Max Healthcare Institute Ltd (NSE: MAXHEALTH) Q4 2025 Earnings Call dated May. 21, 2025
Corporate Participants:
Unidentified Speaker
Suraj Digawalekar — Investor Relations, CDR India
Abhay Soi — Chairman & Managing Director
Yogesh Kumar Sareen — Senior Director, Chief Financial Officer
Keshav Gupta — Senior Director, Growth, M&A and Business Planning
Analysts:
Unidentified Participant
Amey Chalke — Analyst
Damayanti Kerai — Analyst
Neha Manpuria — Analyst
Prashant Nair — Analyst
Vivek Agarwal — Analyst
Piyush Kumar — Analyst
Tushar Manudhane — Analyst
Kunal Lakhan — Analyst
Rajit Aggarwal — Analyst
Dheeresh K. Pathak — Analyst
Tarun Bhatnagar — Analyst
Rishi Mody — Analyst
Alankar Garude — Analyst
Presentation:
operator
Ladies and Gentlemen, good morning and welcome to the Max Healthcare Institute Limited Earnings Conference call. As a reminder, all participant lines will remain 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 the operator by pressing Star then zero on your touch tone telephone. Please note that this conference is being recorded. I now hand the conference over to Suraj from CDL India for opening remarks. Thank you and over to you.
Suraj Digawalekar — Investor Relations, CDR India
Thank you Ran Good morning everyone and thank you for joining us on Max Healthcare’s Q4 and FY25 earnings conference call. We have with us Mr. Abhay Soy, Chairman and Managing Director, Mr. Yogeshrin, Senior Director and Chief Financial Officer and Mr. Keshav Gupta, Senior Director, Growth M and A and Business Planning. We will begin the call with opening remarks from the management, following which we will have the forum open for an interactive Q and A session. Before we begin, I would like to point out that some statements made in today’s call may be forward looking in nature and a disclaimer to this effect has been included in the earnings presentation shared with you earlier.
I would now like to invite Abhay to make his opening remarks. Thank you and over to you all.
Abhay Soi — Chairman & Managing Director
Good morning everyone and thank you for joining us on Max Healthcare’s fourth quarter and full year FY25 earnings call. This year has been a pivotal one for us fueled by focused strategic decisions, disciplined execution on ground and significant milestones that have set new benchmarks. After acquiring hospitals in Nagpur and Lucknow in the last quarter of previous year FY 2024 we acquired the 500 bed marquee JP Hospital in Delhi NCR. This year as part of our Asset Light expansion strategy, we commissioned Max Dwarka and signed up contracts for Build to Suit Hospitals to be set up by our partners in Mohali, Thane and Pritampura Delhi during the year.
In what could have been a year of moderate growth otherwise, we initiated multiple long term growth plans including the announcement made last week regarding acquisition of approximately one acre land parcel adjoining a fully occupied 400 bed hospital in Vishali. Our recent acquisitions Max Lucknow, Max Dagpur and Max Noida played a key role in accelerating Top Line and EBITDA growth. Our overall financial performance for FY25 reflected this momentum with a year on year growth of 26% in revenue and 22% in EBITDA. Notably, Max Lucknow demonstrated year on year growth of 56% in revenue and 102% in EBITDA while Max Nagpur reported a year on year growth of 23% in revenue and and 86% in EBITDA in the first year since acquisition.
Max Noida is being integrated into our network and reported a gross revenue of Rupees 228crores with an operating EBITDA of Rupees 48crores at a margin of 21% post acquisition since October 2024. Additionally, our newly operationalized Acid Life Hospital in Dwarka achieved EBITDA break even in six months, a new record. The hospital clocked a revenue of Rs.171 crore and an EBITDA loss of 29 crores for the entire year FY25 since becoming operational in July 2024. It exited the year with a revenue of approximately Rs.30 crores per month and 73% occupancy on the 235 beds in March.
With balanced 68 beds yet to be opened, we are already looking forward to embark on the next phase of expansion of 200 beds at this facility. These results demonstrate the resilience of our operating model and the caliber of our teams. It reinforces our confidence as we prepare to commission three new Brownfield Towers at Max Danavati and Mohali Hospital within the next three months and complete our greenfield facility in Gurgaon by the end of this year, adding approximately 1500 beds in total. Among the year’s other standout achievements, we are proud to have been ranked Amongst the top 20 companies in SNB BSC 100 index and recognized under the Next Leaders category for Corporate Governance Excellence by Institutional Investor Advisory Services, India’s largest proxy advisory.
This recognition underscores our unwavering commitment to the highest standards of transparency, accountability and integrity in corporate governance. On that note, we would like to highlight that we continue to undertake corporate actions to simplify the holding structure, improve governance and optimize cash flows. To that effect we have concluded merger of two wholly owned subsidiaries AS Hospital Limited and Max Hospitals and Allied Services Limited. We have also filed an application with the NCLT for merger of Cross Lay Remedies Limited and JP Healthcare Limited which will in effect reduce our outflow on the acquisition by rupees 200 to 225 crores.
Now coming to the performance highlights of the fourth quarter which is the 18th consecutive quarter of year. On year growth, our average occupancy for the Network stood at 75% versus 74% in Q4 last year and at similar levels in the trailing quarter whilst the occupied bed days grew by 30% year on year and 2% quarter on quarter. Do note that the network occupancy stood at 78% if we exclude Max Noida which is still being integrated into the network, something which we completed the acquisition of in November 2024. Average revenue per occupied bed for the quarter stood at 77,100, remaining relatively flat year on year and growing 2% quarter on quarter.
Like for like R pop for the existing units grew by 7% year on year and 2% quarter on quarter. Network gross revenue was 2,429 crores compared to 1888 crores in Q4 last year and 2,381 crores in the previous quarter. This reflects an increase of 29% year on year and 2% versus trailing quarter of this New units reported a gross revenue of 353 crores while existing units registered a year on year growth of 12% in revenue driven by 6% growth in occupied bed days and 7% growth in average revenue per occupied bed. The international patient revenue stood at Rs.
202 crore registering a growth of 28% year on year. Despite contraction in patient footfalls from Bangladesh and Yemen due to continuing political unrest. Network operating EBITDA stood at 632 crores reflecting a growth of 26% year on year and 2% quarter on quarter. This includes rupees 67 crores. EBITDA contribution from new units Network operating EBITDA margin stood at 27.2% for the quarter. Existing units reported an ebitda margin of 28.5%. Annualized EBITDA per bed for the network stood at Rs. 74 lakhs. Like for like EBITDA per bed for existing units stood at 84 lakhs reflecting a growth of 7% year on year.
Profit after tax excluding exceptional items and one off tax gains was rupees 376 crores versus 311 crores in the fourth quarter last year and rupees 372 crores in the previous quarter reflecting a growth of 21% year on year. There was an exceptional item of rupees 74 crore towards CIS charges paid to Yeda for seeking permission for change in shareholding of JP Healthcare Limited prior to acquisition and one off gain in tax costs of rupees 18 crores consequent to voluntary liquidation of a wholly owned step down subsidiary in the third quarter FY25 overall free cash flow was rupees 422 crore during the quarter rupees 390 crores was deployed towards ongoing capacity expansion projects and upgradation of facilities as acquired hospitals.
Consequently, net debt for the network came down by rupees 32 crores and to rupees 1576 crore at the end of March 2025. Continuing our effort to support the local communities, we treated approximately 36,500 outpatients and 1200 inpatients from economically weaker sections of society entirely free of charge worth rupees 53 crores at hospital tariff. Both are strategic business units continued to report significant growth in the revenue and profitability. Max at Home reported a top line of Rupees 56 crore reflecting a robust growth of 22% year on year. It offers 15 specialized service lines across 15 cities with over 50% repeat transactions.
Maxlab reported a revenue of Rupees 46 crores reflecting a strong growth of 19% year on year. It provides services in over 50 cities through its network of more than 1200 collection centers and active partners. Now coming to the status of expansion projects 268 beds at Nanavati in phase one the interior work is in progress and we expect to commission this facility within 90 days. 155 beds at Mohali finishing work is underway and we expect to commission this facility within 90 days as well. Plans to add additional 45 more beds through internal reconfiguration will be initiated once the new tower is completed within 90 days.
400 beds max mart at Saket Complex interior work and MEB fit out works are ongoing and we expect to commission this Facility latest by second quarter FY26 at max Lucknow we have added 128 beds on floors 9 to 12 as communicated previously through internal reconfiguration. We have added 35 beds in May and plan to add 39 more beds in the next 12 months. We expect to complete the Onco block here by the second quarter this year. 500 beds at Sector 56 Gurgaon structural work is in progress. We expect to commission the facility by end of this calendar year.
At Dwarka the Onko block is expected to be commissioned by the third quarter this year. All of these are on schedule and we will see significant ramp up in our capacity over the next 12 months. 127 beds at max Nagpur 12 beds have been added in October 2024. For for the balanced beds on additional floors we are awaiting EC approval that’s environmental clearance approval. While the bill of quantity detailing has started we expect to complete this project within 24 months 397 beds at Padparganj. We already received the environmental clearance. The tendering work is in progress.
The project continues to be largely on schedule. 550 beds at max Vikrant Saket. We are still awaiting the clearance from Forest Department for tree transplantation. All other statutory approvals already in place and we expect to complete the project by 2028. 400 beds at Dheeraqpur Mahali, our partner is currently awaiting EC approval and has initiated the tendering process detailing the contractors etc. The project is expected to be completed within the next 30 months. 140 beds at Vishali as announced earlier, we have acquired the land adjoining to Max Vishali and will be initiating drawings, detailing etc. In the next couple of months.
We expect to complete this brownfield project in the next 30 months as well. Presently the Vaishali Hospital is operating at 83% capacity utilization. And finally moving on to the overview of the company’s performance. For the full year ending March 2025, network gross revenue stood at 9065 crores reflecting a growth of 26% year on year. New units contributed to 938 crore to the gross revenue. Overall network operating EBITDA grew by 22% year on year to Rs. 2,319 crore reflecting a margin of 26.8%. While EBITDA per bed stood at rupees 70 lakhs. Existing units reported an EBITDA margin of 27.9% and EBITDA per bed of rupees 80 lakhs.
During the full year we generated rupees 1447 crores of free cash flow from operations after interest tax, working capital changes and routine capex rupees 1182 crores was deployed towards ongoing expansion projects and upgradation of facilities at acquired hospitals. Rupees 146 crore was distributed as dividend and rupees 17. 16 crore net of cash at JP Healthcare Limited was used for the JP acquisitions. With this would like to open the floor for any question and answers.
Questions and Answers:
operator
Thank you. Ladies and gentlemen, we will now begin the question answers. Anyone who wishes to ask a question may press Star and one on their touchtone telephone. If you wish to remove yourself from the question, you may press STAR and two Participants are requested to use their 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 Amer from JM Financial. Please go ahead.
Amey Chalke
Thank you so much for taking my question. First question I have if we can give information on the profitability of the the acquired units like Nagpur, Noida, Lucknow for the quarter.
Abhay Soi
Like I mentioned, there’s been. Like I mentioned in the speech as far as Lakhtao Hospital is concerned we had a 56% growth in revenue and 102% growth in EBITDA. Nagpur has reported a 23% growth in revenue, 86% growth in EBITDA. The Noida Hospital which we completed the acquisition in November has a gross revenue of 228 crores. And we had a 48 crore EBITDA at 21% margin. I think with respect to. Have we given the exact numbers?
Yogesh Kumar Sareen
No. So we have not given the. So I think this year, this quarter onwards because of the fact that these two of these hospital were acquired in quarter four last year.
For example the Lexis was acquired in February and Lucknow was acquired in March. So that is the reason why we don’t. Because it’s very tough to now separate the last year number into two parts. And this is without that etc. So that is why we haven’t put the numbers there. But nevertheless you have the overall numbers with you. We have 67,000 of biddha from new units which is 19.4%. Now if I take out Dwarka, you know Duarta is just broke even in December and even this quarter also there is small kind of a BIDA from that hospital in quarter 4.
If I take out D, our EBITDA margin is 24.9% in the new units.
Amey Chalke
I wanted to ask because how much margin expansion still can happen in these units? Except Dwarka obviously which is recently commissioned. But the other three units how much margin expansion scope is there for next one to two years?
Abhay Soi
Significant. I mean this is the first year of acquisition as you, you know by the time you put your building blocks in place you appreciate that takes some time. So I think clearly in terms of bed utilization, I mean just to give you an example, although you had in Lucknow you had expansion of EBITDA by 106%. Yet there is no radiation oncology there. There’s no bunker. Right. And that bunker is going to come into play at the end of H1 this year. And once that happens your oncology business which even currently is not anywhere near the oncology business or the rest of the hospital.
There’s a major move up over there. If you look at Nagpur for example, we already now approaching very high capacity utilization. The teams are coming in play and so on and so forth. We’re already looking at the next phase which is adding another 160, 150 beds over there. So once that happens, that gives you a major fillip because you know you don’t have any capacity left over there. As far as Max Noida is concerned, you’re operating at, you know, we bought a unit which is operating at less than 50% occupancy. So you have 50% more occupancy, higher rpobs as well as all the clinical programs, etc.
Coming. So typically when you do these acquisitions, I mean the first year you’ll have less of a sort of improvement curve in terms of absolute value. Maybe in percentage terms you’re operating of a smaller base when the second year is when you’re going to have that. And each one of these, whether it’s jp, whether it’s Nagpur as well as Lucknow also affords significant further brownfield expansion. So I mean you will have yields coming out for years to come.
Yogesh Kumar Sareen
Also I think the important question is to say that we have very respectable margins. For example, no margin is more than 30%.
Nagpur margin is around 22%, probably more. JP will also be in the same range. I think the main thing is that we want the bit of pervert to improve now which means that we have to put medical problems which are higher end and just to say the new units overall the EBITDA per barrier is 54% of the rest of the net worth which means we have to really grow that number. That’s how you’ll find that. And that’s one of the reasons why you find that the revenue growth and EBITDA growth are. EBITDA growth is a bit tapered compared to revenue growth because the share of new hospitals is going up and their EBITDA per bet is lower than the rest of the network.
Abhay Soi
But going forward you’re going to see that the EBITDA growth will outstrip revenue growth there. Not that the revenue growth is slowing down. I think there’s still more than enough fuel over there.
Amey Chalke
The second question I have on that itself because we have said that 1500 beds brownfield expansion will happen in next year. So this year we have seen lot of acquisitions. So how what are the objective next year? Is it a brownfield focus year or you think the M and A would still be there?
Abhay Soi
No, I think it’s not one at the cost of the other. I think the brownfield is already under construction. It’s already been built. So if you look at Moali Hospital is operating at 80% plus 85% kind of occupancy levels. Okay. And so you’re really that number of beds which are coming in which should be very, very quickly taken up. I mean that’s the whole purpose of Brownfield. Now similarly, if I look at Mumbai the next 90 days again you want to have these beds come up. But that solves the problem of the Mumbai hospital. I mean the max saket again is that of very, very high occupancy.
And that’s the main hub. I mean we are really crying for space and more beds over there. So I think those beds don’t, I mean and the balance sheet is something which is completely different. So here are three brownfields. We are doing Gurgaon sector 56. As you’re aware Gurgaon for us is the highest RPOP, the highest EBITDA per bed market. So again and with this new hospital which is very, very well located over there, sector 56, we are looking to do the same sort of encore, do the same, have the same sort of results that we had in Dwarka.
That has nothing to do with our balance sheet and our capability doing other things. So we will continue seeking acquisition opportunities also. But like I said, we have to be able to touch base on or clear two of our filters. One is the 20 to 25% ROCE within four to five years as well as in markets which are where at least we have one or two of our peers. If these two conditions are met, we are happy to look at acquisitions and we continue to pursue them.
Amey Chalke
Sure. Thank you so much. I will join.
operator
Thank you. The next question comes from the line of Damayanti Keray from hsbc. Please go ahead.
Damayanti Kerai
Hi, good morning and thank you for the opportunity. My first question on your situation at new hospitals. So if I look at your institutional bed share you mentioned it went up to say 33% in 4Q. So is it like, is it because you are putting more of these team patients to really like move up in the occupancy, cover up the fixed cost and then I think can you please comment on it?
Abhay Soi
So that’s absolutely right. I mean if you look at typically when you open a new hospital, Dwarka for example, you kind of fill it with you know, all payer groups because really the first focus is to get the occupancy up and then you start turning it. If I look at Nagpur for example, it was operating at sub 6. It was operating at 50 odd percent occupancy prior to acquisition. But we took up the business over there for Institutional business in order to ramp up the occupancy. And the occupancy now is almost full. It is full up.
So what that does is it helps you occupy your idle beds and yet cover fixed costs or at least a part of it. And it all trickles down to ebitda. So from our standpoint, so long as contribution is positive from any peer group which has ideal capacity, it makes sense to do that. So we continue to do that, and that is what is paying us the yields and dividends returns as well. I mean, there’s no sense in keeping beds idle. If you have any idle beds, you must do institutional business over there. So we continue with that strategy.
Damayanti Kerai
Sure. So at what occupancy you choose to, you know, optimize between institutional or TPA patient. So say you ramp up to 40, 45% or what level you take that decision.
Abhay Soi
See, look, we can go up to, let’s say about 80% occupancy, right? So till I get to 80% occupancy, effectively I can take institutional patient. If I have, suppose I have 60% occupancy other than institutional, then for the balance 20%, I’ll take institutional. I will not have an idle bed.
Yogesh Kumar Sareen
So look at it the other way around. As long as we are not refusing cash patient or insurance patient. We like to do the insurance patients.
Abhay Soi
That’s right.
Yogesh Kumar Sareen
So any growth in cash and insurance patient will be accommodated first.
Damayanti Kerai
Okay, got it, thanks. My second question is on international patient revenue. So I remember, you know, a few quarters back we are talking about initiatives or incentive provided by the government to each flow of the medical international tourists in India. On back of that, have you seen any incremental or I say any meaningful pickup in your international patient business? Because if I see, I think it’s still like 9% of your hospital revenue, although on a bigger base. But any significant or notable push which you might have seen from these initiatives.
Abhay Soi
It will be 9%. But please understand, we increased capacity. We increased capacity by 30%. Right. And the growth in that business this quarter has been 29%, which, which is a significant increase. I mean, I wouldn’t entirely put it down to government of India because that’s a slow move, but as the image of the country sort of improves. But then you have certain setbacks, right? I mean, you also have geopolitical unrest. We had that issue with Bangladesh, we had it with Yemen, etc. We most recently had this with the Pakistan issue where the airspace has been closed.
So some of these have those. But you’ll always be two steps forward, one step back. But if you were to draw a line, I think we’ve had more than 25% growth in this business for a long period of time and 29% is acceleration in spite of these setbacks.
Damayanti Kerai
Got it. And my last question is if I look at your ARFORM on a network basis including new and existing units, so it’s somewhere around 75,000 for FY25. So what kind of good we should look at this parameter given now going ahead. Also, we will be having mix of existing plus new beds on a consistent basis.
Abhay Soi
Irrelevant what the RPOB is. Right. I mean by the overall RPOB is. I mean today if I acquire something for a hundred dollars and it gives me $25 of EBIT, it’s a 25% ROC. I don’t worry about whether I’m what it’s producing is lower R pop or higher R pop. So overall, I mean, what we have to look at is what is happening to overall ebitda. What is happening to overall, you know, EBITDA per bed. What is happening to vis a vis what we are deploying.
Damayanti Kerai
Got it. Okay, thank you.
Abhay Soi
If I look at the RPOP growth of existing facilities gone up by 7.5% but when I buy something worth lower RPOB. So okay, that drags it down. But the fact is, should I not be acquiring something? Well, rpop, even if it’s very, very high on roce, even if I’m getting it very, very cheap answer to that can never be. Don’t acquire answer to that always has to be yes, you must. You know, we are in the. I mean, so long as I can deploy money at a 25%. 20% ROC is pretty high. It’s 25% overall.
Damayanti Kerai
Yep, that’s clear. Thank you.
Abhay Soi
Thank you.
operator
Thank you. The next question comes from the line of Neha Manpuria from Bank of America. Please go ahead.
Neha Manpuria
Yeah, thanks for taking my question. I think in the presentation we mentioned that the IP growth at 3.5% was impacted due to I think lower footfall in internal medicine pediatrics. Is there something to read into this? Because it isn’t as if March is a seasonal quarter. So just trying to understand the reason for this weakness.
Yogesh Kumar Sareen
No. So typically, you know, when you compare quarter on quarter, quarter three happens to have more internal medicine patients and quarter four happens to have less internal medicine patient. So then there’s that impact of seasonality which comes in. I think that’s what we’re trying to explain there because the Share of atom medicine coming down.
Neha Manpuria
But the fourth quarter, okay, so the drop you’re talking is on a quarter on quarter. But even if I were to look at a year on year, it’s just a 3% IP volume growth. So hence I was wondering if there is anything.
Yogesh Kumar Sareen
You know, there’s a lot of this daily basis which comes up sometime. You know, it happens in A2 bus. Sometimes it goes into the quarter four. So I think that’s probably the change that we referring to here.
Neha Manpuria
Okay, got it.
Abhay Soi
Last year, recall October had significant amount of dengue patients, particularly in places like Mohali and Dehradun etc, where we had massive dengue. For some strange reason, it was built into October. This year there wasn’t. So I guess.
Neha Manpuria
Yeah, but I was thinking about March versus March. But I understand that there could be something.
Abhay Soi
Yeah, but nothing to read into it. I mean it could also be. I mean if you look at some of the newer facilities etc. That we acquired, they weren’t there last year. Now they are. They may have a lower level of PEDs than internal medicine and so on. So I mean, but there’s nothing to. I mean none of our signs are showing any. If I look at the number of OPDs overall, there’s been a significant increase, I think.
Keshav Gupta
Yeah, even IP number versus last year, they’ve grown by 6% existing quarter to quarter nearly also about 5%. So.
Abhay Soi
no, PEED is an internal medicine specific medicine.
Keshav Gupta
So in the fourth quarter, generally the surgical business comes up. So IP volumes goes up.
Abhay Soi
Y ear on year.
Yogesh Kumar Sareen
No, it’ll be. It’ll be basically confusion of the new hospital versus the old hospital.
Abhay Soi
That’s right.
Neha Manpuria
The second question is on Dwarka. I think in the presentation we mentioned that the Dwarka achieved break even in December quarter. You know, and based on the loss number, if I were to calculate, I still see there is a loss in Dwarka in the quarter. It’s still making a bit loss. Is that correct or am I missing something here?
Abhay Soi
No, there is no loss after break even. We have not made a loss. We continue on. I mean it’s obviously lower profit, but it’s definitely ever since. So it’s not as if December we may. We were. We broke even and then January, February or March, any of the months that we’ve lost money. We haven’t since then till date we’ve not lost money. We had only occupancy moved up. Your flow through to the bottom line has improved since then.
Neha Manpuria
Okay, and have we ramped up more beds in dwarka on the 140 that we’d commissioned. And what’s the plan for the ramp up the rest of the beds?
Abhay Soi
No, so we already had 235 beds and we have occupancy of 73%. That is March 30 crore of revenue coming from that single hospital in the month of March which I mentioned. So you have a 73% in 235 beds. We are expecting now anytime to be opening 68 additional beds.
Neha Manpuria
Got it. Okay, this is helpful. Thank you.
Abhay Soi
I mean already we just sort of staff them as the occupancy increases. You know what I mean?
Neha Manpuria
Understood. Yeah. Yeah, makes sense. Thank you.
operator
Thank you. The next question comes from the line of Prashant Nair from Ambed Capital. Please go ahead.
Prashant Nair
Thanks. Good morning everyone. Just had a question on the expansion plan. Since there is no slide on that in this quarter’s presentation. So the 1400 odd beds that you are planning to add in financial year 26, that remains on course. Would it roughly be the same range?
Abhay Soi
That’s right. We usually have it in the investor presentation, not on the quarterly presentation. So if you see the investors presentation continues to be the same. We expect in the next 90 days, both within 90 days. Both Nanavati. 260 beds. Mohali, you know, 165 beds. 155 beds. I think by second quarter you will have smart. By end of calendar year you will have the Gurgaon facility and the myths you are also adding in Lucknow and other places. We’ll be adding 1500 beds, not 1400 beds. In fact probably northwards of 1500 beds.
Keshav Gupta
By the end of the year.
Abhay Soi
By end of year.
Prashant Nair
Okay. And of these, I mean how many would you operationalize this year? If you can just give an approximate range, I imagine the bigger projects would have not all beds operational from the beginning. How do you calibrate that?
Abhay Soi
No, no. We ramp up, we’ll be operationalizing and there’s a ramp up sort of this thing etc. Of course, like Dwarka for examp. You know, we didn’t operate. We didn’t commission all 300 beds. Although they’re ready. Right. What we commission is as per occupancy. So we started with in July. Okay. And by March, like I said, we already at 73%. By April, May, you know, it should theoretically be further. So I mean going forward we are opening another. So when you have 75% plus occupancy in any set of beds, that’s the time we open the next lot.
Now we’re opening the final lot in, in Dwarka. And so, you know, I mean roughly within the year we’ve been able to occupy all the beds.
Keshav Gupta
A nd that was a green field. Majority of the beds that are coming up are brownfield.
Abhay Soi
Yeah. So but Gurgaon should have the same, should have the same trajectory as Dwarka. Whereas the brownfield is much faster. Right. The uptake is almost immediate.
Prashant Nair
Right. So that, that’s what I was trying to figure out. So for the greenfield. So for example, for saket, would the rule of thumb be that you initially operationalize say 50% and then once that hits 75% occupancy, you add the next block? Is that how one should think about it when.
Abhay Soi
Well, you can think of it like that, but the only difference is that in a green field you take six months to break even. Right. So by the time you get to 75% occupancy, probably takes you a year. In a brownfield do it, you know, almost in months, like in a month or two or whatever, you’d just be ramping up capacity so your take up is much faster.
Prashant Nair
Understood. Thanks. And when you just one, when you categorize into existing and new units. So new units would include all the acquired hospitals plus just the greenfield ones or would you also include some of the brownfield.
Keshav Gupta
All acquired units plus Varka?
Prashant Nair
Yeah. And on going forward basis also it is the greenfield plus the acquired. Thank you. Thank you very much. That’s it for me.
operator
Thank you. The next question comes from the line of Vivek Agarwal from Citigroup. Please go ahead.
Vivek Agarwal
Thanks for the opportunity. If you look at EBITDA this year, the company has done quite well. We have seen expense and EBITDA margin in the existing units and even the new units, acquired units, the exhibition works quite well. Now we are seeing another, I think 1400, 1500 bets coming up this year. So it would be great actually if you can just give some qualitative color how to look at overall EBITDA growth margins for the next couple of years. Thank you.
Abhay Soi
No, so I think, you know, brownfields normally give you higher EBITDA margins. Right. In percentage terms as well as everything else because your fixed cost is already incurred. So primarily the brownfields coming, which is I think close to 1,000 beds, they should thwart significantly higher EBITDA margins. And I’m not going to give you any forward looking statements, but theoretically they should give you higher EBITDA margins compared to your existing business. So I think that is even if you are sort of Occupying those beds with institutional business and whatever else, even then they give you higher EBITDA margins.
That’s what we’ve sort of analyzed from all our previous round feed that we’ve done. So I think that should work out well for us. And again, you know you have, we have literally increased capacity by 30% last year. Dwarka of course most of the year was for the first six months was operating at a loss and after that it’s been profitable. So you’ll see the full strength of Dwarka coming into the current year. You will look at the momentum of both Lucknow and JP sort of snowball in the current year. On top of that you got three brownfields which are coming and the one green field which comes at the end of the year will produce some operating loss.
But I think at startup like Dwarka did, but you know it should more than get set off or absorbed by what we are doing on the ground field and the momentums of the others. That’s where we are. So I mean I think we are probably going to be entering, you know, if I was to look at it or make a forward looking statement, the strongest year in the last five years that we had.
Vivek Agarwal
Thank you sir. This is comprehensive. And just one more question as I think there is a significant capacity expansion by you as well as the peers. So how you should look at the situation as far as supply of doctors, medical talent, nurses, et cetera. Thank you.
Abhay Soi
I mean look, brownfield capacity additions don’t typically require massive increase or increase in senior level clinicians. You know it doesn’t because it’s the existing doctors, they increase their footprints within those hospitals and so on because they are the ones who are seeking these beds to start with. I think other than that I don’t see massive capacity expansion literally happening other than one and a half, one more hospital other than ours in the current financial year in Delhi NCR or maybe one and a half hospitals. Really nobody else is coming in the current financial year and thereafter.
We have a very strong presence in Delhi NCR. We’ve got about 14 or 15 facilities there. So we tend to pick the best of what is available. And you know, if I look at Mali, it’s not as if any new hospitals are coming. We have expanding capacity. Mumbai, no new hospitals are coming right now. We’re just expanding our brownfield capacity. So I mean I really don’t see. But again, you know, you have to keep in mind that in India, you know there is a need for quality healthcare and new green fields are Required green fields, brownfields and so on and so forth.
And all the senior clinicians over the next years or a decade who are going to emanate are going to be emanating from current set of MBBS, doctors etc. That you have even today. The cost of MBBS, this thing, the salary is about 45 or 50 thousand rupees a month. So your demand supply shows up in the salary standards as well. Right. So I mean I don’t foresee shortage in senior clinicians.
Vivek Agarwal
Thank you sir. That’s from my side.
operator
Thank you. The next question comes from the line of Piyush Kumar from Magnus Hathaway Investment. Please go ahead.
Piyush Kumar
Yeah. Am I audible?
Abhay Soi
Yes.
Piyush Kumar
Yeah. So sir, my question is can we see the average revenue per occupied bed going to the territory of 80,000 plus in the coming quarter and if yes, what specialty could be the main contributing factor?
Abhay Soi
I think all the specialties which have been growing should take you there. I mean we had a 7% growth in the erstwhile kind of hospitals, the present hospitals are growing at a higher sort of this thing etc.
Yogesh Kumar Sareen
So we are already at 77.1 Rpop. Right. 77,000. Rpop is the current Rpop. So I’m not sure what is the 70,000 you’re saying. But yes, there’s a gap between the, between the new units and the existing unit. Right. So obviously we have to as mentioned that we don’t have a traditional ontology for example in Dwarka, even in Lucknow once we start that then obviously that led to the RPOps.
But you know, we obviously want to, you know, shorten the gap. But there’ll still be a gap between an RPUR RPOV and a daily rpob. Right. Which aren’t really missed by that. So there will be some difference. But I think we will, you know I would say shorten gap.
Keshav Gupta
And the second part is that all the places coming up are in like Mohali Saket Complex, Smart Gurgaon, Mumbai, Mumbai, which are 10 we’re still calling it. But the numbers have a higher RPOV in the current mix. So.
Piyush Kumar
And sir, my second question is regarding the stock price. In the last six months the stock price is range bound over 1200 levels. So any comment on that? Sir.
Abhay Soi
You have to tell me. I have no idea how stock prices work. I’m happy to discuss operations and financials and balance sheet but you know, markets have their own.
Piyush Kumar
Thank you sir.
operator
Thank you. The next question comes from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead.
Tushar Manudhane
Yeah, thanks for the opportunity, sir. So just if you could share like. For FY25 RPOB, maybe like Pairwise institutional rpob, international patient rpob and Petricash.
Yogesh Kumar Sareen
No. So we typically don’t share the RPOB separately but we do mention that, you know, what’s the, what’s the, you know, various, you know, parameters. So typically the international RPOB is 1.3 times of the dash. This time in this quarter the institutional is around 40% lower than the dash. So that’s the parameter that is coming to this quarter. Right. So you know, it changes from quarter to quarter depending on what the consideration of patients that we got from international and also the institutional. So institutional RPAP has degrown a bit. You know, it’s degrown by around 3 to 4% in this quarter compared to previous quarter.
But I think that that’s a movement which is so outside there’s nothing changed on the directionally in any of these RPOps.
Tushar Manudhane
And on a full year basis you have to think about in terms. Of either growth or decrease. If you could share that.
Yogesh Kumar Sareen
No. So I would say similar trends as we see but I think the recent trends are more important than the full year trends. So I would say that’s what we see. Let’s say the cash is 100. The interest will be anything between 1.3 to 1.5, depends on which quarter you talked about. And the PSU would be, you know, in some quarter it is 62% of that hundred or sometime it is, you know, 57% that 100. So that’s the range that you have. And TPA, you know, will be, you know, 8 to 9% lower than the cash.
That’s what it kind of works out.
Tushar Manudhane
Thank you. Thank you. That’s it from us.
operator
Thank you. The next question comes from the line of Kunal Lakhan from clsa. Please go ahead.
Kunal Lakhan
Hi, good morning. Abhay. You said earlier during the call that because of the brownfield expansion the margin should improve or rather it’s accretive to the margins. So our existing units are operating at about 28.5% margin and EBITDA of 84 lakh per bed. There is an upside potential to this going at aspirated.
Abhay Soi
That’s right. That’s the whole. I mean I’ve always guided to that your brownfields have a higher EBITDA per bed and have higher EBITDA margins because your management cost and your senior clinician cost is already incurred by the existing hospital. Right. So any incremental beds that you have, even if you were to fill them with lower R pop businesses like institutional etc. Okay. Still give you a much higher, give you a higher EBITDA per bed as well as EBITDA margins below.
Kunal Lakhan
Sure, sure. As and when this incremental brownfield capacity stabilizes. Right. Where do you think these rpobs or rather like EBITDA margins or EBITDA per bed would settle?
Abhay Soi
I’m not going to give you a forward looking statement.
Kunal Lakhan
Okay, no worries. Okay. Secondly, on the free cash flow side, we are generating some serious free cash flow from operations and going by your newer assets are also reaching EBITDA break even faster. Any for upfronting of your long term guidance of say adding or doubling your capacity over the next four years. Any upfronting of that guidance?
Abhay Soi
No. So look, what we do is any guidance that we give is based on us already having acquired the asset. Okay. Breaking ground or permissions or whatever else it is. So it’s not a blue sky kind of thing. So what I don’t tell you is that look, my belief is over the next five years I will generate let’s say 15,000 crores. So I will look at tripling my capacity or whatever else it is. No, that’s not how we sort of guide either. What I can tell you is that look, we’ve guided that we are happy going up to 2.5 times debt to EBITDA.
We have very, very little leverage on our balance sheet, on our books. We are going to be funding all of sort of expansion mostly through internal accruals. Okay. And we will, I mean we have more than spare room to kind of acquire and I mean last year we did three acquisitions, right?
Kunal Lakhan
Yeah.
Abhay Soi
What is very difficult for me to do is guide, okay in terms of till the transaction is closed, that what we are doing now there are other places that we are looking at expanding, putting up facilities, etc. But till I have that sign, I can’t sort of this thing. I am sort of cognizant of the fact that that at 2.5 times debt to EBITDA we get money at eight and a quarter and we’re able to deploy it at 24, 25%. But you know, as and when the deals happen, we’ll announce in, you know that numbers on a rolling basis will only go up.
So I mean today I’m guiding you. By 2028 I may have 9,000 bed, but I’m pretty sure one year down the line, the number would have moved up.
Kunal Lakhan
Understood. Understood.
Yogesh Kumar Sareen
So availability of cash is not a constraint for the capacity addition rate.
Abhay Soi
But it’s not only cash, even the balance sheet. We have enough room in the balance sheet.
Kunal Lakhan
Correct? Correct. Understood. Lastly, bookkeeping question. Can you give me occupancy numbers in Q4 for the newer units individually? Nagpur, Lucknow, Noida.
Abhay Soi
Dwarka, I’ve told you is 73%. The older units were 78%. The Chitta and JP acquisition which is complete in November, I think that 46. 47%.
Yogesh Kumar Sareen
46% average.
Abhay Soi
46%.
Yogesh Kumar Sareen
52% in JP Noida and 26% in Chitta.
Abhay Soi
Chitta. Right. And Chitta is a really small unit.
Kunal Lakhan
Okay.
Abhay Soi
And we obviously didn’t pay anything much for. We didn’t have any EBITDA to start with.
Kunal Lakhan
Sorry. And how much you said for Lucknow and Nagpur?
Keshav Gupta
70%.
Yogesh Kumar Sareen
So Lucknow is 65% with the additional bed that we opened. Right. So Lucknow operating capacity has gone up. And in fact in this quarter again we’ll go up to 413 beds. It was 324 beds in last quarter. So we added beds in that now. So on the additional beds that we added on the Overall capacity was 60 by 2.
Abhay Soi
On the operating capacity that we bought was what?
Yogesh Kumar Sareen
Yeah. That’ll be 209 beds on 234 beds. Right. So it’s 90%.
Abhay Soi
So it was 90% occupancy on the beds that we bought.
Kunal Lakhan
Understood.
Abhay Soi
After that we keep ramping up the beds. So I mean if you look at the end number of beds today then it is 67%. Okay. But this is basically the beds that we’ve added over there, right?
Yogesh Kumar Sareen
Yeah. And some bets we draw down in this quarter in quarter four.
Abhay Soi
Yeah. So don’t. Let’s not.
Yogesh Kumar Sareen
Nagpur is 81%.
Abhay Soi
Nagpur is 81% plus.
Kunal Lakhan
Okay. Very helpful, sir. Thank you so much. And all the best.
Abhay Soi
Yeah. Thank you.
operator
Thank you. The next question comes from the line of Rajit Agarwal from Nilgiri Investment Managers Private Limited. Please go ahead.
Rajit Aggarwal
Good morning, sir. First up, congratulations on good set of results and the overall growth achieved during the year. I just had two very quick questions and this is not a concern exactly. The interest cost has been going up quarter on quarter. And just for how to model it, should we assume the current quarter as the run rate going forward or is it expected to go up even further?
Yogesh Kumar Sareen
No. So we don’t expect any material change in the number. I think this went up since the October quarter because we borrowed money for the JP attrition of 1000 crores and then we had also taken 600 crores loan for the SARA acquisition in March 24th. Right. So these are the debt situation that we have is 1572 throws at the end of March. Which means that these are the two primarily these are the two term loans that we’ve taken which is actually reflecting the net debt. So unless we really do any major acquisitions, I don’t think any major change expected in the interest cost as such.
Rajit Aggarwal
So similar run rate for the remaining quarters.
Abhay Soi
If we do an acquisition then yes, they will change, right?
Rajit Aggarwal
Yeah, absolutely, absolutely. Second question while Mr. Bit touched upon this on the supply side, on the competition side, but specifically given that a peer of yours is coming up with the same number of beds in Gurgaon and at the similar premium location, do you think that is going to impact your numbers or the overall scenario for the next one to two years?
Abhay Soi
No, I’m not seeing any impact on my listening. You know, we have a very large network in Delhi NCR. I mean we’ve got, like I said, we’ve got 14 or 15 hospitals today in terms of number of locations. We had twice the number of locations that our next three peers, okay. Have put together in terms of number of beds we are equal to or more than the number of beds all of them have put together together in NCR. You know, we’ve got 35,000 healthcare workers of which 20,000 live in Delhi NCR. Out of our six and a half thousand senior clinicians, about 4000 live in Delhi NCR.
We have the largest home care business, only profitable one in the country and entirely focused, almost entirely focused on Delhi ncr. Then you got the third largest lab over there. In terms of brand, it’s a much sort of distinct. And like I said, what we are doing over there today, I mean we have a facility in Delhi ncr. Okay. But it performs far better than the flagship of any other hospital chain that you heard of over there. I mean the occupancy in terms of rpob, in terms of EBITDA per bed. Yeah. So I mean for me I’m you know, solving my own need.
But I don’t see this thing. And I don’t think the other hospital is the same size either. Probably the half the size.
Rajit Aggarwal
Okay. They’re paying the same number but yeah, you would know. I think you would know much better. Anyhow, thanks. Thanks for the feedback.
Abhay Soi
Thank you. Thank you.
operator
Thank you. The next question comes from the line of Diresh K. Partak from White Oak Capital. Please go ahead.
Dheeresh K. Pathak
Yes, so thank you for the opportunity, sir. For the Noida asset, what is the total FSI potential and how much being used currently?
Abhay Soi
I mean it’s 18 acres of land for Noida and I think we can add another thousand plus beds. So I don’t think. And the present facility is operating at 50% so there’s tremendous potential over there. We keep adding. So I don’t think we have a problem in the next decade at least.
Dheeresh K. Pathak
Okay, understood. Thank you.
operator
Thank you. The next question comes from the line of Tarun Bhatnagar from Tribeca Investment Partners. Please go ahead.
Tarun Bhatnagar
Yeah, hi. Thank you for your time. My question is on Gurgaon specifically. Now Gurgaon gets a lot of international patients. So should we assume that once Gurgaon comes up then your international numbers will increase and you mentioned on the competition that you have some strength. Any particular competitor who you think can be like very tough competitor for you in Gurgaon or you think that you have much better like right to win in that region. Thank you.
Abhay Soi
Look, every hospital of ours in its micro market, okay. And we have 22 now is the best performing hospital, okay. With respect to perhaps every line item including occupancy, significantly higher occupancy, we operate at maybe 75% in the next couple years of closest competitor at 65%. Okay. It’s a function of the value proposition we put together. Now. Delhi NCR also coincidentally happens to be our backyard. So I am quite confident about what we are going to be doing over there. So it is nothing which is sort of moving our competitive intensity or what we believe would have been the outcome.
So yeah, that’s where we are as fajitur government.
Tarun Bhatnagar
Okay. And international numbers will see an increase once Gurgaon comes up.
Abhay Soi
Sorry, the international numbers. Yeah, sorry, I got that. No, you know, honestly it is a destination for international business, you know, but it’s very similar to Delhi. So I don’t give it a significantly higher sort of this thing. But in the overall scheme of things, I don’t think it’s going to really move the needle for us at the enterprise level. Will it significantly increase medical tourism? Answer is no. In any case, in the first year or so you are going to be taking in all sorts of occupancies. Not only international business, but institutional, otherwise so on and so forth like we have done Dwarka.
So I don’t see day one majority of the beds being filled up with international patients. You know, it also takes time to do that to mature that business. For that particular hospital. So no, I don’t think it be a major move.
Tarun Bhatnagar
Thank you.
operator
Thank you. The next question comes from the line of Rishi Modi from Marcellus Investment managers. Please go ahead.
Rishi Mody
Hi guys, can you hear me?
Abhay Soi
Yes.
Rishi Mody
Yeah, so Abhay, I’m just looking at your capacity beds. It’s around 5100 beds and our operational bed count is around 4654 which comes to a ratio of 90% operationalization. This has been the ratio for the last couple of quarters. Just wanted to understand. Historically we used to do around 95% of our capacity beds were operationalized. Is there like are we going to get to that 95 or is it like there’s a theoretical capacity but we are using the space for something else and hence the operational bed count on the existing infrastructure will remain the same.
Abhay Soi
No. So I mean if I take the example of the last two acquisitions that we did, we acquired JP Hospital and along with it, so basically there was a hospital hospital in Chitta and Bulloch which have come. They have a 200 bed capacity and it’s operating at 26%. So that leaves out about 150 beds there and then.
Yogesh Kumar Sareen
26% on 100 beds.
Abhay Soi
O r 26% on 100 beds.
Yogesh Kumar Sareen
We haven’t opened the 100 beds yet.
Abhay Soi
Okay, so that’s one. But nevertheless it’s basically 150 beds over there. Out of your 5100 then you have the Max JP Hospital which is required, which is a capacity of
Yogesh Kumar Sareen
500 beds.
Abhay Soi
500 beds operating. Sorry.
Yogesh Kumar Sareen
We opened only three hundred and seventy seven. Yeah, so let me ask. So your question is about the operational capacity and available capacity. So I think there are three, four hospitals where we haven’t opened all the beds. For example JP Noida, the hospital has the capacity to do up to 500 beds. We have opened only 377 beds. There is some spend to be done to build that 377 capacity to 500. So we haven’t we planning for the spend. But knowing that the occupancy on the 377 bed is 52% only, we are not any fast tracking that.
Similarly Chitta hospitals, 200 bedded hospital, only 100 beds open. We don’t plan and that on that 100 beds also we have only 26% occupancy. So there’s no plan to open the balanced 100 beds. That will also require some spend. Dwaraka Hospital, you know we mentioned that we open only 35 beds. We the 303 beds. So we’ll open another 70 beds and. And some of them has already been opened as we speak. And then we have, you know, a 200 bed Bathinda Hospital where we open only 100 beds. So this is the capacity Athen Bachinda and property Chitta.
I mean leaving these two, I think the others will open in the due course of time. I mean but Hinda, we haven’t seen the demand so we don’t plan to really open the other Hyundabads but rest all, you know, will be on board I would say in another eight, nine months time.
Keshav Gupta
Also to the point, Altar capacities are real, these are not theoretical capacities and they don’t bring down to operational because of them not being available. They have outcome of the business plan. We don’t make them live because the business. Some sites may not so ask at that point.
Rishi Mody
Okay, got it. So theoretic like in practicality at if the demand is there, you can open up 5,100 beds.
Abhay Soi
That’s right.
Rishi Mody
Okay, I wanted to understand, you know, a loss, right? So I’m comparing existing to existing which is around 4.2 days. Like I just wanted to understand are we taking any structural efforts to bring further down on at least the existing infrastructure or it’s more like now we have optimized to a level and hence the fluctuations will remain on account of seasonality.
Abhay Soi
It’s ongoing. It is seasonal and it is ongoing. And it also depends on your clinical programs. You can’t even compare any two hospitals across the board. You have to do it on an absolute basis because no two hospitals have the same clinical programs. Alos by itself is not a bad thing. It depends on which programs you’re running. So just to give you an example, higher end business, which is international business and a higher end surgical program which is, let’s say transplant will always have a higher a loss but we’ll have a higher EBITDA per bed per day as well.
So I think that is what we should be focusing on rather than purely that unless you have a huge capacity constraint. So at this point in time we have that I think the teams do work on discharge and so on and so forth to hasten the discharges etc, etc, etc to turn around the beds faster. But if you have capacity then it becomes theoretical simply because you know, if you. Whether I have, let’s say I had one bed for 365 days, whether I have 365 patients on one per day or had one patient staying for the whole year, what matters to me is what is the EBITDA per bed Purely from a financial perspective.
Rishi Mody
Okay. All right. Finally, I think on the Nana OT piece you mentioned we’ve got one block upcoming and post that I think we were going to demolish some 260 beds block and then build up a new one to replace it. Which next time we’ll have a higher bed amount. But so just wanted to understand till what period like on those 260 beds at Nanauti which will be demolished, will we be losing revenue?
Abhay Soi
No, we are not building breaking 260. We are breaking 100, 160 beds.
Rishi Mody
Okay.
Abhay Soi
Also these 160 beds are typically a large amount of them are the ones which are not flood occupied. We’re adding 268 right now for a period of two years. These 160 will not sort of this thing. And then we come back with another. 280 beds. Right? Then you have 280, 168 plus another I think 150. Right?
Keshav Gupta
Approximately beds. Yeah.
Rishi Mody
Okay. So if I understand it correctly, the current 160 beds which will go under demolition two years out, which means an FY28. Is that correct?
Keshav Gupta
So currently, so currently we have a 303, 300 bed hospital. We are activating 280 beds approximately now as phase 1.
Abhay Soi
580 minus 160.
Keshav Gupta
Minus 160. And we’ll be activating another 275 to 280 beds as phase two.
Rishi Mody
So the 160 deactivation is happening.
Keshav Gupta
These go, then you have new beds coming, another 280 beds coming. So for two years you’ll have 400 beds when we deactivate 160.
Rishi Mody
But these 160 you’re saying are not that occupied. Like I’m just trying to understand, the hit on revenue will be commensurate to the bed or it will be lower.
Keshav Gupta
Most of these 160 beds are Ward structures and lower occupancy beds. They are the old economy beds. So the idea was to redo them any which way we got a chance to utilize them in a much better fashion to add a new tower altogether on that area, on that footprint.
Rishi Mody
Okay, all right, thank you.
operator
Thank you. The next question comes from the line of Alankar Garud from Kotak Institutional Equities. Please go ahead.
Alankar Garude
Yeah, just one small clarification. Had you booked some cost in Dwarka in the first quarter before commencing operations which are contributing to the full year EBITDA loss of 29 crores?
Yogesh Kumar Sareen
Yes, we did. You know that this hospital startup was delayed, Right? So we are planning for in the quarter one. So we had higher manpower. And that reason, you know, we could ramp it up faster. So there was some loss in the quarter one. I think it’s around 5 to 6 crore rupees, which was, which was also reported. We actually mentioned about it also in the, in the, you know, earning updates.
Alankar Garude
Understood. Yeah, that’s it. From my side. Thank you.
operator
Thank you, ladies and gentlemen. As there are no further questions, I would now hand the conference over to the management for their closing comments.
Abhay Soi
So thank you once again. We will welcome you next quarter. The PCA calls your time. Thank you.
operator
On behalf of Max Healthcare Institute Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.