Fortis Healthcare Limited (FORTIS) Q3 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Forties Healthcare Limited Q3FY26 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Anurag Kalra, the Head of Investor Relations, for the opening remarks. Thank you, and over to you, sir.

Thank you, Alaric. A very good morning, good afternoon, ladies and gentlemen. Welcome to Fortis Healthcare's Q3 FY26 earnings call. The call is being led by our MDNCO, Dr. Ashutosh Ragovanshi. With him, we have RG Financial Officer, Mr. Vivek Gowell. From Agilis Diagnostics, Mr. Anand, the CEO, joins us. Along with him, we have Mr. Akshay Tamad Tiwari, the CFO. We will start with some opening comments by Dr. Raghuvanshi, post which Anand will take you through the highlights of the diagnostics business, and then we can open the floor for questions and answers. Over to Dr. Raghuvanshi.

Thank you, Anurag. Good morning, everyone, and thank you for taking the time to join us on our Q3 Financial Year 26 earning call today. I wish you all a Happy New Year and hope all of you are doing well. I shall dive right into the quarterly results and my thoughts on the business performance and way forward. Our business performance in Q3 has been good considering the seasonal impact of festivals in some of our key geographies. Both our hospitals and diagnostic businesses witnessed a sustained growth momentum and delivered margin expansion compared to the corresponding quarter last year. For the quarter, our consolidated revenues were at INR 2,265 crores, suggesting a growth of 17.5% over the corresponding previous period. Our hospital business revenues grew 19.4% to INR 1,938 crores, while the diagnostic business net revenue reported a growth of 7.3% to INR 327 crores. Our consolidated operating EBITDA increased 34.8% to INR 505 crores, which translates into a margin of 22.3% in Q3 financial year 26 versus 19.4% in Q3 of financial year 25. The hospital business operating EBITDA margin have improved from 20% in Q3 of 25 to 21.7% in Q3 of financial year 26, with an EBITDA of INR 420 crores. Our consolidated profits before tax, before exceptional item for the quarter, increased 21.9% to INR 312 crores. Reported PATH stood at INR 197 crores versus 250 crores in quarter 3 of 25. The decline in PATH was primarily due to the one-off expense for the quarter, INR 55 crore pertaining to new labor codes, offset by a reversal of impairment in an associate company amounting to INR 9 crore. This resulted in net exceptional loss of INR 46 crores. Coming to the nine-month performance of financial year 26, our consolidated revenue stood at INR 6,763 crores, registering a growth of 17.1% versus nine months of financial year 25. Operating EBITDA increased to INR 1,553 crores, reflecting a robust 300 basis point improvement to 23% compared to 20% in the corresponding previous period. Hospital business revenue for nine months grew 19.1% to INR 5,749 crores, while the operating margin improved from 20% to 22.2% in the corresponding previous period. On the balance sheet front, the company's net debt stands at INR 2,547 crores, with a net debt to EBITDA of 1.24x as on December 31st, 2025. As due to the fund raised to part finance the acquisition of PE stake in Agilis Diagnostic by the company, acquisition of Fortis Brand and Trademark, and acquisition of Shreeman Hospital Jalanda. I am pleased to announce that we continue to progress well on our cluster-based inorganic growth strategy. To that effect, in January 2026, we acquired the 125-bedded People Tree Hospital in Yashwantpur, Bengaluru for INR 430 crores. This was done through a 100% acquisition of TMI Healthcare Limited, private Limited, along with the underlying land, building, and an adjacent land parcel that enables future expansion to over 300 beds within the same location. With growing awareness on mental health in November 2025, the company launched Adayu, a 36-bedded specialized mental health care facility located in Gurugram. This facility offers evidence-based treatment through a multidisciplinary approach to deliver comprehensive, compassionate, and world-class care. Our bed expansion plans are progressing well. During the year so far, we have added approximately 750 operational beds, including the Bangalore acquisition and the Adayu facility. The bed addition also accounts for our Jalandhar acquisition, Greater Noida lease facility, and expansion in our existing facilities, including Maneser, Noida, and Faridabad. A bit of flavor on the hospital business, hospital occupancy in Q3 financial year 26 remains steady at 67% compared to the same period last year. However, the number of occupied beds increased 14% to 3,189 beds in Q3 from 2,790 beds in Q3 of financial year 25. Our hospital business recorded a 4.5% increase in RPOP, reaching 2.56 crores per annum. The growth in RPOP was supported by increased share of complex cases reflected in, for instance, a 52% year-on-year increase in robotic surgery. All of you, perspective of the hospital business for nine months of financial year 26, in 13 of our facilities, we have reported operating EBITDA above 20% during, and these 13 facilities together contribute 77% of the hospital revenues. In comparison, in 2025, we had 10 of our facilities with operating EBITDA margin above 20% and contributing 73% of the hospital revenue. Revenues from digital channels with the website, mobile application, and digital campaigns witnessed a 19% year. Digital revenues contributed approximately 30% to overall hospital revenues in Q3 of financial year 26. Coming to the diagnostic business front, we continue to witness year-on-year improvement in top-line and margin. Gross revenue grew 8.3% to IANA's 371 crores from IANA's 342 crores in Q3 of Q25. Operating EBITDA margin gross revenue stood at 23.1% versus 14.4%. On a like-for-like basis, excluding one-off, the operating EBITDA margin stood at 21.3% in Q3 of financial year 25, As part of our ongoing network expansion strategy, the total number of new customer touchpoints has reached 4,370 as of December. The revenue contribution from preventive portfolio has increased to 12% in Q3 from 10% in Q3, while the contribution from specialized portfolio has increased to 35% from 33% in the corresponding previous quarter. We believe our diagnostic business is further positioned to scale its revenue while sustaining healthy margins. With this, I conclude my remarks. Our business remains on track to maintain this growth. We continue to make strong progress across our strategic growth levers, which we expect will drive sustainable growth and further strengthen our positions in the healthcare sector. With that, I hand over to Anand for his comment.

Thank you, Dr. Govanshi. Good morning, everyone, and thank you for joining us today. On behalf of Agilus Diagnostics, I am pleased to welcome you all to our Q326 results conference call. During the quarter, Agilus reported gross revenues of INR 371 crores compared to INR 342 crores in the Q3 of FY25, reflecting an 8.3% year-on-year growth. Operating EBITDA stood at INR 86 crores, a substantial improvement from INR 49 crores last year, with margins at 23.1% compared to 14.4% in Q3 of 25. We conducted 9.9 million tests during the quarter, up from 9.6 million in the same quarter last year, reflecting 3.6% volume growth. Our B2C-B2B mix stood at 52 to 48, indicating balanced traction across both the channels. We also strengthened our network through gross additions of over 175 customer touchpoints, further improving accessibility across markets. For the nine-month period ending December 25, revenues stood at INR 1139 crores, up by 7.7% from INR 1058 crores last year, while operating EBITDA rose to INR 275 crores from INR 185 crores. Ebitda margins improved to 24.1% from 17.5% in the same period last year. During the 9-month period, we conducted 30.7 million tests against 29.6 million tests last year, supported by gross additions of 550-plus customer touchpoints across our network. We also expanded our network footprint meaningfully, adding 8 stat labs and 9 HLMs, Strengthening accessibility and coverage across both focus cities and emerging micromarkets. Growth across geographies and product lines remains well distributed, with routine, specialized and wellness portfolios all contributing to the momentum. Our preventive health and wellness portfolio continues to perform well, contributing around 12% to the overall mix, supported by growing customer adoption of preventive panels and corporate wellness offerings. The segment remains an important long-term growth driver, aided by the rising health awareness across the markets. This quarter, we strengthened our test portfolio with the introduction of CNS biopsy with Reflex to IHC, enhancing our capability and capacity in neuro-oncology diagnostics. The RA extended panel, offering a more comprehensive assessment for autoimmune disorders, and the acute leukemia panel, which supports faster and more targeted classification of hematological variculence. Our continued investments in automation, digital tracking, and workflow optimization have strengthened efficiency, turnaround times, and customer experience, alongside steady expansion in our specialized and genomics offerings. Additionally, we also installed the Illumina Noasic X at our global reference laboratory in Mumbai, significantly scaling our NGS capabilities in genomics and proteomics. This enables high-throughput sequencing across oncology, infectious diseases, reproductive health, and rare disease diagnostics. Overall, the Q3 reflects a notable year-on-year improvement in both growth and profitability, supported by disciplined execution, network expansion,

Thank you, Anand. Ladies and gentlemen, we shall now open the floor for questions and answers. May I please request the moderator to begin?

Thank you, sir. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one 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. Our first question comes from the line of Neha Manpuria from Bank of America. Please go ahead.

Yes, thanks for taking my question. The first question is on the Peopletree acquisition in Bangalore. How should we think about this facility? Because it's just a 190-bed facility. I think it's not fully ramped up now. So, you know, how should we think about three years in this facility and it moving to, let's say, mid-20s margin, and would it require additional investment, you know, to get to that mid-20% margin?

Yes, Nayad. Yes, so we have this facility, as Vivek had said earlier, is running sub-optimally at the moment, so it needs to be brought to quota standards. It would require some investment in that regard. The investment in the first phase is not very huge, but at the same time, And we are also going to expand the, start the expansion work for creating further beds so that the capacity can be taken to 300 beds. And that would entail some capex both in medical equipment as well as the civil infrastructure. So, over the next three to four years, we should see this as a high-end, 300-bedded, super-speciality hospital with all the modalities of treatment.

Mr. Agunji, Dr. Agunji, the 300 bed that you're talking about, so currently it's at 190 beds, and then you have the land, adjacent land, which allows you to add more capacity. So, essentially, we'll build out the new capacity in the adjacent land. Is that how we get to this 300 number?

That's right. That's right. We will be starting the construction pretty soon.

Okay. And in terms of, you know, doctors, et cetera, you know, hiring doctors, because Bangalore is another market which we are seeing a fair bit of, you know, capacity coming on board. So how do you think we are positioned to get, let's say, a full-fledged doctor team for a multi-speciality hospital that we plan?

Yeah, I think we are very positive about it. I think Fortis carries a good brand, and it attracts physicians in all different regions, and I don't see any talent in that regard.

Our experience of another

hospital which we had opened in Nagarbawi and ramping it up, that was also about a 100-bedded hospital. And that is, by the way, currently doing EBITDAs close to upwards of 25%. So we are pretty confident that we can attract good clinical talent in this micro market.

Understood. My second question is on the expansion. And if I were to strip out all the acquisitions we have done, including NOIDA, from the 750, I think the organic bed edition this year has been closer to about, you know, 250-odd beds, 250-300 beds. What would this number be next year? And other than the 200 beds in fMRI, you know, what would be the other large acquisitions, other large expansions that we should look at in fiscal 27-28?

Yeah, Neha, Vivek, this side. So, you are right. Still, first nine months, we could add 250 brownfield beds. There are some beds in pipeline for NOIDA, and that will further add 60 beds maybe probably in this current financial year, and next year, we can target around 400 plus beds in the brownfield, which majorly contributed by fMRI because expansion is almost ready. We are planning to commission by April.

Understood. And again, sorry to happen to the doctor point, given that, you know, we have two other large hospitals that will be coming very close to, you know, where fMRI is. Because, you know, are we, do we, I mean, is the doctor team fully equipped for this additional 200 bed that we will add? Or is that something, you know, we need to spruce up some, you know, speciality and you could see more doctor hiring for that?

No, no, we, doctor hiring is something which is an ongoing process and that keeps happening. But the current physicians only will be able to utilize this capacity very effectively because occupancy rates of this hospital have been typically high around it has been operating at 80% occupancy level. So we are pretty confident that we have the clinical whereabout and we have a very stable clinical team.

All right. I have a couple more questions, but I'll get back in the queue. Thank you.

Thank you. The next question comes from the line of Tossif from BNP Paribas Exfene Research. Please go ahead.

Thanks for the opportunity. First few questions on the O&M agreement with Glienegas. Can you call out the O&M fees for this quarter? And how has been the performance of Glienegas for last nine months? And also, where do you stand currently on the inclusion of Hombay Hospital in the O&M agreement?

Yeah, so we are in the integration phase for O&M. As you know, this has been started this quarter only. So we have earned 5 crore as O&M fees in the current quarter, and the revenue for this quarter for the, excluding Bombay is 172 crore, and EBITDA is Almost 3% after absorbing 3% yeast to us. So, that means this will be around 6%.

And what would have been the growth for 9 months for clinicals?

9 months growth is actually negative for the unit we are looking at. It is almost 4% negative. And there are a lot of disturbance. There are clinician attrition. Management team has also been changed. So all those actions have been taken. I think we will start seeing the result probably from the next financial run onward.

Okay, that's helpful. Second follow-up question of the recent acquisition in Bangalore. Can you tell us when you do plan to commercialize the adjacent land bet, additional bet? Is it something one can look at in the next 18 months or is it a plan for beyond 28, FY28?

So, it will be like a sort of brownfield expense like we do in our facility, which typically takes 24 to 30 months time, and Bangalore is a slightly difficult location, and that's why I'm saying 30 months time, because approval generally takes more time, but we will start the work immediately on that.

So, it's something beyond FY28, one should look at it.

Yes. But in the meantime, we will operationalize and bring operational efficiency in the existing beds.

Thanks. I'll ask you more questions. I'll get back in the queue.

Thank you. The next question comes from the line of Aman Goyal from Access Securities. Please go ahead.

Yeah, thank you. Thank you for the opportunity. Sir, my question is related to since we are experiencing in the aggressive expansion in the NCR region. So, to maintain our clinical talent in the region, are we seeing any higher MGs for these marquee hospitals or doctors? Are there any revised revenue share over the last 12 months?

So, I will say this is an ongoing process as Dr. Gwansi mentioned. This pull and push always remain, and we need to correct sometime, you know, the remuneration and takeout of the doctors. And that will be more than compensated by the revenue growth. As we know, companies in the growth phase, so little bit increase may not be affecting our margin that much.

Okay. Oh, sir, my next question is related to the Manesar facility. If we could throw some carer on the revenue occupancy trends and all.

Yeah, so Manesar is starting 15 crore per month revenue. And EBITDA side, it has already started contributing positive EBITDA. So, that way, Manesar is a good story for us, and I think here onward, it will start contributing more. We are starting the, we have already started the work for Oncoblock, and that will further add to the profitability of this unit.

Sir, the EBITDA margin is in the single digit, My last question is related to the, are you operating any facility above 80-85% and we are still evaluating the opportunity for the brownfield extension?

Yeah, sometime our unit hit 80%, like Salimar Bagh is one example, which very often hit 80% occupancy, and we have planned for expansion, we have got all the approval now, and we will start work for the Salimar Bagh immediately.

Okay, thank you, thank you, that's all from my side.

Thank you. The next question comes from the line of Sanjay Shah from KSA Securities. Please go ahead.

Yeah, good morning, gentlemen. Thanks for the opportunity and congrats on the great numbers. So my question was regarding, we see many new players are entering via asset light or PE back model. How we are prepared? How does Fortis differentiate itself? Is it in a clinical depth or doctor's ecosystem? How does Fortis differentiate itself?

Yeah, so I think one of the major differentiation is in terms of the kind of infrastructure we're able to provide, and there's a legacy of the institution, and there is an environment which is very conducive for clinicians to be able to practice effectively, and that's what probably makes us attractive. And we have a lot of involvement of physicians in clinical governance and broad policymaking as well. So that makes them feel included, and that's what makes it attractive for them to be a part of us.

My second question was regarding our international fashion revenue, which is growing steadily. And how scalable is this segment? And what investments is required to meaningfully grow in double digits?

Yeah, so, I mean, the percentage of revenue, this has been stable at about 8-9%, and somewhere as total revenue percentage. It has remained in that level, and it is likely to remain in that level, because the international traffic is subject to so many other geopolitical situations which are continuously evolving right now. So I think one cannot really bank on that. But what we are doing is that we are focusing on newer markets, especially the West, the East Africa, and also a little bit onto the Middle East and Central Asia. So those are the geographies which we are focusing on. We are doing direct marketing there and opening some information centers in these geographies to increase this.

The next question comes from the line of Karan Vora from Goldman Sachs. Please go ahead.

Thank you for taking my question. My first question is with respect to Glen Eagle. So, I think we highlighted the 5 crore number we booked, but is that the full quarters number or we were only able to, you know, book a part of it? So, if you can clarify on that one.

Yeah, it is almost full quarter, Saran, because we have started this in July somewhere, mid-July, so it is almost full. Got it.

And it will be included in our RPOP number, as in this will help improve our RPOP numbers as well, right, just from a calculation standpoint?

Yes, yes, you are right.

Okay, got it. And for Glen Eagles, like I think we've highlighted some of the challenges, but can you, you know, elaborate more on the challenges we are facing at Glen Eagles, at individual hospitals, and what are we trying to, you know, to tackle those challenges going forward?

So, I will say there are specific challenges for each facility, and it is not common for all. So, there are, but all the hospitals looking like have good potential. For example, Chennai facility, there are a lot of potential. There is an extensive plan, but I think execution is the problem. And last year was totally disturbed here. And I think, as I said, next Next year onward, it will start showing result. Similarly, Hyderabad, there are two facilities, and one is Laklikapul, and another is Alginagar. And Alginagar is also there a lot of potential. We are putting cancer there, cancer facility there. Lakalikapul is having a space constraint, and we are trying to tackle that problem separately. And as regards to Bangalore, there are two facilities, Kangari and one small facility. And I think Kangari is doing quite okay, but that other small hospital, a lot of work needs to be done.

Got it. And, like, the same management team which operates the broader, you know, Fortis hospitals or which looks after the broader hospitals will be taking care of this or we have hired any regional or some second layer of management which will look after this to fix all the issues at Glen Eagles?

Yeah, so this essentially falls into our largest structure. So, of course, we will have to strengthen it at the regional level, as you said. So, we have made some changes in some of the leaderships at hospital level. At the same time, we have appointed one or two people on the regional level as well. But the Bangalore cluster, for example, reports to the Bangalore cluster head who looks after the other Fortis hospitals. So, similarly, we have positioned everything into our common structure of Fortis.

Okay, got it. And last question is with respect to, you know, FY27 guidance. So, now that we are, you know, almost close to end of FY26 and we have pretty much meet or beat our, you know, guidance. Any qualitative color, do you think 20% kind of a top-line growth is possible for FY27, and can margins improve, say, 150 basis points more, or any color around that will be helpful?

Yeah, so I will say you have seen that the company is in the growth trajectory, and it is also showing improvement in the margin. We feel there is still scope for margin improvement, especially with the brownfield expansion, we have discussed one of the question on the next year brownfield expansion, and that brownfield is coming in one of our premier facilities, SMRI. So, we expect you will continue to see the growth trajectory what we are seeing in the current financial year at least for two years.

Any number or range you can throw if possible?

It will be very difficult to give a specific number. You can understand. Okay, thank you.

Thank you. The next question comes from the line of Vivek Agrawal from Citigroup Global Services. Please go ahead.

Thank you for the opportunity. So, just want to understand as far as the hospital business is concerned, if you can break down what is the growth in existing unit and how much has been contributed from the new unit. Thank you.

Yeah, so the acquisition which we have done, the Jalandhar and this greater Noida, that has contributed around 4% of the revenue growth, balance is all from the existing units.

Understood. And how the margin trajectory looks like for the existing units? So, overall margins have been expanded, let's say, on 170 basis points, but in the existing units, how you think, how the margins have been out?

Yeah, so, existing unit also, so, major benefit is coming from the existing unit for the margin extension, and so, it is merely from the existing unit. So, because greater NOIDA is the new unit, so, it is hardly contributing to EBITDA, actually, it is dragging the margin a little bit, and Jalandhar, of course, is contributing.

So, is it fair to assume that overall margin expense in existing units is much better than 170 days?

Yeah, I have already told about Jalanda. Jalanda is a start contributing as per our flexible hospitals and greater NOIDA is on the, you know, improvement trajectory.

Understood. So, one question on institutional patients. So, have you started seeing impact of better pricing in ECHS?

Yeah, so we have started seeing the positive results from the CGHS particularly. CGHS, the circular is new and there is still some doubts which need to be cleared and team is working with the authorities to get it cleared. But till now, the number is quite positive.

So, one question on debt, right? Now, after the people-free acquisition, the debt is close to around 3,000 crores, close to 1.5x of EBITDA. So, now, how to look at the company's ability to grow further inorganically, right? Are you flexible enough to take more debt, let's say, can go to 2.5x of EBITDA, or now onwards, you need to mainly depend on whatever, for example, greenfield or groundfield plants that are in place?

First of all, the data number is not that alarming. We have still room to take some more data for our growth aspiration. Having said that, you might be aware that open operating is now settled, and IHH in the public forum has expressed the infusion by IHH, and that will be used for either data reduction.

Thanks, that's from my side.

Thank you. The next question comes from the line of Karthik Agarwal, an individual investor. Please go ahead.

Yeah, hi. You have reported a 14.3% increase in OVD. I want to know what is the source of this growth? Is it coming from existing hospitals or new bed reduction?

Yeah, so this is, this is partly, this is a mixture of both, because when we say occupied bed increase, it is an increase of bed in Jalandhar, as well as Great Anoita, because earlier these hospitals were not there, and little bit increase in the Adayu also. And rest of the thing is in our existing.

So, based on the existing facilities, did you report this increase in?

So, almost all the facilities have shown good ramp-up. Salimar Bagh, SMRI, all our flexible hospital have shown good attraction, except I will say BG Road, which is still struggling, and we are working on how to, you know, improve the propensity level of BG Road. I will particularly like to mention about Mulun because earlier we were having Mulun and BG Road in the same category, but Mulun has start operating at 65% less occupancy level. I think the next we have to improve the occupancy level for sure.

Okay. Thank you.

Thank you. The next question comes from the line of Madhav Marda from Fidelity Investments. Please go ahead.

Madhav, please go ahead with your question and kindly unmute yourself in case if you are on mute.

Since there is no response from the participant, we will move to the next participant. That is Nikhil Goyal, an individual investor. Please go ahead.

Hi. First of all, congratulations for a good set of numbers. My questions are two. One is on ARPOB. So, our ARPOB is currently 2.65 crores. I want to understand what is our target ARPOB, maybe one, two years down the line. Are we expecting any increase in it, or are we expecting it to remain flat going forward? The second question is on the distribution of our revenue across the different EBITDA margin buckets that we have. So I have observed over a period of time that some hospitals are consistently under the less than 10 margin percent range. So are there any actions that we are planning there, either in terms of improvement or in terms of, you know, having them out of the system? Thank you.

Yeah, so ARPOP increase, we are expecting around 4 to 5% ARPOP increase going forward also. This year we are trending around this level. And I want to clarify that ARPOP increase should not be confused with the price increase. So, 4.5% RCOB increase, 2, 2.5% is only price increase, and balance is because of the case mix, and majorly coming from the high-end work we are doing, especially in the Onco business, where, you know, apart from the IP business, there are a lot of daycare business come, and as a result of which, you know, the revenue goes up, at the same time, bear remains constant, and this result into the RCOB increase.

Thank you, sir, for the details, but just a follow-up question. As you said, Jaipur is pricing challenger, and it is very So,

I will say it is a question of strengthening the clinical program, okay, so Jaipur is missing, you know, Onko business very much. And that has resulted into the margin. Along with Onko business, there are a lot of business come from to the other specialty also. And it has space and it has all the, you know, things which hold because of the challenge Jaipur has faced. Now Jaipur has come back to the original plan.

By when we will have Onco installed in Jaipur, if you have any timelines in mind?

So, these type of specialty takes some time, and generally it is 18 to 24 months time. In the year budget, we were planning to put something for Jaipur.

Thank you so much. Just one last question. On the ARPOV, you mentioned that half of it comes from price, and half of it comes from product mix. Going forward also, we are expecting a similar trend, that half of it comes from price and half of it comes from product mix. Great. Thank you so much for your time.

Thank you. The next question comes from the line of Shaleen from UBS Global. Please go ahead.

Yeah, hi, sir. Sir, I just want to check about you that, you know, capital is very much needed for our growth. So, do we have any sense of the timeline, you know, what could be the potential investment from IHS can come in?

So, as you know, they have just completed the open offer. There is a cooling period till then they cannot go ahead with the further equity infusion. I think that cooling period end by May and this is a board level, their board level discussion and then our board level discussion on the equity need. As I said, currently, we are in a very comfortable position, but from the management side, we have expressed that we want to create sufficient room in our balance sheet for future extension. We feel we are in an ideal position looking at current market dynamic to reap maximum benefit from this current market. So, we will like to take that advantage. I think in a four, three to six months time, we will be having more clarity about that exact timing.

Got it, sir. And I assume it will be the preference or warrant kind of a thing, right? Given IHS wants to increase the stake and it's not going to be, you know, any other further dilution.

Because earlier there was a restriction for IHS to, it's part of restriction, not restriction in real sense, For increasing the stake, with the open offer completed, that restriction has gone, is no more there. So, as I said, it is a board-level decision. We have expressed our desire to have more equity in the balance sheet to create room for further growth. And I think just three to six months' time, this will be done. You are right. In our estimate also, it will be pre-pensal allotment.

Okay. Last slide, sir. I know it's, again, maybe a little early, but any sense that what kind of a fund you would like to have it or be comfortable with when you're looking for such kind of a raise?

Yeah, so very difficult to give number. We will like to have at least 5% type of base for preference which is allowed also as per CBA regulation. Again, this is our desire. This is how IHL will take it is their decision.

But can IHL also think about doing CREEPING?

At least we have not heard from them during our discussion with them that they are looking for that option. They also want to grow Indian business. KOTIF is doing quite well for them and they want to grow the business. They have openly mentioned in many investor conferences that KOTIF is their growth engine for India and I think they will like to infuse press

Got it, sir. Got it. Cool, sir. Thank you. That's it from my side. And congratulations on a good set of numbers.

Thank you.

Thank you. Thank you.

The next question comes from the line of Nikhil Mathur from HDFC Mutual Fund. Please go ahead.

Yeah. Hi, sir. Good morning. Good morning. Sir, I want to visit some nine-month numbers. So, can you highlight the bed count addition exact in this nine months, and where all have you added these beds?

Yeah, so, bed count addition is 750 total. Out of that, as Neha earlier has asked, 500 less bed is through acquisition, and 250 is through the brownfield expansion, majorly coming from the Noida, Faridabar, and Manisha facility. There is some more beds we are planning to open in Noida. The final smithing work is going on. I think that will be completed by this quarter. And then we have, as I mentioned earlier, FMRI, which is our flagship hospital. We were planning to open that block in January. It has delayed a little bit because of all these environmental and other issues. But we are targeting to open those beds by April this year.

The occupancy between these new additions, including the acquisition and base business, Because occupancy has been flat in 9 months at around 69% in 9 months versus a similar number last year. So I guess there is some drag on overall occupancy from these new additions. So what's that?

So the occupancy drag is mainly coming from the Noida, greater Noida facility, as well as from little bit from the Dayo, because the Dayo we have opened only in December. Jalandhar starts contributing in the occupancy matrix quite well. Greater NOIDA and ADAYU are very small units, it will not be having much impact. We have gone up if we exclude this new unit.

The total addition, 50 basis points is the drag, right? Yes.

And I have told you which two units are dragging.

So, if I look at, if I refer to your Jan presentation of the bet count addition from FI25 to FI30, which gives a CAGR of around 10.7%, now FI26 obviously is a big addition year, which kind of brings you to somewhere around 6,800 bets. So, the bet count addition from FI26 to FI30 goes down to almost 66.5% as per the current plan. So, my question is, are we at a risk of kind of growth slowing down because the bet count addition itself will be sub-8-9% post-FY26 and your ARPAV expectation is 4-5%, so that gives me to 11-12%. Maybe the base occupancy moves up maybe a few percentage points. So, is there a growth that's slow down and you might have to revisit your M&A study a bit more aggressively?

Yeah, that is one thing which we are now targeting very aggressively. And we have done couple of acquisitions in the last quarter. There are a couple of others which are in pipeline. We can't disclose the details as of today. But yeah, you are right. So there will be, the growth will be coming from the three buckets. One is the brownfield expansion. Apart from whatever disclosed earlier, we have identified certain more, which will be coming in the next year's investor presentation. Then we will also be having this acquisition thing, and then there is some greenfield project also we are looking for.

I mean, every top corporate chain in this country is looking for bed expansion. So, does that leave the current valuation environment conducive enough for you to keep doing M&A? Because the Bangalore one seems slightly on the higher side, if I look at on an EV per bed basis, and with CapEx also needed for the further expansion there. So, just some broad thoughts, are the valuations conducive enough?

Yeah, this is a good acquisition. I give you math. You know, if you, first of all, the location is fantastic. Okay, this is Bangalore one. And there is a potential to reach up to 300 bats. And if you still, if you do 300 bat, greenfield expansion in that locality, it will minimum cost you 1000 crores. Okay, with all the facility which we are planning. And this acquisition will be costing us 800. So, in the metro, in the heart of the city, with 300-bedded capacity, I don't think so. It is an expensive acquisition. I think little bit risk we have to take. And having said that, Fortis has now established itself in the cluster where they are present, and we are quite confident we can handle any competition.

Understood, sir. This is helpful. Thank you.

Thank you.

So, the brownfield extension for the next year mainly is coming from this fMRI and little bit increase in the manager thing and for which almost entire capex has already been incurred, little bit, you know, medical equipment we have to acquire. So, there is no much capex for the brownfield, meaningful capex for the brownfield extension for the bed which are coming. Of course, the new project which we are starting like Mahali, Salim Arbat, these two units which we have taken, those extension we will be starting, there will be additional capex that we will be able to tell you once, you know, the plan is finalized. What is the next question? What was the next question you have for you, from you?

I was just asking, you mentioned there's a few M&A in the pipeline that you're considering. Given we have this cluster-based approach, what are the markets that Photos is looking at from a priority perspective to add assets?

We are doing, we are looking at, you know, the acquisition opportunity in the existing cluster itself. So, we are, we want to strengthen and deepen our presence in the existing cluster. We feel we have a very strong brand equity in whichever cluster we present, we are there, and we want to further strengthen our position in those clusters.

And this would include Hyderabad as well, now with the Glen Eagles, you know, O&M that we have?

Yeah, Hyderabad is now a sort of new cluster for us. We are slightly mindful for Hyderabad because of the intense competition there, but it is not ruled out. From the cluster approach, Hyderabad is definitely there.

All right, got it. Thank you so much.

Thank you. The next question comes from the line of Madhav Mardam from Fidelity Group.

Please go ahead.

Madhav, please go ahead with your question and unmute yourself in case if you are on mute. Hello. Yes, Madhav, please go ahead.

Yeah, sorry, sorry, Madhav. So, my question was on the CGHS and ECHS rate hikes which have come in. Have you been able to quantify what kind of benefit we can get on an anembolized basis, say, in F527?

Yeah, it is positive in fact, Madhav, and it is not that meaningful in this quarter. As I said, there are, if you have gone through that circular course, EGHS, there is a super specialty hospital category, where the registration has not yet been opened. And so, all those things will be finalized in maybe by next year. Similarly, ECHF also, there are a lot of confusion about, you know, the drug pricing and things like that. And there are a lot of clarity team is asking. So, I think let us wait for some time. This much I can tell you that there will be positive effects.

Okay, okay, good. And then the second question, I think you mentioned we've identified some more ground field expansion potential for Fortis. Could you give some more clarity in terms of, you know, which units are these where we've identified more ground field expansion and over what period of time, you know, these could come in for us?

Yeah, so we continuously, you know, look for brownfield expansion opportunity if there is any. Like last quarter, we have taken approval from the board for opening a onco-block in Faridabad unit. So, similarly, you know, these two units which we have taken, Zalander, as well as TMI, there is a scope for further expansion, there is adjacent land parcel we have taken for expansion only. And thirdly, you know, this greater NOID also, there is a potential to go up to 250

The next question comes from the line of Atul Minocha, an individual investor. So, please go ahead.

Yeah, hello. Thanks for taking my question. My question is, if we are leveraging AI for improving operational efficiency, that is my first question. And the second question is, with respect to a recent budget announcement, right, government has mentioned to create digital medical hubs. So, is there any work which you are doing as part of NetHealth or any other body to work with the government and you can share some details around it? Thank you. That's my question.

Yeah, so AI is a new theme, and healthcare, there are a lot of use cases for AI, and we are also working on some of the use cases, and we are taking help of our parent GAMNI IHS. They are slightly more advanced in AI, so we are taking help from them, and I think you will see much more application of AI, at least in our healthcare network. And as we got the engagement with the government, it is an ongoing process and we keep engaged with the government and continue to work with them to provide quality health care to the

So, my question was most present with respect to medical tourism coming from Europe and US, you know, medical visa offering. So, the government has mentioned that, you know, there will be 35 hubs, you know, during this project. So, if you can share more details around that.

Yeah, I will say currently the country is not equipped to handle patients from those geographies, because they have other options also.

Okay, got it.

Thank you. Thank you. The next question comes from the line of Amar Ahir from Raden Capital.

Please go ahead. Amar, please go ahead with your question.

I'm audible, sir.

Yes, yes you are.

So, my question was that on a consultative level, how many, what's the number of beds you are going to add in FY27?

Yeah, we mentioned about 430 odd beds.

Okay, 430 beds you will be adding, and how many will be operational?

Yeah, I think almost all will be operational. FMRI, we are planning to operationalize in two cases. FMRI is 200 plus bedded expansion. So, we will first open 100 beds. We are quite hopeful we will be able to fill it quite fast and then we will open the next batch of beds also. So, FMRI is the only question mark that 100 beds may be operationalized this year or next year depending upon the ramp up. Other will be operationalized fully.

Oh, okay, sir. Got it, sir. That's all from the matter.

Thank you so much. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Anurag Kalra for the closing remarks.

Thank you, Alaric. Ladies and gentlemen, thank you for your time today. If there are further follow-up questions, data clarifications, please feel free to reach out to me or my police, Amit. We'll be glad to help you. Thank you and have a good day.

Thank you, sir. Ladies and gentlemen, on behalf of Fortis Health Limited, that concludes this conference call. Thank you for joining us. Anyway, now disconnect your lines.