Paras Healthcare Limited (PARASHLTH) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, we welcome you all to Q2 and H1FI27 earnings conference call of Paras Synthcare Ltd hosted by JM Financial. 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 date of this call. These statements do not guarantee the future performance of the company and may involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Abhin Beni with GM Financial. Over to you, sir.

Thank you, and good evening, everyone. I am Abhin Beni, and on behalf of GM Financial, I would like to extend a warm welcome to all of you on the second quarter and H1FI 27 earnings call of Paris Healthcare Limited. At the outset, I would like to thank the management of Paris Healthcare for giving us the opportunity to host the call. We look forward to having an engaging and insightful discussion on the company's quarterly performance and the outlook. From the company, we have with us today Mr. Dharmendra Kumar Nagar, Managing Director, Mr. Delhi Bidani, Group Chief Financial Officer, and Mr. Vinit Agarwal, Chief Operating Officer. With that, I would now like to hand over the call to the management for their opening remarks. Over to you, sir.

Good evening to each and every one of you. Thank you all for joining Parasav's first turning call as a listed company. Wishing you all a happy Dhanteras, happy Diwali, and my apologies for keeping you all engaged with our call, given that the holidays are here and everybody must be eager to go back to their homes and start the celebration. We were listed on NSC and BSE on the 28th of October. On behalf of our board and our teams, I want to thank every investor who has placed their trust in us. Thank you also to our doctors, nurses, and staff across our hospitals. These results essentially are their hard work. With me, Mr. Dilip Badani, our CFO, and our Chief Operating Officer, Vinny Sakribal. Paras health has been... We have built exactly in the last two decades on a single idea. We wanted to solve for North and East India's accessibility issues. Quality and tertiary healthcare should not be a privilege of few and in few metros. We built and run hospitals in Gurgaon. Patna, Dharbanga, Ranchi, Udaipur, Panchkula, Srinagar, Kanpur, with a single belief that patients should not have to travel far, pay a lot for complex care, it should be delivered where they live. Our promise is partners in health, accessible, affordable, high quality and compassionate care close to home. Coming to our Q2 results. It clearly demonstrates why our model is working. Revenue from operations was 511 crores, up 23% year-on-year. Operating EBITDA was 120 crores, up 47%. Margin expanded by 390 basis points to 23.5%. Before tax was 54 crores, that is 2.7 times last year. Profit after tax was 40 crores, 3.3 times last year. For the half year, revenue grew 25% to 981 crores. Operating EBITDA grew 58% to 225 crores. So where has this growth come from? We are currently managing three clusters of our hospitals. The mature hospitals, Gurgaon, Patna, Panchkula, and Darbanga, revenue grew 8.5%, margins rose to 29.5%. Emerging hospitals, Ranchi and Udaipur, revenue grew 27%, and of course, Ranchi had an exceptional quarter. New hospitals, Srinagar and Kanpur, revenue grew 2.4 times last year, and the cluster moved from EBITDA last year to about a margin of 19% in the H1, Q2. Kanpur and Srinagar are now profitable at EBITDA level. That has happened faster than our earlier hospitals, and it is clearly showing a playbook that can be repeated. Number of times. What drives the next phase of The ramp-up of newer hospitals, because we have tremendous capacity, room to grow. They have capacities, and we have room to grow. What else is happening? Better clinical and surgical mix in every hospital, more complex specialty work, and we are tracking that by hospital and by the doctor-wise.

Ladies and gentlemen, the line for the management has been disconnected. Please stay connected while we reconnect the line for the management. Ladies and gentlemen, thank you for patiently holding. We have the line for the management reconnected. Yes, sir, please go ahead.

Apologies, everyone. I think we dropped off the call. As I was stating, what is the next phase of growth? Where does it come from? And essentially, we're talking about four levels. Ramp up of our newer hospitals. We have room to grow in their capacities, better clinical-surgical mix in every hospital, more complex specialty work, tracked by hospital and doctor by doctor, growth in outpatient and inpatient volumes, disciplined new capacity. We are building new capacity in golf course extension Gurgaon, and very, very selective expression that is going to come up. In the future, Ludhiana being an immediate expansion of 500 bids coming in next year. Our balance sheet has strengthened. Of the 500 crores of fresh issue, 375 crores has already gone to repay and prepay borrowings. And, of course, And, of course, not everyone. I'll now hand over to Dilip.

Welcome to all. I will take you through the financial numbers, and before I give you some of the numbers, some of which at the cost of repetition, I will repeat. A detailed presentation has been uploaded on the stock exchange as well as the company's website for your benefit, and a great number of details would be available to you there as well. Speaking of our consolidated financial numbers, our revenue for Q2 stood at 511 crores, a growth of 23% on a year-on-year basis. Sequentially, the revenues for Q2 grew by 8.6% over Q1 this year. For half one FY27, revenues stood at 981 crores, a growth of 25% year-on-year. Including other income, a total income for quarter two stands at 517 crores and at 996 crores for half one. The EBITDA for Quarter 2, which includes other income, stood at 126.6 crores, an increase of 42.5% on a year-on-year basis. The EBITDA for Half 1 stood at 240 crores, a growth of 54% from Half 1 last year. Operating EBITDA, that is, excluding other interest income. was Rs. 120 crores for quarter two, against 81.7 crores last year. For half one, the operating EBITDA stands at 225 crores versus 142 crores recorded last year, a growth of 58%. EBITDA margins for half-1.27 stood at 24.1%, an increase of 4.6 percentage points over 19.5% last year. Operating EBITDA margin. 23% this year versus 18.1% last year. Most of the gains in margin improvement were a result of improvement in material cost by over 3%, which was, again, a result of procurement efficiency, formulary compliances, and case mix. Dr. Cost improvement of 70 basis points was a function of operating leverage kicking in. Despite an absolute increase in doctor cost due to new hires across our hospitals and particularly in the new hospitals, employee costs and other expenses have largely been at similar levels. The bottom line obviously improved as the margin percentage also improved. To relate some of the numbers on depreciation and finance costs for the quarter, they were 38.7 crores and 33.8 crores, respectively. Our PBC, Profit Before Tax, in Quarter 2 improved by 12.7% over the previous quarter, which is from 48 crores in the previous quarter to 54 crores in this quarter. Whereas last year in quarter two, the PBT was only 19.8 crores. The PACT this quarter, in quarter two, was 40.3 crores against 12.4 crores last year. And this has resulted an EPS of rupees four per equity share of rupees one each. The profit after tax. which was 44 crores for the full year in FY26 is now 90 crores in half one FY27. Back margins for FY26 which stood at 2.7% is now 9% for half one 27. Dr. Nagar touched upon a bit on our borrowings. Our gross borrowings as of September were 979 crores. We held 360 crores of cash as well, giving us a net debt of 620 crores as of end September. Post the IPO 500 crores and net of expenses of the IPO, our balance sheet has become much, much stronger. We have already repaid 375 crores of the term debt, which is as per the usage of offer proceeds, and a pro forma net debt post repayment would be 143 crores. OCF operating cash flow for half one was at 68 crores, despite working capital movement of a negative 172 crores. And receivables have increased from 350 crores in March to 518 crores. This is with the payer mix change, settlement cycles, and lumpy payments from certain payer groups. This is certainly a management priority, and we would be looking at it. Our DSOs at about 92 days on a blended basis are, however, very much under control with us. Half-1 capex has been at 90 crores invested across various units, as well as payments for our new Gulgaon 2 unit. Concludes the financial summarization, and I will hand it over to Veneet to take care of the business performance and more details about the cohorts that he will talk about.

Thank you, Dilip. Wishing everyone a very happy dharaj and a happy day, Veneet. Moving on to our cohort performance, let's start with our matured hospitals, Gurgaon, Patna, Panchkula, and Darbanga. Revenue for our matured hospitals grew by 8.5% in Q2 FY27 and 9.1% in H1 FY27. Our operating EBITDA grew by 3.1% in both Q2 and the half-year, with Q2 margin being 29.6%, that is closer to 30%. A growth of 360 basis points compared to last year, and at the half year, we stood at 28.9% with a growth of 330 basis points. Our occupancy for the mature hospitals for the first half of the year stood at 76.5%. Coming to our emerging hospitals, Ranchi and Udhepur. Our emerging hospitals grew by 27.2% in terms of revenue in quarter two, and 43.2% in the first half of FY27. EBITDA grew by over 46% in quarter two, and 110.9% in the first half of FY27, showing a very positive movement in our emerging hospitals. Our EBITDA margins Have grown by 230 basis points over Q2 last year and 586 basis points over the H1 of the last year. And our overall margin for the first half of FY27 for emerging hospitals stood at 18.3% compared to 12.4% of the first half of the previous year. Showing a positive movement and also showing the progress that we can make once our emerging hospitals move into the matured cohort. Our occupancy for the first half of FY27 for the emerging hospitals stood at 68.6 percent compared to 49.1 percent, an increase of 1,950 basis points, showing a very positive movement on our occupancy levels. Talking about our new hospitals, Srinagar and Ghanpur, they have shown tremendous growth over the last year. Revenue has increased by 139% in quarter to FY27 and 147% in the first half of the financial year on a year-on-year basis. Our operating EBITDA, which was negative of 13 crores in FY26, has become positive of 15.8 crores in quarter two FY27, and for the first half, it has surpassed 15 crores in terms of operating EBITDA, and our margins, which were negative, have become closer to 19%, to be precise, 18.7% in the first half of FY27. Showing a room of improvement further as we move into emerging and the mature cohorts. This was possible, and we have highlighted earlier that initially, when the occupancy is low for new hospitals, the stabilization and operational cost impact the stability. But as we have been able to increase occupancies, increase speciality treatment, increase both our OPD and IPD footfalls, we have been able to deliver sharp turnaround in our growth and profitability. For H1 FY27, our occupancies for the newer hospitals stood at 68.4% compared to 27.8% in the first half of FY26, an increase of 4,060 basis points. Now, coming to our few consolidated operational KPIs, our RPOB for H1FY27 stood at 48,900 compared to 48,400 in the first half of the previous year, showing improvement in our RPOBs. Our eros has gone down. Our occupancy for Q2 FY27 stood at the group level at 76.3% compared to 62.5% in quarter two of FY26, an increase of 1,380 basis points. For H1 of the FY27, our occupancy stood at 73%, compared to 59% in the previous year, our increase of 1,400 basis points. Correspondingly, our occupied bed days have also grown on a year-on-year basis by 23.9%, from 162,000 to 201,000. Our volumes, both in terms of inpatient and outpatient, We are grown by 27.3% and 20.4% respectively in the first half on a year-on-year basis. Our Congo art speciality stood strong at 74% in H1 of SY27. Our fair mix in H1, SY27 stood at 32% as cash or self-pay as we call it, 24% insurance, And remaining 44% coming from the government schemes and the PSUs. So, effectively, if we look at the operating leverage in terms of all the three cohorts that we are performing in, the broader message is that our volumes, our occupancies, our RPOB, our ALOS, all are...

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 then one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and then two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, you may press star and then 1.

Your first question comes from the line of Neha Manpuria with Bank of America. Please go ahead. Neha, your line is unmuted. Please proceed with your question.

Hi, am I audible?

Yes, ma'am, you're audible. Please go ahead.

Please go ahead.

So, my first question is on Odaipur. You mentioned that Odaipur was soft that quarter. While overall, you have definitely given a very thorough performance, just wanted to understand what is the reason for soft performance in Odaipur.

Hi, Neha. Vaneet Agarwal, let me take this question of yours. In Udaipur, rather the entire region of Rajasthan or the state of Rajasthan, the state government scheme is being reviewed. That is being reviewed by the state government, that is being reviewed by the central government. And it has been temporarily suspended across multiple hospitals in Rajasthan. However, at the same point in time, when we are looking at Udaipur from a Paris context, our overall... Cash and insurance business has grown in terms of absolute numbers, and we have recovered almost 30 to 40 percent of what we were in terms of the entire state government business. However, looking at the state and the territory, we are hopeful that in future, the scheme will be started again across the different hospitals operating in Rajasthan, we being amongst one of them, and the leverage will kick in.

Got it, sir. In that sense, would it be fair to assume that even the revenues could be lower, YOY for Udaipu?

So, Neha, as I mentioned, in terms of our overall increase, our overall CTC mix has improved, our pair mix has improved, and we are continuously working on further improving our pair mix. There are multiple initiatives that we are taking in future. Specifically for Udaipur and across our units to ensure that our dependencies on the government scheme's business is reduced.

I've got it. Sir, my next question is on Kanpur. Could you help us understand how the ramp-up in Kanpur has been for you?

So Kanpur ramp-up has been quite positive. We have been moving... Quite positively in a direction where Our EBITDA margins have improved from a negative of 22.8% to 15.6%. Our occupancies have improved, and our overall revenue has further improved. Now, in terms of Kanpur, it's a combination of obviously one operating leverage. Obviously, it's a factor of we taking certain initiatives in terms of adding more impanelments in Kanpur. Also, a factor of adding more and more clinicians in Kanpur to cater to a very clear, speciality-focused mix and the kind of treatment, the tertiary care and the quaternary care treatment that we want to move into. Just to give you an example, our occupancies in Kanpur have ramped up from 22.7% in the first half of FY26 to 78.4% in the first half of FY26. Very strong signals in Kanpur, and we hope to continue this growth journey in Kanpur in future. Thank you.

That's very encouraging to hear. In Kanpur, have you operationalized all the beds, or is it still happening?

So, we are yet to operationalize more beds. We will be offering more beds in Kanpur by the end of this financial year.

And how many beds could that be?

I'll take that question. We had opened half the beds, so there are two more wings which are yet to be opened, and out of the capacity of 435 beds, we had opened roughly half the beds, and half the beds are yet to be opened.

Okay, and in terms of empanelment, is comfort empaneled in all insurance as well as, you know, government schemes, or is that process still underway?

No, it's all impanelments in terms of insurance, and government schemes are completely done now.

Okay, thank you for this. I'll get back in the queue.

Thank you. A reminder to all the participants, if you wish to register for a question, please press star and then one. The next question comes from the line of Mother of Murda with MLP. Please go ahead.

Hi, good evening. Thank you so much for your time. My first question was, you know, I think at the network level, our occupancies are quite strong. If I picked it up right, you said about 76% occupancy in quarter two. I wanted to understand, given that occupancies are quite healthy already, how much scope do we have to, you know, optimize the payomix, you know, to shift more to cash and insurance business in the coming, you know, one or two years?

Now, a good question. So, basically, there is definitely a scope to improve on our pair mix, and there are multiple steps that we are taking. We have to understand one thing first. In terms of our newer hospitals, which is Srinagar and Kanpur, our strategy, obviously, was to have beds being filled faster, and hence, we were looking at impunnelments then. Now that they are complete, we do have scope for improvement. In terms of the overall piece that we look at, there is still, Srinagar is operating at 60.4% of occupancy as of H1 of FY27. Now, in terms of improving the CTC mix, there are a lot of marketing initiatives that we are taking in terms of ensuring that our overall input funnel, they improve, which subsequently kind of converts into admissions. Which is the IPD football that we are talking about. So the entire focus is in terms of improving our CTC consults, so that we have enough and more input funnel to look at.

And with this healthy occupancy, I'm assuming even on the case mix, you know, we would have sort of enough opportunity to keep optimizing and, you know, sort of improve that as well. Is that like a good assumption to make at this point?

No, absolutely right. So, there are two elements to it, basically. One, obviously, is that we are looking at high-end tertiary care specialties to deliver for us. Now, hence, our surgical mixes are improving, our procedural mixes are improving. Plus, the second point is that we have added quaternary care programs across some of our units. So, an example being liver transplant program, which was started with Gurgaon, and now we have extended that program to Panchkula and Patna. So, liver transplant is one of the biggest levers, where we are seeing enough and more traction across the three units. Kidney transplant is another area that we have been working upon. Bone marrow transplant is another area. We have also started robotic surgical programs across different units, including Gurgaon, Patna, Panchkula, and recently launched in Ranchi, with a very specific, ortho-specific robotic program in Udaipur. So we are looking at different combinations of also getting deeper into each speciality, introducing and covering it from the start to the end point of that speciality, plus adding more and more quaternary care programs into our ambit.

Got it. And then just wanted to get a guidance from you in terms of, you know, how many new beds do we plan to operationalize, you know, in the second half of this year and in FY28, what's the plan there?

So, I'll take this question, this is Dilip here. So, as we told you that we've got a couple of wings yet to be opened in Kanpur, and there are some more beds to be opened in Rachi. So, there would be about 200 to 250-odd beds which are yet to be opened, which would take up our operational beds which currently stand at 1,500. We'll go up closer to 1,800 within the overall capacity. Having said that, we will be having more beds coming up in Gurgaon too, as well as Ludhiana over the next 12 to 18 months. As we have said, the 300 beds are coming up in Gurgaon and 500 beds for Ludhiana in the following year.

Understood. Thank you so much for coming back to the video.

Thank you. Participants, if you wish to register for a question, you may press star and then one now. The next question comes from the line of Sanitya with Unicorn Assets. Please go ahead.

Hi, I'm Haudible.

Yes, sir. Please go ahead.

First question of the cash flows. So if you compare...

Sorry to interrupt, sir, but you're sounding slightly muffled. If you're using a speakerphone, may we request to use the handshake? Is this better now? This is much better. Yes, please.

Yes. So if we look at the cash flows, then we see that it's almost like 300, 250 KM kind of... million kind of negative impact, whereas our profits are like... Almost 4x from last year's first half. How do you explain that?

As you've seen the cash flow, there has been a movement, a significant movement in the working capital. So, 172 crores has been a result of working capital absorption with the DSOs increasing from around 79 days to 92 days, which typically rises in the middle of the year and should settle down as we go forward. And the case mix and the pair mix improves over time.

Oh, sorry, but I didn't understand like how it, so I'm comparing from September 25 over September 26. So I don't think there should be any seasonal or middle of the year in past that is visible on such like, the trade receivables have gone from 87.5 to 134 groups. This is like almost double. So, what changes in the payer mix or whatever you are reflecting to, would you explain how?

There are two parts to it. If you look at the 25% jump in the business itself, that itself has been one of the variables. The second is there has been a greater percentage of empanelments in our newer hospitals that is also absorbed part of the working capital. And therefore, the overall mix of debtors has gone up from 79 to 92 days from March to September. I'm talking about from March itself this year, there has been a movement.

Okay, so I see that the 200 crore improvement for first half of last year versus first half of this year, almost 50% of that has been affected in trade receivables.

About, it would be less than that, but yes, directionally, you're right.

Okay, and there's one more line item just below the three receivers, other assets and other financial assets, if you can explain what's that.

So you are referring to...

In this sequence, A for operating cash flows.

Other financial assets. Yeah, so this is actually a reclassification of fixed deposits, which have been taken for a long-term basis and has to be classified as other financial assets. It's basically a 50 crore fixed deposit, which is classified as other financial assets.

Okay, any particular entity to which it is done?

It's our regular bankers.

Okay, so no, I was just trying to understand it wasn't there the last year, so from which accounting entities has been reclassified, either that could be explained or... Is it something new, then, from which entity? Yeah, yeah.

So, I'll explain that to you. If you love to go back, and at the cost of explaining what happened last year, we had an 80 crore capital infusion, equity infusion, which came in in April 25. That gave us some cash, so we took a longer-term FD. Now that, as per auditing standards, cannot be classified as current, and it couldn't be classified under the bank balances. It had to be classified as other financial assets under that category of long-term non-current assets. So that is what it is, really.

Great. Really helpful. Thank you so much for patiently answering my questions. Thank you. Thank you.

Thank you. Ladies and gentlemen, in order to ask a question, you may press star and then one. Our next question comes from the line of Wanchi Shah with EV&A Advisors. Please go ahead.

Hello. Hi, sir. Am I audible?

Yes, ma'am. You're audible.

Yeah, so my question was, mature hospitals have reported EBITDA margins of around 29% in H1-FI-27. So, what is the sustainable EBITDA margin potential for mature hospitals, and how should margins evolve as new hospitals mature?

Yeah, okay, it's a very good question. If you look at our cohort analysis, which is depicted in our presentation, we have shown that the new hospitals start off as negative, become positive, start hitting mid-teens to high-teens margins, and move into the middle bucket of emerging. The middle bucket then gradually moves to the leftmost mature bucket. Which is currently a blended of mid to high 20s EBITDA range. We expect gradually over a period of time, everything should migrate in a steady state towards that level. And obviously, there will be some new hospitals at all points of time. So the blended EBITDAs which we are looking at in the long steady state should be in the mid 20s range. That's the way we are envisaging our business as a model. That's our playbook. I'm not giving a guidance on that, but that is the model playbook which we are looking at. I hope that somewhat answers your question.

Yes, sir. Very well understood. Sir, I have one more question. So, what other locations are we looking at, apart from Murdiyana and Gurugam, for expansion, and what will be our expansion strategy, whether it will be Greenfield or Brownfield?

This is Dr. Nagar here. Thank you. This is a forward-looking question. Currently, we are very focused on delivering the new Gurugam facility. At Golf Course Extension and Luthana facility. Given this is 800 beds coming on stream, we are focused on delivering rapid growth in these and our newer facilities. In terms of the medium to long term, just to reiterate the philosophy and the reason for our existence, we want to solve for North and East India's accessibility, quality issues. We are very, very focused on that. In terms of the models, whether they are greenfield, brownfield, M&As, and O&Ms, we are happy and we are very excited to look at all the models at an appropriate time, but currently we are only focused on these two.

Noted, sir. Sir, I have just one last question. We are particularly present in Tier 2 and 3 settings. Do we see any challenges in getting medical talent?

I think it's a very geographically good question. We have seen that we have beautiful, great talent, let's say, in Kashmir. It's not been a problem. In fact, we've had a problem of plenty. I can give you an example. Even the day before yesterday, a professor of urology from UK has just approached me for wanting to come back. He's a dean in a university there. That is the depth of talent that is available, for example, even in places like Kashmir. But again, that doesn't answer the whole question. Where we find there is also a lack of talent in tertiary and coronary care is in places like Drabanga. We do find that is a challenge. And, of course, Good treasury and quarterly care. Although, given the government's policies, increasing in undergraduate medical seats tremendously, we are nearly touching 150,000 seats this year, and of course, more than 50,000 post-graduates, it might be much more.

Thanks for answering all my questions. All the best to you, sir, and Diwali greetings to everyone.

Thank you so much.

Thank you. Participants, if you wish to ask a question, you may press star and then one now. Our next follow-up question comes from the line of Madhav Marza with MLB. Please go ahead.

Thank you for the follow-up. Just wanted to check, you know, given we have a fair bit of new beds, you know, coming into the mix in the coming 24 months, and, you know, KSMPMX improvement opportunity as well. Is there like, you know, given it's our first earnings call, is there any revenue or guidance that you would like to share for the network as a whole for the next two, three years? Thank you.

Thank you. Yeah, so there is no guidance as such, which we are sharing. However, we have seen, you have seen the trend of our revenue, and revenue growth is healthy. You got to see how the mature buckets, emerging buckets, and new buckets can shape up. With the new buckets, current new buckets shifting to emerging, and emerging moving into mature gradually, and two new hospitals coming in the new bucket. I think similar trends, similar kind of modeling you can do, but without any specific guidance from our end.

Thank you.

Thank you. Same to you.

Thank you. Thank you. A reminder to all the participants, if you wish to register for a question, you may press star and then one. Our next question comes from the line of Mr. Amei Chalki with JM Financial. Please go ahead.

Yeah. Thank you so much for taking my question and congrats to the manager on Goodnob. Our first question on ALOS. So, we are operating with almost 2.8, 2.9 ALOS for an aggregate of eight hospitals. This is one of the lowest ALOS I have seen on the listed hospital space, especially when we have such a large scale hospitals like from Apollo, Max, 1040, etc. So, what are the reasons, what are the factors which are leading to such a low A-loss number, which suggests that there is a greater operational efficiency in our hospitals? And do you expect this lower A-loss number to continue even in the future, considering we have so many new hospitals which have already come up, and where typically we are present in Tier 1, Tier 2 hospital, Where also the ALOS number is typically on a higher side, more than 3.5 to 4. So is it a sustainable number for us going forward?

So, if we read this slide, if we look at these numbers that we have been maintaining, our numbers have always been in the range of somewhere between 2.8 to 3, and we expect that the trend continues for us. Now, the reason why we have these numbers, obviously, is surrounded by the fact the kind of case mix that we carry, obviously, in terms of looking at the different case mix of surgical specialties versus medical specialties, daycare versus the midnight occupancies, and the new areas which are developing up in terms of on-code radiation being one, chemo being another, robotic surgeries, improving the A-loss for the patients, So, these are certain interventions that have helped us reduce our A-losses, and we expect the same trend for us to continue.

So, when we open a new hospital, is that considered as a criteria to maintain? Because typically, we see that new hospitals are having a higher A-loss because initially the case mix is a bit inferior.

So you are absolutely right. When we open new hospitals, this is certainly not the criteria. For new hospitals, as you rightly mentioned, depending upon the case mix, the A-losses could initially be higher, and then as in when we introduce new and new medical programs and new technology for that particular unit, the A-losses typically with improving case mix and the new technology will further taper down.

Sure. And second, bookkeeping question I had was on the seasonality for our business. Most of the hospitals we have seen having a stronger 2Q and 4Q. It would be helpful if you can mention how the seasonality is typically spread out for us on quarterly basis. Especially in this quarter, we have seen the newer hospital reaching to 70% occupancy. Do you expect it to be sustainable for upcoming quarter 3 and quarter 4?

See, there are clear factors for it. The seasonality trend also is a factor of where we are operating in, which part of the country we are. We are being focused on North and East India. The trend continues for us, as we have seen for us in the past. In terms of improving our occupancy, as we are leveraging, one, the existing capacity. So that's one area that we are working on. And the second, obviously, is the bed expansion that is going to come up, as we have mentioned, in the new units and in the existing units. So effectively speaking, as our operating beds increase, we do have scope and margin of improvement in our existing facilities, plus obviously the new upcoming facilities as well.

Thank you so much. I have a last question on a strategic question. So, most of our hospitals so far have been asset-light. Going forward, we expect to stay asset-light when we add new hospitals. And also, does that mean the acquisition would remain a low priority for us because it will require a good amount of capital allocation versus our typical asset-light business model?

Thank you. Let me take this question, Dr. Nagar. Our new hospitals that are coming up, whether it's the Gurgaon or Daludiana, continue to be asset-light. Our focus is on delivering quality health care in the geographies that we want to be in. That is the priority. In terms of the opportunity for M&A, Opportunity on greenfield, opportunity on brownfield. We are honestly open for everything, but currently, given that where we are and given the current commitments, we are very focused on delivering value on those, and that is what we intend to do in the next two years. If the opportunities arose, we will continue to look at them, and we have done public-private partnership as well, so even that is an opportunity for us.

Got it. Thank you so much. I will join. Thank you.

Thank you.

Thank you.

Our next question comes from the line of Mr. Avin Benin. Please go ahead.

Hi. Thank you. I'm an audible.

Yes, sir, Yadigul.

Hi, thanks for the opportunity. A few questions, sir. So, the mature hospital's cluster is at an occupancy level of almost 78%, which is around 200% improvement here on here. How much further headroom do we see that is available to drive this, and are there any white spaces or levers that can be filled to have further optic from here?

Definitely. Beneath this side, let me pick this one up. So, in terms of our matured hospitals between Gurgaon, Patna, Panchvila and Darbanga, we do see there is a possibility of further occupancy increasing in Patna. We do have opportunities there. But when we look at, for example, in Gurgaon, the reason Gulf Coast Extension Gurgaon comes in is because of the simple reason that there is less of headroom for us in the existing unit. So, yes, we do see opportunities in Patna. We do see some opportunities in Panjshkala. We can still have improved occupancies there. But Gurgaon, yes, that's the reason World Coast Extension comes in.

Understood. And with Dharbanga, even though it's a 100-bed hospital, a small hospital, there are a lot of specialties that are still available, that can still come up. So, any plans to add more advanced specialties or case mixes there?

So, let me answer this point in two parts. Obviously, with Darbanga, yes, there can be a future tech expansion, stroke speciality expansion as we progress. However, a small journey about Darbanga is Darbanga was supposed to be a feeder to Patna because of its proximity to Patna, and that's the business model that we are operating Darbanga with. It continues to be a feeder hospital to Patna in terms of the quaternary care programs. Darbanga will constantly and keep on feeding Patna, but in terms of improving some level of tertiary care programs further, diving deeper into those programs, yes, that expansion will still come to Darbanga.

Thank you for that. The other question that I wanted to ask was that the emerging hospitals are at a margin level of around 18 and a half, 19%. What would be the kind of timeline that you estimate that these would reach to the comparable of natural facilities from your previous experiences, how they have been trending?

Yeah, I think it's a good question. So, if you look at the age profile, Typically, emerging should start moving to the mature bucket in four to seven years, after seven years. So once they reach that kind of maturity level, we expect that they should be hitting low to mid-20s, and then they move to mid to high-20s in the mature bucket. Ranchi is already kind of delivering the mature type of margin profile, and therefore... We will see how soon we would like to classify it as a mature hospital, although it still is in the age bracket, which is in the middle category. Ranchi is already delivering mid-20s kind of EBITDA margin.

Just to add, Ranchi is already delivering 25.8% in quarter 2 of FY27 as part of the EBITDA margin. So that's what Dilip was mentioning.

Thank you. And just one last question. Given that Burgaon Hospital will be commissioned and also you had mentioned earlier about adding a lot of advanced specialties in white spaces, what kind of recruitment and recruitment plans are being taken care of and what are the kind of new doctor additions that you are doing?

No, very, very good question. So, obviously, In terms of when we are looking at the entire clinician hiring, stroke clinician edition plan, there are two things that we do keep in mind. One, obviously, is the medical programs that we constantly add. Two, obviously, is the... Deep dive into a single speciality, how we expand our programs into specific areas. So these are the areas where we will continuously attract and try and attract more and more clinical talent and have more and more teams with us. Obviously, it's also a factor of having clinical talent to ensure that whatever. Specific areas that we kind of come through, we are able to cater that. Just to also add to that, there is an interesting piece that we should be looking at, that the kind of clinical talent that we have acquired, we have three Padamshris with us in Gurgaon itself, Dr. V.S. Mehta, Dr. Padma, Dr. Alka Kriplani, all three are there with us as Padamshris in a flagship unit itself, plus The kind of talent that we have in other units as well. So, example, Dr. John Mukhopadhyay in Patna, he is a prominent figure and a name there.

Got it, sir. Thank you for taking my questions. That's it. Thank you.

Thank you. Thank you. Ladies and gentlemen, that was the last question for today. As there are no further questions from the participants, I now hand the conference back to the management for closing comments. Over to you, sir.

Yeah, thank you all for attending this conference call, our first conference call, and we look forward to interacting again with you in future. Thank you, and good night.

Thank you. Ladies and gentlemen, on behalf of GM Financial, that concludes this conference. Thank you, everyone, for joining us and you may now just connect your lines. Thank you.