Jupiter Life Line Hospitals Limited (JLHL) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Jupiter Lifetime Hospitals Ltd. Q2 and H1 FY27 earnings conference call. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participants' line 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 then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Dr. Ankit Thakkar, Managing Director and CEO. Thank you and over to you, sir.

Good morning, everyone. I thank you for joining us on our earnings call to discuss the business and financial performance of Q2 and H1 FY27. I hope everyone had a chance to view our financial results and investor presentation, which were posted on our website. I am joined this morning by Mr. Strategy, Mr. Arithya Gupta, Senior VP, Corporate Affairs, Mr. Nitin Patodhi, our Head of Finance, Suma Uparati Officer, Relations Advisors. I am pleased to share with all of you that following successful negotiations with the landowner, the board has approved the acquisition of the land currently leased for our Pune South Hospital. The land measures 11,452 square meters, and the total agreed consideration for the 50 crores of deposit that was already paid earlier will be adjusted against this, so the incremental cash outflow for the company is limited to 100 crores. The land is expected to be registered in our name in the coming few days. We have always said that we prefer to own the land on which certainty and better long-term. The Pune South project is also progressing well and remains on schedule. We expect to commence the next phase of activities before the end. BKC is in the planning stage and will soon go into the regulatory clearance process. Coming to our operating hospitals, Our existing hospitals continue to perform in line with expectations. At Dombiwili, the ramp-up in the EBITDA impact was 20 lakhs in part of this improvement with seasonally higher infections. This has traditionally been the case with all of our existing hospitals as well, where Q2 occupancy has been higher than Q1. The overall ramp-up trajectory of Dombiwili, however, remains intact. Moving to the financial performance. Q2 numbers, the income stood at 456.5 crores in this quarter. The EBITDA stood at 106.9 crores with a PAT of is 867.5 crores with a 1,800.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone phone. 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'll wait for a moment while the question queue assembles. The first question is from the line of Abhin Beni from JM Financial. Please go ahead.

Thank you. I hope I'm audible. First of all, congratulations to the management, to the great set of numbers. Sir, my first question, if you could inevitably help us understand what kind of revenues did Domboli block in the quarter and the kind of occupancy levels we exited for the hospital.

So, currently, we have not been giving unit-wise that accessibility.

Sure, sir. But in terms of metrics, what kind of occupancy levels that we are seeing right now? And given this higher infectious diseases that are there, what kind of metrics or evolution are we seeing right now?

So, currently, occupancy should be in mid-30s.

My second question, regarding the mature assets, especially Pune and Thane that is there, any brownfield bed expansion opportunities that we might have here, any kind of bed increases that we can see? And second, growth here, as you earlier mentioned, is much linked to inflation. Apart from that, occupancy-wise, any levers that we can probably see in future?

So, Pune, there is no further scope of expansion. Thania has said that, you know, we may have a possibility to add some beds subject to regulatory clearance. We have not got the clearance yet, but we remain hopeful to get it soon. If and when that happens, I'll update everybody about that. Already high 70%, so unless the new beds do come in, inflation remains the only lever. Pune occupancy is close to 70%, so it still has a little more headroom of growth in terms of occupancy as well.

Sure, sir. Thank you. I will join Dr. Pitya.

Thank you. The next question is from the line of Kalkesh Jain from Jain Securities. Please go ahead.

Yeah, hi. Thanks for your question. So, one question I have. So, don't worry, Abinda loss harrowed sharply from 9.5 growth in Q1 to 0.2 growth in Q2, partly due to your higher infectious disease admission. What would be the Q2 losses have been excluding the seasonal benefits, and what loss should we expect in Q2 as admission loss?

So, I mean, it's hard to segregate and label each patient and say, what if this person had not come in and what would be the losses with that?

Thank you. Anyone who wishes to ask a question may press star and one. The next question is from the line of Janarjan from JF Securities. Please go ahead.

Hello, thank you for the opportunity. Recently, the Supreme Court has raised concerns regarding the commercialization of private healthcare, particularly the markups on medicines and the pricing of medical consumables. From Jupiter Lifeline Hospital's perspective, how do you see these developments translating into potential regulatory changes, more specifically if the government introduces restrictions on medicine margins, pharmacy pricing, or hospital billing practices? What could be the potential impact on Jupiter's revenue mix, EBITDA margins, and overall profitability? How much of the company's operating economics could be affected? And what measures would management take to mitigate that impact? And the second question is, I want to know the economic mode and sustainable competitive advantage. So, if we look at Jupiter Lifeline Hospitals in the context of its peers, what are the structural advantages that allow the company to build and sustain its competitive position over the longer term? For instance, considering clinical expertise, doctor relationships, patient trust that we have built up, case complexity, occupancy, payer mix, and capital efficiency, which of these factors genuinely differentiate Jupiter from competing hospital chains? And more importantly, which of these advantages become stronger as the business scales, and how do they translate into sustainable pricing power, superior returns on invested capital, and long-term shareholder value? So, these were the two questions. Thank you.

So, there have been a long question, but unfortunately, I don't have a very long answer. The first…

All right. Thank you. Thank you so much.

Thank you. The next question is from the line of Dhvani Shah from DSP Mutual Fund. Please go ahead.

And congrats on a good set of numbers. First, we wanted to understand a little bit more on indoor facilities. So, we can see that the top line has grown by almost around 18%, but the EBITDA number has remained flat. So, if you can just explain how this kind of turned out in the quarter and what is the trajectory you're expecting.

So, Inver, as I said couple of months back, is kind of in a growth phase, and this is a phase where we are investing more in three quarters, in my mind, go up and go down.

Will the next set of bets come into play? Is the medical hiring almost near completion, or do you expect this to continue for at least the next two to three quarters?

Ongoing, we expect it to continue for some more time.

Fair. Also, slightly on the bookkeeping number, you say that there's a goodwill number which has been reported at 5 crores, and this is mainly for the IV fluid or, I think, manufacturing facility near Ujjain, which we have acquired. But the cost of acquisition is around 3.8 crores. So, just trying to understand what is it that led to a goodwill creation on this.

So, this was a historical land which was bought, and it has been transferred at the current ready-reconnaissance land value. 3.8 was the equity value. There was debt in the company of about 7-8 crores or something of that sort. So, that is the 10 crore of debt.

Understood. And just one more thing. Like, last quarter, we did try and understand that Dombifilly runs at a fixed cost around 6 to 7 crore per quarter, and at that time, the losses were around per month, and the losses were around 3 crore per month, and occupancies of 25 to 30%. If I just forward that math into this quarter, wherein the EBITDA losses have almost broken even, but occupancies are still at 35%. So, would it be fair to understand that the balance impact is the seasonal incidence benefit that we've got in the quarter?

It is a combination of general organic growth and a little extra seasonal, you know, padding that you get in this quarter. What would have happened if this quarter was, you know, Q1 instead of...

Thank you. The next question is from the line of Arian Jain from Grow Mutual Fund. Please go ahead.

Yeah, thank you for the opportunity. I hope I'm audible.

Yes.

Yeah, so, sir, my question was a follow-up on a previous participant's question. So, the margin cap on OncoDrug has already, I think, come out and will be effective from 1st November time around. Since we don't give out, you know, case mix for our revenue, just wanted to understand, ballpark, what would be the impact of this 30% margin cap on our revenue that this ballpark would be fine?

So, Aryan, very honestly, we have not done that, and we don't have any way of interest.

Okay, understood. And, sir, on Dombevili, since this quarter, we were almost break-even. I know it may sound a little repetitive, but, sir, I just wanted to understand. Your earlier guidance was achieving break-even, maybe close to end of second year of operation. So, would you be revising that guidance right now, or would you wait a bit, maybe a couple of quarters for that, for the division of that guidance?

Let's see how it plays out. I mean, you know, I said that typically that we make when we start any new hospital.

Okay, and just one last thing. How much debt levels would we be comfortable with doubling our debt capacity?

So the board has currently mandated self-imposed ceiling.

Okay, understood. Those were my questions. Thank you.

Thank you. Participants who wish to ask questions may press star and 1 at this time. The next question is from the line of Mohit Mittal from JH Investment. Please go ahead.

Yeah, hi. Thank you for the opportunity. Hopefully, I am audible.

Yes.

Okay, thank you. So, sir, can you please share the RPOB details excluding Dombi Viti for this quarter and the first half?

Interesting question. Let me see if I have those numbers.

Okay, sure. Yeah, that was the question from my side.

Okay, thank you.

Thank you.

Thank you. The next question is from the line of Ahmed Madha from Unify Capital. Please go ahead.

Yeah, thank you so much for the opportunity. Two, three very brief questions. Firstly, in your presentation, you provide occupancy details excluding Dombi Valley. Can you give a brief sense? How is that number being calculated? Just trying to reconcile the numbers better. Should one assume like 200 operating beds and into, say, 35% occupancy or 70 beds operating in Q2? That's how one should look at it. Can you give some sense on it, please?

I'll tell you the logic is that when you do excluding Dombi Valley, you will...

Okay, so what denominator one should look at? In terms of overall monthly fixed cost, insurance, impenelment, all those stuff, how are things progressing? Obviously, there have been a lot of questions on this same topic and everyone is trying to make a judgment. Where do we move? But just some more granular understanding if you can provide.

Typically, it's about a year.

On the Thane side, what will the current occupancy be close to? And is it that things will be steady state in the hospital, and we can assume certain rate of R4 growth, and the volumes will be more or less steady? Is that a fair way to look at it?

Yeah, but oddly speaking, they have been steady for the last couple of years because capacities...

And the occupancy will be closer to 75% on the... Thank you so much. That is nice.

Thank you. The next question is from the line of Abdulgadir Puranwala from ICICI Securities. Please go ahead.

Yeah, thank you for the opportunity, and congrats on that early EBITDA break-even for our own-year EBITDA break-even for Dumbivli. So I have a couple of questions on Dumbivli, starting with, you know, if I look at your sequential numbers, that is in Q2, Q1, it more looks like the Dumbivli revenue would have been a little flattish, and despite that, there is an EBITDA break-even. So, I wanted to hear your comments as, you know, how has the revenue played out? And, you know, you talked about some increased investments to happen in Dombivli in terms of doctor hiring. So, is that something which is supposed to happen maybe by Q3 or something? What are you planning towards next year, that is, fiscal 28?

Abdul, the doctor hiring will be an ongoing process for the next year, year and a half, you know, as in when. And typically, we'll follow again as we have discussed in the week.

Got it. And next one, so you talked about adding new bids at Indore. So any timeline to that? Is that something that will happen, say, maybe in the next six months or beyond that?

Not in six months, I think, because we are still, I think.

Okay. And last one, if I may. So, you secured 500 crore of thumb loan. Out of that, I think in the presentation, you talked about 100 crores going towards purchase of land for the new Pune facility. So, how do we see the balance 400 crores getting utilized?

We'll see. So, basically, there is no new project that I have to announce today. So, there are three projects which are live. Outlay for the three also we have spelled out. So, essentially, these will be the projects towards which the money should be used.

Got it, sir. Thank you for answering my questions.

Thank you. Next, we have a follow-up question from Jalinarjan from JF Securities. Please go ahead.

Thank you for the opportunity once again. As Twitter continues investing in expansion, how should we assess the conversion of Kibita into operating cash flow after working capital requirements? I just wanted to understand when would probably the operating leverage would kick in for our company and what level of annual maintenance and growth CapEx should investors factor in and over the medium term, how does management expect free cash flow and return on invested capital to evolve as the new facilities mature? Sure. And the second question is, what's the current gross debt and cash we have as of today on the balance sheet? And the third one would be any guidance that you want to give over a medium term regarding the revenue, profit, EBITDA growth, and the EBITDA margin. Thank you.

So, as we had said, in the last couple of years, EBITDA to net cash,

anything on the annual maintenance and, you know, the growth, revenue, profitability.

So, we have never given...

It was just about, you know, the medium-term guidance.

Yeah, any ballpark number would be perfectly...

So, from here

on, I don't think we have more huge capex lined up, but it's just that We would probably go for annual maintenance and just, you know, the minuscule numbers that...

Yeah, so nothing which is pending which needs to be done in terms of CAPEX for the current units.

Thank you. Thank you so much, sir, for patiently answering all my questions. Thank you so much.

Thank you. Before we take the next question, we would like to remind the participants that you may press star and want to ask a question. The next question is from the line of Malik Walia from 361 Capital. Please go ahead.

Hi, sir. Thank you for the opportunity. I hope I'm audible. So, just wanted to understand, have we started all specialties at our Dombi Vildi facility or we've not yet started all of it?

So, pretty much all transplants have not yet started. Understood.

Okay. So, with the addition of, let's say, transplant and the oncology specialty, how much ARPOV increase are we expecting? Any broad understanding on that? Will that be significant or are existing specialties will be the key driver there?

Three days of the hospital, a lot of water variations had to come. Three years is the occupancy going up and as part rising faster than inflation in a new hospital, mainly because of…

Understood, sir. Thank you. And one last question on insurance. So, is it generally observed that the GIPSA insurance impanelment is done earlier than the private ones? Yes. Okay, so can you expect that within that one-year period which you mentioned, that six to eight months, JPSA will be done, and then within a year's period, the private insurers will be done? Is my understanding correct?

Well, that is the hope. Let us…

Okay, okay. Thanks a lot, sir. Thank you.

Thank you. The next question is from the line of Mihir from MB Securities. Please go ahead.

Yeah. So, sir, I had a few questions regarding from the data point perspective. So, I wanted to know how much KPEX we have incurred in the Pune 2 hospital and the Meera Road so far.

So far, we have spent around 220 crores. Now, we have spent another 100 on the land. Meera Road, currently, we have bought the land and is still in the regulatory phase once the construction starts.

Okay, understood.

So, 320 crores in the Pune one. And, sir, could you also share payer mix of the Dombi Valley hospitals for this quarter, you too?

Again, I have a blended number, which is 55 odd percent of insurance for the whole crew. But considering that Dombivoli does not have cashless empanelment, the number is going to be skewed more towards self-payers, out-of-pocket. The insurance that does happen in Dombivoli would either be, you know, few.

Thank you, ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments. Over to you, sir.

I hope the questions were answered satisfactorily. However, if there are any more questions or you need any clarifications, please feel free to contact the SGA team and they'll be happy to put you in touch with us. Wishing all of you a happy Diwali. Thank you.

On behalf of Jupiter Lifeline Hospitals Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.