Ladies and gentlemen, good day and welcome to the Max Healthcare Institute Limited Earnings Conference Call. Please note that this conference is being recorded. I now hand the conference over to Mr. Suraj from CDR India. Thank you, and over to you, Suraj.
Thank you, Ray. Good afternoon, everyone, and thank you for joining us on Max Healthcare Q2 and H1 FY 2027 earnings conference call. We have with us Mr. Abhay Soi, Chairman and Managing Director, Mr. Yogesh Sareen, Group Director and Chief Financial Officer, and Mr. Keshav Gupta, Group Director, Growth, M&A, and Business Planning. We will begin the call with opening remarks from the management, following which we will have the forum open for an interactive Q&A session. Before we start, I would like to point out that some statements made in today's call may be forward-looking in nature, and a disclaimer to this effect has been included in the earnings presentation shared with you earlier.
I would now like to invite Abhay to make his opening remarks. Thank you, and over to you, Abhay.
A very good morning, and thank you for joining us today for Max Healthcare's second quarter and first half of FY 2027 earnings call. We gained momentum in the second quarter, with revenue growing by 20%, operating EBITDA by 18%, and PAT by 10%. Demand for quality healthcare remains strong across our hospital network, with occupancy holding steady at 77% despite a 14% year-on-year increase in operational bed capacity. Occupancy and revenue across all three brownfield expansions, namely Max Nanavati in Mumbai, Max Mohali, and Max Smart at Saket, Delhi, have ramped up very well and in line with our expectations. At Max Smart, the newly commissioned 260 beds achieved EBITDA breakeven within three months of operations, being Q2, and are now witnessing high occupancy levels. However, the initial ramp-up of these beds did create a drag on EBITDA of Saket Complex during Q2.
Excluding the Saket Complex, revenue grew by 20% and EBITDA by 25%. We expect to commission the remaining 140 beds after Diwali Puja. Encouraged by these quick ramp-ups, we continue to explore opportunities to add capacity at our existing hospitals. In this regard, the board has approved an investment of INR 415 crore towards addition of 209 brownfield beds at Max Noida, Max Vaishali, and BLK-Max, along with an MLCP multi-level car park tower at BLK at the cost of approximately INR 85 crore. This is a part of the INR 415 crore. Most of this capacity is expected to become available over the next 18-24 months. During the quarter, 202 brownfield beds were added to the operational capacity, mainly at Max Smart, Max Lucknow, Max Noida, and Max Dwarka.
Services have also commenced at the new oncology block at Max Dwarka, which will enable addition of around 20 beds to the hospital in Q3 FY 2027. Following the rights issue by Kalinga Hospital Limited, our shareholding has increased to 66%. A new leadership team has taken charge of Max Bhubaneswar, and clinical teams have been added across gastroenterology, GI surgery, neurosurgery, and orthopedics. The hospital reported a revenue of INR 38 crores and EBITDA of INR 4 crores for the quarter. We have commenced renovation of the facility, and the first part will start rolling out towards the end of the year. Moving on to the Q2 performance highlights. Average occupancy for the network was 77%, similar to last year, despite a 14% increase in operational bed capacity. Occupied bed days were up by 13% year-on-year and 7% quarter-on-quarter.
Average revenue per patient for the quarter stood at INR 2.31 lakhs, growing by 8% year-on-year. This growth was partly driven by a decline in institutional bed share to 29% from 34% last year. Network gross revenue stood at INR 3,219 crores compared to INR 2,692 crores in Q2 last year and INR 2,982 crores in the previous quarter. This reflects an increase of 20% year-on-year and 8% quarter-on-quarter. Due to the discontinuation of select high-value chemotherapy drugs for institutional patients as a result of CGHS rate revisions last year, the share of oncology for inpatient revenues dropped to 21% from 26% in Q2 FY 2026. Excluding oncology, gross revenue grew by 25% and ARPP grew by 11% year-on-year. International patient revenue was INR 307 crores, registering significant growth of 33% year-on-year, and now accounts for 10% of healthcare revenue from hospitals.
Digital revenue from online marketing activities, web-based appointments, and digital lead management was INR 1,099 crores, accounting for approximately 34% of overall revenue. Website traffic crossed 1.14 crore sessions during the quarter, growing by 44% year-on-year. Operating EBITDA for the quarter stood at INR 820 crores versus INR 694 crores in Q2 FY 2026 and INR 704 crores in the previous quarter, reflecting growth of 18% year-on-year and a significant growth of 16% quarter-on-quarter. While EBITDA per bed grew by 4% year-on-year to INR 77 lakhs per annum. Operating EBITDA margin was 26.8%, similar to Q2 FY 2026, despite 14% increase in operational bed capacity, reflecting an improvement of around 200 basis points over the trailing quarter.
Profit after tax for the network was INR 448 crores against INR 406 crores in Q2 last year, normalized for one-time tax gain of INR 149 crores, and INR 357 crores in the previous quarter, reflecting a growth of 10% year-on-year and 26% quarter-on-quarter. The network generated free cash flow of INR 500 crores during the quarter, of which INR 292 crores was invested in ongoing capacity expansion and projects, and INR 195 crores was disbursed towards dividend. Net debt for the network stood at INR 2,369 crores compared to INR 2,384 crores at the end of June 2026, while the net debt to EBITDA ratio continued to remain below 1x. Continuing our efforts to support local communities, we provided free treatment to over 57,000 patients from economically weaker sections of the society, worth INR 90 crores at hospital tariff, reflecting growth of 47% year-on-year.
Both our strategic business units continued to deliver steady growth in revenue and profitability. Max@Home reported revenue of INR 86 crores, reflecting robust year-on-year growth of 37%. It offers 16 specialized service lines across 15 cities, with over 56% repeat transactions. Max Lab reported revenue of INR 66 crores, reflecting year-on-year growth of 24%. It provides services in over 60 cities and served over 7 lakh patients during the quarter. Now moving on to the status of our expansion projects coming on stream over the next few years. The balance 205 beds at Max Nanavati and Max Smart, Saket, Delhi, will be opened post Diwali Puja. 100 beds at Max Lucknow in the existing 460-bed facility will be commissioned over the next two quarters. 85 beds at Max Noida will be commissioned by December 2027.
500 beds at Sector 56, Gurgaon, we expect to start phased commissioning of this facility by the end of this financial year. 250 beds at Bhubaneswar, renovation of existing facility is underway, and we expect phased completion over the next 12- 15 months, with the first part of the renovation being delivered by the end of this current calendar year. 100 beds at Max Nagpur project work continues to be on track, and we expect commissioning by December 2027. 400 beds at Zirakpur, Mohali project is on schedule, and we expect commissioning it by December 2027. 200 beds at Pitampura project is on track, and we expect commissioning in FY 2029. 400 beds at Patparganj, we expect commissioning by end of FY 2029.
260 beds at Max Dwarka, we are putting up a new tower over there, brownfield, which is the next phase, because the Dwarka hospital is running at full capacity, will be commissioned by FY 2030. 270 beds, additional beds at Max Nanavati in phase II, project work has started, and we will be commissioning it by FY 2030. 450 beds at Pune, we have received the IOD, project is expected to be commissioned by FY 2030. 200 beds at Max Vaishali, which is the new tower being created, brownfield, over there. Project work is underway, and we expect commissioning again by FY 2030. 400 beds at Shaheed Path in Lucknow, phase I, we are awaiting formal environmental clearance and building plans to commence construction activity at the site. We expect to commission by phase I, FY 2030.
Finally, moving on to the overview of the company's performance for the first half of financial year 2027. Total bed capacity was around 6,200, a growth of 20% year on year. Network gross revenue stood at INR 6,200 crores, reflecting growth of 18% year on year. Operating EBITDA stood at INR 1,524 crores, registering growth of 17% year on year, while operating EBITDA per bed grew by 4% year on year to INR 74 lakhs. Operating EBITDA margin was 25.9%, similar to H1 FY 2026. This is despite total bed capacity increasing by 20% year on year. Profit after tax for the network was INR 805 crores against INR 750 crores last year, normalized for one-time tax gain of INR 149 crores, reflecting a growth of 7% year on year.
In the first half, we generated INR 897 crores of free cash flow from operations. After interest, tax, working capital changes, and routine CapEx, INR 629 crores was deployed towards ongoing expansion projects and facility upgrades at new units. INR 386 crores was spent towards the acquisitions of Kalinga Hospital Limited, Bhubaneswar, and Yerawada Properties Private Limited, Pune. INR 195 crores was distributed as dividend.
With this, we open the floor for any questions you may have.
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask questions may press star and one on their touchtone 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 questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and one. The first question is from Tauseef from BNP Paribas. Please go ahead.
Good afternoon, and thanks for the opportunity. My first question is related to disempanelment of hospitals mentioned in the footnote. Can you tell us how many hospitals has been disempaneled and which are the ones, and do you further plan to increase the numbers, and what was the rationale behind this?
We disempaneled BLK in May, and then for CGHS, and then we did railways, et cetera, because they were not paying us, and then also ECHS at Shahjahanpur. These are the ones that we disempaneled. But I think as we feel pressure on the CTI business, we will have to take that toll at a hospital level, right?
I mean, it's a normal trajectory. The more sort of mature hospitals or older hospitals, you see them disempaneling and distilling the payer mix, whilst the newer hospitals, you empanel them and you take on more institutional business.
Just want to understand, are these decisions taken voluntarily overnight by any hospitals, and would you seek empanelment of the upcoming Gurugram hospitals of CGHS and ECHS?
Yes, we will seek of the new hospital, and like I said, of the older hospitals, you de-empanel. For example, most of the hospitals which are going for brownfield, they do close to no institutional business, and once the brownfield new capacity comes in, you start empaneling and you start doing institutional business as well.
That's helpful. My second question is related to the doctor attrition rate and the dynamics of Gurugram market. With one of your competitor recently commissioning the new hospital, but we haven't seen a good attrition of star doctors in the market. Just want to check your thoughts. Have we started talking to doctors, and what gives you the confidence that once we commercialize Gurugram, we'll be able to board good clinicians in a very quick time?
See, I mean, clinician attrition happens up to maybe 1% of the clinicians attrition per year, which may go up by a very slight amount or not. Do keep in mind, it is not as if so many hospitals are coming up. You already have plenty of hospitals. We have plenty of hospitals. Anybody who is the head of admin in a hospital wants to head a hospital in four to five years. If you are a senior consultant, you want to head a program in a few years, and so on and so forth. You have to provide career progression as well.
The fact is, if you do not grow, if you do not set up more hospitals, then your next line will go and join competition. I think the fact that we are putting up our own hospital in Gurugram and other places, expanding in Delhi NCR, allows us to sort of retain and give opportunity to the second line as well, right? I mean, we have-- Keep in mind, we have 14 facilities in Delhi NCR, and we have over 4,000 clinicians working for us on a full-time basis here.
Just the last one, if I may. What is the potential impact on sales and EBITDA on the recent trade margin cap imposed by the government on non-scheduled drugs? Any broad number would be helpful.
We are still working it out.
Thanks. I will get back in the queue.
Thank you. The next question is from Neha Manpuria from Bank of America. Please go ahead.
Yeah, thanks for taking my question. Abhay, you mentioned that the commissioning of Smart had some impact on the Saket complex. Based on your understanding, how long do you think it would take for Saket to normalize? Given that we have a fair bit of brownfield capacity that is coming up, do you think you could see some sort of disruption like these in our other facilities that we need to account for?
No. See, I've always guided to the fact that unlike a greenfield, a brownfield, greenfield may take six months to one year to break even. Typically, we guide to one year in a greenfield. A brownfield breaks even within the first quarter itself. I always guided to that fact, right? When you come up with expanded capacity anywhere, you'll have a preoperative expense over there because firstly, you'll hire employees. You may not be hiring senior management or perhaps very senior level consultants or clinicians, but you do hire everybody else. So before you commission, you're carrying a cost. After you commission, first your occupancy ramps up, and then the quality of your revenue ramps up, and then the EBITDA ramps up.
The first quarter, you break even within a brownfield, and we've seen that Mohali was the first to open. We broke even in the first quarter, and then it ramped up. Similar was the sort of Nanavati Max in Mumbai. You're seeing the same thing at Saket. Last quarter was really the first full quarter of its operations. Although it ramped up beautifully by the end of the quarter, I mean, there was a EBITDA drag in that complex because of which. It's just that one quarter this thing that you have in a brownfield.
Okay.
Yeah. Nevertheless, there is a drag. What is the extent of the drag? You have an EBITDA growth overall of about 20%, but if I remove that complex, there is 25%. By next quarter, it comes back to normalcy, right? Because whatever drag has to happen, the maximum burden you face is preoperative and then immediately upon operations.
Okay, understood. Basically, you mean that because this is still in ramp-up mode, that dragged down the profitability of the[crosstalk].
Yeah, absolutely. Absolutely. What happens is, let's say we open 250 beds, okay?
Correct.
In the first month, you'll occupy 50 beds. Second month, you'll occupy another maybe 100, 150 beds. By the third month or end of third month or fourth month, you're already occupying 250 beds. I mean, that's why we are doing Diwali Puja and starting an additional 150 beds there, right? All of the 150 beds then start giving to the bottom line, and more and more and more. Your EBITDA trajectory sort of surpasses your revenue trajectory, and even all your operating leverage you get.
Yeah, fair enough. To your point that the EBITDA margin ramp-up should happen, let's say, in second or third quarter post-commissioning. We should see this drag probably normalize by March. Would that be a fair understanding based on what's happening?
Yeah, to a large extent, it's already normalized, but yeah, you will see. I mean, like I said, look, you have a drag when your occupancy is 50 beds out of 400, right? Your drag, when your occupancy is 250 beds plus out of the 400 additional that you put, then your drag is that much less. I mean, you're already hitting very high numbers. What you're seeing is a stigma of the entire quarter.
Understood. Okay. That is[crosstalk].
I mean, there's a hockey stick growth. You see, imagine it like a hockey stick.
My second question, just on Mumbai, if I were to see the bed addition that you give by state in Maharashtra, is it fair to assume that for the phase II, the block that needs to be taken down, that's been taken down, that's why the ramp-up that we are supposed to see in Nanavati, that's not reflected in Maharashtra's operational beds?
That's right. So, those beds are discontinued, and the balance 40 or 50 beds which have to start in Nanavati will start at the end of the Puja. Do keep in mind the quality of the beds which are being brought down are basically economy class, so the quality of the beds was not very significant.
Okay. And my last question.
Which is an equivalent amount of drag. Mumbai is already past that point of the revenue ramp-up and the EBITDA ramp-up.
My last question on the I know you said that you are still assessing the onco margin cap, but broadly, there has been a fair bit of noise around the drug devices, consumables, et cetera, and the margins made by hospitals. If you could give us any comments on what you think is being misunderstood, or how would you probably put forward your position on this, that would be very helpful.
I think the position of the sector is being put across into the court. The matter is sub judice, and I think it is quite clear what the position of the hospital providers is, and so is the position of the government. I think more than what you hear in the media on so on and so forth, I would urge everybody to actually see what the pleadings of the government or what the statements were made, whether it is the government or the hospital sector. I think the hospital sector pretty much stands by the fact that the overall profitability, the median net profit of the entire sector, if I was to look at last quarter's numbers, is about 9%, if I am not mistaken, in a capital-intensive sector.
Historically, it has been a product-based pricing industry rather than a services-based pricing industry. We will have to possibly recalibrate that going forward, depending on the pulls and pushes, but I think this is where it is. Like I said, the matter is pending, so I think many wise heads will be opining on it and we will see it.
Sure. That's helpful. Thank you so much for that.
Thank you. Next question is from Damayanti Kerai from HSBC. Please go ahead.
Yeah. Hi. Thank you for the opportunity. My question is regarding your comment on the payer mix change. As you said, you will keep on evaluating the mix exposure to CGHS channel, et cetera. And I think during the quarter, you reported the revenue contribution from this channel is around 18.5%, 300 basis points lower than the previous year. So, will this be the level of revenue share which you intend to maintain, or there will be volatility depending on how you see the change in payer mix part?
No, we are reacting to as and when new capacities come up. Those capacities will take on CGHS, institutional business, et cetera. And as some capacities mature, they will be moving away from that business. Some part of this is also revenue reduction is due to discontinuation of high-value drugs as well, of oncology that you see have impact, are actually a result of CGHS, right? So, you see that percentage reduction over there, we put you to that as well.
Sure. Earlier, you mentioned that you would obviously like to bring down exposure to the institution channel. Any number you have in mind where you intend to move ahead?
No, no. I do not think there is any intention to reduce the exposure to the institutional channel. The best case for us, I mean, is that if we increase capacity in a particular place, then we are able to serve both the businesses. What happens is automatically as capacity, somewhere where there is a capacity pressure, automatically your lower ARPOB business starts getting, or the lower sort of ARPP business starts getting distilled. The best-case scenario is if you can keep increasing capacity over there.
Okay.
I mean, take an example of, I mean, I will give you a very specific example of the hospital in Mumbai, where there was no institutional business, but because you did a capacity expansion there, you were able to put up more capacity, you were able to accommodate it. So, we started, we empaneled that hospital. Whereas in some other hospital in BLK, where there is capacity pressure, you have depaneled. That sort of thing will continue.
This disempanelment, whether that would be again a case-on-case basis, right? I just want to understand, say you have disempanelled CGHS from BLK Hospital. In the future, if you want to re-empanel, will that be a possibility or how that goes then?
We haven't de-empanelled them. We've got ourselves de-empanelled. You're on an empanel, okay, and you choose not to or whatever, then you apply to them and you get yourself de-empanelled from it. Yes, I mean, if as and when we expand that particular facility, we may at that stage re-empanel ourselves. But let's say in the case of BLK, you're only adding about 85 odd beds, so you may not do that. 64 beds, you may not do that. It's not a large capacity that you're sort of adding on.
Understood. My second question is on the regulatory headwinds which we are seeing for oncology drugs specifically, I think in last year as well as the recent development. While the matter is under the court, what do you think, like which other segments can really help you to offset the impact of these regulatory headwinds in oncology? Whether like you will be preferring some other sector over oncology as your key driver?
We don't. We react to the burden of diseases in the market, right? You've seen, it's not as if other diseases are not growing. They've all grown by 25% year-on-year, right? So growth has been, eventually you have inventory over there. Although you have a loss in revenue, it's not as if you have a reduction in occupied bed days to that same extent, right? I mean, I don't see that as something which is going to be impacting.
Okay, so the top four or five segments, generally we call onco, so that proportion should continue to increase, some part getting offset by others.
No, you need to put this in perspective. We have inventories, we have various specialties and patients. When a patient comes at the ER or patient comes for elective surgery, we don't ask him, "Are you for oncology? Okay, and are you for cardiac? So cardiac patient, please wait, and oncology patient, please sort of, you'll get an accelerated sort of admission path or whatever." Doesn't operate like that, right? It's at the point whichever bed is available. If a particular, we haven't seen reduction in occupied bed days of any particular specialty.
Sure. Okay. Thank you for your response. That's helpful. I'll get back in the queue.
Thank you. The next question is from Karan Vora from Goldman Sachs. Please go ahead.
Thank you for taking my question. My first question is with respect to the Gurgaon greenfield, which is expected to come online by the end of the year. Just wanted to get a sense on how many, are we expected to, in the phase I, do all the 500 beds or will it be split? What could be the EBITDA impact from the same? Any breakeven timelines, et cetera, you would like to highlight?
Yeah, so we typically start with 150- 200 beds, okay, ramp up, hit breakeven, and then we try to open more beds, right? You've seen a similar sort of this thing in Dwarka as well. There is no benefit in opening all 500 beds if you don't have day one occupancy. You can't have day one occupancy of 500 beds. It doesn't operate like that. There's still a ramp-up period. When we opened Dwarka 300 beds, we had an EBITDA loss of INR 30 crores. You can estimate, I don't know if I was to draw a line in the sand, INR 40 crores to INR 50 crores. We are still working that number, but it should not be more than that.
Got it. The second question is with respect to CGHS. So, you mentioned that we have successfully done this strategy of kind of taking in CGHS patients in new beds. Just wanted to get a sense on, in such instances, how do you ensure that the patient perception of the premiumness of hospital doesn't get impacted when a lot of CGHS patients come through? Or even for that matter, in some of the hospitals where we have north of 75%-80% occupancy, how do you ensure all the, because it means that the hospitals are completely full, right? So how do you ensure that the service levels as well as the patient perception not get impacted because of such high occupancy?
I don't understand. I mean, when you open a new hospital, I mean, if I had occupancy of 500 beds, I'd probably open the 500 beds. When you open a new hospital, you don't have occupancy of 500 beds, right? I mean, first and foremost what you do is you take business. Lower ARPOB business, lower clinical mix, lower this thing, whatever else it is. And the perception doesn't get affected by institutional business or whatever else it is. I think 40% of our business is upcountry.
Karan, so there is no intent, implicit or explicit, to have a different perception creation for the different patient pool. System is neutral to which sponsor the patient is from. What happens is that when the hospital is full, because of the economic benefit, we kind of de-empanel the full hospital at a later stage. But hospital perform normally.
No, automatically they start distilling.
Got it. And just one follow-up here. So the empanelment, when we dis-empanel, but the empanelment in itself will also be of a certain period, right? So maybe a one-year or a two-year empanelment. So, once we empanel ourselves to, or any particular hospital, to that CGHS scheme, what is the minimum timeframe for which we have to abide by it?
No, it's a six-month evergreening process that you have. You sign an agreement, and you keep evergreening it every six months.
Yeah, and you can give a one-month notice, right? So if you have a dis-empanel, you can give a one-month notice, both sides.
Got it. Helpful. Thank you.
Thank you. The next question is from Rahul Jeewani from IIFL Securities. Please go ahead.
Yeah. Thanks, sir, for taking my question. With respect to the two greenfields, which is Sector 56 Gurgaon and Zirakpur, Mohali, for 56 Gurgaon, you talked about INR 40 crore to INR 50 crore kind of an EBITDA loss. Would that loss be just in the initial few quarters, or would you expect this drag for the full year of FY 2028? Similarly, if you can also talk about what kind of an EBITDA drag we should build in from Mohali in FY 2029.
No, no, normally, we typically guide to a one-year breakeven. We broke even in six months in Dwarka. I guess the answer will be somewhere there. Dwarka, we had a 300-bed in Delhi. It had, like I said, a INR 30 crore, INR 35 crore EBITDA loss. This is cumulative peak loss of EBITDA.
Okay, sure. Zirakpur, Mohali should also have a similar kind of a loss in FY 2029, or would you expect that number to be slightly lower?
Lower, much lower.
Lower.
Yeah. About INR 30 crore.
Okay. That's it from my side. Thank you.
We'll work out the numbers, give you more precise numbers, but roughly that. We get to know, we have a better idea when we start onboarding teams, right? When you start onboarding teams of clinicians, et cetera, that's the time you know what the trough is, what the pre-operative expenses and what your day one expenditure is going to be.
Sure. Just on, let's say, this impact of the[crosstalk].
Yeah. If you're opening something in December next year, 12 months down the line, we haven't started onboarding the teams, right? So I don't know what the cost of the team is. Therefore, I'm not trying to be evasive, but I actually don't have a I can only give you a line-in-the-sand answer at this stage.
Sure. The second question is with respect to the impact from the discontinuation of chemotherapy drugs. So that impact started from third quarter of last year. With the impact annualizing in third quarter of this year, would you expect this top-line growth, which we delivered of around 20%, to accelerate further going into third quarter and fourth quarter?
It happened in. Yeah, that should be the case because you are of a lower base.
And that would also be aided by the fact that you would have some of these incremental brownfield and greenfield expansions coming and helping in too?
That is true.
Sure. Okay. Yeah, that is it from my side. Thank you.
Thank you. The next question is from Dhara Ganatra from UTI PF. Please go ahead.
Thank you, sir, for taking my question. My question is largely on this trade margin cap that has come out. What I wanted to understand is, what is the kind of share of pharmacy revenues and EBITDA share of pharmacy in both revenue and EBITDA? And within that, how much would be medical oncology?
Sorry, repeat that question, please.
What is the share of pharmacy in your revenues and EBITDA? And within that, if you can also highlight how much would be the medical oncology part of it. So excluding the surgeries and all on the oncology part, how much would be the pharmacy share?
Chemotherapy is generally 30% of the overall oncology revenue, right? Now, within that, as in, you know, there's a mix of some ORC drugs and monopoly drugs where there is no impact of this price cap, et cetera, right? That proportion, we have to really, once we get these [MRUs] revised, MRPs, we'll be able to kind of see what the impact, et cetera, is. But that's what the story is. Basically, 30% is the chemotherapy, and within that, there's a share of ORCs and monopolies, and then there's a share of generic drugs. Monopoly and ORCs will not have an impact of this one, right?
CGHS, et cetera, already impact happened last year.
CGHS is already coming in.
CGHS impact on oncology.[crosstalk].
That's already been in there.
Already been.
That is already coming in the quarters.
Right. What is the kind of impact that you all have internally assessed as management? Anything that you would like to point out?
We have not really looked at it.
Okay, sure.
Like I said, we are looking it up. We have not. Only part we know, the CGHS impact won't be there because that impact already happened last year.
Sure, sir. That's all from my side. Thank you.
Thank you.
Thank you. The next question is from Bino Pathiparampil from Elara Capital. Please go ahead.
Hi, good afternoon. Sorry, just a follow-up on the previous question. How much did you say is the contribution of pharmacy to the overall revenue? All pharmacy put together, not just oncology.
I did not give you a number.
Oh, okay. But in a general sense, could it be 15%, 25%, 35%?
It is bundled services. For example, you have a chemo, this thing, but then you have the mixing charges, et cetera, bundled with it. It is a little difficult to find out what is the part of the. Because in packages, you will have to split it. How do you work it out?
Understood. Okay. What part of the total revenue would be packaged services and what would be as you pay, as you go kind of service?
40%.
No, so actually it will be, I mean, depends on which side you are talking. You are talking the self-pay or the different insurance companies. But it will be anything between 20%-30%.
The CGHS won't have. This is off the[crosstalk].
This also will have something.
CGHS also.
Sorry, 20%-30% would be packaged services?
Yes. Depending on the customer.
Okay. For the remaining 70%, you would be able to give some sort of contribution of revenue, right? Contribution of pharmacy to the revenue, right?
We won't be able to tell you. We know the overall pharmacies, but we won't be able to tell you what is the now balance, what is the pharmacy, et cetera, because that's not the way we see these numbers.
Okay. But we are looking for roughly a rough estimate of the 70%, maybe?
You'll have to unbundle the services from which is not possible.
Got it. Okay, thank you.
Thank you.
I mean, you know the overall net profit, you know.
Understood. Thank you.
Thank you. The next question is from Sidharth Negandhi from CWC. Please go ahead.
Hi, thank you for taking my question. You mentioned that the ex-oncology growth is 25% in revenue. Could you help me understand what would that also mean in terms of EBITDA growth? Second, while you alluded earlier in the call to not really having a particular set patient mix, there has also been a decrease in the cardiology sales, which means cardiology would have grown slower than the overall revenue. While we do not see that in the allied space in pharma of any slowdown in the cardio growth, is there anything that may be happening there due to increasing competitive intensity, or what is your read on the cardiology growth being slower? Yeah, those are the two.
Cardiology is typically a seasonal business. You have a winter season, you have higher incidence of cardiology cases, and that is the time lower incidence of orthopedic cases. Are you looking at quarter-on-quarter, year-on-year?
Year-on-year.
No, I am not sure what your question is. I think you saying the oncology, yes. I think oncology, big impact is because of the chemotherapy drugs discontinuation, right? As a result, we have said that if we take the oncology out, then the revenue growth is obviously higher because in last year, you have those chemotherapy drugs, and this year you do not have. That is the reason you find that the oncology share is also down as a percentage to the total revenue, right?
Sure. Correct. Sir, what I wanted to understand is revenues ex-oncology are higher by 25%. Could you help us also understand what that has meant on EBITDA growth? Is EBITDA growth also significantly higher because of the same oncology impact? That was question one. On cardiology, just to clarify, I was looking at it year-on-year, not quarter-on-quarter. That's where the question was.
EBITDA growth would be higher, right? I mean, therefore, your EBITDA margin is the same as last year, in spite of that revenue going out of the books.
No, we can't impute a value which is not there in the P&L. We can't just say that this would have been the value. We don't want to kind of do that kind of number, right? Obviously, the drop in chemotherapy drugs has an impact on the margin, right? We said that last time that the overall impact of this is roughly around INR 100 crores in a year, right, of chemotherapy drugs being discontinued. But nevertheless, we had a net gain of INR 200 crores on the CGHS price, right? This is the number that we've given earlier.
You can't take one without the other. I mean, if we-- net-net, there was a gain because of price revision of CGHS. One part of it was oncology, where we had a loss.
Yeah. May it help. Thank you.
Right?
Thank you.
Cardiology also increased by what? What is the growth in cardiology?
Something like 18% growth.
You had an 18% growth in cardiology as well. I just coming to the previous this thing. Right?
Thank you. The next question is from Prashant Kshirsagar from Unived Corporate Research . Please go ahead.
Yeah. Good afternoon, sir. My question is on Noida Super Specialty Hospital. Can you share the occupancy level in Q1 and Q2 numbers, if you can?
From Noida?
Yeah.
We don't share specific hospital-level occupancy numbers.
Okay. Secondly, the 85 beds which will become operational in brownfield expansion in Noida, that would be above the 504 beds you have, or will it be 377 beds plus 85?
It is part of the 500-bed complex. Activated beds were 378, 380 beds. We'll be adding 85 beds to that activated bed capacity.
Somewhere there is your answer. I mean, you do a brownfield because your capacity utilization is high. Otherwise, you won't be adding the 85.
Yeah. It will be basically towards that 700-bed hospital, which will be-
No, no, that's the additional.[crosstalk].
The entire site. Sorry, just to clarify, the entire site is an 18-acre site. The current structure has a 500-bed capacity, 504, 505 beds. Of which 380 beds are active. We will be activating another 85 beds in the same complex. The residual 11 acres unused, we can add 700 beds. That's a separate phase to mention in our earlier communications.
Okay, fine. My second question is on the Greater Noida. In the earlier presentations, you had mentioned that there is a land parcel for 400 beds. Do you have an existing hospital in Greater Noida, or you don't have?
No, we don't have. We only have a piece of land there.
Oh, you only have a piece of land there. Okay. That clarifies my issue. Thanks a lot.
Thank you. The next question is from Divya from Ajcon Global Services. Please go ahead.
Hi, thank you for taking my question. Most of my other questions have already been addressed, so I'll just ask one about Max Lab and Max@Home. We have seen healthy year-on-year growth of around 24% and 37% respectively this quarter. However, their contribution to the overall business is relatively small. What are the key growth drivers for these two businesses going forward? Over the next three to five years, do you see them becoming meaningful contributors to the group's overall growth and profitability?
I think the key drivers of this business continue to be what they were in the past. I think there is a need, and our patients and our brand helps. We see it's had the same level of healthy growth in the past as well. I mean, it's always ± 4, 5 percentage points, but it's had a 20%, 25% CAGR over many years. It's been growing at a good thing, so we are happy to see this business. Actually, the percentage of the business of overall revenue remains the same, so long as the other businesses also keep growing at this pace. You're aware, other businesses also been growing at about 25%, 26% over the last five years.
That's the only reason, similar to international business, that it remains a smaller percentage of the As a percentage of revenue, it remains static, but it's been growing on a standalone basis. We see this, of course, we see it as being meaningful over the years to come. Otherwise, we would not be doing these businesses. We don't sort of do businesses just because they're short-term cash cows. We see them as stars of the future, and we continue to invest in these businesses. They're already quite profitable.
Okay, that's helpful. Thank you.
Thank you. We will be able to take one last question. We take the last question from Prince Goenka from Narnolia. Please go ahead.
Hi. Thanks for taking my question. I have two questions. That is, question one, in Bhubaneswar, 80 beds currently shut for renovation. So what is your timeline for making them operational, and what occupancy and EBITDA levels do we expect over the next two-three years? And the second one is, how are employees and doctor-related costs trending as a percentage of revenue? Do we expect operating leverage to improve as newly added capacity mature, or manpower costs continue to put pressure on margin?
The first one, the renovation phase should last about 12 months. The first phase should get delivery of the few OTs and beds in about three months' time. The next two-three years, we will either add another tower of another 250 beds or more. On the manpower, I missed the question. Can you repeat? [audio distortion] What was your question on the manpower operating leverage?
Do you expect any operating leverages to improve as newly added capacities mature, or will manpower costs continue to put pressure on margin?
For the new facilities that have been commissioned, brownfield capacities, they will obviously be operating leverage. That's what we mentioned in the beginning of the conversation. As the capacity gets filled up, there's operating leverage that gets. And same thing will happen for Bhubaneswar as well.
Okay. And one more question. How much 20% revenue growth in Q2 came from higher patient volumes versus improved average utilization per patient?
We have mentioned earlier. The ARPP and the IP volume growth has been disclosed there. About 12% was the volume patient growth, 12%-13% was the volume growth.
Okay. That's all from my side. Thank you.
Thank you very much. We'll take that as the last question. I would now like to hand the conference over to the management team for closing comments.
Thank you, everyone, for joining us today. We appreciate your time and look forward to interacting once again with you next quarter. Thank you.
Thank you very much. With that, we conclude today's conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.