Thyrocare Technologies Ltd
NSE:THYROCARE
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Thyrocare Technologies Ltd
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Ladies and gentlemen, good day, and welcome to the Thyrocare Technologies Limited Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Pratik Hire from Thyrocare Technologies Limited. Thank you, and over to you, sir.
Thank you, Neerav. A very good evening to all, and thank you for joining us today for Thyrocare's earnings conference call for Q4 and annual results for FY '24. Today, we have with us Mr. Rahul Guha, MD and CEO; Mr. Alok Jagnani, CFO; and Mr. Nitin Chugh, Chief Commercial Officer, along with other key members of senior management on this call to share highlights of the business and financials for the quarter and the annual results.
I hope you have gone through our results release and the quarterly earnings presentation, which has now been uploaded on the stock exchange website. The transcript of this call will be available in a week's time on the company's website.
Please note that today's discussion may be forward looking in nature and must be viewed in relation to the risk pertaining to our business.
After the end of this call, in case if you have any further questions, please feel free to reach out to the Investor Relations team.
I now hand over the call to Mr. Rahul Gua to make the opening remarks.
Thanks, Pratik. Good evening, and welcome to all on the call. Thank you for taking time out from your busy schedules to join us this evening. I'll do a quick introduction to us on the call. My name is Rahul Guha. I'm the MD and CEO of Thyrocare and thank you for the opportunity to present the Q4 and annual results for FY '24. I'm joined with my colleague, Alok Jagnani, who is our CFO; and Nitin Chugh, who is our Chief Commercial Officer; along with Pratik, Hire, who is a part of our strategy team and leads Investor Relation.
As I did in the last call, I will start with the quote from Nelson Mandela in recognition of our foray into Africa. It is in your hands to make a better world for all who live in it. And we believe Thyrocare can bring our business model to Africa to make affordable and good quality diagnostics available to all. I'll give you some of the key highlights of what we've been up to in the last quarter.
Before we get into the details of this quarter, I'll reiterate the pay-for-performance pricing structure that we implemented at the beginning of this financial year, earlier, our discount structure was one-size-fits-all, but now we have moved to a slab-based pricing model, which we implemented in May 2023. This has led to an increased energy with our franchise network, with motivation to move up volumes and enter higher slabs. It continues to result in a movement towards larger franchisees and enables much greater reach for our larger partners.
Quality remains the key priority for us. It is an ongoing journey, and we are proud to announce that 25 out of our 30 labs are now NABL accredited. Currently, 94% of our total sample load is processed in NABL labs, a significant achievement considering only 2% of pathology labs nationwide hold this accreditation.
To validate our commitment to quality, we conducted an independent study published in the International Journal of Advanced Research, ideas, innovations and technology. The findings revealed that 9 out of 10 doctors trust Thyrocare reports and confidently recommend our services to their patients. This endorsement underscores the dedication and effort we've invested in maintaining high-quality standards.
On the quality front, as you would see in the presentation, we have reduced our complaints per million samples by 30%, our P90 TAT is now less than 20 hours pan-India as compared to 24 hours last year.
Beyond the work on quality, we continue to selectively expand our offerings. Aarogyam has been our flagship brand in a preventive health care segment. And now we have two more brands, Jaanch and Her Check.
Jaanch, as I've said before, is targeted towards lifestyle challenges or for you to better understand your health. We have solutions across the spectrum for anything you might be worried about, whether it is fever or something more serious. Why is my hair falling? Cancer screening as well as deep investigations for common chronic diseases like diabetes, heart health, amongst others.
In its first year since launch, with a very limited marketing budget, Jaanch has done INR 12 crores. We have also revamped our [indiscernible] portfolio and relaunched it under the brand name of Her Check, and it focuses on women's health.
In the 6 months since launch, we have touched roughly INR 6 crores in Her Check. I'm happy to share that our pathology revenue growth has surpassed pre-COVID levels. From FY '17 to FY '20, our non-COVID revenues serve CAGR growth of 13%. However, in the period from FY '21 to '24, our non-COVID revenue CAGR has soared to 18%. This remarkable achievement speaks volumes about our strategic business expansions, investments in quality enhancement and organizational restructuring efforts. Our active franchise base has now more than doubled over the last 3 years.
On the financial front, the company enjoys a good cash position, and we have proposed to distribute a final dividend of INR 18 per share.
We are also very proud of some of the key milestones that we achieved in the last year. Now we have 7,900 active franchisees. As a result, we processed 22 million samples and serve 15 million patients in the year, which is 8% and 6% year-on-year growth, respectively, in volume terms for our core business.
Total tests conducted for FY '24 is 147 million. In our Nuclear business, we performed 31,500 PET CT scans this year, which compares to 30,800 last year.
Our partnerships business, which excludes API and the government, did phenomenally well in the quarter and grew as we onboarded new clients in health tech, insurance and other segments, and we have continued to grow the existing accounts.
Also, I'm happy to share we have completed the acquisition of Think Health to strengthen our offering for the insurance segment with the additional capability of ECG at home. This allows us to give our insurance partners a one-stop solution for blood and ECG testing and further deepen our presence in the pre-policy-medical checkup and annual health checkup market. And now we are the company who offers health checks with ECG at home, and I'm sure that will enhance our Aarogyam brand.
On the B2G side, we continue to remain focused on technologies where we have expertise, and we continue to execute TB projects in the government, state of Gujarat and Maharashtra.
On the international expansion side, our lab is now set up in Tanzania, and we are going out in the market in full swing. I'm proud to say in April, we processed our first sample in Tanzania.
Also, as I have been telling you in the last quarters, we have revamped our equipment platform. Our equipment was very old, with an average age of 12 years. We have added 30-plus new machines during the financial year, resulting in the average machine age coming down to now 6 years. These new additions have dramatically improved our reporting accuracy and turnaround time.
I'll now hand over to my colleague, Nitin, to cover the highlights for the quarter and the annual business performance.
Thank you, Rahul. A warm welcome to each one of you. I will briefly update you about the highlights of Q4 and annual business performance.
Our franchisee business for the year showed a revenue growth of 14% year-on-year, and in Q4, our franchisee business showed a revenue growth of 13%.
Reiterating what we had mentioned last quarter, growth rate in franchise business has slowed down because of the churn in the small franchisee segment. This churn was expected after we implemented our volume-based pricing. Our big franchisees have grown at 25% while the small has degrown by 39%.
In terms of mix, contribution from big franchisees have increased from 81% to 90%. Majority of the small franchisees have been churned out and the base is stabilizing now. Going forward, the franchisee business should return back to its high teens growth rate. This is evident from the improvement we see in franchisee growth of 13% year-on-year this quarter as compared to 11% year-on-year of last quarter.
Our partnership business, which excludes API and B2G for the year showed a phenomenal growth of 23%, whereas in Q4, it showed a tremendous growth of 40%. On an overall level, our partnership business for the year has remained stable on the account of decline in API and closure of MCGM contract.
Overall, the pathology business, excluding materials and others for the year has grown by 10% year-on-year. And in Q4, it has increased by 16% year-on-year.
Radiologic business, including Pulse Hi Tech for the year, had a strong revenue growth of 18% year-on-year. Overall, at a consolidated level, we did a 9% year-on-year revenue growth for the year. And in Q4, we did 14% year-on-year revenue growth.
Balance, I will hand over to my colleague, Alok, to cover the financial results.
Thank you, Nitin, and a warm welcome to everyone joining us today. Before diving into the specifics, I would like to touch upon the -- our ESOP program, which we have discussed in previous quarter. This initiative implemented at the group label aimed to retain talent within that Thyrocare. This ESOP issued by the parent company will vest over a period of 6 years. From an accounting perspective, we recognize the ESOP in accordance with Ind AS IFRS standard as a book entry towards share-based payment. They are reflected as an expense in the profit and loss account as an equity contribution -- and as an equity contribution from the parent in the balance sheet. The total value of ESOPs amounts to INR 45.53 crores over a period of 6 years. It's crucial to note that this represents a cash less charge, not a cash outflow.
According to Ind AS, options are included the grand date using the black school formula, resulting in a chance to P&L over the vesting period. Typically, this leads to an impact in the year of the grant, followed by a proportionate charge over the vesting period. Further details are available in the presentation.
As these expenses are noncash operating expenses, and do not affect the company cash outflow, we calculate to a normalized EBITDA, which accounts for these expenses along with the provision for bad and doubtful debts.
Now moving on to our financial performance. Revenue for the H2, INR 524 crores stand-alone and INR 572 crores consolidated, making an annual year-on-year improvement of 9% at consolidated level. This growth was supposed by better partnership revenue growth, excluding B2G and API of 23%, franchisee growth by 14%. Pathology revenue, excluding material and others, increased by 10% year-on-year.
In Q4, revenue increased by 14% year-on-year, primarily driven by strong partnership revenue growth, excluding B2G and API by 40% and franchisee business grew by 13%.
Pathology revenue, excluding material and others, grew by 16% year-on-year.
Our margin for the year improved by 2% points, driven by price increase, volume growth and better negotiation.
Employee expenses incurred increased year-on-year due to the increments addition to the growth team and quality personnel to meet NABL requirement. Stand-alone normalized EBITDA margin for the year improved by 1%, primarily due to the improvement in gross margin.
EBITDA margin in Radiology NHL stood 9% versus 18% year-on-year, mainly due to the increased operational cost and change in the revenue mix between scanning and FDG sale.
At a consolidated level, our normalized EBITDA at 28%, which is lower -- 1% lower than last year, primarily due to the increase in business promotion, marketing spend and new business expansions.
We reported a consolidated normalized EBITDA of INR 162 crores for the year, directly reflecting to our cash flow operations, which amounts to INR 168 crores.
With that, now I pass the call over to Rahul for our strategic updates.
Thank you, Alok. Briefly, I would like to take a few minutes to recap to you our strategic direction, and then I will open it up for Q&A. First, I will reiterate our value proposition to the customer. We will continue to remain an affordable option to all patients with good quality and on-time reports. All our efforts on our value proposition is towards ensuring low cost to the patient, assurance on quality of testing through our certifications and engagements with doctors. We have made substantial progress on this, which I updated in my initial comments and is reflected in the presentation. This will remain at our core and will guide all that we do.
Second, our strategy. We continue to maintain our strategy of being the B2B partner of choice to all front-end diagnostic services companies in India, whether it is a small diagnostic center in a semi-urban area, a pharmacy in the metro, a small nursing home and individual doctors or a leading online diagnostic platform or health tech marketplace. We are happy to work with them to provide low-cost robust testing solutions so that they can serve their patients in the most effective manner.
If they require phlebotomy, we are happy to mobilize our phlebotomy network of almost 900 companies and 400 network phlebotomists to serve them better. This strategy has been working well for us with both our franchise and partnerships business, posting strong growth.
We continue our commitment to add more value-added services for our partners. And with the acquisition of Think Health, we have entered into ECG at Home Services, which will strengthen our offering to our insurance partners.
Further, to reiterate, as I've shared in the last few quarters, we have three pillars of growth. The first is our franchise business. The focus is to our franchise business deeper into India, with a focused test menu and provide our clients with a frictionless experience to transact with us and provide their customers the best testing experience that they can.
We continue to focus on private as well as public partnerships. In the public space, we will focus on TB and infectious disease, where we are by far one of the strongest players in these segments with large screening programs, partnering with health bodies and funding agencies who participate in this segment.
Additionally, we will continue to expand our partnerships across health care companies, hospitals and other health services companies and enable them to provide diagnostic testing to their customers.
The third area is relatively new for us. We believe we have a strong and robust B2B model with the core of execution. We are ready to take this model forward with our first entry in Tanzania. The opportunity is significant for us to be able to launch affordable tests in the country of Tanzania.
That in a brief is our mandate as management. Thank you so much for giving us a patient hearing. I will once again end with the quote from the Mahatma. "Find purpose, the means will follow." And our purpose remains to provide affordable high-quality testing to the masses.
With that, we'll open it up for Q&A.
[Operator Instructions] the first question is from the line of Aditya Khemka from InCred.
Rahul, first question on the volume growth. Did I hear you right, volume growth year-over-year for the quarter was 6%? Is that right?
The volume growth? Sorry, for the total business?
I think you were mentioning about the franchisee business, the core business. So for the core business, I think you said volume growth was close to 6%. I just couldn't understand whether it was for the year or for the quarter, that's the clarification I need.
No. Just to clarify, it was for the year. Quarter-on-quarter, it is 10%. I'm talking about sample growth. Patient growth will be slightly lower than that. But our year-on-year, financial year volume growth for the core business is 8% and quarter-on-quarter 10%.
Okay. Volume growth is 8% for the financial year. Understood.
Yes.
And second question, Rahul, on the non-COVID business, Slide 10 on your presentation deck. So non-COVID business, you are showing 18% CAGR FY '21 to '24. But if I look at the number of franchisees that has also gone up from 3,000 to 8,000, and I know that this non-COVID revenue would have two parts, the B2G franchisee part being one and the other being your other partnerships with government and health care aggregators, et cetera. So my question is that if you have franchisees have doubled to like 8,000, and I think in a comment, one of your team members mentioned that now 90% of revenue comes from large franchisees.
So with 8,000 franchisees would like approximately 1,045 large franchises and would 7,000 be roughly smaller franchises or the marginal franchisees? Or what would be the split between the 8,000?
So roughly, without going into -- so first, let me just take the overall COVID. I think our franchisee business from the low COVID base recovered very quickly, right? And then as we added more and more franchisees, we continue to see the uplift in our growth profile.
As I updated last quarter, we had a little bit of a road bump because we saw a lot of churn in the smaller franchisees. And so therefore -- but now the larger franchisees have picked up and things are more or less okay.
In terms of [ town ], if you look at the roughly 900 franchisees, about 3,500 are what we categorize as diamond to silver and about 4,000 would be bronze and others. So it's a rough, I think, 45%, 55% kind of split between large and small. The revenue ratio would be roughly 65%, 35%.
65% for the large and 35% for the small.
Yes.
So now when I look at FY '24, if my understanding is correct, you had almost three businesses which were declining in FY '24. One was your B2G, the other was your smaller franchisee business and the third was your, the PharmEasy business, right? Now on all these three fronts, as of 4Q, have all three businesses stopped declining? Or is there still some way to go on either of these three business to decline?
So see, the small franchise business had stopped declining, as I shared last time, by the time we had come into October, November. So we had bottomed out there, and therefore, you see the accelerating growth coming out in Q4. So I think the small franchisee base has bottomed out.
The government business has bottomed out because, well, it's almost practically 0 now, except for the TB contracts that we are doing very selectively. So I would say that has bottomed out, but we are not entering into very -- many of these government contracts. So at 0, it won't give you a growth jump over there.
On the PharmEasy side, actually, we have seen some recovery in Q4, but Q4, as you know, is the big season for packages and annual health checkups. So going into the next quarter, we'll have to see how it pans out, right? But at least Q4, we saw a decent recovery on the API side as well.
But could you tell us if PharmEasy now offers like lead discounts like they earlier used to do to acquire customers to sell Thyrocare packages? Or are they now also on a unit economic level, making money when they sell Thyrocare packages?
Yes. So, as I -- the diagnostics business at PharmEasy is now profitable at the proper transfer price as approved by the shareholders as part of the related party agreement. So effectively now, Thyrocare, of course, earns a decent EBITDA anyway, which was never diluted but the PharmEasy business also this year has turned profitable -- the PharmEasy diagnosis.
Understood. So then when we look at year-over-year for FY '25 over FY '24, there should be no reason why PharmEasy should not at least even flat or grow from the pace that they are formed in FY '24 or Thyrocare I'm saying?
Yes. Logically, yes, but it's difficult to speak on behalf of our customer. So -- but yes, logically, what you're saying, if this is the profitable pool for PharmEasy as well, I think all intents are there to grow. But if you go back to the old customer acquisition and discounting, then of course, the profitability gets hit. But yes, actually, what you're saying, there is no reason to believe that it will regrow from it.
Next question is from the line of Prakash Kapadia from SPARX PMS.
A couple of questions from my end. How much of our franchisee revenues is from the Thyrocare brand in FY '24? And how much is the revenue from local pathology lab centers or B2B tie-ups? And in this business, the right to and remains more geographic expansion? Or is it increasing throughput per franchisee or getting more B2B business, if you could give some thoughts on this?
Yes. So look, roughly about 40% of our top line is Thyrocare-branded right? And the remaining 60% is B2B tie-ups.
Also, I mean, ideally, I should count all my Aarogyam packages as Thyrocare branded regardless of where they are sold because they are branded as Aarogyam. But for a minute, I'm keeping that aside. Roughly 40% of our revenue comes from centers which have a Thyrocare board and Thyrocare livery and all of that.
In all instances, most of our franchisees would share a Thyrocare report. So that is definitely out there. The right to win, see, largely, I think throughput per franchisee is only so much, it takes time to scale up, right? And a lot of it is how much share of wallet you're able to capture. They typically have one or two local partners who they work with as well and then Thyrocare as a second partner and so on. So your share of wallet is always in a highly competitive space, right, where you're constantly in a price battle where INR 1, INR 2 and then someone can move the volumes to another B2B partner.
I think the right to win really comes from leveraging the Thyrocare brand, our image now and our investments in quality and going deeper and deeper into India, where frankly speaking, the competitive set is not the large branded labs, but actually the local labs, which don't have NABL, don't have the quality processes that we have in terms of cold chain. Don't have the checks and balances in terms of every report has a QR code, all of that, right? And so therefore, people in Tier 2 towns at pretty much the same price of a local lab is getting a high-quality report with all the backing of Thyrocare. So I firmly believe our right to win is there.
Sure, sure. That is helpful. Now on the partnership business, would I understand there are two facets to that business also. So in the non-API, non-B2G, what will drive this business from here on? And how are we differentiating there? And I think the B2G business, you said it's bottomed out. So any risk of further write-offs on receivables because we've seen some provisioning, which we have done now also? So in these two segments, if you could give some color?
Sure. On the first one on partnerships, I think we have many kinds of partnerships, right? I think the health tech partnerships, we have gone quite deep in that. There's not that much more growth we will get from there. But two large unexplored avenues for us has been the hospital segment and the insurance segment, right? Both of which are very large customers who buy diagnostics. Hospitals, of course, where we go in and set up the lab or work with them for their outsourced business as a partner.
And then the insurance players, almost every policy that is issued has a free policy medical checkup and also, they offer many of their policyholders a free annual health checkup. So it's a very, very large market, which has been largely untapped by Thyrocare.
So we will continue to drive the franchise growth by exploring these avenues. And as I mentioned, with the acquisition of Think Health, we now have ECG at home as a capability. So that only enhances our right to win in this segment.
You must remember, we are the only national player that has a company-owned phlebotomist fleet. What that means is if you are a partner with Thyrocare, with a single API integration, I can get you activated with diagnostics in 300 cities overnight. So if you're an insurance player with one single API integration, you can service all your policyholders with annual health checkup and all your PPMC screening in 300 cities through a single window. No other company offers this to their partners.
But coming to the second -- sorry. What I was trying to understand was a lot of these hospitals are focusing a lot more on diagnostic and have become pretty aggressive. So is there an outsourcing arrangement which you think will drive the hospital segment or some specialized tests, which the hospitals would not want to give lower volumes?
No, it's largely outsourced. I think specialized test for us is Thyrocare is not our cup of tea. So I would say largely, outsourced would be the focus. See many of the equipment in a hospital is very low throughput and therefore, very high cost to operate. So in many times, hospitals find that even though they have a lab in the hospital, the Thyrocare billing price to them is sometimes lower than the reagent cost because of our economies of scale and the throughput of our machines. So they keep some of the basic tests in the hospital and then outsource everything else.
Coming to your sense, you know. No, no, go ahead.
Maybe you were continuing on the -- I understood the hospital and the insurance part, the second part you were saying.
Yes. Your second question was on the B2G business, right? See there, firstly, if you recall, almost 2 years ago, when I first took over, we had a government outstanding of close to INR 80 crores. I think almost all that money has either been received or provisioned. So I think though government outstandings as a sword hanging on our neck is more or less behind us. I don't anticipate any more further significant provisions on the government business.
That being said, we have also realized that we need to be focused when we do the government business. And we have to, again, focus on our right to win. We are the strongest in TB testing and infectious disease testing, where we have the full range of technologies starting from the very basic sputum test all the way to whole genomic sequencing for TB. So we have decided to focus on these areas where our strengths are there and work with the government to partner with them on their screening programs. And we feel that's the niche that we will go after.
The government also is taking both these topics, TB and infectious disease, very seriously, and has put a lot of money behind it. So we believe there's a reasonable opportunity there. But on the general tests, we will not rush in.
Right, right. And lastly, one data keeping question from my side. Can you share the geographical breakup of our pathology business between north, southeast west, what I'm trying to understand and are there specific areas where we are strong, are we a pan-India player? Are we maybe north and south focused, if you can give some idea that would be helpful.
I'll let Nitin take this.
So see, generally, our business, we are very, very strong in the eastern region and the western region. North, our share of business is very less and 1/3 in that ranking comes out, southern region.
Prakash, I'll request to come back for a follow-up question. Next question is from the line of Ashok Shah from Red Natural Capital.
Sir, can you please take speak louder through the handset, please?
Is it audible now?
Yes. Thank you.
Yes. Sir, can you please break down the 9% pathology growth into the in terms of volume, in terms of price and in terms of mix and also the mid-teens or high-teens growth guidance that we have for next year, a similar breakdown for that?
Sure. I'll let Alok take that.
Yes. So we have seen 9% revenue growth in the financial year FY '24 versus '23. And the revenue, if you see the split, our franchisee revenue has grown by around 30%, whereas our B2 -- partnership revenue has gone around 33%. This is excluding API and B2G. We are expecting in FY '25 mid-teen growth is degrowth. That's between 15% to 18% is [ expected ].
And see, overall sample growth is for the year, I would be, I think, roughly about 2%. But this should not be considered that then all our growth has come from price. Actually, what you should consider is we had a very high volume contract with MCGM, which is the Mumbai GMC, we which was at a very low revenue per sample. That contract ended last year. So actually, the volumes came out of that, and -- but our franchise and partnerships business covered up for that. So it's actually the mix of business shifting that has given us the revenue growth, not a price increase.
Sure. That was helpful. Second, can you explain the provisions? So what are the provisions this year?
I'll let Alok.
So provision for receivables you are talking about here. So in the current financial year, we have provided around INR 8.7 crores of provisions against the receivable. That is mainly on account of -- two accounts. One is on the government accounts, we have provided around INR 2 crores, INR 2.5 crores of provisions for the receivables, which is doubtful and is.
Another is the provisions has been taken against the international business wealth. We have taken around INR 6 crore provision. And still that amount we are litigating and things are going to be in our favor, then we will see. But mainly this INR 8.7 crore provision pertains to B2G business where we have provided and INR 6 crores pertains to international Gulf places.
All right. Understood. And also, some -- are you planning to take some additional marketing or advertising costs?
No. So the marketing and business promotion cost, what is current year, more or less going to remain the same for the next financial year. No additional.
Okay. And this financial are, those costs mostly pertain to?
This cost -- in the current financial year, the cost increase in the other expenses mainly pertain to business promotions, marketing spend, on Her Check, Jaanch and other branding, what we have done, and that reflect in our revenue also the revenue growth, what we have seen.
Shall I request to come back for a follow-up question? The next question is from the line of Jainav Shah, individual investor.
Yes. So I wanted to ask that the interim dividend of INR 18 was declared in April and the dividend of INR 18 that you declared today. Are those Board dividends same or different as in total dividend is INR 18, plus INR 18 or just INR 18?
So interim dividend has been declared last year. That pertained to the financial year FY '23, not pertain to the current financial year. And subsequently, the amount of interim dividend was the final dividend has been approved in AGM.
Now coming to the current financial year -- we have proposed a INR 18 dividend subject to approval of shareholders in AGM. There is no linkage on that.
Okay. And also, I just wanted to know about the growth strategy in FY '25 guideline for the FY '25?
I'll let Nitin outline that.
See, the growth strategies will divide it into two parts, right? One is your core franchise business. I think the core strategy will be like Rahul said, are to go deeper into the country, right, expand our network, expand in cities and in geographies where we are not very strong today.
And secondly, on the partnerships and -- partnership side, the main focus will be on getting bigger accounts on board, specifically focusing on our insurance player, with the help of [ i2H ], I think we can make a lot of inroads in the insurance business with having both pathology and ECG. So these two areas will be our core focus.
Okay. And also, can you tell me about margin guidance, EBITDA margin guidance?
So margins are going to be more or less same, what we are expecting next financial year also. It's going to be between 25% to between 50%.
See, margins will remain flat. You must remember, we're investing in a few areas, right? We are investing in Tanzania, where currently, the lab is set up and the revenue will take some time to scale up. We are also investing in Think Health and scaling it up. So there will be some costs that we will incur to scale up these businesses. The four business will, of course, give us operating leverage, but that operating leverage, we will reinvest in some of these new initiatives.
Next question is from the line of Niraj from Prosperity Financial.
Sir, actually, if [Foreign Language]. So why promoter are not [indiscernible]?
See, I'm the MD and CEO of Thyrocare. I'm not the promoter. So it will be difficult for me to comment on this question.
Next question is from the line of Atul Kader Puranwala from ICICI Securities.
Just on this promotion cost, what you was incurred in this particular quarter and for the full year, are you calling out that number? what you're spending this quarter and for the full year?
It will be there in the detailed financials, but look, you can get some rough numbers on that. See, I'll just give you a background of what these marketing costs.
These are largely promotion costs that we do to promote Jaanch and many of the other new packages. So they're of three natures. One is some kind of schemes and some gift that we use to our franchisees to promote the new brands.
The second is we invest on a few celebrity and doctor promotions where they help us talk about the new products or specific packages that have been released for the festival.
And the last is we do incur some costs with our large franchisees to effectively have a set of franchise needs at the end of the year to discuss strategy and get their inputs on how we can grow the business. So the marketing cost is largely in these three buckets, and that's where we are investing. The exact number, maybe Alok can get back to this.
So the incremental numbers approximately is going to be INR 8 crores. to INR 10 crores. We have a spend on multiple projects, including whole credits, including promoting charge [indiscernible] branding and multiple other marketing.
Okay. So this INR 8 crores. to INR 10 crores is for the full year, fiscal FY '24, right?
Yes. For FY '24.
Okay. And sir, second on the margin guidance that you just laid as flattish margin. So this is on the normalized EBITDA or the reported EBITDA, the guidance was provided?
Sorry, could you repeat the question?
About the 25%, 27% EBITDA margin guidance for next year, so this 25%, 27% are we talking about the reported EBITDA or the normalized EBITDA?
Our normalized EBITDA overall as a company is roughly 28%. We expect to hold it in that range. The reported EBITDA is 24%. That will actually go up because the ESOP charges, as Alok has shared, in the beginning of the call, starts to substantially go down. So the number we look at internally as management is the normalized EBITDA. We expect to hold it between the 28%, 29% range.
Thank you very much. Ladies and gentlemen, we will take that as a last question. I will now hand the conference over to Mr. Rahul Guha for closing comments.
Thank you, everyone, for joining us and spending the time with us this evening. As always, we continue to remain focused on our strategy, which is to be the most affordable, good quality diagnostic testing partner for anyone in the healthcare business, and we continue to execute on this strategy.
We have been investing in improving our quality, improving our reach and ensuring our turnaround time is as close to best-in-class, and we made substantial progress on all of this.
I thank you all for your support in this journey. With that, I'll hand over to Pratik for closing comments.
Thank you all, on behalf of Thyrocare Technologies, that concludes this conference. We thank you all for joining us. Over to you, Neerav.
Thank you very much. On behalf of Thyrocare technologies Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.
Thank you.
Thank you.