Metropolis Healthcare Limited — Call Transcript 2021

Mar 2, 2021

Ref: MHL/Sec&Legal/2020-21/179

Date: March 2, 2021

To,

Head, Listing Compliance Department BSE Limited Phiroze Jeejeebhoy Towers Dalal Street, Mumbai - 400 001.

Head, Listing Compliance Department National Stock Exchange of India Limited Exchange Plaza, Plot No. C/1. G Block, Bandra -Kurla Complex, Bandra (East), Mumbai- 400051.

Scrip Code: 542650

Scrip Symbol: METROPOLIS

Sub: Transcripts of Earning Call for Q3FY2021.

Pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, please find enclosed herewith transcripts of the Earning Call held on Thursday, February 11, 2021 wherein the management of the Company discussed the Financial and Operational Performance of Q3FY2021.

This is for your information and records.

Thanking you,

Yours faithfully, For Metropolis Healthcare Limited

Poonam Tanwani Company Secretary & Compliance Officer Membership No.: ACS 19182

Encl. a/a

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BLOOD TESTS • DIAGNOSTICS • WELLNESS

Metropolis Healthcare Limited

Registered & Corporate Office: 250 D, Udyog Bhavan, Hind Cycle Marg, Worli, Mumbai - 400 030. CIN: L73100MH2000PLC192798 Tel No.: 8422 801 801 Email: support@metropolisindia.com Website: www.metropolisindia.com Global Reference Laboratory: 4th Floor, Commercial Building-1A, Kohinoor Mall, Vidyavihar (W), Mumbai - 400 070.

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“Metropolis Healthcare Limited

3QFY2021 Earnings Conference Call”

February 11, 2021

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ANALYST: MR. NIKHIL MATHUR - AMBIT CAPITAL

• MANAGEMENT: MS. AMEERA SHAH - MANAGING DIRECTOR - METROPOLIS HEALTHCARE LIMITED

MR. RAKESH AGARWAL - CHIEF FINANCIAL OFFICER, METROPOLIS HEALTHCARE LIMITED MR. VIJENDER SINGH - CHIEF EXECUTIVE OFFICER - METROPOLIS HEALTHCARE LIMITED

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Moderator :

Ladies and gentlemen, good day and welcome to Metropolis Healthcare Limited Q3 FY2021 Earnings Conference Call hosted by Ambit Capital. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing “*” and then “0” on your touchtone telephone. Please note that this conference is being recorded. 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 the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Nikhil Mathur from Ambit Capital. Thank you and over to you Sir!

Nikhil Mathur : Thank you Venba and good morning everyone. On behalf of Ambit Capital, I welcome you all to the 3QFY2021 earning call of Metropolis Healthcare Limited. Today, we have with us senior management team of the company represented by Ms. Ameera Shah, Managing Director, Mr. Vijender Singh, CEO and Mr. Rakesh Agarwal, CFO. With this I will hand over this call to the management. Over to you Madam!

Ameera Shah :

Good evening everyone. Thank you for joining us for the 3QFY2021 earnings call. I hope you and everyone around you are safe and in good health. I am joined today by Mr. Singh and Rakesh and SGA our IR advisors. The presentation and press release has been issued to the stock exchanges and uploaded on our company website and I hope everyone has had the opportunity to go through the same. Let me start by sharing with you that we at Metropolis Healthcare has been conferred with the gold award in two categories in India Health & Wellness Award 2020. The categories were Covid Diagnostic Brand category and Health Awareness Campaign. Metropolis has always put its patients and community first and we look forward to doing more impactful work to have a positive impact on the society.

Let me talk about recent developments in the industry and the economy. As you are aware, with the vaccination drive India could well be in the last leg of the crisis with new cases falling coupled with recovery of the existing patients. We should be proud of ourselves, Government and especially the doctors and frontline workers who have worked selflessly to tackle this gigantic crisis. With vaccination being underway, India is on the move to completely move past this covid-19 crisis and enter the post-covid era soon. We at Metropolis and its every member are extremely satisfied in playing our role in this recovery and will continue to support until we are completely past this crisis.

During Q3 lock down restrictions were eased, however, it is important to note that healthcare unlike other industry is very hyperlocal Different conditions and situations have

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prevailed in cities and states and therefore operational performance has not been uniform all across. While B2C recovery has been better, B2B recovery especially from hospitals are yet to return to fully normal levels, which is partially reflected in our overall non-COVID growth as well. Accordingly, 3QFY2021 revenue increased by 23% on a year-on-year basis with EBITDA margin before CSR & ESOP at a healthy 32.6% up by 430bps YoY.

Of the total revenue, non-COVID business contributed 81% while COVID business contributed 19% to total revenue. The revenue growth in Q3 was led by 10% increase in patient visits and 7% increase in number of tests and our sincere efforts in all areas of the business development including increasing the physical coverage of doctors, penetrating home testing services in newer cities, increase in specialized test and deepening the digital engagement through various campaign which have resulted in that. While we continue to focus on growing our business we have been equally prudent on the cost side as well leading to operating leverage benefits.

The factor contributing to expansion in EBITDA margins are better testing, increased B2C contribution, better cost control through automation and digitization leading to overall operating efficiency. Non-COVID revenue is improving quarter-by-quarter, but since the healthcare industry is still to resume to normal levels, this is the journey as various geographies are in some version of lock down with general sentiments till being cautious. COVID revenue on the other hand as expected continue to moderate gradually month-onmonth, although it contributed a significant portion of revenue during Q3, we expect the revenue contribution to moderate going ahead.

COVID revenue reduced on an account of lower COVID test in volume terms coupled with lower prices of COVID test. Going ahead we expect COVID test to become one of the routine test as vaccination program continue to be there.

Let me also touch upon the Home Testing part of the business

We believe ramping up the home testing will play an important role in enhancing the Brand Equity of Metropolis in the minds of the consumers. Our efforts on this front have shown positive results. Revenue from home visit testing excluding covid has increased 34% from Rs. 19 Crs in Q3FY20 to Rs. 25 Crs in Q3FY21. As a percentage of B2C business, it has expanded by 660 bps to 26.4% in Q3FY21 from 19.8% in Q3FY20. Including Covid, Home testing has grown by 110% from Rs. 19crs in Q3FY20 to Rs. 40crs in Q3FY21.

We have scaled up home testing services to 59 locations as of Dec-20 from 13 locations in Sep-20. We aim to wide our reach to 200 locations by end of FY21. We will continue to

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focus on ramping up the home testing services to newer locations as well as increase the portfolio of tests available for home testing services.

Digital initiatives is playing a very important role in aiding the growth of our home testing services which allows us to create long term loyal customers and enhance the brand value of our business.

Coming to the M&A strategy.

M&A is one of the most important pillars of our growth strategy and you are already aware that we recently announced the acquisition of South India based - Hitech Diagnostics in cash and stock deal as a part of that strategy. Let me just highlight the strategic rationale behind the acquisition. In India diagnostics is a very regional play. There are very few good quality labs operating in the country with the patient first approach having scale and size. Further only a few of these labs are pure pathology and not a mix of radiology and pathology. Our approach towards acquisition has been to strengthen the leadership position in our markets and get disproportionate benefits over time via synergies in people, lab network, infrastructure and customers.

The Hitech acquisition will allow us to build on this scale already created in our focus cities in Bengaluru and Chennai while getting access to newer towns in rest of Tamil Nadu, with newer customer profile and this will create a larger and sustainable opportunity for Metropolis. Once the transaction is complete, we will be able to share more detail on the acquisition and the plan forward. Adding to our leadership position in South India we have upgraded our laboratory in Cochin with better infrastructure and enhanced testing. This facility will help in a faster turnaround time and enhance the customer experience along with the 100 plus network centers that we have in the state right now. It is also in line with the strategy to grow, gain market share and increase B2C revenue.

Let me now highlight a few points, which will be the focus of Metropolis in the coming time. Number one, we will be focusing on ramping up the non-COVID part of the business. The business had already reached normalcy in Q3. Ramping up the non-COVID business will bring further growth and sustainability. Number two, intergrade Hitech Diagnostic into Metropolis in a smooth and time bound manner leading to benefits in terms of revenue and cost to Metropolis. Number three, increase the profitability through increased speciality test, increase B2C business, home testing services, continuous optimization of cost structure to automation and digitization and number four, enhance the brand equity of Metropolis through digital marketing effort via social media, which brings customer engagement, creating digital partnership, doctor engagement and the B2B portal enabling us to become a complete end-to-end digital service provider for all our stakeholders. I am particularly

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happy to share that during Q3 about 21 Crores of revenue came via lead generated through digital medium, which is almost 8% of the total topline of Q3.

With the new website, app, performance marketing efforts, all working in sync with the customer first approach, we had touched base with 45 million audiences in the last few quarters. We believe digital presence & integration will play a key factor going ahead not only in brand creation, lead generation and improving customer experience but home testing services as well which has grown very rapidly.

2020 has taught everyone of us the importance of health, hygiene, wellness and care. I am happy Government of India has reciprocated the importance of this by doubling the allocation to the health sector at 2.2 lakh Crores in the budget 2021 as compared to last year.

Government intends to strengthen the area of preventive health, curative health and well being during the current year. We will be more than happy to partner with the government in this good journey to fasten this process and strengthen health service across the country. Lastly I would remain confident on business going ahead and particularly our cash flows and balance sheet. The board of directors has recommended an interim dividend of Rs.8 per equity share. That is all from my side. I would now like to hand over to Vijender to take you through some of our operational parameters.

Vijender Singh :

Thank you Ameera and good morning everyone. Let me give you a perspective on our operational parameters. For Q3 FY2021, we reported patient visits of 2.7 million registering a growth on 10% on year-on-year basis. We conducted 5.1 million tests versus 4.8 million in Q3 FY2020 up by 7% year-on-year. Including COVID-19 revenue per patient increased by 12% year-on-year to Rs.1029 and revenue per test increased by 15% to Rs.537. On a like to like basis, non-COVID revenue per patient increased by 4% year-on-year basis to Rs.959 and revenue per test increased marginally year-on-year to Rs.468.

Our revenue profile among focused, seeding and other cities stood as follows; focus cities (five cities including the city and peripheral area around metropolitan region) contribution stood at 58% in Q3 FY2021 as compared to 61% in Q3 FY2020. Seeding cities (eight cities including the city and peripheral area around the region) contribution has moved from 21% in Q3 FY2020 to 25% in Q3 FY2021 on the back of our increased efforts in branding in seeding cities while other cities contribution has been same at 18%.

Our B2C revenues in focus cities in Q3 FY2021 for non-COVID business has now reached 61% as compared to 54% in Q3 FY2020. This has been a result of various marketing initiatives undertaken by the company over the last year and standardization as well as

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upgrading the customer service levels on continuous basis. With respect to geographic distribution, I would like to point out that revenue contribution from north region witnessed a substantial improvement from 7% in Q3 FY2020 to 13% in Q3 FY2021 partly aided by COVID wave in the month of October and November in the north, but also due to increase in brand awareness of Metropolis in the northern region.

With respect to test mix on volume and value basis excluding COVID-19 specialized test contributed 16% of the total volumes in Q3 FY2021 as compared to 13% in Q3 FY2020, which is our focus area. Excluding COVID-19 specialized test contribution increased from 37% to 43%. The volume and value mix overall continues to see an improvement. As Ameera pointed out we will continue to focus on ramping up the non-COVID tests focus on improving profitability through better test mix, increased B2C business, ramp up home visit and cost optimization efforts and build a strong Metropolis brand through focused marketing initiatives keeping customer experience at its core.

As part of the recently announced acquisition, our efforts are also geared towards integration of Hitech with Metropolis. We will upon closure of the acquisition look to integrate the portfolio of services across the two brands and strengthen the go to market proposition with an aim to leverage the brand positioning of both the entity. That is all from my side, I will ask Rakesh to take you through the financials.

Rakesh Agarwal :

Thank you, Vijender. Good morning to everyone on the call. Let me give you a snapshot of our financial performance. Q3 financial year 2021, revenue stood at Rs.275 Crores as compared to Rs.223 Crores in Q3 financial year 2020 up by 23% year-on-year. NonCOVID revenue contributed 81% of the revenue while COVID revenue contributed the rest 19% of the revenue during Q3. Non-COVID revenue stood at Rs.224 Crores in Q3 financial year 2021, hosting a marginal growth over the same quarter last year.

COVID revenue stood at Rs.51 Crores in Q3 financial year 2021, it was approximately Rs.100 Crores in Q2 financial year 2021. We expect the COVID revenue to continue to moderate going ahead as well. However, we expect the non-COVID revenue growth to partly set off the revenue downtick from COVID revenue going ahead. EBITDA before CSR and ESOP stood at Rs.89.7 Crores in Q3 financial year 2021, as compared to Rs.63.1 Crores in Q3 financial year 2020 up by 42% year-on-year.

EBITDA margin before CSR and ESOP stood at 32.6% in Q3 financial year 2021 up by 430 basis point on Y-on-Y basis on the back of better product mix, increased B2C contribution and better control of our fixed and operating cost. Q3 FY2021 PAT stood at Rs.58.6 Crores as compared to Rs.42 Crores in Q3 financial year 2020 up by 40% year-on-

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year. Q3 financial year 2021 PAT margin stood at 21.3% margin expansion of 240 basis points as compared to Q3 financial year 2020.

We have continued to focus on our collection efficiency. Our debtor days have improved from 55 days in March 2020 to 45 days in December 2020. Overall working capital days have slightly improved from 11 days in March 2020 to 10 days in December 2020. Our liquidity position remains very strong with cash and cash equivalent of Rs.381 Crores as on December 2020. OFC to EBITDA stood at healthy 83% for 9 months financial year 2021. The board of directors have declared an interim divided on Rs.8 per share.

Even after factoring the additional debt we will take to fund the acquisition of Hitech Diagnostic our balance sheet will be well capitalized with comfortable Debt / Equity ratio and strong OCF and FCF generation. We expect to repay the acquisition debt well within next 3 years. That is it from my side. We now leave the floor open for Q&A. Thank you.

Moderator :

Thank you very much, Sir. Ladies and gentlemen, we will now begin the question and answer session. The first question is from the line of Pratik Mandhana from Nomura. Please go ahead.

Pratik Mandhana :

Thank you for the opportunity. Madam, my question is more towards the industry side how do you expect the B2B versus B2C industry growth rates and as you said company is pushing on EBITDA margin expansion through B2C and I see that one of our peers who mainly operates in B2B has much higher EBITDA margins than the B2C players, so how do you explain that?

Ameera Shah :

Let me talk generally about it, I do not want to comment on any specific company, but the issue was not about B2C or B2B I think that is a incorrect comparison, I think the focus is about test side, which is what helps in determining profitability and the product mix, so what happens generally is let us say if you are having a B2B business and you are offering a large segment like us for example, 4000 varieties when the kind of customer that comes to you is a customer, which is referred to by a specialist because they believe our quality, they want to get a specialized test done, but when you are offering all 4000 variety of tests, we are not able to necessarily make the same margins on our test. There will be many tests for which the volumes are low and therefore your margins are low because we do not have the economies and scale, but in providing the complete product portfolio you are able to get a much higher stickiness of business because there are another few people who are providing those kind services in the country. There are other models, which are to focus on smaller test menu only 100 or 200 tests and try to build volume in those few hundred tests, so these are very different models and I do not think there is a variable at all in terms of profitability. Now when we talk about B2B and B2C, if let us say a company like us was doing 4000

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varieties of tests then we are doing B2B in a good quality, the margins are still good, you are controlling your discounts, you are controlling your service cost, etc., and your business is not being driven from this discounting to customers, but your business is being driven through your services, your quality of reports, your scientific foot forward, but obviously B2C will give you a further stickiness of your brand because you are dealing directly with the end patient and the end doctor, you are not dealing with the middle channel, which is the P2P, so therefore our belief is that we would like to continue to built on the B2C part of the business directly focusing on the focus cities that we have mentioned, we have reached now 61% B2C ratio as of this quarter in our focus cities and our goal we are always maintained up to 65%, we are well on our way there and we believe this will not only give us a better stickiness of business, but enhance profitability as we are seeing playing out in our operating margins as well. Going forward I think B2C part of the business so far has recovered a little bit better because like hospitals are still providing COVID care and therefore not fully seeing non-COVID patient also the smaller labs some of them have shutdown, some of them are still not operating and therefore B2C part of the business is growing a little faster at this point in time.

Pratik Mandhana :

That is helpful, Madam. Just one more thing if you can like you gave the growth expectation for the market, if you can spilt the growth expectation like B2B and B2C, which is expected to grow faster for the market as a whole and secondly what kind of EBITDA margins do we make on B2B and B2C if you can even give a qualitative sense like is B2B EBITDA margin higher for our company or B2C EBITDA margin higher?

Ameera Shah :

Generally for the industry like I said my expectation is B2C will grow little bit faster than B2B in the coming many months from various things I mentioned. Specifically for Metropolis we would not be able to give a guidance on growth, but as far as margin profile there is probably a difference of 7% to 8% or I will say between 5% to 10% between B2B and B2C in terms of margin profile, again we do not do our profitability separately in terms of B2C and B2B so I cannot give you accurate numbers because at the end of the day we are using shared infrastructure and therefore we will not be able to give for that.

Pratik Mandhana :

Just to confirm that B2C is higher by 5% to 10%, my understanding is correct, right?

Ameera Shah :

Yes.

Pratik Mandhana :

Madam, our home collection is increasing, so how is the profitability in those tests so how will that impact company’s profitability in long-term and one more thing like with increasing online aggregators, how do we expect our B2B and B2C to move so what will happen to the industry and Metropolis?

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Ameera Shah :

So, you first question is on home service profitability, I think we had mentioned in the last few calls also that we believe home service profitability to be good, we therefore have been seeing also home servicing increasing we are seeing some of that benefit of the operating margin come to bottomline as you see in the EBITDA expansion. So we do not see any large concern there because home services is a pull and not a push product a t this point, we are not doing any of these activities where we are incentivizing customers or promotions, but we are doing it more like a pull, which is based on our service and quality so that is one and as far as the aggregators, there are very few aggregators in the system at this point in time and they have been largely pre-COVID focused on wellness and I think that continues, I do not see too much of a change if wellness is picking up I am sure they stop the pickup business again. We have not seen really coming to the illness space in any significant way and because in the illness space finally where you get your test done is depending on what the doctor accepts. It is not about only what the patient says I can get the cheapest price and therefore if aggregators are building businesses at market places where they are offering products to the multiple different providers, but if aggregators are chosen to give their own lab report then of course that may or may not be accepted by the doctor and in the aggregator space we are partner with the few aggregators where we are giving our own report as long as the terms are fair.

Pratik Mandhana : Thank you, Madam. That is helpful. That is all from my side.

Moderator : Thank you. The next question is from the line of Chandramouli Muthiah from Goldman Sachs. Please go ahead.

• Chandramouli Muthiah : Good morning and thank you for taking my questions. The first question was on the nonCOVID realizations seems to be a steady pickup even quarter-on-quarter, I think last quarter it was about 926, this quarter is 959 and the previous fiscal year was closer to 870, so at this time I understand there has been again a quarter-on-quarter improvement in nonCOVID size per patient, so what part of this is sustainable and could you just talk us through some of the other factors involved with IL-6 and D-dimer sort of name a part and if there are other factors that were involved?

Ameera Shah : Vijender, you want to take that?

Vijender Singh : Yes, in fact this non-COVID business actually if you look at our business mix as Ameera mentioned that our home visit contribution is also significantly growing and it has grown by almost about 34%, so where the revenue per patient is pretty much higher even higher than the walk-in patient, so this contributes to higher revenue per patient and then second is importantly we look at the retail contribution of our focus cities where today we are talking about 61% retail contribution coming from focus cities, so all these yields the increase in

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non-COVID revenue per patient and then of course third important part is, is the test mix where our specialized contribution has gone up by 240% approximately so these three, four things impact the non-COVID and in terms of future also as the home visit contribution goes up today we are covering almost about 59 cities so once we further penetrate into other cities we expect that non-COVID at least should grow at a decent revenue per patient.

Chandramouli Muthiah : Got it and just a followup to that can you let us know what is the non-COVID volume trend looking like Y-o-Y

Vijender Singh : Yes, in Q3 I think non-COVID volume has also picked to some extent as compared to Q2, but still not back to normal, but yes, definitely it is growing.

Chandramouli Muthiah : Got it, that is helpful. My second question is on the antibody testing, so I think we counted as part of our non-COVID sales, so I just wanted to understand last quarter I think we did 100 Crores of RT-PCR revenue and about 10 Crores of antibody testing, so this quarter I think is about 51 Crores RT-PCR, but just let us know what is the antibody revenue was this quarter?

Vijender Singh : Yes, COVID revenue has been at 50 Crores and almost about I think 2.5% contribution has come from rub off test.

Chandramouli Muthiah : 2.5% of the total revenue is from rub off test?

Vijender Singh : Yes.

• Chandramouli Muthiah : Got it and antibody realization has that come down Q-o-Q or as I understand there is not too much antibody testing, right it is only on the RT-PCR so at this time to understand the antibody realization as well?

Vijender Singh : Since it is not that significant as of now, but we are definitely concerned about the antibody because post-vaccination also patient would need to monitor their antibody levels hence we expect that antibody should pickup, but till now it has not been that great because the acceptance of antibody has not been there still RT-PCR rules in terms of acceptance, so it is not that significant, but however, on the revenue per test of antibody has been more or less stagnant, but in some states there has been capping also.

Chandramouli Muthiah : Got it, that is helpful. Thank you very much and all the best.

Moderator : Thank you. We will take the next question from the line of Praveen Sahay from Edelweiss Financial Services. Please go ahead.

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Praveen Sahay : Thank you for taking my question and many congratulations for a very strong set of numbers. Madam, one thing on the margin sustainability side, definitely you had highlighted about the B2C specialized test than home visit, but this 31.5% of margins for back-to-back two quarters, is there any element of one-off in that and how sustainable these margins are?

Ameera Shah : See the margin expansion is a combination of two factors, actually three factors, one is the volume obviously coming from the existing infrastructure, which means the economics scale benefit and has come through COVID testing coming into existing infrastructure that is one. Number two, it is out of better cost management and driving efficiency on the side of Metropolis through our own efforts and number three is a product mix and channel mix. So I think the second and the third are sustainable because those are under our influence, but the first one obviously is not under our influence. As the COVID volumes decrease as we go forward, I think definitely there will be some impact as far as the margin portfolio in terms of the sustainability of EBITDA margin, but number two and three, the product mix, channel mix as well as the cost stability that we believe can sustain. There is no one-off.

Praveen Sahay : So, COVID volume definitely is going to go down from here, so any quantification you can do on the margin front, how much that can be sustainable for you?

Ameera Shah : Very difficult actually because they are all in the same infrastructure, but obviously difficult for us to give you a quantification at this point.

Praveen Sahay : Second question on the digital media leads as you had highlighted 21 Crores of revenue you had generated for this quarter, so how big you wanted to make this as a percentage of the sales and what initiatives you have actually taken in that, is that just a geographical penetration you are increasing or getting a revenue or is there something else to know about?

• Ameera Shah : Digital of course is a part of the journey as you know in healthcare digital has not played any role and if you compare this a year ago digital revenue was probably less than 1% of our revenue in the same quarter and today it is about 8%, so clearly I think COVID has played a role as we have been mentioning in the last few calls on getting some customers and patient to actually start to use digitalize as a medium not always to provide services that are provided, but at least from a booking perspective and people are using this as a medium in healthcare which was never the case before.

Praveen Sahay : So, any aspiration as a percentage of sales you want to generate revenue from the digital?

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Vijender Singh :

See, in our internal discussions what we are currently doing, we are trying to track our issue between click versus brick, this is a loosely used term in our internal discussion, but primarily going forward we want to track this because accordingly we will start allocating our resources so as of now this click business contribution is close to 8%, however, on the other side our footfalls to centers has also started increasing, so we will keep a track of this issue and then accordingly allocate resources, but yes on digital front we would continue to focus from marketing point of view.

Ameera Shah :

I am sorry, Vijender answered the question, just to add to that there are many things, which can be done digitally, one of course is where we can do targeting new customers and patient who are not the part of the Metropolis family before and bringing them into the ecosystem, which is obviously one part it. There are also other ways of actually now newly engaging with the patients and doctors to actually make it easier for them to be able to interact with us whether it is through providing more information, educating them on products these are very technical product that we sell, so using that as an opportunity to create engagement and education, giving them the chance to book the transaction, talk to our pathologist, interact with us and also to be able to get services could be tracking their reports, it could be looking a fast report, there are many such features, which has been introduced now through digital, which basically brings the consumer and the doctor closer to Metropolis. Now how this will evolve and what are the consequence of it I think we will find out along the journey, it is very difficult to sort of put a number and we are heading towards that, but we are very hopeful by the early reactions that we have seen and we believe that we will continue to track this and this will be a new parallel track for us.

Praveen Sahay : Great, Madam. Lastly on the home testing as you had extended to 59 locations, so do you have any target of reaching out to newer locations, how much more to add in that? Ameera Shah : So, we are planning to get to about 200 locations by the end of 2021. Praveen Sahay : Great. Thank you, Madam and all the best. Moderator : Thank you. The next question is from the line of Arpit Shah from Stallion Asset. Please go ahead.

Arpit Shah : Good morning. Just wanted to understand how the realization would differ between lab and home testing and also how the unit economics would trickle down from that if the lab testing like Rs.100 and the home testing would be Rs.110 or Rs.115 and how the raw material cost and other expenses will pan out in terms of unit economics?

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Ameera Shah :

I think again, the lab and home testing are not the only two channels, right, so you are asking on resuming in terms of a walk-in patient, who walks into the lab verus the patient who does the same test at a home testing, right, so usually what happens is that when you are doing testing at home while the appointment may be booked for one person at home, sometimes other members of the family may also use that opportunity to come to the lab and get testing done as of course is not a constant, but happens in some cases, does not happen in all cases, while in walk-in is usually one patient for walk-in, that is one difference. In terms of unit economics, home business is actually more profitable from the perspective that you do not have physical centers where you are paying rent and your personnel is not sitting there always, but in mobile and therefore able to go and fulfil sort of an entire area versus waiting for patient to come to them, so therefore home business we believe are more profitable than walk-in to a laboratory and of course when you also say walk-in number we have multiple channels, one is PSC, which is our own center, we also have partner franchise centers, we also have doctor collection centers, so there are many different on the commercial and sharing one actually different in all, so it is very difficult for me to give you off the bat answer, but generally you will find home visit to be more profitable.

Arpit Shah :

That realization we got 10% or 15%?

Ameera Shah : Again, it depends on which channel we are talking about, if you are talking about walk-in patient, the realization of home visit will be similar or slightly higher, but if you are talking about for example, that is a walk-in patient to our own center, if I talking about walk-in patient in a doctor center, realization are much lower, so again in the B2C, the different channels give you different realization even within walk-in.

Arpit Shah : Okay, just a followup on that where do you see the revenue mix of home testing move from 11% or 12% revenue in the next year?

Ameera Shah : Sorry, revenue of home test?

Arpit Shah : Home testing moved from 11% of total revenues now to what percentage of revenue mix in next year?

Ameera Shah : We do not have a quantification at this point of time what direction it is growing because we also do not know how consumers are going to behave post-COVID, so home business trend and all of this of course has increased a lot in COVID and we believe that it will continue. Our internal goal would be we would like to double this number as a percentage of revenue, but that is the matter of 2 years, 3 years, or 5 years I think it is very difficult to comment at this stage.

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Arpit Shah : Got it. Thank you.

Moderator : Thank you. The next question is from the line of Yash Gupta from Angel Broking. Please go ahead.

Yash Gupta : Good morning everyone. Thank you for the opportunity. First question, we have close down around 254 service network in this quarter, how much revenue we have lost due to it, any quantify number? Vijender Singh : Yes, the revenue loss actually cannot be quantified yearly basis, but largely if you take an average would be about close to almost about 1.5 Crores approximately, however, some of the business has been moved to B2B also, its not that we have shutdown the centers, but some of them were potential for future growth and those have been converted to B2B. Yash Gupta : Okay, followup on that where we can see this number to go from 2477 service center within the next one year, what is the thought process behind it, where we want to see within a year? Vijender Singh : In fact we initiated this expansion plan in Q3 and Q3 we have added almost about 100 centers and probably Q4 also we continue to add at least 75 to 100 more centers and then in future may be next year we will look at this position because we also track business, which are coming to our centers, which is again, which I just mentioned that we have to keep a track of ratio between digital versus patient walkin to our centers, so this ratio we are keeping an eye and bases on that we will continue to take our stances, but however, for next year probably we may take a stance where we may increase by another 500 centers approximately.

Yash Gupta : Thank you.

Moderator : Thank you. We will take the next question from the line of Sayantan Maji from Credit Suisse. Please go ahead.

Sayantan Maji : Actually a couple of clarification on the Hitech acquisition, one when you guys mentioned that this will be separated from day one what kind of amortization are you building in on that acquisition part?

Rakesh Agarwal : Just to give you a perspective right now we have not acquired and there will be a lot of evaluation and PP and everything will done as per the center requirement so we are just holding on our number on this, we have some calculation, but obviously we have that basically a management calculation we want to be very sure and that is the reason why we

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had mentioned that we will come back once we close the acquisition and close the deal and then we will come back with the specific numbers, which has to be given so just hold on for that.

Sayantan Maji : So, your guidance when you guided that EPS accretive this included amortization? Rakesh Agarwal : Yes, that includes everything and obviously overall number EPS is cumulation of everything at the end of the day, but obviously specific number is something which we would like to give it once we are absolutely clear on the numbers, but yes, from an overall calculation basis we are absolutely sure that this will be EPS accretive from the first year itself. Sayantan Maji : Because I was confused because this year revenues are so much higher... Rakesh Agarwal : Just to clarify that when we say first year basically we are saying 2021-2022, because 20202021 is any which way may not be in the picture at all so just to clarify that so when you are saying first year itself that basically means 2021-2022. Sayantan Maji : That helps and secondly can you just roughly indicate out of 83 Crores revenue the company had in fiscal 2020, how much was Chennai, was it 70% to 80% or 50% to 60%, you just mention majority can you just give some indication on the quantum revenue on Chennai? Ameera Shah : I request you just to hold on for a couple of months and we will definitely come back with all the details, just little bit of patience. Sayantan Maji : Thanks. Moderator : Thank you. The next question is from the line of Madana Gopal from Sundaram Alternates. Please go ahead. Madana Gopal : Good morning. First on, I do not know whether you answered this on the Hitech business are we giving some numbers in terms of you have mentioned EBITDA margins have improved and revenue has grown, so some sort of light there?

Ameera Shah : I am sorry, for which period are you referring to?

Madana Gopal : For FY2021?

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Ameera Shah : No, we have not given any numbers at this point of time and as we mentioned we will be happy to sort of once we close the transaction come back with lot of details on the business and how we are going forward. Madana Gopal : Okay, second on digital side, are we creating a platform to enable getting more customers so that our throughput increases or are we approaching this digital from a more broader perspective because there are many things that are possible because we have access to so many customers and getting many of them to this platform can create so many other monetization opportunities, so what is our thought process on this? Ameera Shah : The idea is definitely a larger scope and while of course we are moving after new customers, the idea is also how can we monetize our existing digital base, how can we create that as a services and engagement for potential upscale and profitability, so I think the idea is to really look at it as a general strategy not just as a e-commerce transaction and we are building all the pieces required for that and this is one of course for the patient, but there are also opportunity for the doctor potentially also B2B players so we are creating a larger framework and then we will come back as soon as we have very specific details of economics. Madana Gopal : As part of your this monetization thought process is it even selling healthcare related products financial as well non-financial can be a thought process or will be mostly restricting to the lab plus doctor something of that sort? Ameera Shah : We are exploring to see that there is an opportunity for cross sell and at the end of the day people, patients and consumers identify brand with certain products and we have to judge whether consumers will be interested in buying all the products for example, from a lab services provide, are there opportunities to do that, so those are a bunch of things that we will evaluate. I do not think that is something that we will do in the immediate sort of one or two quarters, but from a longer thought process, yes, definitely those are all opportunity we are looking at. Madana Gopal : Is there a team we have got somebody who is heading it from outside or it is an internal team, which is working on this digital transition? Ameera Shah : There is an internal team, we hired for digital in November before COVID, November 2019, and we have been working on the building block of digitalizing, this is not something, which is just decided and start, there are lot of technology people who have to be built, which is what we have been doing for 6 to 9 months after he joined and the digital revenue, which you are seeing are obviously a consequence of work that went in at that point of time. We are now enhancing the team and actually to make it look at from a broader digital

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strategy and we will be very happy to announce if there are new hire senior people have joined soon that is we are definitely expanding the team and so that we are able to look at it from a broader perspective.

Madana Gopal : Thank you so much. Moderator : Thank you. The next question is from the line of Neha from JP Morgan. Please go ahead. Neha : Thank you for taking my question. I just had one question on the realization, while it seems like the realization increase because of the pent-up demand in elective surgeries and specialized test, one what is our expectation of this continuing because we are still seeing hospital occupancy increase, second is if I were to look at like to like pricing let us say routine test versus routine test has the competitive pressure there changed versus preCOVID or do you think that would change in market given the revenue that labs have earned in the last year?

Ameera Shah : Sorry, your question is not very clear, you are asking are there increased pressure on the routine test side? Neha : Yes, I am just asking when I look at pricing for routine test let us say has the competitive dynamics in that changed after the revenue that some of the standalone labs have made over the last year, are you seeing lesser competitive players putting pressure on pricing and second is on our mix do you think the specialized component will continue to remain elevated in the near term? Ameera Shah : So, I do not think that there is any new pressure on routine testing prices because of COVID, because of any of the dynamics that changed during COVID, I think the situation is similar, if anything it is only a pressure from some perspective that obviously there is large reasonable amount unemployment in the country and we need to be sensitive to making sure that we are not further increasing prices at a time when many people are facing difficulties I think the only thought process is from that perspective not from a competition perspective.

Neha : And so the specialized mix is that expected to remain elevated over the next few quarter or do you think this is a one or two quarter phenomena, which will normalize very quickly? Ameera Shah : No, I do not think this is if not a one-off, it is not that the pent-up demand has come and all mandated in this quarter because in our industry at least I do not find too much of pent-up demand as a concept, may be people may be testing at a certain point in time that time has gone it is not taken suddenly later in the next quarter the tide will turn around, so I think the

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specialized test is a result of efforts going from our test, it think give or take a little bit of buffer instead of quarter-by-quarter I think we will see the range of specialized test in a similar number in the quarters to come.

Neha :

Understood. Thank you so much.

Moderator : Thank you. The next question is from the line of Suruchi Jain from Opportune Wealth Advisors. Please go ahead.

Suruchi Jain :

I wanted to check the overall ESG compliance at an overall company level, so wanted to understand going forward we would be using the ARC model or would that be completely done away and if you could explain the cost structure there a little bit verus the other two options that you are looking at?

Ameera Shah :

So, your first question was on compliance?

Suruchi Jain : Yes, the environment social governance compliance, so in terms of how does the company think about this at a management level?

Ameera Shah :

Sure, at present the thought process is very clear that the stronger the foundation pillars are the more sustainable the business in the long-term, so some from a regulatory compliance the idea is always to make sure that we sort of turn the line and I think from a governance perspective as you can see we have a very good board with good independent directors who add a lot of value and are really engaged and the idea is to keep encouraging between the management team to really think beyond the minimum requirements and to think more best in class practices and obviously as we know this is a journey, this is not switch that get me in one day because these things also take some time to put in, but I am very happy with the fact that we had progressed significantly over the past few years and I think we will continue to make that journey, so I think the overall thought may be for the directors to play that kind of an active engaged role and also to look at Metropolis in a fully strict view of kind of impact that we make on society and financial numbers are obviously very important, but a larger framework in terms of ESG and the kind of role we are playing we believe is equally important and therefore I think we are starting our journey also down in the direction of really looking at our performance in even more holistic manner so hopefully as we start the journey we will be able to report after a few quarters and we will be able to give you other monitoring mechanism to demonstrate the question that you are asking about governance and quantification.

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Suruchi Jain :

Fair enough and my second question was on ARC, just a followup on this, the current dividend of Rs.8 given that we still have debt on our books, so how does the company kind of decide whether to retire debt or give more dividend, do you have like overall framework?

Ameera Shah : I think on the ARC side and if you look at our network I think that we continue expanding, I do not think that there is any plan to shut down, ARC of course if there are nonproductive ARC as a part of routine hygiene those would be closed down if they have not significantly growing at all, but otherwise I think the plan is to continue to grow the network we are currently operating and I think about 210 cities and towns, it is not a 100% accurate number, but the idea is there are many more cities and towns in which Metropolis is not present and therefore we must continue to expand our visibility and cater to these markets so I think that will definitely continue. In terms of unit economic for ARC as you know it is a variable payout, so we do not have direct fixed cost, we do have indirect fixed cost, which are as we put our sales team, we support a little bit on marketing and branding, we support them on courier cost, but beyond that in terms of rent to the unit, cost like electricity all of the factors borne by the franchise and that is variable. So it usually takes may be for a pure B2B ARC usually the break-even is not far because they do not have larger cost in terms of rent etc., for a B2C franchise we find obviously the costs are more because they need to rent in a reasonably visible locations and therefore we usually do B2C franchise in our focus and seeding cities where the Metropolis brand is strong and can help the franchise to reach profitability. On the third question as far as dividend and debt and how we see it, dividend obviously is a matter of your performance of profits of the previous year and how you feel and look at liquidity, so I think we see these as two separate things, we do not see them necessarily overlapping, but of course having said that we have to be cautious and prudent and make sure we have a check that secures at least the balance sheet front and there is no point in weakening it and we are very comfortable we are continuing to declare dividend of a payout ratio of about 30% to 40% as we did last year and we felt quite comfortable in doing that without stretching ourselves. We want to create some sort of consistency for shareholders and investors in terms of dividend payout and realization, as we have always mentioned that M&A will be our first priority and we will use bulk of our internal capital towards M&A, which is what we are doing in this case as well, but at the same time since the company has performed well we would like to share that with shareholders.

Suruchi Jain :

Thank you so much. That is really helpful.

Moderator :

Thank you. The next question is from the line of Anuj Sehgal from Manas Asian Equities. Please go ahead.

Anuj Sehgal : Thank you. I actually wanted to understand what all revenue streams or channels you actually included in you B2C numbers, if you could give a sense of that and also you were

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Metropolis Healthcare Limited February 11, 2021

	talking earlier in terms of different kind of ARC center, so it could be helpful if you could
	break it down as to which all revenues are included in B2C and what is your vision?
Vijender Singh:	In B2C there are two different models, one is where patients walk-in to company owned
	centers it could be a testing lab or a patient service center, so one that number two - we have
	third party B2C centers also, which we call them as APSC, now the patient is walking into
	these APSCs are also part of our B2C, now within this we also have other model where we
	have created some centers in doctor chamber, which is a stop-and-shop kind of model, so
	there also patient walks into and whatever doctor prescribes those are considered as walk-in
	to that center so these are part of our B2C. Now, other than that there are other segments
	also home visit, wellness these are also part of our B2C centers. In case of B2B like ARC is
	a network of third party collection centers who actually largely caters to B2B business in
	other cities or non-lab towns and then other that that in B2B we also count competition
	smaller labs, bigger labs and hospitals also. These are all part of our B2B business.
Anuj Sehgal:	Just one clarification, as you said walk-in into your own centers, home visit, wellness are all
	B2C and third party B2C center is also B2C, but these are all the third party centers are
	primarily owned by franchise, right?
Vijender Singh:	Yes, third party owned by franchise.
Anuj Sehgal:	You are only counting the share of revenue that you are getting from there?
Vijender Singh:	If you know largely in APSC we collect gross and then at the month end we share the
	revenue and that become part of our variable .
Anuj Sehgal:	Got it and then the doctor chambers again is a similar assignment where you will collect the
	revenue and then share with them what is there?
Vijender Singh:	There it is a mix of both models because some prefer net, some prefer gross.
Ameera Shah:	The ARC model, which is the B2B franchise is all on net, the retial franchise like Vijender
	said is mostly on gross and then we pay back and most of the other models are combination
	or net.
Anuj Sehgal:	It has to be clear when you pay back it shows up as a cost in terms of the commission stage?
Ameera Shah:	But, these are not commission, these are revenue shares because they are performing, it
	shows up in the other cost.

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Anuj Sehgal : Understood. Thank you. Moderator : Thank you. We will take the next question from the line of Rahul Agarwal from Incred Research. Please go ahead. Rahul Agarwal : Thank you for the opportunity. Good morning. I had three questions, firstly on the nonCOVID side the way I was looking at the number the true like to like non-COVID volume if I remove RT-PCR, if I remove rub off test and I look at the volume number I was bothered with what kind of growth we are reporting and frankly speaking last quarter we had a discussion on this I had the same question and the anticipation was double digit growth should actually be a possibility going into third quarter, but may be the B2B is not really picked up to our expectation, so Ameera, essentially could you please help understand when do you see genuine 100% pre-COVID levels to be achieved on volume side from a patient volume side and what do you see growth going into next year because the base is really, really low this year, so obviously percentage wise the number looks higher, that is first my question to really understand the business? Ameera Shah : Couple of things, I think at the end of Q2 when we did the call we had actually clearly indicated that we expect Q3 the results to be much lesser than Q2 because Q3 always in our industry is a much weaker quarter because of festivity and therefore our own expectations and our own visibility so that the expected Q3 to be lesser than Q2, so I think the double digit growth is slightly unrealistic expectation that is one. Rahul Agarwal : Ameera, sorry to interrupt, but I am comparing it Y-o-Y, so I think the seasonality should be taken care of, right? Ameera Shah : Not always because again comparing Y-o-Y that you are comparing two years that has completely different issues, so for example, let us understand why does healthcare boom usually in Q2 and why does it come down in Q3 in a normal year, the reason is because you have monsoon season usually that happens in Q2 in parts of the country that Metropolis is and therefore there are lot of infections that happen as people could work during monsoon season and those infections play out into diagnostic centers and then people have to get treated, now usually what happens in Q3 time, when there is Deepavali and Dussehra and people are travelling the number of viruses in the air because you do not have kind of monsoon and number two because people are busy with festive season and other things they are not looking at their health as the focus area and they actually defer it probably to Q4 right, so there is elective surgeries, there is wellness checkup, so that there is a traditional seasonality that definitely plays into our industry, now number two, which we actually look at our last Q3 we actually had a higher base last year Q3 because we had declared that we taken price increase on the retail side in Q3 last year, so our base was anyway higher if you

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look at anywhere of the industry our Q3 numbers of last year were higher than most other people from a quarter-on-quarter growth from a traditional Q2 and Q3 last year was the same, which never happens normally Q3 is lower and therefore this Q3 you will see obviously a lesser growth because the base itself was higher last year that is one and therefore the normal festivity impact came in this year and therefore if you see given the month-to-month chart in our presentation where you will see October and December have actually shown a growth in non-COVID, but November, which is the Diwali month has shown a dip in non-COVID, so I hope that clarifies. Your question about non-COVID not coming back to full normalcy, I fully agree with you. I think the industry still not come back to normalcy, but I think partly it is, for example, when we look at we have dengue and malaria and other infections in any year we are not looking at the entire business or saying non-dengue and dengue because that is the infection at the time because that is the season at that point of time, but COVID happens to be that infection at this point of time, so we have to look at it little bit more holistically because when people are staying at home worrying about COVID they are not going out and therefore they are not getting other diseases and infections and they are more careful about health, so by now understand from a financial basis why we want to separate the two, but from a customer basis the two are completely combined so therefore it is very natural that at that time the COVID is growing and continuing, which is even today, but non-COVID is not going to come back into normalcy because the other infections are that much lower, so my sense is personally that we still see the complete normalcy like a pre-COVID area probably take another quarter or so postvaccination may be is the first quarter of next year we may see some kind of normalcy start to come back, but obviously this is very difficult to predict because there are many exceptional things, which may happen in a longer way depends on how long vaccination takes, it also depends on how government reacts to the lock down the fact is that for example, in state like Maharashtra we are still in lock down it may not appear on the road, but there are many people who are still, theaters are not working, mall are not working, etc., etc., so I think state by state, city by city the lock down restrictions are very different and the way they are actually enforced is very different, so short answer I think in my sense it will take at least a quarter more for the pure normalcy as we are talking about pre-COVID and that all depends on government and depends on the vaccination.

Rahul Agarwal :

Got it. Thank you for the detailed answer. Another two questions, I just quickly cover, so secondly on the margin side I mean if I look at the test mix is improving, the channel mix is improving in a favor of B2C, digital mix is improving, home visit is improving, so basically healthy realization, Hitech benefits obviously when you consolidate you will have some synergies basically coming more from the cost side you have pretty worth in a lot of similar things so essentially when I am looking at the revenue mix is all improving going forward and it is helping margins, your cost anyway you are controlling cost pretty decently well

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even this quarter employees as well other opex has been pretty low and hence you had a margin beat, what I wanted to understand is versus our understanding on the street as analyst basically assuming that Metropolis will improve margin going forward, but ultimately where this all settle at because we are looking at 28% going to 29%, 30%, 31.5%, 32 and then eventually I were looking at a 40% number or 45% number in the longterm where do we settle at here?

Ameera Shah :

I personally do not believe that 40% to 45% numbers is at all in our visibility and not even what we are targeting frankly the way we are looking at the business is that organized sector is still only 10% to 15% of the whole share and frankly our goal should be to increase market share with reasonable profitability and not only keep improving there are many labs, which are at 40% profitability, but none of them have still, so at the end of the day there will be a balance between topline and bottom line growth and for us I think the important word is balance, so I do not think 40% to 45% at all is a number. Where it can go, difficult to predict, but I believe that our current profitability levels and pricing I think in 28% to 29% we were at good profitability level and there is no real desire to keep expanding the profit, but desire to expand the topline, so I think we should really focus on from that perspective.

Rahul Agarwal :

Right, so basically assuming all these benefits flow through reasonably well 50 bps, 100 bps improvement a year should be reasonable, right, I mean nothing more than that should be like really focused for as in terms of target or something?

Ameera Shah :

Look, I think 50 bps, 100 bps is doable, but then we cannot look at this year as a base because you got economy of scale this year as a base, which may or may not come next year right, in the same way, so for example, I will tell you what is the difference is, when suddenly you have a thousands of samples as we say COVID coming into our existing infrastructure without adding too much extra servicing cost right of course we added a lot of home visits, but largely we were using our existing infrastructure then what happens is that it creates a further profitability around the line because you are not adding too much in infrastructure, but if the same revenue next year is replaced with non-COVID business, which requires additional servicing infrastructure then obviously that same margin profile is not going to accrue for the bottom so a lot of this depends on your channel mix, your product mix, and that is really going to decide whether it going additionally at 50 to 100 basis points from here or whether you will see a 100 basis points decrease the next year depending on how things play out, so again I would suggest when you are looking at Metropolis model look at a more consistent profitability model and so it will play out in that way.

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Rahul Agarwal :

Got that and lastly on this home visit side similar question, so obviously home visits have been increasing it is beneficial from a revenue per patient point of view, it is also beneficial because you said that long-term target is to double as percent to sale, now essentially excluding COVID it right now standing at about 26% of topline is that correct for B2C, that is what you have mentioned about?

Ameera Shah :

B2C that is right.

Rahul Agarwal : So, it is about 26% excluding COVID for B2C, which is about 25 Crores revenue, right?

Ameera Shah :

That is right.

Rahul Agarwal : So, you said you want to double it as a percent to overall business, which basically B2C business is that going to get achieved like pretty faster once you do that your March 2021 targets of 200 locations or you think overall where does it settle as a long-term ratio that is what I really wanted to understand?

Ameera Shah : I do not see this as a one year plan obviously the important thing will be to increase capacity and as we expand to the 200 cities that will also increase cost in the short-term so the revenue flow through and the profitability flow though is not going to come in the three quarters or in the next 12 months with the home visit expansion because if we were to expand to 200 locations in the 12 months revenue and profit mix will come close to that. So the way I answered earlier also was we would like to double it but that happens in 2 years, 3 years, or 4 years it is very difficult to predict at this point, it is consumer behavior which is changing very rapidly and this is really changing on a month-to-month basis and it is changing in every geography of the country while we talking about overall - every city is showing different dynamics even in terms of the market sentiment of how many people want to actually step out of their home. So we will definitely continue to track this quarterby-quarter, but at this point I think besides broad direction I am not sure how to give quantification target.

Rahul Agarwal : Alright, got that. Thank you so much. Really appreciate you time and effort to answer the question. A short question for Rakesh, just to double confirm the RT-PCR volume this quarter is it 3,50,000, is that correct?

Rakesh Agarwal :

Exactly that is correct absolutely.

Rahul Agarwal :

Thank you so much. All the best for future quarter.

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Moderator : Thank you. The next question is from the line of Hardik Bora from Union Mutual Fund. Please go ahead. Hardik Bora : Just a clarification I wanted to seek on the resolution that we are passing in the upcoming board meeting, on the enabling resolution to provide support of about 1200 Crores so we had a 500 Crores limit we are increasing it to 1200 Crores any rationale that you can share of that? Rakesh Agarwal : Yes, I will take this, so what happens is that we have taken the 500 Crores investment what we can make and that board gives an approval that you can go ahead up to that limit, so in the balance sheet we already had 130 Crores, which has been invested and with the acquisition of Hitech actually we are adding another 600 Crores odd, so basically that 500 Crores of blanket approval, which we have taken earlier has got breached so now because that has got breached it is mandatory for us go back to the board and say that you please give us a bit of a more blanket for us to invest so in that sense we have just increased the 500 Crores limit to 1200 Crores so that we can get that blanket, it is nothing directional, but it is just to cover up the Hitech and then just have some cushion for the future. I hope that answers? Ameera Shah : Yes, that does. Thank you. Moderator : Thank you. Madam, would like to add few closing comments that was the last question. Ameera Shah : Sure. Thank you everybody for joining us today and I hope we have been able to answer all your questions, but in general Metropolis continue to stand on a strong basis I think our growth and our EBITDA numbers are showing that and I think more importantly I think for building the strategic pillars for growth in the future continue to be reasonably strong. We are going to continue to drive in the strategic areas as we mentioned from home services, increasing B2C especially in our focus cities continuing to manage cost efficiency and really working on our digital strategy in much more detail, I think these are focus areas while we of course integrate with Hitech for diagnostic acquisition into the company to try and create the synergies out of that as well. We are very excited about the next few quarters and we will continue to share with you as things continue to go ahead. Thank you so much. Moderator : Thank you members of the management. Ladies and gentlemen, on behalf of Ambit Capital, that concludes this conference. Thank you all for joining. You may now disconnect your lines.

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