Hi. Good morning, everyone.

This is Rahul from IIFL Capital. I welcome you all to the first quarter earnings conference call of Rainbow Hospitals being hosted by IIFL.

From Rainbow, we have with us today Dr. Ramesh Kancharla, Chairman and Managing Director; Mr.

Abrarali Dalal, Group CEO; Mr. Vikas Maheshwari, Group CFO; and Mr.

Saurabh Bhandari, Head of Investor Relations. Over to you, sir, for your opening comments.

Thank you, Rahul. Good morning, everyone, and thank you for joining us for Rainbow Children's Medicare Limited earnings call for the quarter ended June 30th, 2026.

FY27 has begun well for Rainbow. We delivered another quarter of healthy growth driven by sustained demand across all our core specialties and balanced contributions from both our mature and newly commissioned hospitals.

More importantly, this performance reflects that the investments we have made in expanding the network, strengthening our clinical capabilities, and building leadership across organizations are translating into consistent growth. Revenue grew by approximately 33% year-on-year driven by balanced contributions from our mature hospitals and the new facilities.

Our key operating metrics, including inpatient admissions, outpatient consultations, and deliveries, continues to witness healthy growth. We also maintained a healthy EBITDA growth of 29.9% year-on-year supported by operating discipline and improving efficiencies.

Our expansion journey also gathering further momentum with the signing of definitive agreement for 100-bed brownfield hospital in Malad, Mumbai. We expect the hospital to commence operations in Q1 FY28.

This marks our entry into Western India, an important strategic market where we see significant long-term opportunities. We're also strengthening our presence in Andhra Pradesh through the acquisition of 70-bed Prime Children's Hospital in Nellore along with an additional 30-bed maternal care block expected to commence operations in 6 months' time.

We have also signed a long-term lease for a 50-bed brand-new hospital ready to operate in Guntur, and this facility will commence operations in a couple of months' time. With these additions, the bed capacity in Andhra Pradesh will reach to 500, 500 beds.

On the clinical milestone that made us particularly proud during this quarter was a successful rescue of an 8-year-old child from Guwahati who was critically ill with a severe influenza pneumonia and an acute respiratory distress syndrome. With the ECMO being the only option for survival, our ECMO retrieval team flew over 1,800 kilometers to Guwahati, initiated ECMO, and stabilized the child.

Our team meticulously planned and executed airlifting of this child over 3 hours of flying to the Hyderabad Rainbow. The child remained on ECMO for 36 days before making a full, remarkable recovery and returned back to Guwahati.

This mission stands among the longest pediatric ECMO air retrieval undertaken in the country, and it states a powerful example how the timely intervention and advanced critical care and seamless multidisciplinary teamwork can transform what once seemed impossible into a lifesaving reality. We were humbled to receive an appreciation from the honorable Chief Minister of Assam for recognizing the efforts of Rainbow in saving this child.

In another case, defying all the odds, a 13-year-old boy with an accidental fall from fifth floor of residential building arrived in our emergency with a short notice. On rapid sequence assessment, the child found to be in shock and in coma.

He was resuscitated and commenced on ventilation while addressing the shock. Very soon, he was further discovered to have a sustained thoracic aorta tear, lung injuries, pancreatic bruises, multiple fractures.

Our pediatric cardiologist made an extraordinary decision to address the bleeding aorta by placing a stent graft through angiogram. The bleeding stopped with the graft stent placement.

The rest of the organs will been addressed by the different teams in subsequently. The child spent about 5 weeks in the hospital to make a full recovery.

Though it was a devastating emergency, our multidisciplinary team worked like perfectly choreographed stage show. This how it appears once the recovery when people presented in the clinical meeting.

The boy came back with a smile to present a handmade artwork made by himself to the team of doctors. Extensive coverage received for this big save, and also our team received a huge appreciation from the public.

These challenges made us robust and ready to deal with the most complex emergencies over the decades. Rainbow is now entering an exciting phase of its growth journey.

Over next 5 years, we plan to add 2,500 beds to expand our network capacity to 5,000 beds through an estimated CapEx of investment around 2,200 crores. We already have visibility of 1,200 beds under various stages of development, giving us confidence in our expansion roadmap.

Regarding our projects and progress, we are on track to commence operations in Indore hospital in Q3 FY27. Our regional hub hospital in Coimbatore and a spoke hospital in Gurgaon Sector 56 are expected to commence operations in Q3 FY28, followed by our hub hospital in Gurgaon in Sector 44 in Q1 FY29.

Development is in progress with a Pune hospital of 150 beds and a spoke hospital in Bengaluru, Seegehalli. Both are expected to commence operations in FY29.

We will continue to strengthen our established network across Southern India while selectively expanding into high-potential markets across Western, Central, and Northeast of India. Our entry into Mumbai marks an important milestone in this journey.

We see a significant opportunities to further strengthen our presence in the city over coming years. Alongside our expansions, we'll continue to strengthen our clinical systems, attract and mentor the best clinical talent, and build strong medical leadership across the network so that every new hospital delivers the same standard of care across the group.

With a strong balance sheet and a differentiated care model and a proven execution capabilities, we remain confident of our delivering sustainable growth and creating a long-term value for all our shareholders. With that, I now hand over the mic to Mr.

Abrarali Dalal, our CEO, before passing the mic to Mr. Vikas Maheshwari for financial update.

Thank you.

Thank you, Dr. Ramesh.

Good morning, everyone. We have started FY27 with strong momentum, delivering broad-based growth across all hospitals while maintaining healthy operating margins.

This performance reflects the strength of our differentiated care model and our continued focus on disciplined execution, operational excellence, and sustainable, profitable growth. We have entered '27 with a significantly expanded operating footprint.

Over the past year, our total bed capacity has grown by 26% to 2,435 beds, while our operational bed capacities increased by 22% to 1,862 beds. This expanded platform, coupled with disciplined execution across our hospitals, has enabled us to deliver growth while maintaining healthy operating margins.

This reflects in our operating performance: occupancy improved to over 41%, inpatient discharges by 28%, outpatient consultations by 25%, and deliveries by 23%. We also delivered a 6% improvement in ARPOB while maintaining an efficient average length of stay.

Together, these metrics demonstrate our ability to scale the business while improving productivity and operating leverage. Over the last quarter, we have worked closely with our hospital leadership teams to strengthen our operating rhythm through structured business reviews, sharper performance monitoring, and greater accountability.

These initiatives are helping us identify opportunities earlier, close operational gaps faster, and drive greater consistency across our hospitals, resulting in quicker decision-making and improved execution. I am particularly encouraged by the continued performance of our newer hospitals, which are ramping up well and contributing meaningfully to the overall growth of the business.

At the same time, we remain focused on seamlessly integrating our recently acquired hospitals into the Rainbow ecosystem by embedding our clinical protocols, operating systems, and culture while steadily progressing them towards our profitability benchmarks. Technology continues to be an important enabler of this journey.

During the quarter, we further strengthened our digital ecosystem through enhancements of our CRM platform, patient conversion capabilities, and digital engagement initiatives. These investments are helping us create a more connected patient journey, improve operational visibility, and enable faster data-driven decision-making across the organization.

Another key point has been strengthening collaboration across our clinical operations, nursing, marketing, and corporate teams. As our network expands, sustained performance depends on every function working towards common goals with clear accountability and shared ownership.

We have made good progress in building this operating discipline, and I believe it will become an increasingly important competitive advantage as we scale. Looking ahead, our priorities remain unchanged.

We will continue to drive profitable growth, accelerate the maturity of our newer hospitals, successfully integrate acquired facilities, strengthen our digital capabilities, and execute our expansion pipeline with the same discipline that has defined Rainbow's growth over the years. Supported by a strong balance sheet and an experienced leadership team and a differentiated operating model, we remain confident of delivering sustained long-term growth and creating value for all our shareholders.

With that, I now hand over to Vikas for the financial update. Thank you so much.

Thank you, Abrar. A very good morning to everyone, and thanks for joining us today for the earning conference call for the first quarter ended June 30th, 2026.

Our operating revenue for the quarter stood at Rs 470 crores, reflecting a robust 33% year-on-year growth, driven by healthy contribution from both our mature, acquired, and newly commissioned hospitals. Our EBITDA for the quarter amounted to Rs 134.6 crores, registering a 30% year-on-year growth.

Despite the initial operating losses at the newly commissioned hospitals, we maintained a healthy EBITDA margin of 28.6%. This demonstrates the resilience of our operating model, disciplined cost management, and ability to manage growth without significant stress on balance sheet or return ratios.

Our profit after tax for the quarter stood at 62.5 crores, reflecting a 16% year-on-year growth. Operational performance remained strong during the quarter.

Inpatient discharges, outpatient consultations, and deliveries grew by 28, 25, and 23% respectively. This broad-based growth reflects sustained patient demand across our network, including acquired units and continued ramp-up of our newly commissioned hospitals.

Our payer mix continued to remain balanced and resilient. Cash and insurance contribution contribute approximately 48 and 42% respectively and remained consistent as in the past quarters.

Company continues to maintain a strong balance sheet and healthy liquidity, with cash, cash equivalents, and the investments stands at 613 crores as of June 30th, 2026. This provides us the strong financial stability and flexibility to fund our ongoing capital expenditure program, support our expansion pipelines, and pursue strategic inorganic opportunities while continuing to execute all planned investments through internal accruals.

During the quarter, we invested approximately Rs 56 crores towards capital expenditure, primarily focused on expanding and strengthening capabilities across our existing hospitals and upcoming projects in line with our long-term growth strategy. With these remarks, I conclude my financial update.

We will now be happy to take your questions. Thank you.

Hi, team. Good set.

Couple of questions. Firstly, now that we are on 1,862-odd beds operational, and given the pipeline that we are looking for after the acquisitions, is it right to understand that by the end of this financial year our operational beds should be around 2,050-plus?

First is that. Second is if you can share the strategy we are looking for this year or next year further acquisitions, and given our presence that we are trying to build in Northern India as well, are we also looking for something say in Noida or something say in the west near NCR region, say Jaipur, that kind of strategy?

Yeah.

Yeah. I think given the overall roadmap, I think we have a visibility of 1,200 beds.

Those are the ones which are already been in execution phase. We're also exploring the opportunities the geographies what you clearly mentioned about Noida and the central parts of the India.

Having signed in Mumbai, I think this is a first opportunity for us to get into Mumbai. I think this is a great strategic move for us.

I think Mumbai, we believe it's a great opportunity for us to kind of a expand ourselves to a larger network in years to come. This is how we look at it.

Also there is a lot of growth markets like in Bhubaneswar, Raipur. We are exploring opportunities where there is a need of children's healthcare where Rainbow can play a significant game.

Like we went in Guwahati, I think we're doing very well. We are trying to kind of strengthen our footprint further in the northeast area.

Once we get into geography, we try to play a kind of a larger game. This is how we view it, because that is where we can actually have a better operating model and also send off a clinical as well as operating model can actually be strengthened.

Yeah.

Just to follow up on the same thing. I was looking from the churn perspective.

I think the strategy and the kind of work that we do in child healthcare is tremendous. I think the churn would be more from the perspective of how can we explore into a high say ARPOB, or I don't want to quote in the terms of ARPOB, say high in the terms of revenue models that we can do, because if we see logically something like Gurugram when comes in or Mumbai when comes in or say something we do in Noida or some other territory like that, that eventually will lead to higher revenues per patient kind of thing for us other than what we can organically do.

I was looking from that perspective. Also that should we see going forward the operational efficiency improves, we can reach the higher EBITDA margins from here as well.

Thank you.

Certainly that when we go into the markets like Gurugram and NCR, definitely your price points will be better. ARPOBs will be better.

Abrar, you want to...

Yeah. Hi.

See, specifically talking about Gurugram and Mumbai. Okay?

Gurugram already is a very high ARPOB market because there's a large players in multispecialty there. Who they are.

When we enter Gurugram, our large strategy is going to be around quaternary care. Our hospital there is equipped with high-end tertiary quaternary care like liver transplant, kidney transplant.

We're going to do oncology. These itself are high ARPOB, high ARPP procedures.

Also, Gurugram is a large international market, international medical tourism market. Almost 10 to 15% of that market is pediatrics, which currently does not lie captured because there is no real expertise, specialized pediatric expertise there.

That's coming in, I think that is something that will happen. We will see a lot of these pediatric international or medical tourism patients coming in to us.

It is going to be a very high ARPOB market. If you look at Mumbai, again our hospital being in Malad and it drains almost Kandivali, Dahisar, Borivali, and there's not much.

There's a lot of need for specialized pediatric care in Mumbai. Rainbow comes with a very differentiated kind of a approach.

We go and we look at transporting babies. Our NICU and our PICU will be very, very highly, intensely operational in Mumbai.

Again, these are high-ticket, high-ARPOB kind of procedures. That makes us believe that Mumbai and Gurugram automatically will be high-ARPOB-driven markets.

Great. That really helps.

Just trying my luck on the last one. Now from next quarter, we'll have higher base for the say revenues part.

Should we expect similar kind of at least mid-20s growth or should we look for lower number? See,

I think we are as I said in my earlier speech, that we are really leveraging our operational capabilities, digitizing, doing a lot of lead-driven conversions. I think [the the?]

first quarter growth was very good, but we'll surely be in the range of 20s for sure in quarter two, not less than that.

Great, that is very helpful. Thank you.

Have a good one.

Thank you.

Hi. I just have a couple of questions.

The first one, till a year back, we used to be predominantly in Chennai, Bangalore, and Hyderabad, but now we got into Northeast, we have plans for NCR, and then Mumbai. How should we look at Rainbow say in the next 5 years, given that you have another 1,200 beds to be announced over the next two quarters?

Is the company going to enter new metros in northwest or it will add more of spoke hospitals in south? How should we look at the business model from geography standpoint?

The fact is the country is one, the India. The opportunities actually when you look at it overall the South is demand-premium.

North is an opportunity. That's how we look at it.

When you see overall about the Northern four states, which is Uttar Pradesh, Bihar, Rajasthan, and Haryana put together produces about 62% of the India's births, which is about almost of 28 million babies who are being born. Obviously, that is a market where there is a need of children's healthcare.

There is a need of acute care. Obviously, we need to explore much more significantly.

Also the cities which we have been looking at it, like in Indore, Raipur, and Bhubaneswar, all these cities are actually buzzing. They are actually growing significantly.

There is a significant improvement in the economic status and those things. You look at our multispecialty players.

People have entered in these markets have done very well. Obviously, we being the leader in children's healthcare, for us boundaries is within the country for the moment.

Wherever there is opportunity, we went to Guwahati, and I think we're able to do is actually on an existing platform, we're able to build more capability. Now we are looking at a kind of a make it much more larger multispecialty hub hospital.

In future, in years to come, we'll try to do some spoke hospitals also. It is an opportunity geographically there may be difficulties in operating models, but, of course, we do understand cognizant with that difficulties and try to do the playbook.

Okay. That's clear.

Just a follow-up on this. Does this mean the payer mix will eventually change as you get into new geographies, because right now it's predominantly cash and insurance, but to get some footfalls in new geographies, will you consider looking at government scheme patients at some point of time?

I think we're working on it. I think when excess beds are available, and we are exploring to have some portion of the government business, which again, it depends on the price points and those things because we're not surgical specialties, we're more of medical specialties.

We'll be careful on that front. While improving occupancies and doing a service for the more larger number of people, we need to be conscious about the price points and service delivery and the outcomes as well.

One final question from my side. Could you give some sense on the profitability of a new hospital, say the Assam, Rajahmundry, and the new Bangalore one, how it is doing with respect to EBITDA?

See, these are new hospitals. Though Guwahati acquisition is well established, I don't think there's any margin issue there.

It's doing well. If you look at some of our new hospitals like you mentioned in Bangalore and Rajahmundry, we are still building capacity there.

Having said that, our top lines are doing good. Occupancies are increasing.

Of course, there will be some margin pressure given that these are new hospitals. We don't look at a very long timeline to actually utilize this and get back into or drive profitability positively.

Is it possible to give some number for Rajahmundry, the new Bangalore one on the margin?

Rajahmundry is break-even right now.

Yeah. Rajahmundry is a sort of break-even right now, and EC will be a couple of months or 3 months before we break even there.

We're not far from break-even there.

Okay. That's all from my side.

Thank you. Cheers.

Hi. Good morning, everyone, sir.

On the bed addition front,

sir,

you have given a guidance of 2,500 beds over the next 5 years. It's come around 15% CAGR.

How do you think this will translate to top line? It's close to 20, 25%?

Sir, your voice is a little unclear. Unclear.

Wait if you can just Speak a little louder. Yeah.

Is it okay now? Better, better.

Yeah. Yeah.

On the bed addition front, sir, you have given a guidance of 2,500 beds over the next 5 years. It's come around 15% CAGR.

How do you think this will translate to top-line perspective? Is it 20, 25%?

The revenue projection, if we were to add 2,500 beds in next 5 years, what is the revenue growth that you are looking at 5 years hence? That's the question.

Yes.

I think we will probably kind of go past way beyond 2,000 crores by the end of the year. I think from 4 years from that point of view, it'll double.

This is how we look at it. Looking at the trajectory of our growth of the past and also the pace of our next phase of bed additions and the geographies based on all those things.

That's how ballpark, I think we will have to come back to you a little later on the business plan more clearly. Okay.

On the ARPOB front, sir, normally in this other specialty hospitals when they do very critical specializations related treatments, ARPOB will increase better. How it will improve in our case in this maternity and child care?

How ARPOB will be driven as we grow?

As I said in the earlier question if the gentleman asked. As we are adding larger cities like Gurgaon or Bombay, and we are looking at continuously driving into quaternary tertiary care, larger procedures for pediatric, as I earlier mentioned, pediatric liver transplant, pediatric kidney transplant, pediatric cardiac surgeries, automatically, the ARPOB will be driven because of case mix.

It's a question of getting into newer geographies, driving more of these procedures.

Okay. Usually when we start the new hospital, how the ARPOB levels and when it become mature, say, 5 years from the line, how it looks like?

Any numbers, ballpark number?

I think let's put it this way. We are the pilot project in the country of pediatric.

Every number whatever we have driven and delivered so far is a fresh number. Can you compare with the adult apple to apple?

You cannot. That's what.

We are discovering ourselves. For example, at this point of the time, if you look at the ARPOBs of Rainbow compared to any other peer groups, and we are not far behind.

We're on the top four or five fifth organization. What drives the ARPOBs for us is that what is the quality of the hospital, whatever has been done, whether it is what proportion of intensive care beds, what is the traction of those patients, how much is the obstetrics comes in with that.

On the later stages, in a building stage of the super specialties, then the ARPOBs further will be driven because of the high-ticket items. This is how we look at it.

As I said clearly, as we put it clearly, the next 5 years we are going to reach 5,000 beds with five hub hospitals is along Hyderabad, Bangalore, Chennai, Gurgaon, and Guwahati. These are the hub hospitals.

They will drive the complexity and a higher ARPOB businesses. At the same time, and our spoke hospitals wherever we have done it, they will fairly kind of do very high ARPOB business because of the rapid churn, high outpatient footfalls, and short LOS, and high obstetrics and deliveries, neonatal intensive care.

Those drives the ARPOBs. This is how our mix so far, our understanding of our business and the numbers and the ARPOBs pair out.

We have been the last 5 years CAGR if you look at it, our ARPOBs have grown about 6%, 5, 6%.

Yes, CAGR is 5 to 6%. Yeah.

That's how we look at it. Also,

if I can add here, if you look at our presentation, we have given the breakup of our ARPOB of new units and the old units. New units or mature units, if we definition is 5 years.

If you look at the ARPOB, difference is roughly 18%, right, for the quarter first. For the new hospital, which is less than 5 years, is 59,000 ARPOB, whereas the mature, which is more than 5 years, is 70,000.

The answer which you're looking for is that whether the new hospital when they mature, whether the ARPOB will grow disproportionately. The answer is yes.

As the hospital continues to mature, the complexity of the businesses which they handle, the ARPOB is expected to go up, which we have demonstrated over a period of time.

Got it. Thanks a lot for the explanation.

Thank you.

Hi. Thank you for the opportunity.

My question is on your Mumbai market entry. You spoke about your focus segments, etc.

Just want to understand a bit on your thought on the potential challenges in this market which you can face, and then you can also elaborate a bit on the doctor engagement model which you intend to do for this market. After say a few years down the line, should we assume Mumbai market could be as profitable as your home market of Hyderabad?

How should we look in terms of profitability profile for this part? Thank you.

Yeah.

Damayanti, we have a fairly good understanding of the Mumbai market. I know it's a little high-priced market.

The HR costs are high. Doctor costs are high.

At the same time, the pricing also will be different in Mumbai. The important thing is that for us to be in Mumbai and to see that now, obviously, we can bring a huge value into Mumbai.

That's definitely for sure, number one. Number two is that now the clinical play what we'll be able to do is way different from any other people currently in Mumbai.

That's number two. When you're able to kind of play your strengths in Mumbai, obviously that you will become a premium.

In terms of driving the profitabilities, margins, I think we'll have to study multispecialty hospitals and those things because it is a high-priced, high-cost models and those things. I think I'm not very sure at the moment to put a number onto it.

I'm sure it'll be north of 20%, but I don't know exactly where it will stand. I think that requires some time for us to understand.

This is how I see it now. We're very excited about our Mumbai opportunity.

That opens the doors for us to kind of build on much stronger in Mumbai.

Sure, sir. The doctor engagement model, will that be similar, like doctors will be on Rainbow's payroll or it will be something different than your usual model?

We always try wherever it is to say that the doctors who have to be on the full-time model will be full time because to run a efficient children's hospital, you require a large set of doctors to be full time. There could be some hybridisation can happen in a different level with obstetrics and some of the specialty doctors, but core team has always to be full time.

Sure. That's helpful.

Then wanted to check on one of the market where you had entered few years back, Chennai. How has been the experience there?

I just wanted to understand is that turning out to be the way you expected when you entered Chennai market?

Yes. Chennai has done well initially, and then there is some dip in the 2 years ago.

It's building on well now.

Okay. My last question is your plan for spend towards digital ecosystem.

You in the initial comment, we heard about your initiative there. A bit more there.

What kind of spend you foresee to build this part of the business, and how soon we can see the system which you're working to achieve? See,

most of our infrastructure already in place as we speak. What we've done is in the first 3 months we have actually gone and as I said earlier, we have gone and closed a CRM.

We have a CRM, we have a lead management software in place. We have increased our spends into digital acquisition, that is getting more and more patient-facing digital applications.

We have a conversion system in place. The architecture will be largely differentiated in HIS and a SAP model, and the patient interface will be connected through middleware.

That's what we're working on. We're looking at a BI and a data lake, which will streamline our data and improve our reporting efficiency.

Again, as I said, we've already embarked on this mission. I think in the next three or 4 months, we will perfect it.

Sure. In terms of the EBITDA margin profile, how should we look at say FY27, '28 number given the kind of spend which are currently ongoing?

Presently, we have added a lot of beds. Almost 40% of the beds we have added in the last 2 years' time.

Which is why you see some margin pressure, which have already indicated to the markets in my last two earnings call. Overall, your EBITDA pool is increased.

They'll obviously be some margin pressure. Towards the end of the year, we will still come back between 24 and 25% pre-Ind AS.

That's what we always guide it. I think that's

Okay. Thank you.

Thank you for your response, and all the best.

Thanks, Damayanti.

Thanks so much, Damayanti.

Yeah. Hi, sir.

Sir, we are now expanding aggressively into markets outside South India. Now let's say we have Guwahati, Indore, Pune, Mumbai, and then Delhi NCR commissioning as well.

Given that we are now aggressively going outside core markets, what kind of a management bandwidth we have put in place or we are targeting to put in place to manage expansion across, let's say, these diverse markets?

Okay. See, I think we have our managerial bandwidth is significantly improved.

This is a company which is driven by the CEO and also kind with the vision of promoters. Also you got a very strong functional heads and including the projects teams.

I think our corporate team is pretty solid and strong. They've been here with us for last three, 4 years' time.

We strengthen further and with the addition of some service excellence head and new project head. I think we are pretty robust.

We have a sales and marketing head. I think we have very robust.

Also regional structures also we strengthened significantly, like in Bangalore, Chennai, Andhra Pradesh, and Hyderabad anyway that all of us here is home ground. We will actually be looking at creating some regional structures as we move forward in Mumbai in Delhi as well.

We are very comfortable with aligned team and also high on execution. We look forward to see that a lot more strength coming in.

Sure, sir. In terms of these regional clusters, can you define in terms of what kind of clusters would these be?

Maybe one Delhi NCR and one Maharashtra to manage hospitals across these markets?

Rahul, see, we have a very strong front line of hospital heads who are driving the business, supported by a strong corporate back end with functional heads like Dr. Ramesh mentioned.

Going forward, we will be dividing cities into clusters, and hospital heads will be looking at two, three, four hospitals, depending on their maturity. That's how it's going to be.

It's going to be a large city, which, for example, has, say, six or seven hospitals. There might be two clusters headed by two cluster heads who would also be handling a hospital directly and looking at two, three other hospitals.

It's a typical zonal structure. That's what we're going to look at.

Sure, sir. Let's say out of these 2.5 thousand incremental beds which we are planning to add over the next 5-year period, we have visibility for 1,200 beds.

For remaining, let's say, 1,200, 1,300 beds, would we go into other cities or would look to add hospitals within the cities which we have already identified? Would we go deeper, let's say, in Mumbai, Pune, or Central India or look to further spread across the country?

Fact Rahul, I think anyway, 30% of the beds go into the Southern markets to strengthen our hub-and-spoke model and the new areas and micromarkets. The rest of the 35 to 40% of the beds will 70% of the beds will be in the new markets.

New markets in the sense, it will be Delhi NCR more focus, and some other Northern cities, and Central India plus Mumbai. This is where it's going to be roughly our bed strength is going to be built on next 5 years' time.

Sir,

roughly when the new expansion would happen in all these new markets which have already been identified and laid out to the market? Yeah.

See,

Rahul, one more thing is we have always been we are the organization we want to go in and try and address the large cities, large markets more comprehensively and try and build an hub-and-spoke model and do the wider coverage of the city. That is how I think the children's hospitals I believe in that be efficient in both in terms of delivering the outcomes to the city and also managerial also cost optimization, managerial bandwidth, all these things could be built much more strongly because the medical hospital and emergency-driven hospital.

In a market where you are in, for example in Hyderabad, we have about close to 1,000 beds. Is 1,000 beds going to be stopped there?

We'll continue to add beds in Hyderabad. We'll continue to add beds in Bangalore.

Because that's the power of hub-and-spoke model, and because your reputation is at the highest level, and people would look forward to have you in multiple places presence.

Sure, sir. Sir, last question from my end.

I think you referred to the fact that obviously near-term revenue growth would be 20%, but did you indicate that target is to double top line over the next 4-year period?

Yeah. If you're looking at the growth of 20%, obviously, you would reach the doubling your revenue in 4 years' time, right?

Sure, sir. Essentially, 20% is the target for the medium term in terms of revenue growth?

Absolutely.

Yeah. Thanks, sir.

That's it from my side.

Good morning to the team. I have two questions.

The first question to Mr. Dalal is beyond the regular outlook, I want to understand what are the top two to three execution priorities you're focusing on in the immediate quarters?

Alongside that, what do you see as the biggest risk in patient demand shifts or competitive pressures, and how are you preparing to manage them while strengthening Rainbow's position in the pediatric and maternity space? That's my first question.

I'll ask my second question after this. Thank you.

Yeah.

I think two of the main levers that we're looking at currently is strengthening, while we're working on all the levers, tech being a big part of it, increased investment in social media. We've already borne good results in the first quarter.

That's one. Second is we're looking at largely increasing our doctors referring more and more to our hospitals.

I think that's one very important aspect that we're working on. We are making our doctors visible to the markets, to the corporates, and actually communicating what we do.

These are the top two levers at this point of time that we are working on in terms of driving in volumes. What was the second part, sorry?

On the competitive landscape?

Competitive.

Yeah. See, on the competitive landscape, number one, I really think that we are a niche hospital.

I don't think that there's real competition in our category. Okay?

If you look at our business, we are largely pediatric, super specialty, pediatric-driven. We, of course, do participate in mother and child.

Actually from that point of view, there's no real competition I would perceive. If you look at the patient demand shift, I think people want to come to specialized hospitals for deliveries and for pediatric care for their children.

I think where deliveries are concerned, we are a comprehensive solution. We also have fertility.

If someone wants to come for a complete comprehensive solution, I think we are the place to go to, right from IVF to birthing to pediatrics, neonatology, pediatric intensive care, pediatric super specialty. It's a complete circle.

I think this is where it is. I think as patients get more educated about our comprehensiveness, which we talk about, I'm sure the shift will be more in our direction.

I think it's about educating the patients more digitally and through ATL activities.

Thank you. My second question to Mr.

Vikas is again along a similar line, from a financial point of view, what key risk or challenges you anticipate in the immediate quarters, and what specific measures have been taken to manage the margins, ensure consistent cash flow, and strengthen the balance sheet, especially in areas that are cost pressure intensive and the receivables part and any regulatory compliance issue? Thank you.

Thanks, Sucrit. That's a very exhaustive question which you have asked.

See, as far as the cost is concerned, you have seen we have added 780 beds in the last 2 years' time. We plan to add any other further beds as we are acquiring Nellore and so.

As the acquisition comes, the first priority becomes the seamless integrations, streamline the system, processes, and the cost structure of the new units which we are acquiring. If it is a greenfield, obviously, you know how to optimize the cost and makes sure that the growth which we have planned, it's accordingly that.

If it is better than that, how to streamline the cost accordingly, and if it is less than that, how to manage that cost. I think the cost management remains very, very good part.

As far as the another challenge is concerned is because the company is cash surplus, we have some sizeable treasury investments. There has been a lot of turbulence period in the debt market or the credit market, how to manage your treasury yield, etc., and make sure that the liquidity plus the safety is not compromised with the reasonable returns as per the industry standard is being maintained.

I think these are the two broader challenges in terms of acquisitions, greenfield, and the treasury management. Obviously, since company is investing a lot of money, the cost management in terms of the project track record, plus the cost of the project management, that remains the top four or five priorities on this.

Thank you, and best wishes.

Thank you.

Hi. Thanks for the opportunity.

My first question is on our expansion into newer markets. Very keen to understand from you, when we have expanded in the past outside our core markets and when we enter these newer markets, in your opinion, in your experience, what has been that single hardest element to replicate in the newer markets?

Is it setting up the doctor referral systems or is it creating that brand trust in that market? If you can share some thoughts on that.

I think is creating up the clinical ecosystem, which is a doctors and making a kind of a team, which is the high-potency teams. Number two is our ability to communicate to the city and include the young parents of the city into what your capabilities and those things.

That is where it is your maintaining. Of course, your doctors who are referring to you and connecting with them through the educational programs, CMEs, workshops, and various other things, are being a medical hospital, that is the major thing.

Other than actually referrals, because a children's hospital is always be a kind of an emergency care hospital. Also there is a nothing like a predictable number of knee replacements, number of cardiac operations, number of those things.

Those metrics don't work for children's hospitals. It is your quality, deliverables, and outcomes are going to determine your success.

Obviously when you go to geography which is completely kind of a community is not aware of you, you'll have to put an extra effort to ensure that you deliver and you communicate.

Understood. When we think about setting up these referral hubs outside of South India in say Guwahati, in Delhi, what will make you double down in those markets?

What are those things that you look for? Is it just the initial ramp-up and success that you receive in your entry projects, or is it also a function of availability of say acquisition opportunities?

I think it's more of for a children's hospital to develop what we call as hub hospital is kind of a multispecialty children's hospital, is a journey. It takes its own time to kind of a build it.

Places like Guwahati, which is already the platform is well set, and also there is a demand. There's a need.

There's a opportunity. All those things are there, but there's a paucity of the doctors in the Northeast.

That's where we are trying to see if we are able to get the teams right, and there is a patients are readily available in Guwahati. In place like Delhi NCR, yeah, you will be able to have a better teams, and also you can recruit better teams from not only from India, outside India.

That is a leverage you can take it. Also there is a market and opportunity is there, how you actually play your clinical model is more important.

I don't think it will take such a long time in those markets compared to the kind of a Southern markets, because in Southern markets where there is a fragmented, because of mature multispecialty mature markets, and also the many other hospitals like government trust hospitals also there in competing with you. We cracked in Southern markets being a pure-play private children's hospital high on deliveries.

That's where you're able to do it. The markets which we are going to enter in is that the opportunities are much bigger, very different.

Understood. My second question is also, what is your initial read on seasonality this year, given monsoon is in deficit?

We are entering very strong quarters from a seasonality standpoint. If you could comment on that.

In the past, we've mentioned that we've also taken some steps to reduce our mature hospitals dependency on seasonality. Will some of those also play out?

This is exactly, if you look at our last two quarters, we have definitely overcome to an extent of the seasonality. Seasonality will obviously play in a children's hospital because of the disease patterns and those things.

What's important for us now is to kind of a become independent of seasons. We continue to kind of a deliver.

Seasonality will become icing on the cake.

Understood. We've seen increase in occupancies in our mature hospital in Q1 on a year-over-year basis.

Should we expect that to continue in Q2, Q3, irrespective of how season plays out?

I think, as Abrar was explaining in detail about how we are connecting to our communities, young parents, and greater degree of inclusivity,

digital

play, all those things are definitely going to kind of strengthen ourselves to be a kind of a little more independent of seasons. Abrar, you want to...

I think I agree with sir. As we said that, see, we are working on all our levers very strongly.

Really, we are not taking any seasonality into account. It's not a part of our plans.

Obviously, as he said, it's icing on the cake. In the last 6 months, we've driven a lot of levers which have actually borne fruition to the volumes that we've been able to actually garner in this quarter.

I'm hoping that as we continue pressing on those pedals, we'll continue delivering those results in the next two, three quarters. If seasonality were to kick in, it would be great.

I think that's the way we look at it.

Hi. Thank you for the opportunity.

Would it be possible to strip out the inorganic growth in the current quarter numbers? Could you help me with the organic growth in the current quarter?

When you say inorganic, do you mean acquisitions?

That's correct, sir. That wouldn't be present in the base quarter basically, Guwahati and Warangal.

I think the Guwahati Warangal are EBITDA positive, both of them. I think even Guwahati was EBITDA-positive company.

It is almost close to 2.5 crore company EBITDA, Guwahati. Warangal is ramping up.

I think it will come probably a year down the line to the company level EBITDA.

Sir, I was asking from the top-line perspective. In terms of contribution, organically how much have we grown in the current quarter?

I understand 33% is the overall reported growth.

I think there's about 20% growth in Guwahati as well as Warangal, right?

Yeah. Anshul, if you are looking for a contribution, roughly 38 crore rupees of the revenue which came from these acquisitions.

Yeah.

Around 10% EBITDA contribution. That's what they're asking.

Came from acquisitions. On the revenue growth, Anshul, if you remove this, 24% growth on a like-to-like basis.

Yeah.

Clear. Great.

Any particular reason why ARPOBs in the mature cluster have increased year by about 10%? Has there been any insurance price hike, cash hike, or anything to add here?

I think it's a combination pricing as well as the case mix. These are two reasons.

Got it, sir. Second question, if you could just quantify the losses that we would have incurred in the Bengaluru units in the current quarter.

The reason why I ask is that I think Abrar mentioned that we're close to break-even in Electronic City after say probably a quarter, whereas our original guidance in Electronic City was roughly 15 months break-even. Again, Hennur losses considering that competitive intensity in that particular cluster, I presume would be up because of the consolidation in the industry.

Now

obviously, the losses are there in the new launches like HRBR, Electronic City. General guidance is about we break even in Bangalore about 12 to 15 months' time.

That's the time we'll break even. Some of them come a little early.

Some of them may come a little later. Within 18 months' time, we kind of break even those hospitals.

That's how it is. I think we have a very good doctors in HRBR and the Electronic City, I think we still need some more doctors.

We're very optimistic about Bangalore. I think the Bangalore is now going to do very well for the years to come.

Got it, sir. The acquisitions that we have sort of relayed yesterday, those would be positively contributing to EBITDA, and do we expect any losses from these units as well going ahead whenever they get commissioned?

I think amongst the acquisitions that we've declared yesterday, I think those are running businesses, and we do not really see those businesses pulling our EBITDAs down. Having said that, it may take us some time to ramp up further, but surely these are not units where we will have any EBITDA drain.

Yeah. For example, Nellore is an existing business, and also the doctors are well known to us.

We can add significant strength to those doctors and to build business on. Adding obstetrics in 6 months' time will definitely kind of make it a lot more comprehensive, 100-plus beds in Nellore.

I would say in Nellore and Guntur in Andhra Pradesh, we are a household name. That is a Rainbow brand traction is going to be significant.

In Guntur as well, it's a 50-bed hospital. Same time, in 40 kilometers, we have a Vijayawada about 135-bed hospital.

That's more of multispecialty hospital. This will complement to the Vijayawada, and also we will be able to get a lot more deliveries to and also the neonatal intensive care in Guntur.

All the emergency care will be sorted out. This 50 bed is very good acquisition, great facility.

Will complement to the Vijayawada. This is how we look at it.

There may not be a huge losses or anything. It'll just take about 6 months' time to settle down and then start firing.

Overall, Andhra Pradesh, whatever is about five hospitals whatever we have, they will do very well by end of the year.

Thank you for taking my question. I have a question on the strategy side.

You called out five hub hospitals that we've identified. Wanted to understand your strategy for Mumbai.

Do we also plan to have a hub in Mumbai, let's say, in the next 5 years or so? Like in case of Gurgaon, we have a proper strategy with a proper hub hospital coming up, greenfield hospital, and then we can play that market well.

Can you shed some light on the Mumbai piece?

We would certainly love to have in Mumbai because such a massive city. Mumbai, as all of us know, the challenges and opportunities.

When there's an opportunity, I will definitely do a large hub hospital in Mumbai. We will work on that.

We are working on it. Yeah.

Having said that, obviously, the first priority will be to strengthen and launch Malad. That's going to be the first priority.

Got it. That's it from my side.

Thank you.

Hi there. Thank you for the opportunity.

My question was on the seasonality, actually. For us, Q2, Q3 normally are strong quarters.

How has been the start for this quarter? Could you please highlight two, three indicators that we can watch out for?

I'm sure this is too early to kind of comment on that, considering that your monsoon is got delayed. Everyone knows about it, but we'll have to wait and see how things work, because July is too early to kind of comment on that.

Right. Okay.

The second question was on the recent acquisition. You have already answered, but then I would like to know about the Malad unit.

What would be the growth levers for this unit? Is there any lock-in, non-compete, or buyout arrangement with the three doctor promoters?

Is there any path to 100% ownership going forward?

Obviously, there will be any joint venture or any subsidiary, we will have the options. We would like to have them because they've been friends to us for long time, are good doctors.

They will be part of the journey for at least a decade.

Okay. What would be the growth levers from the Malad hospital?

I think most important thing is that, the based on our expertise and also our proactive nature in actually addressing the sick kids and our strong medical model, strong intensive care, both pediatric intensive care, newborn intensive care, we will the city, we believe, is a large opportunity of at least if we look at 10 to 12 kilometers radius from Malad, there's almost a kind of a 80 lakh population. You're you're addressing 80 lakh population in you look at really that how many pediatric beds are there, high-quality beds, there is a serious shortage.

That's why we say it's kind of a there is a huge need and demand for such a high-quality care. For children, obviously we need to go and prove ourselves that that, we are the best guys to in business to do the job what what these babies and children are are requiring.

That's that's where our strengths lies to do a high acute care, to the the transports more aggressively, our capabilities in doing the driving intensive care services, and also the some specialty like ECMO services, all those specialty things we can do it. That's why we're pretty confident about what on our capabilities.

I'm sure there's a huge need in Mumbai.

Right. That's it from me.

Thank you.

Thank you.

Thank you for the follow-up. Just wanted to understand when we see Cloudnine as our competitor in the NCR market, they follow a very different approach to what we are doing.

Understand that we are planning a hub unit in Sector 44, and then maybe we will try to widen our approach in the city. Just wanted to understand how management see what they are doing as a strategy versus what we are planning to do.

The Cloudnine. See, I, again, as I said that it's a very different category of hospital.

Okay? We are a tertiary, quaternary, pediatric, super specialty hospital who drives a lot of deliveries.

Having said that, we are almost I think number two for sure in number of deliveries. Cloudnine is a different structure altogether.

If you look at what Cloudnine does, it's largely a digitized model, and they drive in deliveries and conversions, whereas we are a much wider spectrum. While we obviously do drive deliveries in and we have also multifold increased our investment in digitization, which we've been talking about since morning.

That's where there's a semblance of maybe some competition or similarity, but otherwise largely 65, 70% of our model is completely different. It wouldn't be a correct platform in my mind to compare.

No, that is absolutely correct. I understand that.

My question was coming from a different approach. Yeah.

Sorry. You're saying something?

No,

no, go ahead.

Yeah. My question was coming from a different approach.

How I was looking at it is say a parent. They go to an hospital.

They try and having a kid. Then they actually have a kid with a hospital.

They form a relationship there with multiple doctors and they have a memory there. They try to be going there more even as the child grows, right?

That kind of forms a pattern of going, and you get say more out of same patient, you can say, or whatever. It becomes a family approach in that sense.

That was my approach to look at this, that when we

Exactly.

I have an answer for this. Here the Rainbow is a kind of a when it comes to delivery, we built a lot more safety networks, and we try to sell ourselves to kind of do normal deliveries.

We are a lot more confident with our normal deliveries to address high-risk pregnancies, and because of your backdrop of a strong neonatal and pediatric systems which you don't need to kind of a look out for anything to come in and do it, which naturally is there in the system, embedded in the system. The people who deliver with us, they absolutely stick to us, because it is a seamless transition.

People who deliver outside, which are the multispecialties, other birthing centers, in the present day, people knows about the capability as of what anybody can do it. They are a large number of people automatically shift.

They might go for 1 or 2, 3 months' time vaccinations. After that, it's kind of a there is a disconnect comes.

Then people will try to go because, for example, a child in the middle of the night would choose where? Choose a place where there is an acute care, where the 24/7 an emergency with the consultantled service that cannot be provided by neither birthing centers nor multispecialties.

That can only be done by a children's hospitals. Children's hospitals because our focus on acute care and an emergency is a lot more stronger and also depth.

This is what makes us a different from these birthing models versus multispecialty hospitals. No,

I think you're talking of stickiness, right? I think that answers your question.

See, between what I said and what sir said, now even if there is a family which has initially delivered with a competitive single-specialized chain, okay, post-delivery, any pediatric issue can only be or largely be addressed by Rainbow. For example, there's a pediatric emergency.

We have a ER at night, anything pediatric, and that is the point where the shift will happen, if that answers your question. Yeah.

That does. I don't want to push it further, but just getting my approach right.

Don't we think that if we have a wider network of say BirthRight in that sense that because it's 10 to 12 15 visits in a We already do.

We already do have. Yeah.

We already do have. BirthRight is available in all our 24, 25 hospitals.

Okay. It's already there and in a much capacities in most of the things.

It's already there.

Same on extending on that I was asking that, okay, do we want to actually expand it horizontally, the BirthRight part of ours versus the actual specialty of the pediatric specialty part?

This hospital has been promoted by highly skilled super specialty doctors. We're always very about what we deliver to the patients, because anything what we do, we should always be a strengthen our medical systems.

In a smaller places, building medical strength is not that going to be that easy. While it may look appearance-wise better, but something goes into an emergency is disastrous.

Therefore, I wouldn't build a hospital 20, 30 beds. I would only build a hospital basic even 50 50 beds is nowadays painful for me to even acquire it.

I always feel comfortable to have 80 beds and above, because I need to build a strength in the systems to support whether it is a expected mother or during the delivery or a newborn or child, because this is how we envisaged the healthcare to be built much more on the stronger platforms.

Thank you for joining today's conference call. Your continued support and thoughtful questions is instrumental to our strategic journey.

If there are any questions, do write to us or connect with us at [email protected]. Thank you very much.