Rainbow Children’s Medicare Ltd (NSE: RAINBOW) Q3 2026 Earnings Call dated Jan. 29, 2026
Corporate Participants:
Ramesh Kancharla — Chairman and Managing Director
Abrarali Dalal — Chief Executive Officer
Vikas Maheshwari — Group Chief Financial Officer
Analysts:
Unidentified Participant
Rahul Jeewani — Analyst
Dhananjai Bagrodia — Analyst
Prithviraj — Analyst
Nancy Yadav — Analyst
Anshul Agrawal — Analyst
Rishi Dilip — Analyst
Bansi Desai — Analyst
Alankar Garude — Analyst
Presentation:
operator
Sam sat. Sa. Ladies and gentlemen, please stay connected, the call will begin shortly. Thank you. Sat foreign. Ladies and gentlemen, good day and welcome to The Rainbow Hospital’s Q3FY26 earnings conference call hosted by IIFL Capital. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference is now being recorded. I now hand the conference over to Mr. Rahul G. Varney from IIFL Capital. Thank you. And over to you, sir.
Rahul Jeewani — Analyst
Yeah. Hi. Good morning everyone. This is Rahul from IFL Capital. I welcome you all to the third quarter earnings conference call of Rainbow Hospitals being hosted by IFL from Rainbow. We have with us today Dr. Ramesh Kanchala, Chairman and Managing Director, Mr. Abrar Ali Dalal Group CEO, Mr. Vikas Maheshwari Group CFO and Mr. Sourav Bandari, Head of Investor Relations. Over to you sir for your opening.
Ramesh Kancharla — Chairman and Managing Director
Medicare Ltd. Earnings call for Q3FY26 and nine months ended 12-31-2025. I would like to start with a few key strategic and operational updates for the quarter. Our operational performance showed steady improvement across all the key performance indicators including outpatients, footfalls, IT discharges and deliveries. Growth has been quite satisfactory considering the festivities, year end holidays and ongoing seasonal impact. The new units performed well with a steady improvement both in IP and OP volumes. The acquired hospitals at Warangal and Guwahati have operationally well integrated into Rainbow Network. Both these hospitals are performing well and in line with our expectations.
During the quarter we commissioned a 100 bed hospital at Raja Mandari strengthening our presence in coastal Andhra Pradesh. The performance of this hospital so far has been exceptional and is very close to break even in few months time. The 90 bed spoke hospital in electronic city Bangalore. We just commenced operations reinforcing our footprint and advancing the hub and spoke model in Bengaluru. With these additions, the company has largely completed the planned expansion for the current cycle and now transitioning from the phase of capacity addition to the execution for Q3FY26. The company reported revenue of 445.5 crores growing at 12% and the EBITDA of 147 crores with a growth of 9% and a PAT of 73.9 crores.
The growth of 7% compared to the Q3 of the last financial year. Occupancy for the quarter stood at 47.2% coming to projects. The 60 bed hospital in Bangalore city is in concluding stages and we’re awaiting for the final governmental approvals. We expect to commence operations in few weeks time. The construction has started at the regional hub hospital at Coimbatore of 130 beds. We are targeting to commence operations by end of the 27th. Our upcoming Gurgaon Hospital expansion in Sector 44 and Sector 5056 NCR. The execution is at risk phase. Right now we are at the basement stage plan and we are hoping to complete the basement slabs in three months time.
The Greenfield regional hub hospital in Pune of 150 beds has received project plan approvals from government and excavation work has just started. On the clinical side I would like to present our experience of first liver transplant in Bangalore. Hubbard 11 year old child was referred with a chronic liver disease with jaundice under losing weight. Evaluation by our pediatric liver team concluded that the child has got an advanced liver disease and the only hope for the child to survive a long time is a living related liver transplantation. So parents were we discussed with the parents and assist both the parents for the living related liver donations.
The mother was more suitable for liver donations. So therefore our transplant team has actually done a proper workup of both the donor and recipient and done the transplantation using the right lobe of the mother to the child. Left lobe of the mother to the child. The four transplant procedure went very smoothly. The post operative period was very uneventful. The transplanted liver started working. Both mother was discharged at day seven and our child was discharged on day 18 post operatively with the normal liver functions. Though this was the first liver transplant in this hospital, systems were so robust to support the seamless transplant procedure.
We are grateful for the mother who not only gave birth to this child and also gave us second lease of life by donating a left love of liver. I’m pleased to say that now we perform a pediatric liver transplant across all our hub hospitals in Hyderabad, Bangalore and Chennai. As a pediatric liver specialist, I’m so excited and very proud of our teams. They were able to commence three liver transplant programs in the last six years time with a survival of 94% clinically we continue to see strong traction across pediatric specialties and coateral care with improving case mix and a growing contribution from complex and high end procedures.
Our teams across the network remain focused on delivering high quality outcomes supported by full time consultant led model with a strong multidisciplinary collaboration. I’m pleased to welcome Mr. Abrar Alaid Dalal As a Chief Executive Officer, I’m sure his leadership and experience will be a strong addition to the organization. As I look forward, I would like to reiterate that the major capacity addition in the last two years have almost concluded and we are now focusing on operational excellence, patient experience and strengthening our sales and marketing and to improve our occupancies across the group level. I’m sure with our focused executive plan we will be able to deliver great outcomes and value for our stakeholders.
With that, I now hand over the mic to Mr. Abrar Ali to introduce himself before passing the mic to Mr. Vikas Nishwari for the financial update.
Abrarali Dalal — Chief Executive Officer
Thank you sir. So good morning everyone. I come with over 25 years of experience across the healthcare, telecommunications and FMCG industry. My career spans a leadership role in operations, strategy and business development. My previous track record has largely been in managing turnaround, brownfield expansion, driving clinical excellence and brand repositioning, mostly in the healthcare industry. In my previous role I led the growth journey of Sehrz Hospitals for six years and successfully completed two transitions from Airstone Capital to OTPP in October 22 and then from OTPP to Manipal recently in October 25. I look forward to contributing to Rainbow at this important juncture with a clear focus on improving occupancies, enhancing service levels and building scalable sustainable operations for a long time growth.
Thank you so much and over to you vikas.
Vikas Maheshwari — Group Chief Financial Officer
Thank you Mr. Abrar. A very good morning to all of you and thank you for attending this investors conference. I am pleased to brief you on the financials performance in the key developments of Rainbow hospitals for the third quarter and the first nine months of FY 2526 on operating revenue for the quarter stood at 445 crores reflecting a growth of 12% when compared to the corresponding quarter of the previous financial year. For the first nine months our revenues stood at Rupees 1243 crore reflecting a growth of 9% when compared to the same period of the previous financial year.
Our EBITDA for the third quarter amounted to rupees 147 crore marking a 9% growth compared to the same period last year. For the first nine months our EBITDA stood at close to 400cr reflecting a growth of 6% when compared to the first nine months of the previous financial year. The EBITDA margin for the current quarter Is at around 33% while for the first nine months our EBITDA margin is 32.1%. The profit after tax for the quarter is rupees 74 crore. A growth of 7.2% in comparison to the corresponding quarter of the last financial year. For the first nine months our PAT stood at rupees 2,303 crore reflecting a growth of 8.3% when compared to the first nine months of the previous financial year.
In terms of the operational performance, inpatient discharges, outpatient volume witnessed a growth of 9 and 18% respectively when compared to the corresponding period of the last financial year. Deliveries grew by an impressive 16% when compared to the corresponding period of last year. Our payer mix continued to remain robust and the balance. With 51% of the revenue coming from the insurance and the balance 49% coming from the cash patients for the first nine months, the payer mix remains more or less same where the cash stands at 48% and 52% at insurance. I am pleased to inform that our company continue to maintain a robust balance sheet with a cash position of 579 crore as of December 31, 2025.
These funds will support our ongoing capital expenditure margin and acquisitions plans. With our current cash and anticipated internal accruals in the coming quarters we are well positioned to complete all our planet capital expenditures using internal resources. During the quarter, company has invested 57 crore rupees in capital expenditures toward expanding and enhancing our services at existing and upcoming hospitals. With these insights I conclude my financial update. I now invite questions and suggestions from the participants. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star N1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Dhananjay Bargh from Alchemy. Please go ahead.
Dhananjai Bagrodia
Hi sir. Congratulations on assignment. Just wanted to understand what are we thinking regarding occupancy. Because now we have enough capacity. How are we thinking of growing occupancy?
Rahul Jeewani
Question on occupancy. How do we build occupancy?
Ramesh Kancharla
Yeah, the current occupancy is about 47 point. So this year we have seen the seasonal mutedness across the group. More so in the matured hospital groups like in Hyderabad, Andhra and Bangalore. So that’s what actually occupancy levels. So what we have seen is that the performance, I mean the occupancy has been lower. In static operations, numbers are lower. These are the three segments which in the last. I’ll also kind of express clearly that the three segments which have actually not been performed because of a seasonal mutedness. So rest of the kind of overall other system is actually well positioned.
Generally Q2 and Q3 are the seasonal quarters. So this year very unusually we have not seen any kind of any the seasonal which impacts our positively our footfalls and that IP admissions.
Dhananjai Bagrodia
Sure, we get that. But in terms of longer term we are now below 50% utilization. What can we see or what can you think of doing to grow that? Recently.
Rahul Jeewani
Your voice was not very clear actually.
Dhananjai Bagrodia
Hello.
Ramesh Kancharla
Okay, can you please repeat again?
Dhananjai Bagrodia
Right, right now we’re below 50% utilization. What are we thinking longer term on how we could move that? Because once we get that then our margins and numbers could be increasing significant from here and even our growth will be there. So anything but trying to pinpoint that on how to grow occupancy.
Ramesh Kancharla
Absolutely. Every plan is in place for the next year to drive the occupancies. And also that’s why I said we have actually strengthened our sales and marketing. We have got senior leadership in this position and also the Mr. Ali joining us and also we are looking at kind of driving the aggressive sales and marketing and also to see that other avenues are clear improving the occupancies. And we are also evaluating that, you know to see that whether any some of the hospitals, whether the CGHS would work the revised rates that in the revelation. But we’re not taking a call yet.
I think these are all things which will definitely will kind of. We are seriously looking forward to improve occupancies to a kind of north of 55%. That’s where I think we deliver a great result.
Dhananjai Bagrodia
North of 65%.
Ramesh Kancharla
55 to 60%.
Dhananjai Bagrodia
Okay. And so would we look at also increasing now more capacity in the near term or would we now just focus on occupancy? Occupancy. Occupancy, yeah.
Ramesh Kancharla
We have done a large capacity addition almost 780 beds in the last two weeks. And also there’s a. Our pipeline is very strong and the deliverables are going to come in next 18 months, 24 months time, next set of beds. So we have a one and a half years of clear operational execute our recent addition of the beds. I think in a way this is actually positions us very well to kind of to do the great execution try to drive our occupancies, drive our operational outcomes.
Dhananjai Bagrodia
Okay. And so for average length of stay for this 2.73. What do what are we targeting? Is this a fair number we should target going ahead or how should one look at this.
Abrarali Dalal
Yeah. Hi Danja. This with respect to the alloc it has been broadly in the range of to 2.8. So the mean is somewhere is 2.7 plus minus. I think that is the right trajectory for our business model.
Dhananjai Bagrodia
Okay, fine. Fantastic. And rpob RPAP growth at some stage, let’s say now we have already reached. We’re actually doing really well on RPO now we’ve almost reached 60,000. Would it be fair to assume that RPOP has peaked out or do we see in that also improving from inflation?
Abrarali Dalal
It just RPOP growth may be there but the right metrics is to check our arpp. Basically because of the loss keeps changing. If you look at our IP rpp I think that is the most important parameters to check.
Dhananjai Bagrodia
Okay. But.
Abrarali Dalal
We expect IT to grow 5 to 7% CAGR 1 or 2 quarters here and there. There may be some aberrations but over a larger period, longer period we have seen it is growing by six to seven.
Dhananjai Bagrodia
Perfect. Okay, fine. Sure. Thank you so much. Thank you so much and best of luck. Thank you.
operator
Thank you. The next question is from the line of Prithviraj from Unified Capital. Please go ahead.
Prithviraj
Thanks for taking my question. First on the new hospitals, is it possible to give more details about, you know how Gauhati, Varangal, Rajmandary are scaling up, what kind of patients are we getting and how is the insurance empanelment Also a follow up on that. Could you please give us the occupancy and margin details for each of these three hospitals during the quarter.
Ramesh Kancharla
Thanks Prithvir. It’s a good question. As a, you know, company policy we don’t give the geography wise details. Since you have asked for the details, what we saying that whatever the acquisitions have done at the time of acquisitions those companies like Guwahati was doing close to 8 crore rupees revenue per month. I think it is doing slightly better than that per month right now. Warangal when we have acquired was doing close to two, two and half crore rupees revenue per month depending upon the month. 2.2 times I think we have reached to that trajectory again as far as so and we are improving as the impanelement and insurance impediment are happening.
It is improving now as far as the insurance impanelement is concerned for the both Guwahati and Warangal happy to share that 70% of the insurance impanelement is done two or three large insurance companies where the impanelement is pending. Our team is in touch with them. Hopefully before February, March we should see that those impediment also in place. So the company is completely focused on as far as the business enablement gears are required in terms of the impanel with the government departments or the insurance. We are on top of that.
Prithviraj
And anything on the margins.
Ramesh Kancharla
Margins are for the Guwahati is as per the company level. For the Varangal it is on the improvement path. It is EBITDA positive, but it is on the improvement path now.
Prithviraj
And you also made a point that Rajmandi has broken even in the first quarter, is it right?
Abrarali Dalal
Yeah, it’s close to breaking. It’s close to breaking even in the first quarter. Yeah, in the last month. So things are good in Rajivandari I think good traction, both in outpaced footfalls, Inpatient intensive care doing very well, Lots of transports. I think it’s going very well because in the coastal Andhra place, the Rainbow is very well known. It’s kind of household name. So we’ve got a great team doing very well.
Prithviraj
So you know, given the way these hospitals are scaling up, is it fair to assume that maybe in two years these margins can be in line with company’s margins?
Abrarali Dalal
Yeah, some of the geographies definitely. That’s what we expect and hope for. But not everywhere could be the same one. I mean it all depends on the competitive landscape and also their price points. Both of them drives where they are in the long term. I think we look at all the consolidated figure, what always we care about 24, 25% margins. That’s why Rainbow should actually aim it and keep that margins while growing, while we are growing.
Prithviraj
Okay, one last question from my side. I mean let it be ARTOB or arpp. We saw a high growth this year. It might be also because of lower seasonal business. Let’s assume we get back the seasonal business next year. Will the RPOB or ARPP growth rate will be lower than inflation rate just for next year if the seasonal business comes back?
Ramesh Kancharla
No, when you have a seasonal business proportionate to the IQT business and also the large intensive care business, it will not impact much. When you have a seasonal businesses which are kind of simple illnesses occupying the one bed days, two bed days, definitely it will lower because you got lots and lots of children getting admitted for one day or two days where the billing is very small. So I think what’s important for us is that we have A large part of business which are pretty standard, which is obstetrics, intensive care services, newborns and period specialties, period surgical.
So these are all pretty standard regular business. What we have the seasonal business which is normally Q2 and Q3, which comes on top of it and gives a lot of occupancies and lots of outpatients and diagnostics and it drives the top line significantly. Seasonal business drives top line significantly. That’s why I always kind of look at it. What’s important is that a business which you are doing is with a solid good business which you have got underlying business and on top of it when you have seasonal business and drives the both footfalls as well as occupancies, that gives a handsome growth.
Top line as well as the EBITDA and the rest of the things is kind of not because the quarter to quarter may vary but at the year level we need to look at it to see that if you have a RPP of 5, 6% growing is healthy.
Prithviraj
Okay, got it. Just a bookkeeping question because you had recent hires, you know, CEO and some senior level, do we expect an increase in the employee expenses or it’s already in the books.
Ramesh Kancharla
Prithvi as a senior leadership joints and we have already completed our capex plans, etc. So we are expecting a growth from the revenue also coming up and corresponding EBITDA margins also improving from there. So though obviously the new leadership, whatever is joining there may be a cost but as a percentage to the revenue which increase. We believe that, you know, in next 2, 3/4 this will stabilize this.
Prithviraj
There. That’s all from my side. Thanks.
operator
Thank you. The next question is from the line of Nancy Yadav from Allegro. Please go ahead.
Nancy Yadav
Hi sir. Congrats on a great set of number numbers. I think some part of my question already got clarified in the earlier question. But I just wanted to understand, you know, why there has been some decline in the volumes and our revenues are flat as compared to the previous quarter. But there’s been some decline in OP and IP volume and we started our Rajmandri facility also this quarter. So how exactly should we look at a decline in volumes? Was it just because of seasonality or there was something else that impacted it?
Ramesh Kancharla
Oh, it’s purely seasonality. What we have seen, what has happened when you look at we had a high base last year, we had a pretty high season the last year. In terms of occupancies, in terms of outpatient things, when it comes to seasonally muted that whatever is the kind of the numbers in the outpatient footfalls or the seasonal business related occupancy is gone off, especially in the mature unit. So where we are kind of Hyderabad and Bangalore and those areas, Vijayawada. So that is actually shows the kind of overall flat curve on the seasonal business.
Right. So this is exactly why you’re seeing kind of the lower occupancies in group, more so in the mature units.
Nancy Yadav
Understood. And so just another thing about hospitals. So when we start a unit like you know, we’ve started three units recently, how long does it take for them to, you know, start ramping up for them to start contributing meaningfully to financials?
Ramesh Kancharla
Okay, so the, for example, the Rajmandary we have started it. I think for the next financial year Rajamandi will contribute positive EBITDA without any doubt. So Electronic City in Bangalore will take about 15 months time. That’s what it is. And we are likely to start in few weeks time. The Hanover that will not take more than a year time to kind of a break even. So this is more or less by next year. I think most of our last two years of units would be EBITDA positive. That’s what we expect it to be in Chennai.
In Bangalore, except Electronic City, most of them will be contributing to positive ebitda.
Nancy Yadav
All right, that’s all I had.
operator
Thank you. The next question is from the line of Anshul Agarwal from MK Global. Please go ahead.
Anshul Agrawal
Hi. Thank you for the opportunity. Hope I’m audible.
Ramesh Kancharla
Yes.
Anshul Agrawal
First question was while you have suggested the timelines of breakeven for the Bangalore units, would it be possible to guide or quantify the losses that we could expect in the coming quarter or any period as such till these units break even. Follow up on that is Rajivantari. I think in the last call if we mentioned that we’re expecting it to break in within 12 to 15 months, but I think we’re on track to break even within two quarters. So any particular reason that we would want to call out or any change that we have seen that has happened versus our earlier expectations which has led to this strong performance in that unit?
Ramesh Kancharla
No, obviously the Rajamandri, our brand equity is very, very high in that Godavari district. But every household knows about Rainbow so and we got a great teams. We are able to create great teams in Rajamuddi and we are doing a lot for intensive care services over there and the demand is fairly good and based on kind of what our capabilities and competencies see that obviously now the traction is Pretty good. Much better than we expected in Rajamantri because we have got a unit in Vishakhapatnam, other unit in Vijayawada. This is in between 200 km on either side.
This is a potential area and also strong agricultural delta area. So that’s why it’s actually done very well. There are lots of towns nearby Rajmandri so they’re all contributing significant numbers to to the kind of Rajman reunite.
Anshul Agrawal
Got it. Would you be able to quantify the losses or guide towards what kind of losses can we build in for the Bangalore units in the upcoming quarters?
Ramesh Kancharla
For two units which is electronic city and the handle which is getting open in few weeks time from here for the full year for the FY26 I think the loss assumption, a bitter loss assumption of 56 crore rupees is the fair assumption.
Anshul Agrawal
Both units combined, right? Not per unit.
Ramesh Kancharla
So 10 crore rupees for both.
Abrarali Dalal
I would say about 12 to 15.
Ramesh Kancharla
12:15 CRUP is loss I’m sure you should budget it.
Anshul Agrawal
Got it. Second question, what I had was on the mature portfolio. While I understand the seasonality impact in the current quarter as well, we are hearing incremental news flow around competition sort of in the single specialty ramping up and you know another multi specialty hospital is sort of coming up with a new hospital in Hyderabad itself. While we obviously can’t call out if season will return next year but do you foresee mature hospitals to sort of lag given the fact that you know increasing competition funding for other hospitals is on the rise especially in our core markets.
Ramesh Kancharla
Oh there’s no doubt about it. The competition has been there for the last 1012 years time in Hyderabad it’s always been there but it’s increasing. There’s no doubt about it. So the multi specialties who have lost their pediatric business and obstetric business they are trying to kind of see that we also want to do a mother and child within the large multi specialty hospital and also standalone small hospital and a mom and pop store. So all these things everyone is competing with the outpatient food for delivery segment and those areas see when it comes to kind of the children who requires high end care who are sick would definitely come to rainbow.
And because number of local hospitals coming, definitely some outpatients. What we need to figure out is see that how do we actually capture the larger market. Obviously cities also growing and also the more and more younger families are coming into the city. We need to see how we can actually capture larger footfalls into our network. Which means we may have physical hospitals. We kind of, we have in plans to do start some the clinics in the local geographies because the traffic conditions are getting worse. This is what the requests are coming. So obviously we’ll have our own plans to kind of see the competing at the local small mom and pop shows or small, small children’s hospitals.
How do you position ourselves? So this is an ongoing phenomena. I’m sure you know this will keep us engaged and try to overcome all these challenges.
Anshul Agrawal
Got it. So again would we be maintaining our sort of high teams top line growth aspiration goal despite all these challenges in the mature hospital or core geographies?
Ramesh Kancharla
I’m sure no challenges are there everywhere. So when you have 6, 7 multi specialty hospital groups in each city they have challenges but they’re overcoming in the same way. For us I think it’s one the challenge is not there for us at the paripas level. You know equivalent, they know equivalent play to rainbow at least they’re all about seven, 10 years behind to us. So that’s where it is. But what is the small leakages wherever OPD footfalls people aspiration to go to nearby. We need to solve those problems. I think that is what we try to work around because we have worked close to thousand beds in Hyderabad and we’re going to continue to kind of expand ourselves to the OPDs multiple ways and also more units.
This will be continuous ongoing phenomena. I don’t think we are going to sit quietly and see that everyone grows. That’s you have a, you have a brand equity, you have a kind of a reachability to the population that will continue to drive it as a leader.
Anshul Agrawal
Got it very clear sir, just one last question. Are there any immediate plans to increase the operational beds at Guwahati Hospital? I. I see that we have only have 85 operational beds where the capacity is around 150 beds. Are there any immediate plans to increase your operation bed here?
Ramesh Kancharla
I think about next three, four months time those will probably come into the for probably a kind of a new financial year early part will come into operation on those beds.
Anshul Agrawal
Thank you. That’s it from my side. All the very best.
Ramesh Kancharla
Thank you. Thanks.
operator
Thank you. The next question is from the line of Rishi Dilip from RDM Advisory. Please go ahead.
Rishi Dilip
Yeah, hi sir, can you hear me?
Ramesh Kancharla
Yes.
Rishi Dilip
Yeah, hi sir, a few questions. So you know a lot of questions have been asked on occupancy and the rationale has been seasonality led occupancy decline. I just wanted to understand are we exploring any other business models or maybe smaller clinics to bring in patient flow from slightly further distances so that even if the seasonality doesn’t work for us yet, our mature hospitals can rise up to 60% occupancy. Just what initiatives we are taking there.
Ramesh Kancharla
Yeah, the plans are underway. I think we are looking at doing some small clinics. The formats we are working on that probably about in six months time. They are all in the execution phase.
Rishi Dilip
Okay, all right, that’s great to hear. Secondly, I wanted to understand the international patients is the big rationale behind our Gurgaon Hospital investment that we are doing. We want to make it a global hub for international patients for pediatrics. Given how we’ve seen a lot of volatility in geopolitical relations, what hedging mechanisms or what mechanisms are we implementing so that even if there is a disruption, we still don’t suffer extremely highly when we end up operationalizing that hospital?
Ramesh Kancharla
Yeah, it’s a good question. Definitely we are already kind of in the process. So Gurgaon strategic plan is actually is we will start working on it from the probably from the mid last of 124 months away. So obviously we need to well before we need to think about it strategically how we going to position the hospital, what kind of you know the Dr. Mix we’re going to have it and also the specialties and also how the positioning in the hospital and it’s a huge exercise which we know how we could, we have plans, definitely plan to work around.
International is definitely one of the bigger ailments. When you’re in Delhi, especially as a super specialty children’s hospital like other multi specialties you would like to get that kind of opportunity. Hopefully things may settle down also. But of course we do need to reinvent which are the international markets which are going to be congenial for you to kind of have the patience. Meanwhile our adult kids are also working on the kind of de risking mechanisms how to kind of work around and overcome the challenges where like in Bangladesh it’s become really challenging now. So I think it’s a long way long story.
We need to work on that and we are cognizant about the geography, geopolitical volatility.
Rishi Dilip
All right, I understand. So maybe pick this up once we are closer to the operationalization of the Gurdava hospital. Third question I had was on the hospital operationalization delays that you’ve experienced over the past one year. Some because of construction timeline, some because of government delays in permissions. So just wanted to understand is there has there been some sort of Root cause analysis being done on how to ensure that we hit our timelines on hospital operationalization and change in the process that needs to be done any technology change that can help us reduce the timeline for construction.
Just to get your view on that.
Ramesh Kancharla
Yeah, it’s a great question actually we’re working on that actually to see that how do we actually see the PMCs and how do you structure strengthen it? How do you see use the technology to see that your construction timelines are executable timelines or can they compress? Can they get compressed or can we do it within the timeline? Lot of times what we have experienced is it is because of two aspects. One is wherever you require permission to governmental for Bangalore hospitals. Clearly it’s kind of a delay from the government because there is a division of the Bengaluru metropolitan area, the fourth zone.
So I think in the process actually about two, three months delays have happened. But having said that in the last six seven years time we have not seen the delays more than 1 or 2/4. I think mostly 1/4 or 2/4 now have been delayed indefinitely or 9 to 12 months time a year long. So in Coimbatore I think we had to go for re sanctioning of the drawings. That’s why it’s taken off of six months extra which been communicated because we not put on many capex and those things we have communicated to the our in the con calls that now things are going very well now from this is predictable.
The delays happens in the two two phases. One is in the sanction approvals planning stage. Second thing is on the execution side. If you got a. If you. If you have challenging teams or something difficulties or the other contractors and those things. Thirdly is the final permissions from the government. So these are the three phases. I think the middle one is in our hands. The first and last one is I think we have to depend on the local government and their policies and how the. How the. Sometimes the elections comes in the local global body elections they will take away four or five months time.
So you can’t do anything about it because nobody works. So these are all the challenges. Changes from city to city and state to state.
Rishi Dilip
Right, Right. All right, good that we’re working at least on the things that we can control. Hopefully through some technological construction equipment changes we can ramp it up quicker. Finally you mentioned you are exploring CGHS sign up to ramp up occupancy given the new rates. Just wanted to understand how much is the rate differential now versus our current rates for cash patients.
Ramesh Kancharla
No I think there’s huge difference. That’s why we are still in the benchmark and we love to take a call on that. Now which ask for where there are lots of beds, availability, which geography. That’s something that now we will take about 2, 3 months time to make such decisions because we have been not been in the business of doing a government schemes so far. So this is the first time ever we are looking at it. We want to be conscious about what cost we are going to take it. It’s going to be kind of beneficial in a big way without compressing our R pops on overall our margins.
Then we will take it up. It will be patchy but not at the whole organization level.
Rishi Dilip
And so what would be the percentage difference in the pricing?
Ramesh Kancharla
We still had to kind of do the work on it.
Rishi Dilip
Okay. All right, thank you. That’s it from my end.
operator
Thank you. The next question is from the line of Bansi Desai from JP Morgan. Please go ahead.
Bansi Desai
Hi, thanks for taking my question. Just a follow up on occupancy and sorry to harp on it. If the seasonality continues to remain subdued going into the next year do we see ourselves going past 50% occupancy levels just driven by the measures that we are undertaking?
Ramesh Kancharla
Of course Bansi, I think seasonality is one factor and also that the number of action items which we have in front of us to drive the occupancies. I’m sure we will deliver next year definitely about 55%. This is what we are looking at it now. We have strengthened significantly. I mean our sales and marketing and various other the initiatives to drive the occupancies. And also there’s a significant investments are going to go into the digital initiatives. I mean you know these are all things that I’m sure going to work. And now I know the last six months I’ve been dissecting our own business where and how to do business without much depending on the seasons.
This is what now the current X rays, what we are doing it. We are hopeful that we will overcome this. Of course you know the any medical hospital the seasonality is in a sense and also we cannot escape or avoid seasons and also illnesses in this country. So therefore this is probably I see it as one of the RDF and you know next year is going to be different. It’s not going to be the same.
Bansi Desai
Thanks for that sir. And besides these marketing led efforts, if you could illustrate the efforts that you are undertaking are these lines of adding more doctors or again doing more complex work. If you could illustrate what are these efforts.
Ramesh Kancharla
Of course the moving forward is one is strengthening our specialties and doing more and more more the advanced care and also the tertiary care and all complex things. Now for example we started a liver transplant program five years ago in Hyderabad. It’s going well. We do second largest number of liver transplants in the country in our Hyderabad Banjara hills and we started in Chennai. It’s going very well. The program last one year now Bangalore is commenced obviously. I mean we were going to push the program probably to do about hundred transplants next to 16, 18 months time.
So that is how we would look at it. How do we kind of build our strength in the pediatric super specialty and the neurosurgical cardiac programs, all other things. The next thing is to see that how to drive the intensive case on the more complexities. The that is another one. And you know of course you know your pediatric surgical work, pediatric subspecialty like orthopedics and those things. We’re focusing on every single, you know pediatric subspecialty how we can grow each one of them and especially the hub hospitals eventually to become a kind of a, you know, not depend much on the seasons to kind of go with the regular business like our hub as Banjara Hill.
How it plays up throughout the year. We would like to see more and more haba sports in a similar fashion.
Bansi Desai
All right, noted. And sir, just a second Bookkeeping one if you could comment on how the IVF business has trended and what is it contributing in terms of revenues in this quarter and on an analyzed basis what is it in terms of run rate and also butterfly essentials are, you know retail endeavor.
Abrarali Dalal
For the IVF business. It is at around 4% of the revenue which we have reached to that stage. It is at around 17 or 18 crore of the business. 4% of the business which we have reached is a good scale up which we have done. As far as butterfly is concerned. It is growing and on the quarter basis it is doing something like that 4 crore of revenue which means is 1% of total overall revenue. So it’s still growing phase. I think the IVF has a more scale to grow up than butterfly.
Bansi Desai
All right. And are you dissecting margins for IVF or not at this point in time?
Abrarali Dalal
No, we are looking at this margin on the broader level at the gross level. Pansi and it is on the company level margin. Not something that ebitda dilutive segment.
Ramesh Kancharla
I don’t think IVF dilutes beta. It definitely in line with Company Vita may be better as we move forward.
Bansi Desai
All right, thank you.
operator
Thank you. The next question is from the line of Venkata Sivaram, an individual investor. Please go ahead.
Unidentified Participant
Thank you for coming. Is the company actually investing in improving. Digital user experiences and do expect any meaningful revenue contribution from it in coming quarters or incoming financial years?
Ramesh Kancharla
Yeah, that’s true. We have a conclude we have kind of finalized our digital strategy and marketing and digital strategy and also we are also looking forward to kind of do the significant capex in future to see that how we become like a digital front door hospital. So this is because we operate in a women and children’s hospital, more of a digital native population. Of course in a digital way something is going to be very significant. I mean this is I think a lot of upside is there for us.
I personally believe and we working on that almost we formed up the plan to go ahead with the digital landscape and digital marketing. Apart from marketing, I would like to know if.
Unidentified Participant
The user experience kind of.
Ramesh Kancharla
Thing like some patient and we are refashioning our right from our website to the patient app and the doctor this one and also making ourselves to be completely EMR based. So these are taking its own time but I think a more focus is going more towards the patient app and also the online consultations and also the payment gateways. I think these are all going to get started in very soon.
Unidentified Participant
Okay, thank you. That’s all. Thank you.
operator
Thank you. A reminder to all participants, you may press star and one to ask a question. The next question is from the line of Rahul Jiwani from IIFL Capital. Please go ahead.
Rahul Jeewani
Yeah, yeah. Hi sir. So sir, can you also talk about in terms of the ramp up which we would have seen in the international business Because I think for the past couple of quarters on the international business also we had seen some sort of an impact because of what’s happening geopolitically. So where is the international business trending now and what kind of a trajectory do you expect over the next let’s say two years?
Ramesh Kancharla
Yeah, yeah. I think we just slowly come back to the 2%. I think our original we budgeted about 4% but I think because of geopolitical situations I think dominantly we used to get a lot of patients from Bangladesh and Sudan and Kenya. So these are the two of them got affected significantly. That’s why Somalia is another one. Somalia had a ban also from Hyderabad. So that’s again significantly impacted. So we come up to 2% of the revenue now. I think that’s not. That’s still not very meaningful to me. I think we are trying to kind of revisit our international the plan which are the include more new countries, explore new markets to see that we can get back into the kind of 4% of the revenue.
Rahul Jeewani
Sure sir. And sir with respect to the acquired assets what was the contribution let’s say in third quarter.
Ramesh Kancharla
A contribution in terms of what?
Rahul Jeewani
In terms of top line.
Ramesh Kancharla
So the Guwahati will be close to 26, 27 crores and for the Warangal should be at around 7 crores.
Rahul Jeewani
Okay, so 34 crore kind of a contribution for the quarter.
Ramesh Kancharla
Yes, sure sir.
Rahul Jeewani
So if we adjust that obviously the organic growth has been mid single digit only and we are talking about recovery going into 2728. But yeah, what comfort do you have now that we would see that recovery playing out in 27 and 28.
Ramesh Kancharla
So Rahul, two points. See in the last 12 months the company has significantly invested into senior leadership in terms of sales and marketing which we have announced also like Mr. Srinath has joined now Mr. Abrar Ali Dalal has joined as a CEO to try. We have revamped our units heads and the cluster head wherever it was required taking the corrective measures for that. We have as sir has briefed you earlier is that in the call that we are significantly increasing our presence into the digital digital initiatives, brand repositioning etc. So a lot of things are happening at the same time.
If you look at our the seasonal impact started at around quarter four of the last year. Right. And this low base also should help to get on to that.
Rahul Jeewani
Sure sir. Now just on seasonality obviously what happens for us is one year we see a very strong season followed by a weak season next year. Now let’s say if one had to evaluate the business over a medium to a long term perspective would you say that maybe the growth potential for our business is mid teens kind of a number over the next five year period versus our earlier guidance of 18 to 20% CAGR.
Abrarali Dalal
I think we have to take a CAGR of a 4 year CAGRES CAGR we should clock around 18%. That’s what my personal view is. Whatever the expectation experience of running this hospital group accepting this year which maybe again we may touch to kind of double digit but 17 80% growth has always been there for us in the past. So that’s what we would aim and what would like to reach to. That’s our. That’s our safe zone. Would we feel okay sir.
Rahul Jeewani
So you are still sticking to that. Let’s say an 18% kind of a revenue CAGR over a medium term period.
Abrarali Dalal
Absolutely.
Rahul Jeewani
Okay, sure. So thank you. I can join back with you.
operator
Thank you. The next question is from the line of Prithviraj from Unified Capital. Please go ahead, sir.
Prithviraj
Just have one follow up question. If you look at our margins, the margins are quite high. That’s also because the kind of treatment that we provide at you, at the hospitals. But just, you know, given that the competition is increasing, are we seeing any signs of the pricing coming in and is there a risk for margins to come down?
Abrarali Dalal
I think the margins, the model which we operate, we are kind of a very fixed kind of a model. Right. When you do very well in terms of, for example, we do a 55% north of 55% and our margins are achievable. So it is a more, our hospital is a more medical hospital. Depends on multiple shoulders rather than one, two shoulders. So this is why you will. Your fixed costs are high. When you perform very well, you drive kind of excellent outcomes. So when you kind of drive, when you drive poorly, vice versa, it comes down significantly.
So the threshold is very important for us because even at 50% occupancy for year long, still we are able to manage the margins because our underlying core business is strong. That’s what we have to see it.
Prithviraj
Okay. Thank you, sir.
operator
Thank you. The next question is from the line of Alankar Garude from Kotak. Please go ahead.
Alankar Garude
Hi, good morning everyone. Sir, you touched upon Telangana and Bangalore briefly. Similarly, can you touch upon your performance across some of the other clusters as well?
Ramesh Kancharla
Yeah. So the Chennai I was talking to you about Chennai in the previous calls about Chennai is actually improving pretty well and overall in a good trajectory. And all the three hospitals I think of Gindi and Ananagar are doing very well. Also kind of started showing a good ramp up. So I think we are positioning Chennai very well for the next year. The next cluster is Andhra Pradesh. Andhra Pradesh will be very promising for her, for us because we strengthened the Dr. Team and leadership doctors team in Vishakhapatnam that will give us a very positive outcome.
So we are also planning to teach. We can do a cardigan program in Visakhapatnam. And also we operate currently 100 beds. We plan to kind of operate, operationalize another 50 beds in Vishakhapatnam. Vijayawada always does very well because Rajivandari’s joined the team. Kind of it’s, you know, by third month is coming closer to the break even. So Andhra clusters Will definitely be like another Hyderabad for us in future. So going to Delhi Delhi performance has been okay but I won’t say that the great great performance thus small hospital rose walk turned around doing very well and Malviya Nadar because of our structure and also managing these beds and the challenges of that high cost and all those things wouldn’t allow us to have kind of more than 8 10%.
That’s been always a challenge. Otherwise hospital overall is done well in terms of obstetrics obviously very well in south Delhi. I think we do the maximum number of deliveries in South Delhi. Obstetrics is very good and the pediatric specialties is not a place. It’s not the kind of hospital where you have a lot of space to build advanced care specialities build up and those things. But it’s kind of a mid sized hospital. That’s where we are still and also with high cost and paying a lot of money to the society. So these are the challenges always been.
I think as a hospital we have a good name and we continue to kind of build our credibility in that area. That’s most important for us at the moment because of upcoming Gurgaon hospitals in a few years time Gauhati has been a in a great addition I think great addition. So we are actually recruiting the specialty doctors and hopefully that in the next year, the mid year or so that we want to do kind of launch cardiac program in Gaupi. So that’s a great acquisition that again will join the like Hyderabad and other cluster. We’ll join the company beta.
That’s what our expectation.
Alankar Garude
Just to follow up on Guwahati. Given your experience so far. I know it’s early days but just given your experience so far do you get the same confidence about adding more spokes in the region and if yes by when would you be deciding on your growth plans in the region?
Ramesh Kancharla
I think our partner is pushing us to do things but we want to take our own time to see how. I mean there each state has got its own, Manipur has got its own challenges. Tantavand has got sold. We wanted to study and understand more about potential versus challenges. I think we will take up near time to think about it.
Alankar Garude
Got it sir. The second question is would it be fair to say that we will be playing bit of a catch up to some of the leading multi specialty hospital companies when it comes to some of the sales and marketing activities, digital initiatives etc.
Ramesh Kancharla
Of course we have to. I think there’s significant ramp up what we have to do. I Personally believe that in our way we are and where we need to reach to a long gap which we’re actually been working on it. This is work in progress now. I think in a year to year down the line, I think there’s a lot of buildup is going to happen in the digital and technologies side as well as kind of a marketing side.
Alankar Garude
Maybe a crude way of asking the question. I mean on a scale of say 1 to 100, if the leading multi specialty players are at 100 when it comes to these marketing activities, digital initiatives, etc. Where would we be at this point of time?
Ramesh Kancharla
I think we would be somewhere around 30, 40. I wouldn’t rate myself more than that. See we always. This is why it is such an important thing for me. Rainbow is always grown as a kind of very organic, very doctor driven, very community inclusive these ones. And Rainbow is kind of organization not built on sales and marketing and digital. Because data way the things are moving, word of mouth is getting shifted to online rating. Right. And also cities are becoming very, very fragmented and because very, very cosmolent and people rather than asking for opinion about neighborhood, they go to the digital platforms.
That is the world we are in. I think we need to be in the forefront. If you ask me that where we should be, we probably should be higher somewhere. Higher than multi specialty, lower than multi specialty as we move forward. Penetration.
Alankar Garude
Understood, sir. And one final question. See there’s been lot of discussion on seasonality and we’ve seen that impact on us for a few quarters now and maybe 2/4 two years back as well. From your understanding, how do you see some of these global pediatric hospitals dealing with seasonality? Are they doing something different which we can try and do or this is just part of the course?
Ramesh Kancharla
Okay, so there are two kinds of hospitals we have in global level like hospitals which are super, super specialized like Children’s Hospital Philadelphia and those ones which are mid sized hospitals which are like Cincinnati and those hospitals. I did have a call recently. I think one of the things what they say they do see what a season does in pediatrics is season actually not only. I’m not talking about coughs and colds getting admitted and when there is a viral infection or when there is unusual, you know, bugs in the system, not only the, well, children coming into the hospital because of sickness, these are the ones which actually tilts the balance of the children with the chronic diseases, children with a cardiac problem, children with a neurological problem, children with various other problems.
They are the people actually get affected a lot more in the seasons. So that is what the volume which comes and gets deposited into the intensive care services. So a lot of times we think about the seasonal illness is causing because children who have got underlying problems there is a trigger and they show up, but they need care. Sometimes they need larger care. So that’s what season plays up. It’s the same phenomena whether it is in India or outside. In India we are lot more of secondary and tertiary pediatrics compared to kind of the some of the superficial children’s hospital like in America.
But mid sized hospitals be exactly the same like us in America also.
Alankar Garude
That’s helpful, sir. Thank you. And all the best.
Ramesh Kancharla
Thanks.
operator
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.
Ramesh Kancharla
Thank you all the participants for joining today’s conference call. Very insightful questions and few of the suggestions by the participants. And thanks for that. Your continued support is instrumental to our strategic journey. If there are any questions later on after this call, please do write to us or connect with us at Investors Relations. Thank you. Thank you everybody.
Abrarali Dalal
Thanks, Laura. Thank you.
operator
Thank you. On behalf of IIFL Capital. That concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.