, especially on the OP front. OP is at around 65% to 70% of normal levels, and we expect that progressive resumption of travel will bring back older levels of volumes and are in parallel investing additional efforts in strengthening local market share. Against this backdrop, let me walk you through the financials for the quarter.The company recorded Stand-alone revenues of INR 2,367 crores and consolidated revenues of INR 2,760 crores. On a like-for-like basis, revenue growth was at 6%. The Pharmacy platform as a whole supported double-digit growth -- revenue growth at 17%, while the Healthcare Services revenue degrew by 4% during the quarter.Our new hospitals recorded revenue growth of 7%, while mature hospitals revenue degrew by 8% year-on-year. Margins in mature hospitals were strong at 20.6%, up from 12.3% in quarter 2, an increase of 830 basis points. I'm happy to share that our margins in new hospitals were at 13.8%, a strong improvement from 8.81% in quarter 2 and more than 350 basis points on a year-on-year basis.The pre Ind AS EBITDA for quarter 3 FY '21 stood at INR 301 crores compared to INR 201 crores in the previous quarter, a growth of 50%. With this Healthcare Services EBITDA was at INR 229 crores, 111% growth compared to an EBITDA of INR 114 crores in quarter 2 FY '21. EBITDA after giving effect to Ind AS 116 was at INR 322 crores. A comprehensive cost optimization initiated in quarter 1 FY '21 continued into this quarter as well, and we recorded a savings of INR 40 crores. As guided earlier, we expect to sustain a cost saving of INR 100 crores to INR 125 crores in FY '22.As most of you closely tracking us are aware, the front-end pharmacy business was separated into Apollo Pharmacies Limited in quarter 2 FY '21, with effective date as September 1, 2020. AHEL now has Pharmacy Distribution as its business segment continuing toward 25.5% stake in Apollo Pharmacies Limited. The Pharmacy platform, that is including the front-end retail portion, delivered a strong revenue and EBITDA growth in quarter 3 FY '21. The Pharmacy platform reported a growth of INR 1,440 crores in quarter 3 FY '21, registering a 17% year-on-year growth.AHEL, which continues to be the exclusive distributor for Apollo Pharmacies, reported revenues of INR 1,126 crores in quarter 3 FY '21 and INR 73 crores of EBITDA at 6.45% EBITDA margin.AHLL recorded EBITDA of INR 11 crores as compared to the INR 5.7 crores in quarter 3 FY '20. The business has recorded a 6% year-on-year growth in top line.Net debt as of 31st December 2020 is INR 2,598 crores. We have a debt-to-equity ratio of 0.71. In January, AHEL has raised equity capital of INR 1,170 crores via QIP. We are delighted with the response from marquee investors and pleased to share that the book was oversubscribed by 12.5x. Part of this capital will be deployed towards acquiring the balance 50% stake in Apollo Gleneagles Hospital in Kolkata. Additionally, the proceeds from the fund raise would also enable AHEL to see inorganic opportunities and further develop its digital platform Apollo 24/7.Our Board has approved the scheme of amalgamation of our wholly-owned subsidiary that is Apollo Homecare Limited and Western Hospitals Corporation with its strength. Amalgamation of these 2 companies of the parent is expected to deliver significant synergies.I'm happy to state that we have partnered with the government in the world's largest vaccination program. We'll have commenced vaccination of health care workers in 27 Apollo vaccination centers across the country.To conclude, we believe that things are moving in the right direction. And this quarter has helped us to gain momentum on the inpatient and surgical front. We have been able to cement our position as the safest network of hospitals, providing world-class care for our patients during these trying times. Our initiatives to optimize and streamline the business have placed us in a good position to capitalize on the future growth potential over the medium and long term.I now have Dr. Hariprasad, Krishnan, Obul Reddy, Chandra and Sanjiv from 24/7 with me to take your questions. Thank you.
Thank you very much. [Operator Instructions] The first question is from the line of Neha Manpuria from JPMorgan.
My first question is on the ARPOB. Our ARPOB continues to surprise on the upside, seeing strong growth. While I understand the surgical volumes are going up, but how should we look at a sustainable ARPOB growth from the current levels? Or should we look at the current year as the elevated number, which will normalize going forward?
The ARPOB growth is clearly because the surgical volumes have gone up and also because the COVID ARPOB, which we showed in quarter 2, quarter 3, has come down. So this has been reflected in the ARPOB, which is currently at INR 40,000.
And next year, ma'am, would we be able to be growing this number as surgical continues to normalize on the INR 40,000?
So 2 things which is important for you to understand is our new hospitals have been doing well also, as you have seen. And the new hospitals ARPOB has also increased well in this overall mix that you're seeing by cluster. We are aware that the new hospitals as a segment was around INR 32,000 ARPOB last year, and that has gone to INR 36,000 now. So the new hospitals ARPOB. And we all know that the COVID ARPOB is only around INR 28,000 or whatever that is, around that number.So clearly, the new hospitals ARPOB is continuing to do well, and that we expect should be -- hence, it's a sustainable number going forward. If you look at Tamil Nadu, et cetera, clearly, we still have ability to push the ARPOB because we still don't have some of the high-end surgeries and some of the international patients. We still have a potential to get Tamil Nadu at higher and some of the other places like that higher as well.
And can the new hospitals get to INR 40,000 ARPOB over time? Would that be possible?
We would probably for now look at it at around INR 36,000 to INR 38,000, with -- we are now at INR 36,000. We probably will look at INR 36,000 to INR 38,000 as the first milestone there, and then take it on.
Okay. Understood. My second question is on the cost side. Again, I know ma'am mentioned that we'll be able to sustain about INR 100 crores to INR 125 crores of cost saving in FY '22. But versus the level that we've achieved in this quarter, should we look at this INR 100 crores to INR 125 crores as incremental? Or this is the base on which our cost will increase? How should we look at the operating costs?
It will be based on the FY '20 base where we said INR 100 crores to INR 125 crores. It will be based on the FY '20 base. So clearly, it would be -- some of that is already baked into the numbers.
But there is incremental opportunity for cost savings since you've obviously done only INR 40 crores.
No. So -- but yes, broadly, if you ask me, a bit of incremental opportunity is there for now, I wouldn't want to still guide the very significant opportunity. But INR 100 crores to INR 125 crores will continue to. So the current EBITDA is something that we would like to sustain and grow. Let me put it like that.
The next question is from the line of Anubhav Aggarwal from Credit Suisse.
Yes. One clarity on the previous question. So when you say INR 40 crores saving, this was savings in this quarter, right, which annualizes about INR 160 crores. Out of that, you're saying that INR 100 crores to INR 125 crores is sustainable fiscal '22?
Yes. Of the INR 40 crores saving, there is also INR 10 crores in Delhi, which is not getting consolidated in our results. So clearly, the INR 30 crores is the number that we have in the quarter, which is consolidated. So the annualized number of that is INR 120 crores and which we said we continue to say INR 100 crores to INR 125 crores, which is why I said that the current EBITDA is something we can sustain and grow.
Okay. Very clear. And second clarity on the ARPOB number, even when you look at mature hospital here, I think the ARPOB that you've done this time is the highest ever we have done. So I just want to understand, is there a big difference in the payor mix right now that the ARPOB is significantly higher right now? Because this ARPOB is highest ever and still includes a good contribution for COVID. So clearly, something has gone different in the non-COVID ARPOB.
So clearly, the tertiary care work and quaternary care work has picked up. And most -- earlier, I think a little bit of the COVID pandemic fear lingering on, people have not really come for all of the elective surgeries, which will lower ARPOB. For example, some of the orthopedic work and some of the general surgical work. But what we have done is to look at the intensity of the case mix. And this has really changed in terms of we're looking at more of transplants, we're looking at more of onco, and we're looking at more of the high-end cardiac and high-end neuro. So this is really shown -- this is really reflected in the ARPOB.
You're saying that it was not the payor mix difference, it was largely the case mix difference, which is resulting in that?
Yes.
Okay. And just 2, 3 questions on the Apollo 24/7. When you have started with ProHealth thing, what exactly in layman's term it means? Does it simply mean that if somebody comes for the tele -- or digital consultation platform, rather than him choosing the doctor himself right now, the AI platform will help him suggest some of the options the doctors he can go for?
No. I think there's a little bit of confusion here. So ProHealth is our preventive health care checkup, which is, along with the CoEs we promote like onco, et cetera, we believe that there's a potential to really reach INR 1,000 crores of revenue from preventive health itself.So the preventive health product has AI inbuilt into it. It also has gene sequencing and understanding doing a genetic analysis. It is coupled with AI. It's a very high-end product, which is focused for wellbeing. So it's preventive health care and wellbeing. And this is where we've launched it, and we believe that we can scale this up to about INR 1,000 crores of revenue in the next 36 months.
And this is part of 24/7 or is this outside 24/7?
No, no, no, it's part of AHEL, but 24/7 will be used to actually funnel patients into ProHealth.
It will be both.
Okay. And just 1 or 2 more questions on 24/7. One is the -- you announced HDFC Bank partnership. What's been experience here so far? I know it's early days, but still trying to get some experience from corporate partnership. And any of the partnerships that you've also done after that?
Sanjiv, do you want to talk about the HDFC partnership?
Yes. Thanks A.K. So thanks for the question. So HDFC partnership, yes, it is early days, but we are seeing a lot of momentum. HDFC has got a very large customer data base and HDFC Bank as a service on the health side, they want to promote some of the entire user base. And we are seeing a good traction as far as HDFC and Apollo 24/7 partnership is concerned. And apart from this, we are also in the dialogue with a couple of more corporates, with corporates to have strategic tie-ups and with time, we'll talk about that also. But at this stage, early, but we are seeing good results.
The next question is from the line of Sameer Baisiwala from Morgan Stanley.
Is it possible to talk about the overall occupancy? How we should see this go forward? I think it was 63% now; and pre-COVID, it used to be at 68%, 69% and especially with the COVID patients moving out.
So currently, it is at 63%. And I think the main factor in that is that we mentioned earlier that travel had not yet opened up. So these are mostly -- it's a reflection of our increase in local market share. And we truly believe that when the road and air travel opens up completely that the occupancies will move up significantly. We are seeing very healthy trends in all our new hospitals. Some of which are in Tier 2 where health care has become localized and people are using these facilities. Tire, mature hospitals are also starting to do well. But I think the reason that we believe that next quarter, we should be able to see a pickup in occupancy with travel and roads opening up.
Okay. Great. Is it a possibility that COVID patient-related revenues move out faster than we get recovery in the core business? So therefore, quarter to quarter, we would actually trend down.
So 17% is the revenue from COVID, and I'm not talking about occupancy, but I think that this will be balanced when the international patients come in. And like I said, all the travel, et cetera opens up, plus there is still a little bit of a lingering here that we really need to go to a hospital for surgery. Like I said, our ARPOB is a reflection of the intensity of case mix that we're getting. So we'll also get the high-margin secondary care work coming back. So occupancies, net-net, occupancies will go up.
Okay. Okay. And great job on the cash flow and net debt management. So is it possible to talk a bit more on the QIP fund raise as so how do we break up between Gleneagles and then how much you want to invest in 24/7 and other inorganic opportunities?
So we raised INR 1,170 crores. We will use INR 410 crores for Gleneagles and the other INR 150 crores has been allocated to -- for use for 24/7 and another INR 150 crores for our Diagnostics to really -- we are going to grow the Diagnostics place in AHLL. Currently, we have over 650 diagnostic centers. And we believe that in the next 24 months, we must see the strongest diagnostic player in the south moving on to the east as well as the north. So we have a end use for INR 700 crores. The balance would be used to reduce debt and then strengthen our balance sheet because when required, we will have the ability to do some bolt-on acquisitions that we are looking at to strengthen our presence in certain markets.
Okay. Great. With your permission, one last question from my side. Apollo ProHealth seems to be a great step, Suneeta. So anything you can share on adoption? I know you've given a revenue target of INR 1,000 crores over the next 3 months -- 3 years. But just on monetization, what's the revenue model? And are there any international benchmarks which we can use as case study?
So when we started out, we looked at Itang, I don't know if you've heard of it, but it was a Chinese company that was doing these run-of-the mill checkups. So -- and you know the TAT was around 2 hours. But when we looked at what Apollo stood for, we said, we just can't do these checkups. And if you look at a lot of these people who are checking blood, they are doing their own version of a checkup. So we said the Apollo one has to be more meaningful. It has to have lifetime value. And keeping this in mind, we've created ProHealth, which is a package that looks after wellbeing. It looks at markers that include stress, anxiety, besides the other things, which are normal, the cardiac and the cardiac one looks very closely at neuro issues.Having said that, we've already -- since we launched it just last month, we have 12,000 people who have undergone that checkup. We have case studies where people have reduced weight, and managed to keep their blood sugar at normal levels. So yes, I think the feedback has been very good, and we are getting ready to launch it on an all-India basis. And especially at this time, when people are looking at OP and saying, your OPs have fallen away. I think this is something that will bring back the OPs.
The next question is from the line of Nitin Agarwal from DAM Capital.
On the Apollo Gleneagles Hospital, with the recent changes, their insurance scheme, which are West Bengal government has started, does it have any implications -- what implications do you think it has for the business over there?
So this was something that was always there. It's a state insurance scheme, which has always been there. If you look at the -- they have been pushing that a bit, but funds available in the government, it is not as high as the push, which is there from the government. So there are some of this. We'll have to look at it as pre-election push, but going -- we don't see that this is going to impact us negatively. We are fine and we are -- we had -- whatever is required to be done on the government cases, we continue to do that. So we should be able to navigate this well.
This should not be a source of any potential concern around this West Bengal market or something?
No.
Second. So secondly, now with the cost commission all that we've introduced in the mature stream in the business, what should be a sustainable EBITDA margin for our mature hospitals now going forward. We used to target 20% earlier. Is an aspiration target now a higher 24%, 25% in higher -- in terms of where we can get to in the mature business and then the new hospitals will get to with this increase tailwind of these cost savings?
Yes. So at the mature hospitals level, the first target is to get to 23%, 24% in the next year. That is what we would like to get to. But clearly, the business needs to come back because some of the earlier businesses of international, et cetera, is also important for us. We definitely -- you are right that our cost efforts that we have taken allows us to get that -- achieve that a bit faster. If the business comes back at the same pace over the next 1, 2 quarters, we are hoping for the same because clearly, there is some kind of comfort in the patient's minds and the consumers' minds to come back. We are seeing patients have also started traveling from Bangladesh to Chennai. We have also seen patients traveling from Assam and West Bengal to Chennai. So we have seen that all of that.In fact, 60% of our pre-COVID levels even from out of Chennai has started coming back. So which is definitely good. So if that comes back, you're right, we should be able to see beyond 24% in the next 2 years.
And lastly on this one, the new hospitals have also had a very spectacular improvement in EBITDA margins. So is this sustainable with 14% pre Ind AS EBITDA margin whereas this is a threshold in the level to really work with from here on?
So we have been guiding that we should get to 15% in the next 12 to 18 months, if you will, right? And this is what we continue to work on. And of course, this -- the 13.8% is something that we have got for this quarter. Some of that is also enabled by high-end surgeries. And as some of the other surgeries come, we will still think we should be able to get 13% to 15% next year.
And speaking about last one, you mentioned about the investment in the diagnostic platform. So what are the -- would be a 3-year goal for this business? Currently, it's like a INR 160 crores, INR 170 crores annualized business from a revenue perspective or from a net revenue perspective. Is that fair into where do you see this business really heading to over the next, say, 2 to 3 years, given the fact that a couple of the large pan-India players have become very aggressive in terms they made very large-scale investments in Southern India, which is our currently market, right?
Chandra Sekhar, would you like -- would you answer that?
Yes, ma'am. So our strategy will be to strengthen in our existing markets, which is essentially south and east, and opportunistic entry into some of the other larger markets. We are -- as you rightly pointed out, we are trending to INR 170 crore to INR 190 crore for FY '21. And -- but we are hoping to have a significant growth in FY '22, combined by very few new market, but largely consolidating existing markets. We are looking at a 3-year horizon to top up 2- to 3-year horizon, then we want to hit the INR 500 crore mark. The next year's direction should be upward of INR 270 crore.
And Mr. Chandra Sekhar, how do you view the increased competitive intensity in the market with the 2 large pan-India players really increasing their investments in this business in this area in a meaningful way?
So it is not new capacity creation. It is organizing the unorganized. So from that perspective, the pie in terms doesn't change much. Yes, competitive intensity could change with more corporate behavior. But I guess, there is -- from an industry perspective, it is still 85% unorganized. So the headroom for growth for organized players is only going to continue to be bullish.
And the brand acceptance in these markets of Apollo is very strong, especially in the southern markets, which as you have said, to someone is looking at consolidating and growing, we have a very strong brand acceptance in these markets, which we are already present in. So if Chandra Sekhar has a plan to grow which he has, clearly, we will see that we should be able to get the market share as well.
So if you push on that, does it lead to a meaningful escalation in pricing competition in this market in your area?
When unorganized moves to organize, I think price actually gets corrected upwards because the price from the unorganized is where which is lower. So I guess it's a good place going forward for a few more years for the organized players, even from a price perspective and price consolidation perspective.Secondly, I've not mentioned this, but we are definitely also starting to see a significant amount of work that is starting to come via our 24/7, concept leading to Diagnostics and Diagnostics booking itself coming directly. As that digital platform ramps up, I think the ability to serve via strong presence and good phlebotomist home collection capabilities is what we are focusing and building on. We are very bullish about the future opportunity coming via digital as well.
The next question is from the line of Shantanu Basu from SMIFS Limited.
I would like to know the COVID occupancy in Q3 and the non-COVID occupancy in Q3. So if you can break up your occupancy, overall occupancy into COVID and non-COVID.
So COVID occupancy -- 1 second, just let me. We have brought down the number of beds of COVID to 1,600 levels in December, and we have brought it down even further, the overall COVID beds, which we had actually classified. Now if you look at the COVID occupancy, out of the 1,600 that we had, in Q3, we were at 73% occupancy, which is 1,173 beds were occupied by COVID. And if you look at the non-COVID occupancy, 1 second. Non-COVID occupancy was 60%.
60%, right?
60% for Q3. But again, it's important since you give this -- since I give you this color, in that 60%, December was 67% of non-COVID. So clearly, while the quarter was 60% on non-COVID, December has already gone to 67% on non-COVID. And in the COVID, while quarter was 73%, December was 48%.
Okay. Okay. So would it be right to assume that we are inching close to the -- our long-term 69% mark?
No, I think it will probably be Q1 before we get back. It's not something that we can say because the number, if you look at the beds, we have a COVID bed also, right, which we will now start releasing and putting it back to non-COVID, right? So it's also a factor of classification of those beds, right? Because once we reclassify that and get that inventory back to non-COVID, our occupancy overall will probably show a bit of a dip, but our revenues will still hopefully be okay as we get some of the non-COVID revenues come back, which is a little bit to higher ARPOB. So I think to get back at 67% and 69%, we'll have to think of it as Q1, Q2.
Okay. Great. And what's the number of COVID beds that you have currently, you said?
Now it's come down to -- it's now further down? January is around 800 beds.
January, 800, okay.
Inventory is around 800, and the occupied beds is even lesser.
Okay. Right, right. So is this coming down drastically, right, from 1,600 to 800, yes?
Yes.
The next question is from the line of Prakash Agarwal from Axis Capital.
First question on -- is Apollo Kolkata. So here, what I understand is the consolidation will start from February, but I'm trying to understand the ARPOB has increased already. When do we expect normalcy in occupancy, a? And how do we improve the margin from the previous peak? And what is the management planning to do here if that can be highlighted?
So firstly, we won't consolidate that from February. It will probably be March or April because we've still not completed the transaction and we can consolidate it only after the transaction. So we will complete the transaction over the next 30 to 45 days. So it would probably be March or April.Overall, Kolkata, we have to be -- if you look at FY '20 levels, et cetera, we should go back in FY '22 to INR 400 crore to INR 450 crore opportunity on revenue for the next year, with at least a INR 75 crores to INR 80 crores EBITDA, which is what we should think we should be able to get in next year.
Sir, I was trying to understand the medium term plans in order to optimize the margins. I mean first goal, obviously, would be to achieve the older occupancy and margins? But how can we go beyond is what I wanted to understand.
That is correct. So...
So let me...
Yes.
So what we've done is we've really recruited a few more surgeons and doctors. We are strengthening our Centers of Excellence. So in terms of cardiology, orthopedics, oncology and we have very strong offerings. And with this, I think we should see higher ARPOBs and better margins. We've already recruited these doctors. You would have noted that even Sourav Ganguly chose to come to Apollo Gleneagles. So it's being positioned as a very high-end clinical care center.
Okay, okay.
So we are pushing it for a INR 40,000 ARPOB in the next year itself.
Got it. Perfect. And secondly, for Medics Lucknow, I understand consolidation has already started. And would it come under the new hospital cluster? And would that be the reason for a margin spike in that segment?
Which one you think?
Medics.
Medics is not yet come. It's only going to come ahead, going forward.
Going forward. Okay. So this will further improve the margin levels?
Yes, it will. So there are going to be 2, 3 areas which we seek significant margin improvement in the next year also even beyond this quarter. One is, as you rightly said, Kolkata; second, Medics because Medics is also going to be a significant -- it's doing very well. They'll do over INR 250 crores of revenue, hopefully, next year and will be at least INR 40 crores, INR 50 crores, INR 40-plus crores of EBITDA. They already had INR 10 crores run rate on EBITDA, and they don't have much of COVID. In fact, almost negligible COVID in Lucknow as we speak.And that -- and the third thing is Proton is also something that we are quite excited about because we are seeing that -- Jan, we are seeing a good spike coming from patient inquiries. So we are already at INR 100 crore run rate on Proton if you look at the first -- if we look at Q3, and that's at EBITDA negative and EBITDA breakeven. And we should see significant acquisition in the overall EBITDA from Proton as well into the next year.
Okay. Madam, you had something to say?
No, no. I said Lucknow is already at 18% margin. And the one -- the strength for us in Lucknow is the fact that we are probably one of the best tertiary care hospitals. Our ICU beds, which are about 1/3 of total beds, are at very high occupancy. So the potential to move to a higher ARPOB definitely exists in Lucknow.
Understood. Fair enough. And last one from my side is on the Pharmacy business. So understand, given the restructuring that margin had a step down, but my understanding was step down would be about 100 basis points. We see more than that. What is the outlook and the reason for the same?
No, we have -- on a combined basis, if you scape the account between AHEL, AHEL is only consolidating the back end results. On a combined basis, we are at the same level. Last quarter, we are at 6.4% of the EBITDA on the overall sales, and this quarter is about 6.3%. As you know, when the demerger is affected, there is some cost adjustment between the 2 entries. And also the growth is about 17%, 18%, and the overall sales again is the previous quarter, 25%.
So there are some 24/7 costs also, which are there, which is something which has been absorbed by the Pharmacy business, as you know. And that is also -- otherwise, if you exclude that, maybe the like-for-like EBITDA margins would have been 6.7%, 6.8%.
Okay. And what would be the outlook, sir, going forward next year?
We should be back with the normal growth rates, and then we have 24/7 growing up, and then that will also contribute to the sales and margins. So we'll see that. And then that will be...
But it would move forward, right? I mean the margin trajectory would inch up to 7%-plus mark?
See if you notice that we are at 6.3%, 6.4% now, and we should be closing this year anywhere around 6.5% to 6.6%, and move next year to 7%.
The next question is from the line of Damayanti Kerai from HSBC Securities. Damayanti, your voice is breaking. I request you to move to an area with network or if you're on a hands free, request you to use the handset. Sorry, Damayanti, we can't hear you. We seem to have lost the line for Damayanti. We move to the next question.The next question is from Prateek Mandhana from Nomura.
So my first question is on Apollo 24/7 business. I just wanted to understand that the revenues that we say that we will get from 24/7. So will it get directly into 24/7? Or is it more of a concierge for like Diagnostics and ProHealth that you said that they will funnel the patients into 24/7 and Diagnostics, you will book for the Diagnostics. So where will the revenue get booked? Will it be in AHLL or ProHealth or the e-pharmacy or tele-consulting? So just some bit on that. How will the revenue get booked? And how much of revenues do we expect?
No problem. So clearly, if you look at the Pharmacy, we will ensure that the Pharmacy business is the revenue is booked in the back end of 24/7. So that is something that we will complete. The back-end pharmacy business will still continue to be at Apollo 24/7, and we will start showing that eventually as Apollo 24/7 scales up. But on the other parts, whichever is diagnostics, et cetera, the way we are looking at it is that business will go to the -- it will get pushed on to the Apollo Diagnostics for revenue booking, and there will be a revenue share, which will get as a bargain or a commission, which will get booked by Apollo 24/7. So there will be a -- we will -- once Apollo 24/7 starts scaling up, we will obviously have to figure out how we start reporting GMP, et cetera, so that the perspective of GMP of Apollo 24/7 is understood, but it is again something that we will plan in the next year.
Sanjiv, do you want to add anything?
Yes. I think, A.K. already gave the right answer. So the entire revenue accounting with respect to the pharmacy being delivered or the diagnostic services being offered by 24/7 or as a matter of fact, any other services. Those things will go to respective Apollo entities like APL, AHEL or AHLL. And as far as the GMP part of it is concerned, I think we'll work out some mechanism to also highlight that so that there is a right perspective available with everyone.
Okay. Okay. And to add on to that. So again, there will be multiple divisions. So what kind of contribution from each division can we expect into like the revenues for 24/7 Diagnostics to help e-pharmacy and tele-consulting, if you can just highlight some?
A bit early now. We would probably take it forward as we start doing it. But broadly giving you a margin line I think 15% to 20% margin is what we expect to do on both Diagnostics and tele-consult. Is that fine, Sanjiv?
Yes. Sorry, I think I was not able to convey my question clearly. So I was asking, sir, the revenue that, let's say, INR 100 crores will be the revenue for 24/7. So how much of it do we expect to come from each division like from Diagnostics and tele-consulting and e-pharmacy? So how much revenue contribution from each segment? Like which will be the biggest contributor to Apollo 24/7?
See, we have about 8 health products coming into the platform. Some of them are yet to start and go out -- go online. So that's next year, and we'll have a better view going forward, and we'll be back with those numbers in Q1 of next year. It's not...
But when we look at the target, we have been saying that when we get to the overall target split over the next 3, 4, 5 years, 50% of that will be coming from the Pharmacy business. The other 50% will be a combination of what we spoke now. Tele-consult plus Diagnostics that condition management and some insurance.
Got it. And then, sir, any number that you want to highlight currently, how much -- what is the run rate for 24/7 revenues, if it is -- if you can highlight that?
Just 1 or 2 products are [Technical Difficulty] we will be coming out from next year for specific numbers.
Okay. Okay. And just one last question from my side, if I can ask that, on the number of pharmacies. What is the number of front-end pharmacies that are now there?
We have 4,000 pharmacies operational as of 31st December, and we have added about 250 stores -- 252 stores during the year, but most of them were added in Q3. So we are on track, but there was delay in the schedule of opening because of the COVID pandemic. And we will be [Technical Difficulty] about 300 stores as [Technical Difficulty] 300-plus.
The next question is from the line of Divyansh Kalra from Perpetuity Ventures.
Sir, just wanted to understand the breakup of inpatient and outpatient business from hospitals? And what are the normalized levels? And what was the result -- what was happening in Q3, sir, any update in Q3.
Can you get offline on this because we don't have the exact split of the OP and IP revenues as of now.
Sir, normalized level historically would be in fine, just estimate.
20%.
20% is outpatient. 20% outpatients?
That's right.
Okay. And were we seeing any divergence in last quarter? Because...
Last quarter were OP.
Outpatients? OP increased in last quarter.
Yes. Yes.
Okay. Ma'am, you said something in your opening remarks that international business OP was very much affected. So was there something -- so OP in this contribute significantly in terms of international patients. So my question is, I'm just trying to break up domestic patients and international patients. So what was the ratio of inpatient and outpatient breakup for international patients?
So just looking at international, it's probably just maybe 10% of total volume. I think what was significant is that airlines were not -- we didn't get even within India, patients were not able to travel. And we believe that when that comes back, the OP will definitely pick up. But international is about 10% of that.
This is normalized level? 10% IP -- OP and 90% IP, this is normalized level for international patients. Am I correct?
10% OP is correct.
Okay, a normalized basis.
The next question is from Harith Ahamed from Spark Capital.
So I'm looking at the employee cost for the quarter. There's a 15% quarter-on-quarter decline and 26% Y-o-Y decline. So what's driving the sharp reduction? Is it the front-end pharmacy transaction? Or is there any other reasons for this?
So that is all -- yes, the front end, as you rightly have said, the front-end pharmacy business has been separated out and it has been put into Apollo Pharmacies Limited. So the full quarter impact of that is clearly visible in the reported numbers. So that's what you can see. Of course, as we said, as Ms. Suneeta already said, the overall cost savings, otherwise for the quarter was INR 40 crores and INR 30 crores in the consolidated number for the quarter, which includes a bit of the -- in the INR 30 crores embedded would be almost around INR 15 crores to INR 20 crores of manpower.So otherwise, it is the Apollo Pharmacies Limited, which has got shifted out completely because last quarter, you had only 1 month impact of Apollo Pharmacies Limited, whereas this quarter, you have the 3 months impact of Apollo Pharmacies Limited.
Okay. And my second question is on AHLL. So we've been in a consolidation phase over the last 12, 18 months and that's reflecting in significant margin improvement over this period. So when we think of further expansion here, what are our plans? You mentioned about Diagnostics. So on the other formats, can you give us some details on our next medium term expansion plan?
Chandra?
Yes. So I think we spoke about Diagnostics being the primary area of focus, and that's going to consume over 70%, 75% of our focus in terms of expanding within and consolidating within existing markets as well as some opportunistic expansion into other new markets.And importantly, the second focus will also be on going up the value chain in terms of our high-end test menu. So that's the 2 areas for which we will make both investments as well as marketing efforts to get into more and more higher end test menu. I mean to say areas of oncogenomics and a few other areas that we have outlined.The growth primarily -- subsequently is in primary care network, will be on closer to communities is the initiative that we'll do. It will have ramifications also for Diagnostics in terms of as we get closer to communities. So that's the third area of network. We're not looking at growing the secondary care network significantly, barring a small growth that we will do to assess the regulatory tailwinds that seem to be emerging in the space of IVF. But that will be a small growth, which we'll carefully plan because the IVF as the space is attractive, but we are mindful of the fact that it is predominantly unorganized, but there are some very good regulatory tailwinds that are likely to help organize play. So there is a small focus on growing that. Besides all of this, we're looking at some asset-light growth models, including expanding our franchisee network in the primary care.
Okay. Last one on the Proton sector. You're now clocking annualized revenue run rate of over INR 100 crores, and you broke even at the EBITDA level. And this, I presume, is without much of international patient volumes. So should we think of a significant ramp-up going into FY '22 once international patients are back. So how should we think of Proton from there on?
Yes. Our hope is definitely to double down on both domestic and international because given the domestic opportunity on Proton is high because there are now -- clearly, it is as Ms. Suneeta has been always saying, it's now become a gold standard in radiation in -- globally. It's been -- a lot of doctors have got comfort around embracing it and also suggesting this for patients and specific organs like head and neck, pediatric, et cetera, where we have seen significant help and support being given to the patients. So we are quite hopeful that this should ramp up quite well in the next 2 years. And we should see a good ramp-up in EBITDA as well because, as you know, the EBITDA margins on this business is north of 40%, 50%.
The next question is from the line of Sameer Baisiwala from Morgan Stanley.
Just thinking about a higher ARPOB, was there any pricing action that was meaningful in the quarter, cash market insurance of operate site?
No.
No. No.
Okay. Anything that you're planning over the next 3, 6 months?
Next year, maybe, not for now.
Yes, nothing significant this year.
Okay. Great. And the second is for the digital platform, 24/7, are you looking for any sort of equity dilution over there to either access capital or to access -- patient access?
So we have said that we have plans for that, and we have always been saying that at the right time, it will -- we'll unlock value in the overall Pharmacy business also. And so we are open for all options there. And we will come back to you as we have better plans around the same.
Okay. Great. And how are you thinking about the ALOS going forward? I think it's gone up from 3.8 to now with 4.3, 4.4.
So 4.4, I think, reflects the COVID occupancy. We can hope to see something below 4 in the next quarter and an improvement in the beginning of next year.
Okay. One final, and that's on the side. Any thoughts on COVID vaccine being available on the private market?
Well, we have a plan on rollout. We have a cold chain logistics and everything prepared to roll it out, but we're just awaiting government approval.
So you think it can take a couple of months or longer or...
I think within maybe mid-March, end of March, for sure.
Expecting in Mid-March.
The next question is from Ayush Pansari from Allegro.
My questions was what is the like-to-like Pharmacy revenue and EBITDA as to pre-restructuring?
17% has been the growth overall for the Pharmacy platform for the quarter. And our EBITDA margins of 6.3% to 6.4%, in that range. And what we have reported in the back end a 6.5%.
78%, you said, right?
What is it?
Sorry, I have missed the number. What is the growth number?
17%, 17%.
The next question is from the line of Dheeresh Pathak from Goldman Sachs.
So on the Pharmacy, the quarter's EBITDA growth is lower than the year-to-date growth. So any thoughts there?
Talking about which quarter in reference, specific quarter?
This quarter, the like-to-like Pharmacy EBITDA growth is 20%, and I think year-to-date is in the range of 30%.
We have a robust Q2. And that has contributed to the higher sales and higher EBITDA. EBITDA overall, it's the same range at in the last 2 quarters, 6.4% in Q2 and 6.3% in Q3. And that 6.3% is coming on the back of absorbing some online Pharmacy.
Okay. At the -- during the QIP meeting, we had requested some more KPIs on 24/7. So I was expecting probably this quarter to see some metrics around that in terms of traffic, user engagement. So when can we see that -- those disclosures because typically, your disclosures are very good.
We'll take a couple of quarters before getting that because there is a high level of competitive intensity around this business, as you know, and there's a lot of competitor interest also. Unfortunately, all of them are unlisted, and we are the only listed players. So we have to have -- keep that in mind also. We will -- we know that our transparency levels have been good, and we will get back to that over the next 2 quarters surely.
The traffic increased quarter-over-quarter for your online pharmacy ordering or the consults. Anything can be shared right now for this quarter?
So just on the tele-consults, let me say that we have already done 250,000 tele-consults. We are tracking about 2,000 a day. But more importantly, if you look at our telemedicine platform, et cetera, for the government, we do about 7,000, 8,000 a day. So we really believe that there is a potential to ramp it up. And just going forward, we will. The reason that we're seeing a slight slowdown in tele-consult is that doctors are moving back to the offices. And that's the reason. But at the same time, 24/7 is increasing the number of doctors on its platform. So it was 6,000 last month. And they have a plan to really double the number of doctors and with that, the tele-consults will significantly increase. Thus, the adoption of tele-consults by senior doctors will take a little bit more time. But definitely, there is a huge opportunity. And the plan is there. We think that post March quarter, we will be able to share numbers with you.
Anything on the monthly and daily active users, if you can share? There are certain external app traffic monitoring sites where we're seeing some decline in terms of the traffic activity.
No, no. So we said that with post-COVID a slight decline because doctors have moved into their offices and started seeing patients. But we believe that again, it will pick up because we are onboarding more doctors and we're also onboarding senior doctors who are -- have not been used to the telemedicine platform. But we'll share the traffic with you post the March quarter.
Okay. That would be very useful. Just one more housekeeping thing. So the impact of AS 116 is seemingly lower this quarter versus the last 2 quarters. So any asset that has gone out.
The Pharmacy front-end has been captured out, as part rental moved into the Pharmacy front-end. It is the main reason.
The next question is from Nitin Agarwal from DAM Capital.
Ma'am, on the hospital business, now, when you look at capital allocation over the next say 2 to 3 years, barring the Gleneagles investment, how are you thinking about it? Is it more greenfield, more brownfield, more M&A in terms of a primary drive CapEx? And what stage we need to reach cap up CapEx if you need to?
So post the Kolkata acquisition, the way that we're thinking of growth is one is definitely a focus on existing assets and improving asset utilization. The second is to grow our clusters and definitely to have a presence in the Delhi market where we have 1 hospital. So yes, to look at something in Delhi if we're looking at. And the way that we will do this is through bolt-on acquisitions. We have not clearly looked at greenfield -- we're not looking at greenfield. We're also looking at revenue share options. So it's an asset-light growth strategy.
And so is there any sort of firm capital number in mind in terms of how we sort of approaching this? Because the concern that the hospital in the past has been exceptional sort of capital allocation or phases at a different points of time. Do we see the same situation emerging for us at some point in time?
No, I think that if you look at the debt-to-EBITDA, it's -- we will keep it within 2 to 2.5 and debt-to-equity currently at 0.71 coming down to 0.5 where our upward comfort level is 0.8. So I don't think we'll ever compromise the balance sheet nor will we impact the free cash flows that we hope to see. Some of the growth will -- some of the bolt-on acquisitions will be funded by free cash flows.
And the second one on AHLL, we talked about the different aspects of growth on the business. But I mean, how are you looking at, say, a 3-year picture in the business? I mean, there are obviously the AHLL business is made up of 2, very different -- 2 very different pieces of businesses, which have limited synergies with each other at some level. So I mean, structurally, how are you looking at the business? So when you take a long-term view, how do we independently invest in growing the businesses or grow our business in individual capital? There are opportunities to get individual capital for various segments?
Chandra Sekhar?
Yes, ma'am. So there are opportunities on individuals. There are areas of interest within the platform per se, but I think our preference is to keep the platform intact and seek investments at the platform level. Growth in a 3-year horizon, we are looking at growing year-on-year. In Diagnostics, specifically, we're trying to grow 30%, 35% kind of growth rates, which we are factoring in organically. On the overall numbers, we're tending to see that at a platform level, we will hope to reach about in 3-year time frame, we want to reach there about INR 1,800 crores to INR 2,000 crores and have a steady state 12% to 14% EBITDA margin.
The next question is from the line of Anubhav Aggarwal from Credit Suisse.
Two, three questions from me. One is on the COVID patients, the ARPOB is low at INR 27,000, INR 28,000, but what would you say on the EBITDA side? My sense may be the margins should be higher here, like something like INR 7,000, INR 8,000, won't it be?
Similar margins is what we have. We don't have -- the margins would not be lower. It won't be higher.
So you're saying INR 27,000 is suffice per bed per day, something like that? That's what you're saying.
It actually varies from state to state. So what we would say that it's -- must be about 14%.
Sorry, sorry. So you're saying 14%?
Yes, true. Yes, 14%, what I said was that it varies from state to state. Government had tapping on COVID prices. So it would not be more than 14%.
So you're saying INR 4,000 per day revenue, which is very similar to profitability of new hospitals that you have right now?
Yes.
Yes.
But it's diluted. So when you have a COVID bed in the mature hospital, it is diluted?
That's correct.
Okay. Second question is on the CapEx for the 24/7 in the sense of that you're talking about QIP money being part of the INR 100-odd crore being used there. Can you talk about what you're going to do with that over there in terms of hard, let's say, capital expenditures, which areas you're looking to strengthen over there?
So clearly, the 2 areas that we would like to be spend more money on is one is the tele-consults and second is the condition management. Because these are 2 areas that we believe is going to be more long term, sustainable and summoned. So clearly, from our perspective, the way we look at it is we have to be the only platform or app that a patient should use. It's not about -- the Pharmacy is not the differentiator. It is something that you will clearly use the app, provided you know that you have the ability to reach to the doctor, take care of your health and also ensure that you do condition management and we are able to manage diabetes, have a health counselor for you, stuff like that. So there is a lot that we are planning around that. Many of that streams are already on. There is a separate tech team which is working on this. So it's -- you will see significant improvement in some of these over the next 6 to 9 months and not really quarter-over-quarter, which is why somewhere we are not able to give some of this quarter-on-quarter matrices also. But these are some of the plans which we have, which will -- which you will see showing up sharply.
So just a clarity on this, when you say spend -- more spend on teleconsultation condition management. So as a user, would I see -- I mean, what's happening? Are we getting more cloud space when we are spending that incremental money here? Are we using more AI here? So what will change there? One is changing of the hardware at the back end? Second is in terms of use experience, where would you say this bulk of the money is going to go?
Both user experience. Sanjiv, do you want to talk about that, user experience and AI and what are we building on those products, specifically want to guide, Sanjiv?
Yes. So typically, the money, which is going to be spent out is going to be on the technology front. And when I'm talking about technology, we are talking about the AI and its role in condition management and various bots that could help users experience while coming into the app as well as that could also help service them much better. So primarily, at this stage the money that is being spent in 24/7 is towards the technology build only. And I think 2, 3 quarters from now, you would see that technology-enabled 24/7 app which provides a very good user experience and actually takes it out many problems in one -- I mean it provides solution across many problems in an app. So it's going to be technology-based app than just a pharmacy kind of a thing. So we see that a lot of AI and ML in 24/7 app. So primarily money is spent towards the technology buildup.
Sure. That's helpful, Sanjiv. If I can ask one last question on ProHealth Initiative. In your target of INR 1,000 crores, I was a little confused with that because none of the large -- even the large companies which are listed today on the diagnostics space, they do not have this preventive health revenues more than INR 150 crores, INR 200 crores, each one of them. And we're targeting INR 1,000 crores. So that one is a very -- looks to be a very steep target in 3 years.Secondly, can you also talk about where are you targeting bulk of it from corporate individual segment? And what's the CapEx -- let's say, you would reach your target INR 1,000 crores, what would have been CapEx there?
So yes, you're right. Currently, we're already at INR 262 crores in terms of what we are doing in terms of preventive health care. We do believe there's a large opportunity with corporates. We have tied up with many corporates to look after the health of their individuals. And as you know, COVID showed us that the importance of looking after your health, which is why we're very focused on launching this product. The third part of it is most of the retail consumers who use these products on the app, they never really have a physical interface with the doctor. And wellbeing is all about not just taking blood markers, it's not just doing the exercise and follow the diet, it's a combination of everything. And that's why we believe that ProHealth is something that is an offering that is differentiated from the rest. Finally, the layer of AI. With Microsoft, we have done the cardiac risk score.So in that, we had many learnings on how we can improve cardiac health. Through sugar, we had looked at condition management for diabetes. So it brings in cardiac, it brings in condition management. Overall, it looks at improving the wellbeing, including things like see producing anxiety and the impact of it on your overall wellbeing. So yes, we really need to -- we have a plan to double the revenue 5x. But just think of Apollo, we have 70 hospitals. We have clinics, 200 clinics. We have 24/7 that will be acting as a funnel to ask -- to allow people into this program. So I believe that we have the ability to do it, and this is really a space that we need to occupy.
And what's CapEx for this?
Around INR 50 crores over the next 3 years.
Wow. So if INR 50 crores CapEx, you can almost get increment at INR 750 crores. And I'm assuming this will be at least 30% margin business.
Clearly, the existing assets are -- there is a lot of existing assets, which will be sweated significantly on this, as Ms. Suneeta said. The utilization of our labs in our hospitals, et cetera, 50% today. So we have significant plans to sweat existing assets, which are -- if you look at the assets which are already there in the lab space within the hospital is over INR 500 crores. So there is a significant amount across this, which we will be using to increase the scale. As Ms. Suneeta said, it's a clinically designed product and it's not something which is just a diagnostic product.
The next question is from the line of Krishna Prasad from Franklin Templeton.
Yes. I have a few. First, you've mentioned the kind of growth you've seen in the home care segment. I assume part of it is COVID med. But can you just talk about what kind of ambitions you have there and how this can scale up?
So currently, we are -- home care is now -- clearly, COVID has opened up the customers' minds in redoing transactions on home care. Earlier, it was a lot of nursing care that we were doing on the home care side. But with COVID, we were able to really manage a lot of people remotely. And that was a very strong product, which was -- got accepted by the consumer. This is something that we are now figuring out how we can use remote care to take care of the patients over -- using a product for the same like a weekly call, a monthly call, et cetera. So these are things that we are trying to do also health counselors, et cetera, which we are also putting on the home care side of things. So it is already doing INR 60 crores of revenue per year now, home care. It's -- we believe that this time what will happen is the handoffs from the hospitals to the home care will also start happening. We have to work on some of these over the next 1, 2 years. But clearly, we are seeing that some of these opportunities will play out way well where after an orthopedic surgery, we kind of say that we really are able to send home a patient in 2 days as opposed to really keeping them for an overall ALOS of 4, 5 days. So some of these will start lending itself, and we have also started doing ICU management, especially, with COVID, we were able to set up ICUs at home as well on -- though it is a handful of cases, maybe 20, 25 but still, we were able to do that effectively. So it is lending itself to a lot of opportunities. We'll have to work on it. Variables are also going to be important as we keep collaborating or keep passes open for collaborating on that front on many -- with some of the other players. People like Siemens, Philips, all of them are thinking of some of these, and we will have a rollout planned over the next -- on some of these over the next 6 months.
Sure. And my second question is within AHEL, I would have presumed that daycare would have actually got a boost because of COVID. But doesn't seem to be the case. I'm just wondering, is that the case at all or...
Chandra Sekhar?
No. Actually, the quarter 3 daycare surgery work has come back. Quarter 1 and 2 was very poor. But quarter 3, we are seeing on the backlogs getting back.
Right. And finally, on the disclosure side, I have a request, if you can provide the front-end, a piece of free cash flow data on the front end on the pharmacy, that will be very helpful for us to access the numbers.
Sure, we will.
We'll take that as the last question. I would now like to hand the conference back to the management team for closing comments.
So thank you again for joining us. As we look ahead, we continue to focus on vaccination. We did have a challenging 3 quarters where we were busy dealing with the pandemic. However, we believe that we've actually emerged stronger in the sense that we've rationalized costs. We've created focus around improving occupancies, we've created a renewed focus on asset utilization and more importantly, our focus on clinical differentiation, which is really all about Apollo's DNA. How do we do clinically differentiated products for our people. And I think that all of this will result in better ARPOBs as we move into the future, our strategy on growing market share, ARPOB and improving, again, improving the offerings that we have from Apollo in terms of the verticals, which is the Apollo Health & Lifestyle, where we want to grow Diagnostics; improving Pharmacy metrics; improving the hospital delivery; and launching 24/7 in a way that is meaningful, things that we will focus on, and we are so glad that you've been part of this journey. We look forward to your continued support. So have a great weekend. Stay safe and stay healthy.
Thank you very much.