Hi. Good morning, everyone.

This is Rahul from IIFL Capital. I welcome you all to the second 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.

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 Q2 FY26 and first half of the year.

I would like to start with a few key strategic and operational updates for the quarter. During the quarter, our operational performance showed some softness, largely influenced by low incidence of seasonal illnesses, resulting in lower patient volumes in general pediatrics and also pediatric intensive care.

In addition, early festive seasons like Ganesh Chaturthi and also Dussehra compressed the typical peak period for admissions. These factors collectively led to lower occupancy levels and a transient impact on the financial performance.

However, the underlying business fundamentals remain strong, with continued growth in specialty services, disciplined cost management, and steady progress in operational efficiency. However, these challenges are temporary, and we expect normalization in upcoming quarters.

I'm pleased to inform you that the acquisition of Prashanthi Hospital in Warangal, in Telangana State, and Pratiksha Hospital in Guwahati, making Rainbow a strategic entry into the Northeast region. Both the hospitals have now been fully integrated into Rainbow network, and initial traction has been encouraging and in line with our expectations.

Further, we commissioned our new hospital in Rajahmundry of 100 beds in East Godavari district of Andhra Pradesh, having the regional hubs in Visakhapatnam, Rajahmundry, and Vijayawada would cover most of the affluent parts of Andhra Pradesh. We are now gearing up for the upcoming commencement of two hospitals in Bengaluru: Electronic City and Hennur branches, further expanding our penetration in this key metropolitan city.

With this addition, Rainbow Children's Medicare Limited will conclude its current high-bed addition, having added 780 beds over the past two years' time through expansion as well as acquisitions. To dwell on the financials for Q2 FY26, the revenue registered a growth of 6.5%, amounting to ₹445 crores.

EBITDA increased by 1% to ₹149 crores, while the PAT was degrown by 4%, registering ₹76 crores. The overall occupancy rate for the quarter was 52%.

I would like to share the project update. The Electronic City in Bangalore city of 90 beds is fully ready for clinical commencement, waiting for the government approvals.

The Hennur facility of 60 beds in the final stages of conclusion, and is expected to commence operations by January '26. The regional hub hospital at Coimbatore is in the project phase now, and is expected to ready by by the end of the FY27.

In Gurgaon, the construction work was in was progressing rapidly at both 44 and Sector 56, but the work has been stalled by the government temporarily because of dangerously high pollution in Delhi NCR. We have signed up for 150-bed hospital in Pune on on Bengaluru Highway, and is currently in design phase while waiting for the permissions.

I'm pleased to announce the appointment of Mr. Abrarali Dalal as a Group Chief Executive Officer for Rainbow Children's Medicare Limited, effective from January 20th of 2026.

This appointment marks an important milestone as we fortify the leadership team to drive the next phase of growth and strengthening our business operations. On international business, though some of the issues regarding the medical visas persisting, we have seen some progress on international business front with a monthly revenue tracking ₹3 crore.

We see the business returning to normalcy in the coming quarters. Clinically, we continue to do very well in our pediatric specialties and quaternary care with improved case mix and the revenue contributions.

I would like to share one of our remarkable clinical outcome during this quarter. A 27-year-old expected expectant mother with underlying complex cyanotic congenital heart disease having a single ventricle underwent shunt surgery, called Glenn procedure, to improve her oxygenation and quality of life during her early childhood.

Though the definitive procedure was planned, the family never turned up to the hospital because of a decent quality of life. She got married and planned for pregnancy.

Unfortunately, she lost three pregnancies in her sixth and seventh month of seventh month of pregnancies because of intrauterine death of these babies. Congenital cardiac conditions, which are missed, diagnosed, and neglected, would end up in causing significant problems from in the early adult and adulthood onwards.

This group of conditions usually called as GUCH, which is a grown-up with congenital heart diseases. These conditions are best dealt by the pediatric cardiologists along with cardiac surgeons.

Here, this lady has come to us, to Rainbow Children's Hospital and Cardiac Institute, with a hope to save her baby for current pregnancy. During the evaluation, she was found to have oxygen saturations of around 75%.

This clearly indicates that continuation of the pregnancy may result in intrauterine death of the baby because of poor oxygen saturation. Scientifically, this could have happened for in the previous pregnancies, resulting in intrauterine deaths.

Since any surgical options carry high risk of maternal and fetal mortality, our cardiac and perinatal teams had an extensive deliberations, and also finally and finally decided to rescue the baby to the non- through noninvasive procedures. The pediatric cardiac team planned innovative procedure, first of its kind, doing a via through cardiac catheterization, placing a stent from the single ventricle through the pulmonary valve, which is a critical mal- perhaps malformed, into the pulmonary artery.

This was the plan. This plan was executed meticulously, and post-procedure successful procedure, the oxygen saturation has gone up from 75 to 94%.

The mother's cardiac assessment post-procedure was extremely satisfactory, and the fetal viability was good. This pregnancy was followed up very carefully by the cardiac as well as the perinatal teams, and and successfully delivered at full-term healthy baby.

I was so excited and went down to the teams to celebrate this success. Looking for looking ahead for the second half of FY26, ensure the timely commission of our two spoke units in Bangalore, focus on strengthening business operations delivering sustainable growth across its network, strengthening our sales and marketing function across the key markets to deliver sustainable growth.

Let me take this opportunity to thank our medical teams and also leadership teams for their dedication and hard work. We are grateful to our stakeholders for their continued trust in building this incredible healthcare for children and perinatal services.

With that, I now hand over the mic to our Group CFO, Mr. Vikas Maheshwari, to take you through the financial details for the quarter.

Thank you.

Thank you, sir. A very good morning to all of you, and thank you for attending this investors' conference.

I am pleased to brief you on the financial performance and the key developments of Rainbow Hospitals for the second quarter and the first half of FY25-26. Our operating revenue for the quarter stood at ₹445 crores, reflecting a growth of 6.5% when compared to the corresponding quarter of the previous financial year.

For H1, our revenue stood at 7 ₹798 crores, reflecting a growth of 6.7% when compared to H1 of the previous financial year. Our EBITDA for the second quarter amounted for ₹149 crores, marking a muted growth compared to the same period last year.

For the H1, EBITDA stood at ₹253 crores, reflecting a growth of 5% when compared to the H1 of the previous financial year. The EBITDA margin for the current quarter is at 33.5%, while our H1 EBITDA margin is 31.7%.

The profit after tax for the quarter is 75.6 crores, which is marginally lower than the last financial year. For the H1, our PAT stood at close to 130 crores, reflecting a growth of 9% when compared to the H1 of the previous financial year.

In terms of the operational performance, outpatient volumes witnessed a growth of 5.7% when compared to the corresponding quarter in the last financial year. The deliveries grew by 6.8% compared to the corresponding period of the last year.

Inpatient volumes witnessed steady volumes when compared to the corresponding periods in the last financial year due to the reasons outlined by CMD sir earlier. Our payer mix continue to remain robust, and balanced with 53% of the revenue coming from the insurance and the balance 47% coming from the cash patients.

For the H1, the payer mix stands at 48% with cash and 52% with insurance. I'm pleased to inform that the company's balance sheet remains very strong, with a net cash position of roughly ₹556 crores as of 30th September of this year, and will support our ongoing capital expenditure plan.

Given our current cash and anticipated internal accruals in the coming years, we remain confident in our ability to complete all the planned capital expenditure through internal accruals without any debt financing. During the quarter, the company invested close to ₹261 crore in the capital expenditures towards expanding and enhancing our services at existing and upcoming hospitals, and that includes the acquisition of the Guwahati and the Warangal hospitals.

With these insights, I conclude my financial update. I now invite questions and suggestions from the participants.

Thank you very much.

Hi. Good morning, and thank you for the opportunity.

My first question is for Dr. Ramesh.

With the appointment of CEO, how your involvement or how your role will change in the company?

Yes, Damayanti, I've been in the frontline for long, long time. Also, the time has come that there is a professional management of this company.

We are expanding significantly, and also the multicity. It's important that, of course, I am there as a Chairman, aligning with CEO and the strategic team.

The drive of the professional CEO is much needed for the organization of this size to drive the operation, to kind of guide the facility directors across and functional heads. It's a professional job.

I think it's very, very important to have a proper Chief Executive Officer who have a significant experience in driving independently of the operations, P&L for the organization. That's why we've done extensive deliberations and interviews, and then finally we chose to have Mr.

Abrarali as a CEO.

Okay. Obviously, I think, sir, you will be there to handhold and advise the company as we progress ahead.

Thanks for that. My second question is on your new units, Prashanthi and Pratiksha, who both integrated during second quarter as you mentioned.

Just some color on the revenue contribution which came through these new units and your plan and expectations for scaling up operations in these two units?

Yeah. This is the early phase.

The Pratiksha was doing about ₹8, 8.5 crores because we changed over completely and the management, and also even the insurance. Everything is got changed.

We are in the process of getting all the permissions. Of course, revenue is decent enough, but I think it will show up actually uptake on the revenues probably by December onwards.

Now we have all the permissions and all the insurance is on board. Now the same thing with Warangal also.

It did take some time being a Tier 2 city to obtain all the insurance and those things. There was some decline in the deliveries and those things because of all the insurances are not turned up.

Now they're all on the board. Now we expect to see revenues doing very well in this.

We are very happy with these two acquisitions. The integration went very, very well and seamlessly, both the doctors as well as the staff, nursing.

Our operating model has been instituted very well. I think that's where we are kind of really optimistic about growth of these two units.

Sure. You are largely done with integrating the entire two units.

Maybe from March quarter, we will see meaningful pick-up in revenues. Sir, just a point, I think Pratiksha you mentioned ₹8, ₹8.5 crore kind of number which came in 2Q or what was that number?

It's about lower than that because of insurance and those ones. See, the integration was actually with the SAP, our supply chain, and HRMS and the HIS.

A lot of things have done because it was a company which has operated in multiple heads because pharmacy was in a different company, operations in a different company. They were operating on three, four companies.

That challenge was to integrate all those things and then drive it. Our team has done a great job.

I think now is completely operates like a Rainbow Children's Hospital.

Got it. That's helpful.

My last question is on your international business. Can you remind us you mentioned there are some issues, and which should be normalized in coming quarters, and then you expect things to pick up?

Still the issues remain with Bangladesh and some other markets, the visas not been obtaining with the patients. The overall other areas, the African markets have started becoming more active.

What we have left about one, one and a half year ago, we come back to the business of ₹3 crores per month, which was the business before. Slowly, I think it's improving month-on-month.

That's what we can say now. We are hopeful that it'll come back to normal.

It's not going to be too long time.

Sir. Thank you for your response, and I'll get back in the queue.

All the best. Thank you.

Thank you.

Yes. Congratulations on a strong quarter.

I actually want to know, like you have mentioned earlier, that the payer mix was roughly 52% insurance and 48% cash in Q1. Has that ratio changed meaningfully in Q2?

More importantly, where do you stand on pricing renegotiation with issuers in your key market? Because with rising specialty case mix and inflation in clinical inputs, are you confident that the price revision in Hyderabad, Bangalore, and Chennai will come through with the timeline you had guided earlier?

Yes, the payer mix for the quarter one and the quarter two is more in the same line. There is not much of the change.

This is a very balanced mix which we are driving. The good part is that we don't do any government-related schemes businesses since it is a pediatrics, our payer mix is only cash and insurance.

As far as the insurance renegotiations is concerned, I think our team has already concluded for the Hyderabad. For the Bangalore cluster is under negotiation and it's happening.

It is a routine business for any healthcare operator, right, for the hospital because the insurance keeps falling on some multiple timelines of the life cycle. As and when it comes, we keep negotiating, and so far we have been very successful in terms of the pricing and hedging against the inflation cost and the type of facility we have built and the type of complex work we do.

We have been able to negotiate it properly with the insurance company so far. We expect that, yes, we will be able to manage that going forward also.

Okay. My second question is, one of Rainbow's biggest differentiator is your strength in neonatal and the pediatric intensive care.

Could you share whether NICU and PICU utilization improved in Q2 relative to Q1, and whether that was a meaningful driver for the ARPOB recovery? Do you see that NICU capacity approaching constraints in any of your hubs which may require further expansion?

As far as the capacity constraints of the PICU and NICU is concerned, I think whatever the facilities we have is a very well-built, keeping in the future requirements. We have a head room available in most of our hospitals to accommodate these type of patients in our NICU and PICU.

We don't see, as of time, any constraint on such capacity utilization. Yeah.

Moreover, see, we do hub-and-spoke model. I don't think there is a problem anywhere accommodating the patients.

We always try to see that, and then when we do spokes, should we increase the bed capacity or reduce the bed capacity. We always adjust among the units between them, so that optimization is always done.

I think as we move forward in future, what we had earlier the number of beds in ICUs, maybe a kind of the numbers wise, we probably need to optimize a little bit down because of a number of the units are distributed within Rainbow network itself, because in the past, we used to think about the large hospitals to have a larger units. Now because of a lot of micro-market driven business, we try to optimize the number of beds to see that the efficiency is improved.

Okay. Thank you.

That was really helpful. Thank you.

Hi. Firstly, congratulations on the CEO appointment, and we look forward to speaking with him.

Sir, my first question is that if you just step back and look at the last three to four years, while Rainbow has done very well operationally, we've seen season impacting our business probably twice in the span of last three to four years. I'm just trying to understand that is this impact felt similarly across all your units, or is this more pronounced in one region over other?

The second question in continuation to that is that, as we look ahead and as we diversify our presence in North and Northeast, should that in any way lessen the impact of seasonality that we are feeling?

Yeah. See, the seasonality by and large what we see the Southern states behave very similarly, whether it's Hyderabad, Bangalore, and Andhra Pradesh behaves in one cluster.

Chennai may be slightly different because the level of monsoons comes a little later. The Andhra Pradesh and Hyderabad, Telangana, and the Bangalore kind of follows one pattern.

When we look at the Northeast, Northeast follows fairly different pattern of a seasonal illnesses. I think there in the North, the peak season is always going to be October, November, December, January because of more of pollution-driven in the NCR.

This is some degree of variations will be there, but South largely behaves as one unit.

Sir, are you Yeah.

Please. Carry on.

No,

sir. I was just saying that we ventured Northeast with Prashanthi's acquisition, but do we have plans to scale up our presence there?

Yeah. Firstly, we would like to kind of see that how we can build our specialty footprint there.

We already started some very interesting things in the Northeast. One is that we started transport services.

In the last one and a half months, we done about 15 road transports, which never have been done from Guwahati-based and entire Northeast. We gone far-off distances to Shillong and all the areas, and done the transports of critically sick children.

That's one thing we've done. We're adding specialty one after the other.

We added pediatric neurology service in Guwahati, pediatric nephrology, and pediatric respiratory medicine. I think one of the important thing is to build this as a hub hospital.

That's what is our focus is, and we're trying to see that how early, how fast we can do a pediatric cardiology, cardiac surgery in that area in our Guwahati hospital. We want to see that the base business is very good, and very strong, and reputation is very good.

We would like to see that this hospital, pediatric services, to be kind of for the Northeast. Then we can look out for the spokes in the smaller cities like Silchar is a good place, and Shillong is a good place.

The opportunities are there. They're all very very greenfield.

We would like to strengthen ourselves first here, then next near time and start thinking about it.

Thanks for that, sir. Secondly, if you could also update us on how our IVF centers are performing.

It's been a year. If you could comment on how they are doing operationally and also in terms of patient volume?

Yeah. As expected, our IVF growth has coming mostly through our own network, plus and B2C.

B2B is almost kind of close to kind of very negligible, because obstetricians feel competitive, to send their infertility patient to Rainbow, which is a strong obstetrics network. We had a sales team, but that didn't work.

See, what is working for us is that, one is the in-house growth, number one. Second thing is B2C, both are.

Collectively, actually, we're growing pretty impressively about the last year the same quarter to now is about 40% growth is there. That is a low base, but we would like to see that now we continue to grow impressively, 25% in future.

All right. I have questions, I'll join back in the queue.

Sure. Thanks.

Thank you, Bansi.

Yeah. Thanks, sir.

Sir, you did talk about seasonality in terms of obviously impacting our performance this quarter. Now, if we look at the IP volume growth between the mature and the new hospitals, it seems that the IP volumes in mature hospitals have declined a high single-digit kind of a number between 8-9% YoY.

Why is the impact of seasonality more pronounced in the mature hospitals, given that for some of these mature hospitals we would be doing other services as well, like at the Banjara hospital?

Yeah. See, the mature hospital has got a standard regular business, which is about 50%.

We expect them to do in the Q2 and Q3 about 60+%. If you go back and see that the last year, we've done about 60 65%.

66%. When there is that 66%, the 10% growth comes from the seasonal business.

When we see our occupancies, that the 10% comes from the seasonality, and the revenue generation will come about 12 to 14%. Which is why we typically guide about our occupancies goes up by about 8%.

Our revenue grow by 12% in the Q2 and Q3. This typically happens most of the years.

Sometimes it's cyclical, when there's no seasons, but that's what exactly we have seen it. We've seen our base business is pretty good.

Our EBITDA stand is pretty still the robust, but your occupancies are down by 8%, and your revenue down by probably 10 10 10-12%. If there is a kind of seasonality was there, probably we would have done about 16-17% of growth.

This is exactly the clear-cut. Why the mature hospitals takes, because when there's no seasonality, people get attracted to come to popular hospitals in the seasons.

The second important thing is pediatric intensive care. When there is a seasonal illnesses are in the heightened, significant portion of children become sicker because pneumonias and some of them becomes more sicker.

They require intensive care services. These two play hand-in-hand: general pediatrics and pediatric intensive care in the seasonal illnesses duration, which is why we have seen about 8-9% of the dip overall in our occupancies.

More we see because, in the new units, because they are low base, we don't see much of a difference in the new unit because they are about 40, 40-42% businesses. Here you see what higher-percentage businesses, there is a regular fixed business is there about 50, 52-54% of the business, which is pretty standard.

Sure, sir. This 8 to 10 8 to 10 percentage point occupancy contribution and 12 to 14% revenue contribution from the seasonal business, you seem to indicate that's the contribution at the mature hospital level for 2Q and 3Q generally?

Yeah. That's exactly.

Sure, sir. Sure.

Sir, with respect to, let's say, the IVF revenue, can you talk about in terms of some of the levers which could help us to reduce the impact of this seasonality in the overall business? Obviously, Northeast expansion would help.

Can IVF scale-up also help us in reducing the impact of this seasonality? What is our IVF revenue contribution right now, and where do you see that number settling over the next, let's say, a three to five-year period?

I think about we come up to about 3.2%.

3.2%. 3.2% of total top line this year.

It would go up, but I'm not sure how much it's going to the percentage. Overall, I think we would clock about ₹40 crores plus in the current year, and which is grown almost 50% in the last two years' time, year-on-year.

Obviously that your specialty growth, and superspecialty growth, and also some of the specialized services what we do, and the rare diseases, these are all the areas will occupy as we kind of mature more and more hospitals, mature the hospital.

Sure, sir. Sure.

Sir, the next question I have is, as you indicated that now most of our expansion plans would get completed by FY26, and the next round of expansions would come online in FY29 only. Now as some of these newer hospitals scale up over the next two-year period, can we see a margin expansion playing out for Rainbow over the next two years as some of these newer capacities scale up?

No, certainly, that I think what's more important for us is to drive our operations, and also as I told in the last earnings call that now we have our leadership in the sales and marketing, and who is doing very well. Also now the CEO is joining, I think is strengthening the overall leaderships.

Also what we have is next a couple of years' time is a very pure play of driving the revenue growth. We like to see that.

We always guide about 25% is our base EBITDA, pre-Ind AS EBITDA. We will stick to that.

We'll continue to drive more top-line growth.

Sure, sir. Any comments in terms of what kind of a top-line growth are you looking at from a next two-year perspective?

I think moving forward, we should do 20% growth. That's what next two years is which we aim at, because we have done all the expansions, we've added plenty of beds on the growth areas.

As long as we stabilize our mature units to kind of 8-10% of growth, the rest of them grow at about 25%, consolidated we do 20% growth.

Sure, sir. This 20% growth includes the contribution from M&A, or you are talking about the organic growth for the business?

Including M&A. They are integrated now, they are part of the business now.

Sure, sir. Last question before I join back the queues.

We continue to generate very healthy cash. Right now also, we have around ₹560 crore of net cash on books.

With the Guwahati and the Warangal acquisitions being done, are you looking at more M&A, or would you slow down, let's say, from a two-year perspective, scale up these newer assets, and then only evaluate fresh M&A? Any color there would be helpful, sir.

Surely, if there is a M&As which are appropriate, we would definitely be kind of interested. When such opportunity comes, we would obviously be looking at it.

There is a cash on the balance sheet, we've got execution capabilities. What we look at is that M&As where we can add scale, we can include them into our operating model, and add the scale further, we would definitely look at them.

Sure, sir. I will join back the queue.

Thank you.

Thanks.

Hi. Good morning.

I am fairly new in analyzing the hospital industry. Sir, my first question is, how is the company able to maintain such high gross margins of 86-87%, when the industry average is around 73-74%?

How are you able to maintain such high gross margins? My second question is

Thanks. Sir.

Yes, sir. You can go ahead.

With respect to the gross margin, there is a difference in our specialties and the multispecialty which are mostly listed. I think the pediatrics and on the maternity space we are the only company.

In our industry, that is what is the cost of the consumables, which is between 12 to 14% depending upon mix of the services which you are providing. That is why these gross margins are higher.

Yeah. See, because most of the adult hospitals are surgically-driven.

We are medical hospital. In medical hospital, the cost of implants and the other is much lower, and hence you see higher gross margins.

Okay. Sure.

Sir, my second question is, what CapEx do we expect to incur in H2 FY26? What projection should we make for the hub-and-spoke models bed?

What CapEx per bed should we project going forward? I think the project which is left out is Hennur and Electronic City, which is Bangalore is happening.

I think the leftover payment and the Gurugram project which is happening there, I think for the second half, I think close to ₹100 crore amount should go. For our Pune and Coimbatore project for the next 3 years, you should budget close to amount of ₹600 crores.

Okay. Sir, my third question is, how do we see competition affecting the occupancy rates in especially the hub regions?

Competition will always be there, and also the market also expanding it. It's a question of how do we navigate ourselves, keep ourselves to grow.

The competition in Hyderabad, competition has been there for the last 15-18 years' time. That continuation, competition will continue to grow.

That's the life. I think we just have to work around and play out our strengths, and expand more micro-markets, and be a dominant player.

I think that's the only way forward.

Okay. Thank you, sir.

Thank you for taking my questions, and all the best for your future endeavors. Thank you.

Thank you.

Thanks for the opportunity, and good morning, everyone. I heard that you talked about expanding in Pune.

Can you kind of give some color as to what size of a hospital you're looking there, and are there any large pediatric hospitals already there in Pune?

See, in Pune, we are looking at 150-bed children's hospital with perinatal services, a lot more focus on children. This is going to be on Bangalore Highway, closer to the Baner.

When you look at the landscape in Pune, Pune is kind of another city like Hyderabad and Bangalore today, and there are a lot of mom-and-pop stores which are doing well, because a lot of deliveries are happening, and also a lot of child population is there in Pune. Also it's got a fairly decent draining areas into Pune.

This is in competitive landscape, the real children's hospitals who are doing significant work are more on the trust and medical college side, not much in the pediatric side. For example, Deenanath Mangeshkar, they have a fairly large department, and also the couple of medical colleges got a large departments.

There is a some pediatric units are there, which are small, about 50 beds and 60 beds, doing some degree of ICUs and those things, and not a comprehensive pediatric hospital. There's a need, and there is a demand.

Both of them are here. It all depends on what kind of professionals you're going to having, how you're going to drive your outcomes.

Understood, sir. Probably this would be the first pediatric hospital that would have the kind of the most broadest suite of services for pediatric care?

Exactly.

Exactly. That's exactly.

With respect to your existing business, if you could share what percentage of our what percentage of our business is generated from high-end services like transplant, oncology?

I think we do whether tertiary, quaternary services together, it's very difficult to separate in children's hospitals. All put together, 40% is our tertiary care and quaternary care together, including transplant, about 40% of the business.

Okay. Is this part of the business growing faster than the rest of the business?

See, when you do hub-and-spoke model, it get diluted, isn't it? Because you're doing a lot more spokes also.

Spokes don't do too much of the high-end care, it'll get kind of will remain in the kind of the same proportions. For example, when you do more and more spokes, the obstetrics also kind of What we have seen obstetrics from 20% to 25%, 20 now to 30%.

It keeps growing. Dynamics keep changing because when you do a bed mix of hub-and-spoke model, this is bound to happen.

Okay. Okay.

Within our large hub hospitals: Hyderabad, Bengaluru, Chennai, would large part of the high-end care be delivered from Hyderabad, and while Chennai and Bengaluru are yet to catch up?

Yeah. It's not catching up, it's actually it takes a long time to build the high-end services for children.

One is the expertise, number two is awareness, number three is outcomes. All these things will take its own time.

It took a long time for us in Hyderabad. We do liver transplant, renal bone marrow transplant.

We started doing a liver transplants in both in Chennai and Bangalore now. To come to kind of level of maturity, it'll take time, not rapid.

Okay. Okay.

Just one final one on international patients. Two things: one is getting international patients in pediatric care, is that more difficult than probably a general hospital?

Second, what is the current state? Do we have a minor contribution coming from the international patients?

See, it's a long shot. We are working on it.

We start working on international business, and it was going fairly well till the recent geopolitical situations, whatever has happened, the drop on international business with Africa as well as Bangladesh and all over. I think we are optimistic.

As we move forward, moving into the future, the international business even for the pediatrics is going to be a significant component. That's what my belief.

I'm sure we need to do a lot more networking with the doctors in the international markets. For example, the pediatricians or pediatric cardiologists, other specialties, wherever they are, I think that relationships is going to build more business for us.

Got it, sir. Got it.

Any sense on how large this can become? 10% of the top line, maybe next five years or so?

I won't put a number, but I think we should aim at 10% at least.

Okay. Okay.

Thank you. Thank you very much.

Yeah. Thank you.

Hi, thank you for the opportunity. Am I audible?

Yes, yes.

Great. Sir, first a clarification.

I think I mentioned sir saying that the top-line CAGR that you're aiming or targeting is at about 20%. Now considering that H1 was at 7%, is that any indication around H2 being stronger than the usual H2 versus H1 kind of growth?

Anshul, let me take this question. What sir has told that 20% CAGR growth is over a period of time.

The basis is two. One is that whatever the capacity which we have added, which is a large capacity is around 47% from the low base, right, is around 780 beds which we have added and all the capacity expansion and the super specialty services in our hub hospital at Bangalore, Chennai, and ramp-up of the two acquisitions which we have done, the Guwahati and Warangal.

Over a period of time, next 2.5 years, 3 years, you should look at the revenue growth of roughly close to 20% CAGR. This is one.

Second, second half how it will pan out, it's very difficult to tell, but obviously, we should be judged not on the quarter-on-quarter, but over a period of long trajectory. Far we have been able to deliver three years or five years CAGR if you look at is roughly 16-17%.

Since the bed capacity is large being added, we are optimistic that we should be able to deliver at around 20% of the growth in next 2.5, 3 years CAGR.

Right, sir. Growth could be back-ended is what you are saying, on back of expanded capacity.

Acquisition integration.

Got it. Sort of a follow-up on this only, sir.

Our depreciation number has not increased in the on an H1 H H-o-H basis. Would this also sort of grow in line, considering that we have added almost 800-odd beds in in the last, say, a couple of years?

The commercialization of the Rajahmundry and the two hospitals at Bangalore, which will happen in the quarter December, right? We'll see some uptick of the depreciation on that side.

Plus in our case, depreciation includes some part of this Ind AS working like this lease, which gets divided into finance cost and depreciation. As a percentage, you should look at the similar type of trend except one or two quarters where the some three facilities getting opened.

Little bit of the bump up, otherwise it should be on the same range.

Got it. Third question I had was any update on the break-even of the Bangalore and the Chennai hospital that we opened in 2024, the Anna Nagar and the Sarjapur hospital?

Are we closer to break-even in Bangalore?

The Sarjapur hospital was broke even in about 15 months' time. Anna Nagar took about, yeah, exactly what we guided, about 18 months' time.

The last few months, it's a cash break-even. I think whatever we have guided, they're kind of following the line.

All right, sir.

Despite seasonality impact in the current quarter, the ramp-up on these hospitals has been in line with what we had guided.

Yes. Yes.

Yeah.

Got it. That's it from my end.

Thank you very much.

Thank you, Anshul.

Thank you.

[unclear] numbers. Sir, just wanted to ask you some accounting

Dhananjay, we are not able to hear you at all. [unclear] As

Sir. Just a few clarifications.

You indicated CapEx of ₹100 crore in second half, but I missed the number which you said for Pune, then Coimbatore and Delhi NCR combined. Did you say ₹600 crores?

For including Coimbatore, Pune, and Gurgaon, we should be doing some CapEx of roughly close to ₹600 crores, Rahul. Sure, sir.

Are you including the initial or let's say the CapEx which you would have already incurred for the two NCR hospitals, or this is the incremental CapEx over the next, let's say, two to three years? Rahul, let us talk about Gurgaon.

We are adding roughly close to 450 beds, right? Here the land and building is owned by the company, which we are building it up.

It will cost close to 1.5 plus onward for the construction of the whole facility, right? The CapEx is large.

For that, we have already spent for the land close to 180 and roughly ₹20, ₹30 crores for the other work for which we have already spent the money. The balance construction which is progressing over a period of next 2.5, 3 years, we'll be spending that much of the amount.

Out of that whatever the amount I have told you, the maximum amount pertains to Gurgaon project.

Sure, sir. So ₹600 crore over, let's say, '27 to '29.

Yes, 3 years.

Sure, sir. Sir, with respect to the break-even for, let's say, the spoke hospitals, your spoke hospitals in Bangalore and Chennai achieved break-even within 12 to 18 months.

Can you similarly talk about the timelines for some of these regional hospitals which you are setting up in, let's say, the core AP Telangana market? How much time would a Rajahmundry and Coimbatore, once they are commissioned, how much time would those hospitals to achieve break-even?

See, Rajahmundry would do it in about 15 months, 15-18 months' time. Because the brand visibility in Rajahmundry is very, very high.

If you look at the coastal Andhra Pradesh, every household knows about Rainbow Hospitals. It is a huge reputation, where every family knows about it.

Rajahmundry is actually we started about a month and a half ago, the traction is already pretty good. That's why we look at Rajahmundry.

Rajahmundry will get integrated very, very soon. The network between Rajahmundry, Visakhapatnam, and Vijayawada would cover almost from Srikakulam to right up to Ongole, which is the most potential area for Andhra Pradesh, are going to be covered by these three hospitals.

Another Nellore district will be covered by the Chennai hospital. We are there almost from the entire Andhra Pradesh coast till Chennai.

That is going to be. Warangal anyway is acquisition, we need to just build on more pediatric business.

Obstetrics, they do very well. These two Electronic City and Hennur, Electronic City might take a little longer time, about 15 months' time.

Hennur would actually break even in one year time.

Sure, sir. Sir, with respect to, let's say, these regional hospitals which you are adding in these, let's say, Tier 2 kind of markets, can you talk about how your pricing varies in terms of pricing between Tier 1 markets and some of these Tier 2 markets?

Oh,

again, the Tier 2 markets, we have a Vijayawada. Vijayawada is a matured hospital, which is the almost about 18 years of 15 years of operations.

The pricing of that hospital to Hyderabad is almost like a 80% 70 75 to 80% of Hyderabad costs, roughly. If I go to Vizag and Rajahmundry, I would probably about 70% of Hyderabad costs.

60 to 65. 60 65 65 to 70% of Hyderabad costs.

Because they are a little more of a cash-oriented, less of a insurance business and those things. You tend to drive more of occupancies, more of a popular for some time.

Then it'll get settled after 3, 4, 5 years' time as your reputation builds further.

Sure, sir. Let's say pricing in these Tier 2 markets could be 25 to 30% lower than what we have in Tier 1 markets?

Yeah, 30 to 35%, Rahul. You're right.

30%. 30% on the margin.

At a steady-state level, these hospitals should be doing margins which you make in your Tier 1 hospitals, given the cost structures also would be lower in these markets?

That's true. That's true.

For example, Vijayawada market has margins of like Hyderabad only, place like Vizag, there may be the 4-5% less because it's a city of difference. There's a lot of public sector and a lot of district populations who are price-sensitive, those things.

Rajahmundry is pretty good. Rajahmundry is affluent part of Andhra Pradesh.

Sure, sir. Sir, last question from my side would be on the Delhi hospital, the Madhukar Trust hospital.

Can you talk about in terms of the ramp-up at the Madhukar hospital in terms of how the EBITDA margins are playing out, and what is the balance receivable from the Madhukar Trust in terms of the loan which we have extended to that hospital? Thank you.

I think this year we are I think we're encouraged to see that it is doing a double-digit EBITDA, finally. Considering this cost structures and model, I think the last the the four, five months has been consistently doing about double-digit EBITDA.

We see that, this business to grow in the next couple of years' time pretty fairly well. However, the EBITDA EBITDA in this hospital are not going to be in the best-case scenario maybe 15-16%, even the best scenarios, because of the, free beds.

What happens in the free bed in children's hospital, it is a when you get a sick patients in ICUs in free beds, it drains away a lot of revenue. That's why you're it's a low-EBITDA margin hospital.

Sure. Vikas, in terms of outstanding receivable from Madhukar Trust?

The principal outstandings remain same, Rahul, is at around ₹23, ₹24 crores plus whatever the other things which is there. If you read through our financials, last year we have restructured the repayment schedule of theirs for moratorium and then given us some timelines for the repayment of that.

As on date, the status quo is same as was as of 31st March.

Sure, sir. We were also supposed to convert the Rosewalk hospital from a premium birthing center to a, let's say, a regular birthing center.

Has that played out?

It's been done. It's doing well.

It's doing much better now. It's difficult to erase that name of luxury from people's minds, but it's doing much better now.

I think it's also tracking really well.

Sure, sir. That's it from my side.

Thank you.

Thank you, Rahul.

Thank you for joining today's conference call and for your thoughtful and thought-provoking questions. It is always a pleasure to speak with all of you and take all the questions to clarify.

Your continued support is instrumental to our strategic journey. If there are any other further questions, please do connect with Mr.

Saurabh Bhandari, who heads our investors relationship, at the emails which is given into our press release. Thank you very much.