Aster DM Healthcare Limited (NSE: ASTERDM) Q4 2025 Earnings Call dated May. 21, 2025
Corporate Participants:
Puneet Maheshwari — Investor Relations
Alisha Moopen — Managing Director and Group Chief Executive Officer
Ramesh Kumar — Chief Operating Officer
Sunil Kumar — Chief Financial Officer
Varun Khanna — Group Managing Director, Quality Care India Limited
Unidentified Speaker
Analysts:
Unidentified Participant
Presentation:
Puneet Maheshwari — Investor Relations
(Starts Abruptly) And sprawl for the quarter of FY ’25. The company declared the Q4 and full-year results for FY ’24-’25. With us, we have the senior management of Aster DM Healthcare, namely Mr Alisha Muppin, Deputy Managing Director; Mr TJ, Non-Executive Director; Mr Amup Muppin, Non-Executive Director; Dr Zeba Muppin, Non-Executive Director; Mr Ramesh Kumar, Chief Operating Officer; Mr Sunil Kumar, Chief Financial Officer; and Mr Hitesh Dadda, Chief Investor Relations and Media Officer.
We are also delighted to have Mr Khanna, Group MDO of Quality Care. MR. Khana is here solely in the capacity of a representative of Quality Care to give insights into business and future plans of quality care, the entity which is in-process to get merged with Astadium Healthcare. It is to be noted that merger is subject to further regulatory approvals. 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 the management, followed by an interactive Q&A session. Certain forward-looking statements may be discussed in the meeting 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. Astardium 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 Mr Alisha Muppet to start with opening remarks. Over to you, Mr Alicia.
Alisha Moopen — Managing Director and Group Chief Executive Officer
Thank you, Puneet. Good afternoon, everyone, and thank you for joining our Q4 and full-year FY ’25 earnings call. Financial year 202 has been a year of continued and significant strategic progress for Astadium Healthcare, starting with the demerger of the GCC ending — entity and then ending with the inking of the quality care merger, which is in-progress. We remain focused on execution, efficiency and building a strong foundation for long-term value-creation. Our overall business recorded a 12% revenue growth, reaching INR4,138 crores in-full year FY ’25.
This was driven by a 7% increase in inpatient volume and a 12% year-on-year increase in ARPOP with an improvement in ALOS by 6%, reflecting much better clinical protocols. We have successfully reduced the average length of stay due to several key initiatives, which includes preponing the discharges through third-party application for TPA patients, improving the admission management of elective cases, higher number of targeted therapies in medical oncology and increased minimally-invasive and robotic surgeries that enable quicker recoveries.
Additionally, a reduction in scheme-based admissions have also contributed to shorter hospital stays, all of which have collectively improved efficiency as well as the ALOS. Operating EBITDA grew by 30%, reaching INR806 crores with EBITDA margins expanding to 19.5% in FY ’25, up from 16.8% just a year-ago. This improvement was driven by ongoing cost discipline, operational efficiencies and enhanced EBITDA performance from our lab business. We also reduced material cost, which is excluding the wholesale pharmacy to 20.9% of revenue from 22% in FY ’24, reflecting much stronger procurement and pricing controls.
Our normalized path excluding the NCI, excluding exceptional one-off items such as the project unity cost of the merger, rose 49% to INR357 crores, aided by improved operational leverage and higher other income related to the GCC business restructuring. Now coming to the Q4 performance. During Q4 FY ’25, we witnessed revenue reaching INR1,000 crores, up by 2% year-on-year, factoring revenue impact in the Kerala cluster, primarily due to a full month impact of Ramadan in March, a lesser day-in February and lower international patient volumes. But despite having a modest revenue growth in Q4 ’25, overall operating EBITDA has grown by 16% year-on-year and operating EBITDA margin has reached 19.3% in Q4 FY ’25, which is up from 17.1% just a year-ago. While focusing on profitability, we also strategically exited loss-making segments in our wholesale pharmacy business.
We have delivered strong double-digit growth in our key operating regions, Karnataka and Maharashtra cluster, which grew by an impressive 16% and the Andhra and Telangana cluster by 11% in Q4 on a Y-o-Y basis. These results reinforce the strength of our core operations and strategic focus in high-performing markets. We have strengthened the Kerala leadership team by onboarding experienced professionals who bring renewed focus and execution strength.
On the MVT front, we are actively reengaging with partners in key geographies and expanding our outreach into newer markets such as Africa and Southeast Asia by a more structured digital engagement strategy and an enhanced referral partner network. Based on this momentum and leadership team firmly in-place, we anticipate a return to normal growth patterns over the next few quarters. We remain confident in the long-term potential of the cluster and view this phase as a short-term correction with a broader trajectory of sustainable growth. Now moving to our core business of hospitals and clinics.
Our hospital business continues to perform well with operating EBITDA margin improving to 21.9% in FY ’25, up from 19.5% last year. Specifically, our mature hospital, those that have been operational for more than six years have expanded their EBITDA margin to 24.3% in FY ’25, up from 22.4% a year-ago with the return of capital employed of 34%. 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. Moving to some of the new businesses such as labs and pharmacy. As of, 31 March 2025, we have 262 labs and patient experience centers and 203 Asta Pharmacy branded retail stores.
Our lab business has demonstrated a strong performance, achieving 12% year-on-year growth of revenue in FY ’25, while maintaining a positive EBITDA margin of around 8% post breakeven in Q4 FY ’24. While focusing on profitability, we have also taken a very strategic initiative to exit a few loss-making segments in the wholesale pharmacy business during the year. Moving to our CapEx plan for the future. Our expansion plans at Aster DM Healthcare are multifaceted and ambitious designed to further solidify our position as a leading healthcare provider in India.
Apart from our recent merger announcement with Quality Care India Limited, we are also focusing on both organic and inorganic strategies to further drive — drive further growth. Over the past year, we’ve added around 300 beds, including 100 beds in Mims and 100 beds at Aston MedCity, bringing our total capacity to 5,159 beds as of, 31 March 2025. We are significantly strengthening our presence in South India through strategic capacity expansion. Of the 2,100 plus beds earmarked for India expansion. In Bengaluru, ASTA will add a total of 939 beds, including 350 beds at Aster CMI Hospitals, another 159 beds at Asta Whitefield and 430 beds at the newly announced fourth hospital on Road with 300 beds expected by H2 of FY ’27 and the remaining 130 beds by FY ’29. Strategically located in the fast-growing Sajapur corridor, the new hospital strengthens our presence with Bengaluru’s expanding IT hub and enhances our citywide coverage across key zones.
With this addition, Asta’s total bed capacity in Bangalore will exceed 2,000 beds, reinforcing our position among the top three healthcare providers in the city for the future. In Kerala, we will add 818 beds over the next three years with two major greenfield projects, Asta Casa Code, a 264-bed hospital and Aster Capital in Travandrum, a 454-bed facility and in Hyderabad, a 300-bed state-of-the-art women and children hospital are planned to be commissioned. Now moving to the update on the merger. Under the proposed merger with Blackstone-backed, we have achieved some key milestones over the last quarter. Shareholders have approved the preferential issuance of shares.
The CCI have granted the approval. We have also completed a strategic share swap as there has acquired a 5% stake in QSIL in exchange for a 3.6% preferential allotment. The transaction now awaits final regulatory clearances, including approvals from the stock exchanges and the NCLT, and it is expected to be complete by Q4 FY ’26. Through the merger with AsterDM Healthcare, the combined entity will emerge as one of India’s top three hospital networks with 38 hospitals and over 10,300 breads across 27 cities. For FY ’25, the combined entity reported a pro-forma revenue of INR8,105 crores and an adjusted EBITDA of INR1,661 crores, translating to a healthy EBITDA margin of 20.5%.
Aster and QSIL each contributed meaningfully to this performance and this complementary financial profile not only enhances margin visibility, but also strengthens the long-term resilience of the entire platform. As we move forward into integration planning, one of the key synergies that we anticipate from the merger lies in the procurement and the supply-chain optimization. Leveraging the purchasing power of the combined entity will enable better supplier terms, cost efficiencies and streamlined inventory management, ultimately reducing material costs and boosting margins.
Operational integration will further strengthen our clinical capabilities and through the sharing of pooled medical expertise and combined infrastructure to improve patient-care and enhance revenue potential. Additionally, the expanded scale will support investments in advanced technologies and digital platforms, driving innovation, improving patient experience And creating long-term value for all stakeholders. Coming to the promoters pledge, in-line with our strategy, the promoters of Astardium Healthcare has successfully reduced their pledge from 99% to 41% after completing a debt refinancing transaction with top-tier global financial institution. This is a testament to the financial — to our financial strength as promoters. Moving on to exciting digital initiatives, I’m happy and pleased to inform that we have now rolled-out Aster Health app across Aster units in Kerala, Karnataka, Telegana and Maharashtra in the first phase of deployment. Further, we plan to integrate the services of hospitals, labs and pharmacies and going-live with full in-hospital digitization and personalized care. By leveraging data-driven insights, these initiatives will not only expand our patient funnel, but also enhance lifetime patient value and clinical outcomes. Ultimately, this robust digital ecosystem will help in driving sustainable growth as well as delivering superior value to our patients and stakeholders. We are very proud to share some of our recent recognitions during the financial year FY ’25. We are honored that Dr Azad Muppin, our Founder and Chairman, received the prestigious Lifetime Achievement Award from AKMG Association of Kerala Medical Graduates, recognizing his visionary leadership and contributions to Global healthcare. Also, he was awarded the Global Entrepreneur of the Year at the second ET Entrepreneur Summit and awards. It is also a moment of great pride that Aster GM Healthcare has earned the prestigious Great Place to Work certification. We also had in making history by becoming India’s first hospital to receive the prestigious comprehensive stroke Center accreditation from AHA. We were also honored at the Awards, winning the title of the best multi-specialty hospitals as a Group. Additionally, Foundation was recognized as the first runner-up for best CSR excellence in Healthcare. In conclusion, as Asta embarks on this transformative journey through this merger with QSIL, we extend our sincere gratitude to our stakeholders for their unwavering trust and continued support. The strategic merger represents a significant milestone, establishing Aster as one of India’s top three hospital chains operating 38 hospitals with over 10,300 beds nationwide. It significantly expands our geographic footprint, especially across South and Central India, while unlocking operational synergies under a robust governance structure. With a dedicated commitment to quality, accessibility and patient-centered care, Astadium Healthcare is well-positioned to accelerate growth, operational excellence and continued innovation. I now invite our COO, Mr Ramesh Kumar, to further elaborate on the cluster-wide performance. Thank you all.
Ramesh Kumar — Chief Operating Officer
Thank you, Mr Alicia. A very good afternoon to everyone.. I’m really excited to provide you an overview of our cluster performance for the FY ’25. We have witnessed a continued growth and improved operational efficiency across all our regions during this year, and I’d like to provide a few highlights around the same. Starting with Karnataka and Maharashtra cluster. This cluster has demonstrated significant progress with a total bed capacity of 1,479 beds and 1,014 beds, operational sensors beds, occupancy has improved by 90 basis-points year-on-year, rising from 61% to 62% in FY ’25. Especially when it comes to revenue for Karnataka and Maharashtra cluster, it grew impressively by 28% year-on-year, reaching INR1,408 crores in FY ’25 compared to INR1,100 crores in FY ’24.
The operating EBITDA also surged by 48% to INR321 crores in FY ’25, climbing from INR217 crores in FY ’24. Our operating EBITDA margin expanded to 28.8% in FY ’25, up from 19.7% in the previous year. This performance underscores our commitment to enhancing the profitability while expanding services, particularly through high-end treatments hospital like CMA and especially at Asta Whitefield in Bengaluru. Witnessing the growth of quality healthcare offering in Bengaluru, we have announced the fourth hospital at Sar Japur with a total capacity of 430 beds in two phases with the primary focus on Onco care.
With addition, total capacity in Benguru will be exceeding 2,000 beds, reinforcing our position among the top three healthcare providers in the city for the future. Turning into the Kerala cluster. This cluster with a total bed capacity of 2,633 beds and 1,974 operational sensors beds exhibited the occupancy rate at 71%. Finally, the Kerala posted a revenue growth of 5%, reaching INR2,108 crores in FY ’25, up from INR2007 crores in FY ’24. Operating EBITDA grew by 15% year-on-year to INR493 crores in FY ’25, with the margins improving from 21.4% in FY ’24 to 23.4% in FY ’25.
Highlighting our effective cost management and focus on operational efficiency, revenue growth in Kerala Cluster was impacted by the month-long rundown and a short February month compared to the previous years. Advancing in Andhra and Telegana Cluster, the total bid capacity stands at 1,047 with the 781 operational sensors beds. Performance improved notably with occupancy rate rising by 460 basis-points from 50% in FY ’24 to 54% in FY ’25. The revenue for the cluster grew by 15%, reaching INR473 crores in FY ’25, up from INR412 crores in FY ’24. Operating EBITDA rose sharply by 45%, moving from INR41 crore in FY ’24 to INR60 crores in FY ’25, with the margin strengthening from 10% to 12.7%, underscoring our strategic growth and efficiency improvements.
Looking ahead, we remain confident to maintain our growth momentum by prioritizing operational excellence, broadening our reach and staying committed to delivering exceptional care. We are very well-positioned to continue building on the positive trajectory. Now I request our CFO, Mr Sonal to elaborate more on our financial performance. Thank you very much.
Sunil Kumar — Chief Financial Officer
Thank you, Mr Ramesh. Good afternoon, everyone. I’m pleased to share Astridium Healthcare’s financial performance for FY ’25, a year in which efficiency has been the central theme of our strategic execution. We ended the year with a robust 12% revenue growth with the top-line increasing from INR3,699 crore in FY ’24 to INR4,138 crore in FY ’25. This growth reflects not just scale, but quality and resilience in our revenue streams.
We rolled-out revenue assurance initiatives across units and also undertook a reduction in low-margin scheme business, enhancing the overall quality of revenue. ARPOB increased by 12%, driven by multiple levers, a 6% improvement in air loss, strong growth from Astor Whitefield Hospital and impressive performance across key specialties such as oncology, neurosciences and cardiology. The reduction in ALOS is a result of both strategic and operational changes, including a shift in case-mix, a streamlined discharge process enabling by a third-party partner and increased use of minimal invasive and reported procedures and targeted therapies, which have significantly reduced the patient recovery times.
On the profitability front, our operating EBITDA grew by 30%, increasing from INR620 crores to INR806 crores with a 270 basis-point margin improvement from 16.8% to 19.5%. This performance is a result of relentless focus on cost-efficiency. One of the key contributors was the significant improvement metal cost management. Metal costs excluding wholesale pharmacy as a percentage of revenue declined from 25.3% in FY ’20 to 20.9% in FY ’25. This is a direct outcome of our disciplined procurement practices, centralized vendor negotiations and optimized usage of consumers. We have further streamlined our manpower cost by approximately 70 basis-points within key functional areas.
This has been achieved by enhancing the span of control, allowing us to manage teams more efficiently and reduce supervisor, ultimately improving organization productivity and cost-effectiveness. We also implemented measures to rationalize overhead costs, including consolidation of services, non-medical consumables through centralized procurement. Our standard development this year has been the exceptional turnaround in our lab business. This segment has moved from negative EBIT of INR9 crore last year to a positive EBIT of INR10 crores this year.
This transformation reflects our focused approach towards operational efficiency, scale-up in volumes and a lean cost structure. Our wholesale pharmacy business also underwent a strategic shift. We chose to exit a loss-making operations through outsourcing, which resulted in a temporary dip in revenue growth. However, this decision has made with a clear view to restore profitability. We are confident that this will lead to a profitable turnover in Wholesale pharmacy segment starting quarter one FY ’26. From a capital allocation standpoint, FY ’25 was also a year of efficient deployment.
We have made a capital expenditure investment of INR342 crores, while maintaining our gross debt at lower levels than the last year at INR642 crores. We continue to operate from a net cash position of INR739 crores, leaving reinforcing our strong balance sheet. Our upcoming organic expansion includes over 2,100 beds, which will increase our total network capacity to 7,300 beds. I want to highlight that
Ramesh Kumar — Chief Operating Officer
This expansion will be funded through internal accruals and existing cash reserves without putting pressure on our balance sheet. Furthermore, we are pleased to report an improvement of over 300 basis-points in ROCE from 16.4% in the last year to 19.5% in the current year. Most notably, our core hospitals have been now operates at ROCE of over 25 percentage. To summarize, FY ’25 has been a defining year in DM’s growth journey, driven by efficiency across every dimension of the business from revenue improvements and margin expansion to the turnaround of previously loss-making segments. We have laid a solid foundation for future growth. As we move into FY ’26, we are confident of building on this momentum with the same discipline and focus. On that note, I conclude my remarks. Now I request Mr Varun to take you through the performance of Quality Care India Limited. Thank you.
Varun Khanna — Group Managing Director, Quality Care India Limited
Thank you, Sunil, and thank you all for joining today’s meeting. As you know, Aster and Quality Care are embarking on a transformative merger, bringing together two leading healthcare organizations to create one of the country’s largest and most distinguished medical institutions. Over the next few minutes, I’ll try and cover three key aspects. A brief recap of quality care, our vision and the initiatives that we have to achieve it and our recent performance. While we’ve discussed some of these points before, I’d like to provide additional context on QCIL and its latest developments. Quality Care is a leading healthcare platform in India, operating under three trusted brands, Care, Kins Health and Evercare. Ranked amongst the top-five hospital chains, we have a network of 19 hospitals and seven medical centers, offering 4,000 operational beds across 14 cities and 10 states.
Our financial strength reflects our solid foundation. Annual revenues exceed INR39 billion with strong profitability and EBITDA margins above 20%. More than 55% of our case-mix consists of complex, high-equity treatment supported by 2,500 highly-skilled consultants. All facilities are in APH with one achieving the prestigious JCI accreditation, reinforcing our commitment to quality care. Last year, we defined a five-year strategy focused on transformational and structured advancements.
Our goal is to enhance service delivery, clinical outcomes, commercial operations and digital transformation and all of this while expanding our network. To drive this strategy forward, we have assembled top industry talent from diverse backgrounds to foster a collaborative and growth-oriented culture. Over the past year, we welcomed eight senior-level leaders, including our Group CFO, CTO and CHRO, key appointments that will strengthen our leadership foundation. In terms of network expansion, we are on-track to add 1,200 new beds over the next three years, a 25% increase in capacity.
We are expanding our cancer footprint to six additional centers during the next six to eight quarters, managing the need gap in our micro markets. Additionally, we are making significant strides in digital transformation, including the launch of our call-center, CRM, single ERP, digital patient channels and multiple tools to improve patient service delivery. This year, we embarked on prioritizing our synergy wheel with five key synergy initiatives, which will contribute INR50 crores to INR60 crores in EBITDA with INR20 crores as run-rate for quarter-four 2025.
As we complete the merger, scale will bring significant synergy savings, which we will share in due course. On the performance front, despite significant investments in talent and technology, Quality Care delivered strong financial growth in 2025. Revenue increased by 12% year-on-year, EBITDA rose by 14%. In Q4, the FY — the revenue growth was 12% compared to Q4 FY ’24, while EBITDA grew 16% due to the impact of our strategic initiatives.
These results were primarily driven by 10% growth in inpatient ARPOB, fueled by higher surgical complexity, particularly in the field of oncology, cardiology and orthopedics, procurement strategies that contributed to an additional realization in Q4 with full potential expected next year. Comparative pricing adjustments, which had a marginal impact in late Q4, but are expected to drive a full-year benefit in FY ’26. Clinical advancements remain a priority. Over the past 3/4, we strengthened our clinical complexity by introducing robotic surgery programs, enhanced super-specialized oncology centers, interventional neuro and more, fostering cross learning across our hospitals.
Our teams also demonstrated exceptional resilience in navigating complex challenges, managing political instability in Bangladesh, overcoming operational disruptions from the revamp of four hospitals within our network, ensuring swift response and strong cross-functional coordination to maintain continuity and merging and optimizing three market-leading brands and operations across India and Bangladesh. For a simpler understanding of the network, I’ve broken it down into certain cohorts, which is four hospital groups, mature and established because each one of them would need a tailored strategy, mature and established, which is hospitals like, Dhaka,, Raipur.
It gave us a 14% Y-o-Y revenue growth and 22% EBITDA growth. The strategy here is expansion and we are focused on adding more beds. Emerging units, which is the likes of, Chattugram,, 78% Y-o-Y revenue growth and they are all ramping-up extremely well. Renewed strategy, which is largely the Hyderabad cluster, which had a flat growth this year, but the turnaround initiatives have already been launched, a new DMS for doctor relationship, leadership changes across the network, cost optimizations. And lastly, infrastructure upgrade. In fact, Banjara, our flagship facility will see a relaunch in this quarter. The expected full-year impact will be seen in the upcoming quarters for the renewed strategic focus cluster. Other focus units like Altrafa, Cotem,, Nampali, we saw revenue growth of 12% and the strategy is to enhance our case-mix and ARPOB for the improvement. Looking ahead, we are committed to advancing our clinical outcomes, complexity and patient-centered care. With strong momentum across the organization, we remain focused to becoming the most impactful healthcare provider in the country. Thank you.
Questions and Answers:
Puneet Maheshwari
Thank you,. Dear participants, 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 and you will be able to ask a question. Before now moving on to the Q&A session, I would like to ask 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 question. If you are not associated with any company and you are an individual investor, please go on to the Q&A session.
With this, the floor the and thank you for the insightful presentation.
Unidentified Participant
So first question I have is on the Kedla cluster. I understand there how our team has been changed over there. However, our expectation was that last quarter would have been a kind of a bottom out quarter. However, this quarter also we have seen worsening occupancy. So what is the expectation here? How long can it take for the new team to revive this cluster. And is it — or the issue is with one or two assets within the cluster or it’s across the assets?
Alisha Moopen
Yeah. Thank you. Thank you, Ame. So very good point. I think I had touched upon this briefly. So definitely, we’ve had a little bit of a challenge in Kerala over the last two quarters, which was largely the management change that has happened. Having said that, we have kind of strengthened the teams there. We’ve had the new CEO, COO who has come in, especially at our flagship MedCity, which is a large part of our network in Kerala.
But I think what’s very important to note for Q4 is the significant impact of Ramadan. So in North Carola, definitely, Ramadan does have a significant impact for us, not only in the local business on footfalls as well as elective cases, but it also has an impact on MVT because a lot of people who come in are from Maldives and Oman, which also — which also kind of gets impacted with the timing of Ramadan. So when we look at Q4, definitely all of March was Ramadan and you also — when it comes to MBT specifically, people usually start planning a few weeks in advance, right? So we believe that almost 2.5%, 3% of the revenue hit has been cost because of the Rabadan impact. Now going to your question on do we see this — I mean, we don’t — we see this as a very transitionary phase. This team has been set-up. We’ve kind of got the full team now firing quite well. So we expect that in the next quarter and two, things should kind of move back to start seeing the growth. I will let Sunil and Anup also come in for further comments. But Q4 was largely because of Ramadan and obviously, things like having an extra day last year. When you compare it, there’s a 0.5% difference on revenue that comes on account of that as well.
Unidentified Participant
Yeah. So thank you, Alicia. I
Unidentified Speaker
‘ll also just add to that. I mean, Alicia has covered most of the points of why that Paul was there in the last quarter, but as we all know, the team has been strengthened. There was a leadership challenge over there and new CEO and COO coming in. And again, to add to it, I think the major effect was in our flagship unit and we are — we have gone through a focused approach over and now the team is in-place and we have added more beds. We have — we have also add-on the onboarding of new clinicians. And we are seeing the traction in the first-quarter and in-line with your expectations.
Unidentified Participant
Sure. Thank you so much. The second question I have is on the care or care performance basically. So thanks for Varun being here on the call. So the first question I have on the care is related to Hyderabad cluster. That has been the underperforming cluster for us within the care or hospital chains. So what are steps we have taken so-far over last one year-on the Hyderabad cluster? And how has the performance improved over last one year? And is this also an issue with one or two assets within the Hyderabad cluster or overall performance of the — across units have been poor so-far?
Varun Khanna
Yeah. Thanks,. Thanks for your question. Quite an anticipated one though. So Ame, you know, if you heard me speaking today, there are four cohorts that are created to solve for this problem. One is mature established, the second is emerging. The third is the renewed strategic focus. And Hyderabad cluster really I’d say, falls into that. Hyderabad, we currently run five hospitals, and of which two hospitals have needed a significant help I’d say. So let me give you a narrative of — part of your question in terms of what done a lot of hiring. We’ve changed the leadership teams across. We have brought in the Medical Head of the company. Our clinical recruitment has now got far stronger. We’ve looked at the operating elements and we are working with external consultants to ensure that there is no operating leakage and we are also driving efficiency. And most importantly, we’ve renovated Banjara. Now Banjara needed a uplift. It had been a hospital asset that was not invested in adequately, I’d say, and that turnaround has happened. So during the year, we did go through this entire innovation, which was a complex job, it’s now got completed and we are looking-forward to inaugurating this asset. So I think a significant turnaround is underway and you’ll start to see the performance of the cluster getting significantly better. Hope that answers your question. Any follow-up on this one?
Unidentified Participant
On the 1,200 bed expansion, which we have spoken about on the brownfield expansion, how much would be coming from the Hyderabad cluster if that is the final question. Thank you so much.
Varun Khanna
Let me just give you a breakup of Hyderabad. Hyderabad, we have a new ramping-up facility as well, which is, which tried to perform pretty well. So that facility will see an expansion of about 100 odd beds over the next three years. Outside of that, we do see our flagship facility, Banjara also add about 18 to 90 beds. So collectively about a couple of 100 beds will be in Hyderabad
Unidentified Participant
Thanks lot
Puneet Maheshwari
The next participant who will be asking a question is Mr Tossif if you can unmute yourself and ask the
Unidentified Participant
I am audible?
Puneet Maheshwari
Yes, yes.
Unidentified Participant
Thanks for the opportunity. Good afternoon. Just a follow-up question on Kerala Peach. I think we rightly understand this performance is rightly not comparable because this quarter we might have seen an impact of nearly about 40 to 45 days of Ramzan. But just wanted to understand in last one year, have you seen any attrition rate at the initial level for most of the flagship hospitals in Kerala. Can you highlight something on this?
Unidentified Speaker
Yeah. No, I would come in here. So there has not been any major attrition in the Kerala Hospitals. I mean, the unit leadership level, they’ve — we had a strong leadership level at most of our units. And there — and we have a legacy factor also in Kerala. I mean the — if you look at the cluster, it’s a — it’s a long known brand. And the clinicians especially, they have a bond within the unit and they feel that ownership and more than more than many of us, they believe that it’s a unit and they are never thinking of moving on. So we have been very blessed in that area.
Unidentified Participant
So this quarter we have seen a 6% decline in IPD volumes in Kerala. So can you give us a clarity? It’s mainly alluded to medical tourism patient.
Unidentified Speaker
Yeah. So medical tourism is one. And see now see one of our flagship units, as you know, there was a leadership challenge over there. So we have to admit that the focus was not that much because of the lack of leadership. So that have led to the decline in the numbers and focused marketing and referral approach and all that. So we have got the leadership back-in place. In fact, we have reinforced it much better and we are seeing the traction now.
Unidentified Participant
And what kind of occupancy layer one should see for FY ’26 for Kerala Cluster.
Unidentified Speaker
Sunil, you want to come in on that?
Sunil Kumar
So, thanks for the question. I don’t think so we should be like to give a guidance. But from the growth point-of-view, right, because see, if you look at last four to five years, we’ve been growing in a very ramp-up phase of more than 20% and Kerala was growing more than 30%. Now we have reached the capacity where, 70%, 75% of the occupancy had reached. But as I said, the quarter two, quarter-four has been a temporary dip. And going-forward also, what we look at is that more than occupancy because occupancy is a factor of the new beds coming in also. So quarter two, we added 100 beds in Kandor because it was running at a 95% plus occupancy. Then we also added — in our flagship, we added 100 beds. As Anu Paso alluded, we also started adding few doctors also in majority of the specialties to drive the volumes. But going-forward, we are looking at least a mid-teens growth
Unidentified Participant
On the Kerala.
Sunil Kumar
Yes.
Unidentified Participant
Yeah. Follow-up question to Ramesh Kumar on the part. I think we have announced a new project in Saljapur. So if you can highlight what’s the landscape over there and where how Esther is placed in this market?
Ramesh Kumar
So, as Sarjapur is one of the fastest-growing micro-market in Bangalore, as you know, it has been having approximately around 35 lakh to 40 lakh population concentrated in that belt. And that is one reason. Affordability, insurance penetration is the highest there because of the — mostly software people or you know, with that background, people are staying in and around that area. So we have affordability is also — it’s good. So we — it is right to have a hospital there. Competition, as you rightly asked the next question, competition is also — Sakra was doing exceedingly well. And Manipal, if you really look at they also done in that market very well. There’s a huge potential out there in Sajapur market. Others are also coming and pitching in, but definitely, we’ll be much ahead of time and we will have the right clinicians there onboarding to immediately ensure that that’s a very good successful project for us.
Unidentified Participant
Thanks. I’ll get back-in the queue.
Ramesh Kumar
Thanks,.
Puneet Maheshwari
The next question is from Mr Aditya Chheda., if you can unmute yourself and ask the question Mr can you please unmute yourself and ask the question I think it’s not able to hear us okay so I’ll move on to the next participant the next question Is from Mr Kunal. Kunal, can you please unmute yourself and ask the question?
Unidentified Participant
Hello, good afternoon. So my first question is again on the cluster because I’m not sure I fully understood the impact of Ramsan because in 2024, I think you had 20 days of Ramsan in Q4. Occupancy was fairly healthy in mid to-high 70s. So I’m just trying to understand how much of the dip is because of Ramzan this year because you have 30 days and how much would be because of other factors that you mentioned?
Sunil Kumar
Sunil, do you want to go a little bit more thanks for the question. See, there are — see, currently, if you look at quarter-four, we’ve grown at 2% across at overall level. But if you remove, but only look at the hospital space, right, in the core entity, it is — it has grown 4%. The other 2% dip has happened because we consciously reduced the wholesale pharmacy segment. See, wholesale pharmacy has got two segments. One is the segment which supplies to all B2B and trade business and another is the one which is supplying to the retail pharmacy.
So there we thought that the logistics was not working out really well and we used to have a cash loss. So address that one, we have done that. So that way, it’s artificially come down to 2%, but actually it’s a 4%. Then I think alluded to that 2.5% to 3% has come up because of because see, last year Ramdan started only in the late March and ended in the mid-April and we saw the pickup happening in the month of May. In this case, what happens that it started the beginning of the March and ended in the March, right? So there is a full month impact which is coming to quarter-four.
So that itself has contributed to 2.5, 3 percentage. Second is also the third one, I would say is the MVT. See, MVT, we had a major drive. If you look at the last year MVT also, from quarter three to quarter-four, there’s no reduction. It was almost flat. But now we have seen a major reduction one so because of a conscious decision there, Kunal, specifically through., we’ve seen major ramp-up in the business in the last year and we have also seen that they are not a very good paymasters.
We had to control the receivables. And that’s where you also see in the quarter-four because we were able to reduce the values of the business very consciously, even though revenue dip has happened, our collections have become better. Overall, our receivables distributed somewhere 85 to 90 days DSO, we are able to reduce to below 80 days. And because of which our ECL, you know, the provisions have become better in-quarter four and that is also one of the reasons why even though we have a 2% to 4% growth in the quarter-four, we were able to drive a 16% growth in the EBITDA.
And so I hope — and also Kunal, it’s very, very important to understand that whatever the dip which you have seen, it’s a very, very temporary phase. It’s just a couple of quarters, we should be able to bounce-back very, very soon. We’re putting all the leadership, all the systems in-place to ensure that something like this doesn’t recur again.
Unidentified Participant
Sure. So if we were to kind of going into Q1 now that the Ramsan is over, I think we should see occupancy back toward close to 70% just from the Ramsan impact.
Sunil Kumar
So see, usually when I say I won’t give occupancy because occupancy is very skewed, let us look at the volume growth here, Kunal. When we say that we’ve grown at a mid-teens, at least 78% will be with volumes and balance 7% to 8% will come from the, okay? And now volumes is something which we are very, very confident that will continue to grow at around 7% to 8% going-forward. So occupancy, you can model it out, but we are back to-high single-digit volume growth or something which we are — make it happen.
Unidentified Participant
Sure. Now since you touched upon the lower ECL provisions, there was also some rent reversals in this quarter. I mean, these are not something which are sustainable, right, going-forward. So this 19% margin, would that be sustainable or you may just see a temporary blip because this time the profit was slightly bloated because of this.
Sunil Kumar
So if you look at the — all the four quarters EBITDA margin, we started with a 17% plus margin, then we bounced in-quarter two to more than 21% and quarter three also, we closed at 19.3%. Quarter-four also is 19.3%, right? So you’ve seen that it’s a consistent increase. And if you look at last year, all the four quarters, if you properly, we were hovering between 15 to 17, right? We were at 15, quarter one last year, quarter two it was around 16.8%, then we moved to 17.7 and 17.7 is the — how we ended in the last year quarter-four. Then from there we cash down to 17, went to 21% under — as I said, 21% because quarter two always you’ve seen a — that is the biggest quarter of all the four quarters.
That’s one of the reasons why EBITDA margin really jumped. But you can see that even though there has been a slowness in the revenue growth, we were able to maintain the margin of 19.3%. But what I can say is that going-forward also, on a full-year basis, these numbers what we have published is more of a sustainable. And as I said, previously also we have talked about the future margins we are also aiming at to reach 23% 24% in next three to four years timeline. So we are very much committed in this regard.
Unidentified Participant
That’s great. That’s 23% to 24% without the QCI synergies, right?
Sunil Kumar
No, no, with the QCI synergies.
Unidentified Participant
Sure, sure. And last one for Mr Karna, I — you did speak of several senior-level hires and leadership changes. Just trying to understand, what is the hiring you’ve made on the operational front and on which clusters have you done and any more roles that you need to still fill-in.
Varun Khanna
So Kunal, largely what we’ve done is at two-levels. So one, we’ve created another layer, which is the operating layer, which is what we call the regional Chief Executive layer. We’ve got a senior industry-leader coming into that role already. He came on-board last month. At the Group level, we’ve been able to bring a group CFO. We’ve got a CHRO coming in. I think the guy is coming on-board next week. We’ve also got HR Head and a Sales and Marketing Head at the care level for the business. Outside of that, we’ve brought in a regional CEO for — outside of business, which is the Kim’s business of ours. So there’s a lot of hiring. In total, actually 10 odd people have come on-board. Each one of them are have a great pedigree of given what they’ve done in the past. So we’ve been fairly successful in getting the right people on-board.
Unidentified Participant
Sure. And sorry, one more if I can squeeze in. That’s both to Alicia and Mr Kanna. See, I mean, Astor had this cluster-based approach, right? And obviously is the biggest cluster for QCL. Travandrum is a big — a contributor. So going-forward after the merger, how will the operational structure look? Will you still follow a cluster-based approach or would it be something different?
Alisha Moopen
So Kunal, I, I think we’re still thinking through the best structure for the organization, right? I think it would be really premature for me or Barun to comment on this right now. Of course, you are aware, Kerala will be one of our biggest markets. So we do think it needs to be a cluster, but is it a care la hole or break to two? Those are all discussions we are having to make sure that you find the right people and have the right structure in-place. So maybe give us a few more quarters to come back with more details on that.
Unidentified Participant
Sure. Thank you and all the best.
Alisha Moopen
Thanks,.
Operator
The next question is coming from Mr Nikhil Gokdani. So Nikhil, if you can unmute yourself and ask the question.
Unidentified Participant
Hey, sir. Hi, thank you for giving me the opportunity. Am I audible?
Puneet Maheshwari
Yes. Yes, sir.
Unidentified Participant
So in the Kerala cluster, last-time we spoke that we are going to focus more on the profitability — profitability, ARPUB growth rather than the volume growth. So is this still — now after such a quarter, are we still focusing on profitability over volume growth?
Alisha Moopen
Yeah. So Nikhil, I think it’s really about a combination strategy, right? I mean, as you’re aware, there is a lot more competition in Kerala, but we are the market leaders and we don’t want to go down a discount-based strategy for Kerala. For us, I think it is very important to continue to maintain the RPOBs. We have been price leaders in the market. We don’t want to dilute that. We’ve been service leaders in the market. We don’t want to dilute that.
So with that, we’ve been taking a very balanced approach and making sure that we’re not really talking about a dip in occupancy, but we also don’t want to just show revenue growth and have an erosion on our margins. So it is — it is about kind of maintaining that balance as much as possible. So when people — when we are looking at occupancy also, I think it’s also very important to note we’ve added 300 beds out of that 200 beds in the last quarter have been in Kerala. So naturally, arithmetically, there’ll be some dips that you will see. But I think it’s also very important to note that even with that, we have improved on our profitability, which I think is a good place for us to be in.
Unidentified Participant
That’s great to you. And the second thing that I want to ask I think are we still focusing on the corporate segment because now we need to also grow the MBT segment again? Like we said that we are looking at different regions to grow MBD segment too. So how will be the focused approach over attracting the new patients.
Alisha Moopen
So I think again we in Carolite was a big focus was on Oman and Maldives. In Maldives since the change of the government, there’s been a lot more pressure on the payment and the receivables And we didn’t want to get caught up in that challenge. So opening up new markets has been a key focus for us. So again, strengthening the MBT team has been something which Ramesh and the teams are working on. I think it’s very important for us to open up a lot more markets. I think there have been challenges with Bangladesh also, which used to kind of yield some traffic for us. So we said how do we make sure that we are able to diversify that portfolio of MVT patients. So a much more structured approach in-building the portfolio for MVT. Ramesh, do you want to come in here on MVT, please?
Ramesh Kumar
So as rightly mentioned, we are looking at onboarding leadership where they can take on expanding the team of MBT, certain geographies like the African countries we are looking at. Iraq is another market which is still continuing to yield well. As rightly said, Oman is — Oman will still continue to yield because a lot of traction from Oman still coming in. And of course, a market, as you right cautiously we would be approaching. So overall, we will be expanding mainly into African countries and Onco is also one of the focus areas. So we get large good number — number of patients for oncology from African market. So that’s going to be our focus as well.
Unidentified Participant
That’s great to hear. So can you just summarize what is our strategic outlook for each of the clusters like Kerala, Andra and Maharashtra, like how we are approaching those clusters in terms of adding patients, bids and everything, if you can summarize that and even for the
Alisha Moopen
Sorry, Nikhil, you wanted to understand what on the asset side and if could you just repeat that?
Unidentified Participant
Yeah. In our asset side, our four clusters, Kerala, Andhra and Karnataga cluster, like how we are approaching this clusters in FY ’26, what is going to be our major focus in each of the cluster? And similarly on the QCL side, on the four segments that they’ve bucketed
Alisha Moopen
You want to start with that?
Ramesh Kumar
So I — let me start with Karnatagama Restra Cluster. As we — as you have seen, all the three units have been yielding very well as the Whitefield is doing exceedingly well. We are anticipating a good growth coming in there because we have just — it has just registered a — since within one year’s time, it has registered a very good growth. And both asset RV and CMI would also be and continue to fueling the growth of Karnataka and Maharashtra from, we continue — it’s still growing there. We are looking at how to add more number of beds there.
And of course, we have the mother and child hospital expanding around 156 beds additionally coming up in Whitefield, that will also add to the revenue of FY ’26. So that’s about Karnataka, Maharashtra. And moving on to Kerala, we have right now MedCity, as we said, the change in leadership we are looking at onboarding. None of the clinicians have moved out. So we are — all our clinicians are intact and we are adding more clinicians.
So that is the strategy. We are adding all the specialty wise. We are focusing a little bit more focus on oncology. And we are also trying to add-in other specialties as well. So the flagship will continue to perform and further grow and we are trying to add more volumes. We’ve added another 100 beds there. Second, MIMS and of course, so and Aster. Kanura is really doing well, even though — and there also we have added another 100 bids.
So there we are going to continue to actually look at focus on volumes and focus especially on certain specialties like, again, going back to oncology and some renal transplant and other things. And MIMS specifically, we have seen it is steadily growing, doing very well that is our has been contributing very well.
So I think MIM sir, we continue to have the same strategy. We will have a full volume focus. We are trying to focus on how to create additionally a more volume growth as far as MIMS is concerned. And shortly, we would also be adding Gold hospital as well for the FY ’26. So that is also going to give us a growth in entire Kerala. So that is the Kerala cluster. Moving on to Andhra cluster, Hospital is really one of our good strategies is really doing very well, both top-line revenue and good EBITDA margins. We are planning to add again expand further specialties like oncology. We are looking at a bunca adding there.
And then so Nara Nadhri will do very well for us. And Apol, I mean Ramesh — Ramesh hospitals, Ramesh, Ramesh, we have been focusing on Gunduru and. Vijawada, especially the cardiology team has been doing very well. We are trying to add more what we call clinicians there and accelerate the cardiology part of it. And Gundur, yes, there has been we are adding on more clinicians now, especially cardiology and gynecology. There has been one or two doctors, has been there, but we are adding more clinicians at Gunturu as well. Ongoal, we are trying to focus ensure that add more clinicians to augment the entire oncology, entire onco — sorry, ongoal business as well, top-line revenue as well. So this is what the overall strategy for all the three places. We’ll be driving both some of the additional units, some expanded beds and driving volumes and looking at adding more clinicians on-board.
Unidentified Participant
That’s fair to you, sir. I have one more question.
Puneet Maheshwari
Nikhil, I would request you to put on the queue, please.
We would like to restrict each participant to two questions, please. Okay next we have Mr Vanti. MT, if you can unmute yourself and ask the question.
Unidentified Participant
Yeah, hi. Thank you for the opportunity. I want to understand your EBITDA margin trajectory better. So this 23% to 24% number, which you indicated for next three to four years. So you mentioned that on the procurement side, you have seen good synergies, which is one of the key driver in last year or so. So that’s one. Just want to understand what kind of headroom you have where you have visibility to improve on this from here on? So what kind of contribution will come from say procurement synergies? And then some of the initiative which you mentioned on the other cost line items, if you can elaborate on those? And also this 23% 24%, I understand, is it at the network level, right, hospitals plus your other business? And similarly, if you can give that number for hospital business, the core hospital business over next three to four years?
Sunil Kumar
Thank you so on that question, see, with respect to the — because I said that as a group put together which we can achieve at 24%, 23% 24% in next three to four years. From the — looking from the middle cost point-of-view, because we are just a 5,000 bit hospital when the volume doubles, the leverage comes in. So there at least another 100 basis-points should really kick-in. Our second most important point, I see a leverage is the manpower cost.
Manpower cost is very, very important because we track it as not only as a percentage of cost, but also we look at what is our manpower per occupied bed. And we see that there is another one to 1.2 per man per occupied bed is efficiency which we can do it. And accordingly, if I think I called out in my speech also, even in the current year from the last year to current year, when we say manpower cost, I’m talking about including the junior doctors plus the employees and the outsourced manpower, we have already done a 70 bps efficiency reduction in the current year.
So we see a major reduction coming from there. Second, to a small extent, we should also bring a consolidation of the functions, which should give a synergy. That’s the third-part. And the fourth part would be the more of overheads. So in overheads also is something which is more and also fragmented. So that’s where you can look at consolidation of insurance, consolidation of the lot of AMC and CMCs, consolidation of non-medical consumables and also moving bringing efficient power electricity also, right? We are already in — in the way to bring more than I think 32, 32 megawatt plants, which is in the works today.
So that is something which is going to kick-in sometime in the second-half of the year. I think all these things put together, we should be able to look at another 300 to 400 bps improvement in the margins. Now second is that because as we also talked about the wholesale pharmacy. See, we have — apart from that, we’ve got two more verticals, right, that is the labs and wholesale pharmacy. Labs already we reached around 78% margin in the current year.
And also today, the most important thing is that it has to be more dependent on the non-extra business. And already we are from 23% in the last year. Current year, we moved the proportion of the contribution to 28% there. So once we are able to take it to 40% to 45 percentage or near 50%, we can really move the margins upwards of 20% In the labs. So that way it will not be a drag. And in terms of wholesale pharmacy, I already told you that we have moved out the second segment of the business. So we don’t expect a major growth coming in the wholesale pharmacy. Our wholesale pharmacy is always known to have a lower EBITDA margins. So keeping that in mind, I think overall ’23, ’24 and I think maybe another 100 basis-points 200 basis-points higher it should be for the hospital segment.
Unidentified Participant
Okay. That’s clear. My second question is on your women and child hospital, which you have planned in Hydebad. Did that unit saw some delay like — because earlier I remember you are planning to launch that in the second-half of this fiscal. And as per the presentation, now it moved to 27. So if you can clarify that and in ’27 when we should expect it in the first-half or second-half that will be useful. Thank you.
Alisha Moopen
Pravesh, you want to? Add?
Ramesh Kumar
So this is slightly — as rightly said, we were looking at certain — since it was a which we have taken over and infrawise we had to really do some more work on. So that was a slight delay, which has happened. And now I think it is almost — most of these plans are the plan as well as most of these things are in-place, we are able to accelerate further. We’ll be able to ensure that we kick-off the project and by 2027, we are very positive. At least the — at least in the second-quarter at least, we should be able to kick-start the hospital.
Unidentified Participant
Second-quarter of fiscal year ’27, right?
Ramesh Kumar
That’s the time.
Unidentified Participant
Okay, that’s helpful. I’ll get back-in the queue. Thanks.
Alisha Moopen
Thanks,.
Puneet Maheshwari
The next question is from Mr Binu. MR., can you please unmute yourself and ask the question?
Unidentified Participant
Good afternoon, everybody. A couple of questions. One, in your slide on synergies, I see a INR30 crores synergy in QCIL in FY ’26. May I know where it comes from given that the merger is actually happening only towards the end of FY ’26?
Varun Khanna
Yeah. So let me take this,. So I think a large part of the synergy essentially comes from the procurement side of it, which is where the MAT cost as you grow your scale, you’re able to bring down the material cost. You’re also able to optimize when you start working as a group, you’re able to optimize your formularies, use the right mix. A couple of other things that we’re doing is the repair and maintenance contracts. We are looking at them again, and we’ve been able to bring some degree of improvement there. Food and beverage is another significant piece that we are looking at. In our Kerala cluster, we actually have an in-sourced a F&B company. We’ve started to do that the same way for Care as well. So those are the three prominent things that we’re looking at. Outside of that, there’s a lot happening, which will be EBITDA accretive. For instance, working on medical value travel as a group, that’s going to have a significant benefit emerging this year.
Unidentified Participant
Got it. So you have given your FY ’25 EBITDA at about INR855 crore. I mean, just trying to model it out, I can possibly add another INR30 crores to that and maybe apply the usual mid-teens sort of growth.
Varun Khanna
We know, can you be a bit louder, please? Get closer to the —
Unidentified Participant
I’m sorry. Am I audible now?
Varun Khanna
Better.
Unidentified Participant
Okay. So I was looking at your FY — the quality QCIL FY ’25 EBITDA of INR855 crores. If I add INR30 crores to that and maybe grow it by the usual 15% roughly, which you are doing, is that right direction in which I’m moving into estimate your FY ’26 and maybe FY ’27 numbers?
Varun Khanna
Yeah. I’ll let you do the calculation, but let me give you some color around it so that the favorability that you are trying to build, you are able to. See, INR50 crores to INR60 crores is the synergy number that we’re looking at the QCI level. And this is outside of the synergies that will be driven post the merger, right? So of which from a run-rate standpoint, we’ve been able to get to about INR20 crores is what I told you in-quarter four, largely driven by procurement and some of the other elements are to kick-in, which I alluded to. So we do see — we do see a significant favorability on the synergy side of it. Okay. That answered question.
Unidentified Participant
Yeah. Yeah. Got it. And Sunil, a good question. You — in your breakup of other expenses, there is a benefit coming of about INR7 crore coming from movement in contingent payable number. What is that related to and is that something which continues?
Sunil Kumar
Yeah. Thanks for that, Bino. So Bino, if you recall, we had recognized a gross obligation for the put option which is available for our Dr Ramesh hospitals, right? They were holding around 42.5%. So we recognized and they had a put option, I would say, limit up to basically their right was there up to March 2025. And they in the March beginning of the March, they actually raised a put option notice of around 13%.
Now what has happened is that because of that, we have unlocked the liability which is sitting there and because in the quarter one, quarter two and quarter three of this current year, we had recognized the liability because whenever you’re nearing to the put option date, the liability keeps going up, right, that we had recognized under quarter-four because the complete 42.5% was not excised on only the 13% was excise, the balance got reversed. So that is a benefit. And good thing is that it’s a — it’s more of a permanent benefit because after this year, next year onwards, there is no hit coming into the P&L from quarter one onwards.
Unidentified Participant
Got it, got it. And what would be the total number of shares outstanding once the merger takes place?
Sunil Kumar
I think it’s around 8 million, but you can kind of look at the exact number in our publicly disclosures — disclosed documents in those room.
Unidentified Participant
Okay. Thank you very much.
Puneet Maheshwari
Thanks, Dr. We would request participant to limit to put your question to two, but not more than three per participant at a time. In this line, we have next question from Mr Angan you can unmute yourself and ask the question.
Unidentified Participant
Yeah. Yeah, hi. I just wanted some guidance on debt in the future and considering the bed expansion that you’ve guided for, how are you looking to finance this?
Sunil Kumar
So, Angurd, so let me rather than putting a number, let me give you how we are looking at. So currently, Astridium is a net-debt company with a net cash of around INR700 crores plus. We have 2,100 bps in pipeline, which will cost me approximately INR1,900 crores. Out of INR1,900 crores, we already incurred INR350 crore to INR400 crores. So balance INR1,500 crores, which we need to spend over a period of next three to four years, right? And from the pre-Indas or post-India’s point-of-view, my cash-flow from operations, right, it’s approximately 78% to 80%. I think that should help you do the modeling.
Unidentified Participant
Yeah. Thank you. Thank you.
Puneet Maheshwari
Thanks,. The next question is from Mr. Siddharth, if you can unmute yourself and ask a question we are not able to hear you?
Unidentified Participant
Hi, thanks. Thanks for the opportunity. Two questions. One, I wanted to understand what is the guidance on pre-IndAS EBITDA considering a large part of the expansions going-forward are leased rather than owned land? The second question was on the drop-in EBITDA margin in the Kerala and the Karnataka and Maharashtra clusters on a sequential basis, that drop is much sharper this year than it was last year. So, is there anything that you have to say on that? What drove that sharper drop?
Sunil Kumar
Yeah. Siddharth, the second question, let me answer first. So with respect to the margins, as I said, it’s all to do with the revenue, right? So there have been certain unlock of the provisions, which is I talked about receivables and everything that has happened at the corporate-level or the DM health legal entity. But whatever the decline has just happened, it’s just a one-time because of the revenue not being there. But on a YTD or a full-year basis, right, the Kerala cluster still boasts a margin of 23.4% plus. And also Karanaga Cluster is still maintaining a margin of operating EBITDA 22.8%. So we only think that it will keep going up. As I said, I already given a broader guideline of our next two, three to four years and that’s how we look at the numbers. I’m sorry
Unidentified Participant
, I didn’t get the first question, please. The first question was, you have — you mentioned a 23% 24% EBITDA margin going-forward, right? I’m assuming that’s a post-NAS EBITDA, considering most of your expansion is leads, how do we look at pre-IndAS EBITDA margins going-forward?
Sunil Kumar
Got it. See, currently, if you look at the gap between the post-IndAS — sorry, I would say operating to, there is a revenue, variable rent, which is approximately INR8 crores per quarter are accumulating to INR32 crores per annum. And when you look at the difference between a post-Inders to pre-Inders, there is around INR92 crores, right?
So that’s approximately INR26 crores or INR27 crores per month. Now INR23 crores per month. Now if you look at both put together, the variable rent and the fixed rent what we pay to the leased assets, it comes to approximately INR124 crores, which may amount to approximately 3% of my top-line. So going-forward also, yes, see, it’s not like, Okay, we are making by choice going to asset because in a Bangalore City, for example, the recent one, Sarjapur, it’s not easy to purchase land. A lot of these lands are ancestry land. They don’t want to sell it off. So you have to work with the builders to do a JDA and accordingly take asset on the lease. So keeping that in mind, even in the going-forward, you can — because when the business increases with the thing being in Kerala where the volumes and the new hospitals at and coming into the picture as a percentage of revenue, the rental both fixed and variable, you can model it out somewhere between 2.5% to 3% for next three to four years.
Unidentified Participant
Okay, that’s useful. The second question was on the delay in projects, right? We’ve seen all the brownfield expansions being sequentially delayed from the last quarter to this quarter. You know, Bangalore, Bangalore, Ungol, CMI, Medicity and even the Hyderabad which you addressed. Any specific reasons are we seeing competitive intensity and therefore pushing these out, is there any other reason?
Alisha Moopen
Yeah, I don’t think it has been per se by design. I think as Ramesh had called out, there has been just some challenges with projects, different reasons for each of them that has delayed. I don’t think we’ve had anything more than three to four months of delay per these projects. Yeah. So it’s not — definitely not because of any competition. We had some change in the team of the project team as well. We’ve just changed the project lead recently. So I think that has also been one of the reasons for some of these delays. I don’t know, Mr Wilson, if there was anything you wanted to add to that.
Unidentified Speaker
Great. We are in control at the moment. Actually projects are going as per the schedule, like whatever happened in the past will not be repeated in future. Now, we have a team and we are putting more people also. So things will be on train as it will go ask the schedule now.
Unidentified Participant
Clear. The last question was on QCIL and the funding of the expansion there. How do you propose to fund that expansion, Mr Khana Khanna and what’s the net-debt position for QCIL currently?
Varun Khanna
So that thanks. So of the beds that we’re looking at, there are on the capex side of it, the few projects that we have, we are looking at raising some debt at the entity level. And my sense currently, I may not have the exact numbers is about 70% of what we’ll invest in the project or capex. Details can be furnished later is the way I see it.
Unidentified Participant
Thank you. Thank you, Sudhat.
Puneet Maheshwari
We would request each participant limit to two questions only. Next we have questions from Mr Deepak. MR. Deepak, if you can unmute yourself and ask the question Mr Deepak, can you hear us? I shall now move on to the last question. Mr Nikhil, can you please unmute yourself and ask that question?
Unidentified Participant
Yeah. Hi, thank you for giving me the opportunity again. So my question is like basically what is the price hike that we are planning for FY ’26 across our payer mix? And now we have like the two greenfields coming up and fun in H1 FY ’26 and the one in H2 FY ’27. So what is like a breakeven occupancy on ARPOB level that we are supposed to target to achieve the breakeven EBITDA
Sunil Kumar
See Nikhil, on the price increase, usually whatever the growth what we achieve, the price increase would be somewhere between 3% to 3.5%. That’s a price increase. That’s how I’m saying cumulative of the walk-in cash patients plus the TPAs. And usually insurance companies we renew every two-year once. So that’s a jump what you say. That’s why I’m giving an average number of 3% to 3.5%. And there is no right time to take the price increase because it all depends on the geography of each hospitals. It’s based on the hospitals, we take that call. That’s a — you know, on the price increase bit of it.
Unidentified Participant
And on the greenfield side, what is like the breakeven or occupancy or ARPOB level?
Sunil Kumar
So I won’t say ARPOB, it’s usually 30%, you should be able to breakeven, Nikhil. I’m talking about on a full capacity basis if it’s operational on a 30% capacity, you should be able to breakeven. In terms of timing, Nikhil, it all depends on where are we really commissioning this project. For example, Bangalore, Astra CMA was the first hospital which we operationalized sometime in eight years back, that time it took more than 18 months-to breakeven. But when our second hospital in RV when we opened up, let’s the south of Bangalore, we able to breakeven between 12 to 15 months. And the third one, which we opened up just a year back, we were only breakeven in three months. It’s also about brand recall, right? We were able to get the right doctors in-place. So that’s the old reason why we are developing a cluster approach, right? That’s where in the Bangalore market, as you and Ramesh alluded, the idea is to ensure that there is a fourth hospital. Today, we are in the top three and we will continue to be the leader in the Bangalore market. So similarly, it’s all — but if you go to the new cluster geographic location where you’re not present, it usually should take around 18 months.
Unidentified Participant
Okay. Thank you. That’s it from my side. All the very best for FY ’26 and great work on margins. All the very best.
Puneet Maheshwari
Thanks, Nikhil. We have the last question from Mr. Hi, can you hear me?
Unidentified Participant
Yes, sir. Yes. On the — on the Andhra Pradesh Telangana cluster, just wanted to understand that was on a turnaround path and we’ve suddenly seen a very sharp sequential drop-in occupancy from 55% in Q3 to 51% in this quarter, and therefore, you know, there do you see that along with the fact that the piece is also pushed out a little bit, do you see that coming back to mid-50s, late 50s occupancy next year or how do we look at that? That was one part. And the second part was to understand on guidance, if you could share anything on the proportion of non-Aster business in the labs business next year.
Sunil Kumar
Ramesh, you want to take this?
Ramesh Kumar
Yeah, the first part. Coming to Andhra, if you really look at, we had some certain impact as far as one or two clinicians leaving as far as Guntur is concerned. So that is the cardiology and the — and the volume was driven by the gynecology. So that is a drip in which — dip which happened in Guntur. So we have immediately corrected that cardiology we had sustained because we are very strong as far as Ramesh is concerned.
So it is not a concern. So cardiology, we could retain at least the angioplasty, angiogram, whatever we are doing, but only the OPDA numbers and little bit of inpatient for gynecology has come down. We are quickly rectifying that and that’s a temporary dip which has happened at Gundur whereas continues to do well. And coming to, has also had the same reasons. We had two or three clinicians moving because of competition and we are quickly filling up that and it will happen in — we have already onboarded one or two clinicians and adding a few more and augment and we are trying to ramp-up the place as well. So both the places that will be up and running in this quarter.
Sunil Kumar
So just on the Siddharth on second point with respect to business in the labs, as I said, FY ’24, it was 23%, FY ’25, we moved to 28%. This year, a lot of consolidation has happened in terms of the ramp-up of the lot of FPCs which you opened up. So we look at somewhere between 36% to 38% is the non-aster business which we want to drive-in the labs.
Unidentified Participant
Thank you. Thanks for your time and great performance. Thank you.
Puneet Maheshwari
Thanks, Sujan. So there is no more question to the management now. Thank you all. This concludes the earnings call for this quarter for Mealthcare. I thank the management and all the attendees for joining us today. If you would have any further queries or questions, please do get-in touch with us.
Alisha Moopen
Thank you.
Sunil Kumar
Thank you.
Puneet Maheshwari
Thank you. Everyone