Fortis Healthcare Ltd (NSE: FORTIS) Q3 2025 Earnings Call dated Feb. 10, 2025
Corporate Participants:
Anurag Kalra — Senior Vice President Investor Relations
Ashutosh Raghuvanshi — Chief Executive Officer, Managing Director, Executive Director
Vivek Kumar Goyal — Chief Financial Officer
Analysts:
Manpuria — Analyst
Shyam Srinivasan — Analyst
Abinav — Analyst
Unidentified Participant
Atul — Analyst
Sneha Jain — Analyst
Nitin Agarwal — Analyst
Ankush Mahajan — Analyst
Madham — Analyst
Presentation:
Operator
Ladies and gentlemen, you are connected to the Fortis Healthcare Limited Earnings Conference Call. Please stay connected. The call will begin shortly. Participants, you are connected to the Fortis Healthcare Limited Earnings Conference Call. Please stay connected. The call will begin shortly. Thank you ladies and gentlemen, good day and welcome to the Fortis Healthcare Limited Q3 FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing start and zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Kalra, Senior Vice-President, Investor Relations at Fortis Healthcare Limited. Thank you, and over to you, sir.
Anurag Kalra — Senior Vice President Investor Relations
Thank you very much. A very good afternoon and good evening, ladies and gentlemen, and thank you for taking the time to join us on our quarter three FY ’25 earnings call. The call is being chaired by our MD and CEO, Dr. With him, we have our Chief Financial Officer, Mr Vik Goel. From Agilis Diagnostics side, we have Mr, the CEO of Agilis; as well as Mr Abshey, the CFO. We will start with some opening comments by Dr Agwanshi, post which Anand will take you through certain key highlights of the Diagnostics business and then we can open the floor for question-and-answers. Over to Dr. Raghuvanshi.
Ashutosh Raghuvanshi — Chief Executive Officer, Managing Director, Executive Director
Thank you,. Good evening, everyone, and thank you for taking the time to join us on our Q3 financial year ’25 earnings call today. Before diving right into the numbers and sharing my thoughts on the business performance, I would like to highlight that our performance in Q3 financial year ’25 and the nine months financial year ’25 continues to witness a healthy improvement over the corresponding previous year, led largely by our hospital business. Our performance in Q3 has been quite satisfactory, showing a significant improvement over the previous year. This achievement has been driven by strong performance of our hospital business. We reported a consolidated topline figure of INR1,928 crores, a growth of 14.8% over Q3 of financial year ’24. Noticeably, our hospital business revenues have grown 16.8% to INR1,623 crores, while Q3 financial year ’25 diagnostic business growth revenues were at INR342.3 crores versus INR330 crores in Q3 of financial year ’24. Our consolidated operating EBITDA increased 32% to INR375 crores, delivering a margin of 19.4% versus 16.9% in Q3 of financial year ’24. The hospital business reported an operating EBITDA of INR325 crores, driving a 200 basis-point improvement in margin from 18% in Q3 financial year ’24 to 20% in Q3 of financial year ’25. The hospital business revenue now accounts for 84% of our consolidated revenue and operating EBITDA accounts for 87% of our EBITDA. In 11 of our facilities, we have reported operating EBITDA above 20% during the 3rd-quarter.
These 11 facilities together contribute 74% to the hospital revenue during the 3rd-quarter and nine months of financial year ’24. In comparison to financial year ’24, we had eight of our facilities operating in EBITDA margin of above 20% contributing 62% to the hospital revenue. Our consolidated reported profit-after-tax before exceptional item for the quarter increased 82.2% to INR231 crores. For nine months financial year ’25, our consolidated revenue stood at INR5,776 crores, up 13.1% versus financial year ’24. The operating margin for nine months for financial year ’25 increased to 20% against 17.4% in the corresponding previous period. Nine months of financial year ’25, hospital business revenue increased by 15% to INR4,827 crores. Operating margin for the hospital business improved by 270 basis-points to 20.0% for the year versus The previous year of 17.3%. Coming to the balance sheet side, we remain comfortable and healthy with a net-debt of — debt-to-EBITDA of 0.41 as on December 31, 2024 as against 0.45 on December 31, 2023. Our net-debt stands at INR644 crores as on December 31, 2024. In December 2024, we successfully raised INR1,550 crores through the issuance of non-convertible debentures, leveraging these funds along with internal accruals, we consolidated our stake in by acquiring 31.52% stake from our private-equity investors. As a result, our company now holds a commanding 89.2% equity stake in as on-date. Hospital occupancy improved to 67% compared to 64% in Q3 of financial year ’24. This translated into occupied beds increased by 6.2% to 2,790 beds compared to 2,627 beds in Q3 of financial year ’24. Our hospital business saw a 9.9% increase in ARPOP reaching INR2.45 crore per annum. This growth was largely driven by revenue gains in our new specialties in our key specialties such as oncology, neurosciences, cardiac sciences, gastroenterology, orthopedics and renal sciences. Collectively, these specialties achieved a 17% year-on-year growth and contributed 62% to the overall hospital business revenue compared to 61% in Q3 of financial year ’24. To highlight, the oncology specialty registered a growth of 30% and neurosciences reported a growth of 18% year-on-year. Growth in oncology was led by an increase in revenue from hematology-borne marrow transplant by 44% compared to the same-period last year. To highlight key surgical procedure volumes performed across neurosciences and robotic surgeries witnessed a strong growth of 23% and 77%, respectively compared to the corresponding previous period. Our revenues from medical travel grew 17% compared to Q3 of financial year ’24 to reach INR132 crore. Revenue contribution of international business stood at approximately 8%, which is similar to Q3 of financial year ’24. The company’s key facilities such as Shalimar Bag, FMRI, Faridabad, Ludhiana,,, etc., registered a revenue growth in excess of 20% compared to the corresponding previous year. Continuing with the portfolio rationalization strategy, we divested business operations of Richmond Road Hospital in Bangalore in December of 2024. This divestment supports our focus on improving overall profitability and margins. This is the third facility divested by the company after the divestment of facility and Valapalani facility in Chennai. Revenues from digital channels where website, mobile applications and digital campaigns witnessed a 36% year-on-year growth in Q3 of financial year ’25. Digital revenues contributed to approximately 29.9% to overall hospital revenues versus 25.7% in Q3 of ’24. On the diagnostic business front, operating EBITDA margin stood at 14.4% versus 10% in Q3 of financial year ’24, excluding one-offs. The operating EBITDA margin stood at 21.3% versus 18.3% in Q3. As part of our ongoing network expansion strategy, the total number of new customer touchpoints reached 4,126 as of December 31. The preventive portfolio revenues in overall revenue grew 17% in Q3 and contributed 10% to the operating revenues versus 9% in Q3 of financial year ’24. The Diagnostic business performance is still adjusting to the impact of agiles rebranding exercise, which involved extensive rebranding efforts and associated marketing costs. We expect the branding expense to taper off towards the end of this financial year. That said, I’m confident in potential to scale-up both in terms of its revenue and margins based on its considerable network presence, a balanced B2C and B2B mix and the increased focus on preventive care as well as specialized testing. To also add, I do believe that the Agilis brand is being well-accepted and is gaining recognition. This would place the company in a better position to further scale our performance. With this, I will conclude my comments. We are making significant progress on the growth at all possible fronts, leveraging our robust balance sheet, we will continue to explore and express various growth opportunities that align with our cluster strategy and offer promising synergies. I believe these initiatives will further enhance our growth potential and strengthen our position in healthcare sector. Thank you. And I will now hand over to Mr Arnand for his comments now.Thank you, Dr. Good afternoon, everyone, and thank you all for joining us today. On behalf of Agilest Diagnostics, I welcome you to our Q3 FY ’25 results conference call. Agilest Diagnostics reported a revenue of INR342.3 crores in Q3 FY ’25, marking a 3.5% increase from INR330.7 crores in Q3 of FY ’24. Revenues for Q2 of FY ’25 were at INR372.5 crores. Operating EBITDA stands at INR49 crores in Q3 FY ’25, up from INR33 crores in Q3 FY ’24 with margins at 14.4% and 10% respectively. Operating EBITDA for Q2 FY ’25 stood at INR80 crores, a 21.5% margin. Adjusted for one-off expenses, operating EBITDA in this quarter, that is Q3 FY ’25 is INR73 crores with a 21.3% margin versus INR60 crores at 18.3% margin in Q3 FY ’24 and INR89 crores at 24% margin in Q2 of FY ’25. For the nine-month period, revenue stands at INR1058 crores compared to INR1033.6 crores in the Nine-Month of FY ’24, a growth of 2.4%. Operating EBITDA stands at INR185 crores during the period versus INR162 crores in the corresponding period in the last financial year. Adjusted EBITDA before one-off expenses stands at INR22 crores in nine months of FY ’25 versus INR214 crores in nine months of FY ’24, which is a margin of 21.1% versus 20.7% EBITDA margins respectively. In the quarter three, we conducted a total number of 10.29 million tests compared to 9.85 million tests in the corresponding quarter last year. In the nine-month period, we have conducted a total of 31.31 million tests. Agilis expanded its network significantly, adding over 160 customer touch points in Q3 of FY ’25 and 500 plus touch points in the nine months of FY ’25. The B2C to B2B mix, our revenue mix stood at 51 to 49 in Q3 FY ’25. From a product standpoint, revenue contributions of 33% from specialized testing, 57% from routine testing and 10% from our wellness portfolio. Our wellness portfolio revenue showed a 17% growth in Q3 FY ’25 versus Q3 FY ’24 and 17% in the nine months period of FY ’25 compared to the nine months period of FY ’24. Regional revenue contributions are 30% from North, 21% from West, 32% from South, 13% from East and 4% from international markets. Over the past nine months, we have expanded our test menu with cutting-edge advancements in onco diagnostics and genomics. We recently introduced precision assays for myeloid malignancies with an industry-leading three-day turnaround time. Notably, we are the first lab in India to launch the FDA-approved Claudin 18.2 test for gastric cancer. We have also launched other specialized tests like the lymphoma NGS panel, lymphoid leukemia panel and gut microbiome test in this quarter. Our strong focus
Vivek Kumar Goyal — Chief Financial Officer
On preventive illness and genomics continues to drive innovation, while our efforts to strengthen the Agila’s brand are progressing well. We remain committed to continuously enhancing the customer experience. Thank you, and over to you, Anur.
Anurag Kalra — Senior Vice President Investor Relations
Thank you, Anand. Ladies and gentlemen, that was it on the highlights of both the hospital and diagnostics business. I’m going to request the moderator to now open the line for question-and-answers, please. Thank you. Thank you very much. We will now begin the question-and-answer session.
Questions and Answers:
Operator
Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles thank you. Participants who wishes to ask a question may press star and one now.The first question is from the line of Manpuria from Bank of America. Please go-ahead.
Manpuria
Yeah, thanks for taking my question. First on the Manesir greenfield expansion, could you give us some color on what the losses were in this quarter and how should we think about ramp-up of the facility and any guidance on when the facility can breakeven?
Ashutosh Raghuvanshi
Yeah. Hi. Hi, Neha, Vivek this side. So facility, we have started almost at the beginning of this quarter. So we have — we — it is currently contributing around INR5 crores per month revenue and I think breakeven will be somewhere around INR9 crore per month and we’ll get there by when in your view may we are targeting this by first-quarter next year. And this would be — I’m assuming when you’re saying INR9 crores per month, this would be on a much larger bed count, right, because currently, I think you commercialized only about 60 70 beds. You’re right. So currently, the operational is the hospital is functional, we have opened only 53 beds right now. Maybe another 50 beds we will be opening by March.
Manpuria
Okay. Okay. And my second question is on the Richmond Road facility. I understand this was very small. So is it fair to assume that there isn’t too much cost-benefit or margin savings that we will see from the asset being divested like we saw the last two or last two times?
Ashutosh Raghuvanshi
Yeah. Yeah, it is not that much because as you rightly said, it is very small facility. It is — though it is incurring losses for quite some time, we tried to revive it, could not do that. Now as per the last year financial, it has incurred around INR8 crore EBITDA level loss last year I’m saying. So that much benefit we’ll be getting in the forthcoming years. Understood. And my last question is on Ajulis. I understand you mentioned that the cost-related to rebranding will probably taper off by the end of this fiscal year. But if I were to think about the growth momentum and our target of helping this business grow in-line with the industry. Do you think that is possible in fiscal ’26 or would it take it take us much longer for us to normalize growth in this business? And what according to you, Anand, is required for growth to start improving in? Hi,. It’s Anand here. So I think we will be able to come back to the growth momentum in terms of industry by the second or 3rd-quarter of next year itself, because as of now, this year, we have seen quarter-by-quarter, we are seeing growth in terms of how our core business grows because if you look at the things like public-private partnership and other things, we will see that our core revenue has grown quite well.
Vivek Kumar Goyal
And it is growing — what I’m suggesting is it’s growing. Every quarter we are seeing improvement in the growth and we are hopeful that by — by the second-quarter of next year, we would be able to reach industry levels of growth. That would be closer to 10% or should I take more like — correct, correct.
Manpuria
Okay. Thank you so much.
Operator
Thank you. Participants have wishes to ask a question may press star and one. The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go-ahead.
Shyam Srinivasan
Yeah, good afternoon. Thank you for taking my question. Just the first one on the ARPOB dynamics. We have for the nine months, I think grown 10%, even for the quarter, we have grown close to 10%. So I just want to understand what are some of the drivers of it. I think Dr talked about some of the specialty. But just want to understand, is it just mix or is there some pricing element that is also there on a Y-o-Y basis that is helping us keep the ARPA buoyancy where it is. If I were to look at some of your peers, I don’t see like a double-digit, if I can make it double-digit kind of growth for others. So are we starting off a different base or is there a something micro to the photos that’s leading to this buoyancy?
Ashutosh Raghuvanshi
Yeah. So, Shyam, we have said in our commentary for last many quarters that we expect that the ARPO growth should taper off a little bit and it should probably be somewhere close to 6%, 7%. But it has been better than our expectation. And the reasons for that for us is primarily case-mix. Out of this 9% of just maybe about 1.5% or so will be because of the price revisions. We have taken very minor price increases earlier in the year. And other than that, there is essentially the case-mix which has been happening. As I was pointing out that some of the specialties like bone-marrow transplants, et-cetera, the growth has been as high as above 40%. And those are typically high-ticket items. So that has led to this kind of growth. But I think we would expect that this kind of trend will persist for some more time and we should see similar going into the next couple of quarters as well.
Vivek Kumar Goyal
Yeah, just to add, here, you know, apart from what Dr said about the specialty thing, there are lot of robotic work company has done where the ticket size and ARPOP is slightly on higher side. Plus day care work has also gone up for us. Understood. That’s helpful. Second question is just on the hospital margin matrix. In the five hospitals in the nine-month data that are below 10%, you have — I’m excluding Ludhiana 2 and, what are the other three and is this a possibility that we could look at divestments, some of these other three as well? So other three here is, Jaipur and Vasi. Pehi is a bottom-line case, there were some exceptional expense for the previous year has been booked here. That’s why it is coming below 10% type of margin. And Vasi and Jaipur, we have discussed in the past also they are having their own problem. Jaipur particularly is not able to come up. Vasi has come up to some extent, but Jaipur is still staggling.
Ashutosh Raghuvanshi
Yeah, we are making some changes in these hospitals in terms of leadership, etc. And we expect that should yield some good results. We have seen a positive momentum in in the last quarter, which continues during the running quarter as well, where we are seeing the revenues improving and as a result of that, a lot of that will flow to the EBITDA also. So certainly, we would be going above 10% here and slowly inching towards the 15% level. Therefore, we have different plans. And certainly, we believe that hospital and the city has a potential and we can revive it, but we will have to make some structural changes in terms of both manpower and the services offered. Got it. And my last question is just on the competitive intensity.
Shyam Srinivasan
A lot of beds being added by yourself or many of your peers. If you could kind of give us a little bit of how the industry landscape is looking like, especially on hiring and retaining talent, are you seeing some kind of a war for you know, clinicians, medical talent perhaps? And if you could share some of the attrition numbers, that will be helpful. Thank you.
Ashutosh Raghuvanshi
Yeah. You know, Shyam, I think the talent acquisition and talent retention Is an ongoing. I would say it is not a war, but a battle which keeps happening here and there. But I think overall, there is no reason for concern. One of the things in our case, the majority of the hospitals which are coming with the beds which are coming online are brownfield in nature. So we do not need that much of additional clinical talent except for junior doctors and nursing staff and the support staff. So that kind of pressure is not there at the moment. But you are right that this is an ongoing thing. But what we have also noticed is that in last 10, 12 years, the number of specialists have started increasing because of all the reforms which have happened in the medical education for last 15 years. And as a result of that, now you’re seeing better supply and the larger chains are not finding it so difficult. But I think as you go towards centers and smaller towns and cities this problem becomes acute but in places like Delhi, Bombay, etc, it’s not so severe. There is some degree of competition but not anything to be worried about. Thank you. Thank you and all the best. Thank you. Participants who wishes to ask a question may press star and one now.
Operator
The next question is from the line of Abinav from Elara Capital. Please go-ahead.
Abinav
Hi, good afternoon. This is Bino from Elara. A couple of questions from my side. DR., we are seeing a lot of your competitors being very aggressive in expansion. They are buying a lot of land for new setups, greenfield setups in many of the big cities, plus they are aggressive on the — on the M&A side as well. So — but we don’t hear what is being so aggressive in expansion in the space. Is it that you don’t intend to be so aggressive or are these sort of deals you also look at and you decide not to do it?
Ashutosh Raghuvanshi
No, the answer is very clear that we are here for good-quality assets which fit into our regional cluster strategy as well as-is a value acquisition. So we are going on that path and we certainly are very active in the market evaluating some of these opportunities and we would certainly be looking at creating some of these things pretty soon. We do have some things in the pipeline, which we are evaluating and we would come back at the right time to inform you about that. Understood. Is that more on the M&A side or you are looking at land acquisition in large cities as well?
So we are looking at land as well because there are certain areas where we are seeing a lot of development and we feel that there is a future potential, whereas no assets would be available in those geographies. So in such areas, we are scouting for lands as well. Got it. Second question from diagnostics. These one-off expenses of rebranding, which are continuing now for quite a few quarters. How long do we expect this to continue? We had — we had planned to spend about INR50 crores on rebranding this year. So I think — I think the last quarter and maybe a little bit flow-through into next quarter may happen. So it will be in Q4 is what the major balance will happen in the Q4 spends.
And next year, next year, it won’t be there. We have as much not planned any anything as of now. So we will — as of now, there is no one-off expenses planned. It will be part of the regular budget. But in case if we are having any carryover from this, so we will be doing it in the first-quarter of next year.
Abinav
Understood. Okay. Just a couple of bookkeeping questions. This quarter, the consolidated tax-rate was very low at 9% or so. Why was it low? And the annual consolidated tax-rate?
Ashutosh Raghuvanshi
Yeah. So we have created deferred tax asset on a certain losses accumulated for one of our subsidiary. Actually, if you might be knowing three years back, we have stopped recognizing deferred tax asset till we see the visibility of profitability. Now it is clearly visible. So this quarter we have booked a deferred tax asset of around INR27 crores. So that is the only this quarter. Okay. For next quarter, the tax-rate should go back to around 25%. Yes, you’re right. Okay. And going-forward next year also like be around 25% yes, yes.
Unidentified Participant
Got it. Thank you.
Operator
Thank you. You. Participants who wishes to ask a question may press star and one now. The next question is from the line of Atul, an Individual Investor. Please go ahead.
Atul
Yeah, my question is on the brand itself. If we are able to acquire that brand?
Ashutosh Raghuvanshi
Yes. So that brand is auctioned quite recently through a court process. So that process is on. We did — we were declared the successful bidder. However, the court needs to confirm that sale and that process is currently on. There are some objections by the original brand holders. So we are expecting that this matter will get resolved in the forthcoming couple of months or so. Okay. And update on the legal side of the open office which is installed. So on the legal side, the High Court hearings have been sort of almost concluded and I think there would be couple of hearings more post that we should expect some kind of a decision from the High Court about the forensic audit. Other than that, there are no major cases per se.
Atul
Okay, so are we expecting the legal cost to kind of tapper down, you know, from the quarter starting next year, right? So I think the early part of next year also there will be some significantly higher legal costs, but post that we should see these costs coming down it will also depend upon the outcome of the court cases. The outcome is favorable, that will come down and it all depends on how many are happening.
Shyam Srinivasan
Okay. So in terms of like your long-term vision of being a 10,000 operating bed organization, right, what will be the run-rate of acquisition of these other opportunities which are there in the market, market like you know, for example, in an US like you might be targeting two or three acquisitions. So any roadmap on that front? As I said earlier, we are always actively evaluating the opportunities.
We cannot give a kind of a particular time-frame in which we will achieve this. But definitely, there are some individual assets which are coming at good value. So we will evaluate those. There may be some other opportunities, which might come our way. So since this is more of an opportunistic kind of an approach, it will be difficult to spell out the exact the yearly kind of number, but we are pretty confident that overall over the period of next five years, we should be able to get to our target.
Atul
Perfect. Thank you. I appreciate it. Thank you.
Operator
The next question is from the line of from BNP Paribas. Please go-ahead.
Unidentified Participant
Thanks for the opportunity and congrats on good set of numbers. Sir, we have seen 17% growth this quarter international patient. Can you throw some color? And also if you can share with us what is the contribution from a patient from Bangladesh for?
Ashutosh Raghuvanshi
Yeah. So Bangladesh numbers Are not very significant for us. We do get some patients from Bangladesh in Calcutta, but overall, our number from Bangladesh is small. However, this growth is primarily from Central Asia and as well as from — from the Middle-East and partly from Africa. But if you notice that overall revenue contribution from last year to this year hasn’t grown. So though in absolute terms, this business has grown, but as a proportion to the overall business, it has remained almost at the same level. What’s the current status between India and Bangladesh medical tourism? Has it been completely stopped?
Vivek Kumar Goyal
No, no. It doesn’t get completely stopped, but because of the difficulties in travel, et-cetera, the numbers have significantly come down in other places also. That’s what we have heard from the industry. Thanks. Does that answers your question, Mr? Yeah, that answers my question.
Operator
Thank you. The next question is from the line of Sneha Jain from SKS Capital. Please go-ahead.
Sneha Jain
Good afternoon, sir. Thank you for the opportunity. I’m sorry if I missed it. What would be your margin guidance for businesses basically hospital and diagnostics?
Vivek Kumar Goyal
Yeah. So we are maintaining our margin guidelines where we have said for the current financial year, we should be for hospital business around 20.5% and for the diagnostic business around 21% 22%. Okay. And sir, do you have any CapEx guidance? So capex for all the brownfield projects we are — we are moving forward and there is a capex requirement for normal maintenance also. So total capex need for a year is around INR900 crores, which includes expansion-related need of around INR600 crores and INR300 crore is basically maintenance capex.
Sneha Jain
Got it. Yeah, that’s it from my side. Thank you.
Operator
Thank you. The next question is from the line of Nitin Agarwal from DAM Capital. Please go-ahead.
Nitin Agarwal
Sir, thanks for taking my question and congrats on a pretty good set of numbers. Sir, on the hospitals, we’ve outlined in the presentation of about 400 beds getting added on a brownfield basis in F ’26. Now that if we take a slightly long view, will we have a similar sort of opportunities to add around 600 beds per year even for the next couple of years or this is how should we think about the period beyond F ’26?
Vivek Kumar Goyal
Yeah. Yeah. So we are estimating around this number, 350 to 400 type of numbers year-on-year. It all depends how quickly we can personalize our brownfield expansion. But sir, there are enough opportunities for you to add incrementally another 1,000 odd beds on the brownfield basis even after F ’26?. So around 350 beds. Okay, and sir, secondly on the debt numbers that we’ve given out for December, does it take into account the full payout to — for PE buyout? Not really. In up to December, we have only acquired IFC stake. Other two private-equity stake we acquired in the month of January. So after acquiring private-equity stake, our gross debt is around INR2,300 crores at consol level and net-debt of around INR2,000 crores. That’s our peak debt right now. That is the debt at present.
Nitin Agarwal
Yeah. Okay. Thank you so much.
Operator
Thank you. Ladies and gentlemen, to ask a question, please press star and one. The next question is from the line of Ankush Mahajan from Axis Securities. Please go-ahead.
Ankush Mahajan
Sir, thanks for the opportunity and congrats for the good set of numbers. So just try to understand what is the revised guidance for the hospital margins.
Vivek Kumar Goyal
Yeah, I just mentioned 20.5% we should be closing for the full-year. Thank you. Best from my side, sir. Thank you. Thank you. The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go-ahead. Hi, thank you again for the follow-ups. Just on overall growth guidance, top-line and we — like I think Dr Ragunshi said at the start, we are doing a little better in terms of at least ARPOP. So how should we look at, say, medium-term growth for us like ’25, ’26, ’27, I’m just asking a range. And can we still pencil in like 8% to 10% ARPOB in there and the rest coming from, say, volume growth, both bed expansion as well as same-store? I will say ARPOP growth will be in the range of 5% to 6% going-forward. And I was talking of the hospital business and our revenue growth should be somewhere around 14% year-on-year. So balance is coming from the bad extension and utilizing the existing capacity better. Understood. So 14% to 15% kind of medium-term growth is what you’re guiding to, right, Vivek? Something like that.
Ankush Mahajan
Understood. Okay. And if I were to take your question further on the on the margin guidance, 20.5% for this year, do you think there is scope for further margin expansion in the upcoming years?
Vivek Kumar Goyal
Yeah., we are targeting margin expansion and hopefully, we’ll be seeing margin improvement year-on-year. So our ultimate target is to reach to 25% sooner than later. So Vivek, we have kind of seen a plateau of like between 19 and 20 for some few quarters now. So what can do the step-change, right? You also divested, let’s assume the low-hanging fruit. So what can materially take us from, say, 20.5 or 21, let’s assume to ’25? What are the key things that need to work or what are the key things you’re pushing at?
Ashutosh Raghuvanshi
Yeah. So I think one is, you know this brownfield bed expansion and availability of the bed because as I mentioned earlier, also these capacities are coming in the units, which are already operating at 75%, 80% occupancy. So we see less challenge in filling those beds. That is number-one. Number two, the existing — hospital — some of our existing hospital are still operating at a low occupancy level. These are a big hospital. It’s a very good location, very good clinical talent we have in those good equipment. So I think when these hospital will also grow in the — in terms of occupancy, that should add to the EBITDA margin. And so these are the two basic lever which I am banking upon on the EBITDA margin improvement, which will provide us overall efficiency in the cost and other things.
Ankush Mahajan
Got it. Thank you. And my last question is on the top-line growth prospects for diagnostic services. So I think Anand, you mentioned that we can come back to growth in a couple of quarters and maybe target like a double-digit growth, like 9%, 10%, let’s assume. So how can we again — if you can kind of split that into are you contemplating any pricing action? I don’t know whether Agiles has taken any price increases. Most of our peers have taken over the last two to three years. And in terms of volume growth, we have lagged. So what are some of the efforts that we will likely see on the volume growth post the rebranding exercise what that can push up our volume growth higher? Thank you.
Vivek Kumar Goyal
Thanks, Shyam. So on the growth side, we are seeing consistent changes — improvements on a quarter-to-quarter basis. Every quarter, we are seeing that compared to the previous quarter. So as I told earlier, so the growth what we are expecting somewhere around second — second-quarter of next year is about 8% to 10% kind of overall growth, out of which it will be largely driven by volume and to some extent by value, which is — which will be due to one is the intensity of tests in the sense that a mix of tests that will have an influence on that. As of now, price increase, we have taken a price increase in February of ’24 and we have taken a price increase. So I think we are not contemplating any price increase as of now. So you can imagine that the large part of this growth is going to be volume growth.
Ankush Mahajan
Great. Thank you and all the best. Thank you.
Operator
Thank you. Participants who wishes to ask a question may press our and one.The next question is from the line of Madham from Fidelity. Please go-ahead.
Madham
Hi, good afternoon. Thank you so much for your time once again. My question was on the hospital business. Manish sir, given this is the first full-quarter of operation, is it fair to assume that we would have booked our peak opex losses in this facility this quarter and this should keep coming down? And if you could quantify the opex loss in Q3 at?
Ashutosh Raghuvanshi
Yeah. So Manishwar, we have operationalized major operation happened in this quarter itself. And as a result, there is an operating loss we have booked up INR12 crore — INR12 crore to INR13 crores during this quarter.
Madham
Got it. And you said that this facility should breakeven at EBITDA level Q1 of next year, so that’s June quarter basically we expect to breakeven at this facility.
Ashutosh Raghuvanshi
Yeah, June, June, September quarter, it should be.
Vivek Kumar Goyal
Got it. That’s encouraging. And I think we just wanted to clarify that this is the only greenfield expansion in the next two, three-year pipeline, right? The remaining all the beds which we are adding are all brownfield in nature for POTUS, at least what has been announced so-far?
Ashutosh Raghuvanshi
Yes, absolutely. This is the only greenfield in the year.
Madham
Understood. Great. Thank you so much. Thank you.
Operator
Thank you. Ladies and gentlemen, to ask a question, you may press star and one. Anyone who wishes to ask a question may press star and one as there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Vivek Kumar Goyal
Thank you, ladies and gentlemen, for joining us on our quarter three FY ’25 earnings call. In case there any follow-up queries, Amit and myself are available to speak to you over phone or over email, please do feel free-to reach-out to us. Thank you very much and have a good day.
Operator
Thank you. On behalf of Healthcare Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.