Artemis Medicare Services Limited (ARTEMISMED) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to Artemis Medicare Services Ltd. Q4-FI26 Earnings Conference Call, hosted by Anwati Shares and Stockbroking Ltd. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star and zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Himanshu Binani from Anandrathi Shares and Stockbroking Ltd. Thank you, and over to Mr. Binani.

Thank you, Nidav. Good day, everyone, and welcome to the fourth quarter and full year F526 Unlinked Conference Call of Artemis Medicare Ltd. hosted by Anandrathi Shares and Stockbroking. From the management, we have Dr. Devina Chakravarti, the managing director, Mr. Sanjeev Kothari, the CFO of the company, and Mr. Rudra Narayanacharya, the head investor relations. I would like to thank the management for giving us this opportunity to host this call. We will begin the call with a brief opening remarks from the management, post which we will have a session open for Q&A. Without further ado, I would like to hand the call to Ms. Devlena. Thank you and over to Himanshu.

Thank you, Himanshu. Good morning, ladies and gentlemen. And we are pleased to share our financial and operational performance for the quarter. As we wrap up FY26, I would like to begin by providing an overview of the healthcare sector and the overall hospital industry. The healthcare landscape continues to evolve driven by both rising demand for specialized services and technological advancements. The healthcare landscape is evolving with a growing preference for high-value treatments as patients become more informed and discerning in their choices. Additionally, government policies and tariff adjustments. In healthcare, I have introduced certain challenges in the short term, but we are very confident in our ability to navigate these challenges through our operational agility and strategic cost management. For FY26, we delivered a strong performance, marking another year of growth despite external challenges. Our consolidated revenue from operations for FY26 was INR 1,081 crores, reflecting a year-on-year growth of 15.4%. This group was primarily... Driven by strong performance in our core specialties, including cardiology, oncology, and orthopedics, coupled with an improved pair mix and an increase in high-complexity procedures. Our EBITDA for the year was INR 218 crores, with an EBITDA margin of 20.2%. This reflects our focus on operational efficiencies and disciplined cost management across our network of hospitals. Our profit after tax for FY26 was at INR 104 crores, showing a year-on-year increase of 26.2%. Our quarterly performance highlights turn into quarter 4 FY26. We posted a consolidated revenue from operations of INR 279 crores, reflecting a growth of 16.4% compared to the same quarter of last year. This growth was primarily driven by higher patient volumes, particularly in our high-margin specialties. Our EBITDA in the quarter was INR 59 crores with an EBITDA margin of 21.3%. Our quarter witnessed a strong increase in contribution from both domestic and international patients. Profit after tax for quarter 4, FY26, was INR 30 crores, representing a growth of 32.1% from corresponding quarter of previous year. This strong fat growth is a testament to our ability to scale efficiently while maintaining financial discipline. Operational highlights, our flagship hospital in Burugram continues to deliver strong performance with occupancy level reaching 64.6% in quarter four. This reflects sustained demand for specialized and advanced healthcare services across key therapeutic areas. Particularly in cardiology, oncology, and organ transplant. Our average revenue per occupied bed for quarter 4 was INR 84,571, showing a 7.3% increase compared to quarter 4 of FY25, driven by an enhanced case mix and higher pain patients. In line with our commitment to quality and operational excellence, Artemis Medicare received several prestigious certifications in FY26. Most notably, we received the Platinum Green Building Certification, which entitles us to a 15% increase in FAR at no additional cost. This will allow us to add 100 beds to our Guru Granth facility, further enhancing our capacity. Just to make a point here, our international patients, despite the West Asia war, continues to grow. And this financial year showed a growth of 26.9%. The countries that we are witnessing high demand, apart from Middle East, is Africa CIS, reflecting growing trust in our clinical capabilities and our clinical standards. This strong performance highlights our established position in medical value travel segment and the strength of our global brand. Backed by continued focus on clinical excellence, patient experience, and targeted international outreach, we remain well positioned to drive further growth in this segment. We also continue to make steady progress on our expansion initiatives. Our 300-bed super specialty hospital in Raipur is on track. To commence operations in quarter one of FY27, marking a key milestone in our growth journey. In addition, we are advancing our plans for the 650-bed facility in South Delhi, which is expected to be commissioned in FY29, further strengthening our presence in key markets. On the clinical front, we continue to make achievements in advancing patient care. We have launched several new programs, including India's first private geriatrics and longevity department, as well as a collaboration with Kim's Hyderabad for advanced heart and lung transplants. These initiatives highlight our commitment to providing cutting-edge care to our patients. Our focus on digital transformation remains strong. In FY26, we made significant investment in technology to improve both patient care and operational efficiency. We successfully implemented AI-assisted triage systems across our hospitals, which have already started to show positive results in reducing wait times and improving patient flow. Additionally, we are expanding our use of data analytics to optimize patient pathways and support clinical decision making. As part of our ongoing commitment to sustainability, we have taken several steps to reduce our environmental footprint. In addition to the green building certification I mentioned earlier, we have also focused on energy-efficient systems across our hospitals and implemented waste reduction programs. These initiatives are aligned with our long-term goal to contribute positively to the environment while continuing to deliver world-class healthcare services. Looking ahead in FY27, will be an exciting year for Artemis Medicare as we continue to execute on our growth strategy. We remain focused on increasing our bed capacity with plans to expand from our current capacity of 800 beds to 2,000 beds by 2029. The commissioning of our Raipur and South Delhi facilities will play a key role in this expansion. We are confident that these initiatives will drive strong growth in the years to come. We also remain committed to enhancing our digital capabilities, improving patient outcomes, and maintaining operational excellence. With the Board's approval for a fundraising initiative up to INR 700 crores, We are well positioned to support our expansion efforts and continue to deliver value to all our stakeholders. With that, I will now open the floor for any questions. Thank you.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question, may press star and 1 on their test on telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and 1 to ask the question. The first question is from the man of Sanjay Shah, from KSA Shares and Securities. Please, go ahead.

Good morning to all, and doctor, thanks for a wonderful, explaining the opening, on the opening remarks about hospital and healthcare industry in India. And ma'am, I really appreciate your presentation showing the critical care success story of our hospital. My question was regarding, can you highlight on... Critical capability of the hospital, how we are progressing on that side.

So Sanjay, you were asking about our critical care.

Could you just repeat the question quickly one more time?

Yeah, yeah. My question was more related to the critical care capability, what we have developed and what we have planned ahead. That includes the whole healthcare ecosystem.

So, you know, critical care, I would divide into two types. One is a strong emergency care, and the second is the in-house critical care. So, are you aware that Artemis is known for our, you know, critical care in Haryana? We are not only treating our own patients, but we, you know, we are the restful center for a large number of critical care patients from across Haryana. So, we have one is to three critical care beds, and we have a great network of transports which deliver patients from secondary, primary, and other tertiary care facilities to our hospital. We have a large team of critical care specialists full-time in-house. And we have various types of critical care. One is like a general critical care. Then we have a surgical critical care. We have critical care for transplants. We have critical care for cardiovascular surgeries. We have critical, separate critical care for neurosurgery. We have critical care for pediatric surgeries. We have separate NICU and PICU, which is level four in terms of critical care. And in terms of our emergency services, we have actually a very AI-driven, AI emergency facilities, wherein we can pick up the patient from their house, and the AI tool guides our paramedics and our junior doctors in the ambulance and connects them with the ICU and the emergency senior doctors. So actually, the treatment starts in the ambulance as such. So that we do not waste any time if you are caught in traffic, there is no delay in patient treatment. So we have progressively and each year we are enhancing our number of critical care beds, our critical care super specialty. So that continues to be a big ticket item for us in terms of delivery of care being a quaternary care hospital.

So my next question was regarding our international patients. We have been growing in spite of war and uncertain circumstances globally. How we can look our hospital by 2029 when we will start a geographical diversification to south, from north to other areas, a new geographies in India also. And is there any scope of international pressure because we are the highest among the industries? So basically, our endeavor, yeah.

So our endeavor would be to remain at the same 30-31% of revenue coming from international patients, irrespective of where we are and how our top line moves. So every year we add more countries to our list. We increase our MOUs with various international governments. So we have a full strategy and we have a separate international team who works only towards that. So our strategy will continue to have 30 to 31 percent of revenue from the international like we have today.

So, Doctor, now adding our bed in South Delhi will help us to increase our ARPUB from here because going to large metros from the NCR region.

No, sir, you know, we are in NCR, and we have the highest RPOB in NCR. We are higher than even Delhi. But we have been growing 7% to 8% year on year on our RPOBs. So that will be the trend, if not more. Definitely Delhi is a higher, South Delhi is a higher RPOB area. But in Gurgaon, we beat even the South Delhi ARPOPs because of our mix of patients, our high-end surgeries, and our efficiencies of turning the bed around, you know, the bed turnaround time. And we will continue to do so and increase, like, how we are doing, 7 to 8 percent year on year.

My last question was regarding, can you touch upon our Mauritius bed capacity increase from 80 to 110, and how we are doing over there?

So the first hospital has broken even and is making a profit. The second hospital has just started, so we are already beginning to get the fee for the second hospital. So we are on a monthly fee for rugging and giving our expertise to these hospitals. And we are pretty much on track with the first hospital, and we are pretty much on track with the second hospital, which has just started in April.

Thank you very much. Very helpful. Thank you very much.

Thank you.

Thank you, sir.

Next question is from the line of Aditya Cheda from Incruid Asset Management. Please go ahead.

Hi. Good morning. Congratulations on the correct numbers. I have two questions. First was on the women's project. Would you be able to share any project details that are outlined with respect to what should be the capex per bed, etc., and how the facility will come over in phases? And the second question was about the EBITDA margin profile across the hospital cardiac care and MAPABLE segment. And the reason for this is whether the losses from the Laipur facility will impact the EBITDA growth or they will be offset by the Gordaum operating leverage and any losses from daffodils, cardiac, etc. So if you can highlight on this question.

I will answer the second question first, and for the first, the case and all, I'll hand over to Rudra to give you a detail. For the second question, there will be certain some losses in Raipul, but if you look at our projections, our increase in EBITDA will continue because, you know, our occupancy in the Gurgaon hospital is increasing. Our mix of cases is becoming better. The new powers are reaching their maturity. So the EBITDA growth will continue in the coming financial year despite losses in Raipur. Dapodils and Cardiac Care are all EBITDA break-even and making small profits. So that's actually a non-issue in this whole piece. Our endeavor would be to offset the Raipur losses with strong growth in our Durgaan facility. So that's to answer your second question. For the first one, the project highlight I can give you that we are in the process of admitting our drawings, our plans to the MCD, post which the demolition of the old structure is going to start. We are pretty much online in terms of timelines for these actions, but in terms of CAPEX, so it's a 650 bedded facility which will start in two phases of 450 and 200, but the CAPEX and other details I hand over to Rudra to reply to you.

Hi, Aditya, Rudra, this side. For the capex portion, Aditya, there is two parts to it. The first part for around 450 beds, the capex would be to the tune of 350 crores. And for the second 200 beds, it would be another 150 to 160 crores. Total would be 500 crores for 650 beds. Which will be close to 75 lakhs to 80 lakhs per bed. So that is on the capex part of this, Aridja. Any questions regarding this?

This includes everything, right? Land, equipment, etc. The full project.

So, land and building is owned by the trust. We have, we have, in our portion, we had the interiors and the equipment. These include the interiors and the equipments.

Got it. And lastly, on the additional FAR at the CodeCom facility, would you be adding those in FA27 or it will be in phases?

So, we are basically looking at all the options. We have a little pipeline with some other opportunities, and we have this option of 100-bed facility here. So, we are kind of taking that call, whether to start this 100-bed facility in the current financial year, or to take up another, if possible, take up another brownfield or a greenfield project, if that's available. So that we will clear in the next few weeks, and we'll come back to you, and you'll hear it from us very soon.

Thank you. Thank you.

Next question is from the line of Adesh Gosalia. From Spark, please go ahead.

Hello. Thank you for the opportunity, and congratulations to the management for an excellent set of numbers and ending by 26th on such a high note. I had a couple of questions. So firstly, on the EBITDA margins, we saw our Q4 EBITDA margins inching up to 18.5%, the levels we saw in the Q2 of this financial year. So this will be continuing for the next FI27-28, we will be continuing the Gurgaon facility at such high margins for the entire year, or we should expect a similar trend of FI26.

We will not only try to maintain it, but we will try to better it with some plans that we have. So you will see this continuous growth in the present financial year also. Yes.

Okay. And on a blended level, like after the RIPOR comes up, so I think RIPOR would be like commercialized in Q1. So the three quarters of FY27 would see the entire impact of RIPOR. And I think the breakeven is expected in 15 to 18 months. Please correct me if I'm wrong over there. So what should be the blended level on the margins that we can expect?

So, Adesh Rudra, this side. So, as Dr. Devalina mentioned, we will be continuing this 21.2% or the 19.4% without the other income for Gurgaon facility, and the margins will expand only over the period of time. But having said that, like we had indicated earlier, there would be close to 18 to 20 crores of losses from Raipur. So that we are standing with the same levels, 80 to 85 crores of revenue top line for Raipur for FY27 and 18 to 20 crores of losses. So that overall mix will be putting the beta maybe 1 to 1.5% lower because of these losses.

Okay, okay, makes sense. Second question was on the operating beds. Right now, we exited FY26 at 544 operational beds. So, how are we looking this trend-ganching upwards from here on, or this would be maintained, like, if you can share some color on this.

So, 546 beds, which you saw this year, immediately, Raipur starts with 200 more beds. There is an option of adding another 100 beds in our facility and or picking up a brown or green seal project. So this bed expansion, like our commitment is 2,000 beds by 2029, and you will see the beds increasing in phases as we move to 2029, with 2,000 plus beds definitely by 2029.

Yes, that I understood, but I was asking on the operational beds. So from the current Gurugav facility, we had an average operational beds of 544 and F526. So on that, I wanted a bit of a color that how much room is there for us to grow these operational beds. And similarly for Ipore also, from 200 beds coming up, how many beds will get operationalized in F526?

Yeah, so for Gurgaon, I'll stick to Gurgaon facilities first. We have the ability to start 100 more beds, but like I had mentioned earlier, today we are at 64.6% occupancy. The moment we have 70% occupancy for a quarter, we are going to be opening 50, then another 50 beds. That is to put the Gurgaon in perspective. As we speak, our occupancy is going up. It has moved from 60, because we have opened new towers, right? It has moved from 60 to 64.6%, and we are keeping an eye. At 70%, one quarter, we will open 50 more beds, and then 50 more. That's for Gurgaon. For the 200 beds, which we are starting in quarter one of FY27 in Raipur, the first phase will see 150 beds operational, and within three to four months, we will be adding 50 more beds, because we are looking at it as a high-volume market, and so I think in two quarters, you can expect all 300 beds operational.

Okay, that's great to know. And lastly, the key fix figures that Rudra mentioned regarding the women's facilities. So how much of that, if you can just share a timeline that how that would be incurred over the next two years?

So, Adesh Rudra Disaraj, so, these CAPEX, for the, for the CAPEX portion will come after FY27 only, because interiors and equipments have to be placed, and we are planning to start it by FY29, so, the CAPEX portion for women's piece from Artemis side will come into picture after, in the mid of FY28, because we have to start the interiors and the, and the equipment. For the advanced portion that is there, which is linked to the building milestones, that we have started paying it slowly and gradually because the building has to be built and that advance will be adjusted once the hospital gets operationalized over a period of 8 to 10 years.

Okay, got it. So, the FI27, I think, would be a very Capex right here for us. Like, there won't be any significant number coming up in the books. In FI28, the major numbers would be growing up.

No, no, only the replacement Capex of Gurgaon and the splitting of Raipur because 50-60% we have already spent 110 crores. So, rest 50-60 crores. Total would be close to 100 crores maybe. Yeah, yeah, that's right.

You have had 2,700 crores is the KPEX figure that could be coming in.

Correct. Correct. Correct.

Okay, got it. There are a couple of more questions. I will fall back in the view. Thank you so much.

Thank you.

Thank you so much, Adesh. Next question is from Nayana Shankar from Miraya Capital. Please, go ahead. Hello.

Yeah, hi. Good morning. Good morning. So, I have a couple of questions. First, can you give a bit more color on how was the growth in international patient in the last quarter, which is Q4, FY25? And what are the trends that you're seeing on that front in the current quarter, Q1-SI-27?

So the third month of the last quarter, which was in the month of March, we saw a 15% to 18% dip in the international patients, which has turned around in the month of April, and the recovery had started in the month of April, and as we speak, set in the month of May, we are almost closing on to almost 90% recovery as we speak now.

So, you are saying that the impact of war which was seen in March has been almost subsided in the current quarter and we are almost back on track now?

Yes, unless something new happens, we are back on track.

Okay. And the countries that you mentioned that you are looking to add going forward, what are the other countries that we are seeing strong demand from?

We are not only confined to Middle East, we are confined to a lot of our business comes from Africa, CIS, the Stark Nations. Now we are also looking to open, earlier we had only East Africa, now we have also opened a large number of countries in West Africa and the Francophone Nations. We are also looking at now at Canada, and we are looking at some Nordic countries where patients are coming in for high-end treatments. So every year we add a couple of countries, if not more, so that this exercise and this continuity is maintained, and any problem in one region does not affect the overall international flavor for us.

Oh, okay, so if you can share what is the proportion of Middle East patient in our current international patient, if you can share that color.

I would say, I mean, how much is it? 3%, 30%, 30%, 30%, okay, 30%, yes.

Okay, understood. And you touched upon that you see the case mix improving. So if we are maintaining our international position at 31-32%, so how do you see other segments of the case mix in the next 3-4 years?

See, as you keep adding high-end facilities, high-end techs, you know, case mix, not only for international, but domestic. So we have seen a surge in our domestic numbers, and we are also seeing, continuously seeing a surge in the high-end, you know, patients in the domestic, which is also a very big welcome, and that had actually offset some of the international dip, which we saw in March of last quarter. So, basically, you know, high-end surgeries, like whether it is neurosurgeries, cardiac surgeries, oncosurgeries, transplants, we are seeing increase both domestic, especially domestic, as well as international in these areas, which is a very welcoming trend for us.

Okay, so is it fair to say that you can see government mix going down in the next three years?

See, the government mix in terms of percentage might be the same as we're increasing the number of beds. You know, but in terms of percentage, because sometimes when you're opening new beds, you want to prevent free beds, I mean, beds which are not occupied. You don't want a situation like that. But overall, if you look at the businesses, our endover continues to have cash, TPA, and international more than any unpaneled business. But the good news is also the government is also, as you are aware, in reviving the rates. And sometimes we are cherry-picking some of the investigations and treatments which are almost close to our RAC rates. So it's actually a strategy, but we definitely don't want the government business to come up, and it's not coming up, but we keep moving around in a manner so that... No bed stays empty as we increase capacity. So that's basically what I want to say.

Understood. So my next question is around the Gurugram facility. Can you give any hard code number around the EBITDA margin, how you see it going in the next three, four years, and mainly what are the improvement, drivers for that improvement in the EBITDA margin from Gurugram facility?

So, the Gurugam facility will see EBITDA northwards of 20%, if not more, in the coming years. And this will be driven by three factors. The first one is a large number of high-end domestic and international patients. Secondly is efficiency in our consumption. We have gotten our consumption down by 1.5-2% and that endeavour will continue. And third will be, basically, as we have more facilities, the corporate cost is going to get divided amongst the various facilities, which today sits in Gurgaon alone. So, all these three will contribute to an upward of 20% of EBITDA in Gurgaon.

Okay. Thank you. Shankar, sorry to interrupt. Can I request you to please come back for a follow-up?

Yeah, sure. Thank you.

Next question is from the land of Anshul Adarwal from MK Global. Please go ahead.

Hi, thank you for the opportunity and congratulations on a good set of numbers. Thank you. Ma'am, could you please allude on the scope of sort of improving our occupancy at Gurgaon Unit? I was observing that in the past our occupancy in the Gurgaon Unit has sort of hovered around the 63-64% range. And now that we'll add beds, can occupancies go north of 70-odd percentage here onwards?

Yes, yes, absolutely, and that is what we are aiming, and that's when we are also trying to open our new bed. So, we are looking definitely by quarter two of the current financial year, we are looking to move to touch 70, if not exceed it. And because we have the numbers, we know that it will be reaching at that. And our endeavor would be to at 70, 75 percent, which is optimum for us. Actually, for us, for the last couple of years, we have been non-stop adding beds, one tower, Then various floors in a tower, then the second tower, then opening various floors in the tower. So when you see your base, that is number of beds increasing, the occupancy looks more or less the same because our denominator is becoming higher. But now with all the beds open, we are confident to reach 70, if not more, by quarter two of this year.

Okay. My second question is on the Raipur unit. I think Rudra alluded that we are expecting about 18 to 20 crore of losses, which should be more than offset by Gurgaav unit. Are there any costs of doctors or any other line item which are sitting in our console business right now, since you are just about to start this unit?

No, no, no, nothing.

Okay, only once we operationalize, Raipur costs will sort of come in.

Yes, yes, yes, that's right, that's right.

Got it. Also, ma'am, you alluded to certain government tariffs in the healthcare sector which has led to certain challenges. Would you be able to elaborate on this?

No, I said some of the government tariffs have gone up. They have given us...

Okay, the CGHS pricing has improved, so that would be beneficial.

They have revised for private sectors to take in government patients, because there was a large number of rejection from various hospitals. So they have revised it for the better. That's what I wanted to say.

My apologies, I got that wrong. The next question that I had was on our case mix. While you alluded that, you know, our complex, the share of complex care beds or cases has sort of gone up. If I look at our numbers, our Congo mix has sort of slightly dipped, not meaningfully, but slightly dipped.

The Congo Mix is basically the oncology one, and there were two reasons for it. One was there was a pushback from the TPAs for the immunotherapy, you know, because there has been a very big fight between the hospitals and insurers on use of immunotherapy, which is far more expensive than chemo therapy. So this was a pushback, and immunotherapy, of course, the margins are less, but the cost goes up, the top line moves up. So we have now spoken with insurers, and we have moderated the use of immunotherapy, so that is one reason. Secondly, in between, a circular had come from the government regarding chemotherapy for government patients, which was not conducive for private hospitals. So all private hospitals at that point had... We stopped chemotherapy for these empaneric patients until discussions were concluded and a conducive start was found for the hospitals, and now we have restarted. So these were basically transient and mainly for the oncology piece, and, yeah, that's what I would like to highlight.

Great. All the very best, ma'am, for the coming year. Thank you. Thank you.

Thank you. Next question is from 9 of Agni Stavari, from Waikira. Please go ahead.

Hi. Can you articulate your outlook on pricing growth in your treatment, given that two forces, one is that number of beds which are being added by various hospitals, as well as there's some level of negotiations in health insurance industry, including standard operating procedures, reducing the waste and fraud. So maybe if you can just articulate in your RPA of growth of 78%, what kind of pricing or inflation-driven pricing growth you're looking at?

So, basically, for our pricing, if you look at our competitors, so we are slightly on the lower side as compared to our competitors. This is, but we build on it, we build on our top, not through our price, but through our efficiency and case mix. And we keep ourselves the incremental pricing, which happens year on year, it is, you know, it is in a range of 3 to 5 percent, actually 5 percent, which finally comes down to 3 percent for us, because TPAs and insurers have a lock-in period of three years with the price. So, we get a 3% impact only from pricing because government doesn't change and the TPA doesn't change. So, only the cash and the international pricing. So, we get a 3%. But we, rather than increasing the price, we work on case mix. Thank you. Thank you. So, that's where we stand, and we don't use pricing to drive our business.

Great. And lastly, on this health insurance segment, do they then favor you over others to the extent they can influence the traffic, or how is it negotiating with those guys?

So we have a good relation with all our insurance players. Yes, they do promote Artemis as a place, but at the end of the day, a hospital which is 18 years old, a lot of choices are made by the patients themselves, but definitely the TPA and the insurance business is a large chunk of business for us.

Okay, briefly, let me just squeeze one more. This standard operating procedures and everything the GI Council is working on, how has that impacted your business and your peers' business? Does it create an operating advantage for you because you are more efficient?

So I'm a part of the council in CII. I head the working group 3, which has been kind of moderated now by Mr. Ajay Seth, chairman of IRDA. So I am very much part of all of this, and I can only tell you there are five working groups working on various aspects. One is categorization of hospitals, which will... Give transparent pricing, then, you know, ethical things between the insurers and the hospitals. So there are multiple such five agendas, which are five working groups. And I can only tell you, when all these groups are implemented, it will be a huge benefit for the hospitals and also a huge benefit for the insurers. It's going to be a win-win situation. And luckily, we have Mr. State in the center, the GIC council. So, you know, this is going to be a winning ticket for all hospitals because then we really don't have to flog for getting the right price or getting the renewals on time and so on and so forth, which have been a problem with the hospitals because the insurers, you know, they continue beyond three years, do not give us price revision, or they try to sometimes bully us to get low prices. So now there is going to be a huge amount of standardization, and as far as Artemis is concerned, I can only tell you this will be a new dawn in business for us because I am working very closely with them.

Great. Thank you, and wish you very good.

Thank you.

Thank you. The next question is from Ivan of Aditya from Railwood Capital. Please go ahead.

Good morning, everyone. So, first of all, congrats on the storm performance. I just want to get a better sense of the overall ride program and geographical market. So, Raipur has seen like meaningful capacity addition over the last year or so. One listed player has entered and few local hospitals have come up. So, I just want to understand, like, do you believe there is sufficient time demand in Riper and Shilver to absorb these new bed additions without meaningful pressure across occupancies? And when you think of your own ramp-up, do you see your growth coming primarily from capturing shares from existing players? Or your thesis is more that the overall market is underpermitted and will grow with new supply? And who do you see as key competitors in that market?

Okay, so going on to Raipur, let me tell you, Raipur is a market where every... So as we speak, whether it is a Manipal, whether it is a Leelavati, either they are buying land or signing MOUs and so on and so forth, and I predict Vaipur to become something, a mini Lucknow going ahead. Today, they don't have a single, they have a large number of hospitals, but they do not have a single so-called hospital with the right kind of an infrastructure, all medical equipment, and the right kind of doctors, right? So, like, you know, whether it is these are transplants, whether high in neurosurgeries, neurointervention, whereas there is a deep penetration of insurance. There is the per capita income of Chhattisgarh, especially Raipur, is very high. So our strategy is to create Raipur Hospital as a nodal hospital for Chhattisgarh because, you know, almost 60% of patients from Chhattisgarh come to Bombay and Delhi for treatment. And they do not get treated in their own state because of paucity of care. So we are trying to position ourselves and have the first mover advantage to getting all the patients who are moving out of Chaitisgarh to be treated in Chaitisgarh. And everybody's eyeballs are being grabbed by Raipur now, all other good players. So we are trying to establish a first mover advantage in terms of name, quality of care, transparency in care, and so on and so forth. So that's the gist. We had actually, before going into Raipur, had done a complete market survey through PwC. And also the good news is our partners, who own the land and the building, are the two most reputed doctors of Raipur. So there is already – so it's not like a new territory for – I mean, it won't be a totally unknown territory, the hospital, for the patients, because our partners are the two topmost doctors of Raipur. So this is basically the gist that I wanted to give you.

Great. Thanks. Just a follow-up. So what is the capex for bed for the Lycos hospital, and what will be the speciality mix and pair mix as a population like this?

So, it will be between 110 to 120 crores is the CAPEX for a 300-bed facility, and we are doing every, so we are going to be, every specialty is going to be there in Raipur. We will be the first hospital to have a PET CT scan, you know, in the hospital. Apart from that, we will have radiotherapy, robotics, transplants, you know, all the things for which the people of Raipur are going out of Chathisgarh or, you know, to get their treatment. So we have identified that. We have identified it district-wise, what is the need, so that this can become a central referral hospital for Chathisgarh.

Got it. One last question. Basically, according to my research, like, there, in terms of manpower, a state like Chathivgarh, there is difficulty in basically attaining specialized manpower in terms of doctors, nurses, and skilled technicians. So how is the Artemis team going about hiring and basically retaining the specialist?

That was the first deep dive we had done, apart from the financials of the market. That's the first deep dive. So Raipur has its own medical college, postgraduate college, three nursing colleges. So all our resource heads of departments, various departments, they're all in place. So all the letters have been rolled out, and they will be joining from first week of June, which is next month. Nurses are all being hired. So, you know, there is no paucity of medical manpower. Training is ongoing to bring them to our level of expectations, but they are good quality people. There are doctors who are trained in robotics, doctors who are trained in, you know, very high-end cardiac interventions, and they're all there. So now, because of the Instra that we are providing, they are happy to join us, and they're all in place.

Sure. Thank you so much, and all the best for the picture.

Thank you. Thank you, Henry.

Thank you.

Next question is from the line of Patrik Srivastava from Nebesh Shilton. Please, go ahead.

Yeah. Hello, ma'am. Ma'am, what could be the realistic RFOB from Raipur facility in the long run?

So, we have looked at 35,000, 33,000 to 35,000 plus to start with. And then, as we start our high-end, like transplants and others, we expect it to be higher than that.

Ma'am, but if I look at 35,000, which is because it's tier 2, right? And Gurgaon's tier 1 are very high. But if I look at your margin and you are saying that you will be able to margin, you will be able to maintain the margin. But if I do, there are lots of factors which are working against it, right? One is, as you said, right, the ARPOM would be lower. Second would be your payer mix. You are not going to get a lot of international patients, right? There is the, then of course the facility takes time. There is six cod burden. There is also, you know, Apollo Hospital, James Rapport. Yeah. So ma'am, my question is that if I look at a lot of factors, they are working against at least for next one to two years. Structurally, by the way, you know, because RIPOR is a smaller RPOPS, so structurally, anyway, that's a much weaker market from the EBITDA margin point of view.

So, you know, you're forgetting that in these places the cost is also less, and keeping all of that in mind, we have captured around 20 codes of loss and a break-even in 18 months' time. So, what happens is, it takes six months, three months for the TPS to come, six months for all the government schemes to come, and almost at the same time, we start getting the licenses for transplants and other things. And that's how you move, right? So we are starting at 35,000. The cost of running the facility is also lower, whether it is food, whether housekeeping, doctors, nurses, paramedics. So it is lower in that manner. So that is what we have said that in the first 18 months, we will have a loss of 18 to 20 crore. And then we will ramp these numbers up, you know, post getting all the licenses.

Yeah, so, and so ma'am, to make up for this 20 crore.

It is a similar story, like a large hospital, whether it is a Max or a Medanta, they have a facility in a tier 1, and they have a facility in tier 2 cities, right? Now, the R-COBs will always be different in these two cities. When you look at the consolidated P&L, you take into account the high and the low ARCOVs, the high and the low costs of manpower, consumptions, and so on and so forth. And that's how you, but it always adds. If you look at the smaller towns, if you look at the standalone, their ARCOVs are always, sorry, their EBITDA margins are always higher in terms of percentages than the bigger hospitals. Because these hospitals, though they might have a lower ARPOP, they typically function anywhere between 20 and 25 percent every time. Because their other costs are low, you know, so that's how these things work out.

Got it, man. One on the little larger term view. So, this, anyways, we, you know, it will take around three to four years for a RIPOR facility to be, you know, completely rammed up to get to around the occupancy level that we have today at Gurghaw. Now, do you see that in that, till that term, the Gurghaw, of course, will have to perform much better? But if I just do some simple calculation, at least, you know, based on the number of what you gave. So, Gurgaon facility will now, today, which today is at around 21 EBITDA margin, and it's around 230 or something. Sorry, I don't have the exact number, but I think it needs to grow at around...

Yeah, correct.

So, it needs to accelerate. It grows by around 67%. I think crosses your 20%. The number which you gave earlier, in my figures, it needs to grow at around 20-24%.

Hi Pratik, Rudra, this side. So, if you see the Gurgaon margins, if you see the Gurgaon revenues, it will grow at between 15-17% year on year. And whatever revenues, and you have seen the performance and the margin profile of Q4, so whatever revenue that gets added to the Gurgaon facility right now, at least 30% will flow down. So, and 18 to 20 crores of losses that I have highlighted for Raikul, which would be a drag of 1 to 1.5 percent in the first year. After that, once the Raiput starts breakevening, within 18 to 20 months when it is breakeven and everything starts flowing off in a neutral manner, it will add up to the EBITDA. So, it is just a question of 1 to 1.5 years when the profile would be down first, because maybe 1 to 1.5 percent, not more than that.

Yeah, I think that is what even my numbers are saying, 1 to 1.5. So, it should not be a big drag, but we have some slight drag on the margins.

Calculation could be 20 crores over at 1300 crores revenue that we are expecting is 1.5%. So, that is the overall thing. So, 1.5% it would be down for around 15 months, then it would again add up to the EBITDAs.

That's right.

Yeah, thank you. Thank you for the excellent numbers. That clarifies my doubt. Thank you.

Thank you. Next question is from the line of Satyam Kumar from AAA Holding Trust. Please go ahead.

Hi. Thanks for the opportunity. Actually, I have a couple of questions. First, I just wanted to get your thoughts. Like, recently, some news were flowing that health ministries, like, examining margin caps on medical devices, semi-advising insurance costs and all. So, like, I think earlier proposal was 65% cap and recent discussion is around 30 to 50%. So, do you have any thoughts on just anything you'd like to share?

Sorry, I made the question. Could you repeat it? Sorry, I just missed it. I'm sorry.

Sure, sure, sure. So, recently, there were some news flows with regards to that health ministry is examining putting a margin cap on medical devices, the medical devices which hospital use to treat the patients. Okay, so in past also we have heard something on the similar lines when there were news that around 65% cap will be there. We saw news that around 30 to 50% cap might be there. So is there anything concrete with regards to that the hospitals, for the hospital, it can be a negative.

No, there is nothing concrete in this regard, and because I am also members of CII, PIKI, we haven't heard this, and there is no notification which has come. The last time it happened was for the stents and implants, and that's where we are. Nothing new has been added to that list.

Okay, understood. And would you like to give some like guidance for something longer term, like say next three to four years? What kind of top line you are eyeing for? And second, like how the RPOP of international patient is growing with respect to domestic patients? So just these two questions.

So basically, you know, and Rudra will give you a little bit more insight, and we can't give a guidance, but I can tell you the next three to five years is the next phase of expansion that we are going to see. So, not only are we going to consolidate and move bigger and faster in Gurgaon, our facilities in Raipur will start getting matured, our Delhi facility is going to start, so some, we don't want to give numbers as such, because that would be incorrect, but Rudra will be able to give you some kind of flavor.

So, hi, Satyam, from our flagship hospitals, if you see, we would be adding beds, and over a period of 3 to 4 years, you can take at least 15 to 17 percent growth on the revenue front, and whatever numbers, whatever revenue that gets added to the top line, at least 30 percent will flow down to the EBITDA. So that is the overall thing that we have in mind. And apart from that, for the Raipur thing, I have already said you that there would be an 18 to 20 crores of lock and then it will start adding up to the overall P&L. So that is for the next 2 to 3 years. And also we have plans to raise up to 700 crores that we have taken the board approval and we will go for the shareholders approval once the assets are finalized. So that portfolio, we have to see how the mix is and what gets added over here.

And just one, if you can share insights with regards to how ARPOP for international patient is growing compared to domestic patients.

It's one and a half times, I mean 1.3 times I would say more than domestic patients.

No, ma'am, that I understand. How the growth is happening? Like, domestic, how much percentage of price hike you are taking compared to international patients? That aspect I just wanted to understand.

We have taken a 15% hike. Even in the next budget, we have taken a 15% hike on our top line, and 70-30 is the division between domestic and international. So, similar hikes we are taking in domestic and international business. So, the top line, we are budgeted with at least minimum of 15% increase in the top line, and revenue mix, 70% domestic, 30% international, with a 15% overall increase in the business. 15% for domestic and 15% for international.

That's pretty, yeah. Thank you.

Yeah. Thank you.

Next question is from the line of Saikaran. From Pallavarti, please go ahead.

Yeah, hi. Thanks for taking my question. I'm just understanding in terms of capital allocation. If we have to look at the cash flows which the company will generate in the next couple of years, and the kind of capital you have articulated for Burgaum as well as the New South, Delhi and Raipur, don't you think taking the debt itself will be sufficient upon this? Why we need this kind of a large capital rise of 700 flows?

So, for the Raipur and including the 650 beds of Delhi, the maximum peak debt would be close to 350 crores. That we will have to take. And currently, it is close to around 260 crores. So, that will go up to 350 crores max. And we will be generating the internal accruals. And that would be enough to fund our existing projects that we have announced.

So, your question is, why do we need the fundraise? Is that what is your question? Exactly, ma'am.

Yes, please. Yes. Thank you.

So, basically, what is happening is, we need the fundraise because in some of these new projects, we also have to give them a deposit. So, the deposit cannot be funded through debt. So, we have to be... So, that's the reason that we have to kind of... And these are some of the projects which are in pipeline. So as closer to the time of finalization, so we have a pipeline which has some brown and green field projects, and we should be looking at the next four to six weeks to finalize at least one of them, and then go for the race because this would probably be required for this finalization of this new project.

Understood. So, in a way, what you are suggesting is that this capital, what you intend to raise, will defer the projects beyond the three projects which you already have.

Yes, correct, correct, correct, correct.

That's right. So, this capital raise is only going to fund our new projects, which could be one or which could be two. Yeah. Got it.

And the second thing is primarily a simple extension of your capital allocation strategy. Whenever you allocate capital, what are the few things which you look at in terms of ROCs and then how do you think about deploying that capital in terms of the return ratios? If you can just articulate, that will be really helpful, man. Thank you very much.

Thank you.

I'll ask Sanjeev to talk about this. When we evaluate the project, we basically focus on IRR and ROC. IRR and ROC.

And what kind of numbers do you look at?

Currently, our ROC is around 14.5 percent. And going forward, we are expecting in the range of 16 to 18 percent.

In how much period of time?

In next three to four years time frame.

So this will be the incremental capital when you allocate, that's how you think about it, sir? 15-16% kind of an ROCE is what you intend whenever you pick up the project?

Yes, so when we take up the project, which is with any new capital, which is being deployed, we look anywhere between 16 to 18% ROC in the next 3 to 5 years, and that's how we have extrapolated our new projects, and when they fit the bill, only then we go ahead with the project.

Also, to add to Dr. Devlinya Kaikiran, we look at the payback period and we see to it that the payback period is within five to six years of the time. So that is one of the factors that we think, and we see the asset turnovers also, and those are few of the factors that we think, we look at, and then decide upon the new expansion projects.

Great. Really appreciate this, ma'am. If I can squeeze in one last question, if you have to benchmark your Gurgaon Hospital with the best in the NCR, do you still think that there are certain gaps in terms of the capabilities and then maybe some of the existences, still some more, what I can say, up means in the Gurgaon Hospital is needed or we are at par with the best in the NCR?

So, my answer is there is no deficiency in this hospital, and that is why this hospital is the biggest hospital in terms of Gurmao reference. There was a survey done. So, now, the next phase of growth, when the brand becomes popular in other parts of Delhi NCR and in Central India, this is going to be a new era. So, there is nothing that we do not do, from a heart-lung transplant to liver transplant, bone marrow, neurosurgery, neurointervention, cyber retinitis. There is not one thing that we do not do which is missing from our list. So we are right at the top, and that's also a reflection from our patient growth and RPOBs. You know, if you do not, if you are not in the quaternary space, you will never reach those RPOBs.

Thank you, Rok, and really appreciate it. Thank you very much.

Thank you. Thank you. Thank you.

Thank you. Next question is from the line of Anubal Sengal. From Anand Rati, Shares and Securities, please go ahead.

Hi, good afternoon. My question would be, do we have any sort of EWS obligation in the rightful and the new enhanced facility? And if so, then what is the extent of it, if you can quantify that?

So, EWS goes on in every private hospital in Delhi, NCR, and otherwise. So in Burra, we have 20%. In Delhi, we have 10% EWS commitment. And Raipur will be again in the range of 10%, which we are not sure, but less than 10%. So actually, complying to these EWS is not an issue if you know how to do it, how you move your facilities for the EWS, how do you create your facility for the EWS, how do you manage your supply chain. So, you know, all of that. So, we are in this space for the last 18, 19 years with 20-person EWS. And we are known to be one of the best in Gurgaon, in terms of compliance. We have never had an issue.

Thank you.

Thank you. Next question is from the line of Devan Patel from Saminsha Capital. Please go ahead.

Hi. Just wanted a quick clarification.

Can't hear you. Hello?

Can you hear me now? Can you hear me now?

Yes. Yes.

Okay. I wanted to clarify the cash flow from operations for the full year is lower. So are there any one-offs in the second half? And what kind of EBITDA to cash flow conversions we can expect going forward?

Cash flow from operation for the year, if you see, it is around 60% of my EBITDA, and free cash flow is around 50% after netting of CAPEX. There is no one-off as much.

No, one would be true from you, one-off. Okay. Does that answer your question?

Yes, the conversion is particularly lower in the second half, and so are these the normal numbers, because we've seen CFO come off for the full year versus last year.

Versus last year, we have improved cash flow from operations.

Can we just take it offline with Sanjeev and others? Let us check the numbers.

We have cash flow from, three cash flow this year is 88 crore versus 69 crore last year.

But any other question, we can take it offline, yeah, because we'll have to check these numbers and we don't want to give a, yeah, wrong number, yeah.

Yeah, that is all from my side. Thank you.

Thank you very much. Ladies and gentlemen, we will take that as our last question. I will now hand the conference over to the management for closing comments.

Hi, Nirav Rudra, this side. So, I would like to thank everyone for joining the call. I hope we have been able to respond to all the queries adequately. For further information, I request you to please get in touch with me or the investor relations team. Stay safe, stay healthy, and thank you once again for joining us.

Thank you very much. Thank you.

Thank you very much. On behalf of Anwati Shares and Stockbroking Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line. Thank you.