Ladies and gentlemen, welcome to the Q2 and H1 FY 2024 earnings conference call of HealthCare Global Enterprises Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements do not guarantee the future performance of the company, and it may involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Dr. B. S. Ajaikumar, Executive Chairman of HealthCare Global Enterprises Limited.
Thank you, and over to you, sir.
Thank you very much, and good morning, and a warm welcome to all present on this Q2 H1 FY 14 earnings conference for HealthCare Global Enterprises Limited. Today, I'm joined by Mr. Raj Gore, our Chief Executive Officer, and Ms. Ruby Ritolia, Chief Financial Officer. Ruby has been recently appointed as CFO, and she brings with herself an unparalleled experience in the field of finance and investor relations, and will join us in our journey to take HCG to its desired goals. Along with them, we also have few members of our HCG senior management team. At this time, I would also like to thank our Srinivas Raghavan, our former CFO, for his valuable services for the company and wish him luck for his future endeavors. Since our inception, we started with a single cancer hospital with an aim of providing world-class cancer care service to people of our country.
Today, we proudly reflect on our substantial growth, having expanded our presence across the country to become one of the largest providers of cancer services, not only in the country, but globally. HCG has challenged the practice of relying on multi-specialty specialty hospitals for cancer care. Achieving sustainable outcomes is feasible when patients receive optimal treatment delivered with top-notch talent, knowledge, technology, and infrastructure at the right time. World-renowned cancer care institutes are those which specialize only in cancer care, and we are one such. For HCG, focusing on single specialty helps us to concentrate our expertise and our resources, our dedicated resources deployed in understanding, diagnosing, and treating only cancer. This focused factory approach enables us to stay at the forefront of advancement in oncology, attracting top talent and also fostering talent and collaborative environment dedicated to tackling the complexities of cancer.
Clinical excellence is the hallmark of successful cancer institutions or any medical center, and we are such. Our commitment to excellence in cancer care has been unwavering, and we stand proud as a beacon of hope for patients and their families. In a landscape where the prevalence of cancer is ever-increasing, our mission has been to provide not just treatment, but holistic approach to healing and adding life to years. Further, we aim to expand our footprint strategically, reaching underserved areas and ensuring that quality of cancer care is accessible to all. We will continue to invest in research and development, academics, and pushing boundaries of medical science to discover new treatments, and of course, improve the quality of life to all our patients. Lastly, our journey is not just about building hospitals, and it is about building a legacy of innovation.
We are confident of making HCG an epitome of excellence in fight against cancer in India. I now hand over the call to Mr. Raj Gore, our CEO for HCG, for his comments on the strategies going forward and operational performance for the quarter gone by. Thank you. Raj.
Thank you, Dr. Ajay. A very warm welcome to all the participants on the call. Let me take this opportunity to wish all of you happiness, good health, prosperity on the occasion of Diwali on behalf of HCG. HCG has consistently led the way in the battle against cancer in India, constantly adapting the latest advancement in technology and treatment methods through ongoing research and development in the extensive realm of cancer care.
We have effectively demonstrated our expertise in efficiently operating single specialty hospitals nationwide, achieving superior outcomes and aligning our treatments with global standards. Speaking of the quarter gone by, we are happy to report yet another quarter of strong performance. Our revenues for quarter 2 in FY 2024 grew by 16%, with EBITDA, excluding ESOP costs, growing by 14% and PAT growing by 84% on year-on-year basis. Our performance is a combination of our brand strength in cancer care to generate higher footfall and operational excellence, which has been delivered by our excellent team.... Speaking of our recent acquisition, we have successfully consummated transactions at NCHRI in Nagpur and SRJ CBCC Hospital in Indore. Our strategy in Indore involved entering a non-metro city with a high quality asset and integrating it under the HCG banner.
It was a strategic move, given the absence of major players in the region for cancer care and a growing market for cancer treatment. We are in the process of effectively integrating systems and processes across these hospitals with HCG, envisioning significant synergy in terms of management efficiency, treatment upgradation, procurement optimization, and increased patient traffic, bolstered by our local marketing initiatives and the strong Pan-India brand presence. Our emerging centers, that are the centers which opened after 2017, have been demonstrating strong performance and are progressing towards maturity. In particular, our revenues in Mumbai and Kolkata have shown impressive growth of 42% and 41% respectively, year-on-year, resulting in faster expansion of our oncology market share compared to our peers. We are happy to announce that we have launched an additional dedicated women's cancer wing in our center in South Mumbai.
Furthermore, we have been enhancing the infrastructure of our established hospitals by introducing significant upgrades. In the most recent quarter, we operationalized 3 new LINAC machines. We have observed a rising demand for radiation therapy, and there exists a gap between this demand and the available supply of this treatment modality throughout India. In response to this, we have formulated a plan to install additional 6 LINAC machines in various hospitals over the next 18 months, aiming to bridge the gap between demand and supply. Further, all our LINACs, which were under installation in Q1, have been operationalized in Q2, except 1, which is being done in the month of October. In addition to LINAC machines, we have also operationalized 3 robotic surgery machines at our hospitals in Baroda, Mumbai, and Kolkata.
This expansion is in direct response to the increasing demand for high quality cancer care, ensuring that patients have access to the best possible treatment, ultimately leading to superior outcomes. To conclude, I want to emphasize that our substantial infrastructure improvements, our innovative hub and spoke model for delivering accessible cancer care nationwide, and our ongoing research endeavors aimed at advancing treatment options, all contribute to our confidence in elevating the HCG brand to the level of top-tier global hospitals. We anticipate that these efforts will ultimately enhance company's financial performance in the years to come. With this, I hand over to Ms. Ruby, our CFO, for financial highlights.
Thank you, Raj. Good morning, everyone. Firstly, I would like to thank HCG and the management team for adding me to the HCG family. I am honored to be part of the cause of this esteemed organization to fight cancer and bring the global standard of cancer care in India. We have uploaded our Quarter 2 and H1 FY 2024 financial results and updated investor presentation on the stock exchange and company's website, and I hope everybody had an opportunity to go through the same. In reviewing our performance for the quarter, I am pleased to report a remarkable 16% year-on-year growth, culminating in a top line figure of INR 487 crore. Our HCG center contributed significantly, generating revenue totaling INR 459 crore. Milann achieved INR 18 crore, reflecting a 7% year-on-year growth.
Our operational metrics, crucial indicators of our performance, are showing positive trend across the board. Chemo sessions witnessed a robust 8% year-on-year increase, reaching a total of 36,500 in the quarter. While our radiation services experienced healthy growth, the decline in capacity utilization from 57%-51% is attributed to our proactive expansion efforts and incorporation of 3 new linear accelerators during the quarter. We have strategic plans in place to optimize our average utilization and a targeted ramp up by the end of the financial year. Inpatient oncology and occupancy stood at 56% for the quarter, as compared to 61% for Q2 of the previous financial year. On account of expanding bed capacity by 64 numbers and better bed turnaround, resulting into lower average length of stay.
Overall, average occupancy rate for the quarter stood at 63.6%, as compared to 66.4% in the same quarter of the previous financial year. ARCOB stood at INR 42,054, as compared to INR 36,914, registering a growth of 14% on a YOY basis. Let me speak about our performance for matured and emerging centers. Matured centers continued the steady trajectory, growing healthily at 13%, driven by healthy volume growth across modalities. ARCOB grew by 10% to reach at INR 43,460, and despite the addition of beds, the ARCOB, the average occupancy rate increased by 14 basis points to reach 65.1% for the quarter.
Our annualized ROCE for matured centers stood at 21.2%, and ROCE three-quarter allocation was 25.1% for the quarter of financial year FY 2024. Coming to emerging centers, I'm pleased to announce a substantial 29% year-on-year growth in this segment. We are observing a consistent uptake in our emerging centers, marked by increased footfall across various cancer treatment modalities. The average occupancy rate for emerging centers declined to 60.1%. However, this was resultant of mix optimization, particularly at our Jaipur center in North India. The optimization is also reflected in our 20% year-on-year growth in average revenue per occupied bed, indicating a positive trajectory of our operations. Annualized ROCE for emerging centers stood at -3.9%, and ROCE pre-corporate allocation stands at 0.8% for the quarter of the financial year FY 2024.
In our investor presentation, we have detailed the revenue breakdown across various geographies. I would like to emphasize on some key highlights. Nagpur experienced a remarkable 50% increase in revenue. Kolkata saw a substantial growth of 42%. Mumbai exhibited a strong growth of 41%. Ranchi, it is 48% in quarter two of financial year FY 2024 compared to the same period last year. These numbers underscore our robust performance and market presence in these regions. On the EBITDA front, our EBITDA excluding interest grew by 14% YOY, and stood at INR 86.4 crores as compared to INR 76 crores in the same quarter previous year. CAPEX for this quarter, Post-Ind AS stood at INR 13.6 crores as compared to INR 7.4 crores in quarter two of financial year FY 2022.
Our CAPEX Pre-Ind AS adjustment for the quarter stood at INR 17.1 crores as compared to INR 10.5 crores, registering a growth of 53% YOY. Our CAPEX for H1 of financial year FY 2024 stood at INR 64 crores. Net debt, excluding leases, stood at INR 310 crores as at September 2023. We have also given bifurcation of our EBITDA across matured and emerging centers, and detailed numbers on the H1 financials in our uploaded investor deck for future, for further review. At last, I would like to open the floor for further question and answer.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Karan Bidhan Chandra Surana from Monarch AIF. Please go ahead.
Hi, sir. Good morning. Am I audible?
Yes, you're audible, sir.
Yes. Hi, sir. Sir, thank you for the opportunity, and happy Diwali to the whole team. Sir, first, my first question would be: Can you, sir, provide specific details on the number of new beds and facility expansions which are projected to come and become operational in FY 25?
Yeah. Can you just repeat the question? I'm not able to see.
Sir, could you provide specific details on the number of new beds and facility expansions that are projected to come and become operational in FY 25?
I mean, I think this is around 200-250 beds inland. However, we can connect offline to get exact details.
Okay. Okay. And sir, my second question would be on our EBITDA margin expectations, right? So given our, prior discussions and, you know, our earnings call, we have been anticipating achieving approximately 20% Post-Ind AS EBITDA margins, right? However, in recent quarters, we've seen that we may be undershooting that guidance a little bit. So sir, can you discuss the feasibility and maybe that 200-300 basis, you know, that gap that we're seeing, what the feasibility of this is reaching in the second half of FY 2024, especially like we would... I'm assuming we would be expecting a 15% kind of an EBITDA growth for 2024, FY 2024. So, sir, any color or any light on that, when we can achieve that kind of an EBITDA margin, and what, why exactly are we undershooting that?
What cost line items are we seeing, you know, impacting that number, sir?
Yeah, good, yeah. Regarding the EBITDA margin, as we have told in the last call also, we are moving upward. As you can see, there has been a substantial growth in the margin compared to the first quarter to this quarter. We expect the same trend to continue, and we feel, you know, towards the end of the fourth quarter or beginning of the first quarter of next year, we'll be close to 20% margin. Okay? And you had another question, I think, on the PPT. Can you clarify now? Can you... Was there another question?
This is my last question I would include, is that, what would be our EBITDA Pre-Ind AS for first half of FY 2024, and could you provide the lease cost figures for the same period?
Our annual lease cost is close to about INR 75 crore. So that's you can adjust about 3%-4%, I guess, 4-4.5%.
4% of revenue, sir? 3.5, 4% of revenue?
Yeah.
Okay. Okay.
So it's about less than about 3.5%-4%. 4, 3.5.
Okay. Thank you, sir. I'll get back in the queue. Thank you for your time.
Thank you. A reminder to all the participants that you may press star and one to join the question queue. The next question is from the line of, Dhara Patwa from SMIFS Limited. Please go ahead.
Thank you for the opportunity, and congratulations, sir, for the good set of numbers. So in the last call, you highlighted that, you know, we hired some senior onco surgeons at our Mumbai unit. So what's the progress over there in terms of revenue and the high, the high growth which we are seeing in Maharashtra? So is it because of Mumbai and Nagpur, or is there anything more to go? That's my first question.
Yeah, thank you for that question. You're right. We had—we've always said that we want to invest in our clinical talent as well as our go-to-market efforts in markets like Mumbai and Kolkata. You can see the results. This quarter, Mumbai has delivered 41% year-on-year growth in revenue. Kolkata also has delivered 42%. Nagpur, in fact, has delivered 60% year-on-year growth. That was our rationale behind the acquisition that move that we made last quarter. I think we will—you will continue to see the upward, upward trend. In my comment, I also mentioned that we are gaining market share in Mumbai faster than, you know, most of our peers. We continue, we will continue to add additional capabilities.
In Borivali Hospital, we have added one additional linear accelerator because our prior linear accelerator was fully utilized. That ramps up, again, it not only gives us revenue but improved margins. We've also operationalized a robotic program, our first robotic program in Borivali. In Colaba, South Mumbai center, we have launched a dedicated women's cancer care center to meet the exclusive needs of our women cancer patients. So, we're very confident and very optimistic of our growth in Mumbai market.
Yeah. So thanks, thanks for that explanation. And one question was a general question. Since oncology as a market is growing, so I guess everybody now is investing on the equipment for robotic surgery and radiation therapy. Like, whenever we see your earnings call, they all are investing in it. So do you think that could affect HCG going forward? I understand that we are a total cancer care hospital, and there are not many more of immunologists, you know, people who could understand immunotherapy. Those kind of surgeons are present, and we have that. So, will that be so that going ahead, we'll have an edge over immunotherapies and, other... But we won't have edge in the radiation or robotic surgery because everybody is investing, so the volumes might get spread across these hospitals.
Yeah, I feel that, with the growing, you know, as we know, with the population dynamics of India, as people become aged, also, number of cancer patients increasing, we believe the number of centers which are there compared to the population growth is still not in parity. Having said that, we being a dedicated oncology center, what we have shown in the last 15 years, that our growth will be far more than a multi-specialty, putting up, a linear accelerator or a, robotic. Because, you know, usually, the patients who go to multi-specialty, let us say they go with an abdominal pain, they get, they are diagnosed with cancer, they stay there.
But for a dedicated, this is a globally proven fact, what I'm saying, but if you have a dedicated cancer center, with the all the, from other hospitals, multi-specialty hospital, referrals from doctors come to the dedicated cancer center. Normally, they don't go to the multi-specialty center. So we believe because we are in, not only in metro cities, but also in Tier I and Tier II cities, we don't have a really credible competitor for us in these areas. Regarding the linear accelerators, that is our greatest strength. As Raj Gore said, we are installing more units because we are running in majority of places, capacity utilization. This kind of capacity utilization, you know, if you look at it, are rarely seen in a multi-specialty hospital. Other thing is we are one of the pioneers now going into the Tier I , Tier II cities with robotic.
So that also, as we go forward, will put us in a very leadership position. So I feel, honestly, people can follow us, we are not followers, and we are in such a leading position. Our growth, as we have indicated, will sustain and grow. And as our new centers also grow, we will continue to be in a dominant position in oncology. And more importantly, it is not just equipments, it is also clinical excellence, which is important. We have 400 oncologists under HCG, and nobody can really talk about it like that. And in our own Bangalore center, we have 100 oncologists with, who is dedicated for organ specific. We are also big in research genomics.
So it is, like somebody told me, in one of the other hospital, "To do something like HCG, for us, it will take minimum several decades." So in the past, it has not happened. In the future, with our focused factory approach, I think we are very confident we'll continue to grow and provide this kind of excellence in quality care to our patients. And recently there was a major conference in Mumbai, where we, HCG was a major contributor, participating in various meetings, keynote address, and research activities. So we are now certainly a dominant force in this field.
Sir, thank you for the detailed explanation. Just last bookkeeping question: sir, what will be the effective tax rate for FY 2024 for us?
In the current quarter, we had it at around 50%, but for the full year, we will be somewhere between 40%-50%.
40-50. Okay, that's what my last question is. Thank you.
Thank you. A reminder to participants, you may press star and one to ask a question. The next question is from the line of, Ravi Shah from Opal Securities. Please go ahead.
Yeah. Hi, sir. Am I audible?
Yes, sir, you are.
Hello. Yeah. So I had two questions. First would be how our emerging centers been performing, and are the Mumbai and Kolkata centers at EBITDA breakeven level? And when can they achieve the whole company level EBITDA margins?
So, as I mentioned earlier, we've seen very fantastic response to our efforts in driving revenue growth. Mumbai has delivered 41% year-on-year growth. Kolkata has delivered 42% year-on-year growth. We have done further seeding by adding technology, capabilities, digital talent in these two markets. Our international business is also ramping up in these two markets. Just to give an idea, this last quarter was our highest in international business. But we are actually nearly doubling our pre-COVID quarterly rate in our international business. You know, South Mumbai is an excellent facility with excellent technology, excellent clinical talent trained in U.K. and in U.S.
We are seeding the opening information centers in Middle East, in Bangladesh, in Africa. So we feel that those two cities will continue to benefit from our international business going forward. If you look at overall emerging centers, the growth has been in mid-twenties, nearly mid-twenties year-over-year. The profitability has improved, and you will see, you know, I think we'll continue this positive trajectory going forward.
Okay, sir. Thank you. My next question would be, can you throw some color on the acquisitions that we recently made in Indore and Nagpur? How well are they doing, and what are our strategies for those assets that we have taken?
So, Indore, as we mentioned in our announcement, it's a 50-bedded comprehensive cancer care center. Purely, you know, this is the only private comprehensive, or this is the first, private comprehensive cancer care center in the market. I think, we concluded, we concluded the transaction, in the beginning of October. Currently, you know, we are focusing on upgrading our clinical capabilities, talent-wise as well as technology-wise. We are, you know, we have a value creation plan, across, you know, improving revenue to optimizing cost, through integration or plugging it in on our HCG capabilities, network capabilities. It's early days, but we are seeing good response from our clinicians, our employees, as well as market.
As we, you know, ramp up our brand marketing efforts, we will see growth in these markets, in that market. Who else? Yeah. Yeah.
Yeah. Thank you, sir.
Thanks.
Thank you so much. A reminder to participants that you may press star and one to join the question queue. The next question is from the line of Ankeet Pandya from InCred Asset Management. Please go ahead.
Yeah, hi, thank you for the opportunity. So I have two questions regarding the Indore hospital. Sir, can you give us some so ballpark number on how or what is the margin profile of the hospital? And also, you have mentioned that that there there's space to further increase the capacity by 100 beds. So what will be the CapEx regarding this 100 beds, and by when do you think you will be investing on the on for the 100 beds?
Yeah. Thank you for that question. As you can see from our investor presentation, Indore hospital does about INR 30 crore annual revenue. The margin profile is in mid-teens. We see a lot of opportunity to improve that margin as we integrate that with HCG network. It is a 50-bedded hospital. We have a plan to add 50 more beds. The CapEx for those will be about INR 40-INR 50 crore, and it will come in next 2.5-3 years. It will get completed in next 2-3 years, and, you know, that will position us in the future, you know, to scale up in those markets.
All right. Yeah, thank you. That's it on my side.
Thank you. The next question is from the line of Viraj Shah from Shah Investments. Please go ahead.
Yeah, hi. Good morning. Sir, I have two questions. Are you looking out for any other inorganic opportunities, and if yes, then what would be our ideal size of the asset in terms of bed and location and any new geographies?
Yeah, we are, as you know, Mr. Shah, we are now gone into Madhya Pradesh for the first time, and with the Nagpur being there, we will now consolidate. As we have said in the past, we are, we are definitely looking for strategic locations primarily, you know, across the country, and we believe, you know, if we see some opportunities, certainly, you know, we'll work and make the information known. At this point, we are not doing any greenfield except our Bangalore, which is an extension of our Bangalore center with Whitefield. Otherwise, we want to look at any M&A activities and future. Primarily, we like to work with maybe established oncology, like what we did with CBCC on those models.
We will try to see whether there is an opportunity for us to grow in several regions of the country. As it is now, we have nearly 24 oncology centers, and obviously, you know, India is a big enough country for future growth. But we have to consolidate and then look at you know, our situation and see where which is an applicable India activities we can do.
Okay, great. Sir, and second is, what are we doing to increase our footfall and patient count in our new centers? We understand that HCG has a strong brand strength in the core regions, but what about outside the core regions? How do we generate more footfalls? Hello?
So, our emerging centers, we have shown, you know, 29% year-on-year growth, and we expect it to continue going forward. I already, in my previous question, I explained that in Mumbai and Kolkata, which are our metro markets, where there is established competition, in spite of that, our revenue growth has been more than 40%, and we are rapidly gaining market share in those markets, which shows the strength of HCG brand, even in the new markets that we have entered.
Okay. Okay, sir. Thanks.
Thank you so much. Participants who wish to ask questions may press star and one now. The next question is from the line of Karan Bidhan Chandra Surana from Monarch AIF. Please go ahead.
Hi, sir. Thank you for taking the question again. Sir, can you just disclose the absolute EBITDA figures for the Indore and Nagpur centers as individual entities that you just acquired? And what margins are they operating at, sir? If you can just give some color from point of view.
Nagpur is actually consolidated, which means... So, as I mentioned earlier, Nagpur, we see full impact for a quarter for about INR 2 crore gain, INR 2.1 crore gain out of that transaction, going forward in EBITDA. Indore, as I mentioned, it's about a 30 crore top line asset, asset with about EBITDA in mid-teens.
Anything between 14%-15%, sir? That would be a reasonable assumption.
Sorry?
Anything between 14%-15%, sir, that would be a reasonable assumption, EBITDA margin, sir?
The EBITDA margin will be in the range of 17%-18% at Indore. And, just to mention, when-
Mm-hmm.
Sorry, INR 2 crore impact for quarter two. We had only partial impact in quarter two, so the full impact would come from quarter three onwards.
Thank you. Okay, sir. So basically, we are expecting Q3, Q4 EBITDA consolidated much better than Q1, Q2. Is my assumption okay, sir?
Yeah. Q4 definitely better. Much better.
Understood. Understood. Thank you, sir. Thank you. That's it from my side.
Thank you. The next question is from the line of Jiya Shah from Wealth Securities. Please go ahead.
Good morning, sir. So my question is: What are our views on the Milann Center? Are we going to divest it? And what are the plans for it? Do we not see any substantial performance happening in that business?
For Milann Center, as we have said before, post COVID, we went through a very tough time, and we are now working on it to bring some improvement. And we are, as you can see, we are on the right path. It has come—It's coming up the ladder, and we are looking at it in the future for divesting, but we cannot give any firm timeline for it. But certainly, we want to see how it can grow, and we have worked very hard to consolidate with the doctors to improve the outcome. We are now focusing on quality outcome with existing centers. We have also decided to close down a center to go bring about efficiency in other Milann centers.
So all of this will only improve our EBITDA and our margins, and also the quality of care. So we will, of course, inform when we make a firm decision about the future of Milann.
Okay. Okay, I have another question. Our growth for the mature and emerging centers have been good, but the same has not reflected in our margin flow. When can we start seeing the operating leverage playing out?
That's it. Sorry, can you repeat your question?
Yeah, sure. So what I was asking is that our growth for the mature and emerging centers have been good, but the same has not reflected in our margin flow. So when can we start seeing the operating leverage playing out?
So, she's saying, you see, refer to the slide where your emerging centers revenue has grown by 13% and, margin, sorry, EBITDA has grown only by 7%. We had done some operational efficiency exercise in last financial year, which wherein we did some rejig in terms of centralization and decentralization. That has resulted into reduction of our corporate costs. While it is not visible in at the unit levels, we have our overall corporate costs has gone down, and that's why you would see that at overall level, our margin impacts are not much. Having said that, as we have been growing our revenues on quarter-on-quarter basis, as Dr. B.S. Ajaikumar mentioned, that we should be looking at close to 20% margin by quarter four end or at the beginning of next financial year.
I think, just to add to what, Raj said, as you know, our mature centers, EBITDA margins are over 20%. In fact, our centers of excellence is in the high 20s. So what is happening is the, the centers which are new, once they break even, automatically it will have the overall margin for the entire group. And beyond break even, we expect, that to reach, higher in the maybe 11%-15%. Once it reaches that, at the group level, we will reach over 20%, and that is what we are predicting will happen either in the last part of the last quarter or beginning of the, first quarter of next year.
Okay, all right. I have one last question. So there are certain rumors about CVC exit. Can you throw some light on this? Like, what are their plans and what is happening on this?
I was wondering when somebody will ask that question. I just want to say that as a shareholder, they have every right to come in, and if they feel they've got their return, they will look at exit. Best persons to answer that will be CVC. For us, really, it is a non-issue. They have been a good partner. We have worked with them very well. They came at a very difficult time, and as you can see, we have grown very well with partnering with them. I would not like to say any further comment in this matter.
Okay. All right. Thank you so much.
Thank you so much. Before we take the next question, just a reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Karan Bidhan Chandra Surana from Monarch AIF. Please go ahead.
Yes, sir. So one more question I had was on the total debt that we have right now. We have a net debt of around INR 310 crore as of September 2023. So sir, are we, do we have any plans of, you know, maybe deleveraging it or maybe our debt, I mean, debt will continue rising up when we look for inorganic kind of opportunities. So that's question number 1. And sir, on the question, on question number 2, I had was on the emerging centers. I see that a lot of our emerging centers have been operational for 4-5 years, right? So just getting some sense that when can they be classified as mature centers?
Because I'm assuming that 4-5 years is a good time period for any centers to kind of mature and become, you know, get into like high teens, kind of, EBITDA margins, et cetera. So, if you can just call out, sir, what would be a new centers and, you know, number of new centers and the year of operation, they've been operational, you know? So that would really help, sir. Thanks. That's it from my side.
So Karan, to answer your first question on leverage, today, our net debt of INR 310 crore results into a net debt to EBITDA of less than 1x. And, I think, I mean, we have a lot of headroom there, and whatever, because we are sort of, you know, able to internally generate and fund our, our maintenance CapEx. Any growth CapEx or any, inorganic expansion would lead to increase in the net debt, for which I feel is a lot of, there is a lot of headroom available, with us. So this is as far as, the net debt condition is concerned and how it can go pan out in the future. As far as...
Yeah, so you also sort of touched upon the question on the vintage of the hospitals, the way we look at for our emerging centers. What we have been doing so far is that we have been consistently categorizing certain sets of centers post-2017, so that the profile, EBITDA profile of those centers can be reflected appropriately and people can compare its progress on quarter-on-quarter basis. Well, you are right that, you know, we should be. They are not new centers per se. We have classified them as emerging centers. The latest additions in our portfolio have been at Kolkata and Mumbai center, which is like right now, over 3 years old.
Okay, sir. That helps. Thank you.
Thank you so much. As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Hi. Once again, thank you everyone for joining, having an active discussion. I want to thank you for your continued interest in HCG. We are confident as a management that, you know, we have the right differentiated, specialized cancer care product for India. We have been a leader and pioneer, and we will continue to grow our market share in all our markets. The future is definitely brighter. Once again, thank you, and I wish you a happy Diwali. Have a good festive festival season.
Thank you. On behalf of HealthCare Global Enterprises Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.