Yatharth Hospital & Trauma Care Services Limited (YATHARTH) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to Yathars Hospital and Trauma Care Services Ltd. Q1 FY27 Earnings Call. As a reminder, all participant lines will be in 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 touch-down phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Manchanda. Thank you, and over to you, sir.

Thank you, Athabha. Good morning, everyone. On behalf of Systematics Institutional Equities, we welcome you all to the Q1 FY27 earnings call of the Atharth Hospital and Trauma Care Services Limited. We have with us the senior management of the company, represented by Mr. Yadhar Tyagi, full-time director, Mr. Amit Kumar Singh, group chief executive officer, Mr. Nitin Gupta, president finance and group chief operating officer, Mr. Pankaj Prabhakar, group chief financial officer, Mr. Ashutosh Kumar Jha, group chief strategy, M&A and investor relations. This is Anu Goyal, Group Keep Financial Controller. I now hand over the call to the Yathart Management for opening remarks. Over to you, sir.

Good morning, and welcome to Yathath Hospital and Trauma Case Services Limited's Earning Conference Call for the quarter ended June 30, 2026. Joining me today are Mr. Amrit Singh, our Group CEO, Mr. Pankaj, Group CFO, Mr. Nitin, Group COO and President Finance, and Mr. Ashutosh, Group Chief Strategy, MNA and IR, as well as Mr. Sonu Goyal, Group Financial Controller. Our earnings presentation has been uploaded on the stock exchanges and on a website, and we hope you have had the opportunity to review it. I am pleased to report a strong start of FY27. We delivered our highest ever quarterly revenue and profits this quarter. More encourageably, we achieved a record revenue growth of 51% year-on-year and an EBITDA growth of 29% year-on-year. This performance is a testament to the growth strategy we have been pursuing over the past several quarters. Our newer hospitals at Greater Faridabad, New Delhi, Faridabad Sector 20, and Agra collectively contributed 27% to the mix this quarter. Especially our acquisition playbook has delivered signs of early success. A key highlight was our Faridabad Sector 20. Hospital is turning EBITDA break-even within a record period of 9 months. The hospital is now contributing to a monthly revenue rate of Rs. 12 to 13 crores with an R-pop closer to Rs. 40,000 and the potential to reach Rs. 45 to 50,000 as we move ahead. A new Delhi hospital has already approached the Rs. 50,000 R-pop mark. The hospital is currently operating at a monthly revenue run rate of 8 crores. Importantly, the revenue mix at both these hospitals is 90% plus cash and private insurance patients. Aragra Hospital, which was integrated last quarter, achieved a revenue run rate of 9 to 10 crores and delivered a strong 20% plus EBITDA within its first full quarter of integration. The Gurugram construction is progressing as per expectations, and we expect the hospital to go live by quarter 1 of the next fiscal, with the potential to achieve an ARPOP of Rs. 50,000 plus. Our performance across these hospitals demonstrates the group's ability not only to identify and acquire good assets, but also to integrate and turn around their operations within a very short span of time. Over the past couple of quarters, our profitability has also improved meaningfully with operating leverage ticking in. As reflected in our adjusted EBITDA margin, excluding the impact of New Delhi and Faridava sector 20, stood at 28.1% this quarter. In recognition to the above performance, the board today approved a maiden interim dividend of 5% of face value for all our shareholders, ensuring that shareholders benefit from the growth and investments being done by the group. Behind this execution is a significant effort by the entire organization. In reward to this effort by our people, we have also approved our first ESOP grant and launched a new ESOP scheme 2026 to attract, retain, and align quality talent. These are meaningful steps for us, reflecting our confidence in the business that we are building. And a commitment to sharing the value created with both our shareholders and our people. We are also in the process of identifying ESG priorities across a network of hospitals with the objective of building a more sustainable and future-ready organization. Our focus on strengthening our international collaborations continued this quarter. Expanding our global outreach, we opened the Yathar Information Center in Uzbekistan, and have also leveraged our partnerships with healthcare institutions, as well as undertook many OPD initiatives across key markets across Asia, Africa, and Middle East. With the infrastructure built over the last 12 months, we have expanded our network to 2,555 beds, setting the foundation for record growth this year. Looking ahead, we remain committed to a roadmap of doubling our bed capacity to 5,000 beds target over the next few years. The upcoming 250-bedded Gurugram facility, expected to compensate operations by Q1 of next fiscal, will further strengthen our positioning in the premium NCR market and add another high-potential platform to the network. The opportunity now is to fill these beds, improve utilization, and allow earnings to catch up with the capacity we have created. Overall, we believe Jethat is entering an exciting phase. We have continuously expanding capacity, our speciality and pair mix is continuously improving, and we have substantially installed capacity to utilize, drive a stronger cash generation in the years ahead. With that, I shall hand over the call to CFO Pankaj for further updates.

Good morning, everyone. I will take you through the financial performance for quarter 1 FY27 and the key drivers behind the quarter. The group reported its highest ever quarterly revenue of 3,207 million, up 51% year-over-year and 15% quarter-over-quarter. Our existing three hospitals in Noida. And Jhasi Orsha collectively contributed $2,862 million, growing 22% year over year. Our existing hospital occupancy reached approximately 75% as in-patient volume improved 15% year over year. As far as hospital-wide occupancy is concerned, Noida and Jhasi Orsha Hospital achieved 90% plus. Occupancy. Greater Noida Hospital is currently operating at 74%, while Noida Extension stood at 56%. We expect occupancy level at Greater Noida and Noida Extension to improve further in coming quarter. The newer hospital at Greater Faridabad, New Delhi, Faridabad, Section 20, and Agra. Collectively contributed $1,067 million in revenue, accounting for 27% to the group's revenue. This shift in revenue mix reflects the rapid scaling of our newer capacity alongside continued growth for our established base. The groups are from... We reached an all-time high of Rs. 34,758 in Q1, up 7% year-on-year. Importantly, our premium NCR hospitals at Noida Extension and New Delhi crossed Rs. 50,000 are marked for the first time in Q1, which is a strong indication of the improving case mix. This was followed by Greater NOIDA, which achieved an ARPOP of Rs. 43,000, Faridabad Sector 20 approaching Rs. 40,000, Greater Faridabad and NOIDA at Rs. 45,000, and AGRA closer to Rs. 30,000. This performance is largely driven by the benefits of a stronger speciality mix across our network. We are continuing to invest in advanced clinical capabilities and infrastructure, as we believe deeper speciality capabilities are essential to building a differentiated hospital network and improving the quality of our revenue over time. Oncology has already started contributing close to 10% to the group's revenue. With only one line-neck machine currently at Noida Extension Hospital, we are in the process of adding another line-neck at our Haridabad Sector 20 Hospital soon, followed by the New Delhi facility, which will meaningfully strengthen the oncology share at the group level in the coming year. With newer hospitals demonstrating higher RPOV level, we expect a meaningful uplift in overall group's realization as these subtleties continue to escalate. EBITDA for the quarter was highest ever at 917 million, with PAT stood at Rs. 454 million. While the consolidated EBITDA stood at 23.3%, the adjusted EBITDA margin, excluding the impact of New Delhi and Haridabad Sector 20, stood at 28.1%. With newer hospitals progressively moving up, the profitability curve at Agra Deliver was at 20% plus EBITDA margin, while Haridabad Sector 20 achieves We expect our blended EBITDA margin to improve from the current level. The increase in depreciation and finance costs have been following the significant capacity addition made over the past 12 months, Despite which, our cash profit, which is PAP plus depreciation, Increased significantly by 32% year-on-year, largely reflecting a non-cap impact on the cat growth. With the upcoming Guru Grand Facility and Brownfield Extension planned at Noida Extension and Greater Noida, our total bed capacity will reach over 3,200 beds. We remain confident of achieving our target of 5000 bits over the next five years. FY27 has started a strong note and the early success of our newer facilities gives us a confidence in sustaining this momentum. Thank you for your attention. I would now like to hand over the call to the moderator for question and answer session. Thank you.

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 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 are requested to restrict their questions to two questions per participant. We have the first question from the line of Subhi Gupta from Trinetra Asset Managers. Please go ahead.

Good morning, sir. So my first question is that in the PPT, it's mentioned 5,000 beds target by three years. And you just mentioned five years, is it three or five? Also, just second part of that question, we have like one big cluster, which is Haryana in Delhi, and second would be UP and MP. So are we targeting any more clusters, another cluster to add, or are we going to add beds in this cluster only?

So, I think, yes, definitely the roadmap ahead is to, you know, double up its capacity. In fact, our announced capacity, which includes the Guru Gram and the non-field expansions at Great Noda and Nord Extension, is, you know, already upwards of 3,200 bits. So, from there, if you look at the 5,000-bit capacity, we feel that, you know, we would be even reaching it much earlier than the three-year announced target. This would be primarily, you know, within the not, you know, the cluster that you mentioned, yes, but, you know, we are also evaluating different clusters. One thing that, you know, we have done in the past, we have usually formed a cluster. So it's not a standalone independent assets, you know, we have gone, we have also leveraged the benefits by, you know, adding assets within that surrounding, similar to what we have done here. So, I think even, you know, we feel Gurugram is still, you know, a huge cluster for us to further explore. And, you know, a new cluster, obviously, you know, within the north, we identify. I think UP has certain cities where a good cluster can be formed. So, I think we would still stick to the areas we very well understand, which is the north, the Delhi NCR, and the metro cities in the states that we operate in.

And these will all be higher average bed pay, right?

Yes, so RPOP would be much higher than the group average. In fact, the newest of hospitals which we are doing is already clocking close to 50,000 rupees RPOP. So that's clearly the strategy even going forward.

No, will it be more than 50K or mostly 50K?

Around 50,000.

Okay, just my second question quickly. So we are focusing on improving pair mix. So I think we're focusing on international mix as well. So if you could just, you know, talk about a bit on that, and what kind of benefit are we expecting to get from that? Like, if you could just quantify on this.

Yes, so, yes, definitely. We are working on how to improve the care mix, and that's the reason if you see, in fact, there's a deep of, you know, a few percentage in node accidents and occupancy. This is totally as per expected, and because we wanted to just check the, you know, government business, and that's our thought process. Yes, international concerns, so the various activities we are planning. In fact, this quarter, I think five OPD centers, I mean, the information centers we are planning in the various countries like CIS or African countries. We have posted our very senior marketing person also in African regions. So, I think that they started showing the trends and believe that I think this will help in a better care mix as well as, you know, the IRPOP as well.

Even the new hospitals, you know, both the New Delhi model town and sector Faridabad 20 already are displaying this playbook. You know, these hospitals are close to 90% cash and private insurance business. So, we are able to demonstrate it. You know, Faridabad, we are glad that it has break even much before our target. But the weight has breakeven is also with less than 10% government business. So I think that the playbook is clearly evident and it's being reflected in all the new hospitals. And as the volumes of these two hospitals continue to grow, significant changes will also be visible at the group level pair mix.

Okay, sir. Thank you so much.

Thank you. The next question comes from the line of Akshat Mehta from Seven Rivers Holding. Please go ahead. Hello, sir. I'm Ardabin. Yes, please go ahead.

Yeah, so my first question was on the newer hospitals Delhi and Farida Bhaskar. What we've been seeing is the last two, three quarters, the occupancy has kind of stagnated around similar areas. I mean, when can we kind of see that occupancy go up in these hospitals? And what is the status of government and insurance requirements for these hospitals?

So, I think occupancy is not significantly increased. The reason, you know, why you see the numbers is because the occupancy is counted on different bed capacity. You know, earlier, not all the beds were operational. So, now, quarter and quarter, we are increasing the capacity, and that's where the occupancy is being counted upon. So, you know, the IPD volume's occupancy is definitely increasing. That's the reason why the revenue is quarter and quarter increasing there. As far as the impandements are concerned, I think a lot of impandements are already completed in these two hospitals. So it's not that, you know, we're waiting for government impandements and only that's why the government business is low. Even though we have a majority of the government impandements already, you know, we are sticking to our playbook of not increasing the government fare in these hospitals. And, you know, specific numbers, if you can tell them about the occupancy and the best counted in Fridawan, different to what we were counting last quarter.

So, if you see about it in Delhi, the census bed is 150 on which the occupancy has been counted in this quarter as compared to the handed beds in the last quarter. So, that's the thing. The overall percentage is impacting in that manner. However, the census bed at the new Freedabad hospital has been increased from handed bed to handed census bed. So that's the overall thing that we have added, 160 bed, a new census bed in this occupancy accounting in this quarter.

Okay. So, my second question was on the Delhi hospital overall. So, we started the hospital around 3-4 months before we did the Fahidabad hospital. And if you see after almost a year, so that hospital in terms of scale-up, in terms of occupancy, you know, has been kind of slower than the Fahidabad hospital. So, what is the strategy there to kind of achieve and then kind of, you know, grow from there?

So, I think Delhi Hospital in Model Town is, as per our guidance, we are quite happy with the way it is progressing. In fact, you know, it's not that, you know, the numbers are slow there. It's just that Faridabad 20 has overperformed than our expectations. We were thinking of Faridabad sector 20 to be breaking around 12 to 14 months, but it has broken even earlier than we expected, around nine months, right? Right. As far as Delhi is concerned, we are sticking to our guidance. We expected that hospital to break even around 15 to, you know, 17 months. And it will 100%, you know, it's on track for that is concerned. So we're quite happy with the way Delhi is progressing. I think we're quite happy with the RPOP and the monthly revenue run rate that it has reached. And the same strategy is that, you know, similar to what we're following in the Sridwar, we're following in New Delhi, which is, you know, having one of the most reputative doctors in that area, having star doctors. You know, having a strong brand recall and community connect in those areas with strong, you know, visibility within the communities. So I think both hospitals are progressing on the right track.

Okay. So, if I can ask one more question, sir. On the Agra Hospital, now since you've reached 90% occupancy, are we planning to operationalize the other census beds as well out of the 250 beds?

Yeah. As of now, on 250 bed capacity, we are running on the census of 110 beds. And we are planning to the stage of increasing the census bed capacity to take the full leverage of the occupancy

in the coming quarters. I think the census beds in Agra will definitely increase, and I think there is definitely much room headway for Agra Hospital to grow in terms of the numbers are concerned.

Okay. Thank you, sir. Thank you. The next question comes from the line of Nishita from Sapphire Capital. Please go ahead.

Oh, yes. Hello. I just want to understand this 3200 beds that we are targeting, by when is this going to be operational?

3,200 beds is announced capacity. So, you know, what we mean by that is it's already under our position. Only a bit of construction is left. So, it includes a 250 beds in Gurugram, which will be live in the quarter one of the new financial year. And it includes around 450 beds of Brownfield addition in the two Noida cluster hospitals, which will be live in, you know, somewhere around next 15 months.

Okay, so the NOIDA cluster will be operational in the next 15 months.

Yes, if you start getting operational, maybe, you know, out of 450, 200 beds would be earlier, and 250 beds will be probably in 18 to 19 months.

Okay, okay, understood. So, that still is not. So, what is our current capacity? It's, I think, 2800, right?

So, 2800 capacity includes the new acquisition of the Gulao. As I said, that has to be happened in quarter one in the next 20th year.

Okay, okay, I understand. Yeah, and my next question is, so we've had quite a good revenue growth in QMF by 25 or 51%. Do we expect this growth to continue? What sort of growth can we see for the full year FI 27?

So, I think for the full year FI27, you know, we are on track for the guidance that we've already done, you know, as far as not just revenue, even the revenue EBITDA and the PACT numbers of what we're guiding for 27, you know, we will be, you know, on track for that. And I think certain parameters we will also, you know, if things continue on the ramp up, if expected, I think we should be surpassing certain of our guided targets. So, I think, you know, the company is on track to meet our guidance.

Right. Can you reiterate the guidance? I'm actually attending the call for the first time.

I think we have said that last year we grew 37% YOY. As you can clearly see this year, we will easily surpass that growth, even the EBITDA's concern. I think companies on track close to upwards of 24%, you know, ELB EBITDA margin for the full F527 is concerned. And I think similar is the, you know, ARPOP growth and the FAT parameters.

Right. So, for growth, we can expect around 10-15%.

I think 9-10% is the right estimation to be taken.

Okay. Understood. Yeah. Thank you so much.

Thank you. The next question comes from the line of Prinita from Redis Rock, Capital Limited. Please go ahead.

Hi, am I audible?

Yes, please go ahead.

Yeah. So, could you please walk me through how the quarterly revenues arrived from the RPOP, occupancy, and bet count? When I back-calculate using these three metrics for the last few quarters, I'm getting a number higher than the reported revenue. I just wanted to understand if there's a component that I'm missing in this calculation.

So, if you see about this quarter, with the ARP of nearly 35,000, on the census bed of 18 and 20, with the occupancy of 68%, you will be able to arrive to these numbers. When we calculate the ARP, it includes the total revenue, IPD as well as the OPD revenues.

Would you not recommend doing it for every single hospital separately, or just one for the complete chain of hospitals?

So, I can give you the occupancy percentage of each of the hospitals. If you see about redout, the greater NODA hospital having an occupancy of 74%, NODA 110 sector have an occupancy of 91%, NODA extension having an occupancy of 56%, FREEDAWARD sector 88, that is the greater FREEDAWARD, having an occupancy of 63%. Prida was new hospital having occupancy of 49%, Moral Town Daily having occupancy of 29%, Agra having occupancy of 89%, and Hansi have occupancy of 91%. But to emphasize here, the census bed capacity has been 1820, which in the previous quarter was 655. So, it has increased by 175 beds. However, as we said, there is enough headroom to increase the sensor bed capacity to build up the case to 2,555 among the existing hospitals.

Could you also highlight the ARPAB of each of these hospitals, please?

Yes, you agree. So, Greater Noda Hospital having an ARPAB of nearly 43,000. Noda Extension Hospital have an ARPOP of more than 50,000. Noda Hospital having an ARPOP of 35,000. Greater Fridabad Hospital having an ARPOP of 35,000. New Fridabad Hospital having the ARPOP of nearly 40,000. Model Town having an ARPOP of nearly around 50,000. Agra having the ARPOP of 27,000. And Jhansi Hospital having an ARPOP of 13,000 nearly.

Okay. All right. So, just to clarify, it would be better to look at all the hospitals together when we are calculating the RPOB occupancy and bed count when we are calculating the revenue instead of each one of these hospitals. Is that correct?

Yeah, when we calculate the hospital occupancy as well as the percentage, overall, the drivers comes to the overall occupancy percentage, and with the blended ARC, we calculate the kind of the performance of the exemplary drivers.

All right. Done. Thank you.

Thank you so much.

Thank you. The next question comes from the line of Ashish T from UTI. Please go ahead.

Hi, thanks for the opportunity. So excluding this model town in Faridabad, EBITDA margins are pretty high at 28%, but obviously including the losses, they are lower. When do you expect the new assets to fall in line and possibly when shall we start clocking 26-27% EBITDA margin again?

So, I think if we talk about these two specific hospitals, as we said, for example, it's already broken even, but EBITDA drag is there, right, because I think the EBITDA margins there would be around 4% to 5%. So, it will take, you know, some time to catch up to the, let's say, a 20% EBITDA margin. Model Town, we are expecting it to break even, you know, somewhere around between Q3, Q4 this year. So that will also, you know, reduce the drag on the EBITDA. Both these two hospitals from here, you know, we are targeting, let's say, in around 15 months, once they get break even, you know, the EBITDA, there could be somewhere around 15 to 20%. However, at the group level, even though, you know, that will significantly reduce the drag, We might have new hospitals continuing to start, you know, so in 15 months, Gurgaon will also be live. So, I think the EBITDA drive from these two hospitals will shift to Gurgaon as well as certain other acquisitions that we do going on. But however, you know, as we said, these two specific hospitals will be in line within 15 to 18 months after the break-even. And at a group level, even with the new additions of the continuing EBITDA drag of all the upcoming new hospitals, we would still be, you know, closer to 24% of the EBITDA margins.

If you see the kind of a performance we have delivered and demonstrated at the Agra, when we bought and started the operation at the Agra, it having a beta percentage of 11% yearly. Now we are already reaching much near to around 24%, 25%. So that demonstrates the kind of a performance and the turnover of the kind of a performance of our group.

Hmm. And obviously, we are adding new assets. We are planning to double the bed counts to 5,000. So in the overall scheme of things, as we go ahead over the next three to five years, you know, I specifically had a question on this panel recommending, you know, limiting the hospital room charges to three-star hotel. Would you be worried about such recommendations? And if not, so what's your view on this? Some color would be very helpful.

Yes, sir, recently got this news. So, I think there's a recommendation about the stealing of the, you know, room rent. So, as of now, there's no comment, but see, price increase. There are various reasons and various factors on this slide. So, how this entire ecosystem gets managed, that's very, very important. Also, now, we don't want to comment on it. As industry moves on, when we receive some frameworks, then probably it will be appropriate for us to comment and see that.

Also, see, it's something not for the first time a certain recommendation has been discussed. There have been multiple incidences in the past where, you know, center or certain petitions have said to, you know, look at the room rents and the rates of the private hospitals. So far, you know, we've always seen that government, in fact, has always supported, you know, the growth of private hospitals. In fact, for the first time, after a lot of years, CJ's rates were also revised. So, we feel in the past, government has always backed the private sector as well. You know, I remember times when even the stent rates were capped for certain cardiac procedures, certain implants were capped for, you know, certain orthopedic procedures, as well as certain medicines. So, I mean, this has not, you know, and also possibly in the future, wouldn't cause a significant impact or something to worry about. In fact, you know, a certain optimization of the cost can be done. I think hospitals will do it. They have continued to do it and always done it in the past. But, yes, you know, going forward, we'll get more clarity on this. And, again, it's just a proposal. I think long way than, you know, even close to a certain part of it being implemented as a threat.

Perfect. This is very helpful. Thank you so much.

Thank you. The next question comes from the line of Satyam Kumar from AAA Holdings. Please go ahead.

Hi. Thanks for the opportunity. I have a couple of questions. First, Lexov, can you help me to understand, like, as I see, average length of stay of patient has been fallen below four days. I think this has been the first time when it's below four days. So, can you help me to understand, like, whether this is going to be new consistent below four days or how we should look at it? Is it one of? So, if you can help to understand on this part.

I think it is reflecting in the overall strategy of us when, you know, when the new hospitals are, you know, ramping up, the A loss in those new hospitals is, you know, lower than the group A loss we used to have earlier. For the pure fact that, you know, there is very less percentage of government patients in these new hospitals, government patients typically, traditionally tend to have had higher A losses, you know, Because they come for critical care, they come for a lot of medical management procedures. So I think as the new hospitals are ramping up and also being reflected in the higher arc of growth in the new hospitals. So I think it's a reflection of that. And I think going forward also, I think it should be closer to the numbers of the ALOs that we've had this quarter.

And to add on, the way we are moving towards the surgical mix in the new hospitals is actually demonstrated upon lowering of the LOS overall from lesser than code. Peace.

Understood. So, apart from this, like, how do you see competitive intensity with regards to your Delhi Model Town Hospital? As I understand, I think 50 new sensor-based beds have been added in Model Town Hospital. But overall, how do you see this competitive intensity and how you are seeing that you can increase your rates for procedures or any new procedures you are adding to that hospital since it is in the end of the stage?

So, Delhi, the area where we operate, there are two-three vehicles that are there within the range of, you know, 10 kilometers, but I'll tell you the, you know, Delhi population moves within 2-3 kilometers of range, and the area where we are is very densely populated and very affluent class are there. So, it's a huge opportunity for us to have a complete tertiary or quaternary care facility. In fact, very soon, we're going to have, you know, entire spectrum of oncology treatment, also the transplant program. And, of course, team is working on, you know, still onboarding the few eminent doctors on various facilities. So, I believe we were confident the way Delhi is coming up. And as you stated, within, you know, 15 to 16 months, Delhi will be an operational break-even. And then the thought process in Delhi is that to take it up absolutely, you know, different level as a setting up a complete quaternary care center in that region.

And so, just a couple of bookkeeping questions. So, can you share pair mix for this quarter?

The pair mix is, you know, government pair mix is close to 40% for the overall company for this quarter. Obviously, you know, as I said, in newer hospitals, it is close to, you know, not more than 10% of the government business there.

Sir, has the government mix increased? Because last quarter, what I remember, the insurance and cash were 32-32, and that means government was 36, and now you said 40. So has government mix increased?

So, the volume has not increased. I think the impact is 1-2% of the price revision of the CJJ's rate that the government did recently. So, because of that, I think there would be an increase of around 2% odd in terms of the overall revenue of the government business, but the volumes are constantly decreasing quarter-on-quarter for us.

So, that's why ALOS has decreased. Understood. Okay. And so one last question, if I can squeeze in. This is the last one. So just one thing to understand, PET margins have impacted severely. So any one-off or anything you would like to highlight the way we should look at PET margins going forward? Because it has been severe deep. I understand we are in a ramper phase, but no new hospital has been operationalized in this quarter. Yet census beds have been added. So how one should look at the PET margin going forward?

So, if you see, if you see now, so we are adding hospitals. Okay. So, this year we have planned to add a Gurdugam hospital. Okay. So, so there is a pressure of our interest cost. This, this only will, will add up to the FED margin. That's it. There is no other impact. If you see, what the guidance we are giving for the EBITDA, we are touching across 24 to 25% EBITDA margin as per the guidance.

So I think it's, yeah, so I think it's because we have done certain high capex over the last few months as far as the acquisition of Gurgaon and the construction is going on. Also, we have, you know, recently ordered for oncology machines for both Faridawad and Model Town. So a lot of capex has been done in this quarter, you know, and, you know, a bit of a bandit increasing since FY26. So that is why the interest cost is higher for that. And going forward, obviously, this will stabilize, including the depreciation, which was quite high for quarter one.

So further more pressure on the margins or like this is the range we should expect going forward for near term at least?

I think the pressure should decrease from here going forward because this much, you know, high capex is not being planned anytime for any of the coming quarters soon.

Got it. Got it. Very clear. Understood. Thank you.

Thank you. The next question comes from the line of Disha Parak from SUNY V Securities and Finance Limited. Please go ahead.

Hello. Am I audible?

Yes, please go ahead.

Yeah, I had two questions. Could you help us understand by when the recently acquired units are expected to turn margin negative and start contributing positively to overall profitability?

So, I think we've already mentioned that as far as operational break-even is concerned, Faridabad Sector 20 has achieved it in this quarter, and Modeltown Hospital is on track to achieve it, you know, somewhere between Q3 and Q4 of H2. And we have also just said that, you know, in 15 to 18 months, we do expect, you know, after break-even, the hospitals to reach around, you know, 15 to 20 percent of EBITDA margins. So I think the EBITDA bag of these hospitals will only reduce from here on. And, you know, the margins should expand further, because even technically, Gurgaon Hospital will still not be live for the remaining of this financial year. So that's why we feel the pressure on the margins would reduce from here on.

Okay, and my second question was, separately, we have noticed the occupancy rate at the New Delhi unit remained on the lower side. Could you share the underlying reason for this? Like, was it driven by specific demand generational challenge or any other, like, operational factors at play?

I think it's a repeat of the earlier question. As we mentioned that the occupancy counted on Model Town of the number of beds, those kinds of beds have increased in this quarter. So, technically, occupancy has also increased. It's not decreased. That's one thing. Second thing is, you know, it is pretty much on a line as far as guidance is concerned. We're quite happy with the progress. We're quite happy with the pair mix and the high ARCO. Of course, sector Faridaba 20 has outperformed and, you know, overpassed their expectations. But Model Town also will be in line in the coming quarter as far as break-in is concerned.

Okay, thank you so much. That will be it.

Thank you. The next question comes from the line of Vidisha from CRK. Please go ahead. Vidhi, can you hear me? As there is no response, we will move on to the next question. The next question comes from the line of Vedant Kabra from AVN Capital. Please go ahead.

Sir, congratulations on a wonderful set of numbers. I just had one question on the margin front. You've given break-even per hospital, but I wanted to understand the group-level picture. Now, given that Model Town is guided to break-even in H2 and the other new hospitals are still ramping, at what point do you expect consolidated EBITDA margins to converge back to the 28% mark? Is that an FI28 exit story?

I think there's never been a guidance for us at a consolidated level, the EBITDA margins to be 28%, because, as we earlier mentioned, that we'll continue to add new hospitals. So, once New Delhi and Faridabad 20, you know, are contributing significantly to the EBITDA margins, there would still be Gurugram, which is going live. Then there's a few more acquisitions, which will be happening in the coming years. So, you know, we have always mentioned that I think upwards of 24% is what we are targeting for the EBITDA margin this year. And I think going forward, yes, a percentage up or so in a few years is expected, but we are not targeting a 28% EBITDA margin anytime soon, even at the consolidated group level.

So, sir, if you could like give a quantification on the possible operating leverage, for example, for a hospital like Faridabad sector 20 that just hit breakeven, as it goes from today's occupancy to say a mature 70%, roughly what incremental EBITDA margins do those additional patients carry?

Okay, so we will add our, so let's say whatever the occupancy in the hospital is working right now, okay, so incremental EBITDA, let's say we talk about the 70% occupancy, incremental EBITDA will be around 20 to 23% EBITDA.

Okay, okay, sir, got it. And sir, on the KPEX front, now that we want to go to 5000 beds, what new geographies are we looking at and do those geographies also have higher up of like the Gurugram branch?

Yeah, that's pretty much the strategy ahead that, you know, we will be looking for, you know, metro cities and, you know, big cities where the potential to reach 50,000 ARPOP is there. We are identifying assets. We feel that there is. There's still room within the NCR market and within the cluster where we operate to further add more beds there, as well as, you know, identify new clusters or new metro and big cities. You know, let's say UP has been coming up very well as far as that is concerned. There's capital cities of, you know, Rajasthan and Haryana still has huge potential. And that's what the upcoming AGS4 expansion could be.

Okay, okay, sir. Got it. That's all from my side. Congratulations once again and all the best.

Thank you. The next question comes from the line of Anuj Kashyap from A3 Capital. Please go ahead. Hello, good morning, team.

I'm Audible.

Yes, please go ahead.

Sir, I wanted to know, sir, what is the attrition number regarding the doctors and the anxiety staff we have? Do we keep the record of it?

The production rate of nearly 7% overall at a group level.

As even at the senior level. Go on, go on.

At the senior level, I think the attrition, as far as, you know, senior doctors is concerned, it's even lesser than this because, you know, yes, there is certain, you know, movement of doctors, especially within the NCI, which is happening. But in terms of the total number within a unit of the hospital, that's very less that that moves. So I think attrition within the senior doctors is not even, you know, three to four percent. And at the overall doctor level, it is seven percent. And it's come down significantly for us, by the way, in the course of a few years, because now we're doing, you know, D&D courses where, you know, let's say even a junior doctor tends to stay in the hospital for three years as part of his degree. Earlier, we were not having these programs, so we used to have a lot of, you know, JRs, SRs, which constantly move. So today that has helped us to reduce our overall doctor attrition of close to 7%.

That is good for us. Sir, why I was asking this question, sir, because we have come with an option for ESOPs for our, like, senior teams or the doctors. Sir, what is the right way of, like, keeping the team intact? Like, how, how we thought that an institution rewards his doctors? That's the way of, it is basic monetary or, like, ESOPs or something else it is. What works for us?

So I think ESOPs is definitely something that we recently started, which, you know, does help in it. Because, you know, sometimes, you know, a lot of star talent within the clinical and non-clinical, certain people are already on ESOPs within their other organizations, right? So it's today, age and age, it has become a necessity rather than, you know, a must to have, to attract and also retain top talent. Also, it's not always about monitoring e-stops, you know, what also helps us to retain star and clinical doctors. You know, it's about just pure freedom for them to, you know, govern the departments and practice the way they want. You know, there's no typical P&E pressures, you know, on certain of these doctors, which is quite contrary to, you know, the other organizations within the regions where we operate. So, that does help us, and we always pitch to doctors ourselves as a very doctor-friendly organization, which easier said than done. It does mean a lot to doctors and clinicians of the level and the respect that they deserve, and it does help us in philosophy to also retain them for a long time.

Thank you. The next question comes from the line of Akshay Shindeh from Centrum Brokane. Please go ahead.

Thank you for your opportunity. Congratulations on strong Q1 performance. My question for the new hospital. The new hospital is currently operating at an hour per hour for the first 30,000 of the hospital. We have two beautiful questions internationally, so I'm sure that this is very interesting. Sorry to interrupt, ma'am.

As your voice is not clear, may I request you to please use a handset. No man.

And audible? Is it clear?

Yes. Yes, please go ahead.

Okay, okay. With respect to the newer hospital, which is now RPOB is around 40,000 to 50,000, and going ahead, the initiative is like focusing on international patient flow, addition of advanced technologies such as LENAC. How do you see the RPOB evolving over next two to three years?

I think we have maintained that ARPOP will continue to grow somewhere between, you know, 8-10% YOY from each year. We are well on track for that, and, you know, that's also expected for this fiscal year.

Okay, and additionally, what EBITDA margin level do you expect these hospitals to achieve by FY28-29? Most of them are at EBITDA break-even level.

Yeah, so I think within two years from today, I think new hospitals should be even upwards of, you know, 25% of EBITDA margin, somewhere around 26-27%, you know, just like our, you know, existing, you know, matured units. And, you know, we're quite confident of achieving it with the performances that we've already seen, you know, from the recent quarters in these new hospitals. I mean, AGRA is already close to 20% to 23% of EBITDA margin. So, there, it would be even much earlier than the two-year number that I just said.

Okay, and this strong growth from the newer hospital, can we take as a new base and expect to continue going ahead?

Yes, I mean, there's still a long runway to grow because, you know, there's huge occupancy ramp up, which yet remains. You know, these are good capacity hospitals. And, you know, each year, at least we are going to add one new hospital. Guru Brown will be live very soon. So I think we want to continue with this momentum and still continuing to deliver on the high KPIs of higher RPOP and low come and mix for all these new hospitals.

Understood. And lastly, do you want to give any revenue growth guidance for FYI 28-29 years?

I think, you know, what we said that, you know, this year will definitely, you know, be upwards of last year's revenue growth, and I think that also should be sustainable for the upcoming years ahead of that.

Understood. Thank you very much. That's helpful, and all the best.

Thank you. The next question comes from the line of Prerna Amanna from Equity Research Program. Please go ahead.

Yeah, hello. Am I all good?

Yes, please go ahead.

Yeah, yeah. Hi, sir. Congratulations on a great set of numbers. So, my question was, you had given in last quarter's PPT that you have a target to reach 5,000 beds in the next three years, that is by FI29. So, can you confirm the same, or are you going to increase the timeline to operationalize these beds? Like, will it be five years, or will it be three years, that is by FI29?

I think it should be even less than three years. So, you know, we did mention last time around three years. So, we also mentioned that we will be, you know, surpassing that target much earlier as 3,200-bit capacity is already visible and it's already announced. So, I think the remaining capacity would be much faster. We've always, you know, in the past, you know, achieved in lesser time the capacity expansion that we have planned. So definitely it would be lesser than, you know, three years. Probably somewhere around two and a half years, I think, would be the right estimation.

Okay, well, that's impressive. And the other thing is, are we going to see any more acquisition in this year?

We are in talks for certain assets. We are in talks for certain good and premium assets with good and high artwork potential. We've always maintained that it's not just the geographies that we want to stay in, but also typically in the cities where we operate. You know, we tend to have largest capacities in those cities, and, you know, in Agra, when we went, we acquired the best infrastructure of that city, so is the Jhansi Ocha Hospital, and also at NCR, all institutions have been on that playbook. So, we are in talks right now for capital cities within nearby states. We have always said in the past that we like to add one new hospital at least each year. So, on that basis, I think this financial year should see an addition of one new asset.

Okay, sir. Thank you so much.

Thank you. The next question comes from the line of Virat Panisuriya from Skyridge Wealth Management. Please go ahead.

Hello, am I audible?

Yes, please go ahead.

Yeah, so over the last three years, your capex per bed has gone up from 30.7 lakhs to, I guess, 61.4 lakhs. So I just want to understand what was the reason behind it and what should we project the capex per bed to be for, let's say, for the next 1,800 beds that we'll add.

So, 1,800 beds that we're going to add, I think the capex per bed should be around 75 to 80 lakhs capex per bed, which includes the greenfield, the brownfield, the acquisitions. It also includes certain, you know, lease-based asset light, you know, models that we are in talks with. In the past, why, you know, it was much lesser? See, those were the times when, you know, certain of these hospitals were not even fully equipped with the high-end oncology machines or all the equipments started off small, so these hospitals slowly ramped up in capex. Even the land of the Noida Cluster hospitals that we purchased was way back, and the prices were much lower. The registered prices today in the cities where we operate has, you know, extraordinarily grown. If we are to construct a same hospital today that we did in Noida Cluster around, you know, 7-8 years back, I think it would cost us similar to, you know, this amount of 75 to 80 lakhs capex per bed only. I mean, Guru Ground we are constructing, and that's almost a 1 crore capex bed for us. So, I think that this is the reason, and obviously, it's the equipment and the higher land prices and also the scale and size of the hospital. Today, that's what the brand deserves is the reason for this higher CapEx for wear.

And so, what would be the mix of equity and debt structure going forward for the remaining CAPEX that we have?

May I request you to please rejoin the queue for any follow-up questions? Thank you.

I will be giving the answer. I would like to give the answer on that front. See, if you see about the debt, we have a debt in our books in the March of nearly around 210 crores, which is now being increased to around 300 CR. Basically, it has increased because we have partly taken the acquisition fund from the debts around 80 crores. However, the rest of the money we have paid through our internal acquirals, so that has been utilized in that fund, And we believe that going further, we will be utilizing our internal accruals towards the acquisition and maintaining the maintenance as a gross capex, which serves the requirement in our existing hospitals.

As far as, you know, we are quite comfortable with the debt. You know, we still have long, you know, room to take debt. I think somewhere around, you know, 2x of the training last 12 months EBITDA at a group level, You know, we are comfortable with that debt level even in the times ahead. So I think we have enough, you know, internal referrals, we have cash, we have debt to fund easily the capex for this 1,800 bills remaining.

Thank you.

Thank you. Ladies and gentlemen, you are requested to restrict your questions to one question per participant. I repeat, you are requested to restrict your questions to one question per participant. We have the next question from the line of Bhagwat from Prosperity Wealth Management. Please go ahead.

Thank you for the opportunity. Just one quick question. So, first of all, in the addition of the assets from the recent acquisitions, what should be the expected decision for current year? So, do you expect to stimulate the Q1 number to continue for the year?

So, if you see the definition around 29 to 30 TR, okay. And the same trend will maintain. So, as in when we edit the global facility, then there is a marginal increase in the definition at a group level, group consolidated level. So, the trend we are projecting right now is around 29 TR for a quarter.

And that we expect to continue for the next three quarters of the year.

Yeah, yeah, yeah, for next three quarters because we are not going to add Gurgaon in this financial year. Okay. It's more or less close to the March or the first quarter of the April 20th, 28th. Okay.

Okay, and that picture says that we have around 1,200 plus. So, this is the expected depreciation, right?

This one? Can we repeat the question?

In the balances, so we have around 1,200 crore fixed assets, considering the recent acquisitions. So, considering that fixed asset, the estimated depreciation may be around 29.50 per quarter.

Yeah, 29.50 per quarter.

Okay.

Including the current year acquisition.

Okay, right. And the increased cost is going to continue, similar that we have in Q1. For the year?

So, if you see, so if you see, so we have reported around the interest cost of last quarter is 5 CR. This quarter, we have reported around 6.6 CR. Okay. The same will continue as we are not going to take any fresh loan further.

Okay. Thank you for that.

Thank you.

Thank you. We will take the last question from the line of Vicky Bhagwani from Guardian Capital. Please go ahead.

Hello, sir. Congratulations on a great set of numbers. I had two questions. First, if you could please share progress on brownfield expansion in Noida, extension in Greater Noida in their timelines, please, if you can reiterate.

I think the Great Nordic construction, you know, is up and kicking. The architecture drawings and the maps have all been approved. You know, as you can understand, in Delhi and Sierra, monsoons are happening right now. So, you know, the construction is just a bit delayed due to the rains. You know, as soon as that season ends, you know, the construction will be fully back live. Similarly, the trend for Nord extension, we are evaluating all the final drawings and the structure layout. We feel, as mentioned earlier in the call, somewhere around 15 to 18 months, the capacity will start coming live for the ground-field capacity expansion.

Great. Thank you. So, second question was, are other expenses as a percentage of sales has increased? Is there some one-off, because as gross margin costs have declined but other expenses have increased, is there some one-off for change in accounting practice?

So, you are discussing quarter Q1. So, if you see, our doctor cost has been increased by 2%. That's the only change. If you see, there is only change of 2% quarter on quarter. And that is only because of the doctor cost. It is a component of other expenses. Yeah.

It is specialist charges that you pay.

Yeah, yeah. It is specialist charges. We haven't generated doctors. Okay.

Okay.

Thank you so much. Thank you. We will take that as the last question, and I would now like to hand the conference over to the management for closing comments. Thank you, and over to you.

Thank you, everyone, for your questions and attending the earnings call of Yathath Hospital. Thank you.

Thank you. On behalf of Systematics Institutional Equities and Yathath Hospital, that concludes this conference. Thank you for joining us, and you may now disconnect your line.