Dr Lal PathLabs Ltd (NSE:LALPATHLAB) Q4 FY23 Earnings Concall dated May. 11, 2023.
Corporate Participants:
Hon. Brig. Dr. Arvind Lal — Executive Chairman
Om Prakash Manchanda — Managing Director
Ved Prakash Goel — Group Chief Financial Officer
Bharath Uppiliappan — Chief Executive Officer
Shankha Banerjee — Chief Executive Officer of Suburban and Other Group
Analysts:
Rahul Agarwal — InCred Capital — Analyst
Prakash Kapadia — Anived Portfolio Managers — Analyst
Unidentified Participant — — Analyst
Lavanya — UBS — Analyst
Prakash Agarwal — Axis Capital — Analyst
Anish Deora — Nomura — Analyst
Nitin Agarwal — DAM Capital — Analyst
Cyndrella Carvalho — JM Financial Limited — Analyst
Rishi Mody — Marcellus Investment Managers — Analyst
Tanmay Gandhi — Investec — Analyst
Yogesh Tiwari — Arihant Capital Markets — Analyst
Praveen Kumar — Equitas Capital Advisors — Analyst
Zaid Munshi — Concept Investwell — Analyst
Sayantan Maji — Credit Suisse — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Dr. Lal PathLabs Q4 FY ’23 Earnings Conference Call. 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. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Siddharth Rangnekar of CDR India. Thank you and over to you sir.
Siddharth Rangnekar — Moderator
Thank you, Boman, and good evening everyone and welcome to Dr. Lal PathLabs Quarter Four and FY ’23 Earnings Conference Call. Today we are joined by senior members of the management team, including Honorary Brigadier Dr. Arvind Lal, Executive Chairman; Dr. Om Prakash Manchanda, Managing Director; Mr. Bharath Uppiliappan, CEO; Mr. Ved Prakash Goel, Group CFO; and Mr. Shankha Banerjee, CEO of Suburban and other group companies.
I would like to point out our standard disclaimer here. Some of the statements made on today’s call could be forward-looking in nature and actual results could vary from these forward-looking statements. A detailed disclosure in this regard is available in the results presentation. Which is available on the stock exchange website.
I would now like to invite Dr. Lal to share his perspectives. Thank you and over to you sir.
Hon. Brig. Dr. Arvind Lal — Executive Chairman
Thank you, Siddharth, a very good evening, and a warm welcome, to everyone present on this call. We are here to discuss Dr. Lal PathLabs Q4 FY ’23 earnings and I would like to take you all through the key developments and updates during the period under review. India requires quality diagnostics of scale. Over the years we have tracked gradual evolution of the way doctors and patients manage disease and health. Accurate diagnostics is increasingly contributing throughout the treatment process, including health management, disease detection, prognosis, diagnosis, treatment planning and post-treatment monitoring. We therefore continue to invest in creating an efficient technology that network, that’s get aligned with the growth in sample volumes.
To start with, I’m delighted to share the Dr. Lal PathLabs has stocked 15.5% growth in the non-COVID revenue in FY ’23, we have proudly served, about 27 million patients in FY ’23. This has come on the back of a sharp focus on core operations across country, including Tier two and Tier three cities and investments in the digital infrastructure. We have continued to make progress across our three strategic pillars, that is geographical expansion, creating a unique and specialized portfolio and augmenting the technology infrastructure for the future. The highlight was the unveiling of our Mumbai reference lab at Vidyanagar in January this year. This has immediately resulted in the increased testing of the high-end test and in the first — it is also the first private lab in West India, to have a BSL Level-3 bio containment lab.
This speaks leaps and bounds of our commitment to offer best-in class services to our patients by bringing accurate diagnosis at reasonable prices to the full. We also added a second electron microscope at our National Reference Lab in Rohini in Delhi. At this point, I would like to remind you that Dr. Lal PathLabs already has world’s largest histopathology testing center or load processing up to 1,400 biopsies a day and also the largest kidney biopsy testing center. We were the first private lab in South Asia and Southeast Asia to have an electronic microscope way back-in 2016.
Furthermore, I am pleased to share that we continue to work towards enhancing our technological capabilities. We have begun implementing an upgraded lab information systems and advanced tools like artificial intelligence and data mining. These have enabled us to achieve enhanced operational efficiencies and quicker turnaround times or TAT. We continue to add new tests to our test menu and have diversified our reach to higher franchise share of patient service centers. Our processes are tools to drive trust towards our brand and therefore, I think we are uniquely placed to both drive and benefit from the expansion in consumption of diagnostics forwards.
Thank you very much and I would now like to hand over the floor to Dr. Om. Over to you Dr. Om.
Om Prakash Manchanda — Managing Director
Thank you, Dr. Lal. Welcome everyone to Dr. Lal PathLabs Q4 and FY ’23 earnings call. I hope that you and your loved ones are keeping safe and healthy. I’ll share a few of the industry and business insights that I see emerging based on FY ’23 results. During the entire FY ’23 in quarterly commentaries, I’ve always been highlighting that we should analyze — annualize instead of what really trends. Now since the financial year is over the entire analysis becomes a bit more meaningful and we have full-year numbers in front of us of FY ’23.
While FY ’22 was operationally very challenging due to very-high incidents of Delta and subsequent overhang of travel-related tests requirements and [Technical Issues] like Omicron, etc. In contrast to FY ’22 we experienced FY ’23 turned out to be financially very challenging for the entire industry due to the following reasons. Number 1, nearly 80% to 90% decline in COVID and COVID-related revenues. The higher the contribution of COVID testing to the total revenue, because the challenge.
The second is inability to roll-back capacities and manpower and region stocks due to unpredictability of the future COVID demand pattern. On the other hand, FY ’23 also experienced uneven quarterly base and coupled with aggressive competitive activities further made it difficult for all of us in understanding the underlying growth trends. Now since FY ’23 is over, I really thank you friends. So, my faith is the following. Number-1, bundled packages have become way of life in our industry. Our contribution of [Technical Issues] first-fit to total revenue has further gone up to 22% in-quarter four. This means we are doing higher number of tests per patient and that’s very clearly visible in on sample volumes as well.
Number-2, our CAGR trends based on — this is our internal estimates, of a few large players, their data is in public domain that also include the inorganic assets and residual FY ’23 covered revenues over four years suggests that some of these players have experienced all put together [Technical Issues] growth rate of 10% to 11%. This may not be reflective of the entire industry growth, but if I look at all the data put together of — in public domain, I am seeing CAGR of 10% to 11%.
Number-3, after a long gap, we saw in Q4, some of the players have taken price increase and we also did little bit in the month of February. We will talk about that.
Number-4, as the pressure on margins buildup in the industry, especially on smaller and mid-sized players. We do see consolidation opportunities emerging [Technical Issues] however, valuation expectations and unavailability of quality assets will make this journey a little difficult. On suburban diagnostics, as a platform, we have now set for next phase of integration as Dr. Lal mentioned that we’ve built a state-of-art reference lab in Vidyavihar in the month of January this year.
Second is, as all of you know that COVID contributed nearly 50% of the total revenue of the suburban year FY ’22. It is now down to just 6% in FY ’23. The stage is definitely set for next phase wherein we plan to bring in and now back-end synergies between the parent company LPS [Phonetic] as well as suburban diagnostics and go further aggressive in Mumbai and Western India [Phonetic]. In the end, I would say the brands that have the trust of the patient and medical fraternity holistically invested in-network creation, infrastructure scale-up, patient services, etc., will sustain and grow in the long-run.
With that now, I would like to invite our CEO, Bharath to continue this conversation. Thank you and over to you. Thank you, Om. A very good evening to everyone present here and I warmly welcome you all to our Q4 FY ’23 Earnings Conference Call. I will now take you through some of the operating and business highlights of our company. In Q4 FY ’23, we registered 6.3 million patient visits, generating a total revenue of rupees for INR491 crores. COVID [Indecipherable] has declined 83% and contributed to only INR11 crores. That it’s just 2% of the overall revenue. During the full financial year, we registered 26.9 patient visits and generated a total revenue of INR2017 crores. You would remember last year in Q4, we had a pronounced Omicron wave of COVID with high testing volumes, comparable to the end of Delta wave. As a result, test mix profile shifted significantly. Hence for analysis purposes one must look beyond Y-o-Y growth and use other metrics like sequential in 3-year CAGR numbers. Our non-COVID revenue at INR480 crores registered a Y-o-Y growth of 14.4% and follow historical sequential trends within Q3 and Q4. The tests per patient also moved up, from INR2.48 rate in Q4 FY ’22 to INR2.76 in Q4 FY ’23 representing 11.2% growth in non-COVID tests conducted. Underlying non-COVID patients visits in the organic business grew nearly 8%. As you’re aware, we had taken some price corrections in the month of February ’23, the same has got settled and has been absorbed by various segments of our customers. According to our estimates, this price correction has had a 1.7% impact in this quarter and 2.7% [Phonetic] on the ongoing basis. We have been focused on four strategies programs. Building a bundled test portfolio [Technical Issues], super specialty business, enhancing digital capabilities and geographic expansion including serving Tier-3 and Tier-4. Like Om mentioned our bundled tests portfolio continues to do very well and it contributed nearly 22% of Q4 ’23 of non-COVID business. Overall, trusted portfolio generated a revenue of INR370 crores in FY ’23. [Indecipherable] portfolio led by genomic testing division Genevolve, Center of Excellence for Reproductive Diagnostics, L-CoRD and Center for Autoimmunity Excellence L- ACE is becoming, similar to the Swastik portfolio in size and growth rate. Our expansion program aimed at reaching the interiors of the country in Tier-3 plus towns our Bharat continues unabated. We now have 277 labs at the year end at year end, including 17 labs at Tier-3 like [Indecipherable] and Sulthanpur in the North. We continue to invest in scalable and profitable digital programs combined in medical excellence and leveraging digital and analytical capabilities, improve patient journey. I would like to talk about three visual properties recently launched and scaled-up today, namely Chips, Recommendation Engine, and Patient Wallet. Our Chips customer health improvement plan is designed to engage our patients digitally with personal personalized digital interventions — digital diagnostic interventions. Further, we have made an Recommendation Engine that share the specific tests at the point-of-sales. All these programs, combined with the Patient Wallet will provide personalized scalable digital customer relationship management program. We are receiving good customer traction on this program since their launch. We believe we have the right set of building blocks which we have put in-place in the marketplace with a few more in the pipeline and this we believe will help us deliver industry-leading growth rates. With that I would like to invite Ved to take you all through the financial performance. Over to you, Ved.
Ved Prakash Goel — Group Chief Financial Officer
Thank you, Bharat. Good evening, everyone, and thank you for joining this call. I am now sharing some of the key financial highlights for Q4 and FY ’23. Our non-COVID revenue for Q4 FY ’23 came in at INR480 crores versus INR420 crores last year same quarter. A growth of 14.4%. Whereas FY ’23 non-COVID revenue came in at INR1954 crores versus INR1691 crores last year, a growth of 15.5%. Total revenue for Q4 FY ’23 came in at INR491 crores against INR486 crore last year same quarter, a growth of 1.1%.
Total revenue for FY ’23 came in at INR2,017 crores versus INR2,087 crores in FY ’22. Revenue realization per patient for Q4 FY ’23 is INR774 against INR728 last year same quarter, an increase of 6%, led by price increase, test mix and higher contribution of Swastik. Normalized EBITDA after eliminating the impact of RSU, PSR and one exceptional expenses for Q4 FY ’23 trees came in at INR131 crores and INR528 crores for FY ’23. Normalized EBITDA margin for Q4, is at 26.6% and 26.2% for FY ’23. Normalized PBT after eliminating the impact of notional depreciation on account of consolidation of suburban financial for Q4 FY ’23 came in at INR102 crores versus INR94 crores in last year same quarter. And INR400 crores for FY ’23 versus INR494 crores in FY ’22. Normalized PBT margin is 20.8% for Q4 FY ’23 and 19.8% for FY ’22 — sorry, FY ’23. Normalized PAT for Q4 FY ’23 came in at INR76 crores versus is INR73 crores in Q4 for FY ’22 and INR297 crores for FY ’23, versus INR369 crores in FY ’22.
Normalized PAT margin is at 15.5% for Q4 and 14.7% for FY 23. Cash-and-cash equivalents as on March ’23 is INR838 crores. Net of borrowing, is INR601 crores. I’m pleased to share that our efforts towards optimizing costs and increasing the operational efficiency by using the technology and digital tools has resulted in reducing our debt [Phonetic] outstanding and inventory to 28 days now. So, one-side we are doing efforts on front-end, patient side, as Bharat mentioned that digital technology has given the hedge. Another fact on the operational side, we are taking technology and tools to optimize the cost.
Finally, we are pleased to share that the Board of Directors has proposed a final dividend of INR6 per share. With this the total dividend for FY ’23 is INR12 per share. Final dividend will be paid after the shareholders’ approval in the upcoming AGM. This brings me to the conclusion of my opening remarks, and now I would request the moderator to open the forum for Q&A. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] Ladies and gentlemen we will wait for a moment while the question queue assembles. The first question is from the line of Rahul Agarwal from InCred Capital. Please go ahead.
Rahul Agarwal — InCred Capital — Analyst
Yeah, hi, good evening. Thank you for the opportunity. Two questions, firstly, I noticed revenue mix largely shifting to outside Delhi NCR. So, obviously, other geographies are doing better. B2B is bit higher Y-o-Y and [Technical Issues] is obviously growing faster. All of this combined, on the question for you, does this result in margin dilution for fiscal ’24 for Y-o-Y? That’s my first question.
Om Prakash Manchanda — Managing Director
Margin dilution for FY ’24 you said?
Rahul Agarwal — InCred Capital — Analyst
Yeah.
Om Prakash Manchanda — Managing Director
We don’t think so we — we our margins if you look at our nearing our pre-COVID levels with the COVID impact is also even in FY ’24 also, we believe that we should be able to sustain [Technical Issues].
Rahul Agarwal — InCred Capital — Analyst
In-spite of these three things, gaining revenue-share? Delhi, outside our B2B and [Technical Issues].
Om Prakash Manchanda — Managing Director
Yeah, you see outside NCR one must realize that as the scale picks up there are there are markets, which actually mimic like Delhi NCR. And if you notice in the last sort of four to five years, our expansion through lab network is actually not that fast as it seems to be earlier. Because most of it is now building through hubs [Phonetic], where our tendencies is now to open more collection points [Technical Issues]. So, I think we are actually optimizing the costs [Technical Issues] our margins don’t get dilutive. So that’s the way we see it. And in any case, if you look at earlier portfolio mix, we always had some markets which are operating on a lower-margin, but our risk not now is fairly scaled-up margins are there pretty healthy there.
Rahul Agarwal — InCred Capital — Analyst
Perfect, got it, and secondly again [Speech Overlap]
Om Prakash Manchanda — Managing Director
Variation is not material enough, so that’s the way [Technical Issues].
Rahul Agarwal — InCred Capital — Analyst
Got it, and secondly, on the growth side of it, obviously, the starting first quarter of fiscal ’24, the base is supportive because we no more have very large COVID revenues. Life is coming back to normal. Obviously, that helps in getting normal diseases and hence normal testing for non-COVID should pickup. Employee attrition is generally low now in favor of digital labs and what I understand from term checks [Phonetic] and obviously growth outside Delhi NCR is faster than Delhi NCR. So combined of all of this, do you see 13% to 14% revenue growth next year?
Om Prakash Manchanda — Managing Director
So, I think instead of me putting a number, clearly I do believe that we entered in FY ’23 on [Technical Issues] digital outside environment in FY ’24, as you — you outlined it very well pressure on attrition is very low. Our [Indecipherable] fixed-price increase there. We have demonstrated that COVID pressure should be rolled back capacity on large. We buy some more stocks etc. That is also behind us. So, the good news is that we are now entering into FY ’24, in a bigger slate, with a less sort of headwinds compared to what we saw last year. I think overall it augurs well. Now coming to growth rate, it’s very difficult to put a number right now, but I definitely do believe that they should do better than what we’ve done previously.
Rahul Agarwal — InCred Capital — Analyst
Got it. Perfect. And lastly, just a bookkeeping, the 26.6 million patients non-COVID for full-year, could you break-down that into Dr. Lal and suburban separately.
Om Prakash Manchanda — Managing Director
For FY ’23?
Rahul Agarwal — InCred Capital — Analyst
Yeah, 26.6 million patients.
Om Prakash Manchanda — Managing Director
We have that number.
Bharath Uppiliappan — Chief Executive Officer
So, Rahul, because we have not — the suburban was not fully maintained this year. So probably these numbers, may not give the right picture. So, at this point, I think this is the consolidated number we have.
Om Prakash Manchanda — Managing Director
For us, if we look at suburban so far our tendency was to show separately, because in some quarters, we didn’t have a base. So now since that sort of issue is no more with us, we want to operationally see as if like both [Technical Issues] and suburban, they go hand-in-hand together. So we would want to actually highlight suburban separately if that’s available, that’s the way we look at it.
Rahul Agarwal — InCred Capital — Analyst
Can I get it for fourth quarter in that case, that’s the Y-o-Y comparison, right?
Bharath Uppiliappan — Chief Executive Officer
But I’ll come back to you.
Om Prakash Manchanda — Managing Director
The number, I think is immediately not available with us, we’ll come back.
Rahul Agarwal — InCred Capital — Analyst
Okay, perfect. I’ll come back-in the queue. Thank you so much. All the best.
Om Prakash Manchanda — Managing Director
Thank you.
Operator
Thank you. The next question is from the line of Prakash Kapadia from Anived Portfolio Managers. Please go ahead.
Prakash Kapadia — Anived Portfolio Managers — Analyst
Yeah, thanks for the opportunity. Couple of questions from my end. There have been price hikes in the industry by new age players, any change in competitive landscape we are witnessing? And given that growth in industry have generally come down post COVID, so any acceleration or any trends, we are witnessing or sensing shift from unorganized or shift from regional players for national players like us, that is the first question.
We also taken some price hikes in our portfolio. So, if you could help us understand the impact of revenues for FY ’24 and is it in speciality? Is it in packages? Is it in specific geographies? If you could highlight that. And the third question is, you know, in our endeavor to drive organic growth, what should be the key drivers for that in FY ’24 and beyond? So obviously suburban scale is one of the factor, but how is non-metro contribution shaping up? How is the new patient addition happening, new tests? Some of these points will be helpful if you can clarify.
Bharath Uppiliappan — Chief Executive Officer
Hi, Prakash, this is Bharat here.
Prakash Kapadia — Anived Portfolio Managers — Analyst
Hi, Bharat.
Bharath Uppiliappan — Chief Executive Officer
Let me start with the first question on how the competition intensity shaping up in the industry right?
Prakash Kapadia — Anived Portfolio Managers — Analyst
Yeah.
Bharath Uppiliappan — Chief Executive Officer
So, there are two-three ways to look at it. One is that the incumbent players and let’s say some of the newer traditional players model players let’s say for sake of any other better word, continue to intensely be competitive in the marketplace. So, there is no let down on that count. So, including new entrants, regional labs chains, etc. all continue to compete very aggressively in the marketplace like in the past. What we are seeing is that some of this new-age E-com based Google advertising, Facebook advertising, based companies because of it may be funding pressure or because they not able to see the traction themselves, are scaling down, let us say, deep discounting because patients are also now realizing that these discounting’s are actually click bait [Phonetic] operation, that is they finally end-up paying the money they pay similar money to what we pay to one of the incumbent players.
So, I think, it is all catching-up and the industry is a bit of a transitionary phase. Everyone is trying to innovate and try and do the best he can. So that is the way to look at the land competitive landscape today, but yes, advertising intensity has mainly come down at least from an ATL [Phonetic] above-the-line perspective. Digital media competition still continues very intensely.
Prakash Kapadia — Anived Portfolio Managers — Analyst
Okay, okay, so [Speech Overlap]
Bharath Uppiliappan — Chief Executive Officer
This is going to take time.
Prakash Kapadia — Anived Portfolio Managers — Analyst
So, Bharat effectively you are saying this would take time and there is no major shift it’s — it’s maybe the pace has decreased, but it remains as competitive as it was.
Bharath Uppiliappan — Chief Executive Officer
Yeah, yeah. [Technical Issues] I think the world has come to a new age — new world wherein less competition and things back. It is still intensely competitive. All of us fighting for our share of the business. But some segments of competition has kind of come down.
Prakash Kapadia — Anived Portfolio Managers — Analyst
Okay, okay.
Bharath Uppiliappan — Chief Executive Officer
So, the second question revolves around just remind me on…
Prakash Kapadia — Anived Portfolio Managers — Analyst
It was about price hikes which we have taken. So is it for specialty portfolio? Is it specific geographies and the impact of that, if any, on next year and going-forward?
Bharath Uppiliappan — Chief Executive Officer
So, we have not taken any price increase on routine tests, and the most commonly ordered tests, including packages. So that is a first statement I would like to make. We have taken price increase on what is really is on [Indecipherable] test, high-end test, done in reference lab only and so on and so forth. And I talked about that in the what I would call the opening speech, a 1.7% impact for this quarter and 2.5% estimated going-forward assuming the mix holds up.
Prakash Kapadia — Anived Portfolio Managers — Analyst
Okay, okay.
Bharath Uppiliappan — Chief Executive Officer
Right, it was not geography specific, it is pan-India basis and really blood tests which are less frequently ordered for consumers and patients, [Technical Issues]. The good news is that all of the partners from where the samples predominantly come from have largely accepted the price increase. We are not finding major impact or push-back as a result of this, because it’s been long overdue. They also realize that they have also taken-up prices, so I think it is gone well and execution was planned for.
Prakash Kapadia — Anived Portfolio Managers — Analyst
Sure, that’s it.
Bharath Uppiliappan — Chief Executive Officer
And on the third question of growth levers going-forward, Dr. Lal covered this. Dr. Om covered this. I also covered this. There are three or four, please look at it. One is geographic expansion, in Tier-3, Tier-4 cities along with strengthening our metro city presence either in where we operate in Northeast also including Mumbai. So, there is A, is geographic expansion plan. Second, we have differentiated channel management programs. We talked about that, I think last quarters also on how do we manage B2B separately than B2C. We have talent management programs, driving growth through channel partners.
You obviously spoke about today, high-end testing is that the genomic testing all the Centers of Excellence on Reproductive Diagnostics or Autoimmune all key take aways to differentiate your business while delivering value to all stakeholders. The fourth is obviously getting the tech stack-up to share, so that we constantly provide an [Technical Issues] factor to the patient saying something new has happened. So, we spoke about the chips program today. We spoke about the recommendation engine and also the wallet.
Prakash Kapadia — Anived Portfolio Managers — Analyst
Right, right.
Bharath Uppiliappan — Chief Executive Officer
So, I know it’s a combination of what we have done traditionally with is geographic expansion, combining with obviously [Technical Issues] and super specialty portfolio and layering an tech component to that.
Prakash Kapadia — Anived Portfolio Managers — Analyst
Right, right, right. Fine, fine, that’s, that’s helpful. I have one or two more questions. Maybe, I’ll join back the queue. Thanks.
Bharath Uppiliappan — Chief Executive Officer
Thank you, Prakash.
Operator
Thank you. Before we move to the next question, I’d like to remind our participants to limit your questions to two per participant. If time permits, you may join the queue for any follow-up. Thank you. The next question is from the line of [Indecipherable] from Elara Capital. Please go ahead.
Unidentified Participant — — Analyst
Hi, good afternoon. Just a quick clarification, when you see the price increases you took will have an impact of 2.5% is that on your overall revenue or on just the portfolio on which you have taken price increases?
Om Prakash Manchanda — Managing Director
On the overall revenue.
Unidentified Participant — — Analyst
Okay and what are your plans for addition of labs for FY ’24 and ’25?
Bharath Uppiliappan — Chief Executive Officer
So, our lab expansion program continues, the way it has always been about 10 to 15 labs predominantly in Tier-3, Tier-4 cities spread across North-East and some portions of South and West.
Unidentified Participant — — Analyst
Understood. Great, thank you.
Bharath Uppiliappan — Chief Executive Officer
Thank you.
Operator
Thank you. The next question is from the line of Lavanya from UBS. Please go ahead.
Lavanya — UBS — Analyst
Hi sir, thanks for the opportunity. So I just wanted to understand margins for suburban, in this quarter just because last quarter we have seen a meaningful hit.
Bharath Uppiliappan — Chief Executive Officer
So normalized EBITDA margins for suburban for this quarter is about 11.2% and for full year it is 12%.
Lavanya — UBS — Analyst
Okay, so we are still seeing the impact of the new franchise opened on the margin from suburban.
Om Prakash Manchanda — Managing Director
So, no I think on suburban if you go back pre-COVID times that was the trajectory of the business in any case. I think during COVID times they experienced very-high leverage because suburban has experienced a very sharp drop of COVID revenue this year from nearly INR113 crores it has fall to this INR9 crore. The P&L shape is very similar to let’s say what it used to be pre-COVID times. But the important thing is that this has nearly platform of nearly INR155 crores of revenue. 80% of that comes from the city of Mumbai. And now with the sort of the support of Centralised Lab and LPL parent support, we are basically hoping to drive this both revenue synergies as well the cost side synergies, with a slight higher margins, but this is a margin which it used to have pre-COVID times.
Bharath Uppiliappan — Chief Executive Officer
And these margins, please note that we have launched this big reference lab in Mumbai. So, this quarter the only impact of that reference has also [Speech Overlap]
Lavanya — UBS — Analyst
Okay, got it. So, one more thing on the exceptional expense that you have seen in the current quarter, what was it related to? And I just wanted to, understand the tax-rate guidance that you gave for next financial year FY ’24?
Bharath Uppiliappan — Chief Executive Officer
So, this exceptional item is one large amount is receivable from BMC, Bombay Municipal Corporation. As per policy we have provided, but we are hopeful that this money will — will come to us very soon. And second, a small amount which has been provided for COVID inventory which is going to expire. So, these are the exceptional item.
Lavanya — UBS — Analyst
Okay, on the tax-rate?
Bharath Uppiliappan — Chief Executive Officer
Tax-rate, we have normal tax-rate, which is about 25% for the corporate. There is nothing which is exceptional here, normal tax-rate.
Lavanya — UBS — Analyst
Okay, thank you all the best. Thanks for the opportunity.
Bharath Uppiliappan — Chief Executive Officer
Thank you.
Operator
Thank you. The next question is from the line of Prakash Agarwal from Axis Capital. Please go ahead.
Prakash Agarwal — Axis Capital — Analyst
Yeah, hi, good evening. First question is on, just trying to understand the price increase, you mentioned it is for specialized test. How has been the experience versus the competition? Has the competition followed you? Have you lost some business because of price hike or it is status quo and it is value-accretive?
Bharath Uppiliappan — Chief Executive Officer
So hi, Bharat here. So, two-three things, one is that this price increase has gone relatively well. We were skeptical in the beginning, but I think the execution was near-perfect and communicating to customers on why this price increase and in the context of the overall tenure of the price increases this seemed to be logical and reasonable to them.
Number two, we explain the impact that over 2.5% on an ongoing basis on the overall portfolio, given the mix of the portfolio with which this price increase has been taken. Yes, now and we also have not taken price increase on the routine portfolio, the most common order test portfolio or the health packages and so on or the bundle test packages.
Now, with competition follow, each company will follow its own what I would call, policies, procedures, priorities, etc., but given the inflationary situation, the lowering of COVID volumes. I do expect that everyone will take price increase as per their areas of strength and what they think they should be doing. So yes, in industry price should start to move-up.
Prakash Agarwal — Axis Capital — Analyst
Okay, and the price increase would be only for your specialized which is about 30%, 35% or lower in terms of total volume value?
Bharath Uppiliappan — Chief Executive Officer
So, it’s on value basis, it is about nearly 50% of the portfolio is only we have taken.
Prakash Agarwal — Axis Capital — Analyst
Okay, and 50% [Technical Issues] specialized testing menu?
Bharath Uppiliappan — Chief Executive Officer
It is not only specialized — specialized plus I said less frequently order tests and so on.
Prakash Agarwal — Axis Capital — Analyst
Okay, okay fair enough. Okay and the second question was trying to understand the competitive environment in the B2B segment. We hear that the new players are getting very aggressive, especially on the B2B side. And your progress in the south, please? Thank you.
Bharath Uppiliappan — Chief Executive Officer
Yeah, so on the B2B side the responses that yes, it is as competitive as ever. We have put in-place multiple programs to better manage this channel and segment was channel like we do for patients so we have a B2B channel program, which is very intense and very well appreciated. And in fact, B2B is one of our fast-growing channels today as well compared to historical averages. So, we’re very pleased with the progress the sole approach of channel management program, on the overall revenue growth rates.
On South also progress is — continuous. We grew South at a reasonable pace compared to what I would call it the company growth rate. We grew ahead of the company growth significantly. So, I think, yes, we will continue to build deeper penetration in South and the geographies where we currently operate in.
Prakash Agarwal — Axis Capital — Analyst
So B2B, you would have grown what you’re saying, you’ve done well [Speech Overlap].
Om Prakash Manchanda — Managing Director
We have good growth rates on B2B.
Prakash Agarwal — Axis Capital — Analyst
And margin accretion or flattish?
Bharath Uppiliappan — Chief Executive Officer
Yeah, so if you manage the mix as well as, the cost structure well and there is also scope negotiate the backend costs. So I think it plays out well enough. Also, as the volume growth as testing efficiencies come in, we are able to amortize lot of control calibration cost etc.
Prakash Agarwal — Axis Capital — Analyst
Okay, fair enough, okay. I have no more questions.
Bharath Uppiliappan — Chief Executive Officer
Thank you.
Operator
Thank you. The next question is from the line of Anish Deora from Nomura. Please go ahead.
Anish Deora — Nomura — Analyst
Yeah, hi, thanks for the opportunity. Sir, I’m looking at the quarter-on-quarter sequential data 4Q and 3Q. So while the realization per patient has improved and even the number of tests per patient and the number of samples processed have shown an uptake, but if you see the number of patients, that is the patient volume, they have shown a decline over 3Q, which was supposed to be a seasonally weaker quarter a strong 4Q. So can you share your thoughts around this decline. And is it pointing out to any particular trend that you are seeing that we have a bearing on the coming periods?
Bharath Uppiliappan — Chief Executive Officer
So, on patient visits. I don’t think we should get swung by quarter-on-quarter movements. There is not a base issue last quarter this quarter and last year, this year, etc. Like I mentioned in the opening comments, our underlying patient visit growth rate is nearly 8%, visit to visit, number of tests performed, is at 11% and revenues obviously, highest.
Anish Deora — Nomura — Analyst
Got it, got it. Thank you, that’s from my side.
Operator
Thank you. The next question is from the line of Nitin Agarwal from DAM Capital, please go ahead.
Nitin Agarwal — DAM Capital — Analyst
Sir, thanks for taking my question. Two questions, one is on the operational base. We’ve seen some reduction in employee costs, on a Y-o-Y and Q-o-Q basis Likewise if I adjust for the — the one-off that you mentioned about INR7 odd crores, even other expenses are down. So, how — what should we attribute to these reductions to given the fact that business has been growing?
Om Prakash Manchanda — Managing Director
So, while we’re taking the statistics at an overall well — these business opening comment talked about use of technology, in automating our processes, etc. So that has given us a large headcount, what I would call leverage. But for specifics around rest of the equation Ved will take on.
Ved Prakash Goel — Group Chief Financial Officer
Yeah, so Nitin, so this is primarily because of RSU charge which is lower than last year. That is the precise reason for the compensation of employee cost. So, this is one. Other expenses, obviously we had lot of programs run in this year, I mean, last year where efficiency has been created as in my opening our remarks also. Lot of use of technology tools. We have created and duplication of the — replication of the work, which can be used by technology tools. So those have given some advantage and that’s why we have got some advantage on other expenses.
Nitin Agarwal — DAM Capital — Analyst
And secondly on the [Technical Issues], we have the full-year numbers and you have some more clarity on the post COVID trends, what is the realistic ballpark range that one should work with in terms of the patient testing volume growth for us?
Ved Prakash Goel — Group Chief Financial Officer
Volume means patients you are saying.
Nitin Agarwal — DAM Capital — Analyst
Yeah, patient volume growth, yes, going-forward. I mean on a directional basis it’s a late single-digit, early double-digit, mid double-digit, what is the realistic number that given the industry dynamics, we can work with?
Om Prakash Manchanda — Managing Director
See, it’s very difficult to put a figure, but as I made [Technical Issues] first question is on the losses. We do believe that FY ’24 numbers should really be greater than last year figures. I think all sort of variables are pointing towards that. We will not have that sort of a competitive scenario as we experienced last year. And as you mentioned that since COVID is not there actually. In one-way, good news as we have done with it and make money [Technical Issues] otherwise, invest in [Technical Issues] and now we can completely focus on non-COVID business. I think the only thing we are not having with us is, I think INR63 crore of COVID [Technical Issues] COVID in the life business in our phase. We don’t know, it’s highly unpredictable. It can actually [Technical Issues] as well. It could be same, but I think if I take that out, we definitely are hopeful of improving our performance metrics.
Nitin Agarwal — DAM Capital — Analyst
And just lastly on that, typically from a seasonal perspective is in Q4, supposedly a better quarter for the diagnostic business in Q3?
Ved Prakash Goel — Group Chief Financial Officer
No-no, I’ve mentioned in the opening speech, saying that sequentially Q3 and Q4 are similar for us. I think, it’s a fair [Speech Overlap]
Om Prakash Manchanda — Managing Director
I think we’ve also made this comment in the past, but I think for last two-three years, I’m seeing that the variation come due to infections. And for some reason, I find that you are not following the pattern because Q3 no more [Speech Overlap] anymore, even in Q3, also we are having lot of infections. So in some way Q3 actually has moved up. While in Q4, they have been similar. So that’s why the defense industry is much less than before. Let’s see how it happens this year. Because the COVID thing has always been there. Infact, we told respiratory infection in general has been there in the population. I think let just this wait out for FY ’24, but you’re right. Q3 is simply a softer quarter, but we have not seen that trend last couple of years.
Nitin Agarwal — DAM Capital — Analyst
And since you mentioned that point infections. We’ve seen very-high intensity of incidents rather of infections for the whole of FY ’23 which is reflected in, I guess the pharmaceutical sales of anti-infectives and all the cold and cough preparations. I mean has it had in your assessment, any tailwind for our business also.
Hon. Brig. Dr. Arvind Lal — Executive Chairman
Actually, respiratory infections is generally do not really selectively for very-high jump-in testing. In fact while we were all talking about during this month of April and even in March also we talked about COVID etc. We didn’t see that it sort of jump in COVID testing. But I think one place, which normally tends to work in situation like this is PRB inflammatory marker. So that is one place we have seen there a significant jump in this Q4. So CRP is wanted for the [Technical Issues].
Nitin Agarwal — DAM Capital — Analyst
And lastly, on the realization per patient, obviously with the bundling that we are doing, that’s sort of going up, we are what 780 or thereabouts for this quarter. I mean, how does one look at this number? Is there a significant scope for appreciation from these levels of this number?
Hon. Brig. Dr. Arvind Lal — Executive Chairman
I don’t think so. It has suburban cycles. I think there are few things that have gone into this one is of course bundle packages now contents going up [Indecipherable]. I don’t foresee a very sharp jump the [Indecipherable]. I think it should stabilize around December. Suburban in general has a higher realization and Dr. Lal PathLabs, so that also has gone in for the full-year impact. I think whatever little will come now into the price increase that we’ve taken in the month of February, maybe that we have some marginal impacts. Mix may not change my — my gut says that you may not see sharp jump this in FY ’24.
Nitin Agarwal — DAM Capital — Analyst
Thank you. best of luck.
Operator
Thank you. The next question is from the line of Cyndrella Carvalho from JM Financial Limited. Please go ahead.
Cyndrella Carvalho — JM Financial Limited — Analyst
Thanks for the — actually I am audible?
Operator
Yes.
Cyndrella Carvalho — JM Financial Limited — Analyst
Yeah, sir, if we are looking at the volume growth you in your opening remark quite interestingly highlighted the Mumbai lab. We know our earlier lab whenever they have come, they have given us a good traction. So, what do you think about the Mumbai lab? How it will contribute to our overall patient growth like, how should we relate this? If you can help us understand this?
Shankha Banerjee — Chief Executive Officer of Suburban and Other Group
Hi, this is Shankha here. So, so the Mumbai lab has been launched in — in January, and so the thing is it’s going to be a slightly longer wavelengths compared to the other reference lab because from the suburban point-of-view, it’s kind of starting a completely new vertical, so to say in terms of the specialized business and also trying to get a completely new customer client profile under — to be built under the portfolio that we are currently doing. So, from that point-of-view, yes, the from the last quarter, it will definitely have better impact in terms of patient growth, but it may not be exactly comparable in terms of the things which we saw in East Calcutta or Bengaluru, which might take a slightly longer wavelengths.
Cyndrella Carvalho — JM Financial Limited — Analyst
Understandable and in your opening remarks, you also mentioned about a slightly higher cost there that we carried for the entire FY ’23. So now if we look at our cost base versus the growth that we have seen at least the normalization, that we have seen in FY ’23, do you think [Technical Issues] your FY ’24 and ’25 this cost base will support us on the growth? And you should see some operating leverage also?
Ved Prakash Goel — Group Chief Financial Officer
Yeah, Cyndrella, Ved here. So definitely, see that idea because one is launching this reference lab, which will obviously give advantage and what Shankha is saying on B2B side. But another, because as you know, all the infrastructure is in-place and I think you also have visited that lab. Now we have to leverage this infra. In our view, the efforts is more on topline, but similarly, the operating leverage will also come on the bottom-line. So, I believe that margins from here should improve.
Cyndrella Carvalho — JM Financial Limited — Analyst
Okay, that is helpful. And also, if we try and understand the overall marketing scenario today as you highlighted that there is some sluggishness, there is — the great intensity continues, we have taken specialized price increases, but this specialized price increase should reflect across the entire year, right. I mean, we just started in month of February. Is that understanding correct?
Om Prakash Manchanda — Managing Director
Yes indeed.
Cyndrella Carvalho — JM Financial Limited — Analyst
Okay, okay. Thank you so much for my questions. Thanks you.
Hon. Brig. Dr. Arvind Lal — Executive Chairman
Thank you.
Operator
Thank you. The next question is from the line of Rishi Mody from Marcellus Investment Managers. Please go ahead.
Rishi Mody — Marcellus Investment Managers — Analyst
Yeah, my question has been asked already earlier, I try to remove myself [Technical Issues].
Operator
Thank you. The next question is from the line of Tanmay Gandhi from Investec. Please go ahead.
Tanmay Gandhi — Investec — Analyst
Hi sir. Thanks for taking my questions. Sir, first question is on the sequential growth rate. If you look strictly historically look at our sequential growth in 4Q it had reached between 3% to 5%, right. From which time, it was flat. So — so anything — anything worth highlighting here?
Bharath Uppiliappan — Chief Executive Officer
We couldn’t hear your question properly. Could you repeat yourself, if you don’t mind.
Om Prakash Manchanda — Managing Director
Your line is not clear.
Tanmay Gandhi — Investec — Analyst
Is it better?
Om Prakash Manchanda — Managing Director
Better.
Tanmay Gandhi — Investec — Analyst
Yeah, so sir, my question is that you know is historically if you look at our sequential growth for 4Q, so historically, it has ranged between 3% to 5%, right. But this year it is flat, so anything particular you would like to highlight here?
Om Prakash Manchanda — Managing Director
So that’s what I actually mentioned, your observation is right. It’s not 3% to 5%, normally, it’s about 2%. And the 2% actually is [Technical Issues] so sometimes depending on the infection rate it is flat, but I am seeing this trend for last two years even I think if I remember, even the sales, here also we saw the same thing. So, my hypothesis is that now just evened out in terms of infection rates. Earlier Q3 was seen as a healthy quarter. I think now because of air pollution, etc., all these things, generally the [Foreign Speech] which is more screening packages is become very good even. So, looks like now the pattern that I’m seeing is that Q2 is the highest. All those three quarters are very similar. Q1, Q3 and Q4. That’s the observation that I have for last two or three years. Well, let’s see in FY ’24 what happens. [Technical Issues] will not have this whole variable of COVID [Technical Issues] be more it’s. But your observation is right. This time we have not seen a sequential [Technical Issues], which we normally see. And this is not the first time moving even last year also we noticed that.
Tanmay Gandhi — Investec — Analyst
Okay and sir if we understand that year-on year growth for this year, is not that relevant because of volatile base, but sir if we try to extrapolate our sequential growth, which we have seen during the last four quarters, right, to — to FY ’24 then it roughly translates to mid-to-high single-digit growth. So is that the right way to look at it?
Om Prakash Manchanda — Managing Director
No, I don’t think it will be. Our estimate is — I know we’ve done 15.5% non-COVID. But it also has four quarters of [Indecipherable] compared two quarters previous year, right. So, the normalized work will be how much for this year? 10% to 11% [Speech Overlap] we definitely hope to follow this year. It won’t be single digit.
Tanmay Gandhi — Investec — Analyst
Okay and sir, last question on [Technical Issues]. So, we have been saying that largely, it has peaked out and you don’t see any sharp jump from this level right. And historically, our revenue growth was largely driven by outpatient and sample growth but now — but now, but this year, it was also driven by higher realization of our patient. Going forward as we expect some moderation in sort of split expansion, so do you see do you see that again our revenue growth would be driven by volume and — and volume growth has actually come down, right.
Bharath Uppiliappan — Chief Executive Officer
So, yes, our efforts will always be to drive the volume growth — patient visit growth — not volume patient visit growth and there are various techniques we are using to get better on that count. But as a result of bundling the tests per patient is also moving up significantly, about 11% odd in Q4, and that trend [Technical Issues] further growth. It will reflect in the numbers like interim CFO, is to acquire new customers and service our existing customers in a better fashion.
Tanmay Gandhi — Investec — Analyst
Understood. And sir, a related question in 4Q, did we have any, did we have any one-off kind of growth in tax-related packages?
Bharath Uppiliappan — Chief Executive Officer
Growth — what did you say?
Tanmay Gandhi — Investec — Analyst
Growth in tax-related packages or subset, any one-off growth [Speech Overlap].
Bharath Uppiliappan — Chief Executive Officer
Tax packages, so in the last two-three years. I think Q4 [Technical Issues] picks up because of this tax advantage. This is a normal phenomenon in the base assets. But this year’s growth has been still better than the previous year, led by better distribution, better understanding of our patient’s acceptance, etc. So it is more than tax.
Tanmay Gandhi — Investec — Analyst
Okay got it sir. Thank you. That’s all from my side.
Operator
Thank you. The next question is from the line of Yogesh Tiwari from Arihant Capital Markets. Please go ahead. Thank you sir, for taking my question. Am I audible? Yes.
Yogesh Tiwari — Arihant Capital Markets — Analyst
Sir, my first question is post COVID. What would be the growth of the in-vitro diagnostic industry.
Om Prakash Manchanda — Managing Director
In vitro diagnostics?
Yogesh Tiwari — Arihant Capital Markets — Analyst
Yes, sir.
Om Prakash Manchanda — Managing Director
Normally IV industry is referred to the reasons suppliers. I presume you’re asking for [Technical Issues] So as I mentioned to you [Technical Issues] which is available in public domain, I just added up, at least for companies data. The last four years, I removed this impact of COVID yield, which is FY ’21 and ’22. The growth rate that I’m seeing is about 10% to 11% CAGR over 4-year or 3-year period. I personally feel that it should sustain. One variable which probably won’t get added because last 4-year CAGR may not have very-high pricing impact, but since our revenues will take price increases. Now coming back, let’s see how the players do but my reading is, it will definitely be in this way going-forward.
Yogesh Tiwari — Arihant Capital Markets — Analyst
And sir, what would be the total size of the industry, if you can share the thought?
Om Prakash Manchanda — Managing Director
What will be the total size of the industry?
Yogesh Tiwari — Arihant Capital Markets — Analyst
Yes.
Om Prakash Manchanda — Managing Director
So, there is no published data that we will normally, we refer that these large players contribute about 15% of the value. So, I think one crude better would be [Technical Issues] INR30,000, INR35,000, INR40,000 crores, which is essentially the — the private-label business. When you add this to our hospital lab business, [Technical Issues]. So my sense is to go through INR60,000 crores, something like that. That’s one — one of the ways to look at it.
Yogesh Tiwari — Arihant Capital Markets — Analyst
This you mentioned this is for the Indian domestic right.
Om Prakash Manchanda — Managing Director
Yeah, Indian domestic market.
Yogesh Tiwari — Arihant Capital Markets — Analyst
Okay, sir. That’s very helpful. Thank you very much.
Operator
Thank you. The next question is from the line of Praveen Kumar from Equitas Capital Advisors. Please go ahead.
Praveen Kumar — Equitas Capital Advisors — Analyst
Yeah, hi, thanks for the opportunity. I had a couple of questions. The first question was on comment that Dr. Om has made in his opening remarks. You had mentioned that bundled packages have become a way of life. So just thinking about the comment a little bit more. See as bundled — in terms of bundled packages decision-making point could be perceived to shift to the customer, the patient, instead of the doctor and since the doctor can use this as a major competitive advantage for Dr. Lal, how does — how do you perceive this panning out in terms of your competitive advantage? Yeah, that was my first question.
Om Prakash Manchanda — Managing Director
Well. I think that’s a great sort of question. My reading, if it was only limited to preventive health checkup, yes decision-making is with consumer or the patient. Since a lot of chronic disease patients also are shifting to bundle packages, we need to actually upgrade this to — these packages [Technical Issues] better value-for-money. So even in U.S. patients also in bundled packages. So, doctor decision-making is still there. Only thing is the doctors also have started prescribing these packages as a part of the normal prescription.
Praveen Kumar — Equitas Capital Advisors — Analyst
Okay, understood. Thanks for that. I had a second question which was more on the investor presentation, the financials in particular. What I wanted to understand was the company declared normalized — normalized EBITDA margins, whereas a few items are excluded — one of which is the employee stock-compensation or the RSU based compensation. So just wanted to understand the rationale for excluding this. Is it — is it that you perceive these to be more one-off kind of expenses because if not, if you perceive that these are more ongoing nature of competition, best practices, then in one-way or the other the company is bearing the cost for that, right, shouldn’t it be part of overall EBITDA itself? Not a specific normalized EBITDA, yeah. Thank you.
Bharath Uppiliappan — Chief Executive Officer
So, Praveen, there are two reasons, one is, of course, this is non-cash item, it is not really where the cash outflow from the company’s and second, this charts varies depending on the price of the share because if we are granting ESOP at a time where the price differentiates so probably fluctuates the charts. So, these are the reason why we are showing [Indecipherable].
Praveen Kumar — Equitas Capital Advisors — Analyst
But just to understand that, if I look at your past annual reports, and other financial disclosures, this cost has varied between 1% to 1.5% kind of number, right. So just wanted to understand that there is — it seems to vary in that range. So, shouldn’t that be part of this non normalized EBITDA?
Om Prakash Manchanda — Managing Director
[Indecipherable] you have both the figures in any case, you have a normalized. And you will see EBITDA figures also you can see that. But you’re right. So, there is a, there is a baseline number which will stay here, which could be I think 1% to 1.5% is fairly a good assumption.
Praveen Kumar — Equitas Capital Advisors — Analyst
Understood, thanks. Thanks for the clarification.
Operator
Thank you. The next question is from the line of Zaid Munshi from Concept Investwell. Please go ahead.
Zaid Munshi — Concept Investwell — Analyst
Yeah, thank you. Sir, my question is related on the hospital [Technical Issues]. So do we have any plans to expand with partnering with hospitals for the diagnostic part as we don’t disclose the numbers with you know-how many hospitals you have of date.
Bharath Uppiliappan — Chief Executive Officer
So, we have said in the past that we secured [Indecipherable] we find a very strategic or a geographic fit available to us. Because expanding into a hospital lab management without like a normal retail business can lead to lot of other issues like outstanding debtors and so on. So, it is best to do it with lot of consideration, rather than do it on a mass scale. So, we are selective about the [Indecipherable] we entered in the contracts with, but yes, we do do [Indecipherable].
Zaid Munshi — Concept Investwell — Analyst
Okay, so currently I’m main focuses on independent labs, not on hospital labs.
Bharath Uppiliappan — Chief Executive Officer
Yeah, yeah so. I think that is the main focus. Once in a while we get opportunity we will do [Indecipherable] no problem at all.
Zaid Munshi — Concept Investwell — Analyst
Okay, okay. Yeah, thank you. That’s it.
Operator
Thank you. The next question is from the line of Sayantan Maji from Credit Suisse. Please go ahead.
Sayantan Maji — Credit Suisse — Analyst
Yeah, thanks for the opportunity. So, my first question is on home sample collection. So, I just wanted to check what are the current trends that you’re seeing after a normalization in — in a post-COVID outbreak. Do you see patients coming back two your centers and the percentage of revenue from home sample collection, has it come down? And what is it currently? How much percentage of our B2C revenues are coming from home sample collection? And what are we in case this is something which is sustaining even after COVID and what are the steps that we’re taking to be competitive versus especially versus the integrated digital health platforms?
Bharath Uppiliappan — Chief Executive Officer
So, two-three points, one is that during COVID, I think the predominant mode of operation itself was home collection, so the number was very-very high. I think close to 20% percent in those days. But pre-COVID this number of home collection was about 5%. Today, I think what we’re seeing is, let us say, about 8% to 9% of home collection which is a better trend than what we had in the pre-COVID bids, but significantly down obviously from the COVID days. So that is one-way to look at the numbers.
Breaking this, underlying thing is about the patients choosing a lab of trust. It is all about convenience, convenience is one of the various factors involved in it, but they want to look at lab of — lab etc., and we continue to enjoy a very trusted position, a very favored position on this count. So, we are seeing home collection revenues in-line with this thought of us.
Sayantan Maji — Credit Suisse — Analyst
Okay, and this 8% to 9% is of B2C, or of the total revenue?
Bharath Uppiliappan — Chief Executive Officer
Of I think the total revenues.
Sayantan Maji — Credit Suisse — Analyst
Of total revenue, okay. And in the deck, you have mentioned of variable model. Can you just explain it to, let’s say, mid, like what is this variable model which grows in business volume?
Bharath Uppiliappan — Chief Executive Officer
When did we speak about variable model, sorry, if I [Speech Overlap]
Sayantan Maji — Credit Suisse — Analyst
So, in slide number 25 of the investor deck, it says that in the home collection slide you said it is a variable model, which grows [Speech Overlap]
Bharath Uppiliappan — Chief Executive Officer
Okay, okay, okay, okay, Ved you want to take this?
Ved Prakash Goel — Group Chief Financial Officer
So Sayantan this is — this is one-way of hiring people, which is fixed pay, and another way is the lab pickup. You pay as per pickup. So, it is not a fixed charge, like you have — our own center versus franchisee center. It is similar to that, like, we instead of hiring people or giving fixed contract, it is per pickup based payment.
Sayantan Maji — Credit Suisse — Analyst
Okay, so basically the salary of the phlebotomist is entirely dependent on the number of samples, he or she picks up in a day.
Bharath Uppiliappan — Chief Executive Officer
Yeah, you are right.
Sayantan Maji — Credit Suisse — Analyst
Okay, got it. Sure and just second question is bookkeeping one. So now that you know FY ’23 is over so what was the total [Indecipherable] impact on EBITDA [Indecipherable] benefit to EBITDA?
Bharath Uppiliappan — Chief Executive Officer
So, it is about 2.5% roughly, which is on account of [Indecipherable].
Sayantan Maji — Credit Suisse — Analyst
Okay sure. Okay, thank you for taking my questions. All the best.
Bharath Uppiliappan — Chief Executive Officer
Thank you.
Operator
Thank you. Ladies and gentlemen, that would be our last question for today. I now hand the conference back to the management for their closing remarks. Thank you and over to you.
Bharath Uppiliappan — Chief Executive Officer
Thank you everyone for being with us on this call today. I hope we were unable to address your queries. If you have any more questions or queries, please feel free-to reach-out or our Investor Relation team, CDR India and we will be happy to clarify your thoughts. Thank you once again. I would now request the moderator to close the call.
Operator
[Operator Closing Remarks]