Virinchi Ltd

Adopting AI in Fintech and Healthcare delivery

OVERVIEW

Building on last year's theme of Lend-Tech and Health-Tech, Virinchi is in the process of implementing AI technologies in its flagship SaaS platform, Qfund™ and in healthcare delivery.

The company reinforced its Machine Learning algorithms for credit scoring and risk management and deployed Predictive Analytics for loan default prediction, enabling our customers, the alternative lending institutions, in making enhanced and insightful lending decisions. The latest version of Qfund with these reinforced AI features aided in gaining two customers during the financial year under review. This will have a relatively large positive impact on the revenues and profits in FY 202425 and beyond as the contracts are long-term in nature. SaaS revenues increased 4.05% to Rs. 127.69 Crore during the year under review.

During the year, the company started work on Clinical Decision Support System - Right to Science (RTS) to augment doctor decision making through patient similarity model development involving a gathering and analysis of clinical and diagnostic data of a large number of patients over multiple parameters.

Though the external healthcare revenues were lower compared to last year's revenue at Rs. 119.07 Crore, the adjusted EBITDA strengthened due to the efficient management of operations.

Patients are investing more in health insurance than ever; in turn, this insurance coverage is providing them with the incentive to be treated in better hospitals. This is enhancing the bed utilisation of organised and professional health care providers.

At Virinchi, we see an attractive market opportunity emerging: the country is extensively underpenetrated for organised corporate health care across the country; this under-penetration is evident along eastern India. As a forward-facing company, our objective is to invest in urban clusters along the eastern coast, moving in a contiguous manner and capitalising on our growing brand recall.

At Virinchi, we are optimistic of commissioning our 100-bed oncology heath care facility during FY 202526. This facility in Hyderabad will capitalise on the following advantages: it is contiguous to the company's flagship Banjara Hills health care facility; its dedicated oncology focus addresses a growing social priority; a singular vertical will help develop the facility into a centre of excellence that attracts the best professionals; by the nature of its focus, the facility is expected to deepen specialisation over general health care facilities, resulting in superior outcomes.

The Vizag facility would be commissioned once the Oncology facility at Banjara Hills is up and running. When you put these two expansions together, you get a Virinchi that is likely to grow its bed count across the next two years and emerge as a 1100-bed health care organisation. This is expected to enhance the company's scale to be among the ten largest corporate health care companies in the country, enhancing visibility, talent access and quicker ramp up in new centres of the company's presence.

At Virinchi, the key to enhancing the profitability of these facilities lies in the company's contrarian approach.

One, the company's approach to acquiring new facilities has been asset-light (leasing), ensuring that the Balance Sheet remains underborrowed.

Two, the company invested these facilities with digital interventions, pricing patients with an advanced experience without compromising the personal touch. We believe that this combination - digital yet humane - has emerged as our most effective calling card.

Three, the company's omnichannel approach will comprise a complement of its brick-and-mortar approach with its telemedicine facility. In an India that is extensively under-penetrated for organised health care, there will be a premium in reaching out to doctors across distances connected through a robust video engagement that makes it impossible for the health care facility to service patients from outside the city of its presence.

We see attractive headroom in this regard: there is only one organised omni-channel service provider in the country, providing an attractive opportunity for a committed health care company like Virinchi.

We believe that this approach will do four things for our health care business: it will strengthen our brand in locations where we are not present, seeding our brand in those markets for a time when we may enter that location with a brick and mortar presence; it will empower us towards asset-lightness where we deliver a superior Return on Knowledge and Return on Brand. Further, it will strengthen our competence in addressing patients from across regions by cutting across cultural and language barriers, building our multi-regional personality besides deepening our service orientation using digital technologies and strengthening our brand recall as a technology-driven organisation.

The enhanced use of technology will accelerate patient recovery and make it possible for them to be discharged around shorter tenures. This will enhance our respect in the following ways: It will strengthen our recall as patient-focused and widen our prospective patient reach leading to superior capacity utilisation; it will generate attractive billings within shorter time frames (strengthening our capital efficiency). We are optimistic that the synergistic play from the above factors will enhance overall value from this business.

In view of these intiatives, I am optimistic that Virinchi is poised to post a sharp increase in revenues around attractive margins in FY 202425, enhancing value in the hands of all those who own shares in our Company.