Shalby Ltd (NSE: SHALBY) Q2 2025 Earnings Call dated Oct. 30, 2024
Corporate Participants:
Jigar Todi — Investors Relation and Corporate Strategist
Amit Pathak — Chief Financial Officer
Deepak Anand — Global Chief Business Officer
Shanay Shah — President
Naresh Kapoor — Founder and Managing Director
Analysts:
Kashish Thakur — Analyst
Unidentified Participant
Rohan Vora — Analyst
Nishita Shukla — Chief Operating Officer
Bino Pathiparampil — Analyst
Pinaki Banerjee — Analyst
Priyank Parekh — Analyst
Dhruv Shah — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Shalby Limited Q2 Financial Year ’25 Earning Call. [Operator Instructions] And there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions]
I now hand the conference over to Mr. Kashish from Elara Securities Private Limited. Thank you. And over to you, sir.
Kashish Thakur — Analyst
Thank you, Nivedita. Good evening, everyone. We welcome all the participants to the Shalby Limited Q2 FY ’25 earnings call hosted by Elara Securities. Today, we have Senior Management representing Shalby. Among the senior management, the participants we have Dr. Vikram Shah, Chairman and Managing Director; Mr. Shanay Shah, President; Ms. Nishita Shukla, Chief Operating Officer; Mr. Amit Pathak, Chief Financial Officer; Mr. Deepak Anand, Global Chief Business Officer; and Mr. Babu Thomas, Chief Human Resource Officer.
We will start with the performance highlights from Mr. Amit Pathak, CFO, and Mr. Deepak Anand, Global Chief Business Officer. After that, we will open the floor for question-and-answer for all the participants.
I now hand over the call to Mr. Jigar Todi for important disclaimers regarding any forward-looking statements that may be made in today’s call. Over to you, Jigar.
Jigar Todi — Investors Relation and Corporate Strategist
Thanks, Kashish. Good afternoon, everyone. Our earnings presentation is uploaded on the stock exchange website and our Company website, shalby.org. We do hope you have already had the opportunity to go through the presentation. Please note that some of the statements made in today’s call may be forward-looking in nature and may involve risk and uncertainties. Kindly refer to slide number 40 of the investor presentation for a detailed disclaimer.
Now, I would like to hand over the call to CFO, Mr. Amit Pathak, for his opening remarks. Thank you. And over to you, sir.
Amit Pathak — Chief Financial Officer
Yeah, thanks, Jigar. Good evening, everyone. I’m pleased to welcome you all to Shalby’s quarter two FY ’25 earning call.
Now I will walk you through the financial performance of the Company for the second quarter of FY ’25. The consolidated revenue of the Company is around INR275 crore in the current quarter versus INR243 crore in the quarter two of the last year. And we have been grew by 12.9% on YoY basis. EBITDA of INR39.8 crore in the current quarter versus INR58.1 crore in the last — in the quarter two of the last year with a margin of 14.4% in the current quarter and 23.9% in the second quarter of the last year. And our EBITDA has been down by around 31.5% on YoY basis. PBT is INR13.7 crore in the current quarter versus INR42.6 crore in the quarter two of FY ’24 with a margin of 4.9% in the current quarter versus 17.5% in the quarter two of FY ’24. The revenue for the current year H1, the half year, is INR563 crore versus INR483 crore in H1 of FY ’24 and we have been grew by 16.5% in terms of revenue on the YoY basis. We are maintaining the healthy balance sheet with the low gearing ratio of 0.2 times on the debt gearing ratio.
Now I will run you through the standalone performance of the hospital business. Our standalone revenue is INR218 crore in the current quarter versus INR223 crore in the quarter two of FY ’24, and it is down by 2.4% on YoY basis. The EBITDA is INR40.8 crore in the current quarter versus INR57.5 crore in the last year quarter two with a margin of 18.7% in the current quarter versus 25.8% in the quarter two of FY ’24 and it has been down by 29.1% on the YoY basis. The PBT has been clocked at around INR28.3 crore in the current quarter versus INR47.3 crore in the quarter two of last year with a margin of 12.9% in the current quarter versus 21.2% in the quarter two of FY ’24.
On the standalone performance, our revenue has been degrown by 2.4% on YoY basis due to reduction of surgeries by 7% on YoY basis. Rajasthan and Gujarat have witnessed a major rainfall in the current quarter where most of the districts in Gujarat and Rajasthan has experienced heavy flooding, which has resulted in patients postponing elective surgeries. This results a major dip in the surgeries in Arthroplasty business as well as in the other specialties. Our EBITDA on the standalone performance has degrown due to the above reason, which has resulted the higher expenses in proportion to the revenue.
On the standalone basis, we continue to maintain a strong balance sheet with a positive net cash balance of INR74 crore. With this operating leverage kicking in and growing with the asset-light approach, our standalone ROCE is resulted to 15% in quarter two at an annualized basis. Our ARPOB and ALOS has shown an improvement at INR38,779 and 3.6, respectively, compared to INR36,136 and 3.92 in the same period of the previous year. ARPOB on YoY basis has been grew by around 7.3%. The number of occupied beds increased by over 2% on YoY basis as the occupancy ratio of 49% in the current quarter due to acquisition of Sanar. The peer mix of the current quarter is 36% from the self-patient, 41% from insurance, and 23% from the government business.
Now from the investment point of view, the further capex will be incurred for the capacity expansion from 130 beds to 200 beds in the coming years for Sanar International Hospital. The revenue of Shalby Sanar is INR25.74 crore in the current quarter versus INR23.7 crore in the Q1 of FY ’25 with a growth of 8.3% on quarter-on-quarter basis. The ARPOB and ALOS of Shalby Sanar for the current quarter is around INR85,722 and 3.64, respectively, in the current quarter. Shalby Sanar is presently operating at 25% occupancy level and it will increase gradually in the coming quarter. In the current quarter, 54% of the revenue contribution of Sanar has been generated from the international patient. Revenue from international patient on the overall Group basis is INR15.3 crore, which includes Sanar as well as Shalby Limited.
At Shalby, our undivided focus has been demonstrating our clinical excellence through successful expansion of many diverse critical surgeries in several of our hospital units. We also take a pride to share that we have successfully completed 28 transplants, 12 in kidney, 11 in liver and 5 in BMT during the current quarter. In the current — in September 2024, Shalby Krishna Hospital has got a license of Bone Bank and has successfully operationalized in the ongoing quarter three of FY ’25.
Now our SOCE franchise business has delivered adequate performance in the current quarter. The total revenue from the FOSO business is INR2.3 crore, which has been grew by around 14% on a YoY basis and the total revenue from FOSM business is around INR1 crore, which is flat on the YoY basis. Our new SOCE unit at Rajkot has become operationalized from July 2025 onwards.
We have been incredibly selective in our choice of potential partners from many inquiries we received so far to maintain the reputation of our strong brand. We follow clearly defined process and strict criteria when making these selections. Looking forward, we have a strong sense of optimism [Phonetic] about seeing positive development in the upcoming quarter of this fiscal year. Our primary focus remains on utilizing our expertise and excellence in orthopedics with the goal of establishing more than 40 franchisee hospital across India within the next four to five years.
For our Homecare business, we serve 9,000-plus patients in the current quarter versus around 7,800-plus patients in the quarter two of the last year with a growth of 15.3% patient count in the similar period of the last year. Revenue from the Homecare business is INR3.9 crore in the current quarter versus INR3.6 crore in the same quarter of the last year which is 7% growth on the YoY basis. As part of our social commitment, we continue to spread awareness about the importance of health and well-being through various social media platforms and created 130-plus healthcare videos. We also conducted more than 410-plus healthcare camps and 160-plus healthcare talks across all units during the last quarter as a part of various community outreach programs.
Shalby also takes the pride in nurturing young talent through our Shalby Academy vertical with 1,135-plus students registered in various healthcare programs during the last quarter. We also like to inform you that Shalby Advanced Academy has successfully completed enrollment process of MBAHHM program of Ganpat University with 34 enrollments for the academic year 2024 to ’26 batch. Shalby Academy has successfully launched first batch of Kaushalya The University’s Diploma and MSc courses at our premises.
Our SAT implant business has delivered minimal EBITDA loss of INR72 lakhs in the quarter two of FY ’25 due to marketing, sales promotion and other allied expenses incurred during the quarter for our upcoming products. Our operational efficiency is improving quarter-on-quarter basis with the optimization of the procurement cost. Shalby Advanced Technology U.S. has delivered the revenue of INR27.8 crore in the current quarter versus INR14.7 crore in the quarter two of FY ’24 with a growth of 90% on YoY basis.
Now I will hand over the call to Deepak to share insight about our implant business. Over to you, Deepak.
Deepak Anand — Global Chief Business Officer
Thank you, Amit. And good evening, everyone. During the second quarter of this financial year, our implant business made significant progress, generating revenues of INR27.8 crores, which is a growth of 90% on a year-on-year basis, with contribution from the U.S. and OUS at 30% and 70%, respectively. The total constructs sold has grown by 46% from 2,174 units to 3,184 units in quarter two financial year ’25, and it’s grown by 85% from 3,585 to 6,644 in H1 of financial year ’25.
The average cost of goods manufactured per component has decreased by 30% quarter-on-quarter basis and 35% year-on-year basis. We are actively focused on bolstering our team with skilled professionals, transitioning our sales mix to retail customers from wholesale, enhancing operational capacity and efficiency, expanding our product pipeline through extensive research and development efforts, and significantly reducing procurement costs. The reception of our Shalby Advanced Technology implants in hospitals across all markets that we have launched has been highly positive, and we have received additional orders from the Indonesian market.
With our key strategies formally in place, our team is fully dedicated to executing these plans flawlessly. Shalby is well-positioned to achieve double-digit growth with sustainable profitability while also expanding and deepening our presence by opening up new geographies. These efforts will ultimately drive the creation of sustainable value for all stakeholders at Shalby. The four different pillars that we’ve been focusing, let me speak about each one of the — each pillars quickly.
The first pillar being sales. The growth of sales has been 90% over the last quarter and 8% over the previous quarter. In Indonesia, we have surpassed $0.5 million business already in the first half of the year. Response has been extremely great, and we’ll be adding more surgeons in time to come. India business had a growth of 115% over the last quarter, and 91% growth over the previous quarter. We’ve added more than 18 people in the team in India, and about five distributors in this quarter.
The U.S. business, we’ve been — we’ve added five new customers, as well as onboarded seven distributors in this quarter. We are looking at Latin America, five countries in Latin America, Russia, Iran, Malaysia actively as our next growth phase, along with expansion in Japan. When it comes to cost reduction, our cost of goods manufactured has gone down by 30% over the previous quarter, and we are currently at $77 against $109 of last quarter. This has been done by change in vendors for raw materials and increasing our capacity in our plant.
From a capacity increase standpoint, which is our pillar three, our plant has significantly grown its manufacturing capability, where we were manufacturing approximately 2,700 components in April, we’ve been able to manufacture 7,500-plus components in September, which has allowed us to produce more to take care of the demand in the market, as well as to drive the cost of goods down. Looking at more new vendors for raw materials coming on board in quarter three and quarter four, we will have a good capacity soon to expand our global business.
And the last pillar being a new product, this team is working not only for the current day, but also for the year and two years down the lane. So we have established SAT India, and we had started hiring engineers. We have more than 15 engineers who have been hired across the globe in the last — in this quarter. And we have also looked at strategic partnership for some products for India and Southeast Asia, which will drive growth for some of our new products like G21 bone cement in partnership with Italian companies.
So that’s it from my end. Thank you, Amit. Over to you back.
Amit Pathak — Chief Financial Officer
Thanks, Deepak. So I can — now I request the moderator to open the forum for the Q&A.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Rajesh, is an individual investor. Please go ahead, sir.
Unidentified Participant
Good evening, ma’am. Hello?
Deepak Anand
Good evening.
Amit Pathak
Hi, good evening.
Unidentified Participant
Good evening, sir. Greetings of the day, sir, and wish you a very, very happy Diwali, sir.
Deepak Anand
Thank you.
Unidentified Participant
Sir, my question is, is there any plan for raising equity capital to fasten our growth of our Company, specifically — aggressive growth, specifically in Mumbai and NCR region or any plan in future to hive off this implant business and focus more on our more lucrative business, which is hospital business, which have more secular growth and have higher margins?
Amit Pathak
So thank you. Just to answer your question, in terms of the hospital, we are not looking for any kind of equity infusion right now because our cash position on the standalone basis is suffice to take care for our expansion for Delhi as well as Mumbai location. Apart from that, our balance sheet is so strong that we can raise the further fund from the bank. We don’t have the cash liquidity issue. So that will suffice if you require to invest somewhere apart from Mumbai and Delhi. So our balance sheet is sufficient to take care of that.
Now in terms of the implant, you can see the implant, we have already started the story that implant will grow in the coming years. In the current quarter, you can see there is a 90% growth in terms of the top line. And as we will progress in the coming quarter, implant will start delivering the profit. And in the coming years, it will deliver the higher double-digit profit. So it is a profitable venture for us and there’s no possibility that we will look forward for any kind of hive off for that.
Unidentified Participant
Okay. And sir, like if we have any plans for any aggressive inorganic growth in Delhi NCR region because it is a very big area and very lucrative as far as hospital business is there. Because if you see, the average revenue per bed in NCR region is very lucrative and very high margin business is there in Delhi NCR and there is a lot of opportunity here, sir, also like in Delhi and Noida and Ghaziabad and this Faridabad. And they have very ample opportunity for our Company. If we have any plan — aggressive plan in Delhi NCR and especially in Delhi NCR and Mumbai region, because they are very lucrative as far as this business is concerned?
Amit Pathak
We have already started putting up our footprint into the NCR and Bombay is already in plan, and we are always evaluating the right proportion — proposition what we have. So whenever the good opportunity will be there, we will evaluate. But right now, whatever we have in our hands, we have briefed to the market where we are moving on.
Unidentified Participant
Thank you, sir. Thank you so much, sir.
Operator
Thank you. The next question is from the line of Rohan from Envision Capital. Please go-ahead, sir.
Rohan Vora
Hello. Am I audible?
Amit Pathak
Yes, please.
Rohan Vora
Yeah. Thank you for the opportunity. So sir, my first question was on the surgeries that got postponed because of monsoon in Gujarat and Rajasthan. So are we seeing spillover in the month of October? How has been the response? And do we see the growth coming back in this quarter based on the spillover of the last quarter?
Amit Pathak
So in terms of the growth, you can see, except this quarter, if you can see YoY basis, all the quarters we have delivered the good reasonable amount of growth, okay? So this quarter, we expect the growth will be in the similar range, but we cannot comment right now because quarter three just started. We have to see how the things are going on.
Shanay Shah
Just to add to that, in the month of October, from what we have seen, we definitely see growth and that spillover effect coming in this quarter despite three or four days of the month being impacted due to the festive season of Diwali. So we definitely see that. In fact, even in the month of November, there are lot of surgeries lined up in two of our flagship units, if you compare it to the previous quarter or if you compare it to the same quarter last year. So the quarter three is expected to be kind of — quarter three and quarter four will see the spillover effects of quarter two.
Rohan Vora
Got it. Got it. And sir, my second question was on Sanar. So while we’ve started operations with 130 beds and currently at 25% occupancy. So what could be the idea behind scaling up it right away? And what is the kind of timeline that we are looking at Sanar scaling up to occupancy level at hospital level of 50%?
Shanay Shah
Sure. So Mr. Naresh Kapoor is also part of the call. He takes care of the north cluster with — for Shalby on the hospital side. So I request him to take that question.
Naresh Kapoor
Hi. Good evening, everyone. On your question regarding the expansion, so typically, right now, the expansion plan is on the drawing boards. And once we have finalized that, then it will go for the permissions and everything. And in my opinion, it would take roughly about 12 months to 18 months to complete once we apply for permission and we get the permission, etc. So on your question that since we are operating at 25%, so we see in coming quarters, the occupancy will grow. And as the occupancy grow, we do feel that within next 12 to 18 months, we will be needing enhanced capacity.
Rohan Vora
Got it. Got it. And sir, if I can just one more question here. So basically, at hospital level, we have been in this range of 49% — 48%, 49% kind of occupancy. And we see our peers doing occupancy in the range of 60% to 70%. So what are the drivers that we are looking at? What are the steps that we’ve taken to scale up occupancy at the hospital level, at the Company level?
Shanay Shah
So I think the steps, I think — first of all, I think we have to look at the numbers slightly differently. So what happens is that as Delhi, Sanar got added, and as Amit also said — alluded earlier that the occupancy level is at 25% at the moment. So at aggregate level, what happens is that your overall occupancy comes down because of that. So that’s the reason the occupancy numbers in percentage have come down. But if you look at the absolute numbers, the absolute numbers we’ve seen a growth on a year-on-year basis, there is a 12% growth, so — and which is expected to continue. We’ll see occupancy growth in terms of absolute occupancy as well as an ARPOB growth of between 4% to 6% that we have seen historically.
Rohan Vora
Thank you, sir. I’ll get back in the queue.
Operator
Thank you. The next question is from the line of Kashish. Please go ahead, sir.
Kashish Thakur
Hi. Thank you for the opportunity. Sir, two questions from my end. First question will be on ARPOB. We have seen a growth of 7 percentage YoY this time around. So how are we looking at ARPOB for at least FY ’25, and what will be its growth drivers?
Amit Pathak
So as we have mentioned, the ARPOB is keep growing on the quarter-on-quarter basis. As Sanar occupancy will grow, that will also contribute into the ARPOB because the international patient, we have the higher ARPOB. So the way we have seen historically, it is growing every quarter 5% to 7% or every year around 10% to 12% on a basis that will continue to grow.
Nishita Shukla
So adding to him, I’d just like to tell that we will be — we are focusing on all transplant surgeries, say high-end surgery, liver transplants, kidney transplants and all, it’s all are going to give us a good ARPOB.
Kashish Thakur
Thank you. My second question is regarding our payer mix. So if you see, our insurance has gone down to 41% from 44.2% last year. So any specific reason for this as insurance penetration has been increasing, so our competitors’ insurance — generation from insurance revenue is quite higher. So can you just throw some light why it is so?
Amit Pathak
Okay. So just to say regarding this, as we mentioned in the current quarter, there is a lot of surgeries has been come down into the Gujarat region also, when in our flagship unit and couple of units we have the higher TPA business. And in the couple of states like MP, we have more of a government business. So this time the mix has changed because in terms of this mix, the Gujarat have the lower surgeries and all these things. So that is the reason the payer mix has been changed.
Shanay Shah
And we have to look at it hospital-wise specific because if you look at Jabalpur, for example, if you look at most of the hospitals in the region, about 60% of the number of patient who walk into the hospital out of 100 are CGHS patients, right? So now what happens is that the numbers look skewed because of such kind of hospitals. And then on the other side, you have our flagship hospital where we don’t take government patients at all. So you have only self-paying and TPA patients in our flagship hospital.
So hospital-wise, it is different and region-specific as well, it will be different. I don’t think it will be fair to compare us with any of our peers, the reason being that most of our peers have most, like for example, if you’re comparing us to say a hospital which has most of — hospital group, which has most of the hospitals in Delhi, the payer mix is expected to be different. I hope that answers your question.
Kashish Thakur
Yes, sir, it does. So understood. Thank you so much. I’ll get back in the queue. Thank you.
Operator
Thank you, sir. The next question is from the line of Raj Kumar, is an Individual investor. Please go ahead.
Unidentified Participant
Yeah, good evening. Can you hear me?
Amit Pathak
Yes.
Unidentified Participant
Yeah. Thanks for the opportunity. Sir, just a few questions. So the first one is on the tax rate. I just want to know what is the guidance? Because our tax rate seems to be, even on a standalone basis, almost 35%. So is it due to that we are still in that MAT regime?
Shanay Shah
Yeah, we are not able to hear you clearly.
Unidentified Participant
Yeah, can you hear me now?
Shanay Shah
Not very clearly, actually
Unidentified Participant
Yeah, is it clear now?
Shanay Shah
It’s better. It’s better.
Unidentified Participant
Yeah. Sir, I just want to know what is the — I mean, any reason why your tax rate is almost 35% given that the domestic companies pay only 25%? So is it due to that we are still in that MAT regime or?
Amit Pathak
So we are still under the MAT regime. So the MAT will be get utilized by the end of this year. So thereafter, we will see the impact. So till current year or maybe the quarter one of the next year, the MAT will continue.
Unidentified Participant
Okay. Okay. Yeah. Sir, then the next question is, this new insurance scheme introduced by PM, this is — that Ayushman Bharat for senior citizens. I just wanted to know what is the — will we get any kicker out of this because it’s targeted towards the senior citizens and given that a lot of senior citizens have bone-related issues. So will Shalby get any kicker because more people will be covered and more people will opt for surgeries. Is that a right assessment?
Shanay Shah
So at the moment — so if I’ve understood your question, right, because your voice was a little blurred, but basically, it is fairly early to comment on this right now. I think we have to let a few weeks, a few months pass, and then I think at that point of time, we’ll be able to better comment on the impact of this change.
Unidentified Participant
But at a ballpark level, is that a fair assessment from an investor’s standpoint that can we expect there’ll be some uptick in business?
Shanay Shah
See, out of the hospitals that we operate, only two of the hospitals are Ayushman Bharat empaneled for us, right?
Unidentified Participant
Okay.
Shanay Shah
So for us, any which way the impact will be very minimal. For the rest of the hospitals, I mean, we are unable to kind of give you an assessment of the overall impact, but I can tell you, for us, it won’t be a significant impact.
Unidentified Participant
Okay, got it, sir. And lastly one housekeeping question. So this other expenses on a consolidated basis, I see almost INR34 crores reported current quarter, which is almost 50% jump year-over-year. So is there any one-off in this line item?
Amit Pathak
So there is not one-off. If you compare to the last year quarter two, we have not consolidated Sanar. So Sanar expenses are coming into the place. Apart from that, as our implant business is growing up, so you can see there will be some expenses around that. On the standalone level, we don’t have the much of the increase except INR1.5 crore. The rest of the impact is the addition of Sanar and the implant business. There is no one-off.
Unidentified Participant
Okay. Because even compared to June quarter, it has gone up by almost INR7 crores, INR8 crores, so.
Amit Pathak
So compared to June quarter, if you will see that I have mentioned, in the implant, there is a growth in terms of the top line also. In terms of standalone, there will be some increase in the cost, okay? And other entities also, there is an increase. So that is impacting there.
Unidentified Participant
Okay. And sir, any guidance on the return on equity that you’re targeting for FY ’25, ’26 onwards because I know that a lot of acquisition that has happened this time in implant business is getting stabilized. So I just want to know from ’25, ’26 onwards, so what kind of return on equity we are kind of expecting?
Amit Pathak
So you can see in this quarter, we have shown around 15% and prior quarter you have seen the 18%. This quarter was slightly exceptional, you can understand. And we have contributed always higher on the return on equity. Every quarter, it is growing. So we can see somewhere by the end of the year, it will be around 20% kind of thing.
Unidentified Participant
So this is on a consolidated basis? Because you are reporting only on standalone basis the return on equity. So I am asking on a consol basis what is the return on equity?
Amit Pathak
So consol basis, we will come back to you. We don’t have the data handy with us.
Unidentified Participant
Okay. Yeah, because I asked this question last call also, sir. I didn’t get a response. So that is the reason I’m — and I would appreciate if you could email.
Amit Pathak
Have you reached out to Jigar Todi, our Investor Relation?
Unidentified Participant
No. It’s okay. Yeah, I’ll take it offline.
Amit Pathak
Yeah, so please drop a mail. We will share the data with you.
Unidentified Participant
Yeah. Thanks a lot, sir. Thanks for that. Thank you.
Operator
Thank you. The next question is from the line of Bino from Elara Capital. Please go ahead, sir.
Bino Pathiparampil
Hi. Good evening. Just to follow up on Sanar, what is the level of profitability there and what is our expectation over the next couple of quarters?
Shanay Shah
Yeah, Mr. Kapoor, if you could take that please.
Naresh Kapoor
Yeah. Hi. In terms of occupancy, right now, as earlier mentioned by Amit, we are around 25% and it’s growing now. And we expect next couple of quarters, it will grow further as we have got couple of new doctors on-board in high-end specialties like liver transplant, bone marrow transplant and medical oncology. And also, we have got recently accredited by AACI, which is an American accreditation company. Now this accreditation will help us in getting some institutional business from different countries. So we expect the occupancy to go up.
Bino Pathiparampil
My question was around profitability. What is the EBITDA margin and how do you expect it to move over the next three, four quarters?
Naresh Kapoor
Okay. Sorry, I heard it wrongly, maybe Amit can answer this. Yeah.
Amit Pathak
So you can see Sanar, we are at around EBITDA neutral. And as Mr. Kapoor says, there’s a lot of potentials are into the Sanar with this accreditation and the business will grow and it’s growing on quarter-on-quarter basis. In the current year, we are seeing it will be the EBITDA positive in the single-digit kind of thing. Next year, it will be on the — move into the double-digit kind of profitability with the growth in occupancy and the revenue.
Bino Pathiparampil
Understood. And just to recap, what is the sort of bed addition we are planning there? Currently, it’s 180, I believe.
Naresh Kapoor
We’ll add around 60 to 70 beds, so taking the capacity to around 200 beds.
Bino Pathiparampil
Okay. And will that be for adding any new specialties or would it be in the same existing specialties?
Naresh Kapoor
So specialties bouquet, more or less we are complete, but definitely, we’ll be taking up some more additional high-end work like CAR T cell, which is in — along with bone marrow transplant, which is not being done by many of the hospitals. So we have a couple of patients lined up and we have recently tied up with the company, which is manufacturing the CAR T cells and that business will give a substantial revenue. The ticket size, just in case I can mention that, ticket size is roughly around INR70 lakhs to INR1 crore per patient.
Bino Pathiparampil
Got it. Coming back to Gujarat, the monsoon impact on surgeries. Could you specify which exactly month or weeks it was in?
Amit Pathak
Can you just repeat the question?
Bino Pathiparampil
Yeah. The impact of monsoon on reduced number of surgeries in Gujarat, Rajasthan. Could you tell us which the past weeks or months it was during the quarter?
Amit Pathak
It was majorly in the month of July and some part in the August also.
Bino Pathiparampil
Okay. So if you look at the numbers, they are comparable in September YoY compared to last year?
Amit Pathak
Pardon?
Bino Pathiparampil
In other words, has September — in September, did the number of surgeries pick back up to the normal rate?
Amit Pathak
Yes. So if you are comparing month-on-month basis, September last year versus September this year, the surgeries has been grown. The impact which has been there in the month of August and — sorry, July and slightly in the month of August, that has not been covered totally in the month of September and we are going to catch-up in the current quarter.
Bino Pathiparampil
Understood. Thank you very much.
Operator
Thank you. The next question is from the line of Pinaki Banerjee from AUM Capital Private Limited. Please go ahead.
Pinaki Banerjee
Good evening, sir, and thanks for the opportunity. Sir, in your consolidated profit and loss account, the gross operating expenses have gone up by almost 25% from INR252 crores to INR316 crores. So what is the reason attributable to that?
Amit Pathak
So you are asking for YoY basis?
Pinaki Banerjee
Yes, half yearly YoY basis.
Amit Pathak
So as I mentioned, last year first half, we don’t have the Sanar into the consolidation.
Pinaki Banerjee
Okay.
Amit Pathak
So Sanar has been consolidated into the current quarter. This is the first one reason. And another impact is due to the growth into this implant business, which has been grown compared to last year, which has impacted into the expenses.
Pinaki Banerjee
Okay, sir. And sir, your debt levels have also gone up by — from INR313 crores to INR405 crores. So sir, what is the reason for that?
Amit Pathak
So reason if you can see, this is majorly as you can see the growth is coming into the implant business. We are investing into the implant, the new product is going to be launched into the upcoming quarter. So that is a working capital utilization mainly into the implant business and some part into the Sanar business. But Sanar is minimal, majorly into the implant business only.
Pinaki Banerjee
Okay, sir. And sir, one last question. Sir, your tax rate is almost 83% for this quarter and which was — and last quarter, it was almost 52%. So actually what is the reason just know? You call this MAT adjustment is one of the factors. Is it the only reason?
Amit Pathak
So the reason if you can see in the consolidation, we stopped creating the deferred tax on our implant business as well as into the Sanar. So that is the reason you can see the impact, whatever the tax actual tax is coming into the standalone, almost including the other non-substantial subsidies, the tax rate — tax amount is similar to — is coming into the consolidated and we are not creating any deferred tax for this implant as well as our Sanar business.
Pinaki Banerjee
Okay, sir. That’s all from my end. Thanks and all the best, and happy Diwali to you all.
Amit Pathak
Thank you.
Operator
Thank you. The next question is from the line of Priyank from Abakkus Asset Managers LLP. Please go ahead, sir.
Priyank Parekh
Yes, thanks for the opportunity, sir. Sir, my first question is on occupancy. Sir, what is the sort of peak occupancy our business can have? Hello?
Shanay Shah
So basically, what we have generally noticed is that around 70% is the level at which we can go on a sustainable basis in most of the large institutes that we run.
Priyank Parekh
Okay. So where we see achieving that kind of [Technical Issues].
Shanay Shah
As I said, we are expecting a good — anywhere between 12% to 15% volume growth on a consistent basis. And as Amit alluded earlier, again, the ARPOB growth will be — I mean, our ARPOB growth will be over and above that. So based on that 12% to 15%, I think [Technical Issues] get to the 70% level.
Priyank Parekh
Okay, sir. Understood. Sir, I wanted to understand economics of our FOSO and FOSM business. So compared to the owned hospital, where is — how much capex we have to do in the FOSM business that I wanted to understand.
Shanay Shah
Yeah. I’ll just add to the previous question that you said. So basically, some of the newer hospitals, like for example, say, the Delhi Sanar Hospital or say Mohali, so within the Group, there are many hospitals where the growth will be higher because the occupancy level today is low. I’m talking about a 12% to 15% volume growth in some of the mature units is what I was referring to.
Priyank Parekh
No, sir, from the perspective of the capex and the overall economics of the hospital for FOSO and FOSM business that I’m referring to.
Amit Pathak
Yeah. So from the capex point of view, for the FOSM business, as the entire — this franchisee business, you have to understand is the asset-light model. So FOSM, we don’t have to do any kind of capex. FOSO sometime maybe we have to to do the capex in the range of INR3 crore to INR5 crore, but that depends upon the situation, but this entire franchisee model is an asset-light model.
Priyank Parekh
So INR3 crore to INR5 crore for how much beds we have to do for FOSO?
Amit Pathak
So it’s ranging between 25 bed to 50 bed, 60 bed kind of thing.
Priyank Parekh
Understood. Understood, sir. Okay. And [Speech Overlap]
Amit Pathak
This is also not mandatory, okay? So that is depend upon the what kind of terms we are entering, but MAT to MAT is INR3 crore to INR5 crore kind of thing.
Priyank Parekh
Understood. So I wanted to understand, sir, in terms of the accounting part, the — all the revenue that we earn in FOSO business would be consolidated with us along with the expenses. Whereas for FOSM business, all the revenue — we will be having revenue sharing models. Is that right way to understand it?
Amit Pathak
Yeah. So FOSO you have to understand, it’s a line-to-line consolidation, okay? So that is getting added into our standalone performance. The revenue is getting added into revenue, expenses are getting added into the expenses. But for the FOSM, whatever the revenue share we have, that is just coming into the revenue from operation as a management fee that is in fact — that is getting included into the top line and is directly contributing into the bottom line also.
Priyank Parekh
Understood. Yeah, thank you, sir. That’s it from my side. Happy Diwali.
Amit Pathak
Thank you. Can we take the next question, please? Hello? Are we audible?
Operator
Yes, sir. The next question is from the line of Ronak Kapoor [Phonetic] from Elara Capital. Please go ahead, sir.
Unidentified Participant
So I have two questions. So firstly, I want to know like what’s your overall guidance for FY ’25 regarding revenue and EBITDA and your capex guidance? And the second question is regarding the implant business, how do you see it in the next FY ’25 and over the next three years?
Amit Pathak
So the guidance if you are seeing on the overall basis — I’m just segregating into the two parts. One is the hospital business, another is the implant business. Implant has already pick up their speed, we are going to see the highest growth into the coming quarters compared to the last year, quarter three and quarter four will be the good quarter compared to the current quarter also. We will grow fast for our implant business. For the hospital business, we are always delivering the higher double-digit growth kind of thing and we are going ahead with the same kind of direction right now.
Shanay Shah
And I think you should also consider the fact that Delhi Sanar Hospital in terms of the top line was not — I mean, we acquired it early this year. So the impact of that was not part of the financials last year. So that will add to the top line in this particular year.
Amit Pathak
So this year you will see the 12 months of impact of Delhi Sanar. Last year, it was just two months. So the 10 months of addition from the Sanar Hospital will contribute into the top line.
Unidentified Participant
Okay. And so implant business, like can you give an absolute number like where do you see it in next three years like?
Amit Pathak
Deepak, would you like to comment?
Deepak Anand
Yeah. So on the implant business, we still stick to a path of trying to get to the $100 million business by five years’ time from now. So 2028, ’29 is when we see $100 million business coming into picture.
Unidentified Participant
Okay. And so hospital, you say any absolute number for this year?
Amit Pathak
So we have just given the guidance on the percentage, so absolute will come accordingly. So I can’t calculate right now. We continue to [Technical Issues] same direction.
Unidentified Participant
Yeah, fine. Thank you. That’s it from my side.
Operator
Thank you. The next question is from the line of Rajesh, is an individual investor. Please go ahead, sir.
Unidentified Participant
Yes, yes, ma’am. Actually, I would like to ask one question. Sir, if you can give some guidance on occupancy level in the near future because now onwards every little bit increase in occupancy level will add to the operating leverage and the bottom line will be increased very fast if we can have occupancy level increase to 60% to 70%. Would you like to give any guidance on occupancy level when it can reach up to 70% on overall basis, sir, not on matured hospital, but on overall basis, sir.
Amit Pathak
So you can see our occupancy on quarter-on-quarter in absolute terms, it is growing. We should not see in the percentage terms because once we are adding the operating bed, the percentage due to denominator is getting changed, okay? So from 680 what we have right now the occupancy, we are going to see that very shortly in the upcoming quarter, it will be ranging between 710 to 736 person [Phonetic].
Unidentified Participant
Okay, okay. Right, sir. Because actually, just wanted to understand because in case of increase in — because I have read something like the quantum of beds we have, operational beds we have and the valuation we get from the market is quite different from the industry standard. So if we can increase the occupancy level aggressively, then valuation can be very effective for us also.
Shanay Shah
Yeah, feedback noted, but we are working continuously on the occupancy level. So hiring the right clinical talent across different specialties. And so basically what happens is, we have to be very selective on that front also, because at times, there are doctors that can bring in lot of top line, but if you’re not able to control the expenses because often what happens is that a huge chunk is taken away by them as doctor fees or we might not have control over the consumables and materials. So we have to take a right judgment call at any given time.
But organically, if you see, I think the past trend gives a good sense of what it will look like five years from now. So about five years ago, we were ranging at 300, 330 occupancy in terms of beds, which has now consistently grown and we are at about anywhere between 650 to 700 today. And this is, mind you, nighttime occupancy because, in the daytime, you see 15% higher occupancy than these numbers also, but these patients are often discharged by the end of the day.
So this is how you can expect the numbers to again double over the next four to five years from here. And at that point of time, you will see that essentially we will be at that 70%, 75% level. However, at the same time, you continuously be adding beds in terms of organic and inorganic capacities. So again, from that perspective, you will see that the average will again come below 70%. So this is a continuous process.
Unidentified Participant
Okay. Because I see very much value in our Company as compared to other peers in our industry. So I like our Company just like that — just wanted to tell that.
Shanay Shah
Thank you for the feedback. Thank you.
Operator
Thank you. The next question is from the line of Rohan from Envision Capital. Please go ahead, sir.
Rohan Vora
Hello, sir. Thank you for the opportunity again. So sir, amongst the hospitals that you mentioned, the likes of Mohali, Jabalpur. So which of these do you consider mature and non-mature? What is the classification as far as the occupancy goes?
Shanay Shah
So I think based on the potential to grow in a given unit based on the existing occupancy level is how we determine that this is a significant growth area compared to, say, a hospital which is already at a 50%, 55%, 60% occupancy, we then consider it to be not a very high growth area, but maybe a consistent compounder from there on.
Rohan Vora
Right. Right. So which one of those are ones that there is a focus of growth where you see more space to grow?
Shanay Shah
Well, we see a potential in different places of different things. But if you ask me, Delhi, Mohali, Jabalpur, Naroda are these four hospitals where there is significant possibilities of growth from here on.
Rohan Vora
Understood. Understood. And sir, the second question was over a longer-term, say, when the Sanar Hospital scales up, what is the kind of EBIT margin that we are looking to do on the hospital business?
Deepak Anand
You’re talking about EBIT margin or EBITDA margin?
Rohan Vora
Yeah, yeah, EBIT margin, the segmental margin that you report. So what is the kind of margin that we are looking at the hospital business?
Amit Pathak
For hospital business, you can see, we are ranging between 23% to 25%. Sanar is on the breakeven. If you will include the Sanar, we are ranging between close to around 21% to 22%. And as the things will progress, you can see that we don’t have any debt into this — our existing hospital and we are not seeing any kind of major capex or any major debt will come into the standalone. But with the induction of Sanar, we are sitting at the debt of around INR60 crores. So we are seeing that trend will continue of around 21% to 23% for the next financial year.
Rohan Vora
Okay, sir. Thank you, sir.
Operator
Thank you. The next question is from the line of Dhruv Shah from Ambika Fincap. Please go ahead, sir.
Dhruv Shah
Hi. Sir, [Technical Issues] have a couple of questions. [Indecipherable]
Deepak Anand
Are we audible?
Dhruv Shah
Sorry, can you hear me? Hello?
Amit Pathak
Yeah, we can.
Dhruv Shah
Am I audible? Yeah, hi. Thanks for the opportunity. Deepak, I have a question, three questions on SAT. Does our $8 million incremental revenue still stand, the guidance?
Deepak Anand
For the year?
Dhruv Shah
Yeah, because that’s your guidance, right? $8 million incremental revenue on Shalby Advanced Technologies.
Deepak Anand
So $8 million incremental revenue for this year, right?
Dhruv Shah
Yes, yes, yes. That’s what I’m saying.
Deepak Anand
Yeah, we are running for them.
Dhruv Shah
Sorry, I couldn’t hear you.
Deepak Anand
Yes. It still stands. We’re running for it.
Dhruv Shah
Oh, okay. Okay. And Deepak, the second question is the CKS Gold launch in Q4, which we are expecting, are we due because we are anyway just delayed two quarters?
Deepak Anand
It’s gone for the U.S. FDA approval. So we’re waiting for the U.S. FDA approval to come through. So expecting the approval to come anywhere between December and January. So — but it’s nothing, it’s not in our hands. It’s in the U.S. FDA hands, so — I mean, it takes its time from a standpoint of approval and what we need in terms of tests and stuff. But from our side, we’re waiting for the approval.
Dhruv Shah
Okay. Okay. And Shanay, we are already on INR200 crores of debt now. And with Ashapura’s [Phonetic] capex which will start because now we have the approval, what kind of peak debt are we looking at?
Shanay Shah
Look, prior to the PK Healthcare acquisition, which is the Delhi NCR Hospital, we were sitting on about INR80 crores of net cash. So the position of that company was different. So we are at a debt of this level right now, primarily because of the acquisition that we made. So that was — so that’s the reason. From the perspective of the peak debt, very honestly, we would be comfortable at about — I mean, internally speaking, a debt equity ratio of 1 is to 1 or maybe 3 times EBITDA. But very honestly, we don’t see ourselves going there. The reason being that we are already generating anywhere between INR200 crores to INR250 crores of annual EBITDA. So we feel that — and that number is also growing on an annual basis. So I believe that our internal accruals should take care of a large part of these expansion plans, and if at all, we will have to take on minimal debt going forward.
Dhruv Shah
What was the capex for Ashapura?
Shanay Shah
So Asha Parekh Hospital in Bombay, we are looking at around INR250 crore kind of a number from reinvestment perspective.
Dhruv Shah
Okay. Right.
Shanay Shah
That will again be kind of spread across 36 months from the day that we file the lease agreement with the Charity Commissioner. So from that day onwards, it will take 36 months in a stage-wise manner.
Dhruv Shah
Right, right, right. And when is that expected by — because we had done a press release, right, we had got a Charity Commissioner approval?
Deepak Anand
Yes. So the Charity Commissioner has approved it and now basically, the trust authorities are working on submission of the lease agreement. So the Charity Commissioner in their order of approval told the trust to submit the lease deal to the Charity Commissioner’s office within six months of the date of the order. So the trust at the moment is working on completing the lease document and soon they should be able to submit it to the Charity Commissioner’s office, after which we will be getting the handover of the premises.
Dhruv Shah
Okay, fair enough. Deepak, one last question from my end. Congratulations first of all, for reducing 30% of your cost from $109 to $77, that’s really appreciated. Do we have any further room to reduce this from $77?
Deepak Anand
Yes, we have, and we are working towards it. So there are — it’s a multiple function of raw material coming from vendors and also improving some more efficiency in our plant. It’s an an ongoing path, right, like how sales is an ongoing task and COGS [Phonetic] is an ongoing task. So we are on it.
Dhruv Shah
Okay, great. Great. Thank you so much for the opportunity, guys. All the best.
Deepak Anand
Thank you.
Operator
Thank you. As there are no further questions, I would now like to hand the conference over to Mr. Jigar for closing comment.
Jigar Todi
Thank you everybody for joining the call. We will connect again into the next quarter. Apart from that, if you have any questions, you can reach out to our investor email ID. Thank you. Happy Diwali.
Operator
[Operator Closing Remarks]
Deepak Anand
Thank you.