Ladies and gentlemen, good day and welcome to Fortis Healthcare Limited's Q1 SR26 earnings conference call. As a reminder, all participants' lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please take note and operate by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand over the conference to Mr. Anurag Kalra, Senior Vice President of Investor Relations at Fortis Healthcare Limited. Thank you, and over to you, sir.
Thank you. A very good morning and good afternoon, ladies and gentlemen, and thank you for taking the time to join us on our Q1 FY2026 earnings call. The call is being led by our CEO and Managing Director, Dr. Ashutosh Raghuvanshi. We have Mr. Vivek Kumar Goyal, our Chief Financial Officer, from Fortis Healthcare Limited, Mr. Anand Angadi as our CEO of Agilus Diagnostics, and Mr. Akshay Tiwari, who is the CFO of Agilus Diagnostics, is also here with us. We will begin with some opening comments on the quarter gone by by Dr. Raghuvanshi, post which Anand will take you through his highlights of the diagnostics business, and then we shall open the floor for questions and answers. Over to Dr. Raghuvanshi.
Thank you, Anurag. Good morning, everyone, and thank you for taking the time to join us on our Q1 financial year 2026 earnings call today. Before I take you through the financials, let me share some key business highlights and demonstrate the strength of our business going forward. As part of our inorganic growth strategies, the company recently, through its solely-owned subsidiary, completed the acquisition of Shrimann Superspecialty Hospital in Jalandhar, Punjab, which added 228 beds to its net worth. This transaction further strengthens our presence in Punjab from approximately 800 beds to over 1,000 beds. The acquisition also provides us with the opportunity to add another 225 beds by expanding the existing building and utilizing the SSN land parcel, taking the total to over 450 beds in the future. In July 2025, the company entered into an Operations and Maintenance Services Agreement with Gleneagles India.
Under the agreement, Fortis will manage the operations of approximately 700 beds across five hospitals and a clinic within the Gleneagles India network. Fortis is entitled to receive a monthly service fee at the rate of 3% of the net revenue. This development marks a significant expansion of Fortis Healthcare's operational footprint, and the expanded scale enhances our ability to deliver integrated, high-quality healthcare services across more geographies. The combined strength of both the networks will help us leverage synergies and embrace efficiencies. With these additions, the company now operates 33 healthcare facilities comprising over 5,700 beds across 11 states. Coming to the financial performance, I would like to highlight that we have witnessed a healthy start to the financial year 2026. Our hospital business continues to perform well, both in terms of revenue and margins.
On the diagnostic services front, we have seen an improvement in revenue growth, and margins continue to trend upwards. We reported a consolidated top-line figure of INR 2,167 crore, a growth of 16.6% over Q1 of financial year 2025. Noticeably, our hospital business revenue has grown 18.6% to INR 1,838 crore, while Q1 financial year 2025 diagnostic services net revenue has grown by 6.3% to INR 329 crore versus INR 309 crore in financial year 2025. The hospital business revenue accounts for 85% of our consolidated revenue. Our consolidated operating EBITDA increased 43.2% to INR 491 crore, delivering a margin of 22.6% versus 18.4% in Q1 of financial year 2025. The hospital business reported an operating EBITDA of INR 406 crore, which translates into a margin of 22.1% compared to 18.5% in Q1 of financial year 2025.
Our consolidated reported profit after tax before exceptional items for the quarter increased 46.2% to INR 254 crore. On the balance sheet front, the company's net debt stands at INR 1,869 crore, with a net debt to EBITDA of 0.92x as on June 30, 2025, as against 0.22x on June 30, 2024. The increase in debt was primarily due to the funds raised to finance the acquisition of 31.5% BE stake in Agilus Diagnostics by the company and acquisition of Fortis brand and trademarks. On the hospital business, our RPOB increased by 10.2%, the increase reaching to INR 2.65 crore per annum compared to INR 2.41 crore per annum in financial year 2025. The growth in RPOB was driven by an improved specialty mix with oncology growing 28% YoY and contributing 16.4% to the revenue, up from 15.1%.
The other factors contributing to RPOB growth included increasing share of complex cases, as reflected by a 75% YoY increase in robotic surgeries, and also an improved payer mix with the share of institutional business at 20.3% compared to 20.9% in the same period last year. Our occupancy improved to 69% compared to 67% in Q1 of 2025. This translated into occupied beds increased by 7.8% to 2,928 beds compared to 2,715 beds in Q1 of 2025. We are on track to add capacity of approximately 900 beds in the current financial year, including those at our recently acquired hospital in Jalandhar. We expect to operationalize approximately 50% of these beds in the current financial year. In 11 of our facilities, we have reported operating EBITDA above 20% during the first quarter of financial year 2026. These 11 facilities together contributed 75% of the hospital revenue.
In comparison to financial year 2025, we had 10 of our facilities with operating EBITDA margin above 20%, contributing 73% to the hospital revenue. Several of our key hospitals, such as Mohali, Noida, Anandpur, Faridabad, and Faridabad witnessed margin expansion compared to both corresponding and trailing quarters. In addition, many of our key facilities, such as Shalimar Bagh, FMRI, Faridabad, Jaipur, and Faridabad registered revenue growth in excess of 20% compared to the corresponding previous period. Revenue from international business grew 21% compared to Q1 of 2025 and reached INR 154 crore. The contribution of international business revenue stood at approximately 8% in Q1 of financial year 2026, on a similar line as Q1 of financial year 2025. Focus on digital continues to remain core to our strategy. We have successfully implemented the inpatient modules of EMR at Fortis Vashi, the second such implementation after Fortis Manesar.
This enhances the real-time access to patient data for clinicians. Revenue from clinic digital channels via website, mobile application, and digital campaigns witnessed a 16.8% year-over-year growth in Q1. Digital revenues contributed to 29.5% of the overall hospital revenue versus 29.9% in Q1 of financial year 2025. The company further strengthens its medical talents with onboarding of specialists in the area of oncology, cardiac sciences, obstetrics and gynecology, and renal sciences. We also augmented our medical infrastructure by installing second da Vinci robots at our hospitals in Mohali and BG Road. In the diagnostics business, diagnostic revenue grew 7.4% to INR 369 crore compared to INR 344 crore in Q1 of financial year 2025. Operating EBITDA margin versus diagnostic revenue stood at 23% versus 16.1% in Q1 of 2025, excluding one-off. The operating EBITDA margin stood at 18.7% in Q1 of financial year 2025.
As a part of our ongoing network expansion strategy, the total number of new customer touchpoints reached 4,261 as of June 30, 2025. The preventive portfolio revenues in Agilus Diagnostics revenue grew 8.4% in Q1 of financial year 2026 and contributed 12% to the operating revenue. We have witnessed a steady recovery in both revenues and operating EBITDA margins. This is reflective of the brand-building initiatives undertaken over the last few quarters. We expect this growth momentum to continue going forward with a considerable network presence, balanced B2C, B2B mix, and an increased focus on product mix. I'm confident about Agilus Diagnostics's potential to scale up further, both in terms of revenue and margins. With this, I will conclude my comments. I believe our hospital and diagnostic services businesses are well positioned to maintain their positive trajectory.
Leveraging the strength of our balance sheet, we will continue to explore and evaluate growth opportunities that align with our cluster strategy and offer promising synergies. Thank you, and I will hand over to Mr. Anand Angadi for his comments now.
Thank you, Dr. Raghuvanshi. Good morning, everyone, and thank you for joining us today. On behalf of Agilus Diagnostics, I welcome you to our Q1 FY2026 results conference call. Agilus Diagnostics reported a gross revenue of INR 368.8 crores in Q1 FY2026, reflecting a 7.54% growth compared to INR 343.5 crores in Q1 FY2025 and INR 348.5 crores in Q4 FY2025, a growth of 5.8% compared to the trailing quarter. Operating EBITDA for the quarter stood at INR 84.7 crores, up from INR 55.4 crores in Q1 FY2025, with margins improving to 23% from 16.1% in the last year. In Q4 FY2025, operating EBITDA was INR 62.6 crores, with a margin of 18%. During Q1 FY2026, Agilus conducted 10.1 million tests compared to 9.57 million tests in Q1 FY2025 and 9.59 million tests in Q4 FY2025.
We added 10 labs and 160 plus new customer touchpoints during this quarter, reflecting our continued focus on strengthening presence and accessibility across the geography. The B2C to B2B mix stood at 51 - 49 in Q1 FY2026 compared to 52 - 48 in Q1 FY2025. From a product standpoint, revenue contributions for Q1 stood at 54% from routine tests, 34% from specialized tests, and 12% from our wellness portfolio. On the geography front, revenues were driven by 31% from North, 31% from South, 20% from the West, 13% from the East, and 4% from our international markets. We have also made significant enhancements to our digital platforms this quarter to elevate the customer experience, including improvised digital processes that streamline internal operations and the launch of an in-house feedback management system to capture NPS feedback.
We have been focusing on next-generation diagnostics, and it has helped our genomics portfolio to grow by about 13% compared to Q1 FY2025. We have further enriched our test portfolio with advanced offerings to support personalized diagnostics and patient care. We have launched around 30 tests in this quarter, including tests in oncology and prenatal care. Some of the important tests that we have launched are Digitrak bundles for monitoring NPM1 IDH1 mutations, a critical tool in hematological malignancy management. The comprehensive drug assay panel, which is designed for allergy testing, can provide detailed insights for precise allergy profiling. These new additions showcase our commitment to expanding cutting-edge diagnostic capabilities, driving precision medicine, and improving patient outcomes. Thank you very much, and over to you, Anurag.
Thank you, Anand. Ladies and gentlemen, we shall now open the floor for the question and answers, and I please request the moderator for this.
Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue advances. The first question is from the line of Amit Jhalaria from JM Financial. Please go ahead.
Thank you so much for taking my question, and congrats to the management on these numbers. The first question I have on the hospital performance, particularly the five hospitals: FMRI, Mohali, BG Road, Mulund, and Jaipur, have seen a sharp uptick on the sequential numbers. Is it possible to highlight the reason for the same, particularly Jaipur and BG Road? What is the uptick on CRAs?
Okay. Yeah. Hi, this is Amit. You ask about Jaipur, FMRI, and BG Road.
FMRI, Mohali, BG Road have seen a good sequential uptick in the revenues, as well as Jaipur and Mohali as well. If you can provide some reason for the same, and also if you can provide the occupancy for Jaipur and BG Road.
Yeah. Jaipur is operating around 65% occupancy now, and it has revived. Last year, it was having some challenges we have discussed in the earlier call. It has come out from that and is now on the path of recovery. It has already achieved, you know, around double-digit EBITDA margin also. That is on Jaipur. As we go to FMRI, it has been quite well. FMRI EBITDA, sorry, I'm talking EBITDA. The 20 that we have added, and we are able to fill them quickly. The occupancy level of FMRI is 88% level. BG Road, although the occupancy side is slightly struggling, is at around 56, 57%. They are able to do some quality work, and as a result of that, the EBITDA margin is quite healthy. Any other unit you want to?
Mulund.
Mulund, again, you know the occupancy for the first quarter was not that good. It is below 50%. However, EBITDA margin is about 20%. Mulund, but it is recovering quite well, and we are quite hopeful both BG Road and Mulund will start seeing good occupancy numbers going forward.
On your profitability matrix, you have shown one unit has moved up into the 25% bracket. Is it possible to highlight which is that unit?
25% bracket, you are saying?
Ludhiana .
Ludhiana has moved up in 25%. It is now about 20%. There are two units who have moved about 25% also, FMRI and Anandpur.
The second question I have on the diagnostic side, the full margins, this quarter we have reported very healthy margins. Do you expect your full-year guidance of around 22% margins for the diagnostics could be easily achieved?
Yes. Our margins, as we have seen, it will be in the range of about 22% - 23% is what we are expecting for the whole year as well.
I think going ahead, you might expect some normalization of the margins in the upcoming quarters, you mean?
Usually, the second quarter is a good quarter for us. As you know, we turn quite deep in the third quarter, and the fourth quarter will again normalize. On average, we expect that the overall margins to be around in the range of 22% - 20%.
The consolidated margins, considering the hospitals are also at around 22%, do you expect the consolidated margins to improve significantly over the last one year? If you have any guidance for the same.
We are sticking to our guidance, which we have provided in the beginning of the year, 2% margin improvement. We are excited with the first quarter number. We'll see how the rest of the year will follow.
Thank you so much and enjoy your night.
Thank you. The next question is from the line of Neha Manpuria from Bank of America. Please go ahead.
Thank you for taking that question. First, on the landmark Operations and Maintenance Services Agreements, what is the game plan here? A few of the landmark facilities are not in our core clusters, like the Bharati, Sarasit, Chennai. This does not seem to include the Mumbai facilities. Is that also at some point going to get included in the Operations and Maintenance Services Agreements? Any thoughts here?
Yeah. Neha, for the starters, we have excluded the Bombay facility because that is a separate entity among the Gleneagles India network. That would be considered separately. We would certainly explore the possibility of including that in the current arrangement.
What about the other facilities? I think Gleneagles India also has facilities in Cheddar Garden, Chennai, which technically aren't Fortis Healthcare Limited's core markets given we are located at Chennai now. From an Operations and Maintenance Services Agreement perspective, how does Gleneagles India's O&M contract actually tie into the Fortis Healthcare Limited network?
Yeah. It forms a new cluster for us. We definitely have no presence currently in the Fortis network in these markets. We are going to double down on these markets and create further opportunities we will explore. We do have a Gleneagles facility in Chennai, which does very high-end clinical work, has got fabulous clinical talent. We are going to build on the existing base of good clinicians we have available in this network. These hospitals have been there around for a long time. We will build further on that. With the combined strength of Fortis and Gleneagles, we will be able to support them to perform better. At the same time, we will get a lot of synergies, both on the clinical front and supply chain and other areas as well.
At the moment, given the service fees and the % of revenue to pay off, is that giving any part of improvement in performance that you can see from an EBITDA perspective? What I understand is Gleneagles India's margins are significantly lower versus Fortis Healthcare Limited's. Do you see that changing as you improve profitability, or is there any way we are capturing the upside that Fortis Healthcare Limited will be able to bring about in the Gleneagles India improvement in profitability?
Yes. Some of the facilities have underperformed, but the objective of this whole exercise is to get the economy of scale and get the synergies around the operations as well as supply chain, etc., and improve those profitability margins. However, for current, the arrangement is based only on a top-line fee for Fortis. That is the current arrangement.
Understood. My second question is on the hospital business. I know you're sticking to your guidance of the 250 basis point margin expansion, but given how strong first quarter has been, second quarter usually tends to be stronger, and that we are adding a lot of our brownfield capacity now. Do you think the margins surprise positively? What's keeping us at that 200 basis point margin expansion, given the brownfield technically should have higher EBITDA?
Yeah. You are right that the first quarter, which typically is subdued, has been better. This is, of course, a result of our case mix change over a period of time and the new facilities which we had added and the new modalities which we had added over the last couple of years. I think that change will continue. Although we are maintaining our margin, the momentum is strong and is expected to remain that way.
Understood. The last question on balance sheet, given our presence in west and east, since lower than a certain % of the revenue is given the presentation, is there scope for Agilus to look at inorganic opportunities to improve performance or effectively largely to grow the diagnostic business organically by adding more labs and touchpoints?
Currently, we are looking at opportunities on a case-to-case basis based on the strategic fit and what kind of value we can get from that kind of an opportunity. We are open to all geographies. It's not that we are only specifically looking at certain geographies. Especially in our focus geographies, we are looking at acquisitions that can help us build scale in that region. It's not that we are not open to any opportunity in a particular location. It's not we're not going after any specific geography.
Got it. Got it.
Thank you. The next question is from the line of Sam Srinivas from Goldman Sachs. Please go ahead.
Yeah. Good morning. Thank you for taking my question. I'm just back again on the Gleneagles Operations and Maintenance Services Agreement. If you look at the public disclosure from IHH in terms of their overall India business margins, and if I were to back out yours, Gleneagles, that's whatever. I know I'm not talking only the five hospitals, but the overall, including the Bombays, Mumbai One, very low margins, Dr. Raghuvanshi. Right? What are we trying to bring now in terms of operational maintenance that is going to help improve this? You mentioned high-end specialty and all, but at 3.5% or 4% margins, something is missing, right? What are the things that you need to bring on the table? What is the ulterior motive, right? Is it going to be eventually merged with us over time?
In that case, the asset, at least at the starting point, the margins seem to be pretty weak. I just want to understand what the end game is on the Gleneagles facilities.
Yeah. These facilities have a good potential. They are located well in the micromarkets they are in. We believe that the full potential of these hospitals has not yet been realized. That is a mix of a lot of things. One of the things, which advantage which we get in this kind of alliance, is to get synergies in terms of supply chain and other operational metrics. That clearly will be beneficial to improve the profitability profile of these hospitals. That is the idea for giving the responsibility to manage this to Fortis. At the same time, you know, in the future, we will take things as they come. However, having said that, IHH has publicly stated multiple times that Fortis is their main beacon of growth in India, and India is a focused market for them.
Definitely, you know, all possible options will be on the table at the right time.
Just expressing a concern here, Dr. Raghuvanshi, I mean, if we are given bad assets and we overpay for that, I'm the same from a valuation perspective. It's something that I hope from a Fortis perspective, those things are taken care of. Just wanted to mention that upfront.
Yeah. No, absolutely. Fortis has maintained a very disciplined approach when it comes to acquisitions, and we will continue to be conscious of that. You can be rest assured that whatever in the future happens will be done in a very transparent manner. I'm slant as well, of course.
Thank you. Just moving on to my second question, we're getting 3% net revenue starting July, which is like INR 20 - INR 30 crore, I think. I'm just saying for full year. Is that already in our guidance, or did we get any guidance for Q2 2026? I know you didn't announce it at the quarter end. How should we look at the margin guidance? It should go higher now, right, versus what it was originally?
Yeah. In that guidance, we have not considered just Gleneagles, of course. Whatever the earnings will be, because it will be part of the year, that much it will be added up. As Dr. Ashutosh Raghuvanshi had mentioned for the earlier question, we will be accounting only that 3% of the net revenue.
The value is uplifted because that goes directly to EBITDA, right?
Yes, yes. 2% EBITDA margin will go up.
Okay, sorry, I'm asking, what is our current guidance? If I add 100 bps, is that what it will end up, right? I understand. What is our 2022 - 2023 for our hospitals?
Not the 100 bps term, because if you see the revenue, you might be having some number.
700 crore and 3% is INR 20 to 25 crore. I'm just making.
Yeah, it's for the full year. If you do percentage, it will be something around 0.2% to 0.3%.
Understood. Okay. Great. Last question is on the diagnostic business. We have seen a turnaround, at least from a margin standpoint. I'm on growth again. There is a difference between growth, revenue growth, and net revenue. Maybe the growth-to-net ratio has changed slightly. The other observation I had was when I look at volume growth and ASP increase, like test utilization or even patient utilization, it is higher than our revenue growth. Is there something I'm missing? Thank you.
The volume growth is roughly around 5%. The average revenue per patient, that growth is about 4%. Quarterly, that's about 9% is what they found.
The way we look at it, while the revenue growth is 9%, the way we help with margins is that it has an element of other income also. To make it line to line basis, EBITDA margins include revenue and other income, and that is the base.
Anurag, I'm just talking revenue growth. I'm not looking at EBITDA yet. On the revenue basis, it's 6%. The revenue growth is 6% net revenue growth.
No, no. The operating revenue growth is 9%, which is 5% volume and 4% value. What you see as gross revenue here includes other income as well.
If I can clarify this 9% versus earlier 7.6%, in last year's financials, there is certain one-off income which was booked. If we take the impact of that out, then the revenue growth, what Anand is now mentioning, is 9.3%. Actually, operationally, the revenue has grown by 9.3% if we take out the impact of that one-off income which we have booked in the last quarter.
Got it.
The first case corresponding to what?
No, no. This is helpful. Just explain lastly, any one-off in any of your margins, either in hospital or diagnostics for the quarter?
No, nothing. Nothing here.
Thank you. Thank you, all the best.
Thank you.
Thank you. The next question is from the line of Amit Goila from RARE Enterprises. Please go ahead.
Yeah. Hi. Thank you. Good morning. Fantastic results. Congratulations. One question I wanted to ask you. You said that you are expecting a decision of 900 beds this year. Can we assume that you will at least have 500 based on your current occupancy of 65% - 70%? You will be having at least 500 - 550 staying beds next year, which can add a revenue of about INR 1,500 crores based on your current output?
Yes, Mr. Ashutosh, if I can answer this question, yes. I'm sorry.
Yeah, go ahead.
Hi. Hi, sir. Out of 900, this 250 beds is for FMRI units, which we will be completing by year-end only. We are December, January, sometime around that time. No major revenue we are expecting from that. Our work for Noida facility, 150, Faridabad 50, and a little bit per capability we are adding at other locations. Those will be operating at a decent occupancy level. There is another, say, 200 beds we are expecting to open for Manesar facility, which, as you know, is a new facility. There will be ramps up as per the new facility.
Very good. I'm saying for next year, for next full year, definitely we can get 600 beds additional revenue?
Yes, yes. 100%. All these expenses are coming at ground pay. I think ramps up will be quite fast.
Yeah, at least we can get here based on your current output. We can see a revenue addition of at least INR 1,500 crore here.
I'm talking next year.
Yeah, 2026, 2027.
Yeah, I think so. We will be there in and around that year.
Okay. Okay. Thank you, Vivek, and all the very best to all of you. Thank you.
Thank you.
Thank you, sir. Thank you.
Thank you. The next question is from the line of Ethan Agarwal from DAM Capital. Please go ahead.
Sir, thanks. Sir, congratulations for a pretty strong performance. The problem is, if you were to look at the last few quarters, you had a pretty remarkable improvement in both the revenue and the operating profitability for the hospital business. While you've been talking about various measures you've been taking, if you can just probably summarize the three or four main things which are worth, which have begun to fall in place for the business over the last four or five quarters, and where do you still see opportunity, and which are the major reasons for growth, barring the additions from here on, when you look at the business over the next two or three years ahead?
Yeah. I think there have been multiple factors which have led to this consistently good performance. One of the factors is that the investment which was made in clinical manpower as well as in the infrastructure in the last three, four years has started yielding results. That is one of the major drivers. That also has resulted in the case mix change. We, across our network today, have more than 14 robots, and all these robots are doing very large. The growth has been 75% from last year to this year. That kind of high-end work is growing. The second is that oncology, which we started investing about six years back, is yielding results and is growing at almost 27% to 28% this year. These kind of case mix changes which are happening are resulting in the increased RPOB levels.
At the same time, we are working parallelly on the operational efficiencies, and that is also helping to some extent. I think we still have some more ground to cover, and there are certain areas which we are working on as well.
Doctor, on the current network, is there an opportunity for us to, I mean, I don't know if you track, I don't recall, but checking this number, has there been a meaningful improvement in our ALOS? Do you see opportunity to further think the ALOS in some of our busy hospitals?
Yeah. The busy hospitals, our ALOS, we have definitely had some improvement, but it is not dramatic. We have seen some minor improvement in some of these hospitals where the occupancy levels are above 75% to 80%. Overall, I think it has been pretty stable. Going forward, we definitely remain focused on that. As I was saying earlier, robotics and these kind of procedures are becoming higher in number. At the same time, the daycare segment is growing very fast. That will all help us to reduce the ALOS further.
On the Shrimann Superspecialty Hospital acquisition, the Fortis acquisition, we have now a larger presence in Punjab. How do you look at this region now? What kind of opportunities for growth do you see? If you take Punjab as a cluster now, for example?
Punjab, you know, we have a very dominant presence. We are very far ahead of any other competition. We were together. All these beds make about 1,000 beds, and many of the units are performing. Amritsar and Mohali specifically are doing very well. We have further expansion planned in Mohali, as you might be aware. At the same time, we are planning expansion in Amritsar as well. Ludhiana is also doing all right, and Jalandhar is a facility which we have acquired. It has got good performance in the last few quarters. We expect that to improve further. This cluster, we look at with great interest because this has been the origin of the group, and we have such an edge in terms of branding over there. That is what we want to build on further.
Currently, we are not planning anything further than the current hospitals and the brownfield expansions which we will have in them. The brownfield expansion will have about 450 beds in Mohali, about 250 beds in Jalandhar further added, and about 180 beds in Amritsar we are going to add further. This is the plan for the Punjab region at the moment.
Thanks. Last question, on the payer mix, any, you know, on the skilled patients, I mean, how do you see the payer mix changing in any meaningful way as we go along?
Not really. We have seen some improvement in the first quarter, whereby our TPA and international demos has really gone up. The government demos has also gone up, but it has not gone up to that extent. That way, you know, payer mix has improved slightly. With our expansion program and the geographical presence in some of the regions, our ability to reduce this is very low. The improvement will be gradual. It will not be very dramatic.
Okay. Thank you so much.
Thank you. The next question is from the line of Bino Pathiparampi l from Elara Capital. Please go ahead.
Hi. Good morning. I'm here for the great complex. Next question for the answer, just on your capacity there. Your recommendation is about more than 5,700 operational beds. What would be the total capacity there?
Yeah. Vivek, just checking if your question is 5,700 operational beds?
Yeah.
Bino, out of these 5,700, including the Gleneagles India O&M that we just executed, we have about 1,300 O&M beds. The rest would be those P&L beds that you're talking about.
I think the participant has got disconnected. Can we move to the next question?
Yes, please.
The next question is from the line of Shahin from Lumira. Can you please go ahead?
Yeah. Thanks. This is Shahin here from Lumira. Congratulations on a great set of numbers you delivered. In response to an earlier question, you mentioned about one of the things which you have worked on in terms of investments and case mix. You mentioned about oncology, which I think is somewhere around mid-teen contribution. Can you also share on robotic surgery? What percentage, either in terms of revenues or number of surgeries that you do? What's the scope for these two issues to increase over the next, say, three, four years, or if you have something in mind, in the medium term?
Yeah. Oncology contribution is approximately 17% to 18% at the moment, but that is pure oncology. There is some oncology which gets identified as other specialties, because cancers can be anywhere. Our estimate is that approximately about 19% to 20% revenue is coming from oncology. As far as robotic surgeries are concerned, we don't track that revenue separately at the moment. We have seen a 75% year-on-year change in terms of the number of cases, procedures we have performed. That is the kind of growth we are expecting. We expect that growth to continue because we are adding more robots in our network. Some of the hospitals, we have already got the second system in place. Some of the hospitals which did not have a system earlier, we are in the process of installing robotic machines as well.
I expect that growth will happen in that, maybe not 75% next year, but at least 50% next year as well.
Okay. So your RPOB growth can sort of be in five, six digits, at least, for some time. Would that be something to look forward to?
Yeah. The RPOB growth is, as I was telling in the earlier calls also, this growth is mainly coming from the daycare, OPD, and those types of things, and robotic surgeries because there, you know, consumer is high. The price increase in it is only 1.3%. It is very difficult to predict how much more we can do or what type of daycare demos we will be getting or OPD demos we will be getting. We maintained our guidance that RPOB growth could be in the normal course, which could be around 5, 6%. Okay. Okay. I understood. My second question is on the Manesar facility.
If you can share some light in terms of how much has been the ramp-up and whether it's EBITDA breakeven, it's making some profit, or any indication you can provide?
Yeah. Ramp-up is quite good, and it is better than our expectations. It is picking up quite well. In terms of revenue, it has started generating revenue of INR 11 crore per month. Okay. On the EBITDA side, it is still on the negative side because there are lots of hiring and clinical talent we are adding. The actual benefit of that may be coming in the forthcoming quarter. I am expecting if we are able to achieve the revenue of INR 2 crore more per month, which we are expecting in the next couple of months, this unit could be breakeven on EBITDA level.
Okay. Okay. I understood. That's helpful. Can I ask one more question on diagnostics?
Sure.
Okay. Thanks. Just one question on diagnostics. We are seeing some stability in the business now. In terms of your mix, whether we look at wellness, contribution, B2C, B2B, we are at a particular level. Should we see any meaningful change in these ratios, something which you are pursuing? Also, if you can throw some light on the network itself, firstly, the expansion plan that you have, and is there any franchisee model involved when it comes to these collection centers? How do you manage it?
Thanks, Sam. To the product revenue mix, as you know, wellness currently contributes about 12% of our revenue, and it is one of the quite fast-growing segments for us now. We have been seeing good traction on health checkup packages, which has been taken up by the general population as well across all our units. We see that it will definitely keep growing. When it comes to B2C and B2B mix, yes, at this point of time, our mix is at about 51%, 49%. We expect it to be around the same over the period of the next one year or so. There will probably be further improvement in B2C. It all depends on, you know, which segment grows faster. As we expand further, as we improve our network and our network productivity also improves, the B2C components will keep growing.
Excellent. Excellent work.
Another improvement aspect which has come is we are also going to be adding SRL brand back to us in the sense that now we have ownership of the SRL brand. That will help us to further, you know, strengthen our presence. As you know, earlier, we were not able to provide that opportunity of having SRL as Agilus has been the new name for SRL. We have not been able to communicate effectively. We will be doing that process in the coming months, by which also we expect that the B2C component will further strengthen.
Sorry, I didn't get this. Can you just explain the SRL thing? You have made the brand change. Now you are going to use the SRL brand back. If you can just explain what it means.
No. In fact, we had the SRL brand before, and we converted it to Agilus. Right. We were not using SRL or this process earlier due to certain legal requirements. Currently, we have got the ownership of the brand, and that is the reason we are going ahead.
If I can explain this a little further, the change which we had to do from SRL to Agilus was a little abrupt. At that time, the board, the courts directed us not to use SRL in any form, even to identify that this business was previously called SRL Ltd. We were constrained in communicating effectively to people that this is the legacy of this business, which continues as a new brand. It was not a very ideal kind of a brand change situation, and that impacted our business negatively. However, now we have acquired this brand, and now we have the ability to communicate effectively that SRL is now Agilus. We expect that communication will also further help to strengthen our brand.
Okay. Okay. Understood, sir. Thank you and all the best. Thanks.
Thank you. The next question is from the line of Lavanya Tottala from UBS. Please go ahead.
Hi. Thank you for the opportunity. One question. How has the business been trending in July, like in terms of occupancy? Any sense of how the momentum has been in July?
We are trending well. We can't obviously spell out the numbers because it is price sensitive. We are trending quite well as per our plan.
Okay. Got that. Just on this diagnostic one, clarification, SRL will be used only for this communication that it has been branded to Agilus, but we are not planning for dual branding or something. It's going to be Agilus, just communicating that it was before SRL. Is that understanding?
Yes, yes.
Okay. Got that. Thank you. Thank you so much.
Thank you. The next question is from the line of Sena Sarla from Ambit Capital. Please go ahead.
Yeah. Hi. This is Prashant here. A couple of questions. One on the diagnostic side, more of a clarification. When you talk about margins of 22 to 23%, that's on the gross revenues basis, right?
Diagnostics, that's on the net revenue basis.
Okay. You are all this year, your margin should be that 20 to 20% range on net revenue basis.
Yes.
One question on the hospital side. Delhi Headquarters, Delhi Hospital, which margin bracket would it now feature in?
It has moved up to about a 15% margin.
Okay.
It is around 15%, 17% plus in that.
All right.
It is consistently performing at that level. We identify certain more levers where we can improve it further.
Great. One last question from my side. Back on the diagnostic side, your revenue growth seems to have stabilized at a slightly higher level than you've been doing in the last few years. Where should we see this, you know, finally, on a normalized basis capitalizing? Would it be high to a new digit, or would you go into lower double-digit range? How should we think about this now?
I think in the next few quarters, we'll be in the, I'll say, two digits to about 10% kind of a growth in the next few quarters. As we move forward in the next, you know, six to eight quarters, we will be moving into the early, you know, early double-digit numbers.
All right. Thank you. That's the service.
Thank you. The next question is from the line of Nancy Yadav from Allegro Advisors. Please go ahead.
Hi, sir. Thank you for the opportunity. Most of my questions have been answered already. I just wanted to ask the index adjustment number, and, if possible, a breakup of the number for hospitals versus diagnostics.
Yeah. There is not much impact, and we are not tracking that way because now it is all in fMRI for us in India. There is not much impact. That much I can tell you at consolidation. Hospital business is very negligible. Diagnostic is still there with a little bit, but it is not much.
Oh, okay.
Anurag will provide you separately.
Sorry?
Anurag will be able to provide you separately if you want that number, absolute number.
Okay. Sure, sir. Thank you.
Thank you. The next question is from the line of Ankush Mahajan from Kotak Bank . Please go ahead.
Thanks for the opportunity. Sir, this time, the international customers, that growth is quite good. Would you throw some more light, more light, that how could we attend for the next three quarters for the international customers? What are the mean growths that these customers are coming? That's one part. Second, sir, this is related to robotic machines. How many robotic machines do you have? This year, how many are you expected to bring, new robotic machines? What kind of a CapEx are we doing on the robotic machines?
We have approximately 15 robotic machines across our network right now, and we are in the process of getting another four this year. This is regarding the robotic machines. We have seen a growth of about 35%, as I said earlier. As far as the international patients are concerned, the overall contribution is about 8% for the overall revenue. It's likely to increase a little bit. In absolute terms, it is likely to increase, but as a contribution, it is likely to stay in that level. We do get patients for oncology and other areas like that. Cardiac and oncology is the main, and neuro as well. These three departments get a lot of patients.
What kind of CapEx are we doing for these four robotic machines?
These robotic machines generally cost us around INR 12 crore per machine. I'm talking the venture of it. For ortho robot, it costs us around INR 5 crore.
Great.
The last one from myself. At least oncology is doing very well, as mentioned in the earlier comments, growing with the 27% to 28% of growth. How could we see that trend over the next three years in the oncology segment?
Yeah. We expect that kind of growth will continue for another few years because we are adding oncology setups to some other hospitals where it is not there at the moment. Obviously, that growth momentum is likely to continue.
That's from my side. Thank you, sir.
Thank you. The next question is from the line of Harsh Vaidya from Bandhan Mutual Fund. Please go ahead.
Yes, thank you. Sharma, availability?
Yes.
Yes, sir. Thank you. Good afternoon. Question is for Fortis Healthcare. One, could you help us with the team in Noida and Faridabad hospital?
Yes.
Yeah. Noida is 76% occupancy, and Faridabad is above 80% occupancy.
For Noida, 76% is after the 60-bed addition.
Yes. Yes.
Okay. Just one clarification. I'm just trying to bridge the gap between this almost 200 basis points of hospital margins improvement on a YoY basis. If I look at last year's report of the second file, probably hospitals had certain specific periods of, want to say, run-offs in terms of some provisions. Probably surgical mix was higher, so your margins were impacted to that extent. Excluding all of that, if I just work with the 300 bps of margin improvement, you mentioned that there are no run-offs in this current hospital margin. I understand that Dogana is something that has moved up in the margin metrics. Mulund and Amritsar have also moved up in the margin metrics. Is there anything else that is sort of helping you move up the curve in terms of the margins?
Broadly, these are the three or four drivers that are driving majority effect margin improvement?
At network level, almost all the hospitals are doing really quite well. Some of the underperforming units have also started performing, like I mentioned about Jaipur. There is also very good improvement in the pay in terms of margins and overall performance. Whatever capacity we are able to add, we are able to ramp up as per our expectation, which I told that it is brownfield. If you see the occupancy has gone up, it is touching around 70% at the network level. That helps a lot in the margin improvement, apart from what I have said earlier.
What it means is that you say, at least for FY23-24, let's say, if I look at Faridabad as a MRI addition, Noida addition, whatever ingenuity beds you are adding, and I'm also counting the minimal addition you did at FMRI in four quarters' terms, that ingenuity beds by itself is attracting a very high specialty mix patient pool, one which is something triggering itself. Again, because these are brownfield beds as I'm asking this question.
Yeah. One is these, as I mentioned, these are brownfield expansions, so the ramp-up is not an issue. Plus, you know, we are adding specialties and our clinical talent at all our facilities. Plus, we have invested in the technology also, and that is also helping us in doing some quality work, which overall impacts the margin improvement.
Okay, thank you.
Thank you.
Very good, gentlemen. That was the last question for today. I now hand over the conference to Manish Singh for closing comments.
Ladies and gentlemen, thank you very much for taking the time on the call. Please do feel free to reach out to us if you have any further queries or clarifications. Thank you and have a good day.
Thank you. On behalf of Fortis Healthcare Limited, this concludes this conference. Thank you for joining us, and you may now disconnect.