Thank you, Sagar. Good afternoon, everyone, and thank you for joining us on Healthcare Global Enterprises Q1 FY27 earnings conference call.

We have with us Dr. Manish Mattoo, Executive Director and CEO; Mr.

Sanjeev Kumar, Chief Financial Officer; and Mr. Ravi Gothwal, Head, Investor Relations.

We would like to begin the call with opening remarks from the management, following which we will have the forum open for an interactive Q&A session. Before we start, I would like to point out that some statements made in today's discussion may be forward-looking in nature, and a disclaimer to this effect has been included in the earnings presentation shared with you earlier.

I would now like to invite Dr. Manish to make his opening remarks.

Management, please go ahead.

Good afternoon, everyone, and thank you for joining us for HCG's Q1 FY27 earnings call. Before I begin, I would like to warmly welcome our new Chief Financial Officer, Mr.

Sanjeev Kumar, who has recently joined HCG. Sanjeev brings more than three decades of experience across finance, strategy, and business transformation, and I am delighted to have him as part of our leadership team.

His experience will further strengthen our execution capabilities as we continue to build India's leading oncology platform. As we enter FY27, our focus has progressed from laying the foundation to executing our strategy and delivering consistent operational and financial performance.

Over the past year, we have achieved several important strategic milestones that strengthened our position as India's leading oncology platform. We sharpened our strategic focus through the successful divestment of our fertility business, which was completed at the end of June '26.

We also strengthened our balance sheet through a successful rights issue, expanded our leadership team, successfully commissioned our North Bangalore hospital, and continued to advance our brownfield expansion pipeline and other growth initiatives. With these foundational initiatives in place, our priorities are clear: delivering sustainable, profitable growth, driving operational excellence, improving asset utilization, enhancing patient experience, building our clinical differentiation, optimizing our revenue mix, while reinforcing our leadership in cancer care.

I am pleased to share that we have started FY27 on a strong note. During the quarter, HCG delivered revenue of ₹6,951 million, representing approximately 13% year-on-year growth.

Our newly operational North Bangalore hospital, which commenced operations in May '26, contributed ₹67 million during its very first quarter. More importantly, growth was broad-based, with 16 out of our 25 centers, including North Bangalore, delivering their highest-ever quarterly revenues, reflecting sustained patient demand and improving execution across our hospitals.

Revenue growth during the quarter was primarily driven by a 11% increase in patient volumes. ARPOB grew by 2%, ARPOB improvement driven by annual price hike and favorable payer mix, partly offset by changes in case mix, including a lower contribution from high-value, low-margin therapies.

Our objective is not to merely grow faster, but to grow with a better quality of earnings by treating more complex oncology cases, improving our patient mix, enhancing productivity, and generating stronger returns on the capital we deploy. We believe this disciplined approach will create sustainable value for both our patients and our shareholders over the long term.

I am encouraged to see this strategy translating into visible outcomes. During the quarter, non-institutional business revenue grew by 17% year-on-year.

As a result, our payer mix improved, with non-institutional contribution increasing from 67% in Q1 FY26 to 69% in Q1 FY27. This gradual improvement in revenue mix is an important driver of sustainable profitability and strengthens the long-term quality of our earnings.

On the profitability front, reported EBITDA for the quarter stood at INR 1,223 million. Excluding losses from North Bangalore and one-off costs, adjusted EBITDA increased by 20% year-on-year to INR 1,339 million, with EBITDA margins improving to 19.4% from 18.2% in Q1 FY26.

This demonstrates that the underlying operational performance of the business continues to strengthen. Overall, our Q1 performance reflects healthy operating momentum across the network, supported by robust patient demand, improving operational execution, and continued progress in enhancing our revenue mix.

Let me now briefly touch upon the performance across our operating clusters. The South Cluster delivered another strong quarter, with revenue growing approximately 16% year-on-year, supported by healthy growth in both patient volumes and realizations.

We also witnessed continued improvement in the cash and TPA mix across our Bangalore Center of Excellence and the Vizag cluster. As a reminder, the South Cluster numbers include the newly commissioned North Bangalore hospital, which contributed INR 67 million of revenue.

The West Cluster reported growth of 9%, led by the Maharashtra region, which grew by over 14%, while growth in the Gujarat remained relatively moderate during the quarter. Overall growth was led by volume, which grew 11% year-on-year, and ARPOB remained broadly stable during the quarter.

The benefits of an improving payer mix were largely offset by changes in case and service mix, including a higher share of medical oncology patient footfalls, which typically carry a lower average revenue per patient. Furthermore, institutional business in West Cluster declined by more than 16% year-on-year, which moderated overall revenue growth of the cluster.

However, this is consistent with our strategic focus on improving the quality of revenues, and we expect this business to be progressively replaced by high-value cash and non-institutional patients over time. East Cluster delivered strong 22% revenue growth during this quarter, driven by robust volume growth across the region.

Despite temporary moderation in ARPOB, healthy patient volumes continue to support strong top-line momentum. We remain confident that the significant increase in patient throughput provides a strong foundation for future growth.

This provides us with adequate financial flexibility to fund our expansion pipeline while maintaining a disciplined approach to capital allocation. Looking ahead, I am particularly encouraged by the initial performance of our North Bangalore hospital, one of our most important strategic investments.

In the very first quarter, the hospital recorded over 550 new patient registrations, more than 300 admissions. While the hospital is still in the early stages of its ramp-up, these early operating metrics reinforce our confidence in the long-term potential of this asset.

We expect utilization to improve steadily over the coming quarters as insurance empanelments are completed, onboarded clinicians ramp up their practices, and awareness and brand recall in the surrounding catchment continues to increase. Our capacity expansion continues to progress well and remains an important growth driver over the coming years.

During the quarter, we added 121 operational beds across the network, including 61 beds in the South Cluster, 27 beds in West, and 26 beds in East Cluster, and 7 beds in our Kenya unit. Looking ahead, we have plans to add additional 65 beds in FY27, 520 beds in FY28 and FY29, and 230 beds in FY30.

Nearly 60% of our planned capacity expansion continues to come through brownfield projects, enabling faster execution and low capex, whereas three greenfield projects are in the pipeline, and we will share more details once finalized. Please refer to slide 12 of the presentation for more details.

Alongside bed expansion, we continue to strengthen our clinical capabilities by investing in advanced technologies. During the quarter, we commissioned a new Linac in Rajkot, completing its transition into a comprehensive cancer center.

We also enhanced our robotic surgery capabilities with the addition of two surgical robotics systems: a new installation at Nashik and a replacement at our Bangalore COE. Clinical excellence remains at the heart of HCG's clinical differentiation.

During the quarter, our teams successfully managed several highly complex oncology cases across surgical, medical, and radiation oncology. These included advanced CAR-T therapies for relapsed hematological cancers, rare anatomical cancer surgeries, first-of-its-kind minimally invasive thoracic procedures, and complex organ-preserving oncological surgeries.

Such cases reflect the depth of our multidisciplinary expertise and reinforce HCG's position as a preferred destination for complex cancer care across India. Overall, we are encouraged by the momentum we are seeing across the business.

The strategic actions undertaken over the past year have significantly strengthened HCG's platform, and we believe the company is well positioned to deliver consistent, sustainable, and profitable growth, while further consolidating its leadership position in oncology care. With that, I would like to hand the call back to the operator.

I will be happy to take your questions.

Hello. Am I audible?

Good afternoon. Hi, sir.

Good afternoon. Sir, congrats on a good disclosure in the PPT, and so I had two questions.

First is, how was the performance in the various buckets of the former presentation where in last quarter PPT you highlighted the bucket scientific more than ₹10 crore of revenue per month and then ₹5 to ₹10 crore. How was the performance in those buckets this quarter?

Sumit, you are not clearly audible. Sumit?

Hello,

Sumit, can you repeat the first question again? The line is not

clear. Sir.

Basically my question is on the performance of the various buckets of the revenues. Basically in the more than ₹10 crore of per month revenue and then ₹5 to ₹10 crore.

How was the performance in those buckets this quarter? Hello.

You're referring to the revenue bucket that we have exhibited in the presentation.

Yeah. This quarter you have not added that slide, yeah, how was that performance?

Yes. That's right.

We believe it will be an annual disclosure, but however, since you've asked that question, the bucket with more than ₹10 crore per month revenue, we've got from last year's four hospitals, we've moved to seven hospitals. We've added three new hospitals to that.

The bucket with 50 ₹5 to ₹10 crore per month revenue, that number has gone down from 14 to 11. We are seeing more and more hospitals moving up that ladder of higher revenue numbers per month.

Then the last category with revenues of less than ₹5 crore per month, that number has gone from six to seven with the addition of North Bangalore to that group.

Okay. What would be the like-to-like growth in those buckets?

Hello.

Sumit, I don't have that number right now, but I can offline connect with you and give you that.

Understood, sir. Understood.

Sir, second question is in the presentation that you have highlighted, in FY28 and FY29, there are 180 beds on the Greenfield site. Which we expect these projects to come?

These 180 beds will obviously come from two Greenfield projects. One of them is in our South Cluster in Whitefield.

The other one is in Maharashtra, in our West Cluster. I think the likelihood of the first one to operationalize is somewhere at the end of FY27-28, and the other one in the subsequent year.

Understood, sir. Thank you.

All the best.

Thank you, Sumit.

Yeah. Am I audible?

My question is, can you paint a picture on the plans in reducing the borrowings, and what's the strategy of the company in reducing the financial cost?

Sorry, could you come again, please?

Yeah. What is the strategy of the company in reducing the financial cost?

Is the company going forward would have a strategy to reduce the borrowings so that the profit would be leverage-able in the financial sheets?

Hi. Sanjeev this side.

As you actually see that the interest cost has come down during this quarter because of the proceeds that we had raised from the rights issue that have been used for the purpose of repayment of some of the loans, almost amounting to ₹170 crores. We will actually continue to actually fund our growth through a mix of debt as well as internal accruals, and based on which the interest cost will actually fluctuate from year to year, but certainly at this point of time in this year, we expect it to be moderated from the last year perspective, as compared to last year.

Okay.

Thank you. I'll wait in the queue.

Mhm.

Hi. Good afternoon.

As per the slide in investor presentation on bed expansion, the bed expansion compounds at an 8% CAGR from '26 to '29 against our outlook of a mid-teens revenue growth. Would like to know your outlook on the same center growth, case mix, higher occupancy, etc.

How this mix will contribute towards the overall outlook that you have on revenue growth? How are you looking at this internally?

That's my first question. See,

we remain confident of delivering a mid-teens growth from the existing centers, and including the new beds that is getting through the greenfield and brownfield expansion. Put together, as I said earlier also, we remain confident of delivering mid-teens growth, and there is no change in that outlook.

Our focus will remain on margin improvement, which will improve progressively on the back of improvement in payer mix, higher complexity of clinical work, paring down of the losses from the new hospitals, and better operating leverage coming from existing centers. I think it's going to be a mix of mid-teens growth and focus on increasing our margins.

Right. Next question is on your outlook on the expected loss from the greenfield facility for FY27.

Also now that the ESOP plan is approved, how do you expect the quantum to be charged going forward? These are the two questions.

Aditya, can you repeat your second part of the question?

The ESOP plan that was approved, how do you expect the charge to sort of hit the P&L going forward?

On your first question, Aditya, we are really excited about the way North Bangalore has started to ramp up. As I mentioned earlier, we've done nearly 7 crores within the first quarter itself, for comprehensive cancer center that's a good ramp-up.

We're really excited by the quality of clinicians that we have onboard. We have South India's second and perhaps India's most modern MR Linac, which gives a very sharp clinical differentiation.

We are among the very few hospitals in this part of the country to have organ-specific surgical teams, and we've got very good response from the community so far. Very excited about the ramp-up and how the early traction has been.

We have onboarded key doctors, that process is complete. MR Linac commissioning happened in July.

Most of the costs have been incurred, and now we are focusing on creating awareness in the market through dedicated campaigns. That process is on.

As I think most of the costs have been built in, I feel we've reached the peak EBITDA loss in this quarter. From here on, we feel as we ramp up clinician practices, insurance empanelments happen, and revenue goes up meaningfully, I think the losses will come down quite reasonably in the next few quarters.

That's our projection for North Bangalore. On the second question, the ESOP policy is undergoing final stages of approval, and that charge will impact the company's P&L in quarter two.

Okay. One last question was about the likely impact of the discontinuation of some of the chemo drugs.

How much of the impact are we expecting in the current financial year from those? That's it from my end.

The impact in Q1 has been about 1.5% on our top line, and that's why I think if we were to plug that back, the top line would have been around 15%. Having said that, we've discontinued those drugs because while they were high-value, they were low-margin.

While the impact is about 1.5% to the top line, it has been margin-accretive for us, which is reflected in our margin expansion on a like-to-like basis.

Thank you and all the best.

For the next few quarters, it will remain in the same vicinity, might marginally come down also as it gets replaced by higher-margin cash business.

Noted. Thanks.

Good afternoon, team. My question is on the operational excellence side.

On the third page of your investor presentation, you mentioned that there are some key initiatives are underway. The first one is cost optimization, and the second one is driving productivity improvement, and the third one is enhancing the patient experience.

Could you please add some color on what kind of initiatives are undergoing in the cost optimizing side? See,

on the cost side, we feel there is an opportunity across all the cost line items today, and the work is happening both on manpower cost and other fixed costs across centers. We're using a lot of automation and data analytics on that.

As far as patient experience is concerned, cancer is a very serious illness, and I think there is never enough that we can do to make our patient experience better in our hospitals. We've set up a dedicated team to look into areas where we can make the experience inside the hospital better when it comes to infrastructure, the services we are delivering.

While many of our hospitals are doing a great job, I think there is still headroom for us to improve that. The third piece is around productivity.

We're looking at both the clinical and the non-clinical productivity. How do we assist our clinicians with better technology and sales and marketing-accelerated efforts to improve their practices?

That's one part. The other part is the non-clinical productivity that will come through better conversions and plugging the revenue leakage.

All that work is happening across the organization, which will be EBITDA accretive at the end of the day. More importantly, I think the big piece is that how does their experience inside our hospital become really, really better?

Got it. My second question on the revenue growth side.

How much the increase revenue contribution from the ARPOB increase or the patient mix increase or the volume increase? Could you please break down that also?

The growth will be in line with our inflation, and I think that's all the projection that I can give you today as of now. Okay.

Are you there? I didn't

get your question. I'm here.

Okay.

Sure. Go ahead, please.

Yeah. The last question from my side is, in this quarter, you completed the strategic exit from Milann.

You mentioned that that strategic exit will sharpen the focus on core oncology and enhance the management focus and execution. How that exit will guide or what will be the strategy for that, or what triggered the exit from Milann?

The focus is on building our technology, our clinical capabilities, starting new programs like CAR-T cell therapies in our major centers, starting bone marrow transplant program in major center, improving the robotic surgical work that we are doing, all the multidisciplinary clinical protocols that we have in our centers, how do we advance that in all the centers. I think it's going to be a mix of all that.

The idea being how do we invest more in precision diagnostics, in precision oncology, through targeted cell therapies, more advanced radiation therapy technologies. All that is aimed at giving our clinicians more tools so that they can perform better, more complicated procedures and deliver on better outcomes, which we are known for in any case.

Taking the focus on core oncology. If you're referring to the presentation.

Got it. Thank you.

That's all from my side. I will be in the queue for the next question.

Hi, sir. Thank you for taking my questions.

Sir, you have mentioned in your opening remark as well as into the press release in terms of there has been all-record quarterly revenues from 16 centers out of the 25. Maybe if you can help us understand in terms of which bucket of the centers have actually moved up the value chain?

What I mean is that the last quarterly used to report the ₹10 crore, ₹5 to ₹10 crore monthly revenue, and below ₹5 crore bucket. Maybe if you can help us understand that?

Actually, Himanshu, the growth has been broad-based across buckets. From the smallest-size hospitals to the largest, most of the hospitals have done well.

It's not restricted to any bucket. What has particularly happened is that three hospitals particularly have moved up from the ₹5 to ₹10 crore trajectory to 10-plus crore trajectory.

That's been a plus. You can see the quantum of growth that some of these three hospitals must have had.

Again, just reiterating that the growth has been broad-based across regions and across the size of the hospitals.

Okay. Sir, second, if you can elaborate on the FY28-29, we have 340 brownfield beds addition, right?

Maybe, but then if I actually look at the slide 12 of your presentation, the brownfield details which you have given, so that is actually not adding up to 340. Maybe what are the extra beds where you are adding up?

This brownfield addition of 340 beds will be across our 25 centers. We have mentioned few of the centers, but then there are other additional centers where we have the capacity.

We will operationalize more beds in later part of FY28 and '29.

Maybe if you can help the centers most likely where the beds can be added?

Just to add to that, what Ravi just said, I think where the beds need to be added is also an activity of assessment on an annual basis on the basis of the capacity and its utilization. That's the reason why we have actually left certain beds where there is a certainty, completely that is being worked out.

As a part of the annual exercise that we actually will undertake, let's say, in the month of Jan to March quarter, we will actually again look at where are the other beds really required in various facilities, and we will take a conscious call to really add in those capacities. As far as the brownfield expansion is concerned, and we know that there are a lot of facilities where brownfield capacity is available, which is indicated about very clearly that there will be 520 beds addition between the two years.

Himanshu, this covers just six hospitals, and these are the major, meaningful additions in terms of quantum. There are many other hospitals in this which are not mentioned here, like Vadodara, Cuttack, Ranchi, or many other hospitals which will have additions from 10 to 15 beds, which we haven't mentioned here.

I think there's a long tail which, as they improve their occupancy levels and all, and we'll have bed additions coming at the right time.

Got it, sir. Thank you.

My first question was on capex. How much did we spend in Q1?

Apart from the capex mentioned in presentation, what will be our capex for maintenance and upgradation per annum?

We have incurred a capex of approximately 700 750 million 750 million. As far as the breakup is concerned, yeah, between the growth and the maintenance, we have incurred almost ₹25 crores on account of growth capex and almost ₹40 crores in terms of the maintenance capex.

Also if you can indicate for the full year what would be our spend on just maintenance and upgradation?

On a year-to-year basis, if you actually look at, the maintenance capex is likely to be approximately ₹100 crores in each year, and that's the data we do have.

Okay. This is over and above the capex mentioned for brownfield and greenfield capex, right?

The capex that I mentioned is ₹75 crores is actually growth and maintenance capex both.

Okay. Our utilization level for the Southern Cluster was at 68% in FY26.

I know you've opened a new hospital in North Bangalore, but the existing cluster, till what level of utilization can you take it without growth getting affected? Devang,

the existing facilities can manage utilization levels up to 75-80%. There is ample headroom for growth in our clusters across the board.

Right. The other question was on marketing and promotion spends.

One of our targets was to increase brand visibility. Have you seen a step-up in those spends, a meaningful step-up from earlier?

Definitely. We have doubled down on sales and marketing efforts because it's a specialty which relies a lot on these channels for gaining patient volumes.

HCG enjoys a very strong brand recall in many markets, but it needs to be percolated down to all our consumers. We have doubled down on sales and marketing efforts and then branding efforts, too, and you can see that in the spend.

Could you give just a broad sense on how much percentage point increase has happened in the spends?

While we actually don't give the specific each and every spend, but I can tell you that as far as sales and marketing is concerned, on a year-to-year year-on-year basis, the expenses have increased, if I a meaningful, more than almost 20% plus.

Okay. Just lastly, the new hospital opened at North Bangalore, you mentioned you'll break even in a few quarters.

By what time period do you see that reaching full utilization or an optimum utilization?

I think full utilization very difficult to predict right now because it's dependent on many factors, but I think the optimal utilization of 60-65%, we should hit anywhere between third to fourth year of operations. Just to add to that what we expect is the kind of response that we have got initially in our North Bangalore facility, we certainly expect to have our monthly breakeven in this year.

Okay. Just my last question, now that we have the funds in the bag, is M&A also a part of our focus in the next two years, or that is something more beyond the near term?

No, definitely it is. Whenever we get a value-accretive opportunity which aligns with our values and helps us expand our presence in a new market or existing market, we'll definitely go for it.

Okay. That's all from me.

Thank you.

Hi. Following the rights issue, what is the cash balance today, and how have you utilized that?

The second question is within the finance and depreciation, how much is attributable to the lease expense for this quarter?

Out of rights issue proceeds which we actually had, we have used ₹170 crores for the purpose of debt repayment, which is ₹170 crores. We also increased our shareholding in our Vizag facility from 51 to 85%, and also we used almost ₹120 crores.

Almost ₹50 crores we actually used for the purpose of basically expenses, and ₹95 crores used for the purpose of general corporate purposes, and ₹25 in terms of the use of the 98 the rights issue proceeds.

Right. On the depreciation and finance lease component within the total amount of roughly ₹110 crores?

Could you please come again?

The lease component that will be lying in the depreciation and finance cost for quarter one FY27? What would be the lease component if you have to divide the depreciation into depreciation on assets and the lease component?

I think in terms of the depreciation, if you actually look at, during this particular quarter, the depreciation is actually includes the depreciation on our new facility as well. Over a period of time, this will also include the capex which is offset in decent growth in investment that we have got, as well as in future when we have the greenfield hospitals.

Today it will be in the range of almost 9%, which has been there in as past trends.

Got it.

In your comments, you had mentioned in the West, institutional share of revenues had gone down, pulling down overall revenue. Is it related to a particular state or a hospital?

Is there a change now, or is that something an effort that we have made from our side?

As far as West is concerned, where we have some of the growth which we have talked about is moderate growth, is largely on account of reduction in the scheme business, which is largely low-margin immuno-therapy therapies, and that part has largely impacted the revenue growth. Maharashtra has actually grown well.

It's only Gujarat region, which had a good, high proportion of this kind of business, which we have deliberately cut down on. Hence the growth, while the growth is muted, the margins have expanded.

Right, sir. Thank you so much.

Hi. Am I audible?

Yes.

Hi. Manish, my first question is that now that you've already spent close to 1 year, or maybe more than 1 year in the system, I just want to understand from you that do you think things so far have progressed in line with what you would have expected, or has that been a little slower both on the top-line front and on the margin expansion front?

That's my first question. My second question is that now that you've spent decent amount of time, do you think that at a console level, HCG can at some point in time, let's say 2 to 3 years down the line, this business model can operate at a 23, 24, 25% sort of margin level?

Those are my two questions.

Thanks. A very interesting question.

I would say, I think we could have done better on both fronts. Particularly on the top line, where we did face a couple of headwinds on the price capping and couple of those factors.

I think on margin expansion, our trajectory has been quite good, I would say, to navigate those challenges and still grow at 13-14% so far. I would say is reasonable growth, but definitely we could have done better.

To answer your second question, we're very confident that with the levers that we have in place, the opportunity that lies within oncology segment across markets, the fact that we are present in so many markets across the length and breadth of country, we have a good opportunity to leverage on the centers which are maturing now, and the clinical differentiation that we have and the patient trust that we have earned over these years, I think we're in a very good position to beat the 24-25% EBITDA margins in the next few years.

Sure. Just to understand, could you tell us that out of the 25 hospitals we have right now, how many hospitals would be actually closer to that 25% margin level?

Hello? While we've refrained from giving center-specific details in the past also.

I would say that I think definitely the number has increased over the last year. The fact that our scheme business, institutional business has come down by 200 bps has meaningfully added to our EBITDA margins at a center level also and overall at a console level, too.

About 50% of our centers today, more than that actually, are in that range of 24 to 25%, 20% plus.

Got it. Lastly,

Sorry, 20% plus, just to correct my statement.

Okay. Got it.

Lastly, on the operating cash front, can you tell us what was the cash generation during this quarter? That's my last question.

Thanks.

In fact, in terms of the cash generation that actually we have got, we have almost got pretty healthy cash generation when we really convert from EBITDA to actually cash generation. We almost had a operating cash flow, before the working capital changes, if you really look at, almost hit ₹100 crores almost ₹12 crore.

₹125 crores.

₹125

₹125 crores? Yeah, 18 ₹125 crores ₹120 Yeah, ₹125 crores of operating cash flow before the working capital changes.

If we look at the overall net cash flow from operating activity, it will be in the region of ₹70 crores or so.

₹70 crores?

It would be approximately ₹70 crores from operations. Yeah, ₹70 crores from operations.

Okay. Got it.

Thanks.

Hi. Am I audible?

Sorry, I joined the call late, I'm not sure if this was discussed earlier. In this presentation, you've disclosed that almost 30% of your revenue has come from government business.

I just wanted to ask you how much of this would be attributable to the CGHS patients? The reason for asking this is that I just wanted to know if there was any impact from the CGHS price revision.

We answered this earlier. The impact was about 1 1.5% on the top line because of the price capping, but there was a positive impact on the margins.

Will you be able to quantify this, the margin impact?

Not right now, but we can connect offline, but not right now.

Understood. My second question was what steps are we taking to improve our case mix considering that our ARPOB this quarter was mainly impacted by the case mix?

Thank you. These were my questions.

The case mix is being driven by infusion of technology in many of our centers, whether it's, for example, MR Linac that we've got in North Bangalore as well as the TomoTherapy, the surgical robots that we are getting in some of our centers, establishing the CAR-T cell therapy programs in several other centers, building the bone marrow transplant program, setting up theranostics, again, a part of this precision oncology overall ecosystem, or enabling our systems hospitals to have precision diagnostic capabilities. All these will add to improving the case mix.

We're also

proactively looking and have recruited several clinicians who come with specialized skills, which will help us improve case mix further. Those were my questions.

Thank you.

Yes, sir. Thanks for the opportunity again.

Just wanted to understand what were the utilization levels in all the three clusters?

Can you repeat your question, Sumit?

What were the utilization levels in all the three clusters: South, West, and East?

We actually don't give the utilization levels at this point of time, and this is only an annual exercise, and certainly we would be giving this information when we conclude the March '27 finances.

Directionally can you highlight have they improved or what? The occupancy has more or less been at the same level?

Just want to understand at least on the qualitative aspect.

Yes, definitely they've improved sequentially also and vis-a-vis last quarter, too. Also, Sumit, you need to look at the volume growth.

As we have highlighted, 11% is the overall volume growth. That's also an indicator that the assets are performing better and are utilized.

No, that's fine. Within that, obviously South would be witnessing more or I presume West would be having higher rate of improvement in West versus South.

Is this understanding correct?

Cluster-wise it will be difficult to give right now, Sumit, but overall at a company level, suffice to say that both the utilization levels, the occupancy levels have improved.

Understood, sir. Cool.

Thank you.

My question is on the EBITDA margin side. Despite a nearly only 2% growth in ARPOB, the adjusted EBITDA margin nearly expanded 120 basis points to 19.4%, and which is mostly driven by payer mix and the revenue productivity.

After North Bangalore Hospital ramps up and the company executes a significant bed expansion over the next few years, what do you believe is the sustainable EBITDA margin range over the next 2 to 3 years, and which levers that expectation?

See, we've already stated our long-term aspiration is to get past the 21-22% and reach the 24-25% EBITDA margin. Given our performance in Q1, we are confident that we'll get there.

We're very confident that we are on track to hit those numbers.

May I know the number? It's 21-22 or 23-24?

I said in the next 2 years, we're looking at a 21-22% EBITDA margin. Over the next 4 to 5 years, we're confident of crossing the 25% margin number.

Got it. The next question is on the marketing spend.

How much is right now the marketing spend as a percentage of revenue, and is there any target that you need to set for the marketing spend?

Because of the North Bangalore launch, we're obviously doubling down on marketing in that place. It's gone up by 20% vis-a-vis last quarter.

It's today at 2.9% of our sales. We want to kind of keep it around that mark, given the nature of our specialty and the competitive intensity in several markets that we operate in.

You are keeping the same 2.9% for the longer term also, right?

It will be in that 2.5

to 2.6% range. Got it.

Thank you.

Hello, am I audible?

Thank you for the opportunity, and congrats to the management for great numbers. I have just one question on the long-term margin guidance that the management just mentioned.

What would be the levers for the margin expansion here in the next 4 to 5 years?

The big piece will come from improvement in our payer mix. That's the biggest lever, and we've already seen that happen consistently over the last couple of quarters, particularly in this quarter.

We've we've changed the payer mix by 200 bps points positively, and I think that is going to improve in the subsequent quarters from here. The other piece is investing in the right clinical and technology to improve our clinical work, the complexity of clinical clinical work, whether it's installing TomoTherapy Linac like we've done, or the MR Linac, or the surgical robots that have come in this quarter and will continue in the subsequent quarters as well, or in the right clinical talent, right?

In the last quarter, in the last 4-5 months, we've onboarded about 20 oncologists. I think investing in all those things will definitely help us improve the case mix on back of the payer mix improvement.

Then, of course, the better operating leverage that will come up that will come in help us from from the existing centers as as they mature. We have seen that happen as the EBITDA growth is outpacing the revenue growth because of that leverage, coupled the other factors that I mentioned.

This year particularly, as the North Bangalore losses come down and as it matures next year, that will be another lever for margin expansion for us.

Got it, sir. Thank you so much.

Thanks, Shubhangi. Thank you, everyone, for joining the call.

If any of your questions remain unanswered, please feel free to reach us on the email ID and the number provided on the back of the presentation. Thank you, everyone.

Thank you.