Krishna Institute of Medical Sciences Limited (NSE: KIMS) Q4 2025 Earnings Call dated May. 13, 2025
Corporate Participants:
Bhaskar Rao — Chairman of the Board, Managing Director
Abhinay Bollineni — Executive Director and CEO
Sachin Salvi — Chief Financial Officer
Analysts:
Rahul Jeewani — Analyst
Amey Chalke — Analyst
Nikhil Mathur — Analyst
Damayanti Kerai — Analyst
Abdulkader Puranwala — Analyst
Aman Goyal — Analyst
Anshul Agrawal — Analyst
Gagan Thareja — Analyst
Alankar Garude — Analyst
Unidentified Participant
Tushar Manudhane — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Kims Hospital Q4 FY ’25 Earnings Conference Call hosted by IIFL Capital Services 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 Rahul Jewani from IIFL Capital Services Limited. Thank you, and over to you, sir.
Rahul Jeewani — Analyst
Yeah. Hi, good morning, everyone. This is Rahul from IFLA Capital. I welcome you all to the 4th-quarter earnings conference call of Hospitals. From, we have with us today Dr Bastar Rao, Founder and Managing Director and Dr Ravinay Bolinani, Executive Director and CEO; and Mr Sachin Salvi, CFO. Over to you, sir, for your opening comments.
Bhaskar Rao — Chairman of the Board, Managing Director
Good morning, everybody. I extend a hearty welcome to you all. Last two weeks, we witnessed a spiraling tensions across the country because of the war situation. War is never an option, but at times it becomes a compulsion like in this case, wherein India is driven into a war following the by terrorists. Those ceasefire is announced, the situation is still fluid. We salute our brave soldiers and it is hoped that we will have normalcy soon.
We at Kimsay have taken necessary steps required in an emergency situation like painting or terraces at all units with Red Cross symbol and we product the security measures. Now I have a pleasure in presenting the financials and operational highlights for the financial year ’25, which is yet another year of growth and success. It reflects the trust being reposed in us by our growing number of patients on account of our clinical excellence, patient-care and latest equipment and technologies combined with affordability.
The financial highlights for financial year ’25, the results are total revenue of INR INR3,067 crore, a growth of 22% on year-on-year basis, of which old units contributed INR of INR3,018 crore, A growth of 19% in a our year basis and in new units contributed INR11 crore. EBITDA of INR815 crore, a growth of 24.7% on year-on-year basis, of which all units contributed an INR of INR871 crore, a growth of 31% in our year and the new units contributed EBITDA loss of and one-time eliminations of INR38 crores. EBITDA margins at 26.6% versus 26% in FY ’24 and back at INR415 crore in FY ’25 against INR336 crores in FY ’24. The results for quarter ’25 — quarter-four financial year ’25 are total revenue INR801 crore, a growth of 25.7% on year-on-year and 1.4% on quarter-on-quarter basis, of which gold units contributed INR775 crore, a growth of 20.4% year-on-year and a 2.4% growth on quarter-on-quarter and new units contributed INR76 crores. EBITDA of INR2.3 crores, a growth of 24.4% on year-on-year and a decline of 1.2% on a quarter-on-quarter basis, of which world units contributed INR243 crores INR, A growth of 46.9% year-on-year is 13.6% quarter-on-quarter and new units contributed EBITDA loss of INR18 crores and onetime eliminations of 25.51%. EBITDA margins at 25.3% versus 25% in-quarter four financial year ’24 and 25.9% in-quarter three FY ’25. That at INR106 crores in-quarter four financial year ’25 against INR72 crores and INR93 crores in-quarter four FY ’24 and quarter three FY ’25 respectively. Consolidated EPS for financial year ’25 of INR9.6, a growth of on year-on-year basis. The consolidated results for FY ’25 are consolidated revenue from operations of INR3,035 crore, a growth of 21.5% on year-on-year basis. The consolidated EBITDA pre-India of INR789 crore, a growth of 24% on year-on-year basis. Consolidated EBITDA pre-India is and excluding other income of INR757 crore, a growth of 22.1% on year-on-year basis. The consolidated results of Q4 financial year ’25 are consolidated revenue from operations of INR797 crore, a growth of 25.7% on year-on-year and 3.2% on a quarter-on-quarter basis. Consolidated EBITDA pre-Indias of INR195 crore growth of 24.3% on year-on-year and de-growth of 1.5% on quarter-on-quarter basis. The consolidated EBITDA P&A is and excluding other income, INR190 crore, a growth of 24% and a 5.7% down year-on-year and a quarter-on-quarter basis, respectively. The consolidated operational highlights for financial year ’25 are the average revenue per operating bed grew by 22.7% on year-on-year basis and average revenue per patient grew by 9.2% on a year-on-year basis. IT and OP volumes grew by 11.6% and 14.1% respectively on year-on-year basis. The other developments are gear was tracked with action as we launched a slate of initiatives, expansion and equipment, some of the essential scenario. With the addition of two new units in Gumpur and Andhra Pradesh in Sangli in Maharashtra, we are expecting a direct addition of INR10 CR for the financial year ’26. You will be very happy to know that during financial year ’25, We have opened our hospital at Nasik and in Maharashtra, Kanmur and in Kerala and Dumpur in Andhra Pradesh. The unit was inaugurated by Chief Minister Andhra Pradesh 3 and Chevra, who paid a handsome implement to Kims for its excellent services of its various units across the state. In April ’25, we have opened our second unit in called Kims Sam Dara. We have also started a fertility center with pediatric and a childcare unit under brand-name of and a specialty center in. During the year, we opened an exclusive food care center and also a rehabitation center in Hyderabad. We did the soft launch of our prestigious Mumbai unit in April and it will become full in next five to six months. We’ll also be opening our two hospitals in Bangalore in the current year, which are in the final stage of completion. These expansions have widened our reach and heightened the potential. Coming to technology and equipment, is always in the forefront. I will mention but few of such latest equipments available with us. The new has launched in neurosurgery with the installation of South India First at. This offers unparalleled precision, safety and comfort, making it a groundbreaking solution for patients seeking advanced brain care. Next is Magnetic resonance guided focused. Hospital is the first MRI-guided focused ultrasound with the hero 3T MRI neurocare center in India, aided by expertise to create essential tremors and Parkinson’s patients with the tumors. This response to this unique therapy is quite good. A lot more patients all over the India has come and utilized this facility. Again, is the first and only hospital in India to introduce Pro, a revolutionary technology transforming prostate cancer and prostate can — prostate cancer treatment. Procedure is incession free, radiation free and provide script recovery and minimal side-effects. We also have other equipments like MR Lineax Robotic systems for the knee replacements and etc. The point is, all these are the latest products available only at few centers in our country and it has been always for our to make best of healthcare available and accessible. In the light of packs, I termed the year of 25 and 26 as years of expansion, equipment and excellency. Kim’s recently-completed 50 renal transplants and the occasion was celebrated in a fitting manner since this is quite an achievement in small town in background year. The and Nephrology and Urology summit was held at Kim Rabad, attracting nearly 300 delgates from across the country. Kims made a strong presence in the international abdominal Wall reconstruction Conference at Chennai with five original research papers presented by Kims. Kims has been playing active role in creating awareness in breast cancer. Recently, our Director Kim Shah Ashmi Center for Breast Diseases, Dr Ragram created two Guinness World Records. He achieved the in-person Guinness World Record title Loggest Best Cancer Awareness Lesson, where 5,000 members physically participated. It also won the award for most views of the breast cancer lesson on YouTube in 24 hours. Finally, I would like to sum-up saying that the year gone by to be fulfilling and rewarding, the same tempo will continue and we will try to reach greater heights. The road ahead is optimistic and will reap full benefits by our dedicated services and expertise. Investors are our growth engines, while patients are the very purpose of our growth and they are our good well underagers. Having begun my report about what situation, I would like to conclude on a note of beauty. Presently, Hyderabad is hosting a 72nd Miss World Festival. A galaxy of beauty have decided on Hyderabad for this extra. I am sure event adds further beauty to the beautiful city of Hyderabad. Thank you for your trust and investment in Kim’s.
Questions and Answers:
Operator
Thank you, sir. We will now begin with the question-and-answer session. And anyone who wishes to ask a question may press star and one on your touchstone telephone. If you wish to remove yourself from the question queue, you may press star N2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Chalke from JM Financial. Please go-ahead.
Amey Chalke
Yeah, thank you so much and congrats on good set of numbers for the me. I have first question on the — on the cluster. So the cluster has helped us to deliver better margin this quarter despite losses in the newer units. So there is a good 200 bps jump Q-on-Q in the Telangana cluster. While the occupied bids are largely the same, is there any specific reason for this jump? And should we assume 32% margin for the cluster being a new normal.
So this is — the margin expansion is on account of revenue growth and revenue growth, there have been some initiatives across all the four hospitals. We’ve onboarded a lot of new doctors for given that the new hospital is going to get commissioned in the next 12 months. We onboard the new liver transplant team in second divide because of which there has been significant growth.
So I think will continue to grow at similar growth rates for the next few years given that there is additional capacity in sunshine and that will come up in hospitals these days to come. The margin will sustain and further expand. So basically, the volume from the hires for specialties have increased. That’s the reason why the margins have increased. Thanks.
Bhaskar Rao
Sure. The second question I have is on performance of the unit during the quarter. Is it as per our expectation and what losses we have booked during the quarter.
Abhinay Bollineni
So you had indicated for the full financial year for a full 12-month period, last year will be around INR15 crores of losses. I think we are on-track for that. There has been slightly delayed ramp-up because on account of insurance impairment which we are expected to complete in the next two months. Once those insurance impairment happen, we are pretty confident we should breakeven within three months after the impairments.
And there has been slight delay on account of negotiating and getting to a good price. But otherwise, doctor traction is very promising. Most of the doctors have joined, but it’s just that we have only cash business happening today in Nashik. In-full capacity, a city like will have 30% cash, 30% insurance and 40% corporate public sector companies. Today, we don’t have insurance impairment and we don’t have public in-spite of which the ramp-up has been quite healthy.
Amey Chalke
Sure. And the last question I have is on the unit. If you can update on the enrollment of doctors for the unit and is there any notable hiring you would like to mention?
Bhaskar Rao
So hiring, most of the doctors have been completed. We will have close to 50 full-time doctors joining us from the 1st of June till the end of July. There are different timelines in which the journey. Some of doctors have already started. We have started the at the hospital. There is an OP of almost 60-70 and we are hoping that this week it will pick-up to almost 100 OPD per day. There has been very good traction among the doctor community in and where we are planned to commence IPD services from end of this week
— sorry, end of this month and full-fled services from the beginning of next month. But it will take us a good one, two months before all doctors to be onboard and to get full insurance assignment. Up until then a lot of the business will be driven by cash as a payer. Sure. And considering the three units, including Thane are getting commissioned during next year and there is a slight delay in commissioning like one or two months.
Amey Chalke
Could we increase the losses to be booked for next year to be higher on account of the three units.
Bhaskar Rao
I think we are — we should be able to stick to what we had earlier guided. Both and, we are seeing very good traction. We don’t see the losses yet beyond what we have indicated
Amey Chalke
Sure. Thank you so much. I will join the queue.
Operator
Thank you. Thank you. The next question comes from the line of Nikhil Matur from HDFC Mutual Funds. Please go-ahead.
Nikhil Mathur
Yeah, hi, sir, good morning. I have two questions. My first question is on your O&M projects. So I believe that Guntu, 150 beds, Sangli, 350-odd beds and splendid in Hyderabad, 150-odd beds. They are yet to be part of your festive financial year, right?
Bhaskar Rao
So Gundur and Sangli in Q4 have accounted a very significant income and that’s why it’s not reflected. But between both the assets and Savi, if you look at the month of April, we have done close to INR14 crores of revenue in the month of April. A big part is brokeven in the first three months of operations. And will also breakeven in the next one or two months. Is yet to get commissioned which is blended which will get commissioned towards the towards Q3 of this financial year
Nikhil Mathur
But how will you report this? I mean, would you add the full bed count to your cluster operating bed number or you are just taking in the revenues here. So how is accounting split into clusters for these projects?
Bhaskar Rao
So as far as accounting is concerned, the income, the 9% which we are getting as an operations and management fees will be reporting as other operating income.
Nikhil Mathur
Okay. So they won’t be part of the cluster financial bed count and all. Okay. Understood. And second question is, sorry,
Bhaskar Rao
Go-ahead.
Nikhil Mathur
Yeah, yeah. And sir, my second question is that there is a reasonable reduction in lease payments in FY ’25 versus FY ’25. I’m just looking at your cash-flow statement. It has gone up from INR55 crores to INR40 crores. So anything to read here?
Bhaskar Rao
Or nothing as such. So some of the lease adjustments which were accounted for were EHS check. That is the only thing. There is nothing to read in-between. Nothing has been terminated as such.
Nikhil Mathur
Okay. So any guidance for FY ’26 on this?
Bhaskar Rao
It will say it will remain the same because most of the contracts which we are doing are in the similar line. The Kerala cluster, we are — we are doing that at the business combination. So that would be adding. But as I have said, and,, we have already accounted. So nothing new is coming as of now in the books.
Nikhil Mathur
Okay. Got it. Thank you so much.
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 Damaya Kanti Kerai from HSBC Bank. Please go-ahead.
Damayanti Kerai
Hi, this is. Thank you for giving me the opportunity. My first question is on your new unit performance. I just missed the number. If you can detail us the performance of each unit in terms of revenue and EBITDA, that will be helpful. And how you’re looking at the ramp-up for those new units, Nashik, Column or maybe even QNRI?
Bhaskar Rao
So QRI is run rating currently at around INR85 crores revenue with very little EBITDA contribution. And by the end-of-the year, we are expecting it to close to at least INR112 crores of revenue per month. So if the annualized price will be around INR150 crores. As far as already — already broken even, but because the drag from Column, there is a drag in the overall interest-rate. But I think given how has performed, we are pretty confident that also in the next two quarters will become EBITDA-positive and the cluster will turn to be more.
As far as last is concerned, we are currently — each month we should be doing around INR8 crores of revenue from both the units of INR5 crores from unit of INR5 crores to INR6 crores. There will still be a drag of INR1.5 crores to crores in the month of May. But once the insurance entirement is completed in the next few months, we should then see a much faster ramp-up.
Damayanti Kerai
Okay. So all these new units maybe next Three — like two quarters down the line, they should be a bit of positive and then profitability should pick-up from there onwards.
Bhaskar Rao
And both will turn EBITDA-positive in.
Damayanti Kerai
Okay. And for the quarter, did you mention INR18 crore of total loss from the new units, right? Okay. My second question is on Telangana cluster ARPO. So you mentioned you — you have like-new transplant unit, etc., which has helped your margins notably during the quarter. Then my question is, how do you see ARCO going for this cluster given we are already at say like one of the best-in industry there and you have capability on transplant,
But if you can elaborate on, you know what kind of capability you have on the transplant side and what kind of volumes you expect to continue on that segment specifically?
Abhinay Bollineni
I think we have a pretty mature transplant program both in the heart-lung and liver and kidney side, but we are still adding a new hospital like in, we will start a new transplant program. So that will add some incremental volumes. But there is a lot of work to be done on the broad specialties still we are still at 50% occupancy and we are adding more bit capacity market. So this will continue to support a healthy growth rate both in the revenue and bit rate.
There is growth there are still in which has grown pretty well, but I think there is more opportunity for growth. So you can sustain similar growth trajectory for the cluster, given you have added — you have beds to be ramped-up and then you have capability on the specialty side,, 20% kind of a growth run we should be sustainable first level, given there is more bed capacity existing and additional new hospitals.
Damayanti Kerai
Okay. And my last question is, if you can update us on how your mother and childcare offering is scaling up across hospitals. I remember a few quarters back you had a lot of focus on this segment.
Abhinay Bollineni
So Child is doing well. So any other — one other specialty in our hospitality. We were expecting across the group, it will contribute 10% of the group’s revenue when we retrofit it in most hospitals. Currently also it is around 10%, it can further expand. We have commissioned — we have currently have eight among all our where we a better capacity addition in future.
Damayanti Kerai
Okay, that’s helpful. Thank you. I’ll get back-in the queue.
Bhaskar Rao
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 Abdulgadar Pooranwala from ICICI Securities. Please go-ahead.
Abdulkader Puranwala
Yeah, hi, sir. Thank you for the opportunity. Sir, my first question is with regards to your O&M bills. So by FY ’27, when we complete majority of our bed addition program, what percentage of your overall kind of bed capacity would be towards O&M?
Abhinay Bollineni
I think the three hospitals we have close to 1,200 beds coming from, sorry, 1,000 beds coming from, 250 beds in, 200 beds in, 450 and 350 beds in, 800.
Abdulkader Puranwala
Okay, understood. And next is on the Langana cluster. So if you look at occupancy, which you now report on the operation, but it’s close to 50% and you’re already clocking over 30% kind of an EBITDA margin. So-far for this particular cluster, where should we see the occupancy moving in the next two, three years kind of a timeframe and a sustainable EBITDA margin level for the next two, three years,, if you could share?
Abhinay Bollineni
So I think as the revenue grows, we will continue — the EBITDA margin will continue to expand. And given we are adding close to 500 and if you take this through OEM and with a new conductive hospitals. Occupancy, we have been hoping that over the next four, five years, we’ll get you a full-year occupancy. We are at 50%, we should get you from this 65%.
Abdulkader Puranwala
Got thank you. I’ll get back-in the queue.
Operator
Thank you. Thank you. A reminder to all participants, please press star and one to ask a question. The next question comes from the line of Aman Goyal from Axis Securities. Please go-ahead.
Aman Goyal
Good morning, sir. Congratulations for a great set of number. Sir, my question is related to if you see on sequential basis, there is a flattish on IP volumes and OP volumes, but there is a great growth of almost 8%. Could you throw some light on this? Is it a specialty mix or improvement in payer mix?
Abhinay Bollineni
It’s a of both, I think we had mentioned in the past that, they had a price renewal that happened in the cluster. That is one. And a lot of the incremental business that came — came in from cash and insurance has appeared.
Aman Goyal
Okay. And yeah. And could you please give the outlook for the ORPO growth for especially for Telangan and Andhra, Pradesh cluster for next two years?
Abhinay Bollineni
Like I said, we’ll continue to grow at 10%, 15% both in and. It will be a mix of both volume and revenue growth, sorry, 15% 20% both in and from revenue and EBITDA perspective. It will be a mix of both revenue growth, ARPO growth and volume growth.
Aman Goyal
Okay. Thank you, sir.
Operator
Thank you. Thank you. Participants, please press star and one to ask a question. The next question comes from the line of Rahul Jawani from IIFL Capital Services. Please go-ahead.
Rahul Jeewani
Yeah. Hi, sir. Sir, just a clarification. The new units you said had an INR18 crore EBITDA loss. That I think is the number for the full-year and not the quarter.
Abhinay Bollineni
It’s almost yeah, full-year it is 18.31% for the quarter it is 17.8 times. Majority of it is in-quarter.?
Rahul Jeewani
Okay, sure, Dr. And Dr, how do you look at this drag from the new units going into FY ’26? So obviously, Thani and two Bangalore hospitals would increase the drag here. So do you think that this INR18 crore kind of a loss which we booked this year can inch up to a INR40 crore INR50 crore kind of a number going into ’26? And then if you can also comment on the trajectory of these new hospitals by FY ’27.
Abhinay Bollineni
So all the — both Tane, Bangalore should be operational in Q1 by end of Q1. So Tane will be June 1st and Bangalore should be July 1st, one on July 1st, one on August 1st. I think 12 months from when they commission, we’re pretty confident all three hospitals will be EBITDA neutral, if not EBITDA-positive but there will be a drag for the nine months in FY ’26. So it will continue. I think this INR18 crore drag will expand a little further given the size of the three new hospitals that are getting commissioned.
But by end of Q1 next financial year, FY ’26, I think we should be done with all the negative EBITDA.
Rahul Jeewani
Okay. So you mean into FY ’21 to? Yeah. 12 months of commissioning these hospitals, we should be EBITDA-positive in most of these. Sure, Dr Manay. And you highlighted that the doctor you have, let’s say, are in the process of onboarding 50 new doctors at. Can you also comment in terms of what are your preparations for the two Bangalore hospitals for the — for the decommissioning expected ahead?
Abhinay Bollineni
Very similar, Rahul. I think we have good traction for both the hospitals in. Most of the specialists have been identified, most of the specialties have been identified. From — after we commission, which is on July 1st and August 1st tentatively, within two, three months, most of the doctors should get onboarded and a similar number of 40-50 doctors we will have in the first two months after the soft. For each of the Bangalore hospitals, right?
Rahul Jeewani
Yeah, sure, sir. And Sachin, can you please comment on the debt number at the end-of-the year? And given that large part of capacity expansion, let’s say, is coming to an end, how do you look at the debt and debt-to-EBITDA going-forward?
Abhinay Bollineni
So the debt position as on 31st March ’25, net-debt of INR1,805 crores. As I said, most of the — most of our capex on Bangalore and Thani, we have already incurred and these being large units, I think in the coming year, that is in the financial year ’25, ’26, we’ll be adding another INR300 crore INR400 crores not beyond that. So at the most this INR1,800 crores is anticipated to reach to about some INR2,100 odd crore at the end of this financial — the current financial year. Yeah.
Rahul Jeewani
Sure. And in terms of capex spend and how do you expect the capex to be over the next two to three year period?
Abhinay Bollineni
So as far as the capex is concerned, again, as Bangalore and is almost done, most of the capex which is coming in the coming years will be towards maintenance capex and the newer, newer expansion which we have done and which we have already announced like a or. And additionally in Kondapur, we are building a new hospital. So the medical equipment spending which we will be doing in Kundabur, that will be a new capex.
So at the most the total capex spend in the next two financial year will be to — totally to be to the tuned of about INR600 crore INR700 crore.
Sachin Salvi
But I’ll just to add to what said, I think we’ll continue to maintain the net-debt to EBITDA as promised could. We are very cognizant maybe one or two quarters it will go higher, but overall, we’ll try to maintain that number. As the debt — net-debt tapers down, we have identified more projects. We will continue to add more capacity for long-term growth.
Rahul Jeewani
Okay. And so much. I mean, apart from Bangalore and Tayla, so where are you then thinking about a capacity expansion going-forward, let’s say, once the current round of capacity expansion has done well.
Sachin Salvi
Yeah. So I think Andhra we are looking at more bit capacity addition. We are looking at something in. We’re looking at one more facility in to consolidate the market. So that is in Andhra. In Hyderabad, we are looking at one more geography, one more micro-market other than Kompali. And obviously Kerala and Kerala and Karnataka, we have a lot to hide.
Rahul Jeewani
Yeah, sure. I will join that. Thank you.
Abhinay Bollineni
And one more on the debt, Rahul, you will see basically over a period of time, everybody was concerned about debt and managed to and I went back and looked into the things and seen the research as long as we are pay-out for a year less than 20% of our EBITDA, then in the concerns what everyone has about this one is to one is to 2.1, 1 is 2 1.5 may not be a thing which needs to look into that. That’s what my personal feeling of research.
Rahul Jeewani
Sure, sir, sure, sure.Thank you. The next question comes from the line of Anshul Agarwal from Emkay Global Financial Services. Please go-ahead.
Anshul Agrawal
Hi, thank you for the opportunity. Am I audible?
Abhinay Bollineni
Yes, please go-ahead. You’re audible.
Anshul Agrawal
Great. Thanks. Sir, my question is on the AP cluster. So while we have reported good growth in the top-line as well as EBITDA, our OBD or the occupied beds number has sort of trended downwards for the full-year as well as in the quarter as well despite bed additions. So why have volumes been in this cluster?
Bhaskar Rao
What is the seasonal impact Q3 versus Q4? Across all clusters, there is an IP volume base. And also in this case, there is an ALS in case of Andhra. So that’s why the occupied numbers are low. Usually,
Anshul Agrawal
Yeah, I wanted it. Yeah.
Abhinay Bollineni
Yeah, for the full-year, there has been growth,
Anshul Agrawal
Yes. No, fully occupied beds, I think have gone down by about 8%
Bhaskar Rao
Coming down by almost 15%. If you look at the IP volumes, the volumes have gone up almost 6%.
Anshul Agrawal
Okay, got it. So and the reason why this trend of — is it efficiency driven because I believe year are improving because of case-mix, etc, those specialties would ideally be taking more time for patients to recover, etc. Any reason why this is sharply corrected at a group level?
Abhinay Bollineni
In Andhra, there has been a lot of efficiency from the steel, state double steel and that is why there has been a good decline in the Olympic state. Because if you look at most of our clusters, it’s in the range of 3 to 3 to 3.5 but AMRA is slightly higher. So because of higher component of the scheme. Given that the scheme efficiency is improving, the overall growth of also improved.
Sachin Salvi
The other important factor-in the health-care is when the organisations are keep going and getting a good brand-name and a good consultants. And a lot of complex cases will try to reach the most efficient organizations from all over the country. With that, when there is a complex case coming, the financial are also increase because of the complexity of things that what we need to use and the materials and everything.
That is the other reason, even though it is coming down the number-one, the seasonal apart from that we do get because of our brand-name and the outcomes of the patient-care, a lot more patients we are attracting toward the country
Anshul Agrawal
Got it,. Thank you so much. That’s it from my end.
Operator
Thank you. The next question comes from the line of Gagan Tarija from Ask Investment Managers. Please go-ahead,
Gagan Thareja
Good morning, sir. Sir, the first question is on the ARPOB growth that you have registered for — for the year. Very a strong number of 20% plus. If you can explain how much of that growth is coming from case-mix, payer mix and simply a revision in insurance rates and increase in tariffs.
Abhinay Bollineni
Yeah, I think there has been a good 20% — 20% plus growth in. There are key contributors, one, there has been price revision in cluster. The length of stay has come down by almost 15%, which also contributed to this. And given the payer mix, we are more focused on cash and insurance and in the newer markets like, it where impairments are not yet, most of the business is cash business. So that is one of the reason why we feel higher.
Gagan Thareja
Is it possible to enumerate the increase in tariffs and also you know the proportion of scheme patients down substantially year-on-year.
Abhinay Bollineni
And scheme patients are down by 1% up by 2% both public sector scheme and state government scheme.
Gagan Thareja
It’s an absolute number it remains the same, but given the growth in the other players as a percentage it has of. So but for the coming two, three years, how should we model or think about ARPOV growth because typically hospitals tend to report a mid to-high single-digit ARPOV increase and on an annual basis, this has moved up substantially last year for you and I think in the last three, four years post COVID for most hospitals, but from here on, how should growth look like?
Abhinay Bollineni
Given that we are adding a lot of three new hospitals into large cities, Bangalore and, it could further improve the ARPUB, overall ARPUB. So it’s better to read it on a cluster basis. I think on a cluster basis,, and Pluor, growth should be 4% to 5%. The rest of it will be driven because of the reduction in, better payer mix and better case-mix. Maharashtra and Kerala, Karnata, given that they’re all-in growth phases, it will be difficult to kind of predict growth at this point in time.
But we are not — because all these clusters are very new, there is no price hike that we plan to do in these.
Sachin Salvi
See, yes. And to add that, there are certain things what we have done as I was mentioning that we have been introducing the new technology when compared to India in the — we are the first mowers like this magnetic resonance focused, which can be able to generate around 250 crores a year, which doesn’t require any admission, similarly to. And we’re also adding lot more technology in the radiation oncology and these are all the things which doesn’t require any additions, they are all go to based. That’s why there is operational cost also is very, very minimal. So is that the growth should be — we can expect a good growth moving forward?
Gagan Thareja
Okay, right, sir. And I mean, if I simply look at your available beds today at 5,100 with an occupancy of 48% and another 1,500 beds coming over the next one year, if I understand it correctly between Bengaluru, Thane and Srika Kulam and Ongole and then another and then 800 more thereafter. If one were to take a five-year view, you know, is it reasonable to assume that all of this bed capacity, 5,000 beds odd going to 7,500 odd can be optimally utilized in a five-year time-frame?
And if so, is it therefore reasonable to assume that between ARPOB increases and occupancy increases on a higher bed count, a 20% plus sort of or at least a 20% corridor sort of revenue CAGR is a very achievable number for a five-year time-frame? I? Right. And I also would like your opinions on the margin profile. I understand that the bed additions initially kick-in with full costs and the revenue benefits — benefits accrue over a period of time.
So therefore, is it reasonable to assume that perhaps in ’26, because of the fixed costs, the operating margins might, you know, take a bit of a hit and then ramp-up again and then in a three, four-year time-frame, you know, you can achieve your optimal margins of 27% 28%.
Abhinay Bollineni
I think it’s always — one year will certainly be a hit at a group EBITDA margin for this financial year. And given the pace of which we are adding beds in different clusters, there will always be a significant number of beds that will be in their growth pace, maybe 30%, 40% of the, they will always be in their growth rate. So it is always better to look at it more from a cluster point-of-view, time to look at it at a group level. I think mature clusters that we define as mature should be at a, a 27% 30% kind of a margin and the newer should see consistent growth on a quarter-on-quarter basis on a year-on-year basis.
Gagan Thareja
Okay. All right, sir. And in terms of depreciation expense, as and when new bids get commissioned, that should I mean should one see a proportional increase in that line-item of the P&L for next two years?
Abhinay Bollineni
Or yes, you’re right. So as far as the hospital gets commissioned, the depreciation for that hospital expected profit and loss account. So yes.
Gagan Thareja
All right. Thank you, sir. Thanks for taking my questions. I’ll get back-in the queue. Thank you.
Operator
Thank you. The next question comes from the line of Alankar Garude from Kotak Institutional Equities. Please go-ahead.
Alankar Garude
Hi, good morning, everyone. Another question on ARPOP, sir. With ALOS now already down to 3.6 days, should we expect ARPOP growth and ARPP growth to be more aligned going-forward?
Abhinay Bollineni
Yeah. On the group level, yes..
Alankar Garude
Got it. Secondly, Abhina, can you comment on the performance of Nagpur and Sunshine individually in this quarter as well as maybe some comments on the performance for FY ’25 would also be helpful. Thank you.
Abhinay Bollineni
So on Sunshine, we have done — we have reported an EBITDA of close to INR47-odd crores and a revenue of INR55 — sorry, INR155 crores and an EBITDA of INR49 crores, so INR47 crores. So there has been very good growth on a quarter-on-quarter basis both in sunshine as well as in-markets. In last quarter, we did a revenue of close to INR18 crores and an EBITDA of INR12 crores. Sorry, did I hear that correctly INR18 crores of sales and INR12 crores of EBITDA in 56 crores of sales and INR12 crores of EBITDA in last year.
Alankar Garude
Okay, okay. And if you can comment for the year as well, sir, would be helpful.
Abhinay Bollineni
So the full-year with the full-year sunshine bid around INR600 crores of revenue and INR170 crore of EBITDA and did INR1 crores of revenue and profit growth of INR37 crores of revenue.
Alankar Garude
So qualitatively, would it be fair to say that, I mean, both these networks or Sunshine as a network and Nakpur, the hospital are pretty much on-track. And if I look at Maharashtra cluster, the way we have reported it this quarter and maybe how we’ll report it once Thane comes in, safer to assume that Nakpur will remain steady and then we’ll see that gradual ramp-up in Nasik as you mentioned and going-forward and maybe Sanglie also once it comes in.
So is that the right way to look at it? Sunshine Nagpur healthy and improving going-forward? And then, of course, the newer hospitals are contributing gradually going-forward.
Abhinay Bollineni
Correct. So even though and, there is lot of room for growth, given that we’re adding capacity in both new hospitals and sometimes addicts game where they’re waiting for the ramp-up to happen. So the entire cluster and will continue to grow at a steady growth rate and the newer hospitals will add to over the next few weeks.
Alankar Garude
Got it. And just one last bookkeeping question. What is the nature of the non-recurring expenses of INR67 million in Kerala?
Sachin Salvi
So this is the stamp rupee which we have paid. This is basically a the which we have paid on the registration of a lease due at Kambola and Kolam. So since we have accounted it under India’s 109 business combination, the accounting standard requires us to expense this expenses to the profit and loss account rather than capitalizing it. Since this unit has commenced operation in the current quarter, we have expressed it to the current financial quarter.It is 6.75 cred
Alankar Garude
Got it, sir. That’s it from my side. Thank you and all the best.
Operator
Thank you. The next question comes from the line of Vihang Subramaniyam from Israbha Capital. Please go-ahead.
Unidentified Participant
Yeah, hi. Am I audible?
Operator
Please feel wrong here. Thank you.
Unidentified Participant
Just another question on ARPO. Probably you’ve answered this in some shape or form. But when you look at your ARPO versus some of the other listed peers, I think at an overall company-level, we are still trending much below or so it could be due to regional exposure, patient level mixes. But given that you’re moving outside your core region now incrementally as well as improving patient level mix, from a two to three year perspective, do you think that this gap now?
Abhinay Bollineni
Yeah, I don’t think the right way to look at it will be at a group level. So we should look at it from a cluster level, given we operate in different geographies, even different geographies we operate in larger cities and Tier-2, Tier-3 town. And so it may not give us the right indicator. If you look at the Polangana, we are at 65,000. Andhra, given that the market is around, 23,000 24, we are in that range. Maharashtra, we have a mix of now with and Tier-2, we’ll have a mix of both markets.
I think it may not be fair to compare it with peers at a group level. It may not give the right picture.
Unidentified Participant
Understood. That’s fair. Any guidance you would like to share though for group level RFO because you’re already at 40,000, right? And incrementally, most of your regions or your expansion seem to be in higher RFO micro markets. So do you think that this 40,000 could potentially turn number towards 50,000 55 over the next two to three years?
Bhaskar Rao
Yeah, I should definitely scale to that number because given three big assets are getting added in larger and there is lot of growth left in year, we should — it will go in that direction.
Unidentified Participant
Understood. That’s very clear. That’s it from my side. Thank you and good luck. Thank you.
Operator
Thank you. The next question comes from the line of Tushar from Motilal Oswal Financial Services. Please go-ahead.
Tushar Manudhane
Thanks for the opportunity. So specifically on Telangana front, just would like to understand given the kind of profitability at which we are currently, but like occupancy is still sort of at 50%, primarily because of addition of beds. So here, what would be key drivers to drive both occupancy as well as profitability over next one to two years, either in terms of case-mix, payer mix, if you could elaborate?
Abhinay Bollineni
No, I think that in Sunshine still — there is a lot of scope to hire new specialties, especially in the facility. They are now looking to start an oncology hospital making Sunshine within the new facility. There are a lot of specialties that we invested in the last one year, which still not grown to the scale that we wanted to grow. So given all of those initiatives, we’re pretty confident that the occupancy will grow. And as far as Kundatural is concerned, we’re getting a new facility.
Right now, we are running at a very-high occupancy limited space with new business, we will add a lot of new specialties that we have not been focusing on there currently like oncology, transplanted. So a lot of these initiatives will help us continue to scale as
Tushar Manudhane
Got it, sir. And likewise for Andre Pradesh, the alcohol has been like sort of at least sub 20,000. So any chance there to scale-up or get further better one as far as-is concerned.
Abhinay Bollineni
So we have steady growth in Andhra. They are now doing a lot of transplant work. We will start oncology pretty soon in most of our hospitals. So it will definitely improve. We are pretty confident we get to a 30,000 kind of mark over the next few years with a mix of both payer mix and case-mix. But it helps us what the market can
Tushar Manudhane
So when you say 30,000, so effectively, so what time-frame has it added here?
Abhinay Bollineni
Is it because a lot of the capacity is coming in ’27, so we should take a good three, four-year period before we scale-up both ARPAB and revenue.
Tushar Manudhane
Got it. That’s it from my side. Thank you.
Operator
Thank you. The next question comes from the line of from HSBC Bank. Please go-ahead.
Damayanti Kerai
Hi, thank you for the opportunity. I just had one last question. So if you can update us on the unit? And then how is the payer mix in Kerala cluster looks like? Thank you.
Abhinay Bollineni
Currently, we are operating in two places, and. Both these markets, a significant contribution is just cash as a player also because some impairments have still yet to be done for insurance. But both these markets we don’t see beyond 80% — 80% being cash and 20% being insurance. We should we should — the commission by next financial year.
Damayanti Kerai
Next financial year is 26 this year or next year? Okay, thank you.
Operator
Thank. A reminder to all participants you may press star and one to ask a question. Participants please press star and one to ask a question. Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to the management to give their closing comments. I think
Bhaskar Rao
Thank you very much for all your questions and some more knowledge has come and we have seen last year ’25 as a very good year and moving forward being in healthcare, there are few important things which be able to address. We need to provide healthcare to all the people, whether it be type 1, Type 2, type-2, which an affordable cost. That’s why in Andhra, we have been in the same population, we have been put in 10 places and whereas in Hyderabad, it is only in the four, five places.
The growth and the quality care we need to provide for the — even the middle, lower, middle-class people, everywhere we go in all the clusters, we are doing the same thing. And at the same time, we will see that the growth I will keep on telling the past few years and the growth in the next few years, we have been planned in such a way that it will continue whatever we have been showcased in the last few years. It will continue to grow for the next decade.
That was our aim. And I believe that we can able to execute that plan also. I think thank you very much for the trust on us and we are always with the quality care to provide to the patients and also see that our investors should also get the belt out of your investments with us. Thank you.
Operator
Thank you so much, sir. Ladies and gentlemen, on behalf of IIFL Capital Services Limited, that concludes this conference. You may now disconnect your lines.