Vijaya Diagnostic Centre Ltd
NSE:VIJAYA
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 |
602
1 219.65
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Vijaya Diagnostic Centre Ltd
You don't have any saved screeners yet
Ladies and gentlemen, good day, and welcome to the earnings conference call of Vijaya Diagnostics Center Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Devrishi Singh from CDR India. Thank you, and over to you, sir.
Thank you. Good morning, everyone, and a very warm welcome to Vijaya Diagnostic Centers, Q3 and 9M FY '23 Earnings Conference Call. We have with us Ms. Suprita Reddy, Chief Executive Officer; Mr. Sunil Chandra, Executive Director; Mr. Narasimha Raju, Chief Financial Officer; and Mr. Sivaramaraju, Head Strategy of the Company.
We would like to begin the call with opening remarks from the management, followed by an interactive Q&A session. Before we start, I would like to point out that some statements made in today's call may be forward-looking in nature and a disclaimer to this effect has been included in the earnings presentation shared with you earlier. I would now like to invite Ms. Suprita Reddy to make our opening remarks. Thank you, and over to you, ma'am.
Thank you. Good morning, everyone. On behalf of the management team of Vijaya Diagnostic Center, I welcome you all to this forum. I would like to first share the key highlights for the period following which Mr. Narasimha Raju will take you through the operational and financial highlights of the quarter and 9 months ended 31st December 2022. We are pleased to report that we witnessed steady performance in a quarter that is usually considered dull for the healthcare sector. October and November, that is some muted volume trends owing to the festive season. This, however, was made up by a significant surge in volume in the month of December. The third quarter also experienced healthy growth in demand for non-COVID business and we are confident that this trend will continue into the next quarter.
Business from wellness packages has seen a steady growth and is contributing significantly to the overall revenue. The segment recorded its highest ever contribution in the previous quarter, and did even better in Q3 FY '23 with a contribution of 12.9% of the overall revenue. This quarter marked the opening of 5 new centers with the one-of-its-kind Punjagutta facility, starting fully fledged operations from mid-November. This massive center spanning all of 16,000 square feet, gained good response from the initial days of operation. The newly operational state-of-the-art facility at Rajahmundry also managed to take off and stabilized well, and has been receiving good and positive customer feedback.
As mentioned in the previous earnings call, we have transitioned into a comprehensive ERP system that is more efficient and robust. I would like to mention that the transition was successful and has stabilized throughout the network call centers. We are undeterred in our results to expand to Tier 2 and Tier 3 cities in our core geographies and into untapped neighboring regions. Both internal and external factors were continuum for positive growth, and we start committed to our strategies and initiatives that will propel us to achieve sustainable growth in time to come.
In conclusion, I would like to say that with the combination of well-planned strategic initiatives and robust inherent spreads, we are confident that we are excited to take advantage of the opportunity for growth and the ever-growing demand in the diagnostics sector.
I would now like to invite Mr. Narasimha Raju, our CFO, who will take us through the operational and financial highlights for the period. Thank you.
Thank you, madam. Good morning, and warm welcome to everyone joining us on the call today. I will briefly take you through the company's operating and financial performance for the quarter and 9 months ended 31st December 2022. The consolidated revenue for the quarter stood at INR 113 crores as against INR 111 crores in Q3 FY '22. This quarter being a low quarter for the industry, the company saw a decrease in its non-COVID test volumes during the months of October and November. However, a strong recovery was observed in the volumes in the month of December. For example, the non-COVID test volumes reached stood at 0.8 million in October and November increased to 0.88 million in December 2022. Additionally, the shift in the revenue mix from COVID to non-COVID continued in the current quarter. The non-COVID business revenues stood healthy at INR 112 crores, comprising 99% of our revenue share as against 92% revenue share in Q3 of the last year. Overall, our non-COVID business registered a healthy growth of 9.8%, while COVID revenues registered a decline of 89.2% year-on-year basis.
Our radiology business stood at 36% in the current quarter. The number of footfalls stood at 0.77 million as compared to 0.85 million in the last year Q3. The number of tests registered year-on-year increase up 7.3% from 2.32 million to 2.49 million. The number of tests per footfall has increased from 2.73 million to 3.22 million. The revenue per test was INR 454 and revenue per footfall was INR 1,464 during the current quarter.
EBITDA for the current quarter was at INR 44 crores as against INR 48 crores in the corresponding previous period. EBITDA margin stood at 39.1% as against 43.2% in last year Q3. Healthy non-COVID revenue, coupled with the operating leverage assisted with margin performance despite costs on account of new centers. The profit after tax for the current quarter stood at INR 16.4 crores being 14.5%. Here, I would like to mention one thing. The PAT percentage is lower in the current quarter as compared to previous quarter, mainly because of 2 reasons.
The first one being increase in the depreciation based on the WDV method on account of newly commissioned large hub centers like Punjagutta and Rajahmundry during the second half of Q2, whose full 3-month depreciation impact was there in the current quarter. And the second reason being the Notional interest & Depreciation as per IND AS 116, Leases on account of new centers added in this year. However, please note that the cash PAT percentage consistently remained healthy at 28% levels.
I will now summarize our performance for the 9 months period ended December 2022. Consolidated revenue stood at INR 338 crore as against INR 346 crores in 9 months FY '22. Non-COVID business increased from INR 295 crores to INR 331 crores resulting in 12.2% year-on-year non-COVID growth. The non-COVID business comprised 98% of our revenue share as against 85% revenue share in 9 months FY '22. Our B2C share stood healthy at 95%.
EBITDA stood at INR 133 crores as against INR 156 crores in the corresponding previous year. EBITDA margin stood at 39.3% and the profit after tax was INR 57 crores.
In conclusion, I'd like to say that overall things are moving in the right direction, and the company remains confident of delivering consistent performance going forward. This brings me to the end of my address. I would now request the moderator to open the line for the Q&A session. Thank you.
[Operator Instructions] The first question is from the line of Rishi Modi from Marcellus Investment Managers.
So I had a couple of questions. So first one, right, I see you are opening up a new...
I am sorry to interrupt. Your voice is kind of coming muffled. If you can just switch to handset mode and talk, please.
Okay. So a few questions. First one on the Tirupati hub that you all are putting up, just trying to build the market how big the opportunity do you see? I know you all have spoke there what sort of metrics are you looking at? And which sort of thresholds did it cross that you all are investing in a hub now? Secondly, how big is the market opportunity there? Who is the incoming player that you will be facing on what [indiscernible].
Rishi, we got your question, but not in full. There were some disturbance in your voice. But coming to Tirupati, this would be our first center...
A new geography, Rishi, we do not have a spoke center in Tirupati. In fact, it's a new district, Tirupati is a new district now. Initially, it was part of Chittoor district, so it's a new geography. This will be a flagship center for that particular area. And again, in our model, as this hub stabilizes probably in 1 year, 1.5 years, we look at adding more spokes there. When it comes to the size of the center, it will be about 15,000 square feet. It has everything from basic pathology to nuclear medicine and the CTN and MRI.
The market itself is a huge market, but we will not have an exact number because this district has not been reported, but the unorganized sector is huge. And in terms of organized players, there's no one there except for the B2B players. And the rest of the question, we couldn't hear. If you could repeat it, probably I'll give you some clarity on that.
Yes. So the rest of the question was basically what metrics do we track before deciding to enter a new geography, like what gives us the confidence of entering a new geography.
So Rishi, basically, what we see is we see the potential for the medical market. When we say potential, right, the availability of doctors. Because for a diagnostic player to go into any market, first of all, you should have a treating doctor, right? So today, if you see Tirupati, you have many players and you also have oncologists practicing in that market. And that place will not only cater to Tirupati but it will also create to nearby districts like Chittoor and I think roughly the population size, putting all these 2 to 3 districts would be somewhere around 3,000,000 to 4,000,000.
Apart from that, Rishi, what's also happening is you see it right now from Tirupati to Chennai. But if you have a high-end diagnostic facility because now we also have treating doctors available, I think we can stop the leakage, and we can capture that market.
So Rishi, always the go-to-market strategy has always been the population, the affordability, the number of medical colleges, the primary healthcare centers. So when we see that -- if you look at this district, there are 2 large medical colleges that have been old Sri Venkateswara Institute of Medical Sciences, goes back a very long time. and there's also Tata medical there. So we look at those. And mainly the affordability and the kind of clientele. So this is what drives us to select the geography. And this is something that we've been looking for quite some time. And usually, to find the right place in the right district is the challenge and we did. So we immediately grabbed that. And the center is almost ready. In fact, we would probably see it start off in the early next month.
Congratulations on that. So coming on to our importance of doctors, right, so one proposition where we attract often our capability of hiring super-specialists radiologists from our [ book ]. So in the last 1 year on [indiscernible], what are new specialties have we entered into? What are hirings have we done with superspecialist radiologists based on how we gone and marketed that to our [indiscernible].
So Rishi, the talent pool that we have, in fact, are all there. So if you look at the radiologists today of more than 120 of them, both part-time and full-time consultants, each one would be specialized in certain fields. In fact, recently, one of our radiologists was appointed as the President of the head and neck for all over India because she is a head and neck radiologist. Same way we also have pediatric cardiology -- pediatric radiology. So we -- wherever we do because of the tele network that we have, these radiologists pick up the pool of cases, irrespective of the geography. These are the consultants who report those cases. That itself is marketing because they are actually specializing in that field and reporting that case, irrespective of the geography, which has actually made the business grow in radiology. And we have multiple doctors like this who subspecialize in different fields.
And Rishi, I think the strategy going forward is, like -- anyways, you would be adding some tests year-on-year. But more than that, we're introducing the same expertise that we were giving to Hyderabad market to newer markets now. Like, for example, Rajahmundry, now Tirupati, next Gulbarga and few areas of Kolkata. So it's going to be the same what we are doing now to a newer geography.
Okay, so currently we don't intend on expanding our [indiscernible] mentioned Nuclear Medicine...
We've lost you there. We can't hear you.
[Operator Instructions] We'll take our next question is from the line of Prakash Kapadia from Anived Portfolio Managers.
Yes, could you share the 3-year non-COVID CAGR for the quarter or year-to-date basis? Do you have that handy?
Yes, see, at a quarter level, if you take 3-year view on non-COVID revenue, we are roughly around 8.5%. But the encouraging thing is that if you actually see December to December, right, that is December 2019 to '23, '22. So we are -- so the growth was around roughly 11.5%. I think that's something encouraging, and we are seeing the traction after December also.
Okay. And what do you think will drive higher growth because as you said, the December quarter is 8.5% and year-to-date, if you take a 3-year view, it is 11.5%. So from our perspective, it's going to be illness segment, wellness segment, cross-selling to existing customers growing more deeper in our core markets or East being larger. So what actually will get us to that 12%, 14% kind of revenue growth on a steady-state basis or on a sustainable basis?
So I think Prakash, it's a mix of multiple things. So if you actually see, right, in the last 3 financial years from FY '21, '22 and '23, due to COVID, the center addition didn't happen as per our plan because of COVID, right? And in our business, addition of centers is also important to further revenue growth. So if you see the maximum CapEx that we deployed, what happened during -- from Q3 of FY '22 to FY '23, that is like last 1 year. So I think with this, this will also add to our revenue growth in the coming years. Apart from that, the focus on wellness, right, and the focus on the newer geographies, and also addition of tests and modalities. For example, we used to have only 1 PET-CT in Hyderabad, where there was a long wait time. But now we added the second PET-CT and it is doing good. I think addition of these modalities with new geographies and with whatever center addition that we are doing, I think will have to help us grow.
Also Prakash, Sunil here, so if you look at where we started time of IPO, we were at probably about 86, 87 centers. And very rapidly, we have now got to a number of about 117 centers. We have 27 hubs, 19 spokes as of now. Obviously, this was done during a period of transition, COVID. So some of these centers have been set up in the last 12 months. So really, what is happening right now is, a, we are seeing this completion of non-COVID kind of phasing out, non-COVID is coming back to normal. At the same time, you're seeing a lot of these new centers that are still in the initial ramp-up phase. They have been opened in the last 6, 8, 9 months. And some of the large hubs, obviously, have been opened in less than 3, 4 months ago, Punjagutta and some other...
Rajahmundry.
Rajahmundry also opened then, again, less than 6 months. So I think, clearly, maybe Q4 will give you a better idea, but I think going forward, next financial year, we are quite confident that growth coming from new centers, as well as even the normalization of existing centers. I think growth gets back to more traditional growth rates, which are higher than...
Higher than what we have seen in the quarter.
And any change in consumer behavior post COVID, we have seen in terms of fatigue coming in? Because I would guess consumers would be more aware post COVID, but that doesn't seem to be translating for, not only us, but across players in the diagnostic business. So what is actually hitting revenue growth?
So we've seen a little increase in wellness, as I think Suprita mentioned, that's directly a function of more people saying they are a little more healthy -- health conscious. Now beyond that, of course, again, our business model, we have integrated our test menu, both pathology, radiology, we do high-end imaging. So we are not so dependent only on wellness. But I would say, as of now, we have also seen a slight decrease in wellness, which is a function of maybe COVID, post COVID.
Any changes in competitive landscape or pricing, which we've seen? Has it gone worse? Is it better? Is it same from a competitive landscape perspective? Any thoughts of any price changes at our end? And what has been the technology spend in the last 12 months for us?
So okay, 2 questions. On competition, obviously, there has been some amount of competition, a lot of players coming in, in the unorganized sector also may be due to COVID related -- they saw an opportunity there. However, they're not really having significant impact. I think some of them may not be able to sustain longer term. But in the shorter term, yes, there is some little bit of competitive intensity, and that is across the country. I mean it's not just in our markets.
But shouldn't that -- it's like counter in detail, that should stop with growth rates slowing down that should start hitting them, right? Because if they have come in a period where growth was super normal -- and now you know that super normal growth has gone off. So they should feel the pressure, right?
[indiscernible] , Prakash, but probably it will take some time for that to come to life, right? It's only been a year since probably COVID is done and you saw mushrooming of hundreds of unorganized players putting in CT scans. In fact, some of the houses became CT centers. But we're gradually seeing, in fact, especially from the equipment companies. When we see the number of refurb machines up for sale, it basically signals that, that many number of centers are also not doing well. But it's probably not just going to happen in 1 year, but over a period of, say, a couple of years. And this is both, right, in terms of both pathology and radiology. So we'll just have to probably wait it out and see. And to answer your second question in terms of the IT costs and I think Raju will answer that.
Prakash, as you know, in the current year, okay, we implemented a new ERP building software, okay? And also in the next few weeks, we'll be rolling out of the mobile app also. With these type of initiatives, approximately like a INR 2 crore CapEx was incurred on these type of initiatives.
And just to add, we did not change our pricing.
Okay, there is, no. But sorry, I was saying on the pricing part, we have not changed our pricing. But have we seen increase in competitive intensity or the noise levels remaining same or increasing or decreasing by new edge players or competition?
Prakash, I have answered this even in the previous call. So there is a certain clientele, especially in all geographies that's completely price-sensitive. If you ask me was that our clientele, I would probably say they would have never been our clientele, because we are all of about 15% market share even in a geography where we're Andhra, Telangana. And that's a long way for us to go. And that price sensitive clientele is always going to be price sensitive. So there's a different segment. So we've not seen big noise in terms of price per se because of the quality and the service and the entire experience that we give. But like I told you, there is a lot of unorganized sector competition there, and we'll have to wait it out and see, but we've not changed our strategy or pricing, and we will continue to do the same for the next few quarters.
Our next question is from the line of Cyndrella Carvalho from JM Financial.
So I just wanted to understand, if we look at last 24 months growth, excluding the new centers versus mature centers and a 3-year CAGR, if we have that available with us.
So I think Cyndrella, the best way to say 3-year CAGR, which I've just told. It's close to about 8.5% on a quarter level versus almost 11.5% from December to December because with the centers that have opened in the last 24 months because of COVID, non-COVID, this multiple times. The [indiscernible] entire revenue at the center change. So hence, it would not be correct to compare at this point in time.
That's excluding the last 24 months new centers, which we have opened, if we exclude that, then what is the nature or the earlier center growth? I mean, if we store...
So if I just take on non-COVID to non-COVID, so roughly about 5% to 6% of revenue. When I say same-store sales growth, we are only [indiscernible] centers that have opened like 1 year before December 31, 2021, right? So these centers gave us a growth of 7%. And the remaining 3% growth that we got was from the centers that we opened in last 1 year.
Okay, okay, and coming to the non-Hyderabad market, how are we seeing this? Is there any update in terms of demand? Are we seeing the same kind of footfall in terms of our newer centers and extended market? Can you help us provide some color on the same?
So Cyndrella, we are currently at the same level because Rajahmundry is a center that we opened just 3 months back and the investments that we are making into Vizag, Tiraputi, all is going to come up now. I think we will be seeing improvement from the next financial onwards. But currently, the centers in Hyderabad and also outside Hyderabad, they are growing at the same pace. So hence, we are not seeing any big change in the mix because like previously also 83% of revenue is coming from Hyderabad, even now they're getting 83% of revenue from Hyderabad. Maybe in the year...
No, that's the percentage, Cyndrella, in 2022 per se the year till now, in fact, has been a little like a roller coaster. It's not normal. So probably the COVID, non-COVID, quarter-to-quarter. So we're waiting to some amount of normalization post COVID. And like, Simha said, Rajahmundry is the only hub center that we started is about 4, 5 months old. And it's behaving in a way it should. And we've seen growth happen, but I'll probably be able to give you a better picture in the next call that we would be meeting in terms of trend.
And any color in terms of all these new additions, where should we see a full ramp-up? The ideal time line should be 18 to 24 is the correct way to look at in terms of full ramp-up of these new centers coming up?
So Cyndrella, as we mentioned, okay, for the spokes, you need like 1 to 1.5 years, okay, to look at the full ramp-up revenue. And for the hub centers, typically, you need like 2 years. But for hub specifically like Punjagutta and Rajahmundry, we'll take slightly more time like 3 years to 3.5 years' time.
And if you look at the performance of the center that we opened, okay, in the Q1, whatever center that we opened, okay, it's like 6 months right now. So all of them achieved the P&L EBITDA breakeven as per our expectation. Okay. And coming to the center -- yes, yes. So the Q1 centered whatever we opened, they are 6 months old now. So as per our expectation, the P&L positive EBITDA is achieved already. And even for the second quarter whatever will open, right, okay? So the bigger centers are like Rajahmundry and Punjagutta. Those are also going as per the expectation. Like Rajahmundry, it will take 1 more quarter for achieving the positive EBITDA. And also for Punjagutta I think it will take 2 more quarters to achieve the positive EBITDA. Other than that, that even the spokes and mini spokes, what we opened in the Q2, already we are seeing a positive EBITDA.
[Operator Instructions] The next question is from the line of Rishi Modi from Marcellus Investments.
So I'll just continue on my question that I asked. So I just wanted to know what sort of new test addition that we have done, right? Basically, any new field that we have entered into in the last 1 year?
Yes, Rishi. So in terms of new test addition, we've added a lot of immunohistochemistry markers and flow cytometry is something that we're concentrating on. And also in the department of Nuclear Medicine and PET CT, we have started high-dose therapy. And we've also added PSMA in a variety of scans now -- so again, it's something that has just started about a 1, 1.5 months back, and we've seen good numbers coming in from there, too. So these are some of these super specialized tests that we've added other than normal specialized tests, about 15 to 20 tests get added in the entire test menu almost every quarter.
And what sort of hiring have you done on the radiologist front to support these new test menus or is our current base capable of providing that specialized.
No the current base is capable of doing that. But also, we do keep hiring the pool of radiologists because like we said, more centers have ultrasound in it. So as and when we find good talent, we add them to the pool so that there's extended hours of service in these smaller spokes.
Understood, understood. And I saw that we closed 1 center in this quarter -- so which center was this? And what was the reason like...
.
The center was SomajiGuda, and the decision to do that was because Punjagutta open, and this is just 100 meters from there. So it did not make sense in having 1 very large 16,000 square feet flagship center and a smaller center like SomajiGuda. So we closed that center and the equipment from that center was shifted to one of the existing centers.
Understood, Understood. And that center was I'm guessing not below par performance, right?
Yes. moderately well, but it's pretty close to the...
Understood. Yes. Just last on the mobile app thing, right, you've been hearing for the past few quarters, and it's still not out -- so what's leading to these hiccups and getting delayed? Because I think we are the last ones in the incumbent players to come out with a customer centric app.
Rishi, now there are 2 ways of looking at it, we could just roll out any app and we do have an app.
In terms of perfectness when it comes to certain things that we do. And look at all the other players, probably we are the highest B2C company with 95%. So the moment we're going to release that app, and I'm going to say you can view your report. You're looking at suddenly at 10,000 people downloading and trying to use it. So the first thing was the back-end ERP stabilizing, which happened probably in the last 15, 20 days. And then we've been testing this app extensively. Like I told you, for us, just the existing customer base downloading it itself, is a huge number. And radiology is something that we will have to integrate. So the others will only have a pure pathology they can view. Now there's a concern of showing a DICOM image to a customer. I cannot say I will only showcase the pathology reports to them. So we said let's go all out 100% when we are very confident. So probably 2 weeks from now, we will see that.
Our next question is from the line of Aashita Jain from Nuvama.
So my first question is, how are the trends looking in January right now? And are you still maintaining a revenue guidance of 14%, 15%?
So Aashita, if you look at the 9-month growth, okay, on the non-COVID, it is in the range of 12.2%, okay? And the current month, last month performance was good, as we explained, okay, even though October and November was low. The December uptick was there like 0.8 million to 0.88 million, we have seen the growth in the non-COVID volume. Okay. We expect the similar trend will continue in Q4 but since the last quarter, okay, I don't think it will be right to comment any exact guidance for the Q4, okay, being this financial year closure, but we expect the growth momentum that is happening in the December will continue till March. And also, we expect in the month of March, a good volume from the Health and Wellness segment also, okay? Generally, that's what we have seen during the fag end of March.
Secondly, when I look at your center additions, so we are already tracking way ahead from what we had guided earlier. So how are you looking at expansion plans [indiscernible] for the next 2 years?
So for the coming year, Aashita, as we gave the guidance, we are targeting for the 4 hubs and 11 spokes, okay? Again, out of these 4 hubs, as we mentioned already, the work keeps progressing at the Kolkata, Gulbarga and Tirupati. Anyhow we are opening within the current financial year itself. In fact, in this month itself, which is planned for the next financial year. okay? One more hub needs to be finalized, and then we'll be opening 10 to 11 spokes. So for the next 2 financial years, we should be targeting in the same way 15 centers each year.
Again, when we're opening the spokes, depending upon the requirement, we might open like the mini spokes that we opened in the current financial year, which will, in fact, in a span of like 1 to 2 years, depending upon the requirement, we'll upgrade them with the entire basic radiology equipment like with ultrasound so that they'll work as a full-fledged spoke center.
Okay. And what is your geographical focus area? It will be people [indiscernible] mostly or you're going to go deeper in [indiscernible]?
So Andhra is going to be the core focus. In fact, you've seen all these hubs coming up also Rajahmundry, Andhra, Tirupati. So even the rest of the lineup is in adjacent geographies, Gulbarga, Kamthana, Karnataka. So the focus is going to be on adjacent geographies and Andhra. And like we mentioned earlier, Kolkata is getting ready. Once that flagship is ready, we would be adding a lot more spokes in and around that center. So the focus is basically Andhra and East India and adjacent geographies. And of course, Hyderabad, our core market, wherever we see opportunity, we'll be adding incremental centers in the geography also.
Our next question is from the line of Aditya from Securities Investment Management.
So can you help us understand about the customer liking of the people in a base market in Hyderabad or South of India? So are the people over there brand conscious and will continue to resist Vijaya or any other Southeast players there [indiscernible]? Do you think we are more price conscious and we look to [indiscernible] provide a [indiscernible].
So I think, Aditya, every market will have customers with different choices. There will be price sensitive -- price conscious customers at the same time, there'll be brand-conscious customers, right? For example, when we are going into newer geographies, something like Rajahmundry that we have gone. So the initial ramp up was very good. Maybe for an unorganized player, if they go into that geography, the ramp-up would be something different, right? It's because not only the patient but also doctors are sometimes quality conscious.
The brand in healthcare is nothing but the quality, right? So I think not only South anywhere, I think in India, you have multiple clientele who are both price and then quality conscious. And the second thing is, in healthcare today, even in India, 90% of the healthcare testing happens are need based. I think when the person is in need, quality plays over the price.
Quality, and also trust, Aditya, because when probably you're lined up for a surgery, the time when I don't think that person would be looking at discounted players on who would give you tests rather than go to the best because anywhere your focus is on getting operated. So it's both trust and quality. I think that will be sustainable and grow the business in the long run. In fact, if you look at -- Vijaya is going into these Tier 2 towns, the strategy has always been to have a standardized report, whether it is in pathology or radiology. So irrespective of a customer getting an MRI done or a CDP done in Rajahmundry versus getting it done in Hyderabad, it could be one and the same. So it does not mean that we would offer different services or standardization or quality of report is adding in different geographies. And that has been the strongest factor for growth of Vijaya.
Main reason for asking the question was, are the people in South [indiscernible] literacy rate or the income level will be different from North. So is there any pattern that you replace that from more brand conscious people in south and the more brand conscious people in North?
Not really. I don't think there's any data to suggest anything of that sort. And if you look at, of course, business model, we are integrated. But if you take other change, the pathology change, everybody is from a different region. But usually, this business has always seen that the organized players have certain markets where they are quite strongly -- the brand is recognized more strongly, and you kind of look at that as their home market. So the diagnostics sector itself has seen that different chains have their own home markets.
And strength.
And these are not just out. There are people from the South, North, West, East. I don't think there's any such difference in how people behave.
Sure. Secondly, if I look at the growth rate in your total number of centers, they have grown by 31% year-on-year. But when I look at your non-COVID revenue growth, the same has been lower at around 10% to 11%. So I know this new center will take time to ramp up. But just want to know from you -- the revenue growth in the new centers as per your expectation, or do you think due to the competition or some other factors, the growth has been slower?
So the growth in new centers is as per our expectation, Aditya, but things like majority of these centers were opened in last 1 year. I mean I would say a majority of the CapEx because in the numbers, you may see some number coming in the last year also, but if you see considerable centers have opened in the current financial year and more in the last 2 quarters. So this will take some time to add up. We hope all these centers would add up to the business in the coming years.
Sure. And the last question, there has been a decrease in our revenue per test [indiscernible] even to our share of [indiscernible] increase. So any particular reason for the same?
Basically because of increase in the wellness. So if you see the wellness revenue from Q2 to Q3, right, and [indiscernible] was roughly around 12.2% or 12.3% versus 12.9% now. So it's because of the increase in wellness, the average relation [indiscernible] has decreased by INR 6 I think quarter-on-quarter.
Our next question is from the line of Anubhav Sahu from MC Research.
I'm just trying to delve in a little more on the pricing front. So just want to understand that the new centers, [indiscernible] would be discounts, say, compared to what we offered in Hyderabad.
Yes, there will be a discount of, say, 10% to 15%, depending on the geography.
And if we look at mature centers, particularly, let's talk about Hyderabad, are there any categories in which we are able to increase price either in radiology or pathology, or is it the deal that we are waiting for pricing to stabilize and focus more on volumes?
So the first thing -- sorry, I missed your name. Anubhav, so it's basically like the policy of Vijaya basically is that you want to [indiscernible] Vijaya's mission statement itself, is that we want to get the healthcare at affordable price. At the same time, we don't compromise on the quality. So if you see not now, even in the last 5 to 6 years, I think the pricing increase we did was whenever there was some increase in the reagent cost or the other input cost is when we increase the prices.
Generally, we don't take a price increase year-on-year across the test menu, but there were times in the last 1, 2 years also whenever some input pricing, for example, if you take the MRI, right? So 3 years back, MRI is at INR 7,000. Now we are charging INR 7,500. So whenever we see the input price raising, we will not do a larger increase. It will be something like in the range of 3% to 5% on a particular test. But at the company level, it would be around, say, 1% to 2% is what we have seen in the last 3 to 4 years.
Okay, I got it. I think largely to compensate for the input cost pressure [indiscernible]. And will it be possible for you to get a breakup for the wellness packages in terms of both pricing and volume, the growth which we are having in this category?
So basically, if you see our wellness, none of our packages have only pathologies, it's a mix of both pathology and radiology, that's the reason even our ticket sizes are large. So roughly, we had INR 2,500 per package. So we have packages starting from, say, INR 1,200, INR 1,300, till INR 11,000, INR 12,000. So on an average, we get a about INR 2,700.
Okay, okay. And secondly, on the CapEx front, I think we had a CapEx outlay for INR 115 crores. Is that outlet of fiscal '23 being revised upward because we now see the [indiscernible] centers coming up? How are we on that part?
So Anubhav, we have mentioned earlier that INR 115 crore CapEx is required for 4 hubs and the 11 spokes. And also continue the mini spokes. And the 2 this year, we opened Punjagutta and Rajahmundry, okay? So the guidance for this type of network addition is INR 115 crores. So apart from that, Anubhav, what we have done a few select locations, wherever there is a good demand for the radiology business, either like a basic radiology like ultrasound, X-ray are in one location, one MRI, okay, or a CT. We added a few select locations, depending upon the business requirement. So that estimate is approximately like INR 14 crores to INR 15 crores. So apart from the INR 115 crores CapEx estimate for the new center that's planned, another INR 15 crores for the radiology equipment that we have been buying for the existing network.
So this is the CapEx for the current financial year. And out of the CapEx for the next financial year, out of the INR 80 crore expected CapEx for the next financial year, Tiraputi Center, fortunately, it is getting launched in this current month. So that CapEx would be -- that should be considered as part of the next year CapEx.
And also, one more point to just add, okay, this entire CapEx is getting funded through the internal cash accruals. And if you look at the overall cash balance that is healthy at INR 240 crores plus levels in spite of this INR 115 crore CapEx estimate for the current network expansion.
Okay. And can you just remind me how much of CapEx accrued for the equipment? I think bulk of it is for equipment, but what is the total percentage? what is the percentage?
A significant amount will be towards the radiology equipment, Anubhav. Say, for example, if we are doing like a INR 15 crore CapEx for a center, okay, almost close to like INR 12 crores, INR 12.5 crores is towards equipment.
[Operator Instructions] As there are no further questions from the participants, I now hand the conference back to the management for closing comments.
I would like to thank everyone for attending this call and for showing interest in Vijaya Diagnostic Center Limited. I hope we have been able to answer all your questions. Should you need any further clarification or would you like to know more about the company, please feel free to reach out to us or to CDR India.
Thank you once again for taking time to join the call and see you all next quarter.
Thank you.
Thank you.
On behalf of Vijaya Diagnostic Centre Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.