Fortis Healthcare Ltd (NSE: FORTIS) Q3 2026 Earnings Call dated Feb. 16, 2026
Corporate Participants:
Anurag Kalra — Senior Vice-President, Investor Relations
Ashutosh Raghuvanshi — Chief Executive Officer
Anand K. — Chief Executive Officer, Agilus Diagnostics
Vivek Goyal — Chief Financial Officer
Analysts:
Unidentified Participant
Neha Manpuria — Analyst
Shaikh Tausif — Analyst
Aman Goyal — Analyst
Sanjay Shah — Analyst
Karan Vora — Analyst
Vivek Agrawal — Analyst
Shaleen Kumar — Analyst
Nikhil Mathur — Analyst
Madhav Marda — Analyst
Amar Ahir — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to The Fortis Healthcare Limited Q3FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Anurag Kalra the head of Investor relations for the opening remarks. Thank you. And over to you sir.
Anurag Kalra — Senior Vice-President, Investor Relations
Thank you Alaric. A very good morning. Good afternoon ladies and gentlemen. Welcome to Fortis Healthcare’s Quarter 3 FY26 earnings call. The call is being led by our MDN CEO Dr. Ashutosha Govanshi. With him we have our Chief Financial. Officer Mr. Vivek Goel from Agilis Diagnostics. Mr. Anand the CEO joins us. Along with him we have Mr. Akshay. Tumar Tiwari, the CFO. We will start with some opening comments. By Dr. Raghavanshi post which Anand will take you through the highlights of the diagnostics business and then we can open the floor for question and answers. Over to Dr. Raghavanshi.
Ashutosh Raghuvanshi — Chief Executive Officer
Thank you Anurag. Good morning everyone and thank you for taking the time to join us on our Q3 financial year 26 earning call. Today I wish you all a happy new year and hope all of you are doing well. I shall dive right into the quarterly results and my thoughts on the business performance and way forward. Our business performance in Q3 has been good considering the seasonal impact of festivals in some of our key geographies. Both our hospitals and diagnostic businesses witnessed a sustained growth momentum and delivered margin expansion compared to the corresponding quarter last year.
For the quarter our consolidated revenues were at INR 2,265 crores registering a growth of 17.5% over the corresponding previous period. Our hospital business revenues grew 19.4% to INR 1938 crores while the diagnostic business net revenue reported a growth of 7.3% to INR327 crores. Our consolidated operating EBITDA increased 34.8% to INR505 crores which translates into a margin of 22.3 crores 22.3% in quarter three financial year 26 versus 19.4% in quarter three of financial year 25 the hospital business operating EBITDA margin have improved from 20% in quarter three of 25 to 21.7% in quarter three of financial year 26 with an EBITDA of INR420 crores.
Our consolidated profit before tax before exceptional item for the quarter increased 21.9% to INR 312 crores. Reported PAT stood at INR 197 crore versus 250 crore in quarter 3 of 25. The decline in PAT was primarily due to the one off expense for the quarter INR 55 crore pertaining to new labor codes offset by a reversal of impairment in an associate company amounting to INR 9 crores. This resulted in net exceptional loss of INR 46 crores. Coming to the 9 month performance of financial year 26. Our consolidated revenue stood at INR 6763 crores registering a growth of 17.1% versus 9 months of financial year 25.
Operating EBITDA increased to INR 15 crores reflecting a robust 300 basis point improvement to 23% compared to 20% in the corresponding previous period. Hospital business revenue for 9 months grew 19.1% to INR 5749 crores while the operating margin improved from 22.2 from 20% to 22.2% in the corresponding previous period. On the balance sheet front, the company’s net Debt stands at INR 2,547 crores with a net debt of to EBITDA of 1.24x as on 12-31-2025 as due to the fundraise ons to part finance the acquisition of PE stake in Edilis Diagnostic by the company, acquisition of Fortis brand and trademark and acquisition of Sriman Hospital Jalandhar.
I am pleased to announce that we continue to progress well on our cluster based inorganic growth strategy to that effect. In January 2026 we acquired the 125 bedded People Tree Hospital in Yeshwantpur, Bengaluru for INR 430 crores. This was done through 100% acquisition of TMI Healthcare Limited Private Limited along with the underlying land building and an adjacent land that enables future expansion to over 300 beds within the same location. With growing awareness on mental health, in November 2025 the company launched Adayu, a 36 bedded specialized mental health care facility located in Gurugram. This facility offers evidence based treatment through a multidisciplinary approach to deliver comprehensive, compassionate and world class care.
Our bed expansion plans are progressing well during the year. So far we have added approximately 750 operational beds including the Bangalore acquisition and the Adayu facility. The bed addition also accounts for our Jalandhar acquisition, greater Noida lease facility and expansion in our existing facilities including Manesar, Noida and Faridabad. A Bit of flavor on the Hospital Business hospital occupancy in Q3 financial year 26 remains steady at 67% compared to the same period last year. However, the number of occupied beds increased 14% to 3,189 beds in Q3 from 2,790 beds in Q3 of financial year 25. Our hospital business recorded a 4.5% increase in RPOP reaching INR 2.56 crores per annum.
The growth in RPOP was supported by increasing share of complex cases reflected in for instance a 52% year on year increase in robotics. Just to provide all of you a perspective of the hospital business for nine months of financial year 26, in 13 of our facilities we have reported operating EBITDA above 20% during this period and these 13 facilities together contribute 77% of the hospital revenues. In comparison, in 25 we had 10 of our facilities with operating EBITDA margin about 20% and contributing 73% of the hospital revenue. Revenues from digital channel, the website, mobile application and digital Campaigns witnessed a 19% year on year growth.
Digital revenues contributed approximately 30% to overall hospital revenues in Q3 of financial year 26. Coming to the diagnostic business front, we continue to witness year on year improvement in top line and margin. Ross revenue grew 8.3% to INR’s 371 crores from IANAR’s 342 crores in Q3 of financial year 25. Operating EBITDA margin gross revenue stood at 23.1% versus 14.4% in Q1 Q3 of financial year 25. On a like for like basis excluding one off, the operating EBITDA margin stood at 21.3% in Q3 of financial year 25 as against 23.1% in Q3 of financial year 26.
As part of our ongoing network expansion strategy, the total number of new customer touchpoints has reached 4370 as of December 31, 2025. The revenue contribution from preventive portfolio has increased to 12% in Q3 from 10% in Q3 of 25 while the contribution from specialized portfolio has increased to 35% from 33% in the corresponding previous quarter quarter. We believe our diagnostic business is further positioned to scale its revenue while sustaining healthy margins. With this I conclude my remarks. Our business remains on track to maintain this growth trajectory. We continue to make strong progress across our strategic growth levers which we expect will drive sustainable growth and further strengthen our positions in the healthcare sector.
With that I hand over to Anand for his comments.
Anand K. — Chief Executive Officer, Agilus Diagnostics
Thank you Dr. Agovanshi Good morning everyone and thank you for joining us today. On behalf of Agilis Diagnostics, I am pleased to welcome you all to our Q3.26 results conference call during the quarter Agilus reported gross revenues of INR371 crores compared to INR342 crores in the Q3 of FY25 reflecting an 8.3% year on year growth. Operating EBITDA stood at INR86 crores, a substantial improvement from INR49 crores last year with margins at 23.1% compared to 14.4% in Q3 of 25. We conducted 9.9 million tests during the quarter up from 9.6 million in the same quarter last year reflecting 3.6% volume growth.
Our B2C B2B mix stood at 52 to 48 indicating balanced traction across both the channels. We also strengthened our network through gross additions of over 175 customer touchpoints further improving accessibility across markets. For the nine months period ending December 25, revenues stood at INR11.39 crores up by 7.7% from INR10.58 crores last year while operating EBITDA rose to INR 275 crores from INR 185 crores. EBITDA margins improved to 24.1% from 17.5% in the same period last year. During the nine month period we conducted 30.7 million tests against 29.6 million tests last year supported by gross additions of 550 plus customer touchpoints across our network.
We also expanded our network footprint meaningfully adding eight stat labs and nine HLMs, strengthening accessibility and coverage across both focus cities and emerging micro markets. Growth across geographies and product lines remains well distributed with routine, specialized and wellness portfolios all contributing to the momentum. Our preventive health and wellness portfolio continues to perform well contributing around 12% to the overall mix supported by growing customer adoption of preventive panels and corporate wellness offerings. The segment remains an important long term growth driver aided by the rising health awareness across the markets. This quarter we strengthened our test portfolio with the introduction of CNS biopsy with reflex to ihc enhancing our capability and capacity in neuro oncology diagnostics, the RA Extended Panel offering a more comprehensive assessment for autoimmune disorders and the Acute Leukemia Panel which supports faster and more targeted classification of hematological malignancies.
Our continued investments in automation, digital tracking and workflow optimization have strengthened efficiency, turnaround times and customer experience alongside steady expansion in our specialized and genomics offerings. Additionally, we also installed the Illumina novacic X at our Global Reference Laboratory in Mumbai, significantly scaling our NGS capabilities in genomics and proteomics. This enables high throughput sequencing across oncology, infectious diseases, reproductive health and rare disease diagnostics. Overall, the Q3 reflects a notable year on year improvement in growth, both growth and profitability, supported by disciplined execution, network expansion and operational enhancements. We remain positive about the opportunities ahead and remain committed to delivering consistent high quality growth.
Thank you. And over to Arva.
Anurag Kalra — Senior Vice-President, Investor Relations
Thank you Anand. Ladies and gentlemen, we shall now open the floor for questions and answers. May I please request the moderator to begin?
Questions and Answers:
operator
Thank you sir. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star N1 on their 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. Our first question comes from the line of Neha Manpuria from Bank of America. Please go ahead.
Neha Manpuria
Yeah, thanks for taking my question. The first question is on the PeopleTree acquisition in Bangalore. How should we think about this facility? Because just 190 bed facility, I think it’s not fully ramped up now. So how should we think about three years in this facility and it moving to let’s say mid-20s margin and would it require additional investment to get to that mid 20% margin?
Ashutosh Raghuvanshi
Yes. Neh. So we have this facility as Vivek had said earlier is running suboptimally at the moment so it needs to be brought to fortis standards. It would require some investment in that regard. The investment in the first phase is not very huge but at the same time we are also going to extend expand the start the expansion work for creating further beds so that the capacity can be taken to 300 beds and that would entail some capex both in medical equipment as well as the civil infrastructure. So over the next three to four years we should see this as a high end 300 bedded super speciality hospital with all the modalities of treatment available.
Neha Manpuria
Mr. Doctor, this the 300 bed that you’re talking about so currently it’s at 190 beds and then you have the land, adjacent land which allows you to add more capacity. So essentially we’ll build out that the new capacity in the adjacent land. Is that how we get to this 300 number?
Ashutosh Raghuvanshi
That’s right. That’s right. We will be starting the construction pretty soon.
Neha Manpuria
Okay. And in terms of, you know, doctors etc, you know, hiring doctors because Bangalore is another market which we are seeing a fair bit of, you know, capacity coming on board. So how do you think we’re positioned to get, let’s say a full fledged doctor team for a multi specialty hospital that we plan?
Ashutosh Raghuvanshi
Yeah, I think we are very positive about it. I think Fortis carries a good brand and it attracts physicians from in all different regions and I don’t see any challenge in that regard. Our experience of another hospital which we had opened in Nagarbhavi and ramping it up though that was also about 100 bedded hospital and that is by the way currently doing ebitdas, close to upwards of 25%. So we are pretty confident that we can attract good clinical talent in this micro market.
Neha Manpuria
Understood. My second question is on the expansion. If I were to strip out all the acquisitions we have done, including Noida from the 750, I think the organic bed addition this year has been closer to about 250 odd beds. 250, 300 beds, what would this number be next year? And other than the 200 beds in FMRI, you know, what would be the other large acquisition, other large expansions that we should look at in fiscal 2728?
Vivek Goyal
Yeah. Neha Vivek, this slide. So you are right till first nine months we could add 250 brownfield bats. There are some bets in pipeline for Noida and that will further add 60 bats maybe probably in this current financial year and next year we, we can target around 400 plus bed in the brownfield which majorly contributed by FMRI because expansion is almost ready. We are planning to commission by apparel.
Neha Manpuria
Understood. And again, sorry to happen to Dr. Point given that, you know, we have two other large hospitals that will be coming very close to, you know, where FMRI is and you know, are we, do we, I mean is the doctor team fully equipped for this additional 200 bed that we will add or is that something, you know, we need to spruce up some special, you know, specialty and you could see more doctor hiring for that?
Ashutosh Raghuvanshi
No, no, we doctor hiring is something which is a ongoing process and that keeps happening. But the current physicians only will be able to utilize this Capacity very effectively because occupancy rates of this hospital have been typically high around it has been operating at 80% occupancy level. So we are pretty confident that we have the clinical whereabout and we have a very stable clinical team.
Neha Manpuria
All right, I have a couple of more questions but I’ll get back in the queue. Thank you.
operator
Thank you. The next question comes from the line of TOSIF from BNP Paribas Exane Research. Please go ahead.
Shaikh Tausif
Thanks for the opportunity. First few question on the OM agreement with Glenegals. Can you call out the ONF fees for this quarter and how has been the performance of Glenigas for last nine months and also where do you stand currently on the inclusion of Bombay Hospital in OM in the OM agreement?
Vivek Goyal
Yeah. So we are in the integration phase for O and M. As you know this has been started this quarter only. So we, we have earned 5 crore as a O and M fees in the current quarter. And the revenue for this, this quarter for the excluding Bombay is 172crore. And EBITDA is almost 3% after absorbing 3% fees to us. So that means this will be around 6%. Sorry. Yeah.
Shaikh Tausif
And what would have been the growth for 9 months for clinicals?
Vivek Goyal
9 months growth is actually negative for the unit we are. We are looking at. It is almost 4% negative and there are a lot of disturbance there. Their clinician attrition management team has also been changed. So all those action has been taken. I think we will start seeing the result probably from the next peninsula onward.
Shaikh Tausif
Okay, that’s helpful. Second follow up question on the recent acquisition in Bangalore. Can you tell us when you do plan to commercialize the adjacent land bet additional beds, Is it something one can look at the next 18 months or is a plan for beyond 28? FY28.
Vivek Goyal
So it will be like a sort of brownfield expense like we do in our facility which typically take 24 to 30 months time. And Bangalore is a slightly difficult location. And that’s why I’m saying 30 months time because approval generally take more time. But we will start the work immediately on that.
Shaikh Tausif
So it’s something beyond FY28. One should look at it.
Vivek Goyal
Yes. But in the meantime we will operationalize and bring operational efficiency in the existing beds.
Shaikh Tausif
Thanks. A few more questions, I’ll get back in the queue.
operator
Thank you. The next question comes from the line of Aman Goel from Access Securities. Please go ahead.
Aman Goyal
Yeah, thank you. Thank you for the opportunity. Sir, my question is related to. Since we are experiencing in the aggressive expansion in the NCR region. So to maintain our clinical talent in the region, are we seeing any higher mgs for these marquee hospitals or doctors or are there any revised revenue shared over the last 12 months?
Vivek Goyal
So I will say this is a ongoing process. As Dr. Mentioned, this pull and post always remain and we need to correct some time. You know the sale, the remuneration and take a take out of the doctors. And that will be more than compensated by the revenue growth. As we know companies in the growth phase. So little bit increase may not be affecting our margin that much.
Aman Goyal
Okay. Oh sir, my next question is related to the manager facility. If you could throw some color on the revenue occupancy trends and all.
Vivek Goyal
Yeah. So Manesar is hitting 15 crore per month revenue and EBITDA side it has already start contributing positive ebitda. So that way Manesar is good story for us and I think here onward it will start contributing more. We are starting the. We have already started the work for ONCO block and that will further add to the profitability of this unit.
Aman Goyal
So the EBITDA margin is in the single digit or if you could throw some on the EBITDA contribution terms of percentage wise where does the facility for very minimal.
Vivek Goyal
As I said it is just break even.
Aman Goyal
Okay.
Vivek Goyal
It just started.
Aman Goyal
My last question is on related to the. Are you operating any facility above 80, 85% and we are still evaluating the opportunity for the Brownfield extension.
Vivek Goyal
Yeah, sometime our unit hit 80% like Salimar Bagh is one example which very often hit 80% occupancy. And we have planned for expansion. We have got all the approval now and we will start work for the Salimar Bag immediately.
Aman Goyal
Okay, thank you. Thank you. That’s all for my side sir.
operator
Thank you. The next question comes from the line of Sanjay Shah from KSA Securities. Please go ahead.
Sanjay Shah
Yeah. Good morning gentlemen. Thanks for opportunity and congrats on the great numbers. So my question was regarding. We see many new players are entering via asset light or PE backed model. So. How we have prepared. How does Fortis differentiate itself? Is it in a clinical depth or doctors ecosystem? How Fortis differentiate itself?
Ashutosh Raghuvanshi
Yeah, so I think one of the major differentiation is in terms of the kind of infrastructure we able to provide. And there’s a legacy of the institution and there is an environment which is very conducive for clinicians to be able to practice effectively. And that’s what probably makes us attractive. And we have lot of involvement of physicians in clinical governance and broad policy making as well. So that Makes them feel included and that’s what makes it attractive for them to be part of us.
Sanjay Shah
So my second question was regarding our international patient revenue which is growing steadily and how scalable is this segment and what investments is required to meaningfully grow in double digit from here?
Ashutosh Raghuvanshi
Yes, so I mean the percentage of revenue this has been stable at about 8, 9% and somewhere as total revenue percentage it has remained in that level and it is likely to remain in that level because the international traffic is subject to so many other geopolitical situations which are continuously evolving right now. So I think one cannot really bank on that. But what we are doing is that we are focusing on newer markets, especially the west, the East Africa and also a little bit onto the Middle east and Central Asia. So those are the geographies which we are focusing on.
We are doing direct marketing there and opening some information centers in these geographies to increase this.
Sanjay Shah
Thank you sir, very helpful. Best of luck sir. Thank you very much.
operator
Thank you. The next question comes from the line of Karan Vora from Goldman Sach. Please go ahead.
Karan Vora
Thank you for taking my question. My first question is with respect to Gleneagle. So I think we highlighted the 5 crore number we booked but is that the full quarters number or we were only able to, you know, book a part of it. So if you can clarify on that one.
Vivek Goyal
Yeah, it is almost full quarter because we have started this in July somewhere mid July so it is almost full.
Karan Vora
Got it. And it will be included in our R POP number as in this will help improve our RPAP numbers as well. Right? Just from a calculation standpoint.
Vivek Goyal
Yes. Yes you are right.
Karan Vora
Okay, got it. And for Glenn Eagles like I think we’ve highlighted some of the challenges but can you elaborate more on the challenges we are facing at Gleneagles at individual hospitals and what are we trying to, you know to tackle those challenges going forward.
Vivek Goyal
So I will say there are specific challenge for each facilities and it is not common for all. So there are hospital but all the hospital looking like have good potential. For example Chennai facility there are a lot of potential. There is expansion plan but I think execution is the problem. And their last year was totally disturbed here and I think as I said next year onward it will start showing result. Similarly Hyderabad there are two facility and one is luckily couple and the other is. And LG Nagar is also there a lot of potential. We are putting cancer there, cancer facility there.
Luckily couple is having a space constraint and we are trying to tackle that problem separately. And as regard Bangalore there are Two facility Kingeri and one small facility. And I think Kangari is doing quite okay. But that other small hospital is a lot of work need to be done.
Karan Vora
Got it. And like the same management team which operates the broader, you know, Fortis hospitals or which looks after the broader hospitals will be taking care of this or we have hired any regional or some, some second layer of management which will look after this or all the. To. To fix all the issues at Gleneagles.
Ashutosh Raghuvanshi
Yeah. So this essentially falls into our largest structure. So of course we will have to strengthen it at the regional level as you said. So we have made some changes in some of the leaderships at hospital levels. At the same time, we have appointed one or two people on the regional level as well. But the Bangalore cluster, for example, reports to the Bangalore cluster head who looks after the other Fortis hospital. So similarly, we have positioned everything into our common structure of Fortis.
Karan Vora
Okay, got it. And last question is with respect to, you know, FY27 guidance. So now that we are, you know, almost close to end of FY26 and we’ve pretty much meet or beat our, you know, guidance. So any, any qualitative color, do you think 20% kind of a top line growth is possible for FY27 and you know, can margins say 150 basis points more or any color on that will be helpful.
Vivek Goyal
Yeah. So I will say you have seen that the company is in the growth trajectory and it is also showing improvement in the margin. We feel there is still scope for margin improvement, especially with the Brownfield expansion. We have discussed one of the question on the next year Brownfield expansion and that Brownfield is coming in one of our premier facility fmri so we expect the mark. You will continue to see the growth trajectory what we are seeing in the current financial year, at least for two years.
Karan Vora
Any, any number or range you can throw if possible.
Vivek Goyal
It will be very difficult to give a specific number you can understand.
Karan Vora
Okay, thank you.
operator
Thank you. The next question comes from the line of Vivek Agrawal from Citigroup Global Services. Please go ahead.
Vivek Agrawal
Yeah, thank you for the opportunity. So just want to understand as far as the hospital business is concerned, if you can break down what is the growth in existing, existing units and how much has been contributed from the new units. Thank you.
Vivek Goyal
Yeah. So the acquisition which we have done, the Jalandhar and this written that that has contributed around 4% of the revenue growth balance is all from the existing units.
Vivek Agrawal
Understood, understood. And how the margin trajectory look like for the existing units. So overall Margins have been expanded, let’s say around 170 basis points. But in the existing units how we think how the margins have panned out?
Vivek Goyal
Yeah. So existing unit also. So major benefit is coming from the existing unit for the margin expansion and so it is majorly from the existing unit. So because Greater Noida is the new unit, so it is hardly contributing to ebitda actually it is dragging the margin little bit. And Jalandhar of course is 25% plus EBITDA margin.
Vivek Agrawal
So is it fair to, is it fair to assume that exist overall margin expansion, existing unit is much better than 170 base?
Vivek Goyal
Yeah, I, I already told about Jalandhar. Jalandhar is start contributing as per our flagship hospital and Greater Noida is on the, you know, improvement project.
Vivek Agrawal
Understood. So one question on institutional patients. So have you started seeing impact of better pricing in ECHs, CGHS etc and how you see that trend in coming quarters?
Vivek Goyal
Yeah, so we have start seeing the positive result from the, from the cghs, particularly Echever. The circular is new and there is still some, some doubts or which need to be cleared and team is working with the authorities to, you know, get it cleared. But till now the, the number is quite positive.
Vivek Agrawal
Understood. The one question on debt right now after the PeopleTree acquisition, the debt is close to around 3000 crores, close to 1.5x of EBITDA. So now how to look at the company’s ability to grow further inorganically. Right. Are you flexible enough to take more debt? Let’s say you can go to 2.53x of EBITDA or now onwards you need to mainly depend on dependent whatever for example Greenfield or Brownfield plans that are in place. Thank you.
Vivek Goyal
Yeah. First of all the debt EBITDA number is not that alarming. We have still room to take some more debt for our growth aspiration. Having said that, you might be aware that open offer thing is now settled and IHR in the public forum has expressed their willingness to increase the stake in the company. So in all probability there will be equity infusion by HH and that will be used for either debt reduction or for growth opportunity.
Vivek Agrawal
Thanks. That’s from my side.
operator
Thank you. The next question comes from the line of Karthik Agarwal, an individual investor. Please go ahead.
Unidentified Participant
Yeah, hi. You have reported a 14.3% increase in OBDs. I want to know what is the source of this growth? Is it coming from existing hospitals or new bed additions?
Vivek Goyal
Yeah, so this is, this is partly, this is mixture of both because when we say occupied bat Increase it is the increase of bad by in Jalandhar as well as greater Noida because earlier these were. These hospitals were not there and little bit increase in the Adiu also and rest of the thing is in the in our existing. So which of the existing facilities did.
Unidentified Participant
You report this increase in?
Vivek Goyal
So almost all the facilities have shown good ramp up. Salimarbag, fmri, all of us flagship hospital has some good attraction. Except I will say BG Road which is still struggling and we are working on how to, you know, improve the occupancy level of BG Road. I will particularly like to mention about Mulun because earlier we were having Mulun and BG Road in the same category. But Mulund has start operating at 65% plus occupancy level which is quite increasing. So I think the next we have to improve the occupancy level for the.
Unidentified Participant
Okay, thank you.
operator
Thank you. The next question comes from the line of Madhav Marda from Fidelity Investments. Please go ahead. Madhav, please go ahead with your question and kindly unmute yourself in case if you are on mute. Since there is no response from the participant, we will move to the next participant that is Nikhil Goel, an individual investor. Please go ahead.
Vivek Goyal
Hi.
Unidentified Participant
First of all, congratulations for a good set of numbers. My questions are 2, 1 is on ARPOB. So our ARPOB is currently 2.65 crores. I want to understand what is our target arpob maybe one, two years down the line. Are we expecting any increase in it or are we expecting it to remain flat going forward? The second question is on the distribution of our revenue across the different EBITDA margin buckets that we have. So I have observed over a period of time that some hospitals are consistently under the less than 10 margin percent range. So are there any actions that we are planning there either in terms of improvement or in terms of, you know, having them out of the system? Thank you.
Vivek Goyal
Yeah, so RPOB increase we are expecting around 4 to 5% RPAP increase going forward. Also this year we are trending around this level and I want to clarify that RPAP increase should not be confused with the, you know, price increase. So 4.5% RPOB increase 2, 2 and half percentage only price increase and balance is because of the case mix and majorly coming from the high end work we are doing, especially in the encore business where, you know, apart from the IP business, there are a lot of daycare business come and as a result of which, you know, the revenue goes up at the same time bad remain constant and this result into the RF increase.
So I am we are expecting around 4 to 5% RFOP increase going forward for next two years. As regard distribution of EBITDA for the low EBITDA margin unit. I will say all these units are not very big unit except Jaipur and this Manesar Manesar we have discussed in new unit. I expect this unit to move up in the EBITDA margin ladder as well as in Jaipur also we are considering other plan for expansion and with that we feel that this unit should also move up in the EBITDA margin trajectory. Other unit are very small and these unit are having their own challenges and very difficult to correct those challenges.
Unidentified Participant
Thank you sir for the details. But just a follow up question. So as you said Jaipur is facing challenges and it is very difficult to correct those challenges. I understand Manesar has the potential to move up the header but Jaipur has been in that bucket for a very long time. And why are we planning an expansion in a hospital where there are challenges to and historically we haven’t been able to move it. Also is it because you believe that once scale comes the margins would improve or is there something else that we are trying to do there?
Vivek Goyal
So I will say it is a question of strengthening the clinical program. Okay. So Jaipur is missing you know Encore Venus very much and that has resulted into into the margin with along with Onco business. There are lot of business come from to the other specialty also. And it has space and it has all the you know things which which can absorb one encore block there in Jaipur. So we were having the plan for earlier also but we have put on hold because of the challenge Jaipur has faced last year. And so and now Jaipur has come back to the original plan and we will evaluate again that plan and by.
Unidentified Participant
When we will have Onco installed in Jaipur. If you have any timelines in mind.
Vivek Goyal
So these type of specialty take some time and generally it is 18 to 24 months time. So in the next year budget we were planning to put something for Jaipur.
Unidentified Participant
Thank you so much. Just one last question. On the arpob you mentioned that half of it comes from price and half of it comes from product mix. Going forward also we are expecting a similar trend that half of it comes from price and half of it comes from product mix.
Anand K.
Absolutely.
Unidentified Participant
Thank you so much for your time.
operator
Thank you. The next question comes from the line of Shaleen from UBS Global. Please go ahead.
Shaleen Kumar
Hi sir, just want to check about you that capital is very much needed for our growth. So do we have any sense on the timeline, you know what could be the potential investment from IHS can come in.
Vivek Goyal
So as you know they have just completed the open offer. There is a pooling period. Till then they cannot go ahead with the further equity infusion. I think that pooling period end by May. And this is a board level, their board level discussion than our board level discussion on the equity need. As I said currently we have. We are in a very comfortable position. But from the management side we have expressed that we want to create sufficient room in our balance sheet for future expansion. We feel we are in idle position looking at current market dynamic to reap maximum benefit from this current market.
So we will. We will like to take that advantage. I think in a 43 to 6 months time we will be having more clarity about that exact timing.
Shaleen Kumar
Got it sir. And I assume it will be the preference or Warren kind of a thing, right? Given IHS wants to increase the stake it’s not going to be a. You know any other further dilution.
Vivek Goyal
Because earlier there was a restriction for IHS to it’s whatever restriction, not restriction in real sense for increasing the stake. With the open offer completed that restriction has gone. Is not no more there. So as I said it is a bold level decision. We have expressed our desire to have more equity in the balance sheet to create room for further growth. And I think three to six months time this will be done. You are right. In our estimate also it will be preference allotment.
Shaleen Kumar
Last I said sir, I know it’s again maybe a little early but any sense that what kind of a fund you would like to have it or be comfortable with when you’re looking for such kind of a race.
Vivek Goyal
Yeah. So very difficult to give number. We will like to have at least 5% type of base for preference alert which is allowed also as per CB regulation. So again this is our desire. This is how IHS will take it. Is there different.
Shaleen Kumar
But can I also think about doing creeping.
Vivek Goyal
At least? We have not heard from them during our discussion with them that they are looking for that option. They also want to grow Indian business OT is doing quite well for them and they want to grow the business. They have openly mentioned in many investor conference that fortis is their growth engine for India. And I think they will like to infuse press equity.
Shaleen Kumar
Got it sir. Got it. Cool sir. Thank you. That’s it from my side and congratulations on a good set of numbers.
Vivek Goyal
Thank you.
Shaleen Kumar
Thank you. Thank you.
operator
The next question comes from the line of Nikhil Mathur from HDFC mutual fund. Please go ahead.
Nikhil Mathur
Yeah, hi sir. Good morning. I want to visit some nine month numbers. So can you highlight the bed count addition exact in in this nine months and where all have you added these beds?
Vivek Goyal
Yeah. So bed count addition is 750total. Out of that, as Neha earlier has asked, 500/bed is through acquisition and 250 is through the Brownfield expansion. Majorly coming from the Noida, Faridabad and Manikar facilities. There is some more beds we are planning to open in Noida. The final finishing work is going on. I think that that will be completed by this quarter. And then we have as I mentioned earlier, fmri which is our flagship hospital, we were planning to open that block in January. It has delayed little bit because of all these environmental other issues. But we are quite we are targeting to open those beds by April this year.
Nikhil Mathur
Okay, so can you split the occupancy between these new additions including the acquisition and base business? Because occupancy is largely flat in nine months at around 69% in nine months versus a similar number last year. So I guess there’s some drag on overall occupancy from these new additions. So what’s that?
Vivek Goyal
So the occupancy drag is mainly coming from the Noida Britannoida facility as well as from little bit from the DAIO because we have opened only in December. Jalandhar start contributing in the occupancy metrics quite well. So but greater Noida and IU are very small unit. It will not be having much impact. 50 basis point occupancy may have gone up if we exclude this new unit.
Nikhil Mathur
So of the total addition 50 basis points is the drag, right?
Ashutosh Raghuvanshi
Yes.
Vivek Goyal
And I’ve told you which two units are dragging it.
Nikhil Mathur
Yeah. Okay, got it. So if I look at, if I refer to your Jan presentation of the betcount edition from FY25 to FY30 which gives a CAGR of around 10.7%. Now FY26 obviously is a big addition year which kind of brings you to somewhere around 6,800 beds. So the bed count addition from FY26 to FY30 goes down to almost 6.6.5% as per the current plan. So once. So my question is, are we at a risk of kind of growth slowing down? Because the bed count addition itself will be sub 89% post FY26 and your RPOB expectation is 4.5%.
So that gives me to 11 12%. Maybe the base occupancy moves up maybe a few Percentage points. So is there a growth slowdown? You might have to revisit your MNS study a bit more aggressively.
Vivek Goyal
Yeah, that is one thing which we are now targeting very aggressively and we have done couple of acquisition in the last quarter. There are a couple of others which are in pipeline. We can’t disclose the details as of today but yeah you are right. So there will be. The growth will be coming from the three three bucket one is the brownfield expansion. Apart from whatever disclosed earlier we have identified certain more which will be coming in the next year investor presentation. Then we will also be having this acquisition thing and then there is some greenfield project also we are looking at.
Nikhil Mathur
But sir, sorry to be a bit cynical about this. There are so much expansion. I mean every top corporate chain in this country is looking for bid expansion. So does that leave the current valuation environment conducive enough for you to keep doing M and A? Because the Bangalore one seems slightly on the higher side if I look at on a EV per bit basis and with Capex also needed for the further expansion there. So just some broad thoughts. Are the valuations conducive enough?
Vivek Goyal
Yeah, this is a good acquisition. I give you math. You know if you. First of all the location is fantastic. Okay. This Bangalore one and there is a potential to reach up to 300 beds. And if you still. If you do 300 bed greenfield expansion in that locality it will minimum cost you 1000 crore. Okay. With all the facility which we are planning and this acquisition will be costing us 800. So in the metro in the heart of the city with 300 bedded capacity. I don’t think so. It is a. It is expensive occasion and I think little bit risk we have to take.
And having said that Fortis has now established itself in the cluster where they are present and we are quite confident we can handle any competition.
Nikhil Mathur
Understood sir, this is helpful. Thank you.
operator
Thank you. The next question comes from the line of Neha Manpuria from Bank of America. Please go ahead. Neha, please go ahead with your question and kindly unmute your line in case if you are on mute.
Neha Manpuria
Yeah, sorry about that. Okay, you mentioned there are a few M and A in the pipeline from a priority perspective. What markets would you be interested in for potential MA given a cluster based approach? That’s the first one and second one for the 400 bed addition that we have outlined for the next two years. What would be the rough cubex?
Vivek Goyal
So the brownfield expansion for the next year mainly is coming from this FMRI major portion is coming from FMRI and little bit increase in the Manisa thing and for which almost entire capex has already been incurred. Little bit, you know, medical equipment we have to acquire. So there is no much capex for the brownfield. Meaningful capex for the brownfield expansion for the bed which are coming. Of course the new project which we are starting like Mohali Salimarba, these two units which we have taken those extension we will be starting. There will be additional capex that we will able to tell you once you know the plan is finalized.
What was the next question we have.
Neha Manpuria
For you from you, I was just asking, you mentioned there’s a few M A in the pipeline that you’re considering. What are the you know, given we have this cluster based approach. What are the markets that Fortis is looking at from a priority perspective to add assets?
Vivek Goyal
We are doing, we are looking at, you know, the acquisition opportunity in the existing clustering itself. So we are, we want to strengthen and deepen our presence in the existing cluster. We feel we have a very strong brand equity in whichever cluster we present. We are there and we want to further strengthen our position in those clusters.
Neha Manpuria
And this would include Hyderabad as well now with the Gleneagles, you know, O and M that we have.
Vivek Goyal
Yeah, Hyderabad is now a sort of new cluster for us. We are slightly mindful for Hyderabad because of the intense competition there. But it is not ruled out from the cluster approach. Hyderabad is definitely there.
Neha Manpuria
All right, got it. Thank you so much.
operator
Thank you. The next question comes from the line of Madhav Marda from Fidelity Group. Please go ahead. Madhav, please go ahead with your question and unmute yourself in case if you’re on mute.
Madhav Marda
Hello?
operator
Yes Madhav, please go ahead.
Madhav Marda
Yeah, sorry, sorry. So my question was on the CGHS and ECHS rate hikes which have come in. Have you been able to quantify what kind of benefit we can get on an annualized basis say in FY27?
Vivek Goyal
Yeah, it is positive impact, Madhav and it is not that meaningful in the this quarter. As I said there are. If you have gone through that circular for cghs there is a super specialty hospital category, the registration not yet been opened and so. So all those things will. Will be finalized in maybe by next year. Similarly, ECHs also there are lot of confusion about you know the drug pricing and things like that. And there are lot of clarity team is asking. So I think let us wait for some time. This much I can tell you that this there will be positive impact.
Madhav Marda
Okay. Okay, got it. And Then the second question I think you mentioned we’ve identified some more brownfield expansion potential for Fortis. Could you give some more clarity in terms of, you know, which units are these where we’ve identified more brownfield expansion and over what period of time, you know, these could come in for us?
Vivek Goyal
Yeah, so we, we continuously, you know, look for brownfield expansion opportunity if there is any. Like last year, last quarter we have taken approval from the board for opening a Onco block in Faridabad unit. So. So similarly, you know, these two unit which we have taken as well as tmi, there is a scope for further expansion. There is adjacent land parcel we have taken for for expansion only. And thirdly, you know, this greater Noida also there is a potential to go up to 250 to 300 beds. Currently it is operating at 150 beds. So we have just taken over in a quarter.
So we are stabilizing the thing. So all those things will be coming. And plus there is some opportunity in the existing units. We are finalizing the things. I don’t want to name it because there is some approval and the related. So maybe coming me.
Madhav Marda
Thank you.
operator
Thank you. The next question comes from the line of Atul Minocha, an individual investor. Please go ahead.
Unidentified Participant
Yeah, hello. Thanks for taking my question. My question is how we if we are leveraging AI for improving operational efficiency. That is my first question. And second question is with respect to recent budget announcement. Right. Government has mentioned to create digital medical hubs. So is there any work which you are doing as part of Net Health or any other body to work with the government and if you can share some details around it. Thank you. That’s my questions.
Vivek Goyal
Yeah, so AI is a new theme and healthcare there are a lot of use cases for AI and we are also working on some of the use cases and we are taking help of our parent company ih. They are slightly more advanced in AI so we are taking help from them. And I think you will, you will see much more application of AI at least in our healthcare network. And as regard the engagement with the government, it is an ongoing process and we keep engaged with the government and continue to work with them to provide quality healthcare for the to the master.
Unidentified Participant
So my question was more specific with respect to medical tourism coming From Europe and U.S. you know, medical visa opening. So government has mentioned like you know, they will be creating five hubs, you know, during this project. So if you can share more details around that.
Vivek Goyal
Yeah, I will say currently the country is not equipped to handle patient from Those geography because they have other options also.
Unidentified Participant
Okay, yeah, got it. Thank you.
operator
Thank you. The next question comes from the line of Amar Ahir from Raiden Capital. Please go ahead. Please go ahead. Yes, yes you are.
Amar Ahir
So my question was that on a consolidated level how many, what’s the number of beds you’re going to add in FY27?
Vivek Goyal
Yeah, we mentioned about 430 odd beds.
Amar Ahir
Okay.
Vivek Goyal
Including any equation you will be able to complete. Okay.
Amar Ahir
430 will be adding. And how many will be operational?
Vivek Goyal
Yeah, I think almost all will be operational. FMRI we are planning to operationalize in two phases. FMRI is 200 plus bedded expansion. So we’ll first open hundred bed. We are quite hopeful we will able to fill it quite fast and then we’ll open the next batch of beds also. So FMRI is the only question mark that hundred beds may be operationalized this year or next year depending upon the ramp up.
Ashutosh Raghuvanshi
Other will be operationally fully focused.
Amar Ahir
That’s all from my side. Thank you so much.
operator
Thank you. The next question comes from the line of Karthik Agarwal, an individual investor. Please go ahead. Since there is no response ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Anurag Kalra for the closing remarks.
Anurag Kalra
Thank you Alaric. Ladies and gentlemen, thank you for your time today.
Ashutosh Raghuvanshi
If there are further follow up questions, data clarification please feel free to reach out to me or my colleague Amit. We’ll be glad to help you. Thank you and have a good day.
operator
Thank you sir. Ladies and gent, gentlemen on behalf of Fortis Health Ltd. That concludes this conference call. Thank you for joining us and you may now disconnect your lines.