Fortis Healthcare Ltd (NSE: FORTIS) Q4 2025 Earnings Call dated May. 21, 2025
Corporate Participants:
Anurag Kalra — Vice President of Investor Relations
Ashutosh Raghuvanshi — Managing Director & Chief Executive Officer
Vivek Kumar Goyal — Chief Financial Officer
Akshay Tiwari — Chief Financial Officer
Analysts:
Neha Manpuria — Analyst
Shyam Srinivasan — Analyst
Deepthi Sree Rajulapati — Analyst
Bino Pathiparampil — Analyst
Prashant Nair — Analyst
Unidentified Participant
Harsh Bhatia — Analyst
Amey Chalke — Analyst
Abhishek Jain — Analyst
Abhishek Vani — Analyst
Nirali Shah — Analyst
Presentation:
Operator
Please wait while you are joined to the conference the conference is now being recorded ladies And gentlemen, please stay connected. The conference call will begin in next few minutes. Thank you. Ladies and gentlemen, you’re connected for the Healthcare Limited Conference Call. Please stay connected. The call will begin in next few minutes ladies day,ladies and gentlemen, good day and welcome to the Q4 FY ’25 Earnings Conference Call of Otis Healthcare Limited. 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 star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Anurag Kalra, Senior Vice-President, Investor Relations at Fortis Healthcare Limited. Thank you, and over to you, sir.
Anurag Kalra — Vice President of Investor Relations
Thank you. Thank you very much. A very good afternoon, ladies and gentlemen, and thank you for taking the time to join us on our quarter-four FY ’25 and FY ’25 earnings call. The call is being chaired by our MD and CEO, Dr Ashutosh. With him is Mr Vivek Goel, our Chief Financial Officer. From Agilis, we have Mr, the CFO of Agilis. Unfortunately, Mr Anand could not join us today because he is currently in the midst of some travel overseas, but we’ll be happy to take any diagnostic questions as well. We will start-off with some opening comments by Dr Agwanshi, post which we will open the floor for question-and-answers. Over to you, sir.
Ashutosh Raghuvanshi — Managing Director & Chief Executive Officer
Thank you and Rag. Good afternoon, everyone, and thank you for taking time to join us on this quarter-four ’25 and financial year ’25 earnings call today. To begin with, I’m pleased to inform that the Board has recommended a dividend of INR1 per share, which is equivalent to 10% of the face value for the third consecutive year, subject to the approval of shareholders. This highlights the strengthening fundamentals of company and its sustained earning growth momentum that we are witnessing.
Coming to the financial performance of the company, I shall comment on the year as a whole and then move on to quarter-four. We have witnessed another year of healthy growth and improved margins. The hospital business has been primary driver of company’s performance, consistently demonstrating year-over-year improvements in margins. For the financial year ’25, consolidated revenues of the company stood at INR7,783 crores, a growth of 12.9% over financial year ’24. Our hospital business revenues have grown 14.8% to INR6,528 crores, while the financial year ’25 diagnostic business gross revenues were at INR1,407 crore versus INR1,372 crores in financial year ’24.
Our consolidated operating EBITDA increased 25.3% to INR1,588 crores, which translates into a margin of 20.4% in financial year ’25 versus 18.4% in financial year ’24. The hospital business operating EBITDA margins have improved from 18.6% to 20.5% in financial year ’25 with an EBITDA of INR1,339 crores. The hospital business contributed approximately 84% to both our consolidated revenue and our consolidated EBITDA. Consolidated reported profit-after-tax before exceptional items for the year increased 42.8% to INR899 crores, while the reported PAT after exceptional items stands at INR809 crores.
On the quarterly performance, we reported a consolidated top-line of INR2,007 crores in financial year in-quarter four of financial year ’25, a growth of 12.5% over quarter-four of financial year ’24. The hospital business revenues have increased by 14.2% to INR1,701 crores, while the Diagnostic business gross revenue stood at INR348 Crores in-quarter four of financial year ’25 compared to INR338 crores in financial year ’24. The consolidated reported — consolidated operating EBITDA in-quarter four of financial year ’25 increased 14.3% to INR435 crore, delivering a margin of 21.7% versus 21.3% in-quarter four of financial year ’24. Operating EBITDA for the hospital business in-quarter four grew by 11.7% to INR372 crores with a margin of 21.9% compared to operating EBITDA of INR33 crores in-quarter four of financial year ’24. The figures for quarter-four financial year ’25 and ’24 include certain year-end adjustments related to write-back of excessive provisions, unclaimed balances, expected credit-loss and other adjustments, which are accounted for in the quarter, but pertain to the full-year. Our consolidated reported profit-after-tax before exceptional items for the quarter increased 20.8% to INR242 crores. Coming to the balance sheet side, the company’s net-debt on 31st March are stood at INR1,694 crore, while the net-debt to EBITDA of 0.93 0.93x as on March 31 March 2025. As against INR0.17 on 31st March 2024. In December 2024, we raised INR1,550 crores through the issuance of non-convertible debentures, leveraging these funds along with internal accruals, we have consolidated our stake in Agilis, but by acquiring 31.52% stake from our private-equity investors. As a result, FHL now holds 89.2% equity stake in Agilis. Our hospital business recorded a 9% increase in ARPOV for the year reaching to INR2.42 crore per annum. This growth was primarily driven by the revenue gains in our key specialty areas such as oncology, neurosciences, cardiac sciences, gastroenterology, orthopedics and renal sciences, which together achieved a 16% year-on-year growth and contributed 62% to the overall hospital business revenue. Noticeably, the oncology specialty registered a growth of 25% and neurosciences reported a growth of 19% year-on-year. Hospital occupancy improved to 69% in financial year ’25 compared to 65% in financial year ’24. This translates into occupied bed increase by 5% to 2,838 compared to 2,700 beds in financial year ’24. We also witnessed strong volume growth across key procedures in financial year ’25, such as 72% growth in robotic surgeries and 17% in neuro and spine procedures. Most of our key facilities delivered strong performance this year with revenue of large facilities such as, FMRI registering a growth in excess of 20% compared to financial year ’24. In 10 of our facilities, we have reported operating EBITDA above 20%, both during the quarter-four of financial year ’25 and financial year ’25 as well. These facilities together contributed 73% to the hospital revenues during the quarter and during the year. In comparison, in financial year ’24, we had eight of our facilities operating with an EBITDA margin of about 20%, contributing to 62% of hospital revenues. Revenue from international patients for the quarter grew 17% to INR145 crores, contributing 8.1% to overall hospital business revenues versus 7.9% in-quarter four of ’25. For year ’25, international patients revenue grew 13% to INR539 crores. I’m pleased to share that financial year ’25 has been marked by a significant development. Recently, the company successfully acquired the Fortis brand and trademarks for a consideration of INR200 crores. We have also made significant progress in advancing our strategic growth levers, including inorganic growth, portfolio rationalization and brownfield bed expansion. As part of company’s inorganic growth strategy, signed definitive agreement in February 2025 to acquire Sriman Super Specialty Hospital in Jalandhar, Punjab, along with an adjoining gland parcel for NR462 crores. This acquisition will add 228 beds to our network and offers the potential to increase the facility’s total capacity to over 450 beds. This transaction will allow us to further strengthen our presence in Punjab region from approximately 800 beds to 1,000 beds and then on from — with the brownfield expansion, which is going to come in next two to three years in Amritsar and Mohali. So that would take the bed count to approximately 1,600 beds in Punjab. This transaction is expected to be consumated very shortly. Continuing with the portfolio rationalization strategy, we divested business operation of Richmond Road Hospital in Bangalore in December of 2024. This is the third facility divested by the company after the divestment of Malah facility and Varapalani facility in Chennai. Our focus on bed expansion continues this year with, a 350-bedded hospital facility commencing operations in September 2024, offering an entire spectrum of clinical services, including all key specialties and latest state-of-art medical equipment. We added approximately 200 beds across our network with Shalimar and Anandpur being the key facilities where the beds were added. Our expansion strategy continues to focus on deepening our cluster presence. We plan to ramp-up bed capacity by approximately 2,000 beds over the next couple of years. When completed, we can also expect to see some of our key facilities such as, FMRI, Mohali and BG Road to become more than 450 beds each. Focus on digital continues to remain core to our strategy, especially with a view to enhance patient-care and operational efficiency. In financial year ’25, we rolled-out electronic medical record outpatient module in 12 additional facilities, bringing it to a total of 15. Additionally, we begin implementing the inpatient module of the EMR with the implementation done at to start with and during the year, we will proceed with other units as well. This further enhances the real-time access to patient data for clinicians. Revenue from digital channels via the website, mobile application and digital campaigns, etc., delivered a strong growth of 35% year-on-year. Our digital revenues contributed to approximately 29.6% to overall hospital revenue. The company further augmented its medical infrastructure by commissioning several high-end equipment such as Gamma Knife, MR Linac and surgical robots in some of the key facilities. This reaffirms our commitment to offering the most advanced treatment options and delivering precision-based treatment just to highlight, our capital expenditure in financial year ’25 stood at approximately INR700 crore, reflecting our confidence to further scale-up operations, both in terms of capacity expansion and augmenting medical infrastructure. We expanded our clinical offerings bolstered by high-quality talent. The year saw the addition of reputed clinicians in various specialties, including neurology Neurology, cardiac sciences, oncology, gastroenterology, orthopedics and gynecology. Turning to our diagnostic business, Agilis continues to recover and witness improvement in operating margins. Operating EBITDA margin basis gross revenue stood at 17.7% in financial year ’25 versus 15.3% in financial year ’24. Excluding one-offs primarily related to rebranding expenses, the operating EBITDA margin stood at 22% in financial year ’25 versus 19.6% in financial year ’24. For quarter-four 2025, operating EBITDA margins versus gross revenue stood at 18% versus 14% in the corresponding previous period, excluding the one-offs. The operating EBITDA margin stood at 23.4% in-quarter four of ’25 versus 16.3% in the corresponding previous period. As part of our ongoing network expansion strategy, the total number of customer touchpoints reached 4,171 as on, 31 March 2025. The preventive portfolio revenue in Agiles overall revenues grew 13% in financial year ’25 and contributed 11% to overall diagnostic business revenues compared to 10% in financial year ’24. We believe that Agiles has the potential to scale significantly from the current level and efforts are underway to strengthen its growth imperatives to drive revenues and optimize cost lines. I also believe that the brand is gaining strong acceptance and recognition in the market, positioning the company well to further scale its performance. With that, I’ll conclude my remarks. We are making strong progress across our strategic growth levers. I believe these initiatives will drive sustainable growth potential and strengthen our position in the healthcare sector. With that, thank you, and I hand over to Anurag, please.
Anurag Kalra — Vice President of Investor Relations
Thank you, sir. Ladies and gentlemen, we will now open the floor for question-and-answers. May I request the moderator to take the question.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press RN1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press R&2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We will take our first question from the line of Neha Manpuria from Bank of America. Please go-ahead.
Neha Manpuria
Yeah, thanks for taking my question. On the hospital business, now that we have started seeing a fair bit of traction on the margins. How should we look at the margin expansion from the 20.5%, 21% that we have reported in the current year? Should the step-change in margins continue to get to that mid-teens where our peers are at? And what — given — I think a large part of this was driven by brownfield, but just trying to understand where-is in terms of ramp-up in bed capacity and profitability and when do we think that gets to breakeven.
Vivek Kumar Goyal
Yeah. Hi,. This is Vivek. So on margin expansion, we are sticking to our guidance earlier where we said that we want to achieve a margin expansion nearer to the — some of the best competitor. And we expect margin to grow from the current level, a similar growth you can expect in the forthcoming years also, like 2% growth we have seen in the current financial year. So similar margin expansion growth we are expecting next financial year.
Ashutosh Raghuvanshi
Regarding Manish, sir, we are currently operating at about 40% occupancy, but we have commissioned only 90 beds. Another 120 beds we will commission as the occupancy levels go up. We expect that on the entire bed capacity, which is about 120 plus 90, we will have about 50% occupancy by the end of this year. We exit should be at least 50% plus occupancy. The uptick of this hospital has been very good. So some of the programs which we had anticipated that we will start little later. We are preponing them and we are going to put up the oncology radiation oncology suite, which was planned earlier for two years from now within this year.
Neha Manpuria
So would it be fair to assume that at 50% occupancy, we achieve breakeven on this facility?
Ashutosh Raghuvanshi
I think so.
Neha Manpuria
Understood.
Ashutosh Raghuvanshi
Even before that, we should expect a breakeven.
Neha Manpuria
Understood. And my second question is on the diagnostic business. The — the revenue momentum remains in this low single-digit range, but margins have moved up. Is there any provision write-back, et-cetera, which is sitting in the margin number? And how confident are we of growing in-line with the industry or growing high-single-digit in the diagnostic business given that now the Agilis brand — brand changes nearly getting to two years-old.
Akshay Tiwari
Yeah, Neha, so in domestic business also, we have seen now the increase in the revenue as well as the margin, which is reflected in the financials. So the brand changes now effect is now behind us and we are seeing a double-digit type of growth number in the diagnostic business,. And as regard to your other question regarding the one-off type of thing, so this year, of course, there is a one-off of relating to the brand transition and some one-off relating to the legal fees and some contingent consideration we have to pay for the past acquisition. Apart from that, I don’t see the much you know this thing. And this will discontinue from this year onward and ’25, ’26, there will be normal type of EBITDA margin we are expecting.
Neha Manpuria
So, just to clarify here, so I think initially our view was that this probably grows more high-single-digits. So you believe based on the Agilis momentum currently, we’re confident of double-digit revenue growth. Is that correct?
Akshay Tiwari
Yes, this is what we are targeting.
Neha Manpuria
Got it. And margins would be in the mid-20s as we scale-up revenue
Akshay Tiwari
It should be around 23% immediately. And then moving towards 25% in a couple of years’ time.
Neha Manpuria
Got it. This is very helpful. Thank you so much.
Operator
Thank you. We’ll take our next question from the line of Shyam Srinivasan from Goldman Sachs. Please go-ahead.
Shyam Srinivasan
Yeah, good afternoon. Thank you for the opportunity. Just first one on the hospital business is how should we look at the revenue guidance for fiscal ’26? And if you could break it down into volume and maybe ARPOP?
Vivek Kumar Goyal
Hi, Shyam. This side. So revenue-wise, we expect to grow around 14% 15% number. And this time, you know last year, the year we have completed, we have seen 9% type of growth and balanced growth is coming from the volume. So I’m expecting it will be the river this time, around 5%, 6% in the ARPUB growth and the balance is from the volume side and volume growth is mainly coming from some of the brownfield expansion which had been completed, we will be operationalizing, which mainly include Noida and Faridabad. And also from the capacity ramp-up in the form of more — better occupancy than the last year.
Shyam Srinivasan
And Vivek, helpfulqv. So we had about 5% volume growth. So you’re seeing this volume growth goes to like almost double, like 10%. So what are we baking in terms of for the occupancy, should I model it on like all the expanded beds or we did end at 69%. So just trying to see how we should model that?
Vivek Kumar Goyal
Yeah. Yeah, we are aiming around 70% 71% of potential level at the consol — overall level. Because this brownfield expansion is on the existing facility and these hospital anyway operating at 80% type of occupancy level. So I think we will not be facing any challenge in occupancy side. And plus the facility as Dr alluded, it is ramping quite well.
Shyam Srinivasan
And just from a data point, how many operating beds we ended fiscal ’25 and what is the expected addition this year?
Vivek Kumar Goyal
Yeah. So we ended fiscal ’29 with a bed capacity of around 4,024 because we have taken out certain beds also in the Richmond Road. And we will be adding how much around nine — almost 1,000 beds in the current time. So bed addition is like 25%. Yeah, because most of these capacities are coming like Noida, we have a full — got full OC and we are operationalizing it. 150 bed we’ll be getting. Then there will be Salimar — sorry,, which has completed and will be operationalized in the first-quarter itself. Then, we will be opening further beds. We are expecting around 200 beds to be opened in. FMRI, we will be completing it maybe the benefit be getting only in the last quarter, FMRI, the 220 beds, the capacity expansion. And I will say BG Road is another one, which is we are expecting OC actually. And there is another capacity — I have added also the facility, which will be in our fold maybe by this month-end or so.
Shyam Srinivasan
And what’s the margin profile there currently?
Vivek Kumar Goyal
They are on the similar margin profile.
Ashutosh Raghuvanshi
So they are at an occupancy currently at about 60%, 62% and the margins are about 22 odd percent.
Shyam Srinivasan
Understood. So just wait, just from — it’s a lot — a lot of bed additions, right, brownfield, greenfield or acquisition. So we are confident of this 1500 bps of margin expansion for the hospital business this year?
Vivek Kumar Goyal
Yeah. Yeah, yeah. So we are quite confident and you know, last year also we have demonstrated 2% margin improvement. And similar thing we are expecting this financial year. So we are quite confident about that.
Shyam Srinivasan
Got it. Last question, sorry, I’ve taken many questions. Just this, what is the quantification for this write-off and all the changes that you have mentioned? It’s in the hospital revenue, sorry, I didn’t understand. I don’t know whether I missed opening comments on this one. What are the one-offs?
Vivek Kumar Goyal
Yeah. One-off is basically is there is some impairment charge we have to take and that is mainly coming because of this facility where the performance level is not up to mark, I will say. And as a result of that, based on the future of profitability and cash-flow, we have to adjust the carrying value of the assets. So that along with there is some write-off impairment we have to take for our investment in Sri Lanka assets where you know, as you know, the Sri Lanka stock price movement and the currency movement both affect the carrying value of the investment. So these are the two big items.
Apart from that, there will be a — there is a positive item in this number also where we have taken a positive — a sort of write-back of impairment which we have done earlier for our Faridabad unit because the performance of unit has improved tremendously. So this — the total net impact is around INR89 crores for this financial year. And for this quarter, it is INR54 crores.
Shyam Srinivasan
So it was in the revenue line and — sorry, can you say where it has been accounted for? Sorry, I didn’t understand that.
Vivek Kumar Goyal
So it is sold separately below EBITDA, INR54 crores as a item.
Shyam Srinivasan
Understood. Thank you. Thank you and all that.
Vivek Kumar Goyal
The value and other thing is not much affected. It is — what is impacting is as an annual cleanup exercise, we do write-off — write-back certain unidentified receipt, which are more than three years-old and we also assess the provisions, which we have created in the books of account, whether it is required, it’s quite old and payable similarly. So those type of things, which are quite normal now, so which we are doing for last three years and it is not having significant impact also.
Shyam Srinivasan
Okay, understood. Thank you and all the best.
Operator
Thank you. We’ll take our next question from the line of Deepti Rajula Pathi from Axis AMC. Please go-ahead.
Deepthi Sree Rajulapati
Hello. Hi, sir. Thank you for your time. My question is on the diagnostic business. So last quarter you have mentioned that we are done with rebranding exercises and these expenses will taper off in this — in the end of FY ’25. So we will not see any rebranding costs in the coming quarter or is there any carryover? And one more question is on the variance of the margins in the Diagnostic business. Revenue Q-o-Q, if we see it’s flat, but there is 2.1% variance in the margin. So what is driving this? Just one more question is on the BG road expansion on hospitals. How many beds are we expecting in FY ’26?
Ashutosh Raghuvanshi
Yeah. So yeah. So regarding the first part of your question about the brand-related expenses. The one-off kind of expenses which were there in rebranding, those are done already. So in this year, you will not find those as one-off items. The second is about the margin expansion in-spite of the revenue being flattish is that we have built-in lot of efficiencies in the lab network, the CTPs versus the lab network we have rationalized. There are several other initiatives on the cost side have been taken and that has resulted into this.
We have also upgraded our infrastructure on the diagnostics side quite a bit. We have opened a new lab of genomics in Gurgaon. At the same time, we have opened a new lab for the transplant immunology in Bangalore as well. So with all these initiatives, we believe that high-end test volume with a higher ARPA will also drive growth in the coming year. Regarding the number of beds in BG Road is 140, 140 beds.
Deepthi Sree Rajulapati
Okay, sir. Thank you. All the best.
Operator
Thank you. We’ll take our next question from the line of Binu from Elara Capital. Please go-ahead.
Bino Pathiparampil
Hi, good afternoon, all of you. Most of my questions got answered. Just one strategic question on the kind of expansion we are doing. If I look at most of your competitors, they are targeting Tier-1, Tier-2 cities with large 400, 500 pet facilities. Whereas if I look at your acquisitions, be it,, etc., you’re more going on Tier-3, 4 and slightly smaller facilities. Is that the way forward for us?
Ashutosh Raghuvanshi
No,, you see, we have always stated that our growth strategy is a cluster-based strategy. So as I was mentioning in my opening remarks also that in Punjab, we have approximately 800 beds spread over four facilities, two in Ludhiana, one in and one in Mohali. Now all these hospitals, along with that, this is a strategic fit-in and that’s why we have chosen. But out of choice, we are not going to any new geographies, Tier-2 or Tier-3 kind of geographies.
But this Punjab as a state is important to us. And then with the addition of these beds and the expansion which we have planned in and Mohali, we would have — has a potential of 450 beds. So we will go to 450 beds there. Mohali, we are going to be adding another approximately 350 to 400 beds. — sorry,, we are going to be adding another 150 beds. So Punjab as a cluster, we are the dominant player already, but we will become even stronger once this happens. So that is the other cluster strategy. The Manesa facility, I mean, just I would like to correct you is almost part of the growing part of Gurgram.
So this is not really a Tier-2 or 3 3 kind of situation. This is a kind of a very upcoming area within the Greater Gurgaon area. And Manishir also has additional FSI, which will take this hospital size to 450 beds. The other comment which I made earlier is that many of our hospitals were smaller in size, but the larger hospitals which we have, which are already doing EBITDAs of about 20%, most of them will also become 450 bed plus after the brownfield expansion. So this will give us a profile of a hospital. We — I completely agree with you that a 450-bed hospital has a completely different economics than a 200-bedded hospital. So we believe in that. So we are not changing our strategy within these clusters where we are present, which is Bangaloru, Calcutta, the Punjab, Delhi, NCR and Mumbai — Greater Mumbai area, in these clusters, we will be seeking more opportunities And we would be looking at more hospitals and try to do hospitals which are at least in the range of about 350 bed plus.
Bino Pathiparampil
Understood. Just a latter question only digging a little deeper. You know, Mumbai, Bangalore, Kolkata are cities where you are already present. And in these cities, your competitors both listed as well as private probably in the last two years have two or 2.5 years have announced at least four, five big projects each, most of them greenfield, which means there is a potential and there is land or whatever infra available to develop, but you haven’t been so aggressive in those particular geographies in that sense. I mean, is there any reason and-or would you become more aggressive now,
Ashutosh Raghuvanshi
Yeah. No, we were more focused on our brownfield expansion and execution thereof. And we had the other distractions as well and brand was one of them, which we have behind us now. So we have been actively looking at opportunities, especially in Mumbai. But as you said correctly that most of these projects which are announced are all greenfield. So we have also been looking for greenfields only because there are no acquisition targets per se available in these markets. And land costs being what they are and especially in greater Mumbai area, which is of great interest to us and we believe has lot of potential and lot of demand-supply gap.
So there that comes hard. So we have been actively looking at it. Unfortunately, nothing has materialized so-far, but we are pretty hopeful that at least few of those discussions we will be able to culminate into actual projects now. And those things are purpose-built hospitals.
Bino Pathiparampil
Understood. Thank you.
Operator
Thank you. We’ll take our next question from the line of Prashant Nayer from Ambit. Please go-ahead.,
Prashant Nair
Thank you. Good afternoon, everyone. The first question is more of a clarification. When you mentioned that you expect Diagnostics margins to get to 23% and then beyond that to 25%, you are — this is basis gross revenues or net?
Vivek Kumar Goyal
Net revenue only. Net revenue net revenue.
Prashant Nair
All right, understood. Secondly, you know, in your network, now you have around five hospitals which are in the sub-10% margin bracket and then you have a few which are in the 10% to 15% bracket. Do you have any other hospitals which are not core to the way you look at the business now? So you’ve sold three assets over the last year or two. So are there any more assets like this, which you would look to rationalize or do you think you’re done with that exercise for now?
Ashutosh Raghuvanshi
So I think we do have work to do in couple of our hospitals still in terms of improving, but we believe that those are strategically important for us and exit is not an option. So I think more or less we are done as far as these rationalization is concerned. But on the performance side, two hospitals, especially, I will mention rather three, where we are still working and we are seeing some good results. One is Escorts Hospital in Delhi where our margin profile was less, but we have already consistently there been achieving EBITDAs of about 10% 14% and we are going above 15% over there.
We have a clear visibility on that. So we are confident that this hospital will also come into kind of a normal profitability profile. And the other two units in this category are Jaipur and Bashi. Jaipur has had some issues, but now it is again recovering. The revenues trend look very healthy. We have made certain changes there, both in terms of the leadership and some of the infrastructure changes as well and we expect very good results to come out of that. So we expect that in six months-to — within the — by the end — before the end-of-the year, we should have a healthy margin profile in Jaipur as well.
Washi has some specific challenges because this is part of a government hospital and that’s why we — and we have also got to serve certain free patients referred from the municipal cooperation. So because of that, the profitability profile of this hospital has been low. We also had some attrition of clinician here because of that, the occupancy numbers were little low. But this is again an important market, important micro-market and we are working on strengthening the clinical talent over there to make sure that this also comes in the healthy zone. So that is regarding these three projects, which we are keeping under watch.
Prashant Nair
Thank you. Just one follow-up question on Escorts Delhi. So would 15% plus be close to what this hospital has achieved in the past, where it has been part of or is the ceiling higher in your?
Ashutosh Raghuvanshi
No this is actually better than what it has ever achieved.
Vivek Kumar Goyal
And mind you, this is after absorbing the EWS bat cost because we have to provide 25 bats free of cost. So after absorbing that cost. And as Dr mentioned, it is showing upward improvement in the EBITDA margin profile and we expect it should be settling somewhere around, 15% 16%.
Prashant Nair
Okay, great. Thank you. I’ll get back-in the queue. Thank you.
Operator
Thank you. We’ll take our next question from the line of Atul, an Individual investor. Please go-ahead.
Unidentified Participant
Hello. Thanks for taking my questions. My question is on any update on the Delhi High Court case further like as per last your con-call, it was discussed that it was from last you know last conversation. So if there is any update on that side? And I will add another question, how is the occupancy trend going-in the current quarter? Thank you.
Ashutosh Raghuvanshi
Yeah. So regarding the high-cost case, there is no fresh development that is still a matter of subduedice. But we have — that doesn’t have much impact on us. Regarding the occupancy, we — the trend is healthy and we are doing occupancy levels of — similar to what we did in last quarter.
Unidentified Participant
Thank you. Thank you.
Operator
Thank you. We’ll take our next question from the line of Harsh Bhatia from Bandan Mutual Fund. Please go-ahead,
Harsh Bhatia
Thank you. Good afternoon. Am I?
Operator
Harsh, can you use your set mode? The audio is not very clear.
Harsh Bhatia
This is better?
Operator
Yes, please go-ahead.
Harsh Bhatia
Sir, just one quick clarification.
Operator
I’m sorry Harsh, I’m sorry, you’re sounding muffled.
Harsh Bhatia
Is this better?
Operator
You can try. Please go-ahead with your question.
Harsh Bhatia
Just on the hospital EBITDA part, you alluded to some one-off expenses which are below the EBITDA line-item and I’m purely referring to the hospital EBITDA. Just to be clear in terms of when we look at the 4th-quarter performance on a Y-on-Y basis, the drag at the margin level is largely to do with the performance or is there any other one-offs that are there at the EBITDA line-item? That is the first one.
Vivek Kumar Goyal
Yeah. So one-off is not like one-off, one-off. It is exceptional gain and loss, which as per accounting standard only we have to source separately. So that is that one-off I explained what is those one-off exceptional gain or losses. So there are losses for 2 impairment and impairment of investment in Lanka and there is some impairment gain as impairment loss write-back actually for the unit. So that is so like as exceptional gain or loss. What about — regarding your other questions, you know the EBITDA margin side, the — there is a — there is no one-off, one-off, but provision for doubtful debt has slightly on the higher side if we compare with the Quarter-four of the last year. There was a positive write-back of provision in the last quarter — previous year. And this quarter, it was not there. Last quarter, we got very healthy collection in the last quarter itself. And as a result, there was a write-back of provision, which we have provided based on the aging of the debtor. So that has resulted into the some improvement in the margin. So apart from that, there is nothing abnormal unusual.
Harsh Bhatia
Sure. Would you be able to call-out the number in terms of the recovery for the past quarter, which is not there for this quarter, as well as the drag, if any.
Vivek Kumar Goyal
Yeah. So Manish, so first I tell you about the drag. So, we are we have budgeted also the EBITDA loss of around 20 crore for this year. So yeah, no, for the half year, it will be less now.
Ashutosh Raghuvanshi
That’s correct.
Vivek Kumar Goyal
Yeah. So it will be — it is around INR12 crore type of EBITDA loss, which we have budgeted also and it is there in the financial. So INR12 crore loss is built into this financial, which hopefully in the next — coming year, it should be a some positive EBITDA number will be there.. And as regard to your quantification thing is concerned, the provision for doubtful debt for the quarter is INR22 crores as against there was a negative provision for doubtful debt, that means the income side, INR7.5 crores corresponding quarter previous year.
Harsh Bhatia
Sure. Just one clarification on Manishir. INR12 crore was there as a drag from the 3rd-quarter as well, and there is a INR12 crore drag in the 4th-quarter as well, or just give you sure just one another point. When you look at the margin matrix, and when we’re guiding for the 200 bps margin expansion at the hospital level, in terms of your internal assumptions, how important are these hospitals such as Varshi, Jaipur, basically whichever hospitals are there below the 10% in the margin metrics? Is it important for you to achieve the 200 bps per margin expansion or this is something that has been not been considered to a large extent to provide you that, let’s say, margin of safety to that extent. So basically, how important are these less than 10% margin hospitals turnaround important to your guidance for the 200 bps margin expansion going-forward?
Ashutosh Raghuvanshi
For these hospitals to really come to a to the category of 20 plus is not in something we have considered. We believe that the turnaround of these three hospitals is going to take six months or a year or maybe longer. So we have not considered that when we say that we are expecting about 2% of increase in our profitability profile. So these hospitals are important strategically for the long-term, but in short-term whatever guidance has been given is not considering that these hospitals have come to a 20-plus category.
Harsh Bhatia
That’s very helpful, sir. One last quick follow-up in terms of the bed additions for FY ’26, a large part of that would be brownfield in nature and new towers as such. What should be the general breakeven timeline that we should work with, should it be somewhere around six to Nine-Month period or somewhere closer to one year period? Again, these are towers at the existing sites. So maybe you could help us understand a bit.
Ashutosh Raghuvanshi
Yeah. So since these are brownfield, their absorption is pretty fast. Location to location, it will differ. However, we expect that within six months — we will open beds as the occupancy levels go up. Currently, these hospitals are operating about 75% to 80% occupancy levels. So we expect that this should happen in six months’ time.
Operator
Sure, sir. Thank you.
Harsh Bhatia
Thank you. Thank you. All the best.
Operator
Thank you. We’ll take our next question from the line of Ameya from JM Financial. Please go-ahead.
Amey Chalke
Yeah. Thank you for taking my question. Most of the questions are answered. Just one follow-up on the 900 bed addition next year. So this bed addition should we factor-in back-ended in the second-half of this year or do you think that some of the hospital will get commissioned even — some of the beds will get commissioned in the beginning of the year as well?
Vivek Kumar Goyal
Yeah, we can — we should assume 50-50 because as I mentioned, FMRI bed expansion is happening at the last quarter. And similarly the BG road also will be in the second-half we are expecting and rest of the beds will be commissioned in the first-quarter itself.
Amey Chalke
Okay. And on the BG road, the occupancy still looks around 60%. So is it ideal to open to one more floor there or you think we need to wait for that occupancy to go up.
Ashutosh Raghuvanshi
Yeah. So we are adding more clinical talent and modalities as well. So — but obviously, we will commission the beds will be ready for being commissioned. So capacity will be available to us, but we will keep on commissioning as and when the occupancy level go up. But with the addition of clinical beds and modalities, we believe that occupancy numbers will go up.
Amey Chalke
Sure, sir. Thank you so much. I will join back. Thank you.
Operator
Thank you. We’ll take our next question from the line of Abhishek Jain from Investwell Agent. Please go-ahead. Can you use your handset mode please?
Abhishek Jain
Yeah, sure. Hello.
Operator
Yes, please go-ahead.
Abhishek Jain
Hello. Yeah. So the question is we have purchased this voltage brand under the auction. Can you tell me how much was the royalties we were paying earlier, both in absolute numbers and then percentage level and the margin expansion that we are expecting for the current year of 150 basis-points to 200 basis-points. Does this include the savings from the cement or it is over and above the reason that we are expecting?
Vivek Kumar Goyal
Yeah. So the royalty as per the old agreement we are providing in the books till last year is to 5% plus GST, which comes to around of the revenue. So that means 0.3% impact on the EBITDA margin, positive impact on the EBITDA margin post-acquired acquisition of this brand. So that will be the impact of the brand acquisition, positive impact, 0.3% roughly on the net revenue of the hospital business. And that has been factored in while I guided a margin expansion of 2%.
Abhishek Jain
Okay, fine, sir. And can you also give the same figures for this SRL drive and that we have converted into?
Vivek Kumar Goyal
Yeah. So SRL also the same pine to 5% plus GST was the brand royalty applicable until we were using SRL brand. And now because we have moved to our own brand, brand, so there is no brand revenue right now.
Abhishek Jain
And the figure that you are saying is 0.3%, correct?
Vivek Kumar Goyal
Yes, because GST is.
Abhishek Jain
Thank you very much, sir. That’s it from my side.
Operator
Thank you. We’ll take our next question from the line of Abhishek Vani from Dalal Street Investment Journal. Please go-ahead.
Abhishek Vani
Hello. Am I audible, ma’am?
Operator
Yes, please go-ahead.
Abhishek Vani
Yes. Sir, I want to know about the medical tourism prospectus business for the. So what has been the growth rate across the industry and how has been working on it.
Ashutosh Raghuvanshi
Yeah. So the — we have seen about 17% growth on year-on-year. However, in the current geopolitical situation, we expect that there may be a — there may not be a similar growth this year. But the overall to our context, about 8% of our revenue comes from international patients. We expect that to remain stable. However, we are not seeing very huge growth in terms of
Abhishek Vani
And sir, with respect to the brownfield acquisition, so what impact it will have on our debt levels? And do you expect the margin to recover quickly as opposed to our competitors who have been working with greenfield acquisitions?
Vivek Kumar Goyal
Yeah. So there will not be any incremental debt for brownfield expansion. It will be funded through internal accrual. So there will be no incremental impact. And as I mentioned in the earlier comment, this expansion is happening in the unit, which are already operating at 75%, 80% type of occupancy level. So we are — we should not be facing much challenge in ramping-up these beds and it should start contributing immediately.
Abhishek Vani
Yes, okay. And sir, with respect to the legal cost, so can we expect that the legal cost will fall down in coming quarters as we are already paid-for the brand deal. So what is your outlook on legal costs?
Vivek Kumar Goyal
Yeah. So the legal and other legacy cost is taking away almost 1% of our EBITDA margin. And I will say that will continue till we able to resolve this court cases because there is still one court case is pending in court where the regular hearing is happening. And plus the entity structure also the project, we Call-IT where we are trying to simplify the organization structure. Although the daily NCLT has given the favorable order, we are also expecting order from the Chandigarh NCLT and then we will — it will be simplified. So this year, at least it will continue. I think from next year onward, we should see some reduction in this cost.
Abhishek Vani
Okay. Thank you, sir. Thank you. All the best for the future.
Operator
Thank you. We’ll take our next question from the line of Nirali Shah from Ashika Institutional Equities. Please go-ahead.
Nirali Shah
Yeah I, yes I just had two very good questions fizing that we see today just wanted to view on that IH is increasing damages from Dai Chi. So just wanted some color, some view on that.
Ashutosh Raghuvanshi
Yeah, that’s a litigation which is happening in Japan between IHS and Dai being a matter. We can’t really comment on that.
Nirali Shah
Okay, okay, and about the winning auction for all the trademarks. So would that be any kind of value unlocking?
Ashutosh Raghuvanshi
Yes. So we as the previous caller was asking, we are going to save some the money which you are providing for the royalty for the brand because now we own the brand and that is a positive advantage for us.
Nirali Shah
Okay. Thank you.
Operator
Thank you. Ladies and gentlemen, we’ll take that as the last question for today. I now hand the conference over to management for closing comments. Over to you.
Anurag Kalra
Thank you. Thank you, ladies and gentlemen, for your time. If there are any follow-up questions, we are always available either through email or on phone, please do reach-out to us. Thank you 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