Aster DM Healthcare Limited (NSE: ASTERDM) Q3 2025 Earnings Call dated Feb. 03, 2025
Corporate Participants:
Puneet Maheshwari — Senior Manager, Investor Relations
Alisha Moopen — Deputy Managing Director
Ramesh Kumar — Chief Operating Officer
Sunil Kumar M R — Chief Financial Officer, India
Anoop Moopen — Non-Executive Director
Hitesh Dhaddha — Chief of Investor Relations & M&A
Analysts:
Somay — Analyst
Kunal Randeria — Analyst
Venu — Analyst
Amrudish — Analyst
Harit — Analyst
Nikhil Mathur — Analyst
Nikhil — Analyst
Roland — Analyst
Mithun — Analyst
Presentation:
Puneet Maheshwari — Senior Manager, Investor Relations
Good morning, everyone. I welcome you to Aster DM Healthcare earnings Conference Call for the 3rd-quarter of FY ’25. The company declared the Q3 and nine months for FY ’25 results. With us, we have the senior management of Aster DM Healthcare, namely Ms. Alisha Moopen, Deputy Managing Director; Mr. T J Wilson, Non-Executive Director; Mr. Anoop Moopen, Non-Executive Director; Mr. Ramesh Kumar, Chief Operating Officer; Mr. Sunil Kumar, Chief Financial Officer; and Hitesh Dhaddha, Chief Investor Relations and M&A Officer. I would like to inform everyone about how we will conduct this call. All external attendees will be in listen-mode only for the duration of the entire call. We will start the call with opening remarks by management, followed by an interactive Q&A session. During the Q&A session, you will get a chance to ask a question by raising your hand by clicking on the raise hand icon in the zoom application at the bottom of your window. We will call-out your name after which your line will be unmuted. You will be able to ask the question. We request you to please limit your question to two, but not more than three per participant at a time. Certain forward-looking statements may be discussed in this meeting and such statements are subject to certain risks and uncertainties like government actions, local, political or economic developments, technological risks and many other factors that could cause actual results to differ materially. Aster DM Healthcare Limited will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances. With this, I will now request Ms. Alisha Moopen to start with opening remarks. Over to you, Ms. Alisha.
Alisha Moopen — Deputy Managing Director
Thank you, Puneet. Good morning, everyone, wishing everyone a healthy and happy 2025, and thank you for joining the Q3 and nine months FY ’25 earnings call. With a shared vision to enhance healthcare accessibility and excellence in India, we had announced a strategic move to merge Aster DM Healthcare with Blackstone-backed Quality in Care India Limited, QCIL, bringing together two organizations with a strong legacy of patient-care. This merger will create one of the top three hospital chains in India. This strategic alignment brings together two resilient and high-growth organization with Quality Care’s renowned network of care hospitals, Kim’s Health and EverKare, we are excited to combine Asta’s presence and expertise. The merged entity will have a portfolio of 38 hospitals and over 10,000 beds, extending our footprint across nine Indian states and strengthening our presence in South and Central India. Our unified goal is to deliver world-class healthcare to the communities we serve. While providing an update on the merger, I want to express my profound gratitude to our esteemed shareholders for their overwhelming approval of the resolution regarding the issuance of equity shares on a preferential basis as part of the strategic merger progress. Voting on the resolution concluded on 31st December 2024 with 92% overall shareholder participation. The resolution was approved with 99.99% of the votes in favor. Ahead of the merger, Asta will acquire 5% stake in QSIL from Blackstone and TBG in exchange for a primary share issuance by Aster, representing a 3.6% stake. Following this, will be merged into Aster through a scheme of a scheme of amalgamation subject to the necessary approval. This transaction, it marks a very important step towards the merger and facilitate a smooth integration once regulatory approvals are secured. The share acquisition transaction further strengthens the commitment of both organization to the proposed merger. The application for merger has already been filed with the Competition Commission of India and Stock exchanges for their approval. The completion of the transaction is subject to the fulfillment of regulatory and compliance requirements, including no objection certificates and letters from the stock exchanges, approvals from the CCI and the NCLT. Now moving over to the financial performance. If you look at the long-term India performance, over the last five years, our operations have demonstrated strong growth with a revenue CAGR of 23% and an operating EBITDA CAGR of 38% up to FY ’24. This success has been driven by our strategic focus on capacity expansion as well as ARPOP enhancement. At the same time, disciplined cost management, operational efficiencies and an optimized service mix have significantly improved margins, enabling us to scale profitability while maintaining high-quality care. Now coming to the nine months FY ’25 — FY ’25 performance. Our business has recorded a 15% revenue growth, reaching INR3,138 crores the first-nine months of FY ’25. This was driven by a 12% year-on-year increase in ARPOP and a 4% increase in average occupied bed. Operating EBITDA grew by 35%, reaching INR613 crores with EBITDA margins expanding to 19.5% in nine months FY ’25, up from 16.6% a year-ago. This improvement, this was fueled by operational efficiencies, including a reduction in the ALOS, the average length of stay, cost optimization initiatives and enhanced EBITDA performance in our lab business. Notably, our material costs excluding the wholesale pharmacies, has decreased to 20.7% in nine months FY ’25 from 22.3% in the previous year. Our net profit adjusted for the merger transaction costs grew by 65%, reaching INR251 crores in nine months FY ’25, up from INR153 crores a year-ago. This is driven by very strong operational performance and higher other income from investing the proceeds from the GCC business segregation. Additionally, we have seen a positive shift in our payer mix with the insurance segment’s contribution increasing by over 300 basis-points to 30%, partially offset — offset by a corresponding reduction in the scheme business. Coming to our core business, hospitals and clinics. Our hospital business continues to grow strongly with operating EBITDA margins improving to 22.3% in FY ’25, up from 19.5% of the previous year. Specifically, our mature hospitals, those that have been in operation for over six years has improved — has achieved an impressive EBITDA margin expansion to 25% in nine months of FY ’25, up from 22% a year-ago with the ROC ROCE of 36%. Our strategic focus on a well-diversified specialty mix ensures that no single specialty accounts for more than 15% of the total revenue. This enhances our resilience and strengthens our long-term growth prospects in the healthcare sector. Now moving on to oncology expansion, we are making significant strides in enhancing our oncology services with the launch of Precision oncology clinics, the Asta Cancer Grid and. These initiatives focus on precision medicine and collaborative research, enabling personalized cutting-edge care. Now moving to the new businesses, the pharmacy and the labs. As of 31st December 2024, we have 254 labs and patient experience centers and 203 ASTA Pharmacy branded retail stores. Our lab business has shown strong performance, achieving 14% revenue growth year-on-year in nine months FY ’25, while maintaining a positive EBITDA margin of 8% post breakeven in Q4 FY ’24. We remain committed to our expansion plans. Over the past year, we have added 271 beds, including 100 beds in Mims and 100 beds in Asimid City, bringing our total capacity to 5,128 beds as of December 31, 2024. Looking ahead, we plan to add approximately 1,700 beds, increasing our total capacity to over 6,800 beds by FY ’27. Our expansion pipeline includes major brownfield projects at prominent hospitals like City, Aster CMI and Aster Whitefield, which are progressively — progressing steadily to become high-capacity facilities with approximately 950 beds, 850 beds and 500 beds respectively. Moving to digital initiatives, I am pleased to announce the launch of the Asta Health app this quarter. The app offers appointment management, video consultation and digital health records access, significantly — significantly improving the patient convenience and experience. Now going into the leadership changes, we, we are very pleased to announce the promotion of Dr Prashant M. to the CEO of the Karnataka cluster. Previously, he served as the CEO of Asta RV Hospital in Bangalore. Dr. Prashant will now report to Mr Ramesh Kumar, COO of Astadium Healthcare India, and we will be responsible to driving the continued growth and development of the Karnataka cluster. Moving to some of the recognitions we’ve had in the past quarter, we are delighted to share that Astatium Healthcare was recently honored at the Awards, winning the title of Best Multispecialty Hospital Group. Additionally, Astatium Foundation was recognized as the first runner-up for Best CSR excellence in healthcare. As embarks on this pivotal expansion through the merger with, I sincerely thank our stakeholders for their continued trust and support. This merger marks a transformative milestone, creating one of India’s top three hospitals chain with over 10,000 beds and 38 hospitals. It will enhance our geographic reach, strengthen our presence in South and Central India and drive synergies while ensuring a strong governance framework. With a clear focus on quality, accessibility and patient-centric care, Healthcare is well-positioned for substantial growth, operational excellence and innovation. I will now invite our COO, Mr Ramesh Kumar, to elaborate further on our cluster voice performance. Ramesh, over to you.
Ramesh Kumar — Chief Operating Officer
Thank you, Ms Alisha. So good morning to everyone. I’m really excited to provide you an overview of our cluster performance for the nine months of FY ’25. Actually, we have witnessed a continued growth and improved operational efficiency across all our regions during the year. And I’d like to provide a few highlights around this theory. Starting with Karnataga and Maharashtra cluster, actually this cluster has shown a strong progress with a total bed capacity of 1,446 beds and around 14 operational census beds. We have seen an occupancy improve by 241 basis-points year-on-year from 61% to 64% in this FY ’25. The revenue of Karnataka and Maharashtra cluster has grown by 33% year-on-year, reaching INR1,054 crores in nine months of FY ’25, up from INR793 crores in FY ’24. The operating EBITDA for this cluster also saw robust growth of 58%, increasing from INR154 crores in nine months FY ’24 to INR244 crores in FY ’25. Our operating EBITDA margin also improved 23.2% in FY ’25, up from 19.4% in the previous year, demonstrating our ability to enhance profitability while continuing to expand the services, especially through high-end treatments in hospitals like Aster CMI and Whitefield in Bengaluru. Next, turning to the Kerala Truster with a total bed capacity of 2,635 beds. We have 1,971 operational census beds with a 74% occupancy rate. This utilization demonstrates the trust of our patient place in the quality of care at our facilities. In terms of our financial performance, total revenue from the cluster has increased from INR6.9 crores in FY ’25 compared to INR4,489 crores in FY ’24, making a growth of 8%. The operating EBITDA for the Canada cluster has grown by 21% year-on-year to INR382 crores in FY ’25. Margins have also improved to 23.7% in FY ’25 from 21.3% in FY ’24, reflecting both our top-line growth and our efficiency in managing operational cost. Finally, the Andhra and Telagana Truster has also delivered improved performance with a total bed capacity of 1,047 beds and 781 operational sensors beds. The occupancy rate improved by 530 basis-points, that is from 50% in FY ’24 to 55% in FY ’25. Revenue for the Andhra and Telagana cluster has grew by 16%, reaching INR357 crores in FY ’25 compared to INR307 crores in FY ’24. Operating EBITDA also grew by around 42% from INR33 crores in FY ’24 to INR47 crores in FY ’25, with margins improving to 13.2% compared to 10.8% in the previous year. Altogether, our bed capacity, if you look at, it stands at 5,128 beds with 3,766 operational census beds as on 31st December 2024. Overall, outpatient visits have grown by 11% and inpatient visits by 10% year-on-year in FY ’25, which highlights the sustained demand for our services. Looking-forward, we are very confident in sustaining this growth trajectory by prioritizing our — especially the operational excellence and broadening our reach and of course, maintaining our commitment to delivering the exceptional care, we are all well-positioned to build-in a positive momentum. I now request our CFO, Mr Sunil, to elaborate on our financial performance further. Thank you.
Sunil Kumar M R — Chief Financial Officer, India
Thank you, Mr Amish. Good morning, everyone. For the quarter ended 31st December ’24, India revenues have increased to INR1,050 crores, up by 11% from INR949 crores in-quarter three FY ’24 and operating EBITDA has increased to INR202 crores with a margin of 19.3% compared to INR168 crores in-quarter three FY ’24 with a growth of 20%. Adjusted PAT post NCA for quarter three FY ’24 is at FY ’25 is at INR81 crores compared to INR62 crores in-quarter three FY ’24 with a growth of 30% year-on-year. For the year ended nine months FY ’25, India revenues have increased to INR3,138 crores, up by 15% from INR2721 crores in nine months FY ’24 and operating EBITDA has increased to INR613 crores with a margin of 19.5% compared to INR453 crores in nine months FY ’24 with a growth of 35 percentage. For the nine months ending 31st December 2024, our operating EBITDA margins have grown more than 300 bps, increasing from 16.6% to 19.5% year-on-year. This growth is driven by several factors. The hospital and cleaning segment has achieved over 17% revenue growth with margin expanding by more than 280 bps from 19.5 to 22.3 percentage. Our matured hospital, which contributes 73% of our Hospital and Cleaning segment are now operating at an operating margin of 24.5%. Revenue growth in this segment from a combination of increased volume of more than 10% across our hospitals and 12% rise in ARPOP and 6% improvement in alongside revenue assurance measures. The growth in operating EBITDA is a result of various optimization initiatives across our hospitals. Our metal cost percentage, excluding wholesale pharmacy has steadily decreased from 25.3% in FY ’22 to 22% in FY ’24 and further to 20.7% during nine months FY ’25, making more than 450 bps efficiency improvement over three years. Additionally, manpower cost and overheads have contributed through operating leverage to the EBITDA growth. Aster Labs achieved breakeven in-quarter four FY ’24 with margins increasing to 3.4% in-quarter one FY ’25 and further to 9.4% in-quarter three FY ’25. This impressive turnaround as fueled by strong 27% year-on-year growth in external business, improved operating leverage and metal cost efficiencies. For the nine months ended 31st December ’24, our capital expenditure totaled INR238 crores with approximately 65% spent towards expanding our capacity. We have commissioned to Tower 4 of 100 beds in City during the quarter and over the next three years, we aim to further add nearly 1,700 beds with majority of these being expansions to ensure there is no dilution in our margins. Optimus capital allocation, coupled with margin improvement, our ROCE has experienced a significant growth. ROCE surged by 470 basis-points year-on-year, reaching 19.4%. Hospitals and cleaning segment ROCE rose to 25.8% from 20.6% in nine months FY ’24. Matured hospitals saw an impressive increase in ROCE by over 700 basis-points, reaching 35.7% in nine months FY ’25. India net cash stands at INR1,014 crores as on 31st December ’24. On that note, I conclude my remarks. We would be happy to answer any questions that you may have. I now request Puneet to open the question-and-answer session. Thank you very much.
Questions and Answers:
Puneet Maheshwari
Thanks. We can now move on to the Q&A session. Before moving on to the Q&A session, I would also like to request to all the participants if you can introduce yourself with your name and the company that you are associated with before asking the questions. If you are not associated with any company and you are an individual investor, you can highlight all that also. Moving on to the Q&A session, the first question is from Mr. Somay. can you unmute yourself and ask the question?
Somay
And yeah, am I audible? Yeah. Hi. Yeah. Thank you so much for giving me an opportunity. I have first question on the Kerala performance. Is it possible to highlight what was the key reason for the low-growth for the quarter?
Alisha Moopen
Yeah, sure. Thank you. Thank you,. So there has been some changes, of course, from in the flu season as well, if you look at. Last year, when you look the flu season, it moved — it extended into the Q3, which also helped in the occupancy and the revenue. However, when you look at this year, the flu season actually ended in Q2. So a little bit definitely there has been a footfall difference we are seeing quarter-on-quarter. Other than that, from an MBT perspective also, there has been some reduction in the footfalls from both GCC as well as Maltese, which were key regions for Kerala. So but having said that, I mean, we’re seeing a nice restoration that has happened even in January as we talk about it. But I think we should also be mindful of the fact that there has — there was some leadership changes that happened last quarter for our main flagship unit in MedCity. We’ve had the new CEO who is now on-board as well. So we expect some of this — a little bit of the muted growth to be very temporary and already in January, we are seeing a restoration. No, Anup, if you wanted to come in as well with any anything,.
Anoop Moopen
You have covered it, Alisha. I mean so with the new leadership in-place. I mean things are really looking positive. In the January, we could see the traction happening. And in the coming months, we are hopeful that ramp-up is going to be very positive.
Somay
Sure. Thank you so much. The second question I have is on the — or the occupancy of the more than six years vintage hospitals, which is around, 65% 67%, I believe for nine months. Is it possible to highlight which are the hospitals here would be dragging the overall occupancy? And if there is scope for this occupancy to increase in the future? Thanks.,
Alisha Moopen
Anoop, what do you want to?
Sunil Kumar M R
Amit, thanks for the question. See, with respect to above six years, it is at 67% occupancy because all our matured units are there. Two important reasons, which is also bringing down the occupancy is also the important thing is we added 250 beds in the Kela region, right? In last — if you look at the quarter two end, we added the 100 bps in Kanor. And also in the quarter three, I would say in the current quarter, the quarterly closing, there we added 100 beds in the — our City Hospital. And also we added additional 25 bps in Kotakal and also another 25 bps odd in PMF. So these are the — almost 250 bps added. So that means what has happened is the operational bits also has gone up. That’s where you can see occupancy bringing down largely, right? That is very specifically Kerala cluster. Yeah, even Karnataka cluster, we can see a little bit see as Alicia called out. Last year flu season moved from quarter two to quarter three. If you look at some medical and surgical mix also, we had almost 60% medical mix as compared to 40% in the last year and now 60% was the ratio in the last year, quarter three. Now it has changed, right? So what has happened is that the revenue, the growth what you’ve taken in mix, it’s very similar, but at the same time, your Medical-Surgical mix has done a largely chain. That is also one of the reason why in Bangalore, you can see a little bit of a reduction in occupancy. But otherwise, you can see on also very important conor, with the current — before I’m adding 100 beds, it used to be run at 95% occupancy, right? We used to manage with the transit beds and everything. Now we don’t have that issue. That’s where that source has come down. So these are the multiple factors, I would say why the occupancy is lower. It’s across-the-board.
Somay
Sure. Just last question I have on the Maharatta, and cluster, the performance has been very good for last two quarters in the growth as well as the profitability improvement. Is it only led by the white commissioning or is there anything other than white other unit is contributing to this improvement time. Thank.
Sunil Kumar M R
So, even Karanaka, cluster, yes, I would say whitefield is driving the growth. No two things supported because whitefield only the — because last two years we were running with the Whitefield block C, which is only 50 beds women in children care, where the revenue was lower and also the ARPA was lower at 40 to 50K. Only in the last October, we started the ENB block, which is a true multi-specialty hospital, wherein — because of which ARPA has risen to more than 75% 76K in-quarter three, it’s very specifically in whitefield. That is one reason. And growth very much growth has been driven Karatak commercial cluster, I would say, majority growth is coming because of the whitefield doing really, really well. At the same time, our RV Hospital has done well. There also you can see even though you can look at overall 29% ARPAP growth what we have in-quarter three, even for a nine-month figure when you look at, there is a 33% growth in revenue. And that is possible only because there is a good performance from Whitefield hospital. There also very good performance from RV. Again, they are growing at more than 12% to 14%. Then also a very good growth in terms of Astra other hospital, which is on a Kolapur. So there also there is a tremendous growth. CMI, as I said, CMI is affected barely because the growth is not visible because if you look at last year quarter two, quarter-to-quarter three, the revenue is quite flat because of the flu cases. We have seen that in this quarter three from quarter two, there is no such medical cases due to which the occupancy has come down there. But otherwise, most of the hospitals are really doing well in Karnataka.
Somay
Thank you so much. I will go-ahead.
Puneet Maheshwari
Thanks,. The next question is from Mr. Kunal Randeria from Axis Capital. Kunal, can you please unmute yourself and ask the question?
Kunal Randeria
Yeah, hi, good morning. So just taking over from the previous question. So in Whitefield, it seems that all the blocks are now commissioned, including women and child. So wondering what more headroom? R
Alisha Moopen
Ramesh, do you want to.
Puneet Maheshwari
Kunal, you have got muted.
Kunal Randeria
Okay. Okay, sure. I hope I’m audible now. Yeah. So I was just asking about the Whitefield facility. So all your blocks, including the women and child and the ENB are commissioned. So just wondering how we should see the growth from here on.
Ramesh Kumar
So Kunal, so what we have presently, we have B&C, all the three blocks commissioned as you rightly said, this is around 350 beds. Now a D-Block is also coming up by the month of June, which will add 150 beds, taking the bed capacity to 507. Right now, the occupancy is warpening around 50% to 52% in the operational beds of existing AB and C block. So we are not still yet matched the capacity. And so what is doing well is right now, the oncology high-end work, we have been doing robotic surgeries, I go ERT and these are all high-end surgeries we have been doing, thereby the performance of Onco is really doing well. Neurosurgery also high-end surgeries have been happening. The ARPOP is really good and overall performance by most of the departments have there been doing well because of the high-end cases. So still we have a capacity and by June, we will be adding this 150 beds more. I hope I have answered your —
Kunal Randeria
That’s clear. That’s clear. Thank you very much. The second question again is on the Kerala cluster. So you mentioned there has been a leadership change. So I was wondering if you can share what are some of the changes that the new team is putting in-place?
Ramesh Kumar
Yeah. So Kunal, what we said because the leadership change, I would say that’s a small transition because there now we have taken away immediately there were some kind of you know the contract changes for the MVT, which was coming in a little bit of a and we have stopped a little bit since occupancy was slightly on a higher side and we had a slowdown on the ECHS patients and all that. So some correction had to take place. So there was a traffic slowdown, some intake had happened and also the seasonal changes what we spoke about, the flow impact, which was there last year at the same time, we had a better impact and the ICU occupancy was slightly on a higher. So all put together, it is — I would say that small — the transition has happened during that time. And now we have a perfect a perfect leader, Dr in-place to takeover and it has already started. So as Ms Alisha has rightly mentioned, the January has really taken off, it is just that last 1/4 what we have really seen kind of slowing down. Otherwise, it was back to track.
Alisha Moopen
So I’ll just add to what Ramesh has said. I think strategically, we have sort of said that we want to focus more on the — on the quality of the patients that are coming in as well, right. Earlier, we were talking much more volume-based. So that was where the strategic shift in terms of moving some of the lower schemes and all has happened. So that’s kind of the direction with the — with Kerala also going-forward because you’re seeing more-and-more corporates coming into Kerala, you’re seeing that there will be pressure on the volume. So we said with our market leadership in Kerala, we should be focusing more on sort of improving the ARPOP, quality of the occupancy. So that’s a general direction we have said we will take.
Kunal Randeria
Sure, sure. That’s helpful. But in that regard, have you made some changes to your pricing strategy also? And secondly, Alisha, the point you made on volumes. There’s one big competitor who is entering Kerala with around 3,000 beds or so in the next few years. So just wondering whether there’ll be a lot more supply than demand here?
Alisha Moopen
Yeah. So I think, again, like I said, we do have a very good legacy in Kerala and leadership position and we also believe that once the merger is complete with the Kim asset also coming as part of the merged entity, we will definitely have a very — we will continue to have a very strong position. There will be some pressure on volume, which is where we said, let’s focus more on stabilizing our RPOBs and not really play the price gain. Our pricing strategy as the year is ending, we’re working on it for the next quarter, how we should be thinking about it. But we’ll be agile and dynamic in that process, but we don’t want to be playing the price pressure game to be honest.
Kunal Randeria
Sure, perfect. That answers all my questions. Just one more if I can squeeze in. Would you by any chance give us some indication on how Care Hospitals performed in the last quarter?
Alisha Moopen
I don’t think we’re — I don’t think it’s recommended. I mean, we don’t have access to that information yet because we are still waiting for some of the CCI approvals for sharing all of that data to be honest.
Kunal Randeria
All right. Thank you very much and all the best.
Puneet Maheshwari
Thanks, Kunal. The next question is from Mr. Venu. Mr. Venu, can you please unmute yourself and ask the question, please?
Venu
Hi, good morning. Just a couple of questions from my side. So last quarter, your margins had seen a significant improvement both Q-o-Q and Y-o-Y. And if I remember correctly, you had mentioned some structural changes you have made, et-cetera, which has led to this margin improvement. Could you give an update on that, especially in the context that this quarter compared to last quarter, we have seen slightly softer margins. Are these kind of structural measures that you’re taking? Are they done or is it — is there some more margin expansion we can see? And if you could give some indication of what sort of sustainable margins can we look-forward to? Thank you.
Sunil Kumar M R
Thank you, Venu, the question. Yeah, I know what you’re referring to. So quarter two, we were at 21.4% margin. And now at quarter three, we are at 19.3%, right? So you’re saying there is a dip in there, how do we address it? See, also, we should look at what is the nine months because the quarter-on-quarter, there will be a lot of case-mix changes comes in due to which always the margin always structured. But when you look at our Nine-Month number, at a consolidated India, we are at 19.5% and the hospital clinic, which is our core segment with a 93% revenue, that is at 20.3%. And even the 19.5%, if you look at year-on-year, we added more than 200 to 300 basis-points in the current nine months as you compare to the previous nine months, that is the expand which has happened. Now very specifically to the change which has happened within quarter two to quarter three is that, see, there are multiple reasons. One is the material cost itself. When you look at our specialties with — because when the Congo specialties what we have, you know, cardiac has grown by 16%. Your oncology has grown by 28% and also your neuro has grown by 19%. So you can see that my — these are top departments, which is driving the revenue. That’s one of the reason why ARPOP is very, very strong. At the same time, whenever oncology is taking the front in driving the growth, usually, we see that the metal cost takes impact. That’s where what also we have seen is that almost near to 1%, metal cost also has increased between the quarter two to quarter three. If that wouldn’t happen, we would be more than 20 percentage EBITDA margin even in the quarter three at the consolidated basis. That is one thing. But again, as I said, oncology is something which we are taking very strongly. We have Dr also who is heading the Astrid Institute of Oncology. And across-the-board, we are trying to you know, basically specialize and increase the oncology specialties per se. All these things are a very important thing for to cater to the patients. At the same time, they have certain negative outputs also with respect to cost. But as I said, this is just a quarter-on-quarter you know glitch and we think we will be able to stabilize. Even with that, we are at a 20.7% mineral cost at India level on a nine-month basis. So we still that there is a certain room to further if we bring efficiency. In terms of the optimization measures which you have brought, as I already called out in my speech also, we got more than 450 basis-points in last 2.5 years. So I would say very specifically, it’s approximately 33 months. We are able to bring so much and still we see that in cost, there is another 50 to 100 bps still available for us to do it. Now the next is that we’re also bringing certain solar power efficiency. For example, we are in the almost a 26 megawatt plant is in work-in progress in Kerala. That should give more than I would say, INR15 crores to INR16 crores worth of savings in the coming year. This is expected to operation sometime partially it should get operational in this quarter and partially in the quarter on FY ’26. So I would say and also non-medical consumers is something which are not worked upon. So that is something which is going to happen in the next year. So from the efficiency point-of-view, still there is a lot to do it. But just on a broader sense, which we have even previously spoken. Today, at consolidated India, we are at 19.5%. I expect in couple — I would say by FY ’26, ’27, I’m talking about, we should be somewhere near 21%, right? And also from the hospital Cleans segment, which we are today at 22.3%, 22.4%, there you can expect around 24% margin. So I think this is very much — these are not something which is very up to this one. These are all very sustainable margins, which we can reach and continue to be there.
Venu
Understood. Thank you. Next question on just further clarification on Whitefield Hospital. So your presentation says about 159 beds in Block D is going to be added in FY ’25. So what you also told about some beds being commissioned in October. So what’s the current bed status and is the total number of beds in the cluster, 14 46 which you have given is, does that include the beds that commissioned in October and the 159 of.
Sunil Kumar M R
I referred to the beds we have commissioned or in Kerala around 250 beds. Whitefield overall is around 500 bed hospital, wherein we have commissioned 350 beds. Balance 155 beds, we were expected to commission in-quarter four, but as Ramesh called out in the previous response, it has moved to around me or June, just a two, three months change which we have done. But otherwise, it’s on plan to operationalize in sometime in the quarter one of FY ’26.
Venu
Understood. I thought you told in October, some couple of blocks were commissioned in.
Sunil Kumar M R
Okay. I was referring to last October.
Venu
Okay, okay. Okay. Sorry. And finally, you know, when do you think by, when do you think you can give some sort of pro-forma joint financials of Care QCIL plus you want to take it?
Hitesh Dhaddha
Yeah. See, as Alicia mentioned, we are going through some of the regulatory approvals and hence both companies, as suggested by our lawyers don’t share any information with each other on all these data. So I think once we get some of the relevant approvals, we will start looking into that as well..
Venu
Yeah, got it. Thank you. I’ll jump back the queue.
Puneet Maheshwari
Thanks,. The next question is from Mr Amrudish. MR. Amrudish, can you please unmute yourself and introduce yourself as?
Amrudish
Thank you for the opportunity. Amrish, I’m an individual investor. The first question is on this recent IRDAI IRDI circular on limiting and insurance increases and impact possibly on-going forward. So the health insurance companies seem to indicate that the two-ways they will deal with this. One is, of course, they’ll spread it across their portfolio of other custom clients. But the other is they say that they will have to renegotiate packages with hospitals. I’m not sure if it’s too early to comment on this, but is there any reaction you may have considering our insurance is 30% already and growing?
Sunil Kumar M R
Yeah. Let me add the initial response,, then Ramesh can add to that. See, as of now, we don’t have any such, I would say, a response which has come from any insurance companies. And today business is very specifically in Maharashtra, Telangana and Karnataka, that’s where the Gypsa is there. There almost 50% to 60% of our insurance company — the insurance business is coming from Gypsa. There we are getting a usual. I’m talking about recently, we had a price increase after two years we had the increment increase which has happened. So we have not seen any such requirements, which has come up as of now. Maybe going-forward, we are expecting some discussions should happen sometime in the quarter on FY ’26. But as of now, it’s very early to comment on this.
Amrudish
Okay. Thank you. Yeah. Second question, just wanted to get some logic or rationale for the dividend announcement and considering we’ve already given a very healthy — and I understand we had cash left over, but just keeping in mind our expansion plans, any rationale for the dividend?
Sunil Kumar M R
Yeah. So, yeah, Amrish, see, we — I think as Astra as a Group relisted sometime in 2018, right? Last six years, we have not given any dividend to any shareholders, right? So — and the first dividend is the special dividend we gave in April and a final dividend, which we declared or from the AGM around in August that’s for the FY ’24. So other than these two, we have not released any very specific dividend. See, from the expansion point-of-view, we are today at a net cash of INR1,000 crores plus. And also we have a very good cash-flow from operations, right? Almost my 80% to 85% of my EBITDA is the — we have a cash-flow from operations. We are very — have a very good free-cash flow also. And for example, the 1,700 beds which is in pipeline today as on 31st December 2024, we need approximately INR1,100 crores for a period of three years. I’m talking about the ’25 closing ’26 and ’27. And you can see the way EBITDA is increasing, we should have more than 600 to INR800 crore upwards of cash-flow from operations every year. Keeping that in mind, even for the balance whatever the existing line-of-credit, we are even not looking at borrowing any additional money with the existing cash-flow, we’re able to manage the, what I can say, the expansion plans. And even with that, with the additional coming in, at least in next five years time, if you — three to four years time, if you look at, we can even add more than 1,500 to 2,000 beds. I’m talking with the brownfield or the asset-light beds, which we can add without adding any more debt. So keeping all this in mind, we thought unless, we’re also at the same time looking at any inorganic opportunities. If something really comes up, we should always looking at it. But otherwise, we also thought that not rewarded the shareholders and that’s where we thought we would like to do that by through dividend. Alicia, you would like to add anything to this?
Alisha Moopen
No, I think you’ve covered it. I guess I’m, since the merger has also been sort of finalized, we said that takes care of a large-scale up and for the organization. And exactly like Sunil mentioned in terms of our organic expansion, we’ve kind of got the internal accruals for that. Even when you look at our leverage, it’s hardly there, right? So we still feel like we’re in a strong position to continue to look at both inorganic expansion and organic is taken care of. So we said why not give some back to the shareholders with the — with the performance and to catch-up for some of the years we couldn’t do it.
Amrudish
Thank you. Thank so much.
Puneet Maheshwari
Yeah. We would like to highlight that we’ll be giving preferences to attendees who have not asked the questions before. So in that line next question is from Mr Harit. Harit, can you please unmute yourself and ask the question please?
Harit
Hi, hope I’m audible. Yes. Yeah. So thank you for the opportunity. So the expansion plans that you’ve shared, I can see we have around 450 beds in, 300 odd beds in Hyderabad and these are markets where QCIL is quite strong, especially through Andrem through Kim’s Health, they have a strong presence in that region. So any change of plans or any rethink on some of these expansions post the merger just to give you a
Sunil Kumar M R
Behalfish you want me to go-ahead? See just look at the we have to look at always the demand and supply, right, gap. When you look at this very specifically in, you can see a lot of PEs coming in already other than the Kim, there is no other very, I would say up to that mark, there is no corporate hospital in. If you ask me, there are still three to four big hospitals can really come and survive in Travantrum. And also see in catchment area is quite large. If you look at from the Kerala built altogether, right, for North, you’ve got so many hospitals, including Calicat, Kanor and and then Kochi in the central. But after Kochi, if you go down south, you don’t really have hospitals there, except for the main hospitals in. So that way, we don’t see any reason why we should not go-ahead and do that. So there is no really change in-plan. We are very happy to do that. If we don’t do it, someone else will come and do it. So there is no difference in that. Next in the Hyderabad bit of it, if you look at today already there still there is a gap of almost 3,000 to 4,000 beds. And as per the market research report, there is still another four to 5,000 beds coming up in next five years’ time. So with that, we wanted to grow there in Ospit in Hyderabad. I don’t — again, we don’t see any change in-plan. Also QS QCL, if I’m right, they have somewhere between 800 to 800 plus beds. And with this one, we will have more than 1,000 beds. This also helps us into create a leadership position in.
Harit
Okay. Got it. Next one, Sunil is on the labs and pharmacy segment. On the pharmacy side, we’ve seen a muted YTD performance and you talked about some change in-sourcing — but the first question is, the store count has also declined. So the change in strategy in terms of sourcing, why there is a lower store count is the first part and how we should think about growth next year?
Sunil Kumar M R
Yeah. Thank you, Harit. Maybe initial part I’ll cover, maybe Ramesh can add to that. See, when look at currently we have two more — more than 250 around facilities out of that, the processing lab is 14. See here, we are only seeing 14 in addition to that they also have more than eight to nine labs as a HLM labs, that is our actual labs which they do it. That’s also more or less you can use it as satellite lab. If you club it, you have really more than 20 labs across Karnataka and put together. And in addition to that, we also have more than 240 plus collection centers. Majority of it is in Kerala and 40 to 50 in Karnatak also. Yeah, which is very true. One thing is true is that we initially we had spread-out into Tamil Nadu and other particular states, but we are very mindful that we want to be there, as I very clearly called out. We were trying to bring an app, right? An app is already launched in, I would say, in January. Basically we are already — CMI has already been entered the digital app and we’re expecting all our hospitals to get into the app sometime in the March, right. With that, and also we are also trying to bring in labs and pharmacy as a Phase-2, sometime in the quarter three, in the FY ’26. With all this coming together, that ecosystem what we wanted to create. And if the system is to work means the labs and pharmacies should be within the districts or the states where the astro hospitals are present. That is one of the reason why we are curtailed to the regions where our hospitals are very, very strong. That is on the growth bit of it. Now at the same time, we don’t have to grow too much on the processing labs because logistics is very easy today. And also, as I said, we have 14 plus another eight to nine HLM labs, 20 plus labs in these two states is more than enough to cater to our own patients. In addition to that, what we will be increasing now is the patient collection centers, that is our franchisee PECs, right? So there already you can see there is a growth there around 240 and we expect it to grow more in Karataka and further in Kerala. In terms of the growth, see, most important thing for us is to improve the non-Aster business within the Labs. A year back, if you look at 72% or 78% of the business used to come from the Astra business. Now that has reduced. Our business has moved from 23% to almost 28% to 30 percentage in the current nine months period. And we expect this to grow in a very big way in the coming year because it’s always the initial growth which takes time. But now that we have got the stability there and we are able to break-even, I think the next year, the growth I would say, see, Astra business, which is part of that will grow as per the Hospital because it’s a captive business. Only the non-aster business, I’m expecting to grow more than 35% to 40 percentage in the coming year.
Harit
Yeah. Sunil, thank you for that. My question was more on the pharmacy side. We have a store count of around 200 now, which was 250 at the beginning of FY ’24. So this decline is what I’m trying to.
Sunil Kumar M R
Yeah. So was I explained the lapse bit of it. Pharmacy, 250 we had initially, but again, that is again spread-out over three states, that is Talangana, Karanataka and Keralab. The idea was that because you know that we were bleeding cash there and now the only idea was that we wanted to limit the number of stores we will for very sure we’ll not go below 200, we will maintain about 200. Also, we are wherever the locations are bad and we think that we are not able to drive the yield per day per store above certain benchmark level, then we are moving. So it’s only the movement which is taking time. Otherwise, we will be around 200 to 225 stores overall. We will never go below 200 stores, but the concentration now as you promised also is to breakeven there. So as the way we brokeven labs in FY ’24 — last quarter, we are expecting to breakeven sometime in the last quarter FY ’26.
Harit
Okay. And last one with your permission. But last few months, we’ve seen a few of your former CXO level leaders joining one of your competitors and then that competitor has big ambitions in Kerala. They’ve already announced a few projects. They’re talking about setting up a large hospital in Kochi. So is there a an impact that one should expect for Aster from these aggressive moves by this particular competitor.
Ramesh Kumar
So let me come in here, Mr. So we feel that, see, now with more-and-more corporates coming into Kerala, I think for a competition point-of-view, it is only going to put pressure on the ARPOP levels or the price increase because as you know, the ARPOP compared to the other regions like when in Kerala, it is between 20,000 to 40,000. In Karnataka, it is 60,000 or 70,000 above. So Kerala has always been a price-sensitive market and we are already having a legacy there, a brand and also all seasoned units, we stand at an advantage there. So anyone who is coming in, they will be forced, then they will have a pressure on the price, otherwise, they cannot perform. So either they will be forced to increase the prices or which in-turn again will raise the ARPOB level. So we see that competition is going to — it’s not going to affect Aster in any way. We see it positively.
Harit
Okay. Thanks,. That’s all from my side.
Puneet Maheshwari
Thanks, Arith. The next question is from Mr Nikhil Mathur. MR. Nikhil, can you please unmute yourself and introduce also yourself and ask the question.
Nikhil Mathur
Yeah, hi. Am I audible?
Puneet Maheshwari
Yes.
Nikhil Mathur
Yeah, thank you for giving me the opportunity and congratulations on great set of results. Sir, so the highlight of this quarter was Telangana or cluster and Karan Maharashtra cluster. So what were the drivers for the margin improvement in both of these clusters? And can you — can you also highlight what drove the occupancy specifically in the Telangana and Andhra cluster? So that is my first question.
Alisha Moopen
Yeah. Ramesh, do you want to come in?
Ramesh Kumar
Yeah. So as you as you rightly said, the Karataga, Maharashtra cluster, you’ve seen the performance as well, especially has gone up. The reason why is good is because of the case-mix, especially in Whitefield, you can see the high-end cases have gone up. So the surgical numbers, if you really look at two, three departments like Onco and Euro, they have been performing very well. So it’s all about to do in the surgical mix where the ARPUB has really gone up. And you’ll find like I mentioned about the flu season, which has come, usually the average length of of the flu patients are a little bit high. The analysis also to some extent because surgical numbers have gone up high in cases. So we find the analos has also come down slowly and by year round 0.2, so thereby it has also the — the performance has gone up very well in Karataga, Maharashtra cluster. As far as Andhra is concerned, it is also to do with where prime hospital primarily and we have taken over prime hospital last year at the same time couldn’t really do well. Now they started performing. It is also we had new clinicians onboarded there. Thereby the prime has started doing very well. We also have the — the Thirapati or Hospital. So it is it is also doing very well after we have taken over. So hospital has contributed well. And of course, the Andhra cluster you will find Ramesh Hospitals, the especially Vijawada hospitals are done exceedingly well. That was because of the cardiac season during the 3rd-quarter because they have started really doing well. So predominantly being a cardiac hospital. That’s how the Andhrab cluster has started doing well.
Nikhil Mathur
Okay, that’s great to hear. Sir, my second question is like what are the peak ARPU potential for the Karnataka and Maharashtra cluster as well as Telangana cluster? Because on a Nine-Month basis, we can see that ARPOV in the Maharashtra and Karnataka has reached 60,000. And in Andhran, has reached 2,900 approximately. So is there a further scope for improvement as soon as the seasonality goes off?
Ramesh Kumar
It is sustain. As I told you, the surgical numbers — I’m sure the surgical numbers are going to grow. And of course, the seasonalization should have minimum impact as far as I think because it will be an add-on only. It doesn’t bring in — if we are able to sustain and grow the surgical numbers with this high-end surgeries, I’m sure our ARPU would also continue to grow.
Nikhil Mathur
Yeah. Okay,, that’s great to hear. And sir, my third question is like when we look at the maturity-wise hospitals, we are — our over six years have 24.5% operating EBITDA margin, three to six years have approximately 22% and over zero to three years is approximately 13%. So let’s say in next two to three years, our 3 to 6% will move over 6% and zero to 3 will move over 3 to 6%. So when we are guiding towards 24% sustainable margins, can we have an upside risk over there because there will be a drastic improvement six hospitals in zero to three years. So those are going to drive margins a little more further upside. So is there a further scope beyond 24%?
Ramesh Kumar
Yeah. I’ll leave it to Sunil.
Sunil Kumar M R
Yeah. Sir, Nikhil, see the zero to three years, if you look at, there are basically six hospitals. Out of that the biggest is your Whitefield hospital. Otherwise, all other hospitals are very small underbit hospital, which is basically out of six, even four hospitals are our own hospital, which we already guided previously saying that ARPOPs are going to be low. It is going to be around 20 or even some places it’s lower than that. That also the margins you don’t expect it to be around 20%, it’s around mid-teens. That is the number. So — but even though it’s going to be in mid-teens, you don’t expect it to drag the margins in any way. At the same time, it cannot go beyond that also, right? So for example, Thirupati, hospital is all doing at 16% margin with a good occupancy. And we expect maybe another 100 basis-points improvement because ARPOP is going to be lower. The way case-mix is done with more towards the cardiac and the ortho there. Also the doctor models are very different in. All this will impact in driving the margins. But at the same time, Whitefield today is doing high-teens margin and at a full maturity with another Block day coming in, you can look at very similar to what our CMO hospital is doing near 30%. With all these things being in picture, I think around, 24 25 is a good number to be there.
Nikhil Mathur
Okay. Thank you. That’s it from my side and congratulations on great set of numbers and all the best.
Puneet Maheshwari
Yeah. Thanks, Nikhil. We’d like to highlight that we’ll be giving preferences to attendees who have not asked the question before. So in that line, the next question is from Mr Nikhil. Nikhil, can you please unmute yourself and ask the question?
Nikhil
Hi, am I audible? Yes. Yeah. Good morning all. I have two, three questions. The first question is on the rental cost for full-year FY ’25. From the cash-flow statement, first-half, it is around INR65 crores. So should we analyze the full-year FY ’25 number at around INR130 crores, rental cost
Sunil Kumar M R
See, you are referring to the rental cost. There are two-parts. One is on the variable-cost also. If you include variable-cost, yes, you can go up to INR120 crores to INR125 crores.
Nikhil
Okay. And with the expansion that will happen in the next two years, how this number should change? Should it increase in proportion to the count increase?
Sunil Kumar M R
Not very much to the proportion because Block D is one which is coming in Bangalore. In addition to that, all your Kerala hospitals, which is coming up doesn’t have these huge rentals coming in. So you don’t expect it to grow in proportionate to that.
Nikhil
Okay. That’s helpful. And secondly, on the Kerala Cluster side, what percent of business is coming from international patients today?
Sunil Kumar M R
Kerala, you know, see in Keralai majorly the MVD patients are driven by Mid City Hospital, right? In addition, Calicat, Cota, they do very, very minimal. But when you look at only the Met City, it’s around 12 percentage of your total business comes from MVT.
Nikhil
Okay. So overall, I suspect it would be 6%, 7% perhaps not more than that or 8%.
Sunil Kumar M R
So little less. Yes.
Nikhil
Okay. And in the past, can you give some indication that how does your patient inflow behave versus INR’s performance at a global level? I mean, if I&I were to be weak, let’s say, versus dollar in the coming months or so, how does that impact your business coming from Middle-East or those areas?
Sunil Kumar M R
See with respect to you know, we don’t expect — see, first of all, all our bill happens in the INR. We don’t do on a — any foreign currency to ensure that we hedge ourselves from the fluctuations, right? For example, if a patient bill is going to be around INR5 lakhs, we expect the other party to transfer at that particular point of time equal into that INR. So we don’t do foreign currency, any billing foreign currency, we do always do the INR. That way we’re always hedged on the foreign. And also we are very — currently we do around only 4 percentage or 4.5 percentage in terms of MVD business across India I’m referring to. So there is still very scope, high scope to grow because new markets which were not tapped into it. And even the SARC region, we have not really got many patients from the Bangladesh or other region here. So keeping all this mind, there is still a very, very big potential for us to explore in MVT. Rather than the downside, I would say there is lot of upside here, Nikhil.
Nikhil
Yeah. I think that was I was referring to, let’s say, if I know were to weaken. In the past when such situation has happened, has it led to improved competitive positioning versus many of the countries that you compete with? Perhaps, I mean, 2013, ’14 is one period where you can have some experience of this. I’m not sure if you can call-out something on that front.
Sunil Kumar M R
Nothing as of now.
Nikhil
Okay. Got it. And one final question.
Puneet Maheshwari
Can you please come in the queue? Because we have some more people in the queue as well. Thank you. Yeah, the next question is from Mr. Roland, can you please unmute yourself and ask the question?
Roland
Hi, am I audible? Yes. Yeah. Thank you so much for taking my question. So two questions from my side. One is on Kerala, right? So while you mentioned Jan is back to normal, right, but some of the changes that you have highlighted there, our focus on, let’s say, value or upper-end of our mix versus volumes, so on and so forth, together with the leadership change, this at least to an external party like us sounds as if this might take some time, right, before it settles down. So when you say Jan is normalizing, are these changes already worked in-place before the quarter as well? And is there anything to do with, you know, I mean, some of the — your employees going and joining competition. And do we expect such kind of transitory issues in some of your other clusters as well?
Ramesh Kumar
So, let me come in over here. First of all, the — if you really look at see, Astra’s base is pretty, if you look at MedCity and across all the chain of hospitals what we have, there is — there is a good amount of patient base is already having. So it doesn’t mean the patient — the employees moving out, they can have. And those who join the competitors also, competitors doesn’t have an existing hospital to divert the patient or for that matter, create that kind of impact. It has all to do with a little bit as we told about the seasonal fluctuation, a redirection on our MVT patient GCC, we had a little bit of patients coming down. And for that matter, also was slowed down drastically solely, MVT a bit of impact, a little bit to do with the seasonalization and a bit to do with what you call — I wouldn’t say that any changes as far as the employees thing and where they are able to divert the patients, it is definitely not going to happen because even competitors doesn’t have a hospital within the visit team to attract diverted patients. So that’s about estimated city. That’s the reason we were saying now the leadership is in-place. We have a CEO who has come in, we have a COO who has come in. He is already two months in the system and we leadership are there, including — it’s a flagship hospital where Chairman is directly involved in the interacting with the clinicians and having a kind of days over there. So I really doubt that there is any chances of patient getting diverted or for that matter, performance coming down.
Roland
And those are changes you see in any of your other clusters, right?
Ramesh Kumar
Let’s — see, competition is bound to be there, let’s chances because, yes, as and when they come up with the new facilities, there might be some small disruption here and there. That is bound to happen and not only with one competitor. I mean, most of them there will be a kind of — but we try to keep our clinicians, they are very happy. They are the people who make the difference. For that matter, I think almost all clinicians are intact. The other staff, it won’t make a major difference. The revenue-generating doctors are the key people. If we are able to ring-fence them, I think we are there. So that is what we are — right now we are doing and we are able to — almost all our clinicians are happy.
Roland
And one more last question from my side. On the merger, right, while it’s in the regulatories kind of court as to when we get approval. But before we get the approval, what are the things that we can do from our side, which will ensure that the transition happens quite smoothly or some of the synergy benefits that we envisage can be monetized or materialize sooner than expected. I mean, are there any enough levers at our end that we can do things before the actual merger from a regulatory standpoint fructifies.
Alisha Moopen
Yeah, Hitesh, will you come in here?
Hitesh Dhaddha
Yeah. So there are definitely a lot of levers. At the same time, I think you know we would not like to jump the gun here until we get some of the key regulatory approvals. But definitely, when we were doing this merger or announcing this merger, right, we had thought through the potential that both entities have post-merger and the synergies that can be created across multiple areas, whether it be on account of costs or revenue or also some of the corporate aspects and all. So clearly, there are there are areas that are opportunities that we’ll work upon, but I don’t think we’ll get too much of a hurry to jump the gun here before we get some of the regulatory pools.
Alisha Moopen
So Pitesh is saying, you’re right, there have been a lot of opportunities identified and I think prep work can happen once initial approvals are in-place, but of course, we cannot start with integration until the merger is complete. So what we would do is try and prepare so that at least from a data collection and analyzing perspective, we know where — where we can start implementing sooner rather than later to avoid the time gap. So that’s happening.
Roland
Great, Alicia. Thanks a lot and all the ways.
Puneet Maheshwari
Thanks, Roland. In the interest of time, we would like to take the last question from Mr. Mithun. After that, we will like to conclude this call. MR. Mithon, can you please unmute yourself and ask the question?
Mithun
Yeah. Hi, can you hear me?
Puneet Maheshwari
Yeah, sure, please. Yeah.
Mithun
Just wanted to understand, usually the 3rd-quarter is typically a non-seasonal lower quarter. So I understand your revenues may have been impacted. I just wanted to know about the company — the company that you’re going to merge with, how have they performed in the 3rd-quarter? Just wanted to see if we can — you can kind of share some highlights there as well, so that we kind of know-how the trajectory of both companies are faring.,
Alisha Moopen
Thank you for that. I know there’s a lot of eagerness to know about the merging entity. So we’re still yet to receive the information, which will depend on some of the regulatory approvals coming in-place. So we are hoping that once we have that guidance, we will be able to share with the shareholders as well in some sort of pro-forma performance later. But at this point, it’s a bit premature to be honest.
Mithun
Sure, sure. But is that point right? The 3rd-quarter is typically a non-seasonal quarter for the healthcare sector or just wanted to understand that.
Sunil Kumar M R
I mean, I promise, we have seen that either it goes flat from — see, quarter two is the major season that’s when due to rains and every other thing, and other flus, right, because of which usually the medical case is very-high Q2, Q2. If you look at a complete year, highest peak in revenues will hit sometime in July, August, all right. So after that from September onwards, you have festival starting and October, November, December every month. And it’s not like patient doesn’t want to come. One is that your medical cases go down in the quarter three and also because there is a huge number of, I would say festivals on holidays, even doctors travel. So due to both reasons, Q3, we always see a muted sequential as compared to the other quarters. And always we see quarter-four goes up.
Mithun
That’s fine. That’s fine. I just wanted to understand that. And going into FY ’26, what kind of addition in terms of capacity do you have compared to FY ’25?
Sunil Kumar M R
This year we have started, as I said, around 250 bps plus we have added in the current year. We don’t see anything coming up in the quarter-four FY ’25, but we are expecting the — our women and children block that is 150 bps get to operational in the H1. And also in the H1, we expect Hospital also like come in. That’s again a 260-bit hospital in the north of Kerala. At least these two hospitals, we expect to come in. And also there is one very small hospital of — I’d say, just a brownfield expansion in our Angur around 75 beds. These are three things which you can expect in the coming year, FY ’26.
Mithun
Understood. And just wanted to understand compared to your competitors, your margins obviously are lower because you have several hospitals where capacity utilization is improving and your margins overall will go up. Do you — do you believe there is scope to expand these margins over the next couple of years by 200 basis, 300 basis-points at an overall company-level?
Sunil Kumar M R
See, I think I even answered this very similar question previously. From the — see, look at hospitals and clinics where we are today at already at 22% on a nine months basis and we expect to close-in the same range for the full-year. And even your mature hospitals are beyond 24%. So we see that the hospital clinics segment itself should go beyond 24 percentage, right? So that’s very much possible. And the other, you know, like a wholesale pharmacy or a lapse is where you can see the margins dragging down. That’s where your consol asterl Group margin is around 19.5% on a nine months basis. There, we also expect labs to do really well in the coming years to go beyond 20% margin because labs you’ve always seen a very-high margin business. At the same time, wholesale pharmacy should become smaller and smaller because we are not seeing a very important growth, which we can expect here. Here. Keeping all this in mind, hospital and clinic segment should go in next two to three years’ time. I’m talking about around FY ’27, somewhere above upwards of 24 and our consulted margin should be upwards of 21%.
Mithun
Thank you, sir. Thank you.
Puneet Maheshwari
Thank you, everyone. This concludes the earnings call for this quarter, Astadium Healthcare. I thank the management and all the attendees for joining us today. If you have any further questions or queries, please get-in touch with us. Thank you thank you thanks.