Thyrocare Technologies Ltd (NSE: THYROCARE) Q1 2026 Earnings Call dated Jul. 23, 2025
Corporate Participants:
Unidentified Speaker
Preet Joshi — Manager, Strategy and Investor Relations
Rahul Guha — Managing Director and Chief Executive Officer
Nitin Chugh — Chief Commercial Officer
Alok Kumar Jagnani — Chief Financial Officer
Analysts:
Unidentified Participant
Prakash Kapadia — Analyst
Raman Kv — Analyst
Lokesh Manik — Analyst
Girish Bakhru — Analyst
Yogesh Soni — Analyst
Saket Kapoor — Analyst
Aditya Khemka — Analyst
Anshul Agrawal — Analyst
Presentation:
operator
Ra. Sa it IT. Ladies and gentlemen, good day and welcome to the Thyrocare Technologies Limited Q1 FY26 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. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on a touch tone phone.
I now hand the conference over to Mr. Preeth Joshi from Thyrocare Technologies Ltd. Thank you. And over to you Mr. Preet Joshi.
Preet Joshi — Manager, Strategy and Investor Relations
Thank you Zika for the introduction. A very good evening to all and. Thank you for joining us today for the SiroCare earnings conference call for the quarter one FY26. Today we have with us Mr. Rahul Gua, MD and CEO of PsyroCare, Mr. Alok Kumar Debinani, CF of CyroCare, Mr. Nitin Jug, Chief Commercial Officer along with. The other key members Senior Manager on this call to share the highlights of business and financials for the quarterly results. I hope you have gone through the results at least the quarterly earnings presentation. And the press release which has now. Been uploaded on the stock exchange website. The transcript of this call will be. Available in a week’s time on the company’s website. Please note that today’s discussion may be. Forward looking in nature and must be viewed in relation to the risks pertaining to our business. After the end of this call, in case you have any further questions, please feel free to reach out to the investor relations team.
I would now like to hand over the call to Mr. Rahul Gua and make the opening remarks.
Rahul Guha — Managing Director and Chief Executive Officer
Thanks Preet. Sorry, my throat is quite bad today so I hope I’m audible but. Good evening and welcome all. Welcome to all on the call. Thank you for taking out the time from your busy schedules to join us this evening. Just a quick introduction to us on the call. My name is Rahul Bhubha and I’m the MD and CEO of Thyrocare. And thank you for the opportunity to present the Q1 results for SY26. I’m joined with my colleague Alok Kumar Jagnani who is our cfo Nitin Chug who is our Chief Commercial Officer and Preet Chosi who is part of our strategy and investor relations team.
In addition to that I’m pleased to welcome Mr. Vikram Guptal who is joining us today and will be taking charge as Thyrocare cfo. Alok has been elevated to API Group CFO but will continue to remain involved in Thyrocare as a Director on the board. So many Congratulations to Vikram and of course looking forward to continuing association with alloc. As in all my calls, I will start with a quote from Nelson Mandela in recognition of our foray into Africa. It is in your hands to make a better world for all who live in it and we believe SpiroCare can bring our business model to Africa to make affordable and good quality diagnostics available to all.
Before we get into the details of the quarter, it’s been two years since we implemented the pay for performance structure which has led to an increased energy within our franchisee network with motivation for them to move up volumes and enter higher slabs. I’m very happy to report that our franchisee base is at its highest ever with a steady growth in the franchisee base over the last two years. Encouraged by the success, we are now expanding our field and central teams to accelerate the franchisee addition journey and would be happy to update on the progress in the quarters to come.
Quality remains our highest priority and we see it as a continuous journey of improvement and innovation. We are immensely proud to share that last year we achieved the milestone of becoming India’s first and only 100% NABL accredited National laboratory chain, a prestigious milestone that reflects our unwavering commitment to to world class diagnostic services and a relentless focus on quality and excellence. Achieving NABL accreditation across all our labs has been made possible through the implementation of robust quality management systems, investment in cutting edge technology and equipment, rigorous training programs for our staff and consistent participation in proficiency testing.
Considering that only 2% of biology labs nationwide hold this accreditation, this achievement is not just a significant milestone for us, but also as a testament to our leadership in redefining diagnostic standards across India. But the quality journey doesn’t stop there. We have now set a target of Six Sigma level quality processes in Thyrocare and we tracked our complaints per million with a goal to bring it below 3.4 complaints per million. I’m very happy to say we have already made tremendous progress on this dimension with our complaints for million at 4 versus 6.4 last year when we began tracking this and we are confident we will very soon reach 3.4, making us the first lab chain to achieve six sigma processing.
And we believe we will soon be best in class on this dimension, not just in diagnostics but in healthcare. To communicate our journey on quality, we regularly host advisory board meetings with a panel of esteemed doctors to gain their insights on enhancing our quality milestone. In the current quarter we have hosted three meetings where more than 125 doctors attended. Doctors witness our cutting edge technologies and stringent protocols, reinforcing our commitment to diagnostic excellence with Thyrocare Anushandan I’m proud to share that we conducted and published India’s largest HbA1c study, providing deep insights into diabetic trends nationwide.
More importantly, we launched our fever Study bases are Janch fever panels and the timing is quite appropriate given the fever season is upon us. We found that one out of three fevers are not just simple upper respiratory tract infections as is commonly believed, but are more complicated infections such as dengue, typhoid, malaria and influenza underpinning the need to test and treat fevers judiciously. In the past quarters we have added multiple advanced technologies including histopathology, a new equipment platform in HPLC and our first foray into coagulation. We have also launched biofire, one of the most advanced PCR platform while maintaining the highest quality standards.
We continue to improve our turnaround time on an average during Q1FY26 we released the report within 3.35 hours of samples reaching the lab. This rapid turnaround is made possible by our robust operational processes, advanced automation systems and streamlined workflows. By combining precision with efficiency, we ensure timely and accurate diagnostics, empowering patients and healthcare providers to make informed decisions swiftly. I’m proud to say we have now fully integrated the Polo and WIMTA network and alive with ECG at home across our network for which we had acquired ThinkHer. Our lab network stands at 40 today across Tyrocare, India, Tanzania, Polo, Minta and our partner labs.
Beyond the work on quality and operations, we continue to selectively expand our offerings. ROBM has been our flagship brand and we have two brands, Jansh and Her Chek which were launched recently. Jansh is targeted towards lifestyle challenges for you to better understand your health. We have solutions across the spectrum for anything you might be worried about. Is it fever or something more serious? Why is my hair falling? Cancer screening as well as deep investigations for common chronic diseases like diabetes, heart health amongst others. Jansh has grown 17% year on year and is soon becoming a strong pillar of our lifestyle offering.
We are very proud of some of the key milestones that we achieved in Q1 26. For Q1 26 we have more than 9,500 active quarterly franchisees. As a result, we processed 46.9 million tests which grew by 15% year on year. We served 4.6 million patients in the year which increased by 12% year on year. Please note for reference active franchisee count was 9413 in Q4FY25 and 8145 in Q1FY25 that is the same period last year. We are regularly taking strategic initiatives to further expand our footprint. During Q1 26 we expanded our geographical footprint by opening new partner labs in Roorkee, Kashmir and started processing at a new regional lab in Bhagalpur.
Partnerships business did phenomenally well as we onboarded new clients in health tech segment and continued to grow our existing accounts in Tanzania. Since going live in March 2024 and processing our first test in April, we have successfully partnered with over 192 healthcare facilities in Dar es Salaam till date. Our mission is to continuously collaborate with major hospitals ensuring they have access to comprehensive diagnostic services. With that,
I will now hand over to my colleague Nitin to cover the highlights for the quarter and annual business performance.
Nitin Chugh — Chief Commercial Officer
Thank you Rahul. A warm welcome to each of you. First, I would like to start with our pillars of growth which have been contributing strongly to our performance consistent performance. The first pillar is Customer Success. The focus is on ensuring accurate, timely and affordable diagnostic services through quality control, robust data management and effective customer support. With advanced technology and streamlined processes we aim to enhance customer satisfaction. Launching live reports for our franchisee base and our D2C customer is a testament of our continuous work towards customer success. We’ve also added customer success features like turnaround time, visibility, reminder service, microsites of our partners to help all our partners to grow their business.
The second pillar of network is Network expansion. We are deepening our presence across India by going deep into the country with our franchise network and through our acquisitions as well. Also on the partnership side, we are expanding our footprint by going deep into the pre policy medical checkup and annual Health checkup in the insurance business. We now have more than 9,500 plus active quarterly transacting franchisees in Q1 of FY26 versus 8,145 active franchisees in Q1 of last year FY25. The third pillar is Menu expansion where we are introducing a wider range of specialized tests and health packages for our partners, using targeted marketing to drive adoption and increase value for both partners and customers.
For example launching coagulation HB1C graph reports in most of our lab locations. We also launched highly specialized biofire panels in this quarter. Now I will briefly update you about the business performance of Q1 of FY26 overall. At a consolidated level this quarter we did a 23% year on year revenue growth primarily driven by our pathology business with a growth of 25% year on year. This includes 2% revenue contribution coming from inorganic growth contributed by Polo, Vimta and Fincare. Our franchise business for the quarter showed a revenue growth of 20% year on year. In Q1 of FY26 we started focusing towards opening up smaller labs and partnerships along with franchisees and other storefronts which will lead to higher processing capabilities and ultimately leading to a higher franchise business in coming quarters.
Further revenue for retail franchisee has been consistently going for the franchisees added post FY22. This has been possible because of our slab based pricing model, improved quality, strengthening our relationship with doctors and Chinese partners and test menu expansion. Our partnerships business in the quarter showed a tremendous growth of 36%. If we exclude API this quarter our partnership grew by 29% year on year. Our API pharmacy diagnostic business this year grew by 52% year on year. Radiology business including Pulse High Tech did a strong revenue growth of 6% year on year this quarter.
With that I will hand over to my colleague Aloh to cover the financial results.
Alok Kumar Jagnani — Chief Financial Officer
Thank you Nitin and a warm welcome to everyone joining us today. First to start please I I’m pleased to welcome Mr. Vikram Gupta who joined today in Thyrocare as our new Chief Financial Officer, now Moving to the Q1 FY26 highlights the pathology diagnostic industry is currently growing at a early to mid teen race. In comparison, thyrocare has consistently delivered mid teen to high teen growth over recent quarters, underscoring the strength of our leadership and our ability to capitalize on market opportunities. Before going to the financials, let’s first cover up the ESOP Forum Overview before we discuss the financial Let me briefly touch upon the Employee Stock Options plan.
As the Hylocare ESOP program concluded this year and with only a limited pool remaining for employees and senior management, our parent company has decided to expand the API ESOP pool to include thyrocare senior management. This group level initiative is aimed to retain our most critical talent. ESOP will be issued by our parent company and will vest in accordance with the established policy. From the accounting standpoint, these ESOPs are recognized as an expense in the profit and loss account and as an equity contribution from the parents in the balance sheet. It is important to note that the this is a non cash charge and does not have any cash outflow.
To enhance clarity, we report normalized EBITDA by excluding these non cash charges and have included an annexer in our quarterly earning presentation to further explain the accounting statement. Now moving to the Q1FY26 financial performance standalone revenue for the quarter reached 179 crore and consolidated revenue stood at 193 crore, reflecting a year on year revenue growth of 23%. This growth was primarily driven by 20% increase in franchisee revenue, 36% rise in partnership revenue. Total standalone revenue of pathology grew by 25% year on year, whereas our radiology revenue has also 6% year on year. Of the total growth of 23%, organic growth is 21% and rest of the growth is rest is attributable to inorganic growth.
Now with the recent acquisitions, what we have done in FY25 all are stable and fully integrated with the Thyrocare ecosystems. Standalone gross margin 71% stood up by 48 basis points year on year mainly due to the more favorable negotiation and product mix. Employee expenses up year on year mainly on account of annual increment partially offsetted by actuarial gain. Standalone normalized EBITDA margin 35% has improved by 354 basis points, largely benefiting from the better gross margin and operating leverage generated from the business at the consolidated level. Gross margin reported 71% Normalized EBITDA margin 33% Q1FY26 Normalized EBITDA in absolute value reported 63.35 crores.
Profit after tax reported 38.06 crore. Both Normalized EBITDA and PAT are up by 42% and 62% year on year respectively. Notably, this performance was achieved despite margin pressures from our recent acquisition and geographic expansions.
With that now I hand over to Rahul for the strategic updates.
Rahul Guha — Managing Director and Chief Executive Officer
Thank you Alok and a warm welcome. To you on the Thyrocare board.
Alok Kumar Jagnani — Chief Financial Officer
Thank you Rahul.
Rahul Guha — Managing Director and Chief Executive Officer
Briefly I would like to take a few minutes to recap to you our strategic direction and then I will open it up for Q and A. First I will reiterate our value proposition to the customer. We will continue to remain an affordable option to all patients with good quality and on time reports. All our efforts on our value proposition is towards ensuring low cost to the patient, assurance on quality of our testing through our certifications and processes and engagement with doctors. We have made substantial progress on this and I have updated this in my initial comments and is reflected in the presentation.
This value proposition remains at our core and will continue to guide all that we do. Second, our strategy. We continue to maintain our strategy of being the B2B partner of choice to all front end healthcare services companies in India whether it is a small diagnostic center in a semi urban area, a pharmacy in a metro, a small nursing home, an individual doctor, or a leading online diagnostics platform or health tech marketplace. We are happy to work with them to provide low cost robust testing solutions so that they can serve their patients in the most effective manner if they require phlebotomy.
We are happy to mobilize our phlebotomy network of almost 1900 phlebotomists today to serve them better. We remain dedicated to expanding our business and with the acquisition of HoloLabs and WIMTA clinical Diagnostics, we plan to significantly increase our presence in north and South India respectively. Additionally, to further boost our partnerships business, the acquisition of Think Health has allowed us to offer ECG at home services where we are now having a Pan India presence. This strategy has been working well for us with both our franchisees and partnerships businesses posting strong growth. That, in a brief is our mandate as management.
Thank you for giving us a patient hearing. As always, I will once again end with a quote from the Maha Find purpose. The means will follow and our purpose remains to provide affordable, high quality testing to the masses.
With that, I’ll open it up for Q and A.
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Prakash Kapadia from Kapadia Financial Services. Please go ahead.
Prakash Kapadia — Analyst
Yeah, thanks for the opportunity. Couple of questions from Brian Rahula. Q1 generally is a soft quarter for the industry in general. So what are we doing right for the 23% growth which we’ve achieved? Any specific insights you could share which has led to, you know, this growth, be it, you know, the franchisee contribution in terms of gold, silver, larger, smaller or any specific region which we were not there that has contributed. So that will give some color on the revenue growth and, you know, sustainability for the remaining part of the year. I think from what I remember employee count was around 1700.
What is it as of now and franchisee addition, Is it fair to assume, you know, from this base around 8002000 franchisees could be added during there? Those are my questions. Thank you.
Rahul Guha — Managing Director and Chief Executive Officer
You’re right, Q1 is typically softer than Q4. Historically this Q1 for us has been better than Q4 which is the first time, you know, I Think in a long time this has happened. And if you take out Covid, probably the first time ever, I think what is working for us, as Nitin also talked about in his commentary, is the number of franchisees that we’ve been able to add between last year and this year. I think the number is about 1400, 1500. Yes, sir. And Jay Z, we’re getting the compounding effect of the previous year’s base also.
So if you have seen our disclosures, our annual disclosures, we showed how a franchisee added in 22, doubles in 23 and then continues to grow in 24. So a large number of additions that have happened, you know, last year have actually given us a big boost this year. Plus the overall franchisee count going up. It’s not a very complicated business. You keep your customers happy and you add more customers. I think we are doing both quite well. And the results are showing up in the growth number. To your second question, employee count was 1700 last year.
We are at about 1900, so not that much. And that is after integrating Polo, mta, think health plus expanding, you know, three new labs over the years. So I think it’s reasonably under control. I think your last question was. Yeah, I think you can assume, you know, we are typically operating at 100amonth. I think you should assume that that is the rate we will continue at.
Alok Kumar Jagnani — Chief Financial Officer
More in next three quarters.
Prakash Kapadia — Analyst
Yeah, yeah. And any color, Rahul, on any specific region or geography which has led to this growth or is it spread across the country from the revenue contribution?
Rahul Guha — Managing Director and Chief Executive Officer
See, it’s plus minus, you know, a little bit. But I think the growth is secular across the country. We have not focused in any way in a particular region or something. We are pan India player with deep presence across the country. I think some regions grow slightly faster, some regions grow slightly slower. But it’s not like a big swing. So I can say it’s a secular growth across the country.
Prakash Kapadia — Analyst
Okay, thanks sir. I’ll join back if I have more questions. Thank you.
operator
Thank you. Our next question comes from the line of Raman KV with Sequent Investments. Please go ahead.
Raman Kv — Analyst
Hello sir, can you hear me?
Rahul Guha — Managing Director and Chief Executive Officer
Yes.
Raman Kv — Analyst
Sir. I just wanted to understand that during the quarter revenue per test has increased as well as revenue per patient has increased on a year on year basis. So was there any price hike during the quarter?
Rahul Guha — Managing Director and Chief Executive Officer
So I’ll let Nitin give you more details, but we typically don’t take price hikes. Most of the revenue per test will largely come from mix. But I’ll let Nitin give you a Bit more color on that.
Nitin Chugh — Chief Commercial Officer
Yeah. So there was a very minor price hike but not in a routine test because there were a lot of new tests that were launched. So the price hike color is more or less in the range of 1 and a half to 2% at max. Rest of it has majorly come from a expanding new catalog and opening up newer higher priced items for all our partners as well as working very very well on mix change and helping our partners sell something which is a category above than what they usually sell. So it’s for example instead of just thyroid profile, maybe send somebody a jar steroid or a just selling HbA ones, we sell them a Darch diabetes, basic etc.
So a lot of work has gone on mix chain helping them understand and you know what to sell next apart from what they’re selling. So that has also contributed to a higher revenue per test.
Raman Kv — Analyst
Okay. Sir, Sir. Also one of the question on the basically it’s a follow up portion what the previous participant has asked. Just wanted to understand how many franchisees are franchisee are there with us and how many franchisees did we all did we had during the quarter.
Rahul Guha — Managing Director and Chief Executive Officer
Can you give anything? You can take that.
Nitin Chugh — Chief Commercial Officer
Yeah. So basically like we said last year, same same quarter we had about 8,100 active franchisees in that quarter working with us. Now that number is around 9,500 odd. Yeah. So there is a healthy addition net edition of almost 1400 odd franchise.
Raman Kv — Analyst
And.
Nitin Chugh — Chief Commercial Officer
That’S our financial this year also we are on track to hopefully we’ll be on track to do more than 1200 franchisee addition.
Raman Kv — Analyst
1200 franchises by the end of this year.
Nitin Chugh — Chief Commercial Officer
Yeah, that’s our plan.
Raman Kv — Analyst
Yeah. And my last question is with respect to franchisee only. So how long does it take for a franchisee to become mature franchisee and contribute significantly towards the top line and bottom line.
Nitin Chugh — Chief Commercial Officer
See we have a slightly different model also. So we work on two models lesser on the fact that we have newer partners coming and opening up a franchise from scratch which would require at least 12 months for a franchisee to break even.
So our model is more focused on having partners on board who are already working in the diagnostics space who already have a collection center of sorts, maybe say by the name of Nitin Diagnostic or an Arlog Diagnostic who is probably giving to multiple partners today and distributing their business. Our business model is to add those guys and bring them into the Thyrocare system ecosystem with higher wallet share and hopefully converting them into a fully pledged Thyrocare franchise. Putting up a Thyrocare Board. So that’s our go to market strategy with which I think we are able to add these many and not relying on finding 1200 more new, you know, entrepreneurs to start a franchising of that.
So this way how much time it will take for them to break in? See, because more than 95% of our franchisees have existing centers. So they are already more or less they have established their businesses. It’s just about we try to get as much as much share as possible from their current business and take more wallet share. So most of these franchisees have been well established in say last three years, five years even. Some are 20 years old but very well established businesses. So hardly we see any churn because of business going down. Maybe some wallet share goes down here and there but they are mostly profitable or breaking even.
Raman Kv — Analyst
Okay sir and sir, are we sticking to the revenue guidance of mid teens and volume guidance of mid teens?
Rahul Guha — Managing Director and Chief Executive Officer
Yeah, see it’s too early in the year to revise the guidance. As I said, While Q1 has been very encouraging and the growth has been very strong. If you look last year H2 was very strong for us. So I think it’s very early in the year to be revising guidance at this point. We’ll probably take a call after we see H1. But yeah, the first quarter has been very promising. But as I said, the back half of last year was very good as well.
Raman Kv — Analyst
Okay, thank you.
operator
Thank you. Before we take the next question, a reminder to all participants. You may press star and one to ask a question. The next question comes from the line of Lokesh Manik from Vallam Capital. Please go ahead.
Lokesh Manik — Analyst
Hi, good evening to the team. Am I audible?
operator
Yes, I audible but may I request you to use your handset please sir, the slight echo from your line sir.
Lokesh Manik — Analyst
Is this better?
operator
Yes sir, absolutely. Please go ahead.
Lokesh Manik — Analyst
My question was on the relationship with vendors in terms of supply. Are we following the rental reagent model where you know it is pay as you go or do we take the equipment on our books in the pathology business and then we purchase the consumables. How is that how that supply model play out?
Rahul Guha — Managing Director and Chief Executive Officer
I’ll let the master of this take this question Swallow.
Nitin Chugh — Chief Commercial Officer
Thank you Rahul. So answering to you we are mostly going to move in Capex model as we procure machine and capitalize in our books. We are not working in RR model. Earlier prior to 2223 we was mostly in RR model which we have moved. To Capex model and
Rahul Guha — Managing Director and Chief Executive Officer
location. There’s no free lunch when someone gives you on Reagent rental, they are typically loading their capital cost. We are a completely debt free company with a high operating cash flow. Our cost, you know, is significantly lower than the loading that they put on on the rental model. So we find it much better to finance our own equipment than take financing, you know, at a very high rate in the reagent rental market.
Lokesh Manik — Analyst
Understood. My second question was, you know a part of our strategy in 22 was to leverage the synergies with the API group through retail U and Akman. Now the franchisee growth that we are seeing is it through the referior network which had 2.8 lakhs from pharmacies, are we tapping that or this is independent of that, that we are expanding on the franchisees.
Rahul Guha — Managing Director and Chief Executive Officer
So this is, this is, this is completely independent of that. There is a small base of retail IO pharmacies that come back with us. But you know it’s, we have not seen much success on that front. This franchisee addition is basically collection centers and pathology labs which is independent of retail IO. However, I’ll take that opportunity to highlight one other point. A large part of synergies was the cross sell of diagnostics on the pharmezy platform which as you know over the last few years has been muted. But now I’m very happy to say that the pharmeasy business has come back on the growth track.
Last quarter it was very strong. This quarter Also, you know 30, 40% growth is starting to come back from the pharmeasi side of the business. So that’s very encouraging to see as well.
Lokesh Manik — Analyst
Great. And one clarification for my end. In the annual report it was mentioned that we central processing lab has a capacity of one 30,000 samples per day. And this is for both the CPL. This is only one CPL.
Rahul Guha — Managing Director and Chief Executive Officer
This would be across both CPLs. We have now one central processing lab in Mumbai and one in Delhi. This should be across both.
Lokesh Manik — Analyst
Okay. Okay. And when you are introducing packages, new packages like Jahan or her check or any more down the pipeline, what is the base volume that you look at that would allow you to introduce these packages or the potential volume in the market that you want to see before you introduce these packages.
Rahul Guha — Managing Director and Chief Executive Officer
For us, we are not launching any specific test that is new to Jajar. It is a consolidation of that already exist and you know, but are more targeted towards a diabetic or more targeted towards the thyroid patient. So for us we don’t incur any incremental cost when we create jarge but we use platform.
Lokesh Manik — Analyst
Hello.
operator
Hello sir. We are unable to hear you, sir.
Rahul Guha — Managing Director and Chief Executive Officer
People, even if you’re diabetic people just wait till and do a full body checkup. Right. But there are many subsequent consequences of uncontrolled diabetes that you should be monitoring. That is not there typically in a full body checkup, but is there as part of the Thyrocare menu. So we have kind of consolidated it a little bit to help a diabetic better manage his health, the thyroid patient better manage his health and so on. So from that you don’t really look at it from a. You know, how many test volume do.
Rahul Guha — Managing Director and Chief Executive Officer
I have to get? The way we work is the prevalence of the disease. So there are many diabetics, there are many thyroid patients, there are many heart patients who require specialized packages for themselves. And from that we work backwards.
Lokesh Manik — Analyst
Understood? Understood. That’s it. From my side. Thank you so much. I’ll come back in the queue.
operator
Thank you. Ladies and gentlemen, a reminder to all participants if you wish to ask a question, please press Star and one on a Touchstone telephone. A reminder to all participants to ask a question, please press Star and one. The next question comes from Raman KV from Sequent Investments. Please go ahead.
Raman Kv — Analyst
Hello sir. Thank you for allowing me to ask one more question.
operator
Sorry to interrupt you sir. Before you go ahead sir, can I request you to please use your handset please.
Raman Kv — Analyst
Okay. You hear me?
operator
Yes sir. Please go ahead sir.
Raman Kv — Analyst
I just wanted to understand the partnership of revenue business model. How does the revenue flow and how. Does the profit is accounted for?
Rahul Guha — Managing Director and Chief Executive Officer
Okay, I’ll ask how does it. Right. How is the revenue flow and the profit account entire business model. I want to. With respect to the partnership.
Nitin Chugh — Chief Commercial Officer
Got it. There are multiple aspects to the partnerships model. What what we include in our partnership business. One is the very very very straightforward direct to consumer business in this which is basically somebody coming directly to a Cyrus career site there it is a very simple. Like any other D2C platform, we take the price, what we show to the customer, give some discount, etc. And that’s what is around it. That’s the highest profit margin business because the consumer is directly coming to our platform. Then there are. There are something called as these health techs and corporate players which almost contribute 50% of our partnership business.
These health tech players have generally say a very customized design packages also for themselves. While they have the normal menu in place. We generally have a transfer price set up with these people up front where they know if they have designed the package for a particular customer or a particular insurance company or anyone in the Corporate space, we have a particular transfer price set. They sell it to their customer at whatever price. I will charge them on a transfer price set. It is the same model that how we work with Swamizi. Where there is a transfer price, they handle their customer acquisition, their marketing, they decide what price they sell, what discount they give.
End of the day I just recognize my transfer price revenue. And this is majority of the model on which we work on our partnerships. In some smaller partners, we also have a commission LED model which are direct servicing engine. But again that’s a smaller part, but more or less it’s on a fixed transfer price.
Raman Kv — Analyst
So there are two different models. One is your own CyruCare lab. Another one is wherein you tie up with a company like for example, and for example, if a bundle of bundle a of test is offered at 5,000 in your testing lab, PalMD might price it as 4,500.
You will get, you will recognize 5,000 in your books. Am I right?
Rahul Guha — Managing Director and Chief Executive Officer
That’s correct. So if I give you an example, let’s say there is a package on one of our partners for 2,000 rupees. The partner will collect 2,000 rupees from the customer. Spirocare will invoice its cost. Right. And there are two kinds of cost. One is the flat processing cost and the other, if the partner opts for home collection, then we charge them for the phlebotomy cost as well as the transportation cost. Right. So roughly, if you look at a 2000 rupee package from a lab processing point, we’ll get I think about 700, 800 and another 300, 400 for collection and transportation, on which we make actually pretty similar EBITDA At a company level, very little.
I mean the partnerships business comes marginally lower EBITDA than the overall company.
Raman Kv — Analyst
So this is more or less like a B2B model, right?
Rahul Guha — Managing Director and Chief Executive Officer
Very much. B2B2C.
Raman Kv — Analyst
Yeah. B2B2C. Yeah. So with respect to that, can you give the split between, you know, D2C and the second one, B2B to C.
Rahul Guha — Managing Director and Chief Executive Officer
Can you give the what the.
Raman Kv — Analyst
For example, with respect to the partnership model revenue, how much are you earning from in terms of percentage, how much are you directly earning from B2C wherein that customer directly comes to your own lab versus how much you own from this B2D business to business to consumer. And in Utah you are tied up with a business like a farming.
Rahul Guha — Managing Director and Chief Executive Officer
The partnerships business comes with more or less the company ebitda. So if our company EBITDA at a normalized level is roughly between 30 and 35 depending on which quarter you look at. Let’s say this quarter is 35. Then the partnerships business will be in that 33, 34 range. Right. Our D2C business is actually quite profitable because we realized the entire 2000 rupees and the costs are more or less the same. What I said the 700 plus 400. Right. So to that extent our direct to consumer business is quite profitable. But it’s a small part of.
Raman Kv — Analyst
It’s only 5, 5 odd percent of our entire revenue. 6% the direct.
Raman Kv — Analyst
Okay, thank you.
operator
Thank you sir. The next participant comes from the line of Girish Bakru from Orbimet. Please go ahead.
Girish Bakhru — Analyst
Just a question on test menu. You guys said it is expanding. How much is the test money now?
Alok Kumar Jagnani — Chief Financial Officer
Sorry, how much is the last part of the question has been made.
Girish Bakhru — Analyst
What, what is the test menu? Is it about thousand now?
Rahul Guha — Managing Director and Chief Executive Officer
Roughly about thousand years.
Girish Bakhru — Analyst
And when you are adding these new areas of sector pathology, you know, essay. I mean I just wanted directionally. Are you also aiming to go much higher than current level or is it something that it will be around this number only because I mean of course B2CPIs are above 2000 but histopathology I think in our previous discussion you said can itself be thousand tests, right?
Rahul Guha — Managing Director and Chief Executive Officer
Yeah. So see we. From a technology level we will be comparable. I think we have almost every technology under Thyrocare. But we don’t activate every test in the technology because you know, we want to see a minimum volume before we, we activate the test. So I would say our thousand while if you compare against the 2 and 3,000 is you know, appear low. But from a technology level it’s. It’s almost like to like.
Girish Bakhru — Analyst
Okay. And when you actually look at this number of tests, revenue per test, I. I mean it’s seeing a good jump. Can you tell what is driving besides this let’s say sound mix change? Is there anything that we should look into and if you could give a number for this, what was this number let’s say two, three years ago.
Rahul Guha — Managing Director and Chief Executive Officer
The revenue protest two years ago was 33.8, which is 37.8 is there in the disclosure Girish, as Nitin articulated earlier, most of that 1 or 2% will be straight price. Right. The rest is mostly mix.
Girish Bakhru — Analyst
Okay, and what would be. Let’s say.
Nitin Chugh — Chief Commercial Officer
Yeah, please continue.
Girish Bakhru — Analyst
I just wanted to know, let’s say when you’re adding these new tests histo or immuno would realization be higher? Like how should we look at it? What would be the differential between. Let’s say non pathology. Whether it’s. I mean I know all of this is bundled, but is there a significant differential when adding these new tests?
Rahul Guha — Managing Director and Chief Executive Officer
Yeah. So if you take revenue per test at 37, histopathology will be closer to 250. So you know it’s whatever, almost at 10. Yeah.
operator
Thank you. Mr. Girish, may we request that you return to the question queue. Follow up questions please. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, may we request you to limit to one or two questions per participant. Should you have a follow up question, you would request you to rejoin the queue. The next question comes from the line of Yogesh Soni from Incred. Please go ahead.
Yogesh Soni — Analyst
Yeah, hi, good evening. Thanks for the opportunity and congratulations on the good set of numbers. My first question is I just want to to have a clarification on the active franchise network. In last quarter’s presentation the active franchise was mentioned around 11,250 whereas for this quarter it is mentioned as 9,550. If you can just help me with all this disconnect.
Rahul Guha — Managing Director and Chief Executive Officer
Yeah, yeah, it’s last. See last year we reported for the full year. So. So that was annually annual transacting and now we have moved to a quarterly reporting. So the difference is what you saw 11,000 was over the full year, whereas if you see the quarter number it was.
Alok Kumar Jagnani — Chief Financial Officer
So right now it is almost 9,500 versus an 88,100. So Q4 it was 8,700.
Nitin Chugh — Chief Commercial Officer
So there are two things. So 9,400. Sorry, which is 9,500 now
Rahul Guha — Managing Director and Chief Executive Officer
that he’s asking for 11,000. So in FY25 overall transacting franchise was 11,000 plus what we have reported for the quarter Q4 number was around 9,400. 9,000 just Q4 active it was 9,400 and this quarter we had 9,500.
Yogesh Soni — Analyst
Okay, understood. One question on again on the franchise side if you could help me understand, I mean what is our generate of the franchisees?
Alok Kumar Jagnani — Chief Financial Officer
Right. So see with the net addition of almost 1400 there is almost a thousand odd franchisees which, which have gone out from say last year Q1 where we then we added almost 2400 odd and thus we landed almost 1400.
Yogesh Soni — Analyst
So net addition remains to be 400 or I mean that is how one should read.
Alok Kumar Jagnani — Chief Financial Officer
Net addition of 1400. Total acquired was say in the range of 2400 where thousand odd went away and thus remaining 1400.
Rahul Guha — Managing Director and Chief Executive Officer
And we just. So just to clarify, we Report only the net addition, not the churn number. So you know what you see in the reporting is only the net addition minus churn. But as Nitin said, you know we add much more than this but we have a significant churn. Typically it happens itself. Right. So we know what is the net addition as a result.
Yogesh Soni — Analyst
Okay. And one last question just I wanted to understand on our salesforce so I mean what kind of efforts are we making, you know to or how the efforts are being made to add hundred franchisees every month. I mean we do not see this number for other companies whether it is lab additions or service network. So would want to understand on this bit.
Rahul Guha — Managing Director and Chief Executive Officer
Sure, I’ll let Nitin take this.
Nitin Chugh — Chief Commercial Officer
Yeah, so from an effort perspective, see there are a couple of teams. I don’t want to really get into the details of exact strategy. But yes, there is a centralized team which works on lead management and then there is an on field team which goes and meets the clients and converts the clients. Right. So they work very closely with each other to manage the lead flow, manage the lead conversion funnel, etc. And then there is a conversion team which makes sure that the onboarding and onboarding is very smooth of the newly converted franchise is coming into the ecosystem with training etc.
So that’s the entire strategy. But yes, we have people on ground also doing this.
operator
Thank you. We move to the next question from Saket Kapoor from Kapoor and company. Please go ahead.
Saket Kapoor — Analyst
Namaskar sir. Am I audible?
operator
Sir, yes sir, please go ahead.
Saket Kapoor — Analyst
Firstly, can you give the breakup for the cost of material consumed? What are the key key constituent and what is the cost of setting up of one french a franchisee in terms of what kind of deposits are required or if you could just explain the what are the key key requirements for you to enroll for a franchisee to. Enroll under thyroid care?
Rahul Guha — Managing Director and Chief Executive Officer
Sorry, I didn’t get your name.
Saket Kapoor — Analyst
I am Saket Kapoor, sir.
Rahul Guha — Managing Director and Chief Executive Officer
Thank you Saket. The cost of materials is mostly reagent, almost entirely reagent which is used during the processing of the test. I hope you are asking this question because you want to become a franchisee and Nitin, you can explain what what are the requirements to become a franchisee?
Nitin Chugh — Chief Commercial Officer
See, to open a collection center is very, very straightforward, right? You Approximately need a 200 square feet area, right where you just need some things in place which is a table, chair, a working condition where a phlebotomist can sit and get a patient come in and give the blood sample collection, obviously bathroom etc. For other kinds of samples. And there are certain very simple conditions on how the board should look, what is the size of the board, what kind of mirrors you have to port, etc. Etc. It typically requires a 3 to 4 lakh kind of an investment from an infrastructure point of view, plus some basic deposit obviously if you really want to use a brand name.
Saket Kapoor — Analyst
Sir, what is the deposit part? Is it the refundable out of the total, the franchising model, how much then the deposit money we carry in our. Balance sheet, if.
Alok Kumar Jagnani — Chief Financial Officer
Approximate it is very, very less. And only certain franchisees only give us because only 10% of our franchise we have a board, but it is given back in form of wallet balance which gets utilized in the business itself. So nothing gets carried in our books as such because we typically give them back in form of some informal material, but mostly in wallet so that it gets used in their business.
Saket Kapoor — Analyst
And for the reagents part, how are we sourcing the same? Are we dependent from domestically or are we importing the reagents? Who are the key suppliers for us?
Rahul Guha — Managing Director and Chief Executive Officer
I don’t want to share the supplier names and all of that, but I would say a vast majority of reagent which is true across India is imported and we are no different from the industry.
operator
Thank you. Mr. Saket, may we request you to rejoin the queue for follow up questions? Our next question comes from the line of Lokesh Manik with Vallum Capital. Please go ahead.
Lokesh Manik — Analyst
Yeah, hi, thank you again team, couple of questions. One is in the earlier calls how you mentioned that we would be, you know, sealing the ebitda margin at 50% and you know, anything over that, we reinvest in the business now clearly the operating leverage that is kicking in is much higher than even your plans, I assume for reinvestments or if you know those plans takes time, then do you see EBITDA margins at the earlier levels of 37, 40%?
Rahul Guha — Managing Director and Chief Executive Officer
Yeah, I would say, you know, I will continue to hold to the guidance. I would say Q1, we didn’t have that many opportunities to reinvest into the business but we will continue to see how we can accelerate the growth. Right. I’m particularly keen to see if we can evaluate now seeing the success of Winter and Polo and the full integration and the team’s capability to be able to acquire and integrate in very short periods of time. I would like to deploy capital to see if we can expand the business much faster. So yes, we didn’t have too many acquisition opportunities in this quarter, but I would say we are continuing to be on the lookout so please be calibrated in your expectations on operating leverage because we are continuing to seek out opportunities for growth.
Lokesh Manik — Analyst
No, I completely understand that. I’m coming from more from a steady state perspective because even your expansion in opportunities is more OPEX driven rather than heavily capex driven. So these are temporary nature operations stabilize and in a steady state then you go back to 35, 40% levels. It’s just the structure of a business, if I’m not wrong.
Rahul Guha — Managing Director and Chief Executive Officer
Yeah, but see, we have a management that doesn’t stay in one place. There’s no such steady state for us. We are continuously expanding and continuing to grow. So when the steady state will come, who knows. For example, we were the first lab chain to become 100% enable. And then immediately we said let’s become six sigma, right? So I don’t think there is anything as a steady state in our business.
Lokesh Manik — Analyst
My second question was just clarification of few cost items. So there is healthcare service charges, business promotion and sale incentives and legal and professional services. So just the nature of these three expenses, if you can share would be great.
Rahul Guha — Managing Director and Chief Executive Officer
So that it is. Not readily available. Immediately, but we can share.
Lokesh Manik — Analyst
I’ll follow up with you on that. Thank you so much.
operator
Thank you. Our next question comes from the line of Aditya Chera with Incred Asset Management. Please go ahead.
Aditya Khemka — Analyst
Good evening. Congratulations on a good set of numbers. My question is on the inorganic growth reported. It has contributed around 2% to the growth. Whether there is any element of cannibalization by Thyrocare into the other acquired businesses or the run rate because it’s the same from Q4 to Q1, is there going to be any element of growth from the inorganic acquisitions that we have done. And second, earlier in the call you mentioned that second half was very good for us last year. That implies that the base will get slightly stiffer for further growth. So whether you see the current momentum in franchisee growth etc.
Allowing you to deliver similar growth that we have been delivering. If you have any comments on that, these are my questions. Thanks.
Rahul Guha — Managing Director and Chief Executive Officer
So on the first question I would say there has been. See there were parts of the business that we or businesses that we acquired that we didn’t want to continue. Right. It has nothing to do with cannibalization. So there were certain geographies where we felt it didn’t make sense or there were lines of businesses like for example in clinical diagnostics, there was a research testing that they were doing which we felt we didn’t want to continue. So to that extent we pruned the business down. But once we took over the business and pruned it down since then both businesses have delivered good growth.
Right. You have to remember we acquire businesses only in geographies where we have very little presentation. So there is very little risk of cannibalization when we do the acquisition. And in fact I would say the Polo region of Punjab, Himachal and Uttarakhand which is where we did the acquisition, is our strongest growth year on year for the year. So I think that has worked out well. Coming to your second question which was H2. See as I told you, I think it’s too early to revise guidance. I’ve been saying we will all be happy with mid teens growth which is faster than the industry and volume led.
That being said, Nitin has done an excellent job on the franchise acquisitions and additions over the last year. It remains to be seen, as you rightly pointed out, H2 was very good. So the base is very strong. Let’s see how it pans out. Right. But I definitely feel the franchise addition and that momentum is very, very encouraging.
Aditya Khemka — Analyst
Got it sir. Thank you and all the best.
operator
Thank you. The next question comes from the line of Anshul from MK Global. Please go ahead.
Anshul Agrawal — Analyst
Hi. Thank you for the opportunity. Hope I’m audible. My first question is on the partnership and franchise business. Is there any structural difference between these two businesses except one being online and other being offline? Is it exclusivity or any difference in tariffs?
Rahul Guha — Managing Director and Chief Executive Officer
No, I don’t think there’s any difference. They serve different segments of customers. One is an online customer, the other is a, you know, a customer who likes to walk into a store and get their diagnostic test done. So but I don’t think there’s any.
Nitin Chugh — Chief Commercial Officer
The only majorly what is different is in our partnership segment there is a lot of sample collection also that is done by arrowcare through its own phlebotomy fleet. Right. So basically where we have, we also have very good tech APIs. One single integration. Any partner can open their diagnostic company or business in 300 plus cities etc. Where we can do the right from collection to processing to reporting, everything is done by us. Whereas on the fine side, you are aware these collection centers manage their own collection. We manage the logistics of sample coming from their center to our lab and then processing.
That’s majorly the structural difference.
Anshul Agrawal — Analyst
Got it very clear. There is no term of exclusivity with any of our partnership customers. Right. They are defy to use us as well as any other diagnostic chain as a vendor slash Partner?
Nitin Chugh — Chief Commercial Officer
Yes, yes and no. See, it depends. For example, in Parmiti’s case it is 100 exclusive partnership with Sinochet and with some other couple of other smaller partners also. Yes, we do have these kind of agreements because see, sometimes it is better for them to deal with one partner who is giving you the maximum reach that a company engage. So from an industry perspective, when you take large players, IOPIA has the largest reach in terms of Lego network and logistics network. And thus with one single API, like I said, you can open up your diagnostic business in 300 cities.
So some companies prefer having one partner to deal in terms of pricing and everything and you know, then integrating the APIs and building their own white label solution on top of it. Right. So that way, yes, we become exclusive. But yeah, there are other partners, corporate partners or aggregators or insurers who use multiple place.
Anshul Agrawal — Analyst
Thanks, this is useful. My second question is on the number of patients. Are they all unique patients or are these footfalls?
Rahul Guha — Managing Director and Chief Executive Officer
Footfall?
Nitin Chugh — Chief Commercial Officer
Yeah.
operator
Thank you. Our next question comes from the line of Saket Kapoor from Kapoor and company. Please go ahead.
Saket Kapoor — Analyst
Yes, sir. Thank you for the opportunity again, sir. When we look at the business model and the menu list, are we comparable with players like Suraksha Diagnostics in or is there some overlap there or how should we look into it? The modeling part.
Rahul Guha — Managing Director and Chief Executive Officer
See, Surabsha is slightly different because Surabsha has both pathology and radiology. We are only pathology. So that is one important difference. If you compare against only pathology, which is. Dr. Lal Metropolis R cells agilis. You know, I would say as I said earlier in the call, from a test menu point of view, we will be thousand versus two thousand to three thousand, you know, approximately. But from a technology point of view, we have every single technology in our lives.
operator
Thank you ladies and gentlemen. That is the last question for the day. I now hand the conference over to Mr. Rahul Goa for closing comments.
Rahul Guha — Managing Director and Chief Executive Officer
Thank you everyone for joining us and spending time with us this evening. I’m sorry we ran out of time and could not take all questions but it was good to have all of you and engage on all these questions. As always, we continue to remain focused on our strategy which is to be the most affordable, good quality diagnostic testing partner for anyone in the healthcare business. And we continue to execute on that strategy. We have been investing in improving our quality, improving our reach and ensuring our turnaround time is as close to best in class.
We made substantial progress on all of this and that is what is driving the results that you see. I thank you all for your support in this journey, and I wish you all a good evening. Thank you.
operator
Thank you. On behalf of Thyrocare Technologies Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines. Sam.