This marks our first full quarter following the merger, bringing together Aster DM Healthcare and Quality Care into a unified healthcare platform. To discuss our operational and financial performance for Q2 FY 2027, we are joined today by the senior management team of Aster DM Quality Care, Ms. Alisha Moopen, Executive Director, Mr. Varun Khanna, Managing Director and Group CEO, Mr. Sunil Kumar, Group Chief Financial Officer. Before we begin, I would like to remind everyone that some statements made on today's call may be forward-looking in nature and are subject to risk and uncertainties. With this, I would now like to ask Ms. Alisha Moopen to share her opening remarks. Alisha, over to you, please.
Thank you, Puneet. Good evening, everyone. Happy Dhanteras to everyone celebrating. Thank you so much for joining us. This quarter marks our first 100 days as Aster DM Quality Care. Really, really proud of how our teams across Aster, CARE, KIMSHEALTH, and Evercare have come together in the shared spirit of GO GREATER. Since announcing the merger in November 2024, our ambition has been clear, to bring together four trusted healthcare brands to serve more patients, deliver more advanced care, and create lasting value for our stakeholders. Every milestone in Aster's journey has been built on trust. In these first 100 days, we are focused on bringing our people and our operations together, ensuring seamless continuity of patient care and sharing clinical expertise across our network. A key part of this effort has been strengthening our Center of Excellence and sharing their expertise across the wider network now.
Recent Center of Excellence include the ARISE Robotic Spine Institute at Aster CMI, the CARE Cancer Institute in Raipur, and the Fetal Medicine Centre at Aster Medcity. These centers strengthen specialist care within their hospitals and create expertise that our wider network can draw on, bringing complex treatments closer to more patients. Over the past seven quarters, since the announcement of the merger, we built a very strong growth trajectory, expanding revenue while growing operating EBITDA faster and strengthening margins. This progress demonstrates the strength of this foundation and also reinforces the strategic rationale behind our merger. Our first full quarter as Aster DM Quality Care takes this journey to a new high, with our highest-ever revenue, operating EBITDA, as well as operating margin. Year-on-year, revenue has grown by 19% to INR 2,829 crore, operating EBITDA by 25%, and normalized Profit After Tax by 34%.
This momentum gives us confidence as we build the next phase of growth together. We have also delivered INR 16.6 crore in synergies this quarter, translating the strengths of our combined network into really tangible value. This is an early milestone, but with significant potential ahead as we deepen collaboration, improve efficiency, and bring the full strength of the group. Our next phase of growth combines capacity expansion with stronger clinical capabilities. One of the most fulfilling aspects of our journey is our ability to bring quality healthcare closer to our patients in both tier 2 and tier 3 cities. Our expansion will build upon this reach with a pipeline of 4,230 additional beds, taking total capacity from 10,840 to over 15,000. Our vision remains unchanged, high-quality, physician-led care that is accessible to every community we serve, guided by compassion and clinical excellence.
We enter this next phase with greater scale, stronger capabilities, and a shared direction. Our responsibility is to translate the strengths into better patient outcome and sustained growth. I would like to take a moment to thank our doctors, nurses, and colleagues for their dedication, and all our stakeholders for their continued trust and support throughout this important period in our journey. I wish you and your families a very happy Diwali, filled with good health, happiness, and prosperity. With that, I will hand over to Varun, our managing director, to take you through our operating performance and progress across the network. Over to you, Varun.
Thank you, Alisha, and good evening, everyone. It's been immense pride for me to see our teams across Aster, CARE, KIMSHEALTH, and Evercare come together as one organization. Today, as I share our full first quarter performance for Aster DM Quality Care Limited, I want to recognize the people who made it possible. Throughout the integration, they kept patient care at the heart of their work, ensuring continuity of care and no disruption to clinical services. For us, coming together translates into tangible benefits for patients through stronger clinical teams, access to advanced treatments, and the collective expertise of our wider network. We are delivering these benefits hospital by hospital while remaining focused on the quality of care, the efficiency of our operations, and the trust patients place in us. The trust is reflected in our first full quarter together.
We served 2.2 million patients in Q2, up 12% year-on-year, with more of them coming to us for complex care. Our combined strength is beginning to show in what we can achieve together. By bringing our clinical expertise, capacity, resources together across the network, we delivered our highest-ever revenue, highest operating EBITDA, and operating margin this quarter. Let me take you through the drivers of our performance. Our operational bed base expanded by 4% year-on-year, primarily driven by additions at Kasaragod and the Whitefield Block D. We served, as I mentioned earlier, 12% more patients during the quarter, reflecting stronger demand across the network. With occupied beds growing at 8%, which is faster than the operating or the operational bed capacity, occupancy improved by 335 basis points to 68%, demonstrating better utilization of our expanded bed base.
Alongside our growth, our investments in clinical capabilities enabled us to serve more patients requiring complex care across orthopedics, gastroenterology, nephro-uro, and oncology. This reflects the strength of our clinical talent, with our doctors and care teams bringing advanced medical expertise and complex care closer to the communities we serve. We onboarded 100-plus doctors in the first half of the year and launched new COEs this quarter, including, as Alisha alluded to, the ARISE Robotic Spine Institute at Aster CMI, the CARE Cancer Institute in Raipur, which is a very big one, and the Fetal Medicine Center of Excellence at Aster Medcity. Complex care is growing across the network, with robotic surgeries growing 39%, kidney transplants growing 31%, joint replacements growing 29%. Our hospitals are also widening access outside the metros.
Aster MIMS Kasaragod performed the district's first mechanical thrombectomy, while KIMSHEALTH Nagercoil launched a deceased donor transplant program and a comprehensive stroke unit. The benefit of operating as one integrated network are increasingly evident in our clinical outcomes. Leveraging the clinical expertise of Aster CMI, CARE Banjara successfully performed its first adaptive deep brain stimulation procedure, while specialist teams from Aster CMI and Aster Whitefield supported four transplant procedures across CARE Banjara, Aurangabad, and Indore. This exemplifies our approach to clinical synergy while developing deep expertise within our COEs and extending that knowledge across broader network. We are now replicating this model in advanced transplants, TAVI, and robotic spine surgery, while simultaneously building local clinical capabilities to ensure long-term self-sufficiency and excellence across all our hospitals.
Furthermore, we invested more than INR 600 crore in medical technology over the last 18 months, and this is to enable the endeavor of enhancing complexity in our system. In Q2 alone, we added one LINAC, one digital PET-CT, three robots, two cath labs, and one MRI. Higher patient volumes, more complex treatments, and a favorable payer mix helped us grow our revenue by 19% to INR 2,829 crore. With more patients using our existing facilities, we were able to spread our costs better. This helped operating EBITDA grow by 25% to INR 678 crore, with an operating margin this quarter at 24%. Let me now turn over and talk about the first half performance across the different hospital maturity categories. We always talk about maturity categories. Our mature hospitals, which represent 64% of our operational beds, contributed 73% revenue to our hospitals, 83% of our total operating EBITDA.
The segment delivered 18% revenue growth, led by 11% growth in total patient volume, which further was supported by increasing clinical complexity. Our focus hospitals represent 15% of operational beds, contributing 15% of the total revenue. Investments in strengthening clinical capabilities helped drive a 7% increase in total patient volume, resulting in 13% year-on-year revenue growth. Our emerging hospitals, and this is, mind you, the new hospitals that we launch, represent 10% of our operational beds, contributing to 6% of the revenue contribution, grew 53% in total patient volumes, 53% growth in total patient volumes, which then led to a 62% year-on-year revenue growth as well. This was largely led by Kasaragod and Nagercoil, the two hospitals that we've opened. At our underperforming hospitals, total patient volume grew by 7%. This was supported by higher occupancy, growth in IP volumes, and better conversion of outpatients to inpatients.
The revenue of this segment grew strongly by 24%, while operating EBITDA more than doubled. Our commitment to quality continues to receive recognition. CARE HITEC City received JCI accreditation, while Aster MIMS Kasaragod received NABH accreditation. Furthermore, Aster DM Quality Care was named Healthcare Brand of the Year at ET Healthcare Awards 2026, and CARE Hospitals was named ET Best Healthcare Brand for the second consecutive year. Several of our hospitals featured in Newsweek's World's Best Hospitals 2026 and Outlook's National Best Hospital Rankings, including 12 specialty rankings. The benefit of working as one integrated platform are also becoming evident operationally.
In Q2, and this is about the synergy that Sunil and I have spoken about earlier, we realized INR 16.6 crore of synergies, taking our annual run rate to about INR 65 crore against a full potential of what we believe will be about INR 200 crore of synergy across the levers that we mentioned earlier. These benefits support our ability to keep investing in patient care and grow our network. Delivering on the commitment of excellent patient care requires continued investment in clinical capability and capacity. Over the last 18 months, we've invested more than INR 1,200 crore across various projects, growth, and refresh CapEx. With a current bed capacity of 10,840 and a pipeline of 4,230 additional beds, we are heading towards the 15,000 bed capacity target that we spoke about earlier. Our expansion combines additional capacity at existing hospitals with the new facilities.
Around 47% of the planned beds are brownfield, 53% are greenfield, allowing us to deepen our presence in established markets. The pipeline includes the 454-bedded Aster Trivandrum Hospital as a part of our FY 2027 expansion, which is progressing well on its timelines. Our first full quarter together gives us confidence in the opportunity ahead. We maintained continuity of care, served more patients, and expanded access to complex treatments. As one team with shared culture, we remain committed to investing in our people, technology, and capacity, guided by patient care and clinical excellence. As a unified organization, our purpose is to deliver the highest standards of care for every patient who trusts us with their health. Thank you for the continued trust and partnership, and happy Diwali to you and your families. I now hand over the call to Sunil for the financial performance. Thank you, Sunil.
Thank you, Varun, and good evening, everyone. Varun has taken you through our operating performance. I'll now walk you through how this translated into financial performance, followed by our balance sheet and capital allocation priorities. Before I get into the numbers, a quick word on our reporting basis following the merger. The merger has been accounted for under the pooling of interests method, in simple terms, at book values with no fair valuation of assets and liabilities, which is much more easier, effective from 1st July 2026. So our reported LR results for the quarter and half year ended 30th September 2026 include Quality Care from 1st July 2026 onwards. However, prior periods have not been restated, so the reported numbers, which is uploaded as part of the LR results, are not comparable year-on-year.
To give a like-for-like view, our earnings presentation or the deck combines Aster DM Healthcare's reviewed figures with Quality Care pro forma figures for the comparative periods, basically the year-on-year basis. All growth numbers I quote and what Varun and Alisha have quoted on the combined basis are on combined basis. We will align comparatives with Quality Care's audited numbers at full-year results going forward. The balance sheet that is presented as at 30th September 2026 is combined basis. Starting with quarter, revenue grew by 19% to INR 2,829 crore, while operating EBITDA increased 25% to INR 678 crore. Operating EBITDA margin expanded by approximately 111 basis points to 24%. Normalized PAT after non-controlling interest increased 34% to INR 281 crore, with the normalized PAT margin improving to 9.9% from 8.8% on the previous year same time. ROCE for the quarter stood at 23%, 152 basis points improvement over previous year.
Turning to the first half on combined basis, revenue increased by 20% to INR 5,429 crore, while operating EBITDA grew by 27% to INR 1,255 crore. Operating EBITDA margin improved to 23.1% from 21.8% a year earlier. Normalized PAT for the half year after non-controlling interest increased 27% to INR 457 crore, with a margin of 8.4% compared with 7.9% a year earlier. Coming to the balance sheet, gross debt stood at INR 3,959 crore as at 30th September 2026. Against this, cash and bank balances and current investments stood at INR 2,240 crore, resulting in net debt of INR 1,719 crore. Excluding lease liabilities, our net debt to EBITDA is 0.87 times, comfortably below one. Including lease liabilities, it is 1.72 times. Both ratios are on trailing 12-month basis.
During the first half, on a combined basis, we invested INR 400 crore in CapEx, out of which majority is for ongoing projects and balance is on medical equipment. Our balance sheet gives us the flexibility to support ongoing operations and the investments we have planned. As we execute our expansion program, we remain focused on disciplined investment in capacity and clinical capabilities, continue to realize the integration benefits, and careful management of debt and liquidity. With that, I hand it over to Puneet to begin the question and answer session. Thank you very much.
Thanks, Sunil. Dear participants, during the Q&A session, you will get a chance to ask a question by raising your hand through the raise hand icon in Zoom application at the bottom of your window. We will call out your name, after which your line will be unmuted, and you will be able to ask a question. I would like to also request to all participants, if you can introduce yourself with your name and the company that you are associated with before asking the question. If you are not associated with any company and you are an individual investor, you can highlight that as well. Moving on to the Q&A session, the first question is from Mr. Tausif Shaikh.
Good evening. This is Tausif Shaikh from BNP Paribas. Congrats on a good set of numbers. 19% growth looks phenomenal without much of bed addition. My first question is to Varun Khanna on the potential merger synergy, which we have highlighted of INR 200 crore for the next three years and annualized rate of INR 65 crore. Varun, can you explain us how this synergy benefit is spread equally in next three years? Usually the case should be the initial few years, the benefit could be more. Can you give more clarity on this?
Hey, Tausif. First of all, thank you. It is just the first quarter, and we have been able to get to a INR 65 crore run rate. I am not sure that those INR 200 crore will be over three years. We could do it far faster. This INR 200 crore synergy, you are right, will be skewed towards, we anticipate that over the next four quarters, on a run rate basis, we will be able to impact this entire synergy that we speak about. Between Sunil and myself, I think we feel that another three to four quarters, on run rate basis, we will impact this. The way to see it is that INR 16 crore we have already got to, which kind of gets us to a INR 65 crore run rate, already in the first quarter. You are right.
If the sense that you want to get from me, that will we be able to front-load these synergies, the answer to that is yes.
That is helpful, Varun. Next question is on the centralized procurement of consumables, which we have been talking from last few quarters. Varun, can you tell us what is the incremental cost savings we have been able to negotiate with our vendors, as a joint entity? Any numbers like 10% or 20%? What is the benefit one can assume? Mainly because if I see the gross margin, I think we have reached a level with the rest of the competitive listed peers.
Tausif, one, I think if I go back to the synergy side of it, let me explain to you. We look at a synergy wheel, which is a 10-point synergy wheel. And we have started to now see that holistically. Sometimes, a bulk of the synergy is being driven by a combination of clinical programs, clinical costs, material costs, indirect costs, efficiencies that we bring in, and talent sharing. It becomes very difficult for, we will end up, Sunil and I will only be doing this exercise to bifurcate our numbers. Do not look at it only from a MAT cost standpoint. It is an efficiency line, and for every procedure, the efficiency line could vary in the breakup a little bit. But I will not necessarily take out a deduction that MAT cost cannot get better.
Not that I have a number to share with you, but let me remind you again, we look at the wheel that we look at is business KPIs, MAT cost, international medical tourism, quality and accreditation, F&B insourcing. I told you that insourcing is a large part of it for us. Could be IT integration along with the clinical piece of it. I just told you, talent sharing is becoming a big piece for us. If we are able to share the same talent across multiple hospitals, we do not end up paying extra for it. Somewhere that adds to the gross margin finally, because talent cost is pretty variable. Indirect cost is, again, a very important piece that we are working on. We never thought we could drive those kind of synergies there, and that is turning out significantly better than we anticipated.
Renewable energy is another piece that we have been very focused on. One, from an ESG standpoint, for our commitment to delivering that, and other from a cost standpoint. Needless to say, I think the academics and nursing work that we do across our network also enables a lot for us to better the cost structure. That is the synergy side of our business. On MAT cost, I will certainly not deduce that we cannot get better. We will continue to try and get better.
Thanks, Varun. I will get back in the queue.
Thank you, Tausif.
Thanks, Tausif. The next question is from Ms. Damayanti. Damayanti, can you please unmute yourself and ask the question?
Yeah. Hi. Good evening, everyone. I hope I'm audible. This is Damayanti from HSBC Securities and Capital Markets Limited, Mumbai. My first question is again on cost synergies, a clarification. When you mention next three to four quarters will be the time when you will likely deliver majority of synergies. Just wanted to understand, you will completely realize that INR 200 crore kind of number, or it will be front-loaded in next three to four quarters? If you can just help me understand that.
Sunil, you want to take it?
Yeah. Thank you, Varun. Thank you, Damayanti, for the question. I think Varun called out very clearly. For example, if you look at our earnings deck also, we have said that INR 16.6 crore we achieved in quarter two. But the run rate what we achieved is INR 65 crore, right? That means we know the number which we're going to get in next four quarters. So when Varun said the next four quarters, we are going to hit that number, that means the run rate basis, we are going to hit that by fourth quarter. And full number, we should be able to realize by sixth or seventh quarter. That's where we are.
Got it. That is very clear. Thank you. My second question is, in your 100 days of working as a combined entity, for management, if you can point out two or three points, which you would like to address or work on a priority basis, to really drive the overall momentum. That will be my second question.
Thank you, Damayanti. There is a lot happening in the first 100 days. Honestly, sometimes I feel it is overwhelming. First of all, Damayanti, three, four things, I think, to answer your question. One, the first priority was delivering care in a non-impacted manner to our patients. The fact that we have been able to deliver care to 2.2 million people, I think we have done a fantastic job of that. The merger has only improved or enhanced the way we deliver service. Because we have also, as we got into the merger, I think the first thing we did was we benchmarked everything. There are two ways you look at a merger, three ways you look at a merger. First, to try and benchmark what within the network is done well, where. Right?
Across our four hospital chains, Aster, CARE, KIMSHEALTH, and Evercare, there were a lot of things which one part of the network did better. So we benchmarked that. We realized that we have to bring the first part of our job is to bring the entire network to that benchmark before we externally start to validate and start to grow beyond that. So I think that was the second piece that we did. Now, that panned across clinical, that panned across network, delivery, technology, MAT cost. A simple part is that we also realized after we merged, and this is the time Sunil and I started working together. Otherwise, Sunil was hiding his data, and I was hiding mine. But as we merged the entity, we realized that 30% of articles were bought cheaper by one entity versus the other. The rate rationalize was simple.
One fine day, you got to buy at the price that is the lowest common price. You do not pay more across the network. On technology, similar savings accrued. On insurances, similar savings accrued, et cetera. A lot of people rationalization happened. If you look at our P&L, we have not grown the people cost. Our people cost growth is significantly lower than the volume of patients that we have been able to handle.
Outside of that, there were two, three other priorities or KPIs that we set for ourselves. First was keeping our flock together. That we have done very well. We have taken a target, I will not tell you what the target was, of retaining the top tier talent, which is the top 20 people. We have not lost anybody. The top 100 people, we took a percentage of attrition that could have happened possibly on account of the merger.
This is a merger of two very large companies, right? There also we've fared significantly better. I think what we've been able to do on talent management by virtue of what Alisha alluded to, a term called GO GREATER. That GO GREATER is not just a term. It's not a war cry that we came out with. We had multiple communications across our network. 50 physical employee engagement sessions happened, multiple trainings happened. All of that, I think, is enhancing the way we are delivering care. I can go on the—
Yeah.
Varun, if I can just add to what you said—
Please, please.
Right now. I think what the point that Varun was talking about, keeping our flock together, probably the most important thing for us, making sure that our people are there's no disruption at all, right? I must say that we've been doing repeated pulse surveys, engagement surveys, and the sentiment, morale being so strong, that's the only reason we're able to deliver these results. I think that's been one of the biggest positives of this quarter because, of course, that was a cause of concern for us going into the merger because it's a massive merger and lots of people coming together. I think all the early signs seem to be very positive, and that's very reassuring for all of us, and hopefully to all of you also in that aspect.
Sure. That is very helpful. My last question will be your team's thought on some of the recent regulatory development which we have seen in the industry, say, price capping for oncology drug or what the state government of Kerala is trying to explore. Any comment from your side will be helpful.
Sorry. I do not know if there is a specific question in it. We do not look at our business, and I have said this earlier as well, we do not look at our business through a pharmacy lens, right? We do not think it is the right way as well, Damayanti. Maybe I will get to that. Our business, it is not a retailer business. It is a service delivery business largely. When I say service delivery, it is an integrated clinical care business. A large majority of our treatments are delivered through packages, where medicines, consumables, effort from the clinician and from nursing, infrastructure, all of that comes together, right? Considering that a bulk of it gets from a service standpoint, I think the regulatory pieces only make it better for us.
I mean, the other piece that, if you ask me my view around it, we have actually welcomed some of these measures, and making oncology care more accessible and affordable. I told you that oncology is a focus area for us, and nearly 75% of our operations are in tier 2 and tier 3 markets. I have a feeling, and we all feel the same way at Aster DM Quality Care, that this will further enhance access to quality cancer care in these regions, and will certainly give a huge impetus and boost to patient volumes. Cancer being expensive, a lot of people are not able to get care. For us, as we get into tier 2, 3, which are underserved in cancer, certainly, I think this will be a significant help. The impact of current regulation is limited to specific drugs in oncology.
We do not have an impact at this point in time. I think it will come into play, and we will figure out what happens. But do not see that as a very big issue at this point in time, if I can just leave it at that.
Sure. Thank you for your response. I will get back in the queue, and all the best to your team.
Thank you, Damayanti.
Thanks, Damayanti. The next question is from Mr. Kunal. Kunal, can you please unmute yourself and ask the question?
Yeah. Hi. Good evening, everyone. Kunal Randeria here from Axis Capital. Varun sir, in one of the slides, where you have divided the hospitals into mature, focus, and so on. So how should we understand the difference between focus and underperforming? Do you mean by focus, these are underperforming hospitals in your view, but have the potential to be as- The profitable is mature ones, and underperforming ones, sorry, are the ones which you believe, you do not hold out much hope for improvement?
Hi, Kunal. Kunal, first of all, I am very happy that I am getting a question on that slide because we have been wanting all of you to look at that lens. That lens matters a lot to us and to you as well. First of all, just pull up the full slide. Let me just look at the slide for a minute. Yeah. First of all, I think the mature category is very clear to you. It is more than 25% EBITDA. It is 10-year-old hospitals. The best part of that is that 64% of our beds are sitting there, delivering 73% revenue and 83% EBITDA. The other question, emerging is pretty clear, I think. Your question is more on underperforming and focus. Focus is a network of hospitals which have not got to 25% but are still, from a tenure standpoint, pretty mature.
Therefore, we want to get them there, and they will get there. In fact, we have seen consistent improvement in the operating EBITDA percentage over the last five, six quarters that we have been reporting this. Focus is currently where you see the improvement opportunity is pretty large, but the bucket is, I think it is 11% of the total 5% of the revenue comes from this. It is a small bucket in terms of revenue contribution to our network. There, things were not going well, so therefore they were called underperforming, for some reason or the other. It is a little bit of, if I may call it, tail, from a financial performance standpoint. But there, now we have been able to see significant upside. If you see this quarter, I think we are 700 basis points up in terms of productivity or EBITDA there, and therefore, that is also becoming significant.
But that is the fine delta. One which is structured to be a mature, and the other one is, there are reasons for it to be a laggard, and they may not ever get to a 25% EBITDA, but will continue to contribute a small percentage of the overall EBITDA and the revenue. Does that make sense?
Yeah, sure. That is helpful. But is there any particular region, or these are some individual hospitals across cities that could be maybe not performing as per your expectation?
Sorry, it will never be a region. It will be smaller hospitals, subscale smaller hospitals, that because of that nature, don't end up being a 25% hospital. I will give you an example. A 60-bed hospital, or a 70-bed hospital in Hyderabad, or a 65-bed hospital in Kottayam, may not be able to deliver 25% EBITDA.
Yeah, sure. Understood. Just carrying forward from one of your earlier points where you said how you are keeping your flock together.
Yeah.
So, see, let's take the state of Kerala, right, where you and CARE had a presence, Aster had a very big presence. So how has the leadership of, now the new leadership been able to accommodate both the individual leadership of Aster and CARE over there?
First of all, we don't look at leadership as Aster and CARE.
Oh, sorry, Varun Khanna, to cut you, but what I meant was Aster had its own maybe leadership there. CARE would have some, maybe Kerala cluster CEO or something. How can you accommodate both in those positions now?
Kunal , the beauty of our leadership is that none of them see themselves as CARE or KIMSHEALTH or Evercare or Aster leadership, right? I think we have all come together and owned the company well before day one, right? That was the meaningful part of our, like Alisha's spoke, commitment to enabling that. If we did not get there, we wouldn't have been standing here today with this kind of performance, right? Also, there are strategic ways that we manage that. Let me give you a few cents. We grew or kept at the same level everybody in the organization. The first commitment was that either people will get more from the opportunity that we have created through the merger, or they will continue to do what they were doing from a scale standpoint. That was a big statement to make.
That was a very big statement to make. So each one of our people have actually got impacted favorably in many ways. Now, if you look at the leadership team, not many changes, because hospital levels, nothing changes, honestly. Now, if you look at Trivandrum, for instance, and let me tell you that. In Trivandrum, we had Dr. Sahadulla helping us manage Trivandrum, as you know that he has been running KIMS Trivandrum previously. We have a local leadership team, and the same leadership team today is going to drive Aster Trivandrum Hospital, right?
So that is how harmonious the entire equation is. Al Shifa, for instance, was being managed by KIMSHEALTH earlier, but geographically, it should be managed by somebody who is sitting in northern or central Kerala. It is now managed from there. The CARE team used to manage Maharashtra, for instance. They used to manage Nagpur and Aurangabad.
But there is a Kolhapur as well. So now Kolhapur, Aurangabad, and Nagpur should be managed by the same guy, and we have just brought it together from a regional management standpoint. So all of that has played out in a very thoughtfully, carefully developed org structure. That is, I think, been the key, and we have been able to provide growth to people. But I think I must also say that I always say this, that life is all about amplifying, where AMP plays out, accountability, motivation, and purpose. So we worked on purpose, we worked on motivation, and I think we have got a great set of accountable people, who have then enabled all of this transition and transformation on the ground. So, I know sometimes sounds too good to be true, but you should believe me that, Kunal, this is true.
That is good to hear. One more question, perhaps for Sunil, if I can. I heard your comments on how some of these synergies are getting realized pretty fast. In the next 18 months, you have around 1,200 greenfield beds coming up. Kind of fair to assume that some of the synergies, benefits that you are getting will be perhaps offset by the initial losses from these hospitals, and perhaps 2029 could be a year where there is maybe a J-curve kind of movement in margins?
Thank you, Kunal. See, I think you remember this question has come even previously also. What we always said is that, and which is actually true, is that all the greenfields coming in clusters, which we are well aware. For instance, we have done again, repeatedly again. For example, Whitefield, we broke even in three months, Nagercoil done in four months, Kasaragod in nine months. You have seen the losses, right? It is very, very negligible. So we do not see a drag on our P&L. That is the first thing, whether synergy there or not. Actually, synergy coming in will bring more like a backup plan for that one, per se. So being that in the nature, we do not see a complete set-off of the losses against the synergy which is driven.
Varun called it very clearly, within four quarters, we will hit the complete run rate, and you will see full number coming in six to seven months, seven quarters from there.
Got it. That is very helpful. Thank you, and all the best, and happy Diwali to the entire Aster team.
Thank you, Kunal. Happy Diwali to you as well.
Thanks, Kunal. The next question is from the line of Dr. Bino. Bino, can you please unmute yourself and ask the question? Hello? Bino, we cannot hear. We are not able to hear you. I think moving on to the next question is from Mr. Shubh Kalra.
Hi, am I audible?
Yeah, you are audible.
Thanks. My question is, could you please call out the revenue EBITDA and EBITDA margin for Aster DM and Quality Care separately for this quarter? Basically, I wanted for like-to-like comparison.
Shubh, [Foreign language] merge [Foreign language] . [Foreign language] demerge [Foreign language]. Shubh, sorry, we are not sharing those numbers anymore. All of those numbers as Sunil Kumar mentioned, I will pass it on to him actually, are like-to-like. We have ensured that all of what you see is comparable, and we see it as one network. We will always see it as one network. I would urge you to see it like that. Sunil , if you can add anything to those numbers.
No, I think Varun, you called it very clearly. Shubh and I think even called out in the speech, whether it is the 90% growth and the 25% growth EBITDA, all are combined basis. Also, with the leadership all together, I do not think so. Even books-wise, we are not tracking. Even MIS, monthly basis, I do not think so we are reviewing what is Aster CARE and all. None of the reviews are also happening on the brand basis also, right? It is all 38 hospitals we look together.
Yeah, well, fair enough. Thank you.
Thank you, Shubh. Apologies, we couldn't give a direct answer to that.
Okay.
Thanks, Shubh. Dr. Binod, can you now unmute yourself and ask the question?
Can you hear me?
It's still disturbing. Now, I feel better.
Hello?
Yeah, it is better now.
Okay. Thank you. Good evening, and congratulations again on a great set of numbers in the first combined quarter. The EBITDA margins you have reported has been great, and operating EBITDA margin, and it goes around 23 and a half. Is that the base once the full synergies are in place, like Sunil said, around six, seven quarters down the line? What is the kind of EBITDA margins we are looking at?
So hi, Bino. I am assuming the question that, your voice was breaking, so intermittently we got it. But the question you seem to be asking is that our half-year number is 23 and a half, our quarterly number is 24.
No, no. Sorry, I am sorry. Let me repeat. I hope I am clear now.
Well, you're still breaking now. At least for me, you're still breaking.
Yeah.
Let me join back.
Thanks, Bino.
Sure. In the meanwhile, if any of the attendees would like to ask any question, please pick up and raise your hands. The question is from Dhvani. Hi, Dhvani. Can you please unmute yourself and ask the question?
Hi, am I audible now?
Yes, you are audible.
I wanted to understand one thing. Firstly, in terms of your operational bed capacity, would it be possible to provide census and non-census breakup?
Dhvani, thank you for that question. On an operating 10,600 numbers, what we say, out of that you can take 20% as the non-census beds and 80%, 81% as the census beds.
Yeah, that's helpful. Secondly, on the margin matrix that you've provided on the mature hospitals, if I see on a H1 to H1 basis, the incremental flow through to the margins has been almost 40% because you all have grown at 20%, which gives us the operating margin of 30.2. How do you see this going forward? What are the other levers that we have for this growth to continue or this margin to remain where it is?
Sure, Dhvani. Your question is the mature segment operating EBITDA 30.2%, is that fair?
Thanks.
How do you see this going forward? I think three pieces to this. One, efficiency still continues to be an important lever for us. As the larger hospitals continue to scale up, their costs don't grow in the same proportion. Two, I think this is one segment which is growing pretty well for us. The other thing that you should be mindful of is that this is where we've been talking about the brownfield expansion. One of the big themes that we've spoken about historically as well, and that's why you see a very significant component of our bed growth coming from the brownfield piece of it, that we will continue to keep growing the mature segment from a revenue standpoint. To ensure that capacity gets de-bottlenecked, we are adding beds wherever capacity will become a constraint.
I would see that these will be very productive assets as they get larger, because there is a bed addition of 2,200, give or take, if I have the number right. 2,200 beds will get added to this mature segment, and they will start to fire from day zero. They will not have a lag. That should answer your question. I think that will continue to be very, I would say, very profitable, clinically very phenomenal. The clinical complexity that I talk about, this is where the clinical complexity is also growing. This is where we are making investments into robots, we are making investments into assuring that we have the entire gamut of CONGO covered. This is where we are extremely focused on developing quaternary care services as opposed to what we deliver today.
Therefore, I think they will continue to be ARPOB accretive, they will continue to be complexity accretive. They will continue to enhance a little bit on ALOS as well. If there is a capacity bottleneck, then you can be assured that we have already thought about it, and we will enhance capacity in the assets that have any bottleneck coming up.
That is helpful. Thank you.
Thank you.
Thanks, Dhvani. I think Bino has come back in the queue. Dr. Bino, can you now unmute yourself? I think this will be probably the last question from the participants.
Hi, good evening. Is it clear now?
Now it is better.
Okay, great. I am sorry about the last two times, and congratulations on a great set of numbers in the first combined quarter. My question was that, this quarter, 24% operating EBITDA margin, and if I look at the reported EBITDA margin, it is around 23.5%. Is that a base to look at? It is a great set of margins. Is this a base to look at? From here, like Sunil said, over six, seven quarters, we will see the full benefit of synergies. Where should we look the margin, see the margin going from this 23.5%, 24%?
Bino, thanks for the question. As you called out for the quarter two, it is 24%. When you look at a YTD, which is a H1 FY 2027, it is 23.1%. You should also, even in this quarter, I think both CONGO and non-CONGO has done well. CONGO has grown more than 16%, non-CONGO has grown more than 19%. It has also been a little bit push on the medical specialties also, because some of the geographies, we have seen the doubling of the medical cases and also specifically the dengue cases and everything. There has been a little bit push from the medical cases also in this quarter. Also, we need to see that in healthcare, it is also about seasonality. Now, the quarter three and quarter four is more of festivals.
You will not see the same level of growth of the margins going to be there. But what we have given always guidance is that post-merger, two to three years, we will want to be there at between 24%-25% on full year basis, which we need to be always be mindful. We should not just refer to one quarter, because base, when you look at H1, we are still at 23.1%. The broad guidance which we have given is two to three years, which includes the synergies, which includes the greenfield, and also which includes almost 1,800-2,000 plus beds of brownfield, which we are talking about. And also we will do some acquisitions. We have got a good war chest today. Keeping this in mind still that two to three years, 24%-25% margin looks very well.
Yes, if we are able to do well in the synergies and do well on the greenfield turnarounds, I think we should do well.
Understood. So in two to three years, you will reach that 24%-25%. That is if I got it correct.
Yeah.
Okay. Second question for Varun . Varun, there was an earlier question around price control. So obviously, the price control that has come in right now is only on the drug margins, which obviously, like you said, is not appropriate in the context of a hospital business. But at the same time, there are some other movements happening, especially in the parliamentary committee in the Kerala state. There is some assembly committee which has recommended a comprehensive price control on hospitals. Suppose some sort of a pricing regulation, which is all-encompassing, comes through, how would you look at it? First of all, what is the chance you think of that coming through, and what do you think could be the impact, and how do you plan to deal with it?
Bino, you know the answer to that question. The answer to that question is very simple, that either I have to be a fortune teller, or I have to be in the parliament, and I am none. Very difficult to predict. Again, I think if I go by media, and what I read in the media, it may be very difficult to. Every report cannot go back to an assessment table. Ifs and buts are a part and parcel of life. I think I will give you a broader context, and that cannot be taken away. Private healthcare today delivers 65% of care in India, and this has evolved over the last 10- 12 years. Otherwise, India would have not enabled this level of complexity for its citizens. We are not done yet. We have just covered a part of the metro problem, right?
You got 850 tier 2, tier 3, tier 4 cities which are still under capacity. On do-nothing basis, if all goes well and all of you stay healthy and nobody gets sick, et cetera, and you take care of yourselves, India will still need 1.5 million beds over the next 10 years. In context, 1.5 million beds, you are looking like $130 billion of cash going into the industry, right? That is only possible if there is an economic rationale of putting this kind of money in a business. I do not know, correct me if I am wrong, Sunil. We have a 10% PAT, right?
Right.
We have a 10% PAT business, man, and you need $130 billion. I think everybody understands that for India's evolution, for India's health, for all of us to stay healthy, this is going to be incredibly important. So I am sure someone is looking at both sides of the picture, and therefore, I do believe that while we hear a lot, while we see a lot, especially on Kerala, I have considered Kerala, even when I was not operating Kerala, as one of the finest health systems in the country, by far. This is one state where I would say it is supported by both private and very strong public networks. What I like about Kerala is it is a very evolved network, and it has to be, because this is the highest hospitalization rate in the country as well.
Keralites have always used healthcare to keep healthy, and that is incredibly important. The government has played a very important part in building this ecosystem, right? Nobody understands the need for healthcare as good as what Kerala understands. So I am sure they are looking at it in the right spirit. I have told you that we will engage very constructively with them. We are committed to delivering quality healthcare at the right price, so that it is seen as extremely high value in every part of the country that we operate. So, I will give you that much, and those are the fundamentals which cannot be shaken, right? Which is why I always look at it from a macro perspective, and therefore, my responses are more macro.
Thank you. I hope people who take decisions also understand what you said.
Thank you, Bino.
Thank you.
Thanks, Binod. This being the last question for the earnings call, thank you all. This concludes the earnings call for this quarter, Aster DM Quality Care. I thank the management and all the attendees for joining us today. If any further queries or questions, please do get in touch with us. Happy Diwali to everyone.
Thank you, everybody. Happy Diwali.