Thanks, Ryan. Hi, good morning, everyone.

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

From KIMS, we have with us today Dr. Bhaskar Rao Bollineni, Founder and Managing Director; Dr.

Abhinay Bollineni, Executive Director and CEO; Mr. Sachin Salvi, CFO; Dr.

Nitish Shetty, CEO for KIMS Bangalore Cluster; and Mr. Sreenath Reddy, Director - Business Strategy.

Over to you, sir, for your opening comments.

Good morning and a hearty welcome to all of you from KIMS. The breeze of Independence Day is already blowing as the nation is getting ready to celebrate its 80th Independence Day.

Let me convey the Independence Day greetings to all of you in advance. Without keeping you waiting, I will straight come to financial and operation results, quarter one 2026-2027.

I am happy that the growth trajectory continued unabated, and we delivered strong financial and operational results for the quarter. We crossed the ₹1,000 crore mark of revenue in Q3 '25-'26, and the same tempo is continued with gust in the current year.

Q1 FY '27 updates: Total revenue of INR 1,196 crore, a growth of 36.1% year-on-year, and 10.3% on quarter-on-quarter basis. EBITDA of INR 240 crore, a growth of 20.1% on year-on-year, and 10.9% on quarter-on-quarter basis.

EBITDA margin at 20.1% versus 20.27% in quarter one FY '26, and 19.9% in quarter four FY '26. PAT at INR 37 crore in quarter one '27 against INR 85 crore and INR 33 crore in Q1 FY '26 and Q4 FY '26 respectively.

Consolidated EPS for FY '26 of INR 1.04, a degrowth of 2.3% on quarter-on-quarter basis. Cash and cash equivalents includes cash, bank balance, deposits with maturity less than 12 months, and investment in mutual funds at INR 505 crore as on 30th June 2026.

Quarter one '27 financial highlights consolidated: Consolidated revenue from operations of INR 1,180 crore, a growth of 35.3% on year-on-year, and 9.8% on quarter-on-quarter basis. Consolidated EBITDA pre-Ind AS of INR 222 crore, there is a growth of 14.6% year-on-year, and 12.9% on quarter-on-quarter basis.

Consolidated EBITDA pre-Ind AS and excluding other income of INR 206 crore, a growth of 10.2% on year-on-year, and a growth of 10% on quarter-on-quarter basis. Operational highlights consolidated, quarter one FY '27 updates: Average revenue per operating bed grew by 9.7% and 0.1% on year-on-year and quarter-on-quarter basis respectively.

Average revenue per patient grew by 6.8% on year-on-year, and a decline of 3.8% on quarter-on-quarter basis. IP volumes, 72,493, grew by 26.6% year-on-year, and 14% on quarter-on-quarter basis.

The annual growth is 15.4%, that is over the financial year 2025. OP volumes, 6,58,617, grew by 28.5% year-on-year, and 8% on quarter-on-quarter basis.

The annual growth is 25.4%, that is over the financial year of 2025. Thus, both IP and OP volumes registered an impressive growth.

We have other developments. I want to apprise you of the two significant financial initiatives we have undertaken: a Qualified Institutional Placement and a preferential allotment to promoters.

The QIP successfully raised ₹1,500 crore and was oversubscribed, demonstrating the deep trust and confidence of institutional investors in the vision of our company. In line with our commitment to financial prudence, ₹1,100 crore of these proceeds have already been utilized to reduce our debt.

Furthermore, the preferential allotment to promoters stands at ₹600 crore. Under this arrangement, 25% of the amount is to be infused initially, and the balance to be brought in within 18 months.

The significant allotment underscores promoters' strong commitment and long-term faith in the company's stable future. Together, these two strategic initiatives will substantially strengthen our balance sheet and provide us with necessary financial leverage to explore new growth opportunities.

I am happy to state that we have recently opened two units in Kerala, one unit in Kerala at Palakkad, taking our present strength to three units in the state. There is a good potential, and we are confident of good results.

I am happy that all the new units are doing well on expected lines. At Mahadevapura, Bangalore, operated a breakeven less than 7 months, and we are EBITDA positive.

At Electronic City, Bangalore will expect breakeven in next one or two quarters. It has been started a little bit later than the Mahadevapura.

Both the units are doing very well. We are very, very happy that the entire Bangalore cluster is exponentially doing well.

It is gladdening that very complex surgeries, including lung transplants, are taking place at the newly opened centers, which speaks about clinical expertise and infrastructure at these centers. I would like to brief about some exceptional professional accomplishments.

Dr. Raghu Ram, our renowned breast care expert, has achieved his third Guinness World Records title in a short span of 15 months.

The latest Guinness World Record title was awarded under the newly created category, recognizing innovation in artificial intelligence-enabled holographic health education. The initiative demonstrates the transformative potential of artificial intelligence and immersive communication in advancing public health awareness.

Last month, Dr. Raghu Ram addressed three distinguished institutions in UK.

We inaugurated fully dedicated sports ortho clinic at our Seethammadhara, Vizag unit, which is the first of its kind in the state of Andhra Pradesh. Dr.

Meda, head of our vascular, endovascular surgery department, was invited as a faculty at the prestigious SVS Vascular Annual Meeting 2026, held in Boston, USA, the world's premier gathering of vascular surgery leaders. Dr.

Meda presented the world's first surgical technique: no shunt, no hypothermia, no bypass, a novel technique for open repair of type III and type IV thoracoabdominal aortic aneurysms. This technique is pioneered the first time in the world, represents a landmark advancement in complex aortic surgery.

We are proud to share what is believed to be the first robotic implantation of the new Perceval Plus sutureless aortic valve, not only in India, but Asia-Pacific region, by KIMS Nagpur. The procedure was successfully performed by Dr.

Saurabh Varshney, using the da Vinci robotic platform, marking another step forward in the evolution of robotic cardiac surgery. Thus, I have apprised you about latest developments.

The overall picture is promising and optimistic, and I am sure we'll be able to achieve the projections in the forthcoming quarters with a continued emphasis on quality care and growth orientation. You all know that last quarter, we have been inaugurated the new facility of Kondapur, and we are now doing a 50% growth within a quarter.

I would now conclude saying that we must pioneer the future of health today to secure the very health of our future tomorrow. Thank you.

Rahul?

Good morning to the team. I have two questions.

My first question to Mr. Dr.

Abhinay is, beyond the regular outlook, just want to understand what are the top two to three execution priorities you're focusing on in the next few 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 KIMS position in the hospitality and healthcare delivery space?

That's my first question. I'll ask my second question after this.

Thank you.

I think this financial year, a lot of focus is on the new Kondapur hospital, which just got commissioned last month. The first month has been very promising, it grew by almost 40% in less than a month.

I think a lot of focus on Kondapur, Thrissur, which we are going to commence in the next three to four months, and obviously to neutralize EBITDA in most of our hospital that we commissioned last year.

Okay. My second question to Mr.

Sachin is, from a financial point of view, what key risk or challenges do you anticipate in the coming quarters? What specific measures have been taken to manage margins, cash flow, and balance sheet strength, especially in areas like cost pressures, receivables, or regulatory compliance?

Thank you.

As far as risk are concerned, some of the measures we have already taken care of. We have already launched the QIPO, and using the QIPO proceeds, we have repaid the secured loans.

We have enough leverage to fund the expansion or fund the growth, so that risk factor has taken care of. As far as the receivables are concerned, yes, the government receivables were the challenge, but we have seen a positive trend in that side.

The government receivables are coming on time to certain extent, so that risk to certain extent is mitigated. Loss funding had got reduced a bit in last quarter.

For the newer units, the ramp-up is very important. It all depends upon how quickly we ramp up into newer units to mitigate the risk which are associated with the financial strength of the company.

Thank you, and best wishes.

Hi team, good set. A couple of questions.

First on the Kerala units. How would you attribute the cost increase that we have seen in Kerala units?

Going forward, what could be the steady state that we expect from those? Second one would be on the overall clusters.

We have seen quite a few clusters having a significant jump in the ARPOB, but ARPP is decently grown, not like an abrupt jump. That explains that ALOS has reduced in those clusters in particular.

That has given us quite a good ARPOB jump. Should we see this as steady state or is it a quarterly phenomenon due to a mix of certain kind of surgeries or procedures that we do in Q1 favorably and not in the seasonal kind of a thing?

Yeah.

I think Kerala cluster is still in its growth phase. We just added one hospital last quarter.

We have another hospital that we'll commission towards the end of this year. I think right now we're looking at single-digit EBITDA margins.

Maybe through the year, it will continue similarly, but next financial year, we should move to mid-teens kind of a number, and it should stabilize at around 20%-22% EBITDA margin over the next 2 to 3 years as far as Kerala is concerned. As far as the ARPOB, we're not seeing significant change on a quarter-on-quarter basis.

Whatever numbers were reported in Q4, Q1 are very similar. I think that trend will continue to be similar as we ramp up over the next one year.

Just to confirm that we are focusing particularly on decreasing the ALOS and therefore ARPOBs will stay, is ARPP the right metric to track?

I would suggest look at ARPP because that's a more stronger indicator. ARPOB could be changing because of seasonal case mix, and that particular quarter, one or two things could change.

The right indicator should be ARPP.

Sure, makes sense. How are we seeing demand other than the seasonal factors for the newer units, say in Kerala or Of course you highlighted that Kondapur had quite a good growth.

Other than that, how are we seeing the overall demand in the existing units which are kind of mature now?

Overall, the demand is quite strong. We are pretty confident about the ramp-up.

In fact, things are still going very strong in our favor, in the right direction in most of the clusters. We've had some glitches in terms of insurance empanelments and stuff, but I don't see any challenge in the ramp-up of the hospitals that we've already commissioned.

No, my question was more on the existing ones. How are we seeing the demand in the existing facilities which are kind of mature now?

We are seeing good demand. There's been good growth in most If you look at Telangana and Andhra, which is our mature cluster, if you look at a year-on-year growth, the revenue growth and EBITDA growth in Telangana and Andhra have been quite strong.

There's no number to track for what would be the growth in the existing versus the new, therefore I was asking this question in particular. Because the numbers overall would have been due to the newer unit ramp-up as well, right?

Telangana does not include the new unit. Kondapur commissioned in July.

It does not reflect

Okay. Cool.

That makes a lot of sense. Thank you.

Have a good one.

Hi, good morning, and thank you for the opportunity. My first question is on your capex strategy.

After expanding significantly in last 3, 3.5 years, should we assume you're broadly done with your expansion plan and focus from here on will be on improving the profitability metrics? Or do you think there are still some markets or some pockets within the existing market where you can increase your presence further?

Just want to understand management's thought there.

Like we mentioned earlier, our priority today is to ensure that all the hospitals that we commissioned turn EBITDA positive and reach a single digit, high single digit or low double digit kind of an EBITDA margin. Once we are confident that the trajectory is sorted, the growth will continue to happen over the next 2-3 years, then we have enough opportunities in the core markets, which is Telangana, Andhra, Maharashtra, Karnataka, Kerala, which we will continue to pursue after that.

I think our priority is very clear: next 8 months or next 3 quarters, we will first focus on stabilizing the current hospitals that we commissioned, and maybe next year, we will come up with more greenfield opportunities. In the core geographies, we're seeing enough opportunities in core geographies.

We're not looking at opening up any new geographies.

More room for greenfield within the existing market itself. That's how you're looking.

Correct.

Correct.

My second question is on your Telangana cluster, which is your biggest and most mature cluster. If we leave apart this new addition of Kondapur unit and when we look at the occupancy, the range has been broadly stayed at, say, 50%-52% range.

Can you explain why occupancy are hovering in that range, and should we assume you can really move it to much higher level?

I think so there is one mistake in this. The number of beds in Secunderabad, we have demolished the old facility, which used to have 250 beds.

Right now, the bed capacity shows those beds also, but right now we're not operationalizing those beds. When the new facility gets ready by end of next year and when we operationalize, then the ramp-up will continue to happen.

As far as Telangana is concerned, we don't see any reason why we can't ramp up to 70% in spite of the new Kondapur hospital and the new Secunderabad hospital over the next 3 to 4 years. In the next investor presentation, we keep a note on which are the beds that are not functional at this point in time because of the renovation and rehabilitation.

Okay. The actual occupancy would have been higher than what is shown in the presentation, right?

Then you plan to take it to, say, 70% or so in next few years.

Correct. 70% is doable in spite of the new Kondapur hospital that got commissioned.

Next 3 to 4 years, we will get there.

Okay. My next question, after paying off this ₹1,100 crore of debt, should we assume considerable reduction in the interest expense on your books from second quarter onwards?

Surely.

We have completed the QIPO process only at the end of the quarter. At around 24th June, we have received the proceeds into our current account, and using that proceeds to certain extent, we have reduced our debt on 27th or 28th June.

The interest cost reduction has not come in the last quarter. You will see that reduction in this quarter and henceforth.

Okay. My last question is, Sachin, if you can update us on the empanelment status for all the new units in terms of which are remaining and where you have completed the empanelment with the key insurers?

I think we've made good progress from the last call that we had. We've had traction on some of the insurance companies, some of the key insurance companies.

There are now a few empanelments left for the four assets, which is largely Thane, Nashik, and two of the Bangalore assets. I would say we've now empanelled with 50% of the insurance companies.

The remaining 50 is what we're pursuing, which we are now seeing a positive direction. Earlier, we were clueless on which direction things were going, and we didn't have definitive timelines.

Now, I think we have more definitive timelines on when this will be completed. Most of these empanelments, at least the big ones, the key ones, will be done by end of August, mid-September.

Okay. By say this fiscal year-end, majority of things should be in place from empanelments perspective.

Correct. Okay.

Thank you. Thank you for response.

All the best. I'll get back in the queue.

Thank you for taking my question. The first one is with respect to Telangana cluster.

Just trying to get a sense on what were the losses of new Kondapur unit, and how did we maintain kind of such strong margins, which is kind of almost flattish Y-o-Y despite adding 450 operational beds, if I'm looking at it correctly? The old facility of Kondapur, have we also shut that or that is yet to be shut?

There are very marginal losses in the numbers that are reported in Q1. There are some pre-operative costs that we have started incurring to the tune of ₹2 crore a month for Kondapur, ₹1.5 crore to ₹2 crore a month.

July, which was the first full month of Kondapur being operationalized, the ramp-up has been quite strong, we are not anticipating much losses. We were usually doing around 30 to ₹32 crore, ₹33 crore in Kondapur.

July alone, we did ₹45 crore, and more doctors are yet to join. The traction has been quite strong.

We don't anticipate losses like we had indicated earlier. The old hospital is still operational.

It will take us another 6 months before we shut down. That could be the drag.

Only the rental costs and some operating costs of the old hospitals will be some drag.

Got it. The second question is with respect to Bangalore ARPOB.

I think if I'm not mistaken, we had kind of originally guided for 70,000-75,000 ARPOBs, but we have seen 90,000-plus ARPOBs for two quarters. Is that the correct base we should be looking at, and what has changed versus our expectations before we originally started the hospitals versus what is happening on-ground?

Sreenath, you want to take

Yeah. The ARPOB would go down slightly lower because the empanelments and other things are yet to happen.

Therefore it may not remain at these levels, but it will not go down to the initial levels of 75,000. We are expecting it to be anywhere around 85,000, around that number, 80 to 85,000 once all the empanelments are done and more corporates are empanelled, then it should go down to those levels.

What was the second question? Your second question was what was it different compared to what we had anticipated initially.

There's nothing much different, even though initially we expected around 75,000. The thing is that as a strategy, we placed ourselves as more of a quaternary care hospital, doing very complex kind of procedures, very niche kind of procedures.

These are giving us better numbers, both in terms of the ARPP as well as the ARPOB. That is the only reason as to why the ARPOBs are higher at Bangalore.

It will get stabilized as all kinds of case mixes happen, it will get more stabilized to around that 85,000 number.

Also, if you look at the ARPP, it is very similar to Telangana. It's just that because the ALOS is lower, the ARPOB looks inflated.

Like Sreenath said, 85,000, 80,000 is what you should model as ARPOB for that cluster.

Got it. Helpful.

Thank you.

Yeah. Sir, if we look at, let's say, the ramp-up trajectory at your four new hospitals, which is Nashik, Thane, and the two Bangalore ones.

Nashik achieved EBITDA breakeven this quarter. Mahadevapura and Bangalore have also seen, let's say, substantial decline in losses, but somehow the Thane trajectory seems to have flattened out.

Thane's EBITDA losses essentially have been flat for past three quarters now. Can you talk about in terms of where the ramp-up at Thane has been slightly below versus some of the other newer hospitals?

There is nothing significantly alarming, Rahul, as far as Thane is concerned. Traditionally for Maharashtra, at least for our experience in Nashik, Nagpur, and Sangli, first quarter is usually a weak quarter, number one.

Because of the empanelment delay for the last 4-5 months, we've not been able to see much growth. In the month of May, we got our GIPSA empanelment, and few more empanelments happened in June.

If you actually look at July, Thane did ₹21 crore in revenue and 10% EBITDA margin, and the August trajectory also is is similar as far as the revenue. I think that Q1 suboptimal Q1, we've we've seen that traditionally in Maharashtra, but July has been a promising month.

The same trajectory is continuing in August also.

Okay. Sure, Dr.

Abhinay. Then for this quarter, which is the second quarter, you would expect Thane as well to achieve breakeven on a quarterly basis?

As far as June is concerned, it's 10% margin. If the August-September Sorry?

July. July.

Right. If the August-September trajectory continues similarly, then it should be, yeah, a healthy EBITDA margin.

Sure, Dr. Abhinay.

You said for July, Thane did around ₹21 crore of monthly revenue?

Correct, versus Q1, if you look at the average, it's around ₹16 crore, against which it did ₹21 crore in July.

Sure, Dr. Abhinay.

Then in terms of, let's say, the two Bangalore hospitals as well, given the traction seen at Mahadevapura, Mahadevapura should likely achieve breakeven in 2Q, and Electronic City in third quarter, would that be a fair assumption?

Mahadevapura already achieved breakeven, Rahul. Even in July, Mahadevapura has done ₹20 crore revenue.

Mahadevapura is now stabilized. It's almost zero or slightly positive EBITDA margin.

Electronic City is where the drag is, which like we had indicated earlier, towards the end of the year, that also should become zero. Overall as cluster, we are aiming for Bangalore cluster to be zero EBITDA for the full year with no losses.

We'll recoup the losses also.

Sure, Dr. Abhinay.

Can you talk about the way you indicated margins for Kerala as in mid single-digit for this year, ramping up to 20%-22% over next 3-4 year. How about the Bangalore and the Maharashtra cluster as well in terms of how do you see the margin trajectory in '27 and then over the next 2 to 3-year period?

Bangalore, you talked about neutral margins for the year.

I think both clusters, we should look at a healthy 20% growth on a year-on-year basis, Rahul. Our key is to first stabilize and make sure that there's no drag in any of these assets.

After that, as long as it's growing at a good 15%-20%, I think we are happy on the growth of the hospital.

Okay. Sure.

Sachin, can you call out the debt number post this ₹1,100 crore repayment which we have done?

As of 31st of March '26, at the start of the financial year, the debt position was ₹3,250 crore, which has reduced to ₹2,570 crore as on 30th June. In fact, it had reduced further by about ₹100 crore in the first week of July because, as I have said, we have received the proceeds in the last week of June and we couldn't pay off some of the loans which we have promised to pay as per the objective in the first week.

We could able to retire those debts only in the first week of July. The debt position as of now would be somewhere around ₹2,400 crore.

Okay. Sure.

I will join back in the queue. Thank you.

Hi, good morning, sir, and thanks for the opportunity. First question is on the Kondapur unit.

Just want to understand the revenue potential from this. This has been a fairly lucrative unit for you: ₹350 crore-plus revenue, ₹100 crore-plus EBITDA.

Just wondering, if you're making such a big hospital over here, just want to kind of understand, how do you see this unit in the next 3 to 4 years? It seems

the full potential of the hospital will be around ₹100 crore revenue per month, which is around ₹1,200 crore revenue. We should be able to get to that number over the next 4-5 years.

What drives this number? Because see, if I were to just have a casual look, there are a lot of other hospitals also in that area.

So ₹100 crores, this might even become the biggest unit, or the second-biggest unit. Just wondering, what's driving this confidence?

You're asking why is that happening?

Yes, sir.

I think there are a lot of clinical programs that we've not been able to add in Kondapur over the last few years because of space constraints. We're solving for that.

A lot of new clinical leaders who wanted to join us, but we didn't have space, they are joining. For example, we had no oncology at all in Kondapur.

We've not started transplant even now, even in spite of the new hospital. There is a lot of opportunity to add a lot of new clinical programs and doctors, and we're pretty confident that it will scale up to that number in spite of KIMS having other assets in that geography.

Right. Sir, just comparing, let's say, Mahadevapura's trajectory to Thane, Mahadevapura, I believe, started after Thane.

It is doing higher revenue run rate versus Thane and, as I think, broke even faster. What would you attribute the main difference to?

Is it because of delay in empanelment in Thane, or it's just that there are more beds over there or it's just a bigger success story? Why would this happen?

One key difference between Maharashtra and South is I think the South ideology of full-time practice is lot more easier to get aligned with doctors. As far as Maharashtra, not just Thane, be it Nashik or Nagpur in the past, doctors are not fully aligned to having a full-time practice.

It takes time for us to convince them. They first join us a part-time model, then they slowly continue to contribute more time in the hospital, and then over a period of time, come to full time.

If you look at Nagpur, when we first acquired, it took us 1 18 months, 24 months before we could stabilize that unit because initially those doctors are not fully aligned in terms of having a full-time practice model. Once they get comfort, they see that the hospital is going in the right direction, all promises are kept, then the traction is quite good.

If you look at Nagpur, in the month of July, we have done the highest. We've done ₹30 crore revenue just from the Nagpur facility.

Likewise, Thane has a lot of potential. Maharashtra in general has a lot of potential, but we are aware that it will be a little slow when compared to any other hospital in South, because in South, it's easier to get clinical talent.

Talent is available. Number one, talent is available.

Number two, ability to attract talent also becomes easier because they're already practicing in other corporate hospital. It's easier for them to shift to another hospital, versus in Maharashtra, they have to shut their own hospital or their nursing home or their clinic.

That decision to shut their own setup and move to a corporate hospital for long-term growth takes a little time for alignment. Otherwise, potential I think is quite strong in Maharashtra.

It'll always be a slow growth till the market matures.

Sure. That's helpful.

Just one more clarification on one of the points you made on Telangana beds. Operational beds have gone up around 450 on a quarter-on-quarter basis, but occupied beds are flattish quarter-on-quarter.

What explains this discrepancy?

That Kondapur beds, the last 10 days of Q1 is when we've added them, those are the 450 incremental beds

got added. Okay.

That's the reason there's no increase in occupied beds.

Correct.

Got it. Thank you, sir, and all the best.

Hello, am I audible, sir?

Hello? My question is on the capacity utilization.

Currently, we are around 50%, and earlier, when we were at 60%-plus utilization, we were clocking 28%-plus EBITDA margin. If you can give some guideline, when do you see us hitting 55%, 60% kind of utilization again?

Historically, sir, whenever we have crossed 60%, we have come up with a lot of new beds. Somehow, we have never crossed, correct me if my memory is wrong, we have never been able to cross 65.

Is that the peak kind of capacity utilization in hospital business? Because I see some of the smaller hospitals doing 65% to 70% utilization also.

If you can give a color with a 3 to 5-year framework, how we will be hitting the higher capacity utilization?

Actually, in the bed capacity, in the 1,870 or sorry, the 2,669 beds, if you remove the 450 beds of Kondapur, 500 beds of Kondapur that just got added, and if you remove 200 beds in Secunderabad which are under renovation, and look at the occupied beds as a percentage of the remaining beds, it is already at 65% kind of an occupancy. We'll share that working after the call with you, Saurabh.

Sir. Sir, the other question is, I think you have guided for 4% to 5% ARPOB growth rate, but historically, we have done much better number like 15%, 16%.

Of course, that has to be with also the geographical mix of how hospital has evolved. Even this quarter, we have done a better ARPOB number.

Usually, the inflationary ARPOB growth rate is around 6%, 7%. Should we expect 6%, 7% kind of inflationary ARPOB growth rate going forward or this is too aggressive?

I think it's too aggressive. 4% to 5% is a good number.

Okay. Saurabh, Dr.

Nitesh also.

We just did the math on the bed capacity. If you remove the 200 beds in Secunderabad that are under renovation and new construction and the Kondapur beds, the current cluster is at a 61% occupancy.

Okay.

How do you see, sir, this panning out in, let's say, by FY '28 end and by FY '30 end?

FY '28? Did you say FY '28 or FY '30?

FY '28, like March 2000 March 2028 and March 2030, 2 years and 4 years, how do you see this number panning out, sir?

By FY '30, if we don't add any more bed capacity to the current hospitals, then it should be around 65%, 70%, 70%. If you don't add any more Then

we should be hitting back 28%, 29% EBITDA margin, is that assumption correct?

Yeah, 30% we should be able to hit, yeah.

Sir. That's all I had.

Wish you all the best.

Thank you. Good morning, everyone.

To build on to one of the prior participants' question on Bengaluru, Mahadevapura breakeven. What we see on slide number 25 is, we could still see quarter one FY '27 loss of 15 million and 1 76 million in terms of EBITDA.

Could you please clarify on that? What we should assume is breakeven has already been achieved in Q1 FY '27.

Is that so?

Yeah. See, it's one of the months, right?

For the quarter, it will be a loss, EBITDA loss. In the month of June is where we had the breakeven, and July also, we are doing well in terms of both revenues as well as the EBITDA.

Therefore, this quarter, on a full-quarter basis, that number will be positive.

Understood, sir. Okay.

Thanks for that clarification. My second question goes like this.

The board approved draft O&M and call option agreements with Golden Lion Solutions and Sarvotham Healthcare this quarter. If you could just detail out on the assets, including location, what's the bed count, what's the current occupancy, how are we seeing P&L around this, please?

These are two hospitals in Telangana and Andhra.

Telangana

is one hospital, which is a neat hospital, we're having an O&M agreement with them. That is a 300-bedded hospital very close to the new Kondapur hospital that we commissioned, around 3, 4 km, with a revenue potential of ₹30-₹35 crore a month.

We're pretty confident we should scale up to that. As far as the other Andhra asset, it is one hospital in Kakinada, which is a micro-market that we are not present in.

We have two hospitals in Vizag, which are doing very well. We have a hospital in Rajahmundry.

It's a micro-market in between both these spaces, and we have an O&M agreement with them too, which we're pretty confident the current ₹7-₹8 crore scales up to ₹15-₹20 crore over a period of time.

Understood. Sir, these agreements would be signed in from quarter two FY '27?

Like the P&L, etc., would start getting hit by quarter two FY '27

from? They are O&M agreements, we will only get a percentage of the top line.

The losses will not hit our P&L. As and when we are confident that the hospital has ramped up and things have stabilized, that's when we look at trying to acquire these assets.

Right, sir. Understood.

Sir, and if you could just mention a percentage of capex on sales in FY '27, if you could just give that number and how much would be the split between greenfield, the acquisition, or O&M?

Total capital expenditure which we did in the last financial quarter is about ₹60-₹75 crore. As we have already mentioned, most of the capex which we have promised to do, we have already completed.

Going forward, only some capex we may have to incur into Secunderabad, which was our existing unit, the flagship unit. We are building an hospital in Rajahmundry.

There we'll have to spend about some ₹60-₹75 crore in this financial year. Kondapur capex also is mostly done.

There would not be any material capex, but still you can assume about ₹100-₹125 crore of capex in the next 9-odd months from these three assets. Overall, it would be more, but once we announce these assets, then we can give that number.

Understood, sir. Thank you so much.

Thanks for the opportunity. The ARPOB growth in the AP cluster were growing at a healthy rate in the past, and now the growth has moderated.

What is the reason for that and how do you see it going ahead?

I think AP continues to be strong. Are you referring to Q4 to Q1?

Q4 to Q1 and also I'm comparing it with the past growth rates that I have been seeing it from, suppose say 19,000 to 24,000, 25,000 and then 27,000 in the last quarter, and the growth rate in this quarter particularly has come down. Just trying to understand what is the reason for that.

It could be some seasonal, small case mix changes, but we are confident that AP will continue to grow. In fact, Q4 the Q2 result will be quite better than Q1 result because some of these hospitals have ramped up significantly.

We don't see anything on-ground which is alarming. It's could be some quarter-on-quarter seasonal effect.

It'll continue to grow strong.

We've

also added cancer in most of our hospitals in AP in the last 2-3 months, there will be good ARPOB growth from those specialties as well.

Understood. In the Bengaluru units, have we completed the doctor hiring fully?

Doctor hiring, it's never completed fully. For that year, we are done.

I think for this financial year, we are sorted. We still will keep adding more and more doctors as the hospital matures.

Yeah. Can you give the overall margin trajectory for H2 this year and maybe how do we see FY '28 in terms of the margins, EBITDA margins?

We will share a note on that separately after the call. We won't be having it handy now.

Yeah. Sure.

Thank you so much.

Hi, sir. Thank you for the opportunity.

Just want to touch up on Kondapur once again. I know somebody asked already.

Just wanted to understand if it has already contributed meaningfully to the revenue in Q1 or it just started off well from July?

We started the hospital, we admitted the first patient on the 20th of June. Q1, we had 10 days.

The first full month was the 1st of July to 31st of July, where we saw 30 40% growth in revenue.

Understood. Sir, any pre-operative expenses or any losses that we incurred for the same hospital in Q1?

No, because the EBITDA is already very high, the cluster did 110 crore EBITDA, there was only a 4-₹5 crore pre-operative expenditure. There could be some drag, but given the revenue growth rate, I don't see that there will be significant drag.

Though

EBITDA percentage compressed, but absolute number will increase.

Got it. Thanks, sir.

Hi. Thank you for taking my question, and congratulations on an encouraging set of results.

I had a question on the Bangalore units. I see the operational beds have increased from 280 to 340.

Can you help me understand which of the units have these beds been added in?

Dr. Nitesh here.

We have added beds in the Mahadevapura unit. We have operationalized more beds.

Earlier, we had around 170 beds. We have increased to 210.

We are not added any more beds at the Electronic City. The additional beds have come from the Mahadevapura.

Okay.

Okay. How are we foreseeing addition of future beds as and when the occupancy ramps up?

Do we have any date or occupancy number in mind when we will start adding more beds there?

See, at present, the Mahadevapura occupancy on the census bed, I'm talking about, because the two 210 beds, what I mentioned is the including non-census beds. It's a total operational beds.

Non- census bed, we'll be adding as the occupancy goes up. Right now, census bed occupancy is around 40%.

When it reaches 55%, 60%, we'll be adding more census bed into the count. Otherwise, the non-census bed will remain the same.

Again, we are doing a lot of complex cases. Sometimes we need to commission the ICUs, sometimes we commission ward beds based on the ramp-up of the adding of the beds, the fresh beds.

Okay. Understood.

Thank you.

Hello. My question is on the minority interest going forward for next 2, 3 years.

How much of PAT should we factor for minority interest? That is first question.

Second question is through QIP, I think you said we'll be reducing ₹1,300 crore of debt. In next 2 to next 3 to 4 years, I think conservatively, we should do ₹2,000 crore-plus of, total operating cash flow.

How much of that will go for maintenance capex, and then whatever is left, do you see a further debt reduction happening through internal accruals or we will see more capex being spent towards the growth? If you can, throw some light on these two things.

As far as minority interest is concerned, for the current quarter, it is 10.5%. Over the longer period, it would be somewhere in the range of 10% to 15%.

I do not think it will increase beyond that. As far as repayment of debts is concerned, out of the total proceeds, we have already repaid ₹1,125 crore of debt.

On the maintenance capex, you want to pay? Maintenance capex would be around ₹100 crore per year for the next, say, 3 or 4 years.

Each year.

Each year, ₹100 crore.

Sir. Sir, given in next 3 to 4 years, we'll be doing ₹2,500-plus crore of operating cash flow, and maybe ₹400 crore to ₹500 crore will be maintenance capex, that leaves us with additional ₹2,000 crore of cash flows.

Do you see potential for further debt reduction in next 2, 3 years or you feel this money might get invested for again greenfield or brownfield growth?

Most likely it will get invested for greenfield, brownfield growth.

We intend to keep our debt-equity in the range of 2.5:1. That is the intention.

Most of the internal accruals which get generated, the cash which gets generated out of the business would be deployed for further expansion of the capex opportunity which are there in our core clusters.

Okay. Sir, usually, in terms of the timeliness of the reward and our brownfields are usually quickly rewarding.

Do we have more plans towards any brownfield expansion?

There are a couple of shortlists in Kerala, in Telangana, Maharashtra. At the right time when we think the opportunity is right, we will look at consolidating those.

Sir. Sir.

Wish you all the best. Thank you.

Hi. Good morning, everyone.

Abhinay, trying to understand how should we look at sustainable margins in Telangana. You spoke about 30% earlier in the call, but in the past, you have even achieved as high as 35% margins in Telangana.

Can you help us understand why the difference, 30% versus a peak of 35%?

Even now we are confident on the same number, Alankar. It's because the previous person who asked a question kept saying 28, 29, we said 20 30, 31.

If you look at our '26, '25 numbers, we have delivered 31% EBITDA margin for '26 and '25. We are pretty confident.

If you look at our mature like Secunderabad, it does 34%, 35%. Kondapur before the expansion used to do 34%, 35%.

Sunshine was at a much lower number because there were newer facilities and growing. If you look at Q4, even that is up to 38%, 39%.

I don't see any stress in Telangana. It will continue to deliver anywhere between 30% to 35% kind of an EBITDA.

Now that we're adding a lot of bed capacity, it will take some time for us to get to that number with new Kondapur, Secunderabad, some greenfield opportunity, some acquisition opportunities before we first get back to that 30-plus kind of an EBITDA margin. It will take some time.

Sure. That's helpful.

Similarly, Abhinay, for Kerala, you spoke about settling at 22%-23%. Generally, what we understand is the cost structure in Kerala is slightly higher, but still that gap seems a bit on the higher side.

Would you like to explain the reason?

There is a rental cost of 4%-5% in most of the assets at Kerala, and that's why I'd knocked off that 4%-5% margin and said 20%-22%.

All right. Nothing very structural which impedes margins in Kerala.

No.

Okay. The second question was you spoke about looking at new greenfield options now possibly next fiscal only in FY '28.

Similarly, earlier you had spoken about looking at couple of acquisition opportunities. Would those two be more of FY '28 announcements now or we can expect something in FY '27?

Difficult to say, Alankar, because these are not in our control. As and when the transaction is announced and the closure dates are more dependent on what the seller wants to do.

At this point in time, we don't have much clarity on what timelines is.

Fair enough. The final question is at a industry level, can you help us update on the progress of the common empanelment initiatives?

I think lesser spoken about that in a common forum is better for the industry as such, because a lot of these plants listen and we've discussed and I think we should do it on a one-on-one basis than to discuss in a public forum on GIC. Sure.

Sure. Okay.

Just maybe is there any update at your end regarding common empanelment or nothing much? No,

I think some clarity is emerging as time passes. I think last year unfortunately was a bad year because it coincided exactly with when GIC announced this common council and when we commissioned a lot of hospitals.

I think now insurance companies are also getting clarity on the way forward from GIC, and GIC itself is taking some stand and making some changes. I think it will settle down now over the next few months.

It should settle down.

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

Thank you.

Yeah. Dr.

Abhinay, you talked about the old Kondapur hospital still operating and there being the rental cost impact of that. What kind of a rentals are we currently incurring for the old hospital and how long will it continue then?

Another 6 months before we take a decision on how we want to move that, and around ₹90 lakh plus GST is the cost that we have per month and some other operating costs like electricity and some manpower that is there.

Okay. Annual cost of maybe around ₹12 crore rupees?

Towards the rental, and you can assume another ₹3-₹4 crore towards operationalizing it and sustaining that hospital.

Sure. Given you talked about, let's say, potential of Kondapur being ₹1,200 crore kind of a revenue.

Let's say if you hit those numbers, what kind of EBITDA margins do you think this hospital would operate at? If we assume somewhere around 35%-40% margins, then potentially the Kondapur EBITDA for us could become, let's say, 4 to 5x in, let's say, 4-5 years.

Is that understanding correct?

You should model around 30%, Rahul. The upside is the upside.

Dr. Abhinay, Kondapur hospital, I guess, currently does around, let's say, between 30%-35% EBITDA margins.

You talked about onco and transplant not being there in the existing hospital. Do you think that there is an upside in terms of the margin potential for the bigger Kondapur setup?

Last year, it did 33% EBITDA margin, but for 2 years, it will be a little suppressed because we're adding a lot of new clinical programs. They need to mature.

As you're scaling up to a ₹1,200 crore kind of a revenue, your clinical programs and all, it'll take some time before they mature. To assume a good 30%-32% margin is good at a ₹1,200 crore kind of a revenue.

35, 40, it'll take more time for it to mature and reach that level.

Sure, Dr. Abhinay.

Just last question. Can you talk about some of these, let's say, greenfield or M&A opportunities which you are, let's say, pursuing just in terms of which markets and how large could these assets be?

Whatever we are pursuing, we are pursuing in our home markets only. In the core markets that we are already operational.

Like I said, Maharashtra, Kerala, Telangana, Andhra is where we're mostly focusing on acquisition. Karnataka will continue to do a more greenfield route.

Size of these hospitals are typically around 300, 350 beds with an opportunity to scale up by another 100, 100-odd beds.

Okay. Just asking in terms of, let's say, across these greenfield and acquisition opportunities, if you had to put out a number in terms of overall bed addition, let's say, in FY '28, '29 apart from the projects which we have already announced, what that number could be?

Difficult to tell, Rahul, because we don't know if we will be able to close these acquisitions. We have no certainty on these.

These are just projects that are out there. Unless we have a definitive term sheets or something, it's difficult to put out a number.

Okay. Sure.

Sure, Dr. Abhinay.

Thank you. Thanks for answering the questions.

Very good discussions that has been happened in the last 1 hour. If you look into the holistically that healthcare is a really a service-oriented rather than talking about in a common form openly about the margins of 35%, 30% is not good.

When we meet, we can able to discuss in detail about that. As far as our clusters are concerned, Kerala is doing very well.

The reason is we invested only ₹110 crore, and the revenue we are doing around 77 and even though it is a single digits. Karnataka, as we expected, it is doing very well.

Even the ARPPs were very high, the reason is initially we didn't expect that so much of complex cases, clinical talent that is available. Thanks to Sreenath and Nitish, they could able to bring.

That's why initially we have shown these things. When we added multi-specialties, that will be able to neutralize.

As far as Hyderabad, Telangana cluster is concerned, as we planned, it is going absolutely there is no deviations of that. In Maharashtra, as you've seen that in Nagpur onwards, the entire culture, the patient mindset and the doctors' mindset is entirely different.

Slowly we are trying to change. Once they understood the concept and culture of KIMS and then that is started ramping up as Abhinay was pointed out in Nagpur.

Andhra Pradesh is concerned, it's continuously keep growing as we expected. There's a lot more opportunities because undivided state, Telangana was doing the only one which is doing.

Now we can able to develop a lot more in Vijayawada, Guntur, and Vizag. There's a great potential that we do.

As far as the debt is concerned, I think we are in the philosophy that we need to able to maintain a proper debt-equity, even though irrespective of the new acquisitions or opportunities that is coming. We are very, very, very cautious about both the talent and the debt and as well as the opportunities that are there at the management.

Also that will be definitely keeping all these things in mind, and we are expecting year-on-year growth historically what we are shown last 10, 15 years. We are aiming to see to achieve that year-on-year growth in the top line and bottom line.

That is our entire exercise what we are planning and putting all those things. Your company is in good shape and doing definitely much better than all of us are expected.

Thank you.

Thank you.