Fortis Healthcare Limited (FORTIS) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Fortis Healthcare Limited Q1 FY27 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 touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anurag Kalra, Head of Investor Relations. Thank you, and over to you, sir.

Thank you, Elric. Ladies and gentlemen, very good morning and good afternoon, and thank you for taking the time to join us on a quarter one FY27 earnings call. The call is being shared by our MD and CEO, Dr. Ashutosh Ragubanshi. With him, we have our Chief Financial Officer, Mr. Vivek Goyal. From Agilis Diagnostics, we have the MD, Mr. Vijendra Singh, and the Chief Financial Officer, Mr. Achyatiwari. We will start with some opening comments on the quarter gone by by Dr. Raghunji, post which Mr. Vijendra will take you through his thoughts on the Diagnostics business for the quarter, and then we can open the floor for questions and answers. Over to Dr. Raghunji.

Thank you, Anurag. Good morning, everyone, and thank you for taking time to join us on our Q1 Financial Year 27 Earnings Call today. At the outset, I would like to welcome Mr. Vijayala Singh, who has recently joined us as MD and CEO of Agilis Diagnostics. I shall dive right into the quarterly results and share my thoughts on the business performance and waveform. Building on the momentum of previous year, we have made a positive start to the financial year, delivering a steady Q1 performance across both our hospitals and diagnostic businesses. We reported consolidated revenue of INR 2,545 crores, a growth of 17.5% over Q1 of financial year 26. Noticeably, our hospital business revenues have grown by 19% to INR 2,187 crores, while Q1 Financial Year 27 Diagnostic Business Ross revenue has grown up by 10.2% to INR 407 crores, which is the previous corresponding quarter. Our consolidated operating EBITDA pre-ESOP expenses increased by 15.8% to INR 568 crores, delivering a margin of 22.3% versus 22.6% in Q1 of financial year 26. The hospital business reported an operating EBITDA of INR 471 crore, which translates into a margin of 21.5% compared to 22.1% in Q1 of financial year 26. The performance of the quarter also includes recent acquisitions primarily related to the new hospital acquisitions in Punjab and Bangalore and the lease facility in Delhi NCR. Excluding the impact of these facilities on a like-to-like basis, operating EBITDA margin of the quarter was similar to Q1 of financial year 26 at 22%. The operating EBITDA margin of the diagnostic business for the quarter improved to 23.9% from 23% in the quarter one of financial year 26. Our consolidated reported profit after tax before exceptional items for the quarter increased by approximately 4% to INR 263 clause. On the balance sheet front, the company's net debt stands at INR 2,233 crores with a net debt to EBITDA ratio of 1.01 as on June 30, 2026, as against 0.92x on June 30, 2025. The increase in net debt compared to INR $1,869 crore as on 38 June 25 was primarily due to the acquisitions done last year. A bit of flavor on the hospital business. Our hospital occupancy in Q1 of financial year 27 remained steady at 69% compared to the corresponding period last year. However, the number of occupied beds increased by approximately 17% to 3,418 beds compared to 2,928 occupied beds in Q1 of financial year 26. After factoring in our recent acquisitions, the hospital business recorded an increase in RBOB of 2.6%, reaching 2.71 crores per annum. Our key specialties, such as renal sciences, neurosciences, and orthopedics witness year-on-year revenue growth of 28%, 27%, and 23%, respectively. In 14 of our facilities, we have reported operating EBITDA above 20% during the first quarter of financial year 27. These 14 facilities together contributed over 70% to the hospital revenues. In comparison to financial year 26, we had 13 of our facilities operating EBITDA margin above 20%. Several of our key hospitals, such as Jaipur, Noida, Faridabad, and Moulin, witnessed margin Our bed expansion plans continue to progress well. During the quarter, we added approximately 100 operational beds through brownfield expansion, primarily across our Noida, Amritsar, and Jalanzar facilities. We also recently entered into an O&M agreement for a 300-bedded greenfield multi-speciality hospital to be developed in Qatar. This marks for the FortiCell case entry into Odisha, further expanding our presence in growth markets. Revenue from international business grew 13.3% compared to Q1 of financial year 26 to reach $174.00. The contribution of international business revenue stood at approximately 8% We continue to invest in our medical infrastructure by expanding advanced robotic capabilities across our network, reinforcing our commitment to clinical excellence and technology during the quarter. We installed Da Vinci XI Soft Tissue Robot at Faridabad, Fortis Esquad Heart Institute, Okla, and Ortho Robot at Jalander and Faridabad. Our board has also approved installation of a proton facility at our flagship hospital in Gurkhaon as well. Coming to the diagnostic business as part of our ongoing network expansion strategy, the total number of new customers' touchpoints reached 4,493 as of June 30, 2026. The penetrative and specialized portfolio revenues in Agilis overall revenue grew 27% and 13%, respectively, in Q1 of financial year 27, compared to the corresponding previous period. In addition, the diagnostic business continues to witness an improvement in its product and customer mix, supported by a higher contribution from B2C segment. We expect the growth momentum in revenue and improvement in operating EBITDA margin to continue going forward. With that, I would like to conclude my remarks. We believe both our hospital and diagnostic business are well positioned to sustain their growth momentum, backed by a strong balance sheet. We will continue to evaluate inorganic growth opportunities that are aligned with our cluster strategy and have potential to create meaningful synergies. With that, I would like to hand over the call to Vijayan for his comments. We are very excited for him to join us, and we welcome him once again.

Thank you, Dr. Bhagubadji, and good morning, everyone, and thank you for joining us today. On behalf of Agilis Diagnostics, I extend a warm welcome to all of you to discuss our performance for the first quarter of Fy27. Fy27 has been a steady start for Agilis. During the quarter, we continue to execute on our strategic priorities while strengthening our business across both consumer and institutional segments, investing in advanced diagnostics and improving operational efficiencies. While the market remains competitive, our focus continues to be on building a stronger, more resilient business that is well-positioned for sustainable long-term growth. During the quarter, we reported gross revenue of INR 407 crore, reflecting a 10.2% year-on-year growth over Q1 last year. Operating EBITDA grew to INR 97 crore, while operating EBITDA margins Our audience improved from 23.9% compared to 23.0% in the corresponding quarter last year. These results reflect not only healthy business momentum, but also the benefits of our continued focus on productivity, operating leverage, and a richer test mix. Officially, we processed approximately 10.5 million tests during the quarter and expanded our network to the gross additions of over 200 customer touch points, Further strengthening our reach across the country, we also saw continued momentum in our consumer business with the B2C-B2B revenue mix improving to 5347 in Q1 FY27, from 5149 in Q1 FY26. We continue to see a favorable shift in our portfolio mix, with the contribution from preventive portfolio increasing to 14% in Q1 FY27 from 12% in Q1 FY26. While this specialized portfolio contribution improved to 35% from 34% over the same period. Higher realizations per test and per patient reflect increasing adoption of specialized diagnostics and a favorable shift in our portfolio mix. Innovation continues to be a key pillar of our growth strategy. During the quarter, we achieved an important milestone by successfully completing over 1,000 whole-exome sequencing tests on our NOVA-CX platform at our global reference laboratory in Mumbai. This milestone reflects the growing adoption of advanced genomic testing and reinforces our commitment to making precision diagnostics more accessible to clinicians and patients across India. Beyond genomics, we continue to invest in digital capabilities while supporting long-term sustainable growth. Looking ahead, we remain optimistic about the opportunities before us. Rising awareness, increasing demand for preventive health care and growing adoption, our specialized diagnostics continue to create a favorable environment for the industry. With our expanding network, strong scientific capabilities, and continued investments in innovation and technology, we believe Agilis is well positioned to sustain profitable growth and create long-term value for all our stakeholders.

Thank you, Vijayandar. Ladies and gentlemen, we shall now open the floor for questions and answers.

Thank you. 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 two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of TOSIF with BNP Paribas. Please go ahead.

Good morning and thanks for the opportunity. A couple of questions on your ESOP. Assuming that most of the ESOP were given to doctors, wanted to understand what was the criteria behind choosing the pool of doctors that you decided to incentivize with ESOP, whether it was a broad-based strategy on India or whether currently it was only for hospitals in Delhi and CR, assuming the competition expected to heat up.

Thank you for your question. The strategy and the philosophy of ESOP was the primary consideration, and there was a lot of deliberation, and we decided that ESOP should be not only a tool to sort of recognize people's contribution, But at the same time, also be as a tool of how the organization functions in the future and how it performs in the future. So both components were kept in mind as to how the scheme was designed. And a broad-based scheme was designed across the network. It is not only limited to Delhi NCR, but it is across our network in all the different zones.

Just a follow-up question again on eSwap. Also, was it a pre-planned move to build loyalty, or did the company observe some uptick in poaching attempts from the competitors, especially in Delhi NCR?

Yeah, see, as far as, you know, the coaching activity is concerned, that keeps on happening periodically. We are not overly concerned about that. We believe that our brand attracts the best possible clinicians because we provide an environment with good clinical infrastructure and an environment to function clinically independently. So with that, I think we are an attractive magnet for clinicians. So we are not overly concerned about that. But the idea was that the doctors participate in the growth of the organization and their interests and the company's interests are aligned. So clinicians help in many, many ways for the performance to improve in terms of controlling of the consumption, for instance, you know, other efficiency measures which are necessary to have a better profitability profile. All those things, they become partners. So, that was the philosophy. It was not a reactionary approach. It was a very well-thought, calibrated strategy, which was planned over a period of about one and a half years before we actually implemented.

That's helpful. What is the ease of charge one should assume for FI27 and next to fiscal? And after a soft start to the hospital business on the EBITDA margin fund, can we expect at least 100 basis improvement in EBITDA margin at a consult level for FI27?

Yeah, so as a first question about the charge, what charges will be there? You are right. The charge will be there for next three years and so on. And the charge will easily be higher because it depends on the vesting. And then it will gradually come down. And as we got the margin guidance, we still maintain the margin guidance because overall, all this should also contribute to the better operating performance overall because of this initiative. Thank you.

That's helpful. I'll get back in the queue.

The next question comes from the line of Neha Manpuriya with Bank of America. Please go ahead.

Yeah, thanks for taking my question. Vivek, sir, on the margin, just to be sure, the 25% margin by FI28 is obviously pre-ESOP. Would that be a fair understanding?

Yes, at the time, of course, the ESOP was not approved, but as I said, the ESOP charge has now come, and there will be some adjustment in the cost also, and there will be some improvement in the operating performance also because of the ESOP. Ultimately, whatever initiative we take, it should contribute to the operating performance. And I am confident with all these things, with some cost options, some improvement in the efficiency and the revenue, we will be able to, you know, maintain the margin. Just on this point, like the earlier person was asking a question about the doctor coaching, Generally, it is a necessary practice whenever the doctor coaching happens, we end up increasing the cost. We hope that that cost will be curtailed to a great extent. And all these initiatives, you know, have some plus, some minus, but ultimately it is beneficial. That's why, you know, the company and the board have decided to rule this.

Yeah, and may I, if I may just add the, you know, the other guidance and other targets, It does not change because we have several brownfield facilities which are coming online now, and like the FMRI facility has just got ready, and, you know, the final approvals have come in place now. So we would see some upside of that. At the same time, you know, our NANESER facility has been continuously improving, So that is also going to significantly change the numbers. So we are pretty confident that we are still on track.

Understood, sir. This is very helpful. My second question is on Maneser and Greater Noida. I think both of these facilities, people really understand, but Maneser and Noida are both below 10% margin, and that's one of the reasons you mentioned for the, you know, muted margins in this quarter. When do we think, how much time do you think we get to 20% margins in both these hospitals? Manet, sir, if you could give us some color on how much bed we have operationalized, et cetera, to help us get comfort on that margin improvement.

So, Manet, sir, we have operationalized about 187 beds, and the rest of the facility is also ready. As in when the occupancy goes up, currently it is about 60% occupancy on the current installed beds. So as that occupancy increases, we should be able to open more beds as we are just in the process of getting the final approval for the last two floors as well. Civil work and other things are completed. The second thing which is happening in Maneser is our radiation oncology equipment is under installation. So by the month of November, that should be installed. Once that is commissioned, then this hospital will become a comprehensive oncology center. The growth in this top line has been as per our expectations. But the profitability has not been in line with what we had expected. But we expect that the dynamics of the hospital will dramatically change once we have the oncology set up, Commission by the end of this calendar year. On the other hand, NOIDA is also showing steady increase. Month on month, we are seeing about 8%, 10% growth on the revenue side. So it's more a question of occupancy. So as we acquire more clinical talent, which we have been doing, we should expect good occupancy here as well. So, both these hospitals by the year-end certainly be in the mid-teens as far as EBITDA is concerned, if not higher.

Thank you so much.

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

Thank you for taking my question. So, the first one is, again, slightly getting a better sense on the hospital EBITDA margin. So, I think for this year, our original guidance was around 150 to 200 BIPs margin expansion. That, though, will be ex-ESOP, right? Like, while F528, we are reiterating 25% normalized margin or reported margin, but this year, that will be ex-ESOP, and that's first clarification I wanted. And secondly, how do we kind of achieve that 25% EBITDA margin? Can you explain in a bit more detail, like, what are the cost levers, or is it pure operating leverage? What are some of the building blocks for that?

Yeah. So, Karan, earlier guidance which we have given, that obviously not included with the cost, because it was not rolled up by that time. As Dr. Saab has said, it has taken a lot of deliberation at company management level and goal level, and after that, this was rolled out. So, that was not the part of that. But having said that, as I said earlier, we are still maintaining our guidance. It may, you know, quarter-on-quarter may not be that way. Like, if it's quarter, there is a deep, if we consider it's of course. But overall, in two years' time, we are quite hopeful that we will be reaching to 25%. As regard to the legal circumstances, one is there are new units which earlier Neha has pointed out. These units in the rental stage. And in the current beta margin trajectory, these units have contributed negatively by 0.4% to the overall beta margin. I am, I am expecting this should be maybe at 1% positive. So that itself is a big data. Then the new doctors which we have taken and new teams which we have added in almost all of four units, they, we are quite hopeful they will start doing good because it takes the time. You know, there is some charge relating to the legal cost in the current quarter because of the about hearing, which you people are aware of, the intense hearing which has happened last quarter as well as in this quarter, and that legal cost has also baddened the profitability if we compare with the quarter one of the last year. And lastly, and which is also a very important point, the provision for doubtful debt has slightly gone up for this quarter, because of there is sudden delay in getting collection from the government there as well as some of the TPA. So the team is working on that, and I think that we will also be plugging back. We will be able to plug back. And there is another lever is on the existing hospital where occupancy is left, and, you know, we are seeing some sign of improvement in those hospitals, especially in BG Road and Malum, where, you know, BG Road particularly where occupancy is quite low. So, these are the main levers, I will say, for the work, for the data margin improvement, and to reach us to 25% level.

Got it. And my second question is with respect to the expansion plan. So, can you just rehash, like, let's say over the next three, four quarters, what are the beds we are expecting to operationalize, which all facilities?

Yeah, in the first quarter, we have operationalized 100 beds, and we are expecting to operationalize another 400 beds in the remaining three quarters of the company. The major contribution will be from our collective hospital of SMRI, where all the work has been completed. We have applied for occupancy certificates. We may expect that at any time, maybe business itself, and that will give us 200 more beds, and then there are other expenses which are on target. So, we are doing quite well in terms of our bed expenses long.

Got it. Thanks. Just one quick bookkeeping one. So, this ESOP charge, what is the annual number we are expecting this year and next year?

Yeah, so this charge is, you know, depend upon the ESOP vesting and the period and the number of people whom the option is given. So, because it is applicable, the ESOP was rolled out from 23rd April, this year, this quarter, it is for less number of days. The rest of the quarter, if the number of employees remain the same, the charge will be somewhere around 40 crores per quarter, and thereafter it should fall down to around 30. And in the third quarter, it should be around 25 crores per quarter.

Next question comes from the line of Damyanthi Kere with HSBC Bank. Please go ahead.

Yeah, hi. Thank you for the opportunity. Again, a quick clarification, the 25% margin guidance which you are maintaining, that is including ESOP cost, which you think will be offset by a number of factors earlier discussed. Is that the correct understanding?

Yes, yes. We are aspiring to achieve 25% ESOP, sorry, EBITDA margin after observing the ESOP Okay, thank you for that.

My question is on your growth expansion strategy. So, during the quarter, you announced you are entering the Odisha market. So, earlier, my understanding was you generally take a cluster-based approach to expand into a particular market, which can be seen in your presence in Delhi, NCR, and Banguru, etc. So, now, how do you select market or how do you go about when you try to expand beyond your traditional markets? Some bit of understanding on that will be helpful.

Yes, yes. No, Danyanthi, our strategy has not changed. We remain focused on the existing clusters. If you would have noticed, the hospital in Orissa is only an O&M project. So, we are not committing any capital to that market at the moment. However, it is important for us to continue to focus, as I said, on the existing clusters, and we are evaluating opportunities in the clusters where we are present, and we hope that we will be able to conclude certain opportunities here pretty soon in the clusters where we are present. But at the same time, we also recognize that we will have to consider going to new markets, especially the ones which have huge future potential and are secondary in nature and which we primarily have not been there. So this is more for a learning, and then if depending on how these institutions perform, in future we have an option with the ONM partner to participate in the growth of that region. So otherwise we are still focused only on the clusters we represent, Bangalore, Delhi NCR, Punjab, Mumbai metropolitan region, and Calcutta. So we remain focused on that. Of course, we are managing hospitals in Hyderabad and Chennai as well. So we will in future consider what positioning we want to take in those two cities. But we want to always grow because there are a lot of synergies which come operating in a given market. But we are looking forward to quite a few opportunities, and hopefully we should be able to conclude some.

So I want to hear some updates on the O&M hospital, which you undertook for Glen Eagles. So, compared to when it came under your operation and now, what kind of performance improvement we have seen? If you can specify some metrics, et cetera.

Yes.

Yeah, you can't keep specific for this hospital, but in general, there's a lot of improvement is there, and as you know, we have intended this arrangement only last year, So there is a lot of evaluation, there is a lot of, you know, new doctors and new teams have taken over there, and we are seeing a very healthy improvement in the operating margin in, you know, these facilities. But having said that, we can't give any specific number, you understand.

But suffice to assume you have broadly stabilized operations there, as you mentioned, and then margins are moving in a positive trajectory there.

Yes. So, currently, we are managing only the five hospitals, and we are not managing the Mumbai hospital, which is a separately managed hospital. So in these hospitals, we have improved the existing facilities and the operations. However, it is still not, I would say, completely stabilized. We have not brought it to the fourth standard. So that will take some time. Our expectation is that it should take at least two, three quarters, or maybe around four quarters before we can say that these are fully stabilized.

Okay, that's okay. And my last question is, Dr. Ragubansi, you have highlighted adding oncology to new units will be one of the key booster for margins, etc. So, if you can talk a bit, like, among all the new units, etc., or in the earlier units also, where oncology is yet to be added? And, yeah, I think that's my question. Which units are still within that part?

Sure, sure.

So, as I just mentioned in an earlier question, is that Mane, sir, we are in the phase of installing the equipment. So, that would be ready by the end of this calendar year. And there are two units where the work is just starting on a secondary block at the Brownfield expansion in Faridabad and in Amritsar. Sorry, three units, Amritsar and Jaipur. These three units will also become full cancer hospitals as well. So this is in the pipeline at the moment.

Thank you and wish you all the best.

Thank you so much. The next question comes from the line of Dipti Rajuola Patti with Access ANC. Please go ahead.

Hi. Thank you for the opportunity. It's very good to hear that you're bringing proton therapy to Delhi NCR region. I just wanted to understand KPEX and timelines for this.

It is under timeline, so it will be in the range of

250 to odd crore.

And one more question. And the second question is on the O&M. In any of your O&M, which is performing really well, and you have a call option in current plan?

Yeah, so we don't have too many ONMs at the moment, and there is no call option in any of the two or three hospitals which we are operating. So, on the other hand, the Deneville assets is a different matter where we are in discussions with IHH to see how we can proceed.

The next question comes from the line of Aman Goyal with IIFL Capital. Please go ahead.

Thank you, sir. Thank you for the opportunity. So, my question is on the diagnostic business. We are reporting only 19% top-line growth, whereas industry is growing at 15%, and especially our growth was largely on the account of realization improvement, whereas industry has witnessed Thank you.

I think since it's been 10 days, I joined the organization and probably we will rework on our plans, but our standing continues to maintain growth, including operating leverage from profit point of view, and our guidance continues to be maintained, double digit profit margin. And of course, we'll come back with some of our major plans, but yes, when you look at our data, I think we are in the right direction as far as B2C business is concerned, which is more sticky, more profitable, and also kind of, you know, helping us in building our infrastructure, keeping in mind our B2C ratio growing from 53% to, you know, at least 55% and 58% in the next few times from now. I think we are on track, and probably it's a great opportunity to be associated with Agilis, because Agilis comes with a lot more scientific legacy, so we are going to leverage that. But yes, we are on right track, as of now, I can say.

Thank you. Yeah, if I can just add a little bit. Yeah, I could just add because Mr. Reginstein has just come on board, and he, as you might be aware, that he carries a huge body of experience on building scale. So we are very privileged to have him, and we do recognize that there has been a muted growth or rather kind of a stagnant period for some time, and that was a variety of factors, including the brand change, et cetera. Now, those things are getting stabilized. As they are getting stabilized, we have about 10% growth seen in the last quarter. And a lot of it has come from volume growth as well. So this is definitely a sign of revival. We have done a little bit of a kind of a transformation project where we have rationalized some of our lab network along with the customer touch points. So that journey now will be accelerated under the new leadership and new management. So with that, we are very confident that we will be able to bring it to the similar level. Region-wise, we have seen that after we have started some focus efforts in, say, NCR, the growth in this region has been pretty good, and we are going to replicate the same thing in other regions as well. So you are right that the growth has been slower than the other industry players, But we are completely on the path that we will be able to achieve similar levels within, say, next few quarters.

Next question is on the hospital segment on our specialty mix. We have seen the 200 basis point decline on Onco business. Is this related to chemo business or are there any other factor also?

Yeah, yeah, you are absolutely right. The chemo business is the one which has impacted this. Some of our regions, hospitals, all the hospitals in Punjab, as well as Jaipur, have large number of ECHS beneficiaries. Some of our hospitals in NCR have a large number of CTHS beneficiaries, and in all these categories, the chemo drug pricing mechanism, which they have come up with 30% discount on MRT, is the one which is causing this dip. And as you would have seen that earlier, we were growing in oncology about 23%, 24%, but now that has come down to only about 5%. But we still feel that oncology is going to be a big growth driver in terms of volumes, And we are focusing a lot on radiation as well as being the expertise on the surgical side of oncology and providing comprehensive care. And that would drive our growth in oncology in the future. But certainly it is going to be in the range of 10-12% and not like 27% which is used.

The management fees we have generated from Glen Eagles this quarter. I mean, we have a 2-3% O&M contract with the Glen Eagles.

We are adhering to that agreement. As per that agreement, we are eligible for 3% fees of the revenue, and that we are getting completely.

How much did we book for this quarter?

Around 6 crore.

Thank you. Thank you so much.

The next question comes from the line of Abdul Puranwalla with ICICI Securities. Please go ahead.

Hi, sir. Thank you for the opportunity. So, my first question is with regards to your occupancy. So, this quarter, we understand it was kind of flattish because of the beds what you were adding. But if I look at your 14 facilities, you know, which is contributing to the bulk of EBITDA, that is already occupying and having an occupancy of close to 74%. So, sir, how should we look at growth of these hospitals? So, that is question number one. And second is for the balance six hospital in the range of, say, 10 to 20 percent margin, you know, there seems to be some occupancy room, but, you know, if I looked at previously, you know, the numbers that you shared in FI26, their occupancy has kind of slid down. So, sir, if you could help us understand on both these aspects.

Yeah, so we are now consistently operating at around 70% occupancy on the enhanced base. If you see, these occupancies after taking into consideration the new unit where, you know, some innovation work is going on, for example, in our Bangalore unit, and the other new unit which we have taken. So the occupancy is impacted because of that to some extent, but still it is at 70%, around 70% occupancy. As regards to the work for ramping up the co-pensers, one is these new units, including Manusur, this S1 World facility, Greater Noida facility. There are a lot of scope, and we are seeing, you know, the co-pensers wave up as we are strengthening our network, these networks with better clinical talent and better marketing efforts. There are some big units which are still there with lever occupancy. Panglore, BG Road is one of them. So, again, this is a big lever for us to improve the occupancy level. I think all these levers will be good enough to ramp up the occupancy going forward by another 2% to 3%.

Got it. And the next one is on, you know, your beta expansion plan at fMRI. So, I heard you out when you called out on your guidance and the levers for it. But in the 25% margin guidance that you're providing, at fMRI, you know, how are we thinking about margins to play out in the next one or two years?

Yeah, fMRI is already a very decent of a beta margin. It is around this number, 25% type of number, and, you know, with the new beds coming in, you know, we expect on the larger base it will be able to maintain that ebitda margin, and there will be some improvement in this ebitda margin. Initially, it will be like just two types of EBITDA margins. Going forward, there will be improvement in EBITDA margins. Because you have to add some talent, you have to add some new players to drop this type of bad company. But we are confident that there will not be any margin drop initially, but there will be improvement in the margin.

Got it, sir. Thank you, and I will get back in the queue.

The next question comes from the line of Sain Mukherjee with Nomura Holdings. Please go ahead.

Thank you for taking my question. I just wanted to, you know, what is your CAPEX guidance for this year, and also last year we have seen some acquisitions in organic moves. Is that something which we can expect this year as well?

Yes, Sahil, if I can take this question. Generally, we are expected, because we are in the growth phase, and we have this 2000 bad expansion in the line, so without taking any acquisition thing into consideration, we will be consuming around 50% of our data in our forever growth, which is, you know, brownfield expansion, which is going on, plus, you know, some of the initiatives And so, inorganic, we are actually looking at it, and there are some deals which are we are actually pursuing. Until those are concluded, we can't speak much over those deals. So, we have to wait for getting further details.

And we could expect them to be in their video-focused clusters only, right? Is that a fair assessment to make? Okay. The second one, I don't know, I mean, you might have explained, but I just wanted to understand on the ESOP side, like, what's the policy like? Is it largely to the doctors and, like, how many doctors So, what percentage of people, doctors, you know, have been awarded the ESOP, and what has been the criteria here?

So, it is, you know, it is not only to doctors, first of all. So, it is to doctors and some senior staff of the company. So, roughly, it is around 55-60% of doctors and nurses to administrative staff, including operators. So, I think the proposal may go up and down depending upon, you know, the need to provide the feedback. Right now, it is at this level. I see.

Okay. So, you know, I mean, I think you mentioned about attrition. Is that an issue in the industry in general you have seen? Is it increasing any particular geography where, you know, you have seen that as an issue? Given all the expansion that's happening, incrementally, I mean, as a trend, are you seeing more attrition in the hospital sector?

Not really any kind of pattern we can see. However, it is, you know, within the micro markets when a new hospital opens, then obviously, you know, there will be some disturbance in that local geography. So that pattern we have seen. But so as a general, in some region, there is a lot of attrition happening. That is not the case. It's just within small micromarkets, like, for example, in Noida, as you are aware, that a couple of new hospitals opened up, and that did create little flutter across all the hospitals, actually, and there were some changes. But I think it is at par with, you know, what happens in normal course of business. So we are not unduly concerned about it because the supply of the clinical talent has improved significantly. The younger generation has started coming out after the C7 increase in medical colleges about 15 years back. So all those people have started coming out, finishing their training. So, gradually, over the next few years, you will see that this will not be that big a problem.

Okay. Okay. Thank you, sir, and I'll join back.

Thank you. The next question comes from the line of Gopal Bhatt with Baroda BNPP. Please go ahead.

Hi. Yeah. Just a quick follow-up. I think an earlier participant asked on Onkosher Gurnav. I heard that you maybe were impacted by the ECHS segment, but that is broadly flat if I look on here and here soon. Just any comment there?

Yeah, so within that segment, you know, there are pluses and minuses both which have happened. So a lot of diagnostic tests, investigations, procedure prices have gone up. Whereas, at the same time, the prices of chemotherapy, et cetera, have gone down. So, the net-net effect is not significant, but it has moved to other specialties. That is why you will see the ECHS contribution remains same. But the oncology has a division that growth has become muted because of that. So, our base has been increasing continuously. So, since the growth was very high for about 4-5 years, the base has also become very large.

Okay, got it. Thank you.

The next question comes from the line of Nilay Parekh with Perpetuity Ventures. Please go ahead.

Thank you, sir, for taking my question. So, my question was regarding this revenue and this margin guidance for our diagnostic business.

And also, can you throw some more light on this speciality and this preventive mix for the next two years?

Thank you. Can you repeat the question? I could not just hear properly.

Yeah, please.

So, yeah, yeah. So, wanted to know this revenue and margin guidance for our diagnostic business and also some key additional insights on our preventive as well as this speciality mix for the next two years. Hope my question is audible to you.

So, you are asking revenue margin prediction for the diagnostic, right? So, diagnostic, as Dr. Gonsarja mentioned, we have already achieved double-digit revenue growth, and with our focus of growth and the new team on the ground, we are expecting the margin to be around, revenue growth to be around 23-24%, sorry, 12-13%, Thank you.

Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing remarks.

Thank you, ladies and gentlemen. If there are any further follow-up, queries, questions, clarifications, please feel free to reach out to us. We will help you as best possible. Thank you once again, and have a good day.

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