Krishna Institute of Medical Sciences Limited (NSE: KIMS) Q3 2025 Earnings Call dated Feb. 07, 2025
Corporate Participants:
Bollineni Bhaskar Rao — Chairman & Managing Director
Abhinay Bollineni — Executive Director & Chief Executive Officer
Sachin Ashok Salvi — Chief Financial Officer
Analysts:
Rahul Jeewani — Analyst
Anshul Agrawal — Analyst
Abdulkader Puranwala — Analyst
Harith Ahamed — Analyst
Arunachalam — Analyst
Amey Chalke — Analyst
Tushar Manudhane — Analyst
Parvati Rai — Analyst
Alankar Garude — Analyst
Aman — Analyst
Jay — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Kims Hospital’s Q3 FY ’25 Earnings Conference Call hosted by IIFL Capital. 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 Rahul Jawani from IIFL Capital. Thank you, and over to you, sir.
Rahul Jeewani — Analyst
Hi, good morning, everyone. This is Rahul from IIFL. I welcome you all to the 3rd-quarter earnings conference call of Kims Hospitals being hosted by IFL Capital. From, we have with us today Dr Bhaskar Rao Bolinani, Founder and Managing Director; Dr Rabinay Bolinani, Executive Director and CEO; Mr Sachin Salvi, CFO; Dr Nittesh, CEO for Kim’s Bangalore Cluster; and Mr Srinath, Director of Business Strategy and M&A. Over to you, sir, for your opening comments.
Bollineni Bhaskar Rao — Chairman & Managing Director
Good morning. I extend a warm welcome to you all for the first Investors Meet of this year. Gross revenue of INR790 crores, a growth of 29.7% year-on-year and 1% on quarter-on-quarter basis. EBITDA of INR205 crores, a growth of 36.4% on year-on-year and a decline of 8.1% on quarter-on-quarter basis. EBITDA margins at 25.9% versus 24.7% in-quarter three FY ’24 and 25.5% in-quarter two FY ’25. PAT at INR93 crores in-quarter three FY ’25 against INR77 crore and INR121 crore in Q3 financial year ’24 and Q2 financial year ’25, respectively. Consolidated EPS for nine months of INR7.1 face value of shares at INR2, a growth of 15.6% adjusted for shares slipped on year-on-year basis. Cash-and-cash equivalents include cash, bank balance, deposits with maturity less than 12 months and investment in mutual funds at INR112 crores as on Q3 FY ’25. Financial highlights consolidated. Consolidated revenue from operations grew by 27.5% on year-on-year and it declined by 0.6% on quarter-on-quarter basis, INR772 crores. Consolidated EBITDA pre-India AS grew by 34.7% on a year-on-year and declined by 10% on quarter-on-quarter basis to INR198 crore. Consolidated EBITDA pre-Inders and excluding other income to total revenue margin stands at 23.3% growth of 25.4% year-on-year basis and a decline of 16.2% quarter-on-quarter basis. Operational highlights, consolidated average revenue per operating bed by 25% grew by 25.2% and 0.5% on year-on-year and quarter-on-quarter basis, respectively. Average revenue per patient grew by 12.2% and 2.8% on year-on-year and quarter-on-quarter basis, respectively. IP volume grew by 13.8% and declined by 3.1% on year-on-year and a quarter-on-quarter basis, respectively. The other developments, we are happy to announce that the opening of 200 bedded multi-specialty hospital at Guntu on a basis called Kim at Gundo, a very important turn-in at the capital of city of. Honorable Chief Minister of, has kindly consented to inaugurate this hospital on 12 February of this month. Kims entered into an agreement with Institute of Medical Sciences Hospital in a of District. It has a total 300 beds since is our second hospital in Kerala. The other one is that Kanor opened rich entry and is doing well. Within three months, the Kanor Hospital has been breakeven, which is a landmark in Kerala. As you may be aware, Keral is the first-place in the percentage of people seeking hospitalization. Kim’s Hospital has now set a benchmark in neurocare. It now features South Asia’s first MRI-guided focused ultrasound with the HERO 3T MRI. It is prone to reduce the tremor dominant Parkinson’s and essential tumorsin patients. It gives benefits of without anesthesia, reduce the tremide totally safe and effective. Admission is not required single sessions treatment. The first patient was ang maths teacher from rural parts of Maharashtra who was suffering from hand trauma.
Operator
Yes, sir, please go-ahead.
Bollineni Bhaskar Rao — Chairman & Managing Director
On hearing about this, he came to us and underwent a non-invasive surgery free procedure and walked back immediately. Kim’s Foundation and research center has developed AI-based smart glasses for the visually impaired that will enhance their quality-of-life. The product was launched in a function based by government of Verma. Recently Kim was awarded a non-clinical Operations Excellence Award by Associations of Healthcare Providence of India. Kim’s Khondapur also got the award for Excellence in Nursing practices from AHPI. Kim was hosted a two-day conference of Indian Association of Pediatric Surgeons of both States, which had a record number of participants which able to speak about the awareness and the —
Operator
Ladies and gentlemen, please stay connected while we reconnect the line for the management. Thank you. We have the line for the management reconnected, so you can go-ahead.
Bollineni Bhaskar Rao — Chairman & Managing Director
Clinically, Kim secured another distinction by becoming the first private hospital in the country to outperformed 100 robotic-assisted rupal surgeries, a significant achievement in treatment of pancreatic cancer. You all know that we have been ordered about 25 robots. Out of that five has been placed in the different institutions and all of them are doing well. That is a good move and it is going to improve the quality of the treatment. At Kim’s Kingsway Nagpur robotic-assisted CABG was successfully done, which is first-in Central India, this minimal energy approach ensures cost recovery, reduces post-operative pain, shorter hospital stay and minimal scoring. Kim’s Manota Hospital performed the first finger joint replacement. This is the first such operation in Maharashtra and third in India. Kim has done within no time about 200 robotic knee replacements. I have intentionally kept a good and important news in the end. I’m glad to inform that a distinguished personality has joined our Board. Suresh Patel, who held many prime positions in his illustrious career. He was CMD of Andhra Bank, presently Union Bank of India. Later occupied one of the top positions in the country as CVC that is Central Commissioner. Our Board will be greatly enriched with his contributions. And all the projects — new projects are doing are going-in time. The only thing is that the entire civil structures has been finished in the quarter-four. As we know that the problems what we faced in Nashik, after the civil works are finished to get the required permissions to start the hospital, it takes a little longer time that maybe we maybe end-of-the first-quarter or the beginning of the second-quarter, we’ve been able to commence with all these permissions so that we can able to bring down the — the loss funding. Usually when we finish the civil structure, we will try to recruit all the doctors and then it costs a loss funding heavily. So by after getting all the permissions, if we start and then start recruiting the doctors, we can able to minimize the loss funding, so that is the reason that we may able to start full-fledged within quarter two all the three projects in Bombay and Bombay and Bangalore, and Bangalore 2 hospitals, quarter two of ’26 may be early in the quarter one. Okay, over to the audience for any questions, clarifications.
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 star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press R&2. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Ladies and gentlemen, you may press star and one to ask a question. A reminder to all participants, you may press star and one to ask a question. The first question comes from the line of Anshul Agrawal from Emkay. Please go-ahead.
Anshul Agrawal
Hi, thank you for the opportunity. Am I audible, sir?
Operator
Sir, your audio is not clear, sir. May I request you to use your handset, sir, we are unable to hear you.
Anshul Agrawal
Is this better?
Operator
Now can you say something, sir?
Anshul Agrawal
Is this better?
Operator
Yes, sir.
Anshul Agrawal
Yes, good. Great. Thank you. Sir, my first question is on the Maharashtra cluster. Is there any one-off there? I see a sharp decline in the EBITDA margins here and what could be the EBITDA loss in the unit?
Abhinay Bollineni
So Maharashtra now reports both Nashik and Nagpur. In Nagpur, there has been a decline in revenue owing to a seasonal impact and hence there has been a decline in EBITDA and some one-off write-offs on general dues and PBDD provisions. As far as-is concerned, we have had incurred a loss of INR5 crores for the quarter and that’s why Maharashtra has a cluster, the EBITDA margins have significantly declined. But that should get rectified by Q2, Q3 given that Nasdic will breakeven by then.
Anshul Agrawal
So is on course to breakeven within one year of commencement, would that be correct?
Abhinay Bollineni
Correct.
Anshul Agrawal
Great. Thank you. That’s it from my end.
Operator
Thank you. Ladies and gentlemen, to ask a question, please press R&1 on a touchstone telephone. The next question comes from the line of Abdul Kather from ICICI Securities. Please go-ahead.
Abdulkader Puranwala
Hi, sir. Thank you for the opportunity. Sir, my first question is with relation to your corporate overheads. So if we see for the current quarter because of the press hiring, I think the corporate hedge has gone up. So could you please provide some color as to how do we see this? Is there any one-off element also included in this? And how should that run for the next coming years? Thank you.
Abhinay Bollineni
Sorry, would you repeat the question again, please not clearly
Abdulkader Puranwala
Sure, sir. Sir, my question was pertaining to the corporate overheads. I think in the corporate overheads in this particular quarter as a percentage of your revenue has gone up. Partly my understanding is maybe because of the — because of the recruitments what you have done in terms of your various clusters. So if you could provide us with some color as to how this would pan-out in the next couple of years would be helpful?
Abhinay Bollineni
No, I don’t think we have classified corporate overheads in any part of the presentation. There has been a decline in EBITDA margin because of decline in revenue from mature units owing to seasonal impact from Q2 versus Q3. But Q3 and Q3, there has been a significant growth both in revenue and EBITDA. And there has been a one-time expenditure towards the tune of INR8 crore to INR9 crores, largely because of provisions of PBDD and general dues write-off. Other than this, there has not been any expansion in corporate expenditure and I don’t know where this has been picked-up, but it’s not mentioned anywhere in the presentation.
Sachin Ashok Salvi
And as far as corporate on account of new hiring in particular in our Bangalore cluster. As such, we have not started yet the Bangalore cluster. So it is not coming to a profit and loss account directly. It’s a pre-operative kind of a thing. So there is no surge in corporate overheads as such. Understand we start the newer cluster, I think it will not be there.
Abdulkader Puranwala
No, I was referring to if I look at your operating margins at of cluster, I think it is close to 26.5% as per the presentation. While on a reported basis, the EBITDA margin was close to 24% total limited clarification. I think there was some on the project. So any reason why the timeline for Project 2 has shifted to, say, from Q4 of fiscal ’24 to Q2 FY ’26 or
Abhinay Bollineni
The second project in Bangalore, there has been some delay in execution and hence the delay.
Abdulkader Puranwala
Okay, sir. No questions, but I will get back-in the queue to the question.
Operator
Thank you. A reminder to all participants you may press R and one to ask a question. The next question comes from the line of Harit from Avendus Spark. Please go-ahead.
Harith Ahamed
Hi, good morning. Thanks for the opportunity. So when I look at our Telegana and AP clusters, not just for this quarter, but for the entire FY ’25, there’s been a strong ARPOP growth and you called out reduction as the primary reason for that. So if I look-ahead maybe into FY ’26 and ’27, how should we think about our top growth in these two regions for us?
Abhinay Bollineni
So is both in Telangana and in Andhra for the first-nine months, there has been a significant growth in both volume, IP and OP volume as well as ARPP volume — sorry, ARPP in absolute number. So I think that will continue to do — that will continue to grow at the same growth rate and there will be for more efforts in trying to reduce the ALOS from the current 3.5% to probably 3.3.4 and that impact on the ARPU will reflect.
Harith Ahamed
Okay. And the other income that you’ve reported for this quarter is a bit higher than our usual run-rate. What exactly is leading to this?
Sachin Ashok Salvi
So there is a — there is the income from sale of land at Chenni of about INR12.5 crores, which is sitting in other income in this quarter. Otherwise, it is normal.
Harith Ahamed
Okay. And last one, this time we have plugged some shine with our Telegana cluster. So if you can comment a bit about the performance there, how the quarter-on-quarter-on-quarter revenue ramp-up has been as well as some color on the margin profile there.
Abhinay Bollineni
So Sunshine ramp-up is in-line with the rest of Telangana, Harit. There has been a decline in revenue of INR8 crores and proportionately the EBITDA decline of around INR6.5 crores in sunshine. The occupancies are holding up. The facility is doing quite well. So we’re pretty happy with the progress there and how things are ramping-up. So the reported number for Sunshine this quarter on revenue has been INR150 crores versus INR158 crores of Q2. And the EBITDA has been INR40 crores versus INR48 crores of Q2.
Harith Ahamed
Got it. That’s very helpful. I’ll get back-in the queue. Thanks.
Operator
Thank you. A reminder to all participants, you may press star and one to ask a question. Ladies and gentlemen, you may press TR and one to ask a question. The next question comes from the line of Chalam, who is the freelancer. Please go-ahead.
Arunachalam
Am I audible, sir?
Operator
Yes, sir. Please go-ahead.
Arunachalam
Very, very good morning. And in fact, I’m very happy with the organic growth both in the revenues as well as in the bottom-line. So what is actually our flagship, like what would be the percentage of in all the specialties, like whether it’s cardiac or neuro or gastro, what, what, what or onco or it’s equal
Abhinay Bollineni
So it’s a fragmented split for specialties. Cardiac is around 17%, 18%. Rest of the specialties like renal, neuro, orthopedics, oncology, gastro are around 9% to 10% so it’s quite fragmented across all specialties.
Arunachalam
Why I wanted to notice whether how does somebody perceive skins, do they see you as a multi-specialty or do they see you as a cardiac or a neuro or a onco? That’s why I wanted to know, particularly you are also into medical tourism. That’s why like international patients.
Abhinay Bollineni
So given that the specialty mix is quite fragmented, I think the perception is that we are a multi-specialty hospital.
Arunachalam
Okay, sir. Thank you very much. Thank you.
Operator
Thank you. A reminder to all participants, you may press star and one to ask a question. Thank you. The next question comes from the line of Chalke from JM Financial. Please go-ahead.
Amey Chalke
Yeah, thank you for taking my questions and congrats to the management on a good set of numbers. The first question I have is on Kerala geography. So-far we have announced three units. One, we have already added. There are other two and. So what is the timeline for these units? And if you can also provide some color on, how would the mix like would be — would these be more secondary care kind of hospitals or there would be tertiary care as well? And what could be the roughly ARPOB range for these units?
Abhinay Bollineni
So right now we have Color, which is fully operational. We are planning to add another 50 beds by end of this financial year in the same campus. And maybe another two years from now, we should be able to add another 100, 150 beds in the facility, taking it up to, 350 400 beds. The intent for Kerala as a cluster is to have all specialties and all of them will be doing care work. So in Karnor, we will soon start kidney transplant. Within the expansion for 100, 150 beds, we are factoring in oncology also withinac and all the other services that are required. So all the hospitals in Kerala will be focused on and care. Colum, which should commence operations from April
Operator
Sorry to interrupt, ladies and gentlemen, please stay connected while we reconnect the management line ladies and gentlemen, we have the management line reconnected, sir, please go-ahead.
Abhinay Bollineni
So I spoke about. As far as Kolama is concerned, we are renovating the facility. We’ll rebranded by the first week of April. That again will be a hospital that will service and Care. We don’t have oncology at the moment, but we may eventually look at adding oncology once there is an initial ramp-up. Should take another 12 to 18 months, 12 to 15 months before we start operation. In Phase-1, we don’t intend to have oncology there, but we intend to do transplant as a service, both liver and kidney. And as the hospital ramps-up, we will add oncology as a services but overall, the idea is to have oncology and all the other specialties in all the hospitals in Kerala. We might just stagger it and do it in phases.
Amey Chalke
Sure. And the second question I have is on the scenari. Since the acquisition, how has this unit fared? And if you can give some color on the same on the operational front of this unit? Whatever improvements have happened so-far and what would be now the profitability has it improved or since we acquired? Thank you.
Abhinay Bollineni
So Queen Generai is a very old facility, it’s a 20-year-old facility. So a lot of the renovation works are happening at this point in time. And usually Northern Andhra the is a very weak season even among our other hospitals in North. And most of the doctors have agreed to join only a post. So as we speak, a lot of the onboarding is happening. By end of Feb, a lot of the doctors will be fully onboarded and part of the renovation works also should be completed. So right now, we are not losing any money. It is EBITDA neutral, but there will be a good ramp-up in FY ’26.
Amey Chalke
What will be the occupancy for this unit currently?
Abhinay Bollineni
It will be around 35% 40%.
Amey Chalke
Okay, got it. Sure. Thank you so much. Thank you.
Operator
Thank you. A reminder to all participants, you may press R and one to ask a question. The next question comes from the line of Rahul Jawani from IIFL Capital. Please go-ahead.
Rahul Jeewani
Yeah. Hi, sir. Sir, on the Nashik plus — Nashik Hospital, you talked about EBITDA breakeven in 2Q, 3Q of next year. But can you also talk about how has the doctor onboarding progressed in that hospital? And do we have the requisite doctor talent to allow us to breakeven in, let’s say, 2Q, 3Q of next year?
Abhinay Bollineni
Yeah. So I think all the doctors have been identified probably and letters have been issued to all of them. In the month of Jan, we have done — the occupancy has been around 25 beds, so that’s around 10% occupancy and a revenue of INR3.5 crores to INR4 crores in the month of Jan. We are yet to onboard 50% of the doctors and the dates given are mostly Feb in March. So by hopeful that by March-end, 80%, 70%, 80% of the doctors onboarding would have been completed, hence two quarters from then
Rahul Jeewani
Sure, sir. And in terms of specialties, are you offering all the specialties at right now?
Abhinay Bollineni
Yes, except for oncology, we are offering all specialties.
Rahul Jeewani
Okay, sure, sir. And sir, you called out this INR8 crore to INR9 crore of one-time, let’s say, write-off on advances. So this was across clusters or was this in the Telangana and AP cluster?
Abhinay Bollineni
So it was almost INR3 crores in Nagpur alone, INR3 crore crores in Nagpur alone and the remaining is in Telangana and.
Rahul Jeewani
Sure, sir. And when we had we had these write-offs in Nagpur last quarter as well. So are we done with these write-offs or do you expect this to continue let’s say going-forward?
Sachin Ashok Salvi
So in before we took over, there were lot of advances which were given and we haven’t obtained any services or the vendors have not provided any goods against those particular advances. So we have taken the write-off against these advances in the last quarter and this quarter. Most part of it is done. In Q4 of this financial year, you will see about some INR50 lakh INR1 crore kind of a write-off. But over and above that, I think most part of it is done in number.
Rahul Jeewani
Okay. So you mean that another INR2 crores to INR3 crore of write-off might come in the next quarter as well. So
Sachin Ashok Salvi
Not INR2 crores to INR3 crores, I’m saying INR50 lakhs to INR1 crore.
Rahul Jeewani
Okay. Sorry, I missed that number, sure. And one question on the Thane micro-market. Now one of our peers is already in that market and we would be coming up with a hospital 1Q, 2Q of next year, while one another larger peer has also announced their plans to enter the Thane market. So how do you see the competitive intensity in that market shaping out to be, let’s say, over the course of the next four to five years? Do you think that the competitive environment, let’s say, intensity in that market would worsen or you think that there is enough demand for, let’s say, three or four large players to coexist in that micro-market.
Abhinay Bollineni
So it just reinforces our thought process that there is a lot of opportunity in Thane. And given that Jupiter announced its second hospital in Dhane is even more reassured. I think there is opportunity for all of us to coexist. And good part is there is a good four, five-year window before these hospitals will get commissioned. So it gives us a good runway to get hospitals established in those micro markets.
Rahul Jeewani
And sir, in terms of doctor, let’s say, ability to attract doctors and, that I think should not be much of a problem. Is that correct?
Abhinay Bollineni
Correct.
Rahul Jeewani
Okay, sure. And sir, last question from my end. So Nasdaq is expected to breakeven next year, but what kind of a loss funding you are expecting from Thane and the two Bangalore hospitals in ’26 and ’27? Thank you.
Abhinay Bollineni
So I think by — I don’t think we should have loss funding for ’27, but for ’26 for each of these facilities, we have factored around INR10 crore to INR15 crores.
Rahul Jeewani
On each. So total could be around INR30 crore to INR45 croress. Okay. Thank you, sir. That’s it from my side. Thank you.
Operator
Thank you. A reminder to all participants, you may press one to ask a question. The next question comes from the line of Harit Ahmad from Avendus Spark. Please go-ahead.
Harith Ahamed
Hi, thanks for the opportunity, again. So on from the unit which we’ve acquired, can you talk a bit about this hospital
Operator
Question, sir? Sorry to interrupt you. I request you to use your handset, sir, the audio is slightly more filed, sir.
Harith Ahamed
Just a second.
Operator
Yes, sir.
Harith Ahamed
Yeah, I hope this is better.
Operator
Yes, sir.
Harith Ahamed
So my question was on the Hospital. Just looking for some color on the history of this hospital, whether it’s already operational, how long it has been, how many years this has been operational and if you can share something about the unit-level economics here in terms of revenues and whether it’s profitable at this point.
Abhinay Bollineni
Are you referring to?
Harith Ahamed
Yeah. Yeah, yeah, Polam. Yeah.
Abhinay Bollineni
So Columb is a running hospital. It’s been operational for the last four to five years. It — it’s very similar to how when we acquired Kanur, around INR4 crore to INR5 crores of revenue. I think here it is around INR3 crores to INR4 crores of revenue. I think on the operational breakeven, it should be similar to what we have experienced in that around INR8 crores INR8.5 crores we should be EBITDA neutral.
Harith Ahamed
Okay. Got it. And in Kerala and Bangalore, two markets where you’ve stepped-up your focus. Can you talk a bit about the bed addition plans? What’s the pipeline looking at — looking like and which are the cities that you’ll probably be targeting? And then specifically, if you can comment on your plans for Kuchi, which is a large market in the state of Kerala, if you have any plans to enter that market?
Abhinay Bollineni
Yeah, I think like we had mentioned in the past, both Karnataka and Kerala are very, very important for us. I think Karnataka is a plant should be that we scale-up to at least 2,000 beds in Bangalore over a period of time. At this point, we have two hospitals that will get commissioned in this financial year. And then we have a land for a third facility, which will — which we will start work maybe in the next financial year and then it might take three years from there. But as far as Kerala is concerned, the idea is to again scale-up to around 2,500 to 3,000 beds over a period of time. The cities, obviously, the focus is to be in the larger cities like,,. But at this point in time, we have no visibility. There are a good number of transactions that we’re looking at, both acquisition greenfield and semi-brownfield. But at this point in time, we have three assets which will add-up to 1,000 beds, which is Kullam, Treshur and. As and when we zero down on more assets in Kochi and, we will move into. But the intent is to do a large facility in Kochi close to around 1,000 beds over a period of time.
Harith Ahamed
And on Karnataka, if you can talk a bit about your plans there.
Abhinay Bollineni
Like I said,, we already will commission two this year. We will also start a hospital in soon. Maybe we should start construction from early next year and then three years from there, that should get commissioned. We’re looking at two more opportunities in the northern part of Karnataka. Nothing concrete at this point in time. But as and when we do, we can potentially add around 750,000 beds in the northern part of Bangalore. We are largely present today in south part of Bangalore. We’re looking to add around 750,000 beds in North Bangalore, but that will take time. It will take at least three to four years before we started it.
Harith Ahamed
Okay. That’s helpful. And last one, when I look at the Maharashtra cluster ARPOP for this quarter, there’s been a decline quarter-on-quarter and I assume it’s coming from the Nashik Hospital. But if I think of, let’s say, at maturity, what kind of ARPOP should we expect for? Will it be in-line with Nakpur or slightly higher? If you can give some color?
Abhinay Bollineni
It will be in-line with Nagpur around 32,000 INR33,000 right now, it’s around 24,000 25,000. Continues to be at 34,000, 35,000. So a blended number came out to be around, 28,000 29,000. But I think once it matures or towards the end-of-the first 12 months, we should get to a 30-33 kind of ARPA.
Harith Ahamed
Okay. That’s helpful. Thank you very much.
Operator
Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question comes from the line of Tushar Manodhani from Motilal Oswal Financial Services. Please go-ahead.
Tushar Manudhane
Sir, thanks for the opportunity. Sir, firstly on this ARBP with respect to Andhra Pradesh, seen significant scale-up. So is it to do with the case-mix or payer mix?
Abhinay Bollineni
Yeah, it’s mix of both case-mix and payer mix?
Tushar Manudhane
So how — in which particular case as in therapy has been driving this and how sustainable is?
Abhinay Bollineni
There is a price hike because of insurance renewals. There has been a case-mix change and also Queen Genera is largely driven by cash and insurance as a payer and very little scheme work. So all these three factors pulled our ARPP up.
Tushar Manudhane
Understood, sir. And just on the — as far as the expansion plan goes, while we’ve been expanding in, let’s say, Bangalore as well as the other areas. But like in Telangana itself, which has been the profitable territory for us, is there any scope for further expansion out there?
Abhinay Bollineni
Yeah, even in Telangana, I think we have a lot of opportunity still. I think Sunshine is still only at 60% occupancy. There is opportunity for us to ramp-up beds there. So a ramp-up occupancy there and increase expand margin. So I think eventually Sunshine’s margin expansion will be in the tune of 30% 33%. So there is one opportunity there. Kundapur, we are adding 500 bed — incremental 500 beds, which should be ready by the next financial year. So that will be a big pull for us in terms of revenue and EBITDA. And yeah, these four assets for now. And then we are doing one O&M hospital in a place called, which is a 250-bedded hospital, which also should get commissioned by end of this financial year.
Tushar Manudhane
Got it. And I just missed this the overall operational cost that would come up because of these new hospitals which are expected to commence in FY ’26, if you could just repeat that number?
Abhinay Bollineni
Yeah. Overall operational — sorry, could be the last part.
Tushar Manudhane
Overall addition in the operational cost because of commencement of new.
Abhinay Bollineni
Yes. So since we are reporting them on a cluster-on-cluster basis, Telangana Andhra, we’re not seeing much incremental costs happening because they are all mature Maharashtra, we said Nashik will be around INR10 crore to INR15 crores of operating losses. Kerala, fortunately, we have broken even and as well as Bangalore, we should see INR10 crore to INR15 crore drag this financial year for each of the assets.
Sachin Ashok Salvi
And for the that we are doing in O&M model. So no operation cost comes on only. So
Operator
Please stay connected while we reconnect the management line ladies and gentlemen, thank you for patiently holding. The management line has been reconnected. So you can go-ahead.
Sachin Ashok Salvi
Okay. So as far as asset is concerned, since it is on O&M model, by the structure of the transaction itself, the no operational cost comes on our books. We are only to some percentage of revenue that will be accounted in an income. So there will not be any material cost on account — material operational cost on account of that increase no, no, no,
Tushar Manudhane
That’s it from my side. Thank you.
Operator
Thank you. A reminder to all participants, you may press star and one to ask a question. The next question comes from the line of, who is a freelancer. Please go-ahead.
Arunachalam
So good morning again. Hope I’m audible.
Bollineni Bhaskar Rao
Yes,
Arunachalam
Hello. Yeah. See, you have been — you plan massive expansions in Kerala. So just one question is where how does the brand-name? Does it not cause any sort of a confusion amongst the public? Because there’s one more hospital there or how is it? How does it work, sir?
Abhinay Bollineni
Are you referring to the other in Kerala?
Arunachalam
Yeah, yeah, yeah, correct, correct, sir. Correct sir.
Bollineni Bhaskar Rao
See, basically it is a Kim’s healthy city, isn’t it?
Arunachalam
Correct, correct, sir. Correct.
Bollineni Bhaskar Rao
And we are putting a co-branding as of now, Kim’s and Kim and then Trisur also by the time it is coming to operationals, then our brand also will able to come to the notice of the public.
Arunachalam
Okay. Okay. That’s just wanted to know if there’s any plan for rebranding it or something like that. That’s the question. Okay.
Bollineni Bhaskar Rao
So already keep adding the existing hospitals and when we do standalone, we’ll look into that whether we should able to rebrand or we’ll continue by the time if the brand has been penetrated well in the public.
Arunachalam
Thank you, sir. Wish you all the best for all the markets. Thank you.
Bollineni Bhaskar Rao
Thank you.
Operator
Thank you. Ladies and gentlemen, you may press R&1 to ask a question the next question comes from the line of Parvati Ray from Equintus Wealth Advisory. Please go-ahead.
Parvati Rai
Hello. Am I audible?
Bollineni Bhaskar Rao
Yes.
Operator
Yes, ma’am. May we request you to use your handset, please. Thank you.
Parvati Rai
Yeah. So I wanted to understand, given these expansion plans and while last quarter you did mention that debt-to-EBITDA would be around 2x in the next couple of years as we take the expansion. So interest expense was quite high again this quarter. So going-forward, as we move into FY ’26, what is the kind of debt and the interest that one should factor-in or assume because for the last two quarters, it’s inching up and also on the capex for the next year, is it still at around INR500 crores INR600 crore guidance or given the expansion plans, there is a change that we’re looking at?
Sachin Ashok Salvi
So as far as outstanding debts are concerned, as on 31st December 2024, it is roughly INR1,550 crores. Why interest expense, which has been debited to the profit and loss account in this quarter increased mainly because Nashik assets we have capitalized and all the borrowing — all the borrowing cost on that asset gets factored into interest expenses from this quarter. As far as the guidance as to the capex, nothing changes. It remains the same. Already we have announced and we are — we are on-track and we have already got a sanction for most of our facilities and the expenses which we are incurring are in-line with our budgets, which we have estimated for these projects. I think in couple of calls earlier also, we had mentioned the outstanding debts would be somewhere in the range of INR1,750 crore kind of a range, which will be still in the range of one — below one is to one debt-equity and below two is to one in terms of debt-to-EBITDA. That will continue. Certainly, once all these hospitals get matured, this debt-equity and debt-to-EBITDA percentage will come down in the subsequent financial year.
Parvati Rai
Okay. That’s it from my side. Thank you.
Operator
Thank you. The next question comes from the line of Alankar Garud from Kotak Institutional Equities. Please go-ahead.
Alankar Garude
Hi, thank you for the opportunity. First question, what was the minority share of EBITDA in the 3rd-quarter and maybe if you can give the number for nine months as well?
Sachin Ashok Salvi
So it is 9.9% in-quarter three. And if you’re asking about nine months, it would be somewhere in the range of 10% to 11% in the same range it would be, not more than that.
Alankar Garude
And any outlook, sir, which you can share given so many new hospitals coming up in FY ’26, any outlook as far as FY ’26 is concerned?
Sachin Ashok Salvi
Outlook as to minority interest you are saying?
Alankar Garude
Yeah, yeah. I mean, I mean, how many of these hospitals which are coming up have a doctor equity structure? And accordingly, how do you expect the minority share to play-out because some of these hospitals will also have losses. So do you expect a major change versus this 10% number or it would be broadly in that same range.
Abhinay Bollineni
So the only incremental thing will be the Karnataka cluster where we have 20% minority towards the management team. But otherwise, is 100% owned by the company. Kundapur is anyways part of the current hospital. So we don’t see any other minority adjustments.
Alankar Garude
Got it. And maybe the other question is related to the expansion. Now we have been announcing new deals every few months. Now while we have been adding beds over the last two decades, the pace of additions as well as the expansions being announced is currently much higher than what we have seen in the past. So just trying to understand what are the key learnings so-far? And on the operational side, which are the areas you believe we need to invest in to manage the execution smoothly?
Abhinay Bollineni
Obviously, the size of the company has also increased, so that allows us to do more transactions. That is number-one. As far as where we would like to strengthen, I think on the project delivery, there is scope for us to improve further. We’d like to strengthen that and we’re trying to build teams to strengthen that because we want to do a lot more assets in the future. So we need to have a consistent team that we should be able to achieve on that. And also one of the big reasons why we are doing this bet addition is if you see there is lot more opportunity in AP and Telanga, we have a very strong team here on-ground. So it makes sense to keep investing more-and-more to expand this opportunity. And thanks to Srinath and and Karnataka, Faran and team in Kerala, given their bandwidth, given their experience, it makes sense for us to grab as many opportunities as we get and be able to scale-up as quickly as possible in these clusters, given their 20, 25 years of experience in running such large-format clusters.
Alankar Garude
Understood. Maybe Aveenay, just one question pertaining to what you mentioned for some of these new hospitals in terms of ramp-up. For, for Thrisur as well as I think for Nasik as well, you mentioned that except oncology, you will start with all the specialties. On the other hand, for our hospitals, we have been adding oncology over the last few years. So just wanted to understand basic question of why keep oncology for later? Any specific reason?
Abhinay Bollineni
No, I think all our greenfield projects, all the large-format hospitals, we have oncology from day-one. So Bangalore in both the hospitals, we have oncology from day-one, Thanay, we have oncology. Nashik, contractually we are obligated to not do oncology and that’s why oncology is out-of-the equation there. As far as Kerala is concerned, the way the current hospitals are designed is it does not have space for oncology. So when we ramp-up the current hospitals and then do the next phase of expansion, that’s where we’re bringing oncology. But like say, if you’re doing a greenfield project in Kerala or a brownfield, we will focus on oncology from day-one.
Alankar Garude
Got it. Yeah, that’s it from my side. Thank you.
Operator
Thank you the next question comes from the line of Rahul Jawani from IIFL Capital. Please go-ahead.
Rahul Jeewani
Yeah. Hi, sir. So, sir, on the AP cluster, our margin profile is still lower than what we do in the cluster largely because of our presence in some of these Tier-2, Tier-3 markets in AP. But with the addition of, let’s say, oncology and mother and child care, which you have been planning across your hospitals, when do you think that the AP Cluster margins can catch-up to Telangana cluster margins in terms of what time period over what time period can we get to Telangana cluster margins in APP?
Abhinay Bollineni
Yeah. Rahul, there will always be a gap of 300 basis, 400 basis-points from AP and Telangana given the ARPOB and given the positioning there. But I think if you look at Q2, we have reached 26% margin in AP. And now we are at — that’s in-spite of adding Queen — Queen’s and are right. With oncology and mother and child coming in most hospitals in this financial — I mean in FY ’26 and FY ’27, maybe three years from there, we should get to a 30% kind of a margin.
Rahul Jeewani
Okay, sure. So AP cluster margins with nine months are around 24%, you expect it to inch up to 30% in two years.
Abhinay Bollineni
So yeah, two years after two to three years after the oncology facilities are operational.
Rahul Jeewani
And you said that most of these onco Onco let’s say, capacities will get commissioned in ’26
Abhinay Bollineni
’26, ’27.
Rahul Jeewani
Okay, sure, sure. I’m sure. So yeah, that’s it from my side.
Operator
Thank you. A reminder to all participants, you may press TR and one to ask a question. The next question comes from the line of Aman from PhillipCapital. Please go-ahead.
Aman
Thank you for the opportunity and taking my question. So I just had a question around your Maharashtra cluster. So we have seen a fair amount of bed addition. So what has been the occupancy trend in the Q4 so-far that we have seen?
Abhinay Bollineni
Sorry, in Q4
Sachin Ashok Salvi
Q4, what is expected level?
Aman
Yeah. I mean, so what has been the trend so-far of the — we are almost halfway there in Q4, right? So what has been the trend in occupancies?
Abhinay Bollineni
So I think in — sorry, in Nagpur the occupancy is around 160, 170. In Nasik, it’s around 30 to 35 in the month of Jan.
Aman
Okay. Got it. Okay, so that was the only question from my end. Thank you.
Operator
Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question comes from the line of Jay from. Please go-ahead.
Jay
Good morning. Yeah. I hope I’m audible. Good morning. My question pertains to medical tourism. Could you provide an estimate of the percentage of international patients that Kim’s currently caters to? Additionally, which hospitals in your portfolio contribute the most to international patient revenue? And what are your views on the broader medical tourism trend in India? And how do you see Chems positioning itself to capitalize on this segment. Thank you.
Abhinay Bollineni
I think the location — look, Hyderabad is a location is not very well-recognized for international tourism. But however, we have seen significant improvement from last financial year to this financial year. This year, we should do around INR40 crores to INR50 crores of revenue from international patients. We are hoping that it will go up to INR100 crore, INR150 crores over a period of time just from the Telangana cluster. But I think given Bangalore and Tania, both the locations are very well-poised for international patients. We are hopeful that the contribution for international from these two hospitals will be significantly higher than what it is in Telangana.
Jay
Okay. And just if as the hospital is tracking this metric, so how much EBITDA percent of you know the company is earning from these international patients.
Abhinay Bollineni
So right now, since it’s in growth phase, there is hardly any EBITDA. Once we scale-up, we’re still at INR40 crores of revenue, but once we scale-up, there will be more EBITDA coming. But it won’t be higher or on par with what we are already getting from domestic?
Jay
Sure, sir. That’s it from my side. Thank you and all the best.
Operator
Thank you. A reminder to all participants, you may press R and one to ask a question. Ladies and gentlemen, you may press and one to ask a question. As there are no further questions from the participants, I now hand the conference over to the management for closing comments ladies and gentlemen, please stay connected with
Bollineni Bhaskar Rao
Thanks for all the questions and enlightening us with knowledge and we are very happy the way which we are running in terms of bed expansions and as well as the specialties we are adding. And we have been planned in such a way that it will not able to go beyond our EBITDA debt more than two at any given time and also equity to debt will be less than one, maybe 0.8, 0.9 and opportunities are coming and the doctors are showing a good response with all the new facilities and even the existing facilities where we are adding new branches. And that way, I think we are very happy the way which we are performing and we will still continue to perform the same thing. Thank you very much.
Operator
Thank you. On behalf of IIFL Capital, that concludes this conference. Thank you for joining us and you may now disconnect your lines.