Metropolis Healthcare Ltd
NSE:METROPOLIS
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Estee Lauder Companies Inc
NYSE:EL
|
Consumer products
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Church & Dwight Co Inc
NYSE:CHD
|
Consumer products
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
American Express Co
NYSE:AXP
|
Financial Services
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Target Corp
NYSE:TGT
|
Retail
|
| US |
|
Walt Disney Co
NYSE:DIS
|
Media
|
| US |
|
Mueller Industries Inc
NYSE:MLI
|
Machinery
|
| US |
|
PayPal Holdings Inc
NASDAQ:PYPL
|
Technology
|
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 |
1 503.8
2 288
|
| 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.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Estee Lauder Companies Inc
NYSE:EL
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Church & Dwight Co Inc
NYSE:CHD
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
American Express Co
NYSE:AXP
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Target Corp
NYSE:TGT
|
US |
|
|
Walt Disney Co
NYSE:DIS
|
US |
|
|
Mueller Industries Inc
NYSE:MLI
|
US |
|
|
PayPal Holdings Inc
NASDAQ:PYPL
|
US |
This alert will be permanently deleted.
Metropolis Healthcare Ltd
You don't have any saved screeners yet
Good morning, ladies and gentlemen, and welcome to the Q1 FY '23 Earnings Conference Call of Metropolis Healthcare Limited, hosted by Spark Capital Advisors India Private Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Harith Ahamed from Spark Capital Advisors. Thank you, and over to you, sir.
Thanks, Michelle. Good morning, everyone. This is Harith from Spark Capital. I'd like to thank you all for joining this call hosted by Spark Capital to discuss the 1Q FY '23 earnings of Metropolis Healthcare. I'd like to thank the management of Metropolis for giving us the opportunity to host this call.
From Metropolis senior management team, we have with us today, Ms. Ameera Shah, Managing Director; Mr. Rakesh Agarwal, Chief Financial Officer.
I'll now hand the call over to Ms. Ameera Shah for her opening remarks. Over to you, ma'am.
Hi. Good morning, everyone, and thank you for joining us on the Q1 FY '23 earnings call. I hope you and everyone around you are safe and health. I'm joined today by Rakesh Agarwal, CFO and SGA. The presentation and press release have been issued to the stock exchanges and uploaded on our company's website. I hope everyone has had the opportunity to go through the same.
The industry has grown by leaps and bounds over the last 10 years, while Metropolis has grown even faster. When I look ahead, the excitement has only increased for what the future may hold. The growth opportunity for the diagnostics industry, including the overall health care looks brighter than ever, and this is evident from the fact that the industry has attracted top talent from the best of companies and industries.
We, at Metropolis, have embarked on a 3.0 journey, and believe we have enough resources to execute the strategy for which a plan has already been placed in place. Metropolis 1.0 was all about building the brand amongst labs and hospitals and setting up strong operations and entering markets. Metropolis 2.0 in 2015 was a pivot to the B2C business via prescriptions from doctors and building large distribution of collection centers across the country. Now it's time for Metropolis 3.0. And in one line, this will be about focusing on the needs of the consumer and differentiating our brand in the platter of players.
Metropolis 3.0 is a combination of 3 different areas. For the illness business, we will continue to strengthen our density of centers in focus cities for consumer convenience through targeted network expansion and home visits. This will lead to an increased B2C ratio as we've seen in the past. We are also building operational excellence to enhance stickiness with customers.
The second one is that the phase of COVID has encouraged consumers to be more health aware and proactive. And therefore, it gives us the opportunity to additionally focus on D2C, direct-to-customer, which has never been a large market segment before. We are utilizing this opportunity to better understand consumer needs and meeting them through technology and superior customer experience. This will enable us to focus on the untapped markets of affordable wellness and chronic testing, which have not been a focus for Metropolis before and have a very small contribution to our overall revenue. This will not be done through the cash burn model but a profitable, sustainable way of organically growing us as we have always done.
And number three, as we increase our scientific engagement with top doctors and hospitals of India, this will result in specialty business increasing and differentiating our brand.
We believe that the Metropolis 3.0 journey, which is our digital footprint coupled with our lab and expansion network, will create a long runway of growth, giving us the confidence to achieve the growth theme in pre-COVID levels. This evolution to 3.0 will require addition of different talent and a consumer more-focused mindset.
The future is always built on the strength of the past. Let me take the opportunity to thank Vijender Singh for his contributions towards Metropolis 2.2 in the past 6 years. He will be moving on from Metropolis to explore new opportunities outside the diagnostics industry. He will continue to be a part of Metropolis till November 30 to ensure a smooth transition. We, at Metropolis, wish the best to him for his future endeavors and details regarding the new CEO, who will partner with me for Metropolis 3.0 will be announced shortly.
There has been a lot of talk about Metropolis and our [indiscernible] plans in the past few months. Let me take this opportunity to set the record straight. As the promoter of Metropolis, who have built this business over the past 20 years, I'm excited and passionate about the future. As we have been navigating the changes in the industry, a few months back, we received a lot of inbound finance interest from corporates and financial institutions who were all part of the health care ecosystem for making a potential investment into Metropolis or a strategic partnership.
As a progressive company interested in the interest of all shareholders, we evaluated the proposals to see if any of them bring strategic value to the Metropolis journey 3.0. This fuels many media articles speculating on the direction we would take. And in India, there's never a shortage of "anonymous sources" giving information to media. As management and shareholders, while we were encouraged by the overwhelming interest by multiple parties to invest a minority stake in Metropolis, we have decided that the best direction for us is to continue to build on our own.
The other news was a large primary fund raise to be done by Metropolis. I would clarify that we are currently not looking at any fund raising to the company that we believe at this time would dilute our shareholder interest in an unfair manner. We have strong cash flows and a healthy balance sheet to be able to manage growth or acquisitions. And therefore, there is no reason to dilute at this point.
Lastly, let me give you abundant confidence that the Promoter Group remains committed to the organization's growth just like in the last 20 years, and will ensure we continue to scale higher as a leader in the industry.
Now let's move on to the business highlights. Q1 FY '23 was the first quarter after more than 2 years, which witnessed some normalcy from lockdowns and COVID spikes. We are very pleased that non-COVID revenue, that is revenue excluding COVID PCR and COVID allied test has grown by 26% on a year-on-year basis, while the B2C revenue has grown even faster at 28% Y-o-Y. This is despite the fact that historically, Q1 is weaker than Q4 in the west and south of India, while usually in the north and east of India, Q1 is better than Q4.
If we look at past historical trends, we have usually seen a flat-to-negative growth in Q1 over Q4 because of the reason I mentioned. But this year, due to better operational results, we have seen growth in Q1 for non-COVID over Q4.
I'm also happy to report that we continue to witness increase in productivity in our centers. Since the start of FY '22, we have added 22 labs and 631 service centers. These have shown early positive trends, and we expect the breakeven period for these new centers to be at a shorter tenure as compared historically. The productivity has also been value-led as seen in the increase of revenue from specialized tests in the newer sector.
We have also been able to grow the Wellness segment at a faster pace. As the new health care players with the large marketing budgets have accelerated the awareness for preventive health checks, this has resulted in an expansion of the overall market size of the industry -- of the Wellness industry. This has helped us build our Wellness segment faster than before. Our focus has been on larger packages for the premium for the Metropolis brand rather than large volumes at low prices.
We have seen revenue from Wellness segment for Metropolis increase from 7% in Q1 FY '22 to 12% in Q1 FY '23. We would to take this to a 20% contribution of the overall revenue in the time to come.
We will also continue building Metropolis on a very scientific basis. The brand equity of Metropolis has been built over 40 years based on earning the trust of doctors. The major share of our customers are the patients -- are acute patients who require testing on priority. And the doctors who refer samples to us are specialists who are looking not just for any lab but for a good quality lab with specialized testing capabilities. This segment of the business is much stickier in nature and least susceptible to increased competition by e-diagnostic players.
Our portfolio of specialized test is backed by years of research and plays a very crucial role in the diagnosis and treatment of patients. And 42% of our revenue, excluding COVID and allied test, is contributed from specialized tests. We continue to invest in the R&D of newer tests and we have added 20 new tests in the last 6 months.
Our integration with Hitech is also moving at the expected pace. We have identified 9 Hitech labs, which had an overlap with Metropolis labs and merged them. This will lead to a consolidation of revenue while optimizing the overhead. While lab network has been optimized, but at the same time, we've added 14 new service centers under Hitech to expand the sourcing of patients. As we move forward into integrating operations, the synergies will flow through lower procurement costs and lower operating expenses, complemented by higher revenue eventually leading to margin settlement.
We are on track for adding 90 labs and 1,800 centers by 2025. Out of 22 labs added since '22, 13 labs have been launched in South and West of India in cities and markets in which our brand was strong, but we did not have a lab and 7 in North and East of India and 2 internationally. In terms of centers -- collection centers, out of 631 added since FY '22, 534 were added in South and West, 88 in North and East and 9 internationally.
Additionally, our Home Visit revenues are also growing well, and coverage has expanded to 100 cities. The Home Visit revenue, excluding COVID and COVID allied test grew more than doubled to INR 23 crores in Q1 FY '23. On a quarter-on-quarter basis, it grew by 30%. This is a segment of customers who prefer home testing, but still a large number of customers prefer the brick-and-mortar experience.
The economics from home testing keeps on improving and volume throughput for home testing increases. As we digitize more of our offerings, our focus on self-serve is helping us reduce the cost of servicing the customer. We are finding more patients in raising our new app, Corporate Portal and automated WhatsApp channel to engage with us.
We're also focusing on increasing the B2C, which is via doctors and D2C, which is direct-to-consumer business contribution. Our continued emphasis on improving our Net Promoter Score, which is a reflection of customer experience, is helping us retain customers who value experience and quality far more than price. All the consumer-facing tech tools like Sample and Phlebo tracking, Smart Reports, Quick Report turn-around time and an ability to book and pay quickly and self-serve are all positive voice of customers.
And lastly, but not least importantly, at Metropolis, we recognize that acting responsibly and sustainably is part of being a responsible steward of our planet, with the vision to create a wider impact for the greater good, and continue our mission of building a resilient business and sustainable economic and value creation for stakeholders we have embarked on our ESG journey in the first quarter. We will keep you updated as we progress.
This is all from my side. Rakesh Agarwal, the CFO, will now take you through some of the operational parameters and financial highlights.
Thank you, Ameera, and good morning, everyone. Let me talk about the key performance metrics and operational numbers. Revenue share of B2C business in focus cities for non-COVID stood at 60% in Q1 financial year '23. Our near-term target is to reach 65 contribution. Revenue contribution from specialized test for revenue, excluding COVID PCR and allied is similarly at 42% in Q1 financial year '23 as was in Q1 financial year '22.
Revenue contribution from Wellness tests, excluding COVID PCR and allied, witnessed strong increase to 12% in Q1 financial year '23 as compared to 7% in Q1 financial year '22.
The revenue per patient increased by 3% year-on-year to INR 955, while revenue per test dropped by 7% Y-o-Y to INR 466 in Q1 financial year '23 due to packages contributing more to overall revenue.
Our revenue profile amongst focus cities and other cities stood as follows: focus cities, that is 5 cities, including the city and peripheral areas around metropolitan regions contributed 60% to the revenue in Q1 financial year '23 as compared to 58% in last year, Q1 financial year '22. This is basically due to the Hitech acquisition, which has large revenue in Chennai and Bangalore, two of our focus cities.
Seeding cities, 8 cities contributed 19% to the total revenue in Q1 financial year '23, which is similar as compared to 20% in Q1 financial '22, excluding COVID PCR and allied. Rest of the other cities contributed 21% of the revenue in Q1 financial year '23.
With respect to geographical distribution, revenue contribution, excluding COVID PCR and allied from West region was 50%. South contributed 30%, North contributed 9%, while the rest was contributed from East and International locations. Revenue from South has increased on account of acquisition of Southeast Hitech diagnostics.
Now let us come to Q1 financial year '23 financial highlights. Before starting with the financial highlights, and as Ameera said, that important point to note is that the base quarter of Q1 financial year '22 was very high on account of delta wave of COVID.
Total revenue decreased by 14% year-on-year to INR 280 crores. Most importantly, revenue, excluding COVID PCR and COVID allied, increased by 26% Y-o-Y to INR 262 crores. COVID PCR revenue dropped 80% Y-o-Y to INR 12 crores, while COVID allied revenue dropped 90% Y-o-Y to INR 6 crores in Q1 financial year '23. EBITDA before CSR and ESOP is at INR 71.7 crores in Q1 financial year '23. EBITDA margin for Q1 financial year '23 stood at 25.6%. EBITDA was impacted on account of lower revenue base due to a sharp drop in COVID PCR and COVID allied revenue. Increase in employment costs on account of strengthening of leadership team and strengthening staff, investment in [ label ] network expansion, which means carrying months of fixed cost before lab launch. Profit after tax stood at INR 35.5 crores in Q1 financial year '23 versus normalized by not including except item of INR 63 crores in Q1 financial year '22.
Coming to our working capital ratios. Our debtor days as on June '22 stood at 32 days at similar level while comparing to March '22. Overall, working capital days stood at 18 days as on June '22 compared to 14 days as on March '22. OFC to EBITDA continues to be strong at 99% in Q1 financial year '23. Cash and cash equivalents stood at INR 139 crores as on June '22. Total debt drawn for the acquisition of Hitech was INR 300 crores, out of which we have already repaid INR 106 crores from internal accruals. Hence, gross debt stood at INR 194 crores as of June '22. We are trying to repay that external debt of acquisition by next financial year. During last year, we have also merged all our 100% both fully-owned subsidiaries with the Metropolis Healthcare. This will lead to cost efficiency, better administration, governance and simplify the corporate structure.
In financial year '23, our effort will go towards cost optimization through digitization of processes, efficient manpower allocations, improvement and better breakevens of newly expanded network. Q2 is usually one of our two best revenue quarter in West India and with work happening behind the scene on managing cost well, we expect our margin to be at a pre-COVID level in Q2. On growth, we expect higher single-digit Q-on-Q revenue growth on non-COVID business for Q2.
This is all from my side. We now leave the floor open for Q&A. Thank you.
[Operator Instructions] The first question is from the line of Sriraam Rathi from BNP Paribas.
My first question on the growth, the noncore business. It seems that it has grown at around 8% to 9% 3-year CAGR, including the Hitech revenue. Is it possible to share the Hitech revenue? And secondly, I mean, assuming that this quarter was very normal and generally we used to grow, let's say, 14%, 15%. So by when we expect that, that growth we will be able to achieve now?
Thank you, Sriraam, for the question. As we indicated in the speech, we expect that now since there is more normalcy coming post COVID, and assuming that there are no more waves and also spikes from here on, I think we expect that we should resume a Y-o-Y pre-COVID kind of growth. As we have already seen in this quarter, with a non-COVID growth of 26%. We have seen some normalcy resume. Obviously, the base last year of a non-COVID was a little bit lower because of the wave. But I think our pre-COVID growth rate, I think we are on the way to be able to get there. So I think -- I don't think we have the breakup of the Hitech revenue.
Yes. So basically, if you remove Hitech, we are growing around 17% Y-o-Y overall and the rest of 9% growth is coming because of the Hitech number.
Okay. Sure. That's helpful, sir. And just one question. I mean is it possible to share the number of tests and patients ex-COVID for the quarter?
Well, we'll get it in the next 5, 7 minutes and respond back to you in this call.
Yes, that would be helpful. And we the expect that margins will revert to pre-COVID levels from Q2 onwards. So basically that -- we are assuming that the growth will also bounce further from here on, right, on the revenue side?
Yes. So I mean, absolutely, I mean, I think if you see, there is a good amount of seasonality in our business. And we have to remember that the seasonality is different in different parts of India, which is why different players, depending on their trends in certain geographies have different quarters where they have different growth numbers. For Metropolis because of our strength in West and South, usually Q4 and Q2 are the best quarters historically for the organization. And that may be different for other organizations, strong in other markets.
So I think the pre-COVID margins are very much possible. The only exception I would say there is that if we may continue to invest and we would like to continue to invest in marketing and branding and really building the brand more solidly in the next few quarters. And from an operational basis, we believe that we would be back track at pre-COVID levels unless we, of course, look to invest more in marketing, that may be a slight exception to the rule.
And the total -- the number of patients is 2.8 million in the quarter 1, which is 7.5% Y-o-Y growth and test count in lakhs is 23 million, which is 4.5% growth in -- sorry, not 23 million, I mistake, 5.8 million, which is 4% growth over last year.
The next question is from the line of Rahul Agarwal from InCred Capital.
Firstly, thank you, Ameera, for clarifying on the fund raise. I think it really helps us to get a clear direction, really appreciate that. To start with questions, firstly, on the 80-20 mix of acute and chronic on volumes, that is what is disclosed in the presentation. Could I understand what is the revenue mix like? And how has this behaved over the last 5, 6 quarters? Are we seeing any shifts or is it basically maintaining the pre-COVID mix?
The value -- the revenue contribution will be more tilted towards acute, more than volume because the revenue per patient in acute is higher than it is in chronic. So you won't see too much of a difference, but if anything, it will be a positive bias towards the acute. We have not seen a very large shift in pre-COVID to post-COVID right now in acute versus chronic. Obviously, the last 2 years were quite unstable. And therefore, from a trend perspective, and -- but I think this ratio would probably continue, unless, of course, there are two we are continuing to build on the acute patients and the specialty tests, we are also looking to continue to build on Wellness and Chronic. And obviously, as the percentages change for Wellness, automatically, the acute and chronic will come down or if chronic growth significantly, then acute will come down. But I think in number value, in rupee value, we will not see any decrease in any of them, we'll only see an increase in all.
Got it. Why I was asking this question essentially was to understand, is there any -- are the new digital guys or the new offline guys getting any share from the chronic testing because that is where -- it lies in the middle, right, in terms of doctor influence. So how has that really happened? Are these guys successful in getting any chronic business? Or it is just top-down kind of hypothetical opinion right now?
No, honestly, there is no third-party data, so it's quite difficult to gauge fully. But our sense is that they are more able to get the sort of budget wellness business, which is people being well and suddenly saying, okay, let's do a INR 500 checkup. But usually, when there are chronic patients who are going to doctors, that may not necessarily be the pattern that is getting adopted by doctors and patients of going to the health tech players but more so by consumers alone when there is no doctor involved.
Now if there is a chronic patient who doesn't go to the doctor, who's a diabetic at home and doesn't see the endocrinologists and feels that there may be a value coming from doing cheaper prices because they don't know the technical behind, that share of chronic customers may move. It's very difficult to know. But I think chronic customers who are regularly visiting doctors, it is less likely.
Got it. And my second question was on there is a slide in the presentation which explains about some loyalty benefits to make chronic guys basically not shift and stick to Metropolis or incumbent. Obviously, in terms of response to competition, I don't see any price cuts you guys have taken at a blended company level, maybe between test, you might have done some rationalization. Could you throw some more color like how does the loyalty benefit work really? Because I couldn't really figure out as a customer to Metropolis that is there a loyalty benefit being passed through to the customer in the walk-in labs? So anything specific there?
At this point of time, it has not been launched yet, which is probably why you won't see it on the ground. But it will be launched soon where we are -- idea is very simple that this is a whole segment of chronic that we actually don't cater to, and we are not looking this as a defensive move because our chronic segment is anyway small. We are actually looking at this as an opportunity for us to gain traction in a chronic market.
And therefore, how can we create schemes and packages for customers where they are believing that they are getting a price value as well as they're getting the best quality for metropolis. And that combination, we believe, will be a far more lethal combination than just the price benefit because finally, chronic customers live with their disease and they live with their problems. And while they may get tempted once in a while to look at price, the reality is a diabetic suffers every day. And therefore, the levels of testing are very important for them. So we do believe that if we are able to offer good value pricing over loyalty over time as well as the good quality and services, we believe that opportunity we will win and we should be able to launch this in the next few months.
The next question is from the line of Abhinav (sic) [ Anubhav ] Aggarwal from Credit Suisse.
So we have one clarity on this.
[Operator Instructions]
So the question is on the strategic partner. Just trying to understand what would have been a rationale of getting a strategic partner. Were you trying to get into non-diagnostic services? How would this fund raise would have helped once you've gone for more Hitech related acquisitions or invested that money outside diagnostic businesses? Some color will be helpful here.
So the idea was never to, at this point, to go very far from diagnostics at all. The idea was always to continue to focus on what we do best. And if there was any strategic partnership that would have helped us in increasing volumes for pathology, then that is something that we would have opened our minds to. Obviously, if everything else fell in place.
So the idea, like I said, very clearly, even in the media and in the speech, is we are building towards Metropolis 3.0. And if there is anybody who can help us in that regard, we have as management and our share believe it is our duty to evaluate any such proposals that come in interest of all shareholders, which we found that it did not, at this point of time, make sense, and it makes sense for us to continue building on our own. But the logic will always be what makes sense for the organization, which means increasing pathology directly or indirectly and really enhancing value for shareholders.
That is helpful. If you can also comment how fund raise would have helped you?
Well, we never said we were in the business of fundraising.
And you would say that the organization is generating a significant amount of cash and for your growth needs that is sufficient, right? Balance sheet, don't need to go for fundraise, right?
At this point of time, like we mentioned in the speech, there is no plan to go for the fundraise. As you can understand, businesses are always evolving. And if at some other point, we believe that is necessary, we'll be very transparent and come back to the market and to our shareholders and share with you.
And in the presentation, when you talk about strengthening of leadership team, can you give some more data -- granular data of what have you added on the leadership team? I think two quarters back, you did mentioned about IT team strengthening on the digital side. Is that the same comment?
No, there's multiple areas, actually. And I'll tell you, for example, we introduced a Chief Revenue Officer who joined us in October last year to really sort of take a complete sort of national pan-India charge of the entire revenue generation function. We believe that is bringing extra rigor, more operational rigor in terms of distribution, in terms of coverage, in terms of productivity to the business. We also strengthened our middle management levels across functions in terms of preparing succession plans, in terms of bringing better talent from even other industries as well as diagnostics industry to really strengthen.
And lastly, as we are going through an enormous technology transformation and automation, you have to bring on talent that is able to actually understand how to build that and how to use that. And therefore, we've made a very conscious decision over the past 2 years to really strengthen the teams at the senior and the middle management level in a very significant way. And we have done that. We've made those investments. And we believe today, Metropolis is a more robust, a stronger organization for it.
And Ameera, do you need -- in terms of -- do you still have gaps -- of course, Vijender, the new CEO, you will have to replace, but any other gaps in the team that you see today? Or are you good now for the next foreseeable future?
I don't see any major gaps. I do see one or two positions that we may still continue to add. For example, in certain segments where we believe that we are not staffed adequately or the talent needs to be brought in, for example, towards Metropolis 3.0 when we mentioned that we want to now, besides focusing on doctors and labs, also focused on the consumer. The same team may not have that mindset of consumer. And therefore, you may need to bring in additional people who have a more -- come from a more consumer mindset industry. So I think those kind of gaps are there, but I would not say anything very major.
Okay. And this next question is for Rakesh. When you talk about higher margin close to pre-COVID in the next quarter. A couple of questions for clarity there. One, what kind of delta are we talking about? So from quarter -- current quarter, 1Q '23 as a base, are we talking about 100 basis point margin expansion next quarter? And would that margin largely sustain for the balance of the year? Or is that only for the next quarter to [indiscernible] ?
See, there are two, three things. Obviously, the direction which we are going, it looks like that we obviously will end up getting a bit of near to the pre-COVID level. That's how it looks like for us. Obviously, just to inform everybody that we have also given our increments in July, that is on added line item, which comes in the end. So even after that, we are very sure and there are a lot of work going on because there were a lot of extra fat added because of the COVID scenario.
Now that adding is very fast. But when we want to get rid of it, it takes time. So now in quarter 1, we have done a lot of activities where whatever fat was there because of the COVID scenario, we have been able to cut down that and we believe that now this quarter will be more or less normalized from a cost point of view, and we should come back to some normalcy, very near to the pre-COVID level.
So Rakesh, talking about 100, 150 basis points margin expansion?
I cannot give you an absolute number for that. But obviously, it can be when I'm saying pre-COVID level, then you can make out that how close we will be to that and what basis point will add. So it would be unfair to give a particular direction, but yes.
I was not asking for exact number, I get confused because different margins get reported. So in this quarter...
150 kind of numbers which you are looking at, but obviously, we have to just wait and watch how it goes into the quarter.
And that margin should sustain for the second half as well?
We feel that there may be slight up and down. But overall, I don't think that there will be a major shift in the margin level.
The next question is from the line of [indiscernible] From White Oak Capital.
Just a confirmation, did you say that 20% of the growth in the quarter and non-COVID is from Hitech?
Can you repeat the question? It was not clear.
I just want to confirm if I understood correctly, that 17% of the non-COVID growth for the quarter is from Hitech?
No, no. So we clarified 17% of growth year-on-year came from MHL last year versus this year non-COVID and rest 9% came from Hitech.
9% came from Hitech, okay. The second question is on this brand equity that you say you have with the doctors. So what kind of feet on the street infrastructure do we have? And how much do we spend on that on an annual basis, just to get a sense of the investment that we do in maintaining the brand equity?
Your voice is still not clear to us. So I'm so sorry, because your voice quality was not good.
So you talked about brand equity with the doctors. So just to get a sense of the strength of that, if you can talk about the feet on street that we have to service those doctors and what amount of money do we spend annually on this just to get a sense of the investment that we do on an annual basis to maintain that brand equity.
So we have sort of a sales representative force, medical sales represented force on the ground. We would not be able to reveal too many details because of the competitive sensitivity around it. But we have got an adequate team for the revenues that we generate. We cover specialist doctors, which are not sort of the one feeling with common flu and cough and cold, but more people dealing with more significant issues like a cardiology issue or a stroke or a cancer issue or a kidney problem, et cetera.
And therefore, we are dealing with doctors who understand quality who understand who we are educating on specialized test. And we are creating new markets through the specialized awareness for specialized tests that we do. So often, the tests that get prescribed are sometimes only available with Metropolis or sometimes available with only the top few players. And the quality of these tests are very important to the doctors because if we get the wrong quality report from a Me Too lab, that changes the direction of their treatment. And therefore, they like to work with quality players like Metropolis because they are sure that the report that they're getting enables them to do the correct surgery or the correct treatment. And therefore, we believe that the business that we built is quite sticky.
Okay. Another question is on the phlebotomists' network. If you can just give a sense of how much -- what is the strength of that network, how much is on your payroll? How much is outsourced? And in terms of the productivity, how much collections does average phlebotomist do on a daily basis?
So we do have a combination of on role and off-role, again, details are not available with us at this point. But the productivity is improving. During COVID peaks, obviously, we found the productivity to be the highest. Without COVID, obviously, the productivity has come down a little bit, but there is still capacity unutilization or lack of utilization, which we believe that we can use as we scale up the home services piece.
And the idea is to continue to differentiate the home service. We have to also remember that this is not a courier delivery. This is an invasive procedure of collecting blood. And therefore, a home visit is not just a home visit. It's about how qualified your technicians are, how much they arrive on time, how clean and hygienic they are, how they speak, whether they know the technical areas, they're able to make the consumers comfortable. And most importantly, does that sample travel in the right container and in the right cold chain so that you don't get a wrong report because if, for example, a CBC sample, a hemogram or a hemoglobin sample is collected in the wrong container, you will definitely get a wrong report. And if it's not transported at the right temperature, you'll get a wrong report. And that's true for all tests.
So we're continuing to build on and work on the training, the quality of our service, and we are finding actually, we recently introduced a rating service for our phlebos, and they were incredibly, incredibly high to ask the price. So I think overall, the NPS is only on the movement up and we probably believe that is probably the strongest in the industry.
Yes. But what I wanted to get a sense, Ameera was that given the focus on NPS and other things we just talked about, what is the right number like can a phlebotomist do in a metro city double-digit collections in a day? Or is that too much, there is inherent limitation of the nature of the business?
See, a phlebotomist is doing 15 collections in a day means the idea is that you're basically giving 15 minutes for collection. And what that means is that the quality of the experience may or may not be then the focus because then it's all about the volume. When you are doing something where quality and the care is the focus, we find that usually phlebos can do 10 to 12 average of collections per day. There could be some who do 13, 14, if they are very, very efficient, there will be some who do less but average of 10, 12. And we believe that's a fair number to benchmark again. Anything more than that potentially would probably land up compromising quality and the sake of volume.
[Operator Instructions] The next question is from the line of Shyam Srinivasan from Goldman Sachs.
So just the first one, trying to understand non-COVID non-Hitech Metropolis, right? Just the core business, how it has behaved Y-o-Y. So when you aggregated the 26% growth into 17% for this business, and I'm trying to get just the volume trends, doing back of the envelope calculation myself, seems to suggest that the patient volume has declined. Would that be fair? Because you don't have some of the other numbers, if you could help us at least get the directional sense on maybe why volumes are still flattish on a Y-o-Y basis or even down?
Patient count, as I mentioned earlier, is obviously without Hitech almost 2% growth overall. So that's the patient count growth if we remove the Hitech piece. So basically, we are not now looking alone at [ figures ], so we are just trying to calculate the number for you as you are asking because otherwise, it is 7% growth for us overall. And as I mentioned earlier that from a revenue point of view, we have around 16.5% growth in MHL year-on-year and the rest coming from the Hitech.
Rakesh, but if I look from Metropolis, if I remove COVID RT-PCR, it has not grown, right? Just MH versus MH, only non-COVID. It wouldn't have grown, right?
So how can that be, right? Because if you had a 17% growth year-on-year, and COVID is declining 80% to 90%, obviously, non-COVID is growing. We can work some math and come back to you. But intuitively it would grow. And second of all, we have to remember two things that different firms will have a different strategy. Our company has always had a strategy not on volume growth, but on value growth. And our revenue per patient being one of the key KPIs that we focus on. The volume is not our focus, the value per patient is our focus.
So for example, traditionally, we have always seen that our revenue mix is a combination of some volume but plus the price -- value uptick in the value of the prescription, which is not coming from price, but it's coming from the product mix change. So while we come back to you on the math, the only suggestion is to focus on that KPI because that's the strategy of the company.
So I will not circulate this for the sake of clarification. Just give us some time. I think we'll work it out and give you the -- basically the input behind the increase.
Yes. That's fine, Rakesh. I'll take it offline, not a problem. My second question is on -- if I were to look at Hitech, you talked about the integration. Again, if I were to again infer what the revenue is using the 7% -- sorry, the 9% growth seems to be suggesting about INR 19-odd crores but maybe that is only non-COVID again. So I don't know what the COVID contribution is. Last year was 20%, if I recollect right, for Hitech. Would it be lower, higher related to, say, the 5%, 6% that we are, so just the Hitech number Q-o-Q seems to be lower. Maybe I'm again calculating it incorrectly. If you can help us understand the integration, I think you talked about consolidating labs. So how is that progressing?
So see, quarter 4 for South is always the best quarter. And obviously, in quarter 1, if you look at -- versus quarter 4 will be lower. Quarter 1 is the weakest quarter for South, so let us understand from that parlance. When we look at only Hitech and look at quarter 1 of pre-COVID level, we are still growing on that. So there is no concern. The total revenue, as you said, we have closed around INR 21.5 crores for Hitech and INR 20-odd crores is non-COVID and the rest comes COVID and COVID allied.
Last question, I think just going back to the opening remarks on Wellness testing. I think Ameera, you talked about -- and great progress, like you have seen it reach 12% versus 7%. What are some of the levers to take it to 20%? You talked about affordable Wellness as well. So can you outline something here, please?
Sure. So currently, our Wellness, as I mentioned, is more about larger packages, which is sold on the brand of Metropolis. And we are also looking at opportunities now to say, are there different price points that we can look at instead of only larger packages, can we look at smaller packages, can we look at different price points that allow consumers to get into the Metropolis framework, with maybe a slightly lower price point and then sort of I will look at an upsell or look at a cross-sell in the future.
So I think we are just opening our opportunities in the segment to really address all consumer segments at different price points. And we believe that will increase the volume of wellness further.
[Operator Instructions] The next question is from the line of Prashant Nair from AMBIT Capital.
So my question is primarily related to reconciling the Hitech numbers which you have just answered. So just one additional question. So again, on margins, needed some clarification because -- so you mentioned the 25% plus margin for the quarter. And when we look at margins based on just the reported numbers, it comes about 24.5%. So when you're talking about pre-COVID levels of margins, it would help if you could give a number. What is the broad range that you're looking at? And so would this be before ESOP cost? I mean, how do you look at the margin number?
So margin, as we mentioned that there is a reported margin of 25%. There's some ForEx capital [indiscernible], down to 24.5%. And without CSR and ESOP, the margin is 25.6%, so that is the number. I hope that clarifies the numbers.
Yes, it does. And when you look at pre-COVID levels, are you talking about 26% to 27% range comparable to the 25.6% or how do we think about it?
Yes, you're right. We were between 26% to 28% of margin in the pre-COVID level, depending upon the period city. So that is how we are looking at it.
The next question is from the line of Ankur from Quasar Capital.
I have a couple of questions. One is on the cannibalization side. So ma'am, like we have been expanding our network quite aggressively in the last 3 years. And in spite of that, the normalized testing revenue growth has been around 7%, 8%. So where are we -- are we -- first of all, are we going wrong somewhere because the growth isn't coming in the same way the way we are expanding the network? So is there any cannibalization which is happening on this or the competition is eating some part of it?
I think if you're talking about the growth in the last 2 years during COVID, and I think it's -- it would be not prudent to look at it like a normal time because doing COVID when everybody was in lockdown and when patients were not engaging with health care services, the number of patients going to doctors itself had gone down, which has nothing to do with competition, anybody eating market share. It just has to do with the fact that less people were sick and the people who are sick were sick with COVID and which revenues were very much there.
So the other diseases which were heart issues or lung issues or gastrointestinal issues because people were at home, they were having less of these issues, and they were not going to doctors and treating themselves at home over video calls. So I think we should actually keep aside the year of '20 to '22 of a non-COVID period and either look at it as a total revenue because COVID is also an infection and it's also a disease, which was the focus at that point of time or we have to look at the period before '20. So in the last 2 years, actually, if you see from '20 to '22, in 2021, we actually halted our network expansion, and we actually consolidated the network. And in '21/'22, we again started increasing the network expansion, which will give us benefits in the year '22, '23. So I think I hope that clarifies.
Okay. Okay. So that brings me to this question that, obviously, during the COVID, we saw the benefits of sweating out the network and how it works towards the margins. And I heard your statement that you are not very focused on the volume-driven growth, but on the value growth. So that also brings a question in my mind that since the sweating out of networks is very important for us to increase our margins or even for that matter, become more profitable. So how do -- how are you thinking about that? Because we cannot just go on yes, network expansion is an asset-light model like can you throw some light on how this strategy is going to work where you will focus on volumes, but more undervalue?
So first, just understand what is volume versus value because we have to understand where it comes from. So if you go to, for example, a general practitioner, which is an MBBS doctor, they see maybe 50 to 100 patients a day. And -- but they see patients who have only got a cough, cold, fever, very basic issues. Now if you go and get a general practioner to prescribe their patients to you, you may get 10 or 12 of those patients out of 100 to come for a pathology test. But the average ticket size of those patients will be INR 200 per sample.
What Metropolis does is instead we go to the gastroenterologist or the oncologist, the cancer specialist, who sees 15 patients a day. And out of those 15 patients, maybe 2, 3 will be requiring pathology specialized tests, and we get those, but the ticket size of those is higher. And the ability to do those steps for all the other 150,000 labs in the country is not there. So the reason we look at value versus volume is because we believe that is more difficult to crack, it is a bigger mode. And therefore, the kind of business we are getting is more specialized and therefore, more sticky.
Now the question around sweating the assets, you have to remember the assets are not always sweat through volume. The assets are sweat also through high-quality patients. So for example, you take a 5-star hotel or you take a dhaba, a dhaba will have 1,000 people going through it every day or 5-star hotel may have 200, but they are sweat differently. So I think we have to see the model for what it is.
Having said that, I think, like I mentioned in Metropolis 3.0, this has been our focus till now. And what we have said is that as we move into the future, one of the things we also want to look at is how we can increase our Wellness and Chronic fees, the affordable Wellness and Chronic. And that will automatically increase volumes as well. But that is not something that is going to happen overnight, but that is something which will take a couple of quarters to show up. but that is the direction we are going in to balance volume and value even more than we did in the past. In the past, it was pure focus on value. And in the future, it will be a combination of volume and that. I hope that clarifies.
[Operator Instructions] The next question is from the line of Shanti Patel from Shanti Patel Investment Advisors. [Operator Instructions]. As Ms. Patel was not answering, we'll move on to the next question, which is from the line of Sayantan Maji from Credit Suisse.
So my first question is on your annual report disclosure of advertising and sales conversion expenses, which have actually doubled from nearly 1% of sales to 2% of sales. So can you mention what are the specific activities that we are undertaking here specifically in terms of consumer outreach and do you expect this run rate to further increase in FY '23?
So one thing which we have done this year is spending more on the digital marketing expense. So the digital marketing expenses used to be somewhere 0.4%, 0.5% of the revenue, which has almost gone to 1%, 1.1%. And that is also giving us good ROI in return. So that is one change which has happened. Apart from that, most of the things remain same.
And by the marketing, you mean the ads that we see on social media or Google searches?
Yes. Google Search engine, how we place ourselves there. When somebody searched, we are in the top lab to be looked into. So those are the things where we are investing more, and these are giving a good return in almost 3, 3.5, 4x kind of a return coming from this investment.
And do you expect this run rate to sustain through FY '23?
Sorry?
And you expect this run rate to sustain through FY '23?
Yes. So we are looking at -- and so far, we get a good ROI in this. We will keep increasing the spend. So that doesn't matter for us.
Okay. And my second question was on below our guidance of revenues going to pre-COVID growth swing. Pre-COVID used to grow on an average, I mean, for these straight year it is different, but it was around low teens. So it was 13% to 15%. So do we expect a reversal to that kind of growth? Or will it be more like lower double digit like 10% to 11%?
I think if you look at historically, Metropolis grew pre-COVID over a sort of 2-, 3-year period before COVID, I think at about 15% to 17% year-on-year. I think it's very difficult to give any specific guidance, more specific than what we've given at this point. I think we'll also have to wait to see how the market develops. But like we said, the acceleration and the goal is to get to a sort of a mid-teen kind of a level.
The next question is from the line of Rajdeep Singh from ASK Investment Managers.
Rakesh, sir, just maybe one clarification. Does the quarter include volumes from the government contracts in this quarter?
Yes.
Okay. And is it lower or higher versus Q4 because Q3 was nil?
We are almost at the same level.
At the same level, okay. And second was within your acute testing and chronic testing or maybe B2B chronic, have you taken any kind of price rationalization among the tests, maybe you have increased or decreased. Just some clarity on that would be helpful?
So on the B2B side, I think there has been a fair amount of competition in the market with a bunch of new players entering. And I think that has -- on the semi-specialized B2B that has rationalized prices to some extent on some tests. So we are seeing some amount of intensity there and some rationalization downwards.
Okay. And ma'am, that would be in the range of 10%, 15% or higher than that?
So overall, it is more or less in between it, what you are seeing. It's not like we have really gone overboard. But yes, wherever we are seeing more intensity and it's logical for us to save our business, so we are doing some rationalization, but it's not a big number.
Sure, sure. That is helpful. And ma'am, why do you say so Q1 is weaker than Q4 in West, just a clarification on that?
The weather, illnesses all play a very important role in how and when infections come. I don't have a very scientific reason for you. But if you just look at the historical trend, over the last 10 years, you will find always that Q1 is lower than Q4 whether it is because of summer holidays of schools and people travel, whether it's because of weather, it's very difficult to exactly paint one reason. But for many reasons, that's always the case.
Yes, that is what I thought. So travel could be one of the reasons, but wanted to know what are the other reasons. Okay. And any reason for not calling out the non-COVID per patient revenue in the presentation, like always as you do? And what is that number for this quarter? That will be helpful.
So we are comparing the pre-COVID level to revenue that is INR 955 per patient, right? INR 955 per patient, which is a growth of almost of -- so INR 860 is the revenue, non-COVID revenue, which we used to get pre-COVID when I compare quarter 1 of 2020, and right now, we are getting INR 955 per patient. So actually, the growth if you look at is 11% growth over pre-COVID levels.
And this INR 955 is excluding COVID and COVID Allied?
So INR 955 is including COVID, INR 974 is non-COVID without...
The next question is from the line of Naushad Chowdary from Aditya Birla AMC.
Just one clarification, Ma'am. If I'm reading it correctly, last year same quarter, our top line, our revenue was INR 327 crores, of which around 20% revenue was from COVID, so that comes to around INR 65 crores -- INR 65-odd crores. It means the non-COVID business was INR 265 crores versus this quarter, in the presentation, we have mentioned INR 261 crores, including Hitech revenue. So that way, it seems so, year-on-year non-COVID business was flat versus you're seeing 26% growth. So I'm not able to understand this. Can you help me understand?
Yes. So I will clarify. There are -- you're right, that INR 327 crores is the revenue last quarter, quarter 1, which is basically including our 3 elements, COVID and the COVID allied test, which is basically with the quality above and the pure non-COVID. So if you look at COVID, INR 63 crores was the COVID revenue last year, quarter 1, which has come down to INR 12 crores, which is an 80% drop. We have a COVID ruboff, which is COVID allied test where there is a revenue INR 57 crores, which has come down to INR 5.85 crores, which is a drop of 90% and pure non-COVID revenue, we had INR 207 crores, which has gone up to INR 262 crores, which is a growth of 26%.
When Rakesh refers to COVID, he means COVID PCR. And when we refer to COVID allied, blood test like D-dimer, IL-6, which were all required in the monitoring of COVID patients.
The next question is from the line of Shalini Gupta from East India Securities.
I just -- I thought there was so much price components...
[Operator Instructions]
So ma'am, what are the changes that you're facing so much price competition and so many strong players are entering the industry? So have you considered setting up diagnostic centers in collaboration with hospitals. Does that seem like a viable idea to you?
See, I think, firstly, I think we should understand that not every sector is prone to pricing being the most important thing in the sector. While pricing may be very important in certain FMCG products, it may be important in telecom and may be important in other industries, in health care, in every consumer [ probably ] done, pricing is not the most important factor. It is actually factor #6 or 7 on the list.
So I think companies like us who have built a very strong credibility and trust amongst the doctors and consumers in health care, we find that consumers continue to rely on us and I am are not getting sued in the illness segment by only the price.
As far as your second question, and so just to add one thing. In health care, people actually feel that something is done very cheap, for low price. Actually, they feel that the quality must be wrong, and that's why we've done low price. And therefore, the price quality equation at health care may not be the same as other industry.
As far as your second question about partnering with the hospital to set up a diagnostic center, companies like Metropolis are far more exports in pathology than hospitals are. We do 4,000 variety of tests, while the best hospitals do 500 varieties of tests. Actually, they come to us for specialized tests. They don't do them themselves. They neither have the talent, the manpower, the machine or the expertise or the distribution to be able to do a specialized test.
So frankly, partnering with the hospital to set up a center outside would be helping the hospital. There are cases in which the hospital gives their lab and request us to manage it for them because we are the experts in pathology, and we do that in many cases. But that is inside the hospital for their patients.
Yes, that's what see, I happen to go to -- I was visiting a competitor's facility and that was in a public hospital. And the number of patients there was shocking, they're way too huge. So I'm just wondering like what is the downside of setting up such a center. You have a captive patient base. You don't have to pay an event and the rest of it. So what in your opinion would be the downside to setting up such a center?
So what you're referring to most likely is a public-private partnership if it's in a public hospital where the government does a tender and ask labs to bid for setting up a lab inside their public hospital. And these tenders are available and there. This is not the focus of the metropolis business model for various reasons. Often, we are -- we find that the pricing and the quality, scope and parameters of these tenders tend to be very different from what we are comfortable with. The practices are not what we are comfortable with.
And therefore, we are very, very selective about the -- if we ever get into a public-private partnership, we're very selective about the kind of work we do.
As far as working with private hospitals, we do that. We do have labs, which run inside hospitals. We do take care of their patients and run the labs inside hospitals, like you said, it's rent-free. But then you're also sharing a significant portion of your revenue with the hospital for managing that lab inside it. That is a model that makes sense if the commercial terms are fair, which in some cases, they are where we do the deals, in some cases where they are not, we leave it to competitors to do it, as they would like to pick up a nonprofitable business.
Ladies and gentlemen, this will be the last question for today, which is from the line of Dheeresh from While Oak Capital.
Just the bookkeeping this Ind AS adjustment, if I have to do, I'll have to take out another INR 12 crores or so from the EBITDA and get in AS [indiscernible] Is that a fair understanding?
Sorry, your voice is very -- not very audible.
[Operator Instructions]
I just wanted to understand that for Ind AS 116 adjustment, how much do I need to deduct from the reported EBITDA? Is it about INR 12 crores for the quarter?
Yes, it's between something around INR 10 crores to INR 12 crores. Exactly, I will give you a number, but yes.
And one more basic question I wanted to ask was that when we report the revenues, we are reporting net of the commission paid to the collection center, right? not gross, and then we don't report an expense line item. We report net of the...
So we have a B2C and B2B revenue. B2C revenue where we are collecting these overall revenue from the centers, for example, all the our franchisee centers, own centers and our labs where we collect the MRP from the consumer, and that is reported in gross. And when we pay the revenue share or the commission to the partners that is coming in the expenses. All the B2B partners where we have a net revenue model where we give a discount to them and take the revenue at a discounted rate, that revenue is being counted as a net revenue.
So that share is coming in other expense, in which line item actually I was not able to figure that out?
Rent.
It comes under rent, okay. What is that AS 116 number, if you can confirm?
So that's basically overall 6% to 7% of the total revenue.
As that was the last question for today, I would now like to hand the conference over to the management for closing comments.
Thank you all for joining us today, to Spark for organizing this conference. I just want to summarize by saying that diagnostics and health care in India has always been a very sound structural growth market with a very long runway for growth. We believe as India progresses and as people in India continue to need more testing, as a very small percentage of Indians have ever been tested, as payments move from out of pocket to insurance and as people become more aware, we will see diagnostics and testing only increasing. And the incumbent players who have already built a strong valuable trustworthy brand will continue to do well.
As metropolis is going through our own technology transformation, strengthening of our leadership team and general aggression in the market in terms of building distribution labs, operational excellence and good customer experience, we believe that we will continue to have all the attributes that require great leadership.
And all the perceptions of disruptions in the market and perceptions of price competition, we have to really wait to see how these play out. In our experience, as we have said, price is not the most important factor in health care. Out of the 150,000 labs in India, all have been already offering much lower prices than any of the leaders in the country. Despite that, leaders like Metropolis are the leaders. And the reason for that is that in health care quality and service is appreciated far more than price. We believe that we continue to stand in good stead as the company will continue to create value for all shareholders. And we look forward to continue to engaging with every one of you. Thank you so much, and have a good day.
Thank you. On behalf of Spark Capital Advisors, that concludes today's conference. Thank you for joining us, and you may now disconnect your lines.