Paras Healthcare (NSE:PARASHLTH) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, we welcome you all to Q2 and H1 FY 'twenty seven Earnings Conference Call of Paras Healthcare Limited hosted by GM Financial. This conference call may contain forward looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements do not guarantee the future performance of the company and may involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Abin Benny with GM Financial. Over to you, sir. Thank you, and good evening, everyone. I'm Abin Benny. And on behalf of GM Financial, I would like to extend a warm welcome to all of you on the second quarter and H1 FY twenty seven earnings call of Paras Healthcare Limited.

0:48 At the outset, I would like to thank the management of Paras Healthcare for giving us the opportunity to host the call. We look forward to having an engaging and insightful discussion on the company's quarterly performance and the outlook. From the company, we have with us today, mister Managing Director, mister, Group Chief Financial Officer and Mr. Vineet Agarwal, Chief Operating Officer. With that, I would now like to hand over the call to the management for their opening remarks. Over to you, sir. Good evening to each and every one of you. Thank you all for joining Paras Healthcare Limited's first earning call as a listed company. Wishing you all a happy Danseras, happy Diwali, and my apologies for keeping you all engaged with our call given that the holidays are here and everybody must be eager to go back to their homes and start the celebration.

1:44 We were listed on the NSE and BSC on the October 28. On behalf of our Board and our teams, I want to thank every investor who's placed their trust in us. Thank you also to our doctors, nurses and staff across our hospitals. These results essentially are their hard work. With me is Mr. Dilip Badani, our CFO and our Chief Operating Officer, Vineeth Agrabal. PARASHLTH has been built exactly in the last two decades on a single idea. We wanted to solve for North And East India's accessibility issues. Quality in tertiary health care should not be a privilege of few and in few metros.

2:37 We built and run hospitals in Gurgaon, Patton, Durbanga, Raji, Udaipur, Panchkula, Srinagar, Kanpur with a single belief that patients should not have to travel far, pay a lot for complex care, it should be delivered where they live. Our promise is partners in health, accessible, affordable, high quality and compassionate care close to home. Coming to our Q2 results. It clearly demonstrates why our model is working. Revenue from operations was INR $5.11 crores, up 23% year on year.

3:28 Operating EBITDA was INR 120 crores, up 47%. Margin expanded by three ninety basis points to 23.5. Profit before tax was INR 54 crores, that is 2.7x last year. Profit after tax was INR 40 crores, 3.3x last year. For the half year, revenue grew 25% to INR $9.81 crores. Operating EBITDA grew 58% to INR $2.25 crores. Now where has this growth come from?

4:16 We are currently managing three clusters of our hospitals. The mature hospitals, Gurgaon, Patna, Panchkula and Durbanja, revenue grew 8.5%, margins rose to 29.5%. Emerging hospitals, Ranchi and Udaipur, revenue grew 27%. And of course, Ranchi had an exceptional quarter. New hospitals, Srinagar and Kanpur, revenue grew 2.4x last year, and the cluster moved from EBITDA last year to about a margin of 19% in the H1 Q2, Kanpur and Srinagar are now profitable at EBITDA level.

5:05 That has happened faster than our earlier hospitals, and it is clearly showing a playbook that can be repeated a number of times. What drives the next phase of our growth? The ramp up of newer hospitals because we have tremendous capacity, room to grow. They have capacities, and we have room to grow. What else is happening? Better clinical and surgical mix in every hospital, more complex specialty work, and we are tracking that by hospital and by the doctor wise. Ladies and gentlemen, thank you for patiently holding.

6:00 We have the line for the management reconnected. Yes, sir, please go ahead. Apologies to everyone. I think we dropped off the call. As I was stating, what is the next phase of growth? Where does it come from? And essentially, we're talking about four levers: ramp up of our newer hospitals, which have room to grow in their capacities better clinical surgical mix in every hospital more complex specialty work, tracked by hospital and doctor by doctor, growth in outpatient and inpatient volumes, disciplined new capacity. We are building new capacity in Golf Course Extension Gurgaon and very, very selective expansion that is going to come up in the future, Luthyana being an immediate expansion of 500 bps coming in next year.

6:56 Our balance sheet has strengthened. Of the INR 500 crores of fresh issue, INR $3.75 crores has already gone to repay and prepay borrowings. And of course, this lower interest cost should support profit growth from here. And of course, not every hospital of ours has performed this quarter. Udaipur was softer, and of course, the teams will talk about it, our operations will talk about it. I'll now hand over to Dilip, our CFO, who will take us through detailed numbers. Thank you. Thank you, Doctor. Nagar, and a very warm welcome to all on our earnings call for PARAS Healthcare.

7:43 I will take you through the financial numbers and before I give you some of the numbers, some of which at the cost of repetition, will repeat. A detailed presentation has been uploaded on the stock exchange as well as the company's website for your benefit and a great number of details would be available to you there as well. Speaking of our consolidated financial numbers, our revenue for quarter two stood at INR511 crores, a growth of 23% on a year on year basis. Sequentially, the revenues for quarter two grew by 8.6% over Q1 this year.

8:34 For half one FY 'twenty seven, revenues stood at INR981 crores, a great growth of 25% year on year. Including other income, our total income for quarter two stands at INR517 crores and at INR996 crores for half one. The EBITDA for quarter two, which includes other income, stood at INR126.6 crores, an increase of 42.5% on a year on year basis. The EBITDA for half one stood at INR240 crores, a growth of 54 from half one last year.

9:24 Operating EBITDA, that is excluding other interest income was INR120 crores for quarter two against INR81.7 crores last year. For half one, the operating EBITDA stands at INR225 crores versus INR142 crores recorded last year, a growth of 58%. EBITDA margins for half one twenty seven stood at 24.1%, an increase of 4.6 percentage points over 19.5% last year. Operating EBITDA margin stood at 23% this year versus 18.1% last year.

10:17 Most of the gains in margin improvement were a result of improvement in material cost by over 3%, which was again a result of procurement efficiencies, formulary compliances and case mix. Software cost improvement of 70 basis points was a function of operating leverage kicking in despite an absolute increase in doctor cost due to new hires in all across our hospitals and particularly in the new hospitals. Employee costs and other expenses have largely been at similar levels. The bottom line obviously improved as the margin percentage also improved.

11:11 Just to relate some of the numbers on depreciation and finance costs for the quarter, they were INR38.7 crores and INR33.8 crores, respectively. Our PBT, profit before tax, in quarter two improved by 12.7% over the previous quarter, which is from INR48 crores in the previous quarter to INR54 crores in this quarter, whereas last year in quarter two, the PBT was only INR 19.8 crores. The PAT this quarter in quarter two was INR 40.3 crores against INR12.4 crores last year. And this has resulted an EPS of INR4 per equity share of INR1 each.

12:04 The profit after tax, which was R44 crores for the full year in FY 2026 is now R90 crores in half one FY 2027. PAT margins for FY 2026, which stood at 2.7%, is now 9% for half one twenty twenty seven. Doctor. Nagar touched upon a bit on our borrowings. Our gross borrowings as of September were INR979 crores. We had INR360 crores of cash as well, giving us a net debt of INR620 crores as of end September.

12:52 Post the IPO of INR500 crores and net of expenses of the IPO, our balance sheet has become much, much stronger. We have already repaid INR375 crores of the term debt, which is as per the offer proceeds the usage of offer proceeds And a pro form a net debt post repayment would be INR143 crores. The OCF operating cash flow for half one was at INR68 crores despite working capital movement of a negative INR172 crores.

13:38 And receivables have increased from INR350 crores in March to INR518 crores. This is with the payer mix change, settlement cycles and lumpy payments from certain peer groups. This is certainly a management priority and we would be looking at it. Our DSOs at about 92 on a blended basis are however very much under control with us. Half one CapEx has been at INR90 crores invested across various units as well as payments for our new Gulvang II unit. So this concludes the financial summarization, and I will hand it over to Vineet to take care of the business performance and more details about the cohorts that he will talk about.

14:41 Thank you, Dilip. Wishing everyone a very happy Dhanteras and a happy Devali. Moving on to our cohort performance, let's start with our matured hospitals, Gurgaon, Patna, Panchkula and Garbhanga. Revenue for our matured hospitals grew by 8.5% in quarter two FY 'twenty seven and nine point one percent in H1 FY 'twenty seven. Our operating EBITDA grew by 3.1% in both quarter two and the half year, with quarter two margin being 29.6, that is closer to 30%, a growth of three sixty basis points compared to last year. And at the half year, we stood at 28.9% with a growth of three thirty basis points.

15:34 Our occupancy for the mature hospitals for the first half of the year stood at 76.5%. Coming to our emerging hospitals, Ranchi and Udaipur. Our emerging hospitals grew by 27.2% in terms of revenue in quarter two and forty three point two percent in the first half of FY 'twenty seven. EBITDA grew by over 46% in quarter two and '1 hundred and ten point nine percent in the first half of FY 'twenty seven, showing a very positive movement in our emerging hospitals. Our EBITDA margins have grown by two thirty basis points over quarter two last year and five eighty six basis points over the H1 of the last year.

16:23 And our overall margin for the first half of FY 'twenty seven for emerging hospitals stood at 18.3% compared to 12.4% of the first half of the previous year, showing a positive movement and also showing the progress that we can make once our emerging hospitals move into the matured cohort. Our occupancy for the first half of FY 'twenty seven for the emerging hospitals stood at 68.6% compared to 49.1%, an increase of nineteen fifty basis points, showing a very positive movement on our occupancy levels. Talking about our new hospitals, Srinagar and Ganpur, they have shown tremendous growth over the last year. Revenue has increased by 139% in quarter two FY 'twenty seven and 100 47% in the first half of the financial year on a year on year basis.

17:22 Our operating EBITDA, which was negative of INR13 crores in FY 'twenty six, has become positive of INR 15.8 crores in quarter two FY 'twenty seven. And for the first half, it has surpassed INR 15 point crores in terms of operating EBITDA. And our margins, which were negative, have become closer to 19%, to be precise, 18.7% in the first half of FY 'twenty seven, showing a room of improvement further as we move into emerging and the matured cohorts. This was possible, and we have highlighted earlier that initially when the occupancy is low for new hospitals, the stabilization and operational cost impact the company's stability. But as we have been able to increase occupancies, increase specialty treatment, increase both our OPD and IBD footfalls, we have been able to deliver sharp turnaround in our growth and profitability.

18:20 For H1 FY 'twenty seven, our occupancies for the newer hospitals stood at 68.4% compared to 27.8% in the first half of FY 'twenty six, an increase of 4,060 basis points. Now coming to a few consolidated operational KPIs. Our ARPOB for H1 FY 'twenty seven stood at 48,900 compared to 48,400 in the first half of the previous year, showing improvement in our ARPUs. Our AEROS has gone down one days from 2.9 previous year half first half to two point eight days in the first half of FY 'twenty seven.

19:07 Our occupancy for Q2 FY 'twenty seven stood at the group level at 76.3% compared to 62.5 in quarter two of FY 'twenty six, an increase of thirteen eighty basis points. For H1 of the FY 'twenty seven, our occupancy stood at 73% compared to 59% in the previous year, an increase of 1,400 basis points. Correspondingly, our occupied bed days have also grown on a year on year basis by 23.9% from 162,000 to 201,000. Our volumes, both in terms of inpatient and outpatient volumes, have grown by 27.320.4%, respectively, in the first half on a year on year basis.

20:00 Our Congo Art Specialty stood strong at 74% in H1 of FY 'twenty seven. Our fare mix in H1 FY 'twenty seven stood at 32% as cash or self pay, as we call it, 24 insurance and remaining 44% coming from the government schemes and the PSUs. So effectively, if we look at the operating leverage in terms of all the three cohorts that we are performing in, the broader message is that our volumes, our occupancies, our ARPOB, our ALOs, all bringing us operating leverage that we have shown in all the three cohorts of ours.

20:47 I'll stop here. We can now open the floor for questions. This session concludes the management presentation, and we are open for Q and A. Thank you very much. We will now begin with the question and answer Anyone who wishes to ask a question may press star and then 1 on their touch tone phone. If you wish to remove yourself from the question queue, you may press star and then 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. Again, to register for a question, you may press star and then 1.

21:40 Your first question comes from the line of Neha Mancuria with Bank of America. Neha, your line is unmuted. Please proceed with your question. Hi. Am I audible? Am I audible? Yes, ma'am. You're audible. Please go ahead. Please go ahead. So my first question is on Odevco. You mentioned that was soft this quarter, while overall, you you have definitely given a very solid performance. Just wanted to understand what is the reason for soft performance in Udaipur.

22:26 Okay. Neha, good evening, Agrawal. Let me take this question of yours. In Udaipur, rather the entire region of Rajasthan or the state of Rajasthan, the state government scheme is being reviewed. That is being reviewed by the state government, that is being reviewed by the central government, and it has been temporarily suspended across multiple hospitals in Rajasthan. However, at the same point in time, when we are looking at Udaipur from a PARAS context, our overall cash and insurance business has grown in terms of absolute numbers, and we have recovered almost 30 to 40% of what we were in terms of the entire state government business. However, looking at the state and the territory, we are hopeful that in future, the scheme will be started again across the different hospitals operating in Rajasthan, we being amongst one of them, and the leverage will kick in.

23:28 Got it. Sir, that sense, would it be fair to assume that even the revenues could be lower Y o Y for Udaipur? So Neha, as I mentioned, in terms of our overall increase, our overall CTC mix has improved, our payer mix has improved, and we are continuously working on further improving our payer mix. There are multiple initiatives that we are taking in future, specifically for Udaipur and across our units to ensure that our dependencies on the government schemes business is reduced. Got it. Sir, my next question is on Kanpur. Could you help us understand how the ramp up in Kanpur has been for you?

24:18 So Kanpur ramp up has been quite positive. We have been moving quite positively in a direction where our EBITDA margins have improved from a negative of 22.8% to 15.6. Our occupancies have improved and our overall revenue has further improved. Now in terms of Kanpur, it's a combination of, obviously, one operating leverage. Obviously, it's a factor of we taking certain initiatives in terms of adding more impanelments in Kanpur, also a factor of adding more and more clinicians in Kanpur to cater to a very clear specialty focused mix and the kind of treatment, the tertiary care and the quaternary care treatment that we want to move into. Just to give you an example, our occupancies in Kanpur have ramped up from 22.7% in the first half of FY 'twenty six to 78.4% in the first half of FY 'twenty seven.

25:27 These are very strong signals in Kanpur, and we hope to continue this growth journey in Kanpur in future. That's very encouraging to hear. Sir, in Kanpur, have you operationalized all the beds? Or is it still happening? So we are yet to operationalize more beds. We will be opening more beds in Kanpur by the end of this financial year. And how many beds could that be? I'll take that question. We had opened half the beds. So there are two two more wings which are yet to be opened. And out of the capacity of 435 beds, we had opened roughly half the beds, and half the beds are yet to be opened.

26:15 Okay. And in terms of empanelments, is confident in all insurance as well as, you know, government schemes? Or is that process still underway underway? No. It's it's all impanuments in terms of insurance and government schemes are completely done there. Okay. Thank you for this. I'll get back in the queue. I'll get back in the queue. This. Thank you. A reminder to all the participants, if you wish to register for a question, please press star and then 1. Your next question comes from the line of Madhav Murta with MLP. Please go ahead. Hi. Good evening. Thank you so much for your time. My first question was, you know, I think at the network level, our occupancies are quite strong. If I picked it up right, you said about 76% occupancy in quarter two.

27:07 I wanted to understand, given that occupancies are quite healthy already, how much scope do we have to optimize the payer mix to shift more to cash and insurance business in the coming one or two years? No, good question. So basically, there is definitely a scope to improve on our payer mix. And there are multiple steps that we are taking. We have to understand one thing first. In terms of our newer hospitals, which is Srinagar and Kanpur, our strategy obviously was to have beds being filled faster. And hence, we were looking at impanelments then. Now that we are complete, we do have scope for improvement.

27:52 In terms of the overall fees that we look at, there is still Srinagar is operating at 60.4% of occupancy as of H1 of FY 'twenty seven. Now in terms of improving the CTC mix, there are a lot of marketing initiatives that we are taking in terms of ensuring that our overall input funnel, they improve, which subsequently kind of converts into admissions, which is the IPD footfall that we are talking about. So the entire focus is in terms of improving our CTC consults so that we have enough and more input funnel to look at. Understood. And with this healthy occupancy, I'm assuming given the case mix, we would have sort of enough opportunity to keep optimizing and sort of improve that as well. Is that like a good assumption to make at this point?

28:52 No, absolutely right. So there are two elements to it, basically. One, obviously, is that we are looking at high end tertiary care specialties to deliver for us. Now hence, our surgical mixes are improving, our procedural mix is improving. Plus the second point is that we have added quaternary care programs across some of our units. So an example being liver transplant program, which was started with Gurgaon, and now we have extended that program to Panchkula and Patna. So liver transplant being is one of the biggest levers where we are seeing enough and more traction across the three units. Liver kidney transplant is another area that we have been working upon. Bone marrow transplant is another area. We have also started robotic surgical programs across different units, including Gurgaon, Patna, Panchkula and recently launched in Ranchi with a very specific ortho specific robotic program in Udaipur.

29:52 So we are looking at different combinations of also getting deeper into each specialty, introducing and covering it from the start to the endpoint of that specialty, plus adding more and more quarterly care programs into our Ambit. Got it. And then just wanted to get a guidance from you in terms of how many new beds do we plan to operationalize in the second half of this year and in FY 'twenty eight, what's the plan there? So I'll take this question. This is Dilip here. So as we told you that we bought a couple of wings yet to be opened in Kanpur, and there are some more beds to be opened in Rachi.

30:39 So there would be about 200 to two fifty odd beds, which are yet to be opened, which would take up our operational beds, which currently stand at 1,500, will go up to closer to 1,800 within the overall capacity. Having said that, we will be having more beds coming up in Gurgaon II as well as Ljudjana over the next twelve to eighteen months. As we have said that 300 beds are coming up in Gurgaon and 500 beds for Ljudjana in the following year. Understood. Understood. Thank you so much. I'll come back again. Thank you. You. Your next question comes from the line of Sanitya with Unicorn Assets. Go ahead.

31:33 Do you hope I'm audible? Yes, sir. Are. Please go ahead. Yes. First question on the cash flow. So if it compares to Sorry to interrupt, sir, but you're sounding slightly muffled. If you are using a speakerphone, may we request to use the handset? Is this better now? This is much better. Yes. Please. Yes. So if we look at the cash flows, then we see that there's almost, like, $302.50 euro by enough... Million million kind of negative impact, our profits are, like, almost 4x from last year first half. How do you explain that? Sir, as you've seen the cash flow, there has been a movement, a significant movement in the working capital. So INR 172 crores has been a result of working capital absorption with the DSOs increasing from around seventy nine days to ninety two days, which typically rises in the middle of the year and should settle down as we go forward and the case mix and the spare mix improves over time.

32:47 Sorry, but I didn't understand like how so I'm comparing from September 25 over September 26. So I don't think there should be any seasonal or middle of the year impact that is visible on such... Like, trade receivables have gone from 87.5 to one thirty four groups. This is like almost double. So what changes in the payer mix or whatever you are referring to? Could you explain how? There are two parts to it. If you look at the 25% jump in the business itself, that itself has been one of the variables. The second is there has been a greater percentage of impanelments in our newer hospitals that is also absorbed part of the working capital.

33:35 And therefore, the overall mix of debtors has gone up from seventy nine to ninety two days from March to September. I'm talking about from March itself this year, there has been a movement. Okay. So are you seeing that the INR 200 crore improvement for first half of last year versus first half of this year, almost 50% of that has been affected in trade receivables? About... It will be less than that, but, yes, directionally, you are right. Okay. And then one more line item just below the trade receivables, other assets and other financial assets. So if you can explain what's that. So you are referring to...

34:30 In this sequence, a for operating cash flows. Financial assets. Yeah. So this is actually reclassification of fixed deposits, which have been taken for a long term basis and has to be classified as other financial assets. It's basically a 50 crore fixed deposit, which is classified in other financial assets. Okay. Any particular NGE to which it is done? Yes. It's with our regular bankers. Okay. So no, I was just trying to understand, it wasn't there in the last year. So from which accounting entities have been reclassified, either that could be explained or is it something new then from which entity?

35:16 So I'll explain that to you. If you'll have to go back and that the cost of explaining what happened last year, we had an INR 80 crore capital infusion, equity infusion, which came in April 25. That gave us some cash, so we took a longer term FD. Now that, as per auditing standards, cannot be classified as current and it couldn't be classified as under the bank balances, it had to be classified as other financial assets under that category of long term non current assets. So that is what it is really. Great. Really helpful. Thank you so much for patiently answering my questions. Thank you. Thank you. You.

36:02 Our next question comes from the line of Wanshi Shah with EVNA Advisors. Please go ahead. Hello. Hi, sir. Am I audible? Yes, ma'am. You're audible? Ma'am, you're audible? Yeah. So, sir, my question was, mature hospitals have reported EBITDA margins of around 29% in h one FY twenty seven. So what is the sustainable EBITDA margin potential for mature hospitals? And how should margins evolve as new hospitals mature? Yes. Okay. It's a very good question. If you look at our cohort analysis, which is depicted in our presentation, we have shown that the new hospitals start off as negative, become positive, start hitting mid teens to high teens margins and move into the middle bucket of emerging.

37:04 The middle bucket then gradually moves to the leftmost mature bucket, which is currently a blended of mid to high 20s EBITDA range. We expect gradually over a period of time, everything should migrate in a steady state towards that level. And obviously, there will be some new hospitals at all points of time. So the blended EBITDA, which we are looking at in the long steady state should be in the mid-20s range. That's the way we are envisaging our business as a model. That's our playbook. I'm not giving a guidance on that, but that is the model playbook which we are looking at. I hope that somewhat answers your question.

37:57 Yes, sir. Very well understood. Sir, I have one more question. So what other locations are we looking at apart from Mudhiana and Gurugam for expansion? And what will be our expansion strategy, whether it will be greenfield or brownfield? This is Doctor. Nagar here. Thank you. Since this is a forward looking question, currently, we're very focused on delivering the new Bourgogne facility at Golf Course Extension and Lutzana facility. Given this is 800 beds coming on stream, we are focused on delivering rapid growth in these and our newer facilities. In terms of the medium to long term, just to reiterate the philosophy and the reason for our existence, we want to solve for North And East India's accessibility, quality issues of tertiary and quaternary health care. We are very, very focused on that.

38:58 In terms of the models, whether they are greenfield, brownfield, M and As and O and Ms, we're happy and we are very excited to look at all the models at an appropriate time. But currently, we are only focused on these two. Noted, sir. Sir, I have just one last question. We are particularly present in tier two and three cities. Do we see any challenges in getting medical talent? I think it's a very geographically good question. We have seen that we have beautiful, great talent, let's say, in Kashmir. It's not been a problem. In fact, we've had a problem of plenty. I can give you an example. Even day before yesterday, a professor of urology from U. K. Has just approached me for wanting to come back. He's a dean in a university there.

39:54 That is the depth of talent that is available, example, even places like Kashmir. But again, that doesn't answer the whole question. Where we find there is also a lack of talent in tertiary and coronary care is in places like Dabanga. We do find that is a challenge. And of course, as an industry, finding good tertiary and quarterly care specialists is always going to be a challenge. Although given the government's policies increasing in undergraduate medical seats tremendously, we are nearly touching 150,000 seats this year. And of course, more than 50,000 postgraduates, it might be much more.

40:40 And our own contribution across hospitals where we are producing postgraduates in D and B programs and across most of our units. So medical education creating specialists within our system is a core belief of Paras Healthcare, and we continue to focus on it. Understood, sir. Thank you so much for answering all my questions. All the best to you, sir, and Diwali greetings to everyone. Thank you. Thank you so much. Wishing you, everyone, a happy Diwali once again. Thank you, sir. Sir. Thank you. Our next follow-up question comes from the line of Manav Mehta with MLP. Please go ahead.

41:34 Thank you so much for the follow-up. Just wanted to check, you know, given we have several of new beds, you know, coming into into the mix in the coming twenty, twenty four months and case and payments improvement opportunity as well. Is there like given the first earnings call, is there any revenue guidance that you would like to share for the network as a whole for the next two, three years? Yes. So there is no guidance as such which we are sharing. However, we have seen you have seen the trend of our revenue, and revenue growth is healthy. You got to see how the mature buckets, emerging buckets and new buckets can shape up.

42:21 With the new buckets, current new bucket shifting to emerging and emerging moving into mature gradually and two new hospitals coming in the new bucket, I think similar trends, similar kind of modeling you can do, but without any specific guidance from our end. Our Our next question comes from the line of Mr. Ramesh Chalke with JM Financial. Please go ahead. Yes. Thank you so much for taking my question and congrats to the management on good number.

43:09 First question on ALOT. So we are operating with almost 2.8, 2.9 ALOTs for an aggregate of eight hospitals. This is the one of the lowest ALOTs I have seen on the listed hospital space, especially when we have such a large scale hospitals like from Apollo, Max, and Fortis, etcetera. So what are the reasons or what are the factors which are leading to such a high... Low loss number which suggests that there is a greater operational efficiency in our hospitals? And do you expect expect this lower loss number to continue even in the future, considering we have so many new hospitals which have already come up and where typically we are present in tier one, tier two hospital, where also the loss number is typically on a higher side, more than 3.5 to four.

44:05 So is it sustainable number for us going forward? So if we Biren, this side, if we look at these numbers that we have been maintaining, our numbers have always been in the range of somewhere between 2.8 to three, and we expect that the trend continues for us. Now the reason why we have these numbers obviously is surrounded by the fact the kind of case mix that we carry. Obviously, in terms of looking at the different case mix of surgical specialties versus medical specialties, daycare versus the midnight occupancies and the new areas which are developing up in terms of Onco radiation being one, chemo being another, robotic surgeries improving the A loss for the patients.

44:57 So these are certain interventions that have helped us reduce our A losses, and we expect the same trend for us to continue. So when we open new hospital, is that considered as a criteria to maintain? Because, typically, we see that new hospitals are having a higher loss because initially, the case mix is a bit inferior. So you are absolutely right. When we open new hospitals, this is certainly not the criteria. For new hospitals, as you rightly mentioned, depending upon the case mix, the losses could initially be higher. And then as and when we introduce new and new medical programs and new technology for that particular unit, the A losses typically with improving case mix and the new technology will further taper down.

45:49 Sure. And second, bookkeeping question I had was on the seasonality for our business. Most of the hospitals we have seen having a stronger 2Q and 4Q. It would be helpful if you can mention the... How the seasonality is typically spread out for us on quarterly basis. Especially in this quarter, we have seen the new... Newer hospital reaching to 70% occupancy. Do you expect it to be sustainable for upcoming quarter three and quarter four as well? See, there are clear factors for it. The seasonality trend also is a factor of where we are operating in, which part of the country we are. We've been focused on North And East India.

46:36 The trend continues for us as we have seen for us in the past. In terms of improving our occupancy, as we are leveraging, one, the existing capacity. So that's one area that we are working on. And the second, obviously, is the bed expansion that is going to come up, as we have mentioned, in the new units and in the existing units. So effectively speaking, as our operating base increase, we do have scope and margin of improvement in our existing facilities, plus obviously the new upcoming facilities as well. Sure. Thank you so much. I have last question on strategic question. So most of our hospitals so far have been asset light. Going forward, we expect to stay asset light when we add new hospitals.

47:26 And also, does that mean the acquisition would remain a low priority for us because it will require a good amount of capital allocation versus our typical asset light business model? Thank you. Let me take this question. Doctor. Nagar here. Our new hospitals that are coming up, whether it's the Gurgaon or the Lunyana, continue to be asset light. Our focus is on delivering quality health care in the geographies that we want to be in. That is the priority. In terms of the opportunity for M and A, opportunity on greenfield, opportunity on brownfield, we are honestly open for everything. But currently, given that where we are and given the current commitments, we are very focused on delivering value on those, and that is what we intend to do in the next two years.

48:21 The opportunities arose, we will continue to look at them. And we've done public private partnership as well. So even that is an opportunity for us in the future. Thank you. Our next question comes from the line of Mr. Avin Ben. Please go ahead. Hi. Thank you. Am I audible? Yes. Yes, You're audible? Hi. Thanks for the opportunity. A few questions, sir. So in Metro hospital... Hospitals cluster is at an occupancy levels of almost 78%, which is around 200 bps improvement year on year. How much further headroom do you see that is available to drive this? And are there any white spaces or levers that can be filled to have further uptick from here?

49:12 Definitely. Vineet, let me pick this one up. So in terms of our matured hospitals between Gurgaon, Patna, Panchpala and Dharbanga, we do see there is a possibility of further occupancy increasing in Patna. We do have opportunities there. But when we look at, for example, in Gurgaon, the reason golf course extension Gurgaon comes in is because of the simple reason that there is a lesser headroom for us in the existing unit. So yes, we do see opportunities in Patna. We do see some opportunities in Panchkula. We can still have improved occupancies there. But Gurgaon, yes, that's the reason Gulf Coast extension comes in. Understood.

49:57 And with Durbangan, even though it's a 100 bed hospital, a small hospital, there are a lot of specialties that are still available that can still come up. So any plans to add more advanced specialties or case mixes there? So let me answer this point in two parts. Obviously, with Durbanca, yes, there can be a future tech expansionspecialty expansion as we progress. However, a small journey about Durbanga is Durbanga was supposed to be feeder to Patna because of its proximity to Patna. And that's the business model that we are operating Durbanga with. It continues to be a feeder hospital to Patna. In terms of the quaternary care programs, Durbanga will constantly and keep on feeding Patna.

50:45 But in terms of improving some level of tertiary care programs further, diving deeper into those programs, yes, that expansion will still come to that program. Got it. The other question that I wanted to ask was that the emerging hospitals are at a margin level of around 18.519%. What would be the kind of timeline that you estimate that these would reach to the comparable of mature facilities from your previous experiences, right, how they have been trending? Yes. I think it's a good question, Vish. So if you look at the age profile, typically, the margin should start moving to the mature bucket in four to seven years after seven years.

51:32 So once they reach that kind of maturity level, we expect that they should be hitting low to mid-20s and then they move to mid- to high-20s in the mature bucket. Rachi is already kind of delivering the mature type of margin profile. And therefore, we will see how soon we would like to classify it as a mature hospital, although it still is in the age bracket, which is in the middle category. Ranchi is already delivering mid-20s kind of EBITDA margins. Just to add that Ranchi is already delivering 25.8% in quarter two of FY 'twenty seven as part of the EBITDA margin.

52:20 So that's what Dilip was mentioning. Got it. Got it. And just one last question. Given that Gurgaon Hospital will be commissioned on your and also you had mentioned earlier about adding a lot of advanced specialties in white spaces, What kind of recruitment what recruitment plans are being taken care of? And what are the kind of new doctor additions that you're doing? No, very, very good question. So obviously, in terms of when we are looking at the entire clinician hiring stroke clinician addition plan, there are two things that we do keep in mind. One, obviously, is the medical programs that we constantly add.

53:07 Two, obviously, is the deep dive into a single specialty, how we expand our programs into specific areas. So these are the areas where we will continuously attract and try and attract more and more clinical talent and have more and more teams with us. Obviously, it's also a factor of having clinical talent to ensure that whatever specific areas that we kind of come through, we are able to cater that. Just to also add to that, there is an interesting piece that you should be looking at, that the kind of clinical talent that we have acquired, we have three padamshiris with us in Gurgaon itself, Doctor. V. S. Mehta, Doctor. Patma, Doctor. Alka Kirtlandi, all three are there with us as Paraskshires in our flagship unit itself, plus the kind of talent that we have in other units as well. So example, Doctor.

54:07 John Mukhopadhyay in Patna, he is a prominent figure and a name there. Got it, sir. Thank you for taking my questions. That's it from me. Thank you. Thank you. Ladies and gentlemen, that was the last question for today. As there are no further questions from the participants, I now hand the conference back to the management for closing comments. Over to you, sir. Yes. Thank you all for attending this conference call, our first conference call, and we look forward to interacting again with you in future. Thank you, and good night. Thank you. Ladies and gentlemen, on behalf of GM Financial, that concludes this conference. Thank you, everyone, for joining us, and you may now disconnect your lines. Thank you.