Ladies and gentlemen, good day and welcome to Global Health Medanta Hospital's Q2 FY 2026 earnings conference call hosted by IIFL Capital. 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Jeewani from IIFL Capital. Thank you, and over to you, Mr. Jeewani.
Hi, good afternoon, everyone. This is Rahul from IIFL Capital. On behalf of IIFL, I welcome you all to the second quarter earnings conference call of Medanta. From Medanta, we have with us today Dr. Naresh Trehan, Chairman and Managing Director, Mr. Pankaj Sahni, Group Chief Executive Officer and Director, Mr. Yogesh Kumar Gupta, Chief Financial Officer, and Mr. Ravi Gothwal, Head Investor Relations. Over to you, sir, for your opening comments.
Good afternoon, and thank you for joining us today for Medanta's Q2 FY 2026 earnings conference call. I hope all of you have had the chance to review the results and presentations that were released Friday. Over the years, Medanta has remained committed to one core belief that world-class medicine should be accessible and delivered with compassion. Every quarter, as we reflect on Medanta's progress, I am reminded that what we are building is not merely a network of hospitals but a movement in healthcare, a movement grounded in clinical excellence, compassion, and trust. This quarter marked another proud milestone as we commenced operations at Noida Hospital, Medanta's sixth facility. This 550-bed, state-of-the-art, patient-centric hospital embodies our vision of expanding access to ethical, high-quality healthcare.
The hospital began operations in September and is currently functional with 226 beds, including over 80 ICU beds and five operating theaters, as well as three cath labs, all equipped with advanced medical technology. Our teams are fully committed to ensuring a smooth ramp-up and to extend Medanta's care to more lives in the region. We also announced plans to establish a 400+ bed super-specialty hospital in Guwahati to serve the entire Northeast region. In October, Medanta completed the acquisition and possession of a 3.5-acre land parcel in Guwahati, and the Bhoomi Pujan ceremony was held on 31st October 2025, paving the way for construction to begin. Turning to our Mumbai project, we are pleased to share that we have received additional FSI approval, enabling us to expand our plans from a 500- 750-bed super-specialty hospital. This is a significant development, and we are focused on expediting the construction process to create one of the most advanced healthcare facilities in Western India. With that, I now hand over the call to Mr. Pankaj Sahni, our Group CEO, who will walk you through the financial performance. Thank you very much.
Thank you, Dr. Trehan. Good afternoon, everyone, and thank you for joining us today. I would like to begin with a key milestone of this quarter, the commencement of operations at Medanta Noida, our sixth hospital, which became operational in September 2025. This is a significant achievement for all of us at Medanta. The construction of this hospital began in September 2022, and within just three years, we have successfully brought this world-class facility to life, a testament to our strong commitment and execution capabilities. Currently, 226 beds are operational, including 81 ICU beds, five operating theaters, and three cath labs. The hospital is equipped with cutting-edge medical technologies such as the da Vinci Xi Surgical robot, next-generation O-arm, ARTIS icono AI-driven biplane cath lab, and state-of-the-art diagnostic systems, including a 3 Tesla MRI, Dual Source CT, PET scan, and gamma camera.
These capabilities ensure that our clinicians have access to the most advanced tools for diagnostics and treatment, and this aligns with our vision of delivering world-class care with precision and compassion. Medanta Noida offers comprehensive tertiary and quaternary care across more than 20 super-specialties, including cardiology, oncology, neurosciences, gastroenterology, and orthopedics. We have already onboarded over 150 experienced doctors, including more than 30 senior director-level clinicians who bring deep expertise across key specialties. Our emergency and critical care services are fully operational, ensuring round-the-clock readiness for complex medical needs. The early response from the community has been extremely encouraging, reaffirming the trust that the Medanta name commands. We are confident that Medanta Noida will evolve into a strong pillar of our network and emerge as a significant contributor as it scales up over the coming quarters.
In the first month of operations, Medanta Noida generated INR 39 million and reported an EBITDA loss of INR 197 million, which is in line with expectations during the initial ramp-up phase. We are very excited about Medanta Noida and what it will offer to Noida, the Greater Noida, and wider region, given the strong clinical talent that we have onboarded, supported by the highest quality and ethical medicine that Medanta is known for. Now, moving to the consolidated performance update for Q2 FY 2026. During the quarter, consolidated total income was INR 11,189 million compared to INR 9,748 million same quarter last year, registering a strong growth of 15%. EBITDA ex Noida grew 14% year-on-year with INR 2,804 million, with a margin of 25.2% compared to 25.3% in Q2 FY 2025. EBITDA, including Noida, was INR 2,607 million, up 6% year-on-year, with margins at 23.3%.
Profit after tax for the period was INR 1,584 million, a strong year-on-year growth of 21%. PAT margins for the quarter improved to 14.2% compared to 13.4% in the same quarter last year. Overall, our operating cash flows for H1 FY 2026 stood at INR 3,295 million, and CapEx was approximately INR 4,252 million, primarily towards our Noida project and upgradation of medical equipment across the network. Our balance sheet remains extremely strong, with a net cash surplus of INR 7,082 million at the end of September 2025. Now, moving to the operational performance highlights for the quarter, inpatient volumes during the quarter increased by 13%, and outpatient volumes increased by 15% year-on-year. Our average occupied bed days for the quarter increased by 8% year-on-year, with strong occupancy of approximately 64% on increased bed capacity.
Average revenue per occupied bed for the quarter was INR 65,570 compared to INR 62,141 in the same quarter last year, an increase of 6% year-on-year. During the quarter, international patients' revenue increased by 49% year-on-year to INR 762 million in Q2 FY 2026, driven by increased international patient volume. Coming to the matured and developing hospital performance update, during the quarter, revenue from our matured hospitals, which includes Medanta Gurugram, Indore, and Ranchi, was INR 7,200 million compared to INR 6,833 million in the same quarter last year, registering a year-on-year growth of 5%. Now, please note that the OPD pharmacy business of Gurugram Unit, which is now operated by a 100% subsidiary of the company named GHL Pharma & Diagnostics Private Limited. As a result, the OPD Pharmacy revenue, which is not part of the matured unit reported numbers in Q2 FY 2026 in the presentation.
Therefore, excluding the impact of the Gurugram OPD Pharmacy business, the matured revenue has actually grown by 7.9% year-on-year. Growth was visible across core specialties, whereas degrowth was seen in internal medicine, primarily due to the lower incidence of vector-borne diseases during the quarter compared to the same quarter last year. EBITDA of matured hospitals stood at INR 1,696 million compared to INR 1,689 million in the same quarter last year, with a margin of 23.5%. Adjusting for the impact of OPD Pharmacy business switching, EBITDA growth in the matured hospitals was 2.2% year-on-year. The EBITDA in Q2 FY 2026 includes the impact of additional manpower cost, largely in Gurugram and Indore, as well as the new unit in Ranchi. This increase includes the impact of increments as well as new hiring in the matured units.
On the volume side, inpatient admissions grew by 5% year-on-year, and the occupancy remained healthy at 61% on an expanded base. RPOP for mature hospitals stood at INR 73,447 in Q2 FY 2026 compared to INR 66,989 in the same quarter last year, registering a strong growth of 10%, primarily driven by a favorable change in specialty mix. Moving to the developing hospital portfolio, which includes facilities less than six years old, which is Medanta Lucknow, Patna, and now Noida. During the quarter, 37 new beds were added in Patna, taking the total bed addition to 57 beds in the first half of FY 2026 in Patna. No bed additions in Lucknow, while 226 beds were added in Noida with our operationalization of the unit there. Both Lucknow and Patna continued to deliver strong double-digit growth. Revenue from developing hospitals excluding Noida grew 28% year-on-year to INR 3,531 million.
Including the initial contribution from Noida, total revenue stood at INR 3,570 million, reflecting an overall growth of 30% year-on-year. Overall, EBITDA from developing hospitals excluding Noida was INR 1,112 million, registering a strong year-on-year growth of 34%, with strong EBITDA margins of 31.5%. EBITDA including Noida was INR 915 million, with a margin of 25.6%. Inpatient volumes were up 26% year-on-year, reflecting broad-based growth across Lucknow and Patna, along with an early contribution from Noida, which became operational only in September 2025. Occupancy stood at 70%, with an RPOP of INR 54,854 across the developing hospitals. Including Noida, occupancy was 67%, with an RPOP of INR 54,950. Now, coming to our project updates. In Guwahati, we completed the acquisition of a 3.5-acre parcel of land for approximately INR 600 million. The site, located along National Highway 27, offers excellent accessibility across the entire Northeast region.
Allotment and possession are complete, and I'm pleased to report that subsequent to quarter ended on 31st of October 2025, we concluded the Bhoomi Pujan activities and construction of the Guwahati facility can now commence. In Mumbai, Oshiwara, we received additional FSI approval, enabling us to expand our bed capacity from the earlier reported number of 500- 750 beds. The board has approved a new project cost of INR 15,300 million to cater to the increased bed count of 750 beds. This cost includes the cost of land, additional FSI purchased, as well as the construction and medical equipment, and also includes INR 850 million for staff residential apartments. Overall, Q2 FY 2026 was a quarter of steady growth, with consistent performance and disciplined execution, as well as the launch of the exciting new opportunities that Medanta Noida holds. Our expansion projects continue to progress well across various stages of execution, w ith a strong pipeline, disciplined capital allocation, and a healthy balance sheet, we remain confident of sustaining growth momentum and delivering on our strategic objectives. With this, I request the operator to open the line for questions. Thank you.
Thank you. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on the 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 assembles. The first question comes from the line of Tushar Manudhane with Motilal Oswal Financial Services. Please go ahead.
Thanks for the opportunity, sir. Just on the matured hospital, while even after adjusting for the pharmacy and other income, the EBITDA growth still seems to be just 2%-2.5% with additional manpower cost. Are we more or less done with the increase in the manpower cost, or is there something more to come? Subsequently, when do we see the EBITDA growth in line with or better than the revenue?
Thanks, Tushar. There are two parts in the developing hospitals, although the nomenclature may be a little misleading because it does also include the 110 beds which are new in our Ranchi facility, which was the expansion of that facility. While it is part of the developing hospital group because Ranchi, sorry, mature hospital group because Ranchi is part of the mature group, that includes about 110 beds of new facility. There is some amount of expenses which go into the launching of that new facility, which we hope will stabilize as we get that facility up and running. We are actually hiring additional manpower in Ranchi, not only for the new facility, but also to add in some of the specialties which were missing in the old facility, which is one of the reasons for taking this.
We do expect to see growth in Ranchi as the new unit grows, as well as the old unit gets additional specialties. That is point number one. Point number two is that last year in Indore, we had an unseasonably high amount of vector-borne diseases. When you look at quarter to quarter, there is a little bit of impact of a very high base on Indore last year. Gurugram also, we had some amount of vector-borne diseases, which I think across the industry is a bit lower. However, we did hire, and we did also do some manpower increases in Gurugram, and we do expect that to play out over the coming quarters as well as going forward.
As we look at scaling up and beefing up our core, which is part of our original strategy to strengthen the core, we will look at continuing to invest into our mature units. We do expect to see the results of that as we go forward, and we do expect to see in the coming quarters that you will see the EBITDA growth a little bit more in tune. If you look at it even from a year-on-year basis, if you take the complete six-month to six-month basis, you will find that there is a significantly better performance in the mature facilities over the complete six months. Not getting too much caught up into what happens in one quarter versus the other. If you look at it more of a 12-month run rate annualized basis, you will see fairly healthy growth in the mature facilities as well. I do not know if that answers your question, Tushar.
No, that helps. That helps. Secondly, on the developing hospital side, given that there has been, I guess, decent traction as far as institutional patients are concerned, but when do we see the RPOP further scaling up with the change in case mix?
You have to look at because the RPOP, Tushar, is blended for Lucknow and Patna, which is quite different in both the cities and both the geographies. If you look at the RPOP growth, we've had fairly strong RPOP growth in our Patna facility. A lot of that is also the addition of more and more complex work. Just to give an example, we've added a robot in Patna, I think when you look at it over the last year or so, and we see now robotic work picking up. We see some of our cancer work picking up there. A lot of the cancer work, as you're aware, is on lower length of stays, so therefore you're seeing RPOP growth.
In Lucknow, we are actually seeing also because we did not have some of the specialties, say, a year or so ago, which were maybe lower RPOP in nature, like pediatrics, like some of the other work. That is getting added in. It is not a question of any kind of growth or degrowth. It is really just a question of some of the RPOPs in Lucknow stabilizing towards what we expect to see as a more rational RPOP from what it was in very early days. Very healthy RPOPs there, above INR 65,000. Patna also almost INR 48,000-INR 50,000 RPOPs. We see very strong RPOPs in all these areas. We also look at a lot of the volume-driven growth in both of these units, as you are aware.
If you look at the volume-driven growth in both of these units, we've seen very good growth in Lucknow, almost 30%+ growth in inpatient volumes, similar kinds of growth numbers coming in in Patna. I think RPOPs, as I've always maintained, is really just an outcome of some of the mathematics that gets worked out. If you see realization strong in both units, continuing to grow. If you see volumes in both units, also strong, continuing to grow. I think some amount of length of stay optimization still can be done in both the units. Like I said, I would prefer to look into how the realizations are going rather than just the RPOPs on a standalone basis.
Clarification. Lucknow's also certain specialties, which sort of because of those specialties, there has been sort of a check as far as RPOP growth is concerned, correct?
When you look, Tushar, at the RPOP growth in Lucknow, one, of course, is that, like I said, last year, some of the vector-borne diseases patients ended up staying in the ICU for longer periods of time last quarter versus this quarter. If you look at it across a slightly longer period of time, you will see that growth is there in Lucknow RPOPs as well. If you look at how we think about the growth in Lucknow, it is adding in some of the lower RPOP specialties. That is correct. Pediatrics has just started. We will continue to scale that department up. If you remember several calls back, we talked about adding in some of the longer-tailed specialties in Lucknow. Those have come in. I would say that compared to what you may have seen, let's say, about maybe 12- 18 months ago of RPOPs in Lucknow, these are more stabilized set of RPOPs in Lucknow in this kind of INR 65,000 range.
Got it. Lastly, as far as Guwahati is concerned, is there any sort of guidelines to have the way we have in case of Patna in terms of certain beds allocated for institutional patients, or this is more like entirely we can use it for private patients?
No, we can use, there are no guidelines or restrictions in any of the beds in Guwahati. This is part of the Advantage Assam 2.0 investment project that the government of Assam has done. There are no restrictions whatsoever on any of the beds in Guwahati. However, Medanta will very much look at providing care to all the spectrum. It will not be that we will not be looking into various different types of care classes, as we have done in every one of our units, irrespective of the requirements of the lease. No PPP. This is a pure kind of land which we have procured from the government as part of this investment initiative.
That's it, sir. Thank you and t hanks .
Thank you.
Thank you. The next question comes from the line of Damayanti Kerai with HSBC. Please go ahead.
Hi. Thank you for the opportunity. My question is on your Noida unit. You mentioned you have already onboarded 150 doctors, including senior directors, et cetera. Are you broadly set in terms of having the required medical team which you intend to put up there? Does 2Q operational cost largely reflect the Noida unit cost? How do you see that panning out in, say, 3Q or 4Q?
Okay. First of all, to your question on have we hired most of the clinical talent, I would say that we have hired a large part of the clinical talent, but not all the clinical talent. To give you a simple example, our OBS team is not complete. Our pediatrics team is not complete. That being said, I think because Noida, we will get one complete tower in one shot. I think in Noida, compared to some of the other units, especially most recently Patna, where the hiring was a little bit more staggered, in Noida, I think a lot of the doctors have come in sooner within the first month itself. In Patna, you saw them coming in over a period of 6-12 months. In Noida, I would say a majority of the senior clinicians have come in onboard in the first month itself.
That is part of the reason why you're looking at some of that cost. Obviously, that is a huge opportunity for us, and we're very excited about that. To be very frank, it's also an indication that there is a very huge excitement of senior and established clinical faculty to join us. Everybody is raring to go. We are hoping that the official inauguration will happen in the coming weeks. It's been just about a month or so that the hospital has been open. We are still actually building out the rest of the beds so 220 beds or so are there as of September. We have added in some more beds. As of date, we are sitting on approximately 300 beds, but we intend to continue this build-out without stopping over the next few months.
I do believe that some amount of costs will continue to come in as we'll hire in more doctors, more nurses, maybe not too many senior directors because that we have mostly filled out. You'll, of course, need manpower to fill out all the beds. We're very excited, actually, about Noida as an opportunity and very excited with the response that we get in. Hopefully, we will have a grand inauguration soon. As far as the costs for Q3 and Q4 coming in, I would say that we do have costs which will get added in there. We will also, of course, have revenues that will get built up into that. I don't know exactly how that will play out, but our perspective is that what we've been able to do is bring in the firepower that now enables us to get running. As soon as we get all our, we only have five operation rooms active right now like a nother 9-10 are coming onboard in the next few weeks. As we get all this ready to go, we're quite excited about getting this unit moving in. So far, the response has been very good.
Okay. So in view of great start for Noida unit and then largely your team is now in place, do you think Noida can achieve cost break even within 12 months of operation, or it can be sooner?
As we've said in many of our last earning calls, Medanta has a good track record of achieving operational break-even in what may be considered extremely short periods of time. That is not how we think about it, that may be an outcome we may have been fortunate. We actually look at investing in the right resources and right infrastructure and right talent to build out for the long run. Whether that will break even in six months, nine months, twelve months, I would not like to project out into the future. All I can say is that we remain very excited about it. I see no reason to worry about any of how this will play out. I do not want to guess on which month it will break even. I think let time tell that.
Okay. My last question is in NCR market, obviously for Noida, you said doctors are really excited, and that's why you saw most of hiring happened in first month itself, most of joining, et cetera. When we look at, say, overall NCR market, what kind of competition you are seeing on the talent hiring part, especially from some of your larger peers? Have you seen any attrition, et cetera, more than usual in your Gurugram unit or something?
No, we have not seen any attrition in our Gurugram unit in the last many quarters, I think at least four to six quarters at any of the senior positions of the heads of department or heads of department minus one. Of course, at the junior level, there remains a certain amount of churn. We have seen almost no significant attrition in the last, I would say, I think at least four quarters, if not six quarters. That being said, I maintained in past calls that the competition and the ability to attract and retain high quality and high ethical, more importantly, clinical talent, especially in the kind of full-time model that we have, will remain a challenge. It is not only in NCR. I think this challenge will remain in most of the major markets.
It will remain so not only for the listed players because there are also hospitals which are single-unit hospitals, unlisted hospitals. All of them are growing. All of them are investing in scaling up the bed count from charitable hospitals to unlisted private hospitals to the listed players and indeed even the government hospitals. I do feel that access to clinical talent will remain one of the key elements and key things to focus on for all the players in the industry. Medanta has been very fortunate that we are considered to be a very attractive place for doctors to work. We have seen that with the Noida hiring. So far, no attrition, in fact, no attrition even in Lucknow or Patna that I can actually think of at these levels. The only thing that's happened is that one of our doctors from Patna has actually moved into, one of our department heads from Patna has moved to Noida. So we've done some jugglery around the units, but we haven't seen any major changes in the headcount.
Sure. Thank you for your response. I'll get back in the queue.
Sure.
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Dhananjay Bagrodia with Alchemy. Please go ahead. Hello. B agrodia, please go ahead with the question.
Could you hear me?
No. Can you just come in the range?
Can you hear me now?
Yes. Please go ahead.
This is more of a broad-based question. How are we seeing RPOP for the industry? Are we seeing saturation levels? Do we see that continuing going ahead? Any thoughts on that?
I think there's a lot of nuances to this question. If you look at, first of all, RPOPs are very different. First of all, important to understand RPOP is a derived metric, right? It's a function of realization and length of stay. If you look at Medanta's length of stay, it's probably amongst the lowest in the industry for institutions of this caliber and complexity of work that we do, around 3.06 days. However, if you look at RPOPs as is commonly studied, it's very much a function of the cities where the hospitals are.
As hospitals expand, and you will see that across various listed players, as hospitals expand into markets which may not be in the metro cities or may not be a Delhi-Mumbai kind of market, you will see different markets. Obviously, a Patna RPOP or a Ranchi RPOP will be different from a Delhi RPOP or a Mumbai RPOP. As in our case, we move into, say, a Mumbai market, you may see RPOPs increase because Mumbai RPOPs are typically higher even than Delhi. Delhi RPOPs tend to be a little bit higher than, say, Gurugram or Noida. It is very much a function of where your hospitals are. I think that is how we see it across the group. What you see as reported is a blended RPOP, and therefore it depends on where you are operating. South maybe has a different kind of an RPOP.
I think you have to study it slightly more granularly than just looking at it on an overall basis. That being said, I think the overall growth in RPOP, which till a few years ago, a lot of it was linked to post-COVID very aggressive realizations, I think you see is tapering out. You see RPOP growths across the players now, maybe middle to high single digits in some cases, maybe early double digits. A lot of that is actually increasing complexity of work. Some of that is increasing complexity of work in terms of, say, robotic surgery versus non-robotic surgery. Some of it is in terms of increasing pharmaceutical costs, like things like immunotherapy and other expensive treatments in, say, cancer. There has recently been a revision of the central government rates also, which will play out as we move forward. I don't know. Hopefully, that would have an increase as well because those rate revisions are happening after a long period of time. I think you have to study it more granularly, I do not think that there is one answer to that.
Sure. As a follow-up, you had mentioned in your answer right now that something like robotics has an impact on RPOP. I just want to understand now with even international players talking about how robotics has started coming in operational surgeries, would not that, over the longer term, actually reduce prices because the robot can now be used for 24 hours, costs like that? Or is that naive thinking just to understand?
No. I mean, there is a certain amount of consumable cost for operating a robot in every case, right? The instrumentation, the items which get used in the surgery actually have a cost. It is not that because you're using a robot for a more period of time, it's cheaper. It is not like the robot is doing the surgery without the surgeon. There are still all the other costs associated with the surgery. I do not think necessarily that's true.
Robotics is only one part of it, right?
There is also cost of the pharmaceuticals. There is also cost of advanced procedures like RT cell therapy. There is also cost of increasing antibiotic resistance and therefore need to put in higher levels of antibiotics. There are all kinds of things that are going on. It's not a kind of a one-size-fits-all kind of a simplistic answer that I can give you.
Sure. Just last question. Going ahead then for most of the players, let's assume RPOP is a single-digit number, higher level of growth will just be now bed additions. Is that fair?
No. Sorry. Could you repeat? Are you asking that in Medanta, has the growth come more from bed additions?
No, no, no. I'm saying going ahead, let's assume if RPOP for most, maybe if you don't answer for you, but for the industry, if RPOP is, as you said, going on a single-digit level, so then now most of the growth will just be coming from bed growth. Is that the right way to look at it now going ahead?
No, that is not true. You can generate volume growth without bed growth, as we have done very successfully in many of our units. Bed growth alone doesn't mean volume growth. Volume growth means different kinds of procedures. You can actually generate more efficient operations. If you study Medanta as a group, our RPOPs have been falling, sorry, our ALOS has been falling consistently over the last several years. You can get more efficient about getting patients home sooner, which is always a good thing. There are many different ways to generate growth. Of course, basics of volume and realization is one part. You can generate volume growth without bed growth as well. It's not necessary that you need new beds. By the way, you can also generate bed growth without new hospitals by optimizing how you are actually putting up beds, how you actually have them utilized. Lots of things can be done.
Thank you. Mr. Bagrodia, please rejoin the queue for more questions. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Rahul Jeewani with IIFL Capital. Please go ahead.
Yeah. Thanks for taking my question. You indicated that the Lucknow hospital saw 30% IP volume growth during the quarter. Can you comment in terms of what has led to such strong volume growth for the Lucknow hospital, given that this year we haven't added any incremental beds at Lucknow apart from, let's say, 50-60 beds which we had added last year? If you can also comment in terms of how has the occupancies been at the Lucknow hospital?
Yeah. I think in the quarter, if I look at the occupancy in Lucknow, it's been upwards of 65%, I think around 67% or so. This growth, see, one is that we study only one quarter and another quarter. However, I think that you have to take a little bit broader view. We have seen very strong growth in Lucknow. That growth has come in from many of the actions that we've been taking over the last maybe 12 months or so. You just are looking at a snapshot period in time. If I look at this growth, even in the previous quarter, it was in a similar kind of percentage. If I look at it over six months or if I look at a 12-month running period, it's also been fairly robust.
I do not think that this is anything very unique that has something special has happened only in Q2. It is a combination of the clinical talent that we added in over the last 12 months or so. It is a combination of our increasing beds. We started out with about 4,500 beds, w e scaled that up to about 700 beds. It also includes the addition of some clinical talent there. We have added in some pediatric talent. We have added in talent in our oncology function. We have added in talent in some of our surgical and neuro functions. Even subsequent to quarter end, we have added clinical talent in our Neurosurgery department. We will continue to add in clinical talent in the coming months. We added in a very senior cardiologist, I think, about six months or so ago. A lot of this is talent that we've been building up in the unit that you see playing out over the various months. One snapshot, I don't think, is only that something extra special happened in Q2. It is the ongoing investment in that unit, which will continue. We still have more beds to go in that unit. We'll be adding in maybe one or two more specialties as well. We will be building out a comprehensive rehabilitation center there as well.
Sure, sir. In terms of competitive intensity in the Lucknow market, the kind of competitive intensity which you were facing from some of your peers 12-18 months back, have we seen some letup there, which is also helping us to drive this strong volume growth?
I mean, I do not know if letup is the right word or even what happened 12-18 months ago was driven purely by competitive intensity. I think that we have definitely not seen any significant impact in terms of any clinical attrition, no significant dip in patient volumes, or any kind of feedback from the patient community that they are preferring to go to another hospital versus Medanta. I think that maybe last three, four quarters or more, we have seen everything firing on all cylinders. I have not seen any change, actually, in anything that has been happening there in the last several months. No real impact of this. I am sure that competitive intensity exists. I am sure it will remain. We have not seen any difference anyway.
Sure, sir. My second question is with respect to the Noida Hospital. By when do you expect the insurance and panel empanels to get completed for the Noida Hospital?
We are working very closely with all the insurance providers. I'm hoping that they will be able to move a little bit faster than they have so far. We have good, strong relationships with all of these people. We hope within days and weeks, we'll be able to get this closed. We are waiting for them to get a little bit faster to their responsiveness. Let's hope that plays out quickly.
Sure. By end of the year, do you think that most of the panel meals for the Noida Hospital should be largely done?
I hope so. I hope it's done sooner than that.
Okay. Sure, sir. And sir, last question before I join back the queue. You talked about the benefit on the CGHS business. Now, if I see from your presentation, our CGHS revenue contribution is around 11%, 12% of overall revenue. What kind of a price increase, let's say on a blended basis, the price increase which you are expecting on the CGHS portfolio to play out from FY 2027, and what could be the quantum of margin benefit as well to us?
That's a very nuanced answer to that question. I don't have a number to give you. I'm not even sure whether yet we have done the complete calculation on that yet. What we have seen is that the CGHS authorities have seen fit to increase the rates after several years. Keep in mind that this currently applies only to CGHS, not ECHS. That hopefully will come out if they choose to follow suit as well. Some of the other state governments and some of the other public sector undertakings, etc., which follow a similar guidance, may follow suit. We've seen some positive trajectory over there, especially in some of the specialties and departments which are very, very low and almost unsustainable. Departments like ENP have seen high growth.
In some of the bigger departments like cardiology or cancer, we've seen maybe 5%-10% growth in different procedures. I think each procedure has a different growth rate. Therefore, it requires quite a bit of getting nuanced understanding into that. As with any price increase, since we assume that there would not be a proportionate cost increase, that should all then flow through to the bottom line. That remains to be seen. I think the biggest challenge, frankly, with this business remains the payments and the collections. While we have seen some increases, it is not necessarily that suddenly this has become on par with the cash or insurance business because collections also remains a problem. That being said, given our model, our large-scale model, our fixed cost of doctors, et cetera, we actually feel that we should continue to serve this section of the public. We intend to do so across all our hospitals. As we build out the new ones, we will do some amount of work there as well.
Sure. What is our pure, let's say, CGHS revenue contribution apart from, let's say, ECHS?
I'm sorry?
You said obviously 11%, 12% is including both CGHS and ECHS. What is the contribution just from the CGHS business?
I don't know, Yogesh, if we know that off the top of our head, but I would say more than 50% would be CGHS.
50?
50 maybe?
Yeah.
Okay. Sure, sir. Thank you.
Thank you. Next question comes from the line of Harith Ahamed with Avendus. Please go ahead.
Hi. Thanks for the opportunity. Your comment about moving the operations of the Gurugram Hospital Pharmacy Unit to a new subsidiary. We're trying to understand the thought process here and if you would be moving more pharmacy operations to this subsidiary and then also the lab operations you plan to consolidate under this entity.
No, sorry. I think maybe it's actually the reverse. Maybe you're not aware of the history. This entity already has the complete retail lab operations. This entity also already has the retail pharmacy and outpatient pharmacy for all other hospitals. In fact, only the Gurugram pharmacy was left to move it. I don't even remember now in which quarter, but in several subsequent periods, we have moved all the outpatient pharmacies in all hospitals to this entity, as well as some of our out-of-hospital retail pharmacies. All retail labs are running in this entity. Only Gurugram was actually left over to transition. As soon as we got the relevant licenses for that, that was undertaken. You are seeing actually the last transition impact. Now all outpatient pharmacies are in this subsidiary.
You should also note that it's only the retail business or OPD business which has gone to their pharmacy. Another question which you asked was about the lab business being consolidated with this. All our retail labs are run by our subsidiaries since the beginning. All hospital labs are run by hospitals. We don't have any such plans to move hospital lab business to this entity. These will remain as two separate businesses only.
The IP pharmacy would remain under GHL?
Sir, and that's what you said. It's only OPD Pharmacy. It's basically a retail business which is done by our GHL Pharma and Diagnostics Private Limited subsidiary company. Gurugram was the last leg of that transition. All other transitions have happened in the previous years. Retail labs was always part of this retail company only, which they will continue to do. Hospital labs are part of the hospital business. This company doesn't do any part of the hospital business.
Okay. Got it. If you can give an update on the additional 110 beds that we have commissioned in Ranchi, that'll be helpful.
Sorry, what kind of update were you looking for?
The how ramp-up has progressed and how will that be?
Yeah. So just to give you a sense, in Ranchi, our volumes have grown on an annualized basis somewhere around 15% year- on- year. The new facility is still getting its various empanelments done. We expect that as that gets done, we expect to see some amount of growth there. Once we get the empanelments done, we will optimize the specialty mix across both the physical sites. Although we will continue to run these as one campus. I think the thing that has not yet happened, which we are looking into and do intend to do, is to add in the oncology services into our Ranchi campus, which were thus far missing. I think that is still pending. As soon as we get the specialties aligned across the two facilities, we will be adding in the oncology services.
Okay. Last one, on the ongoing projects at South Delhi and Pitampura, if you can give an update on the progress and also any comment on the timelines that we should expect for the four new projects. I understand these are beyond FY 2027, but how should we think about the commissioning timelines, FY 2028 or FY 2029? Some color would be useful.
Yeah. So if you look at our, let me first go to our Delhi projects. In our South Delhi and Pitampura projects, we have commenced the digging activities in our South Delhi project. Pitampura project, we have submitted our plans for approval. As soon as those get approved, we will be commencing all our various construction activities. Both those projects are moving well. Mumbai also moving well. I mentioned in earlier comments that we have been able to obtain additional beds. That's excellent news. We now can put up a 750-bed hospital in Oshiwara as opposed to a 500-bed hospital. We also will be looking to get now the approval for starting the construction activities there. We've just recently paid off and acquired the additional FSI, et cetera, there. Guwahati, like I said, we've just done the Bhoomi Pujan on 31st of October. We have possession of the land. We have paid out for that land and n ow drawings, et cetera, will be built for these. All the hospitals are typically about three years away, I would say. Noida will build in three years from starting construction till now. Any hospital typically takes three to four years. I do not have an exact date what will come in 2028, 2029 like that. It will take about three to four years to build out all of them.
Got it. Thanks, Pankaj. I'll get back to the queue.
Thank you. Next question comes from the line of Amit Thawani with Clear Blue Capital. Please go ahead.
Hi. Thank you for taking my question. Can you tell me what the impact of the CGHS revision is on our revenue?
I'm not sure if you heard my answer to the earlier question, but I did answer that earlier when there was another speaker who had asked. We don't know this right now because it's quite a nuanced analysis and quite a nuanced expectation of how this will play out. As of late, I don't have a number to give you, as I mentioned to the earlier speaker.
Any ballpark would also be helpful.
I'm sure. However, we don't like to speculate. I would rather prefer to give you facts rather than ballpark speculations. I don't have that number.
Okay. My second question is on the insurance revisions. Typically, I mean, we are seeing some kind of tussle between hospitals and insurers on the revisions. I was just, I mean, what is the current scenario? Are we done with our revisions for the next two years maybe?
Yes and no. Again, requires a little bit more nuanced answer. See, we have different units and we have different insurance companies. Each of them have different contracts with different durations. For example, we may have done with one particular insurance company a renewal last year, which is valid for two years. Therefore, we are not due for that. Some are coming up in the next several months for renewal. Some may already have passed. There is no one answer for that. What I would say is that currently, with the exception of Noida and our new facility in Ranchi, all Medanta units are impaneled with all insurance companies for cashless treatment.
Okay. Yeah. Actually, that was the question I was asking. Yeah. My last question is you alluded to some kind of payment issues when it comes to CGHS. Can you just elaborate on that? I mean, what kind of data days are we seeing today in CGHS and in non-CGHS government business?
See, overall, basis, our data days remain about 80-90 days of our credit business. In CGHS and ECHS, in the government business, average credit realization happens somewhere between seven, eight months.
Okay. Okay.
Sometimes it goes to nine months plus period also, depending upon how they are playing out. It's again, CGHS has moved on to a new portal now. That new portal will take some time to stabilize. Basically, the expert said with this new CGHS thing coming up, new prices, some delay will happen. Some kind of a working capital investment will be required. So again, answer to your question, it takes six months, seven months, sometimes nine months to realize from CGHS or ECHS.
Is that also applicable to ERISA and the PSU business?
Look, PSU business are much faster. They do not follow that longer period. Specifically, CGHS, ECHS takes longer.
Okay. Okay. Thank you so much.
Thank you, sir. Thank you. Next question comes from the line of Tushar Manudhane with Motilal Oswal Financial Services. Please go ahead.
Thanks for the opportunity again. Just maybe it says, "Miss the Noida operational cost." Currently, it is a bit loss of INR 200 million. What kind of numbers to think about, let's say, over next one year in terms of cost or EBITDA loss?
Tushar, you are asking me to gaze into the future, which I'm always tentative and hesitant to do. I don't have a number to give you. You have followed us for some time and seen that we've had a reasonably good record of being able to deliver consistent and strong growth in reasonably short periods of time. I do not want to comment, as I mentioned to another speaker, that we would break even in this month or that month. We are very excited about this opportunity. With the kind of talent and responsiveness which we are getting, I think that as this unit opens up fully, as we get our inauguration done, we do hope to see a good response. I don't know what that means for next month or the month after that.
I think in the next, let's say, 12-18 months, we should see a good kind of performance coming out of here from our quality of work, which we're doing in terms of complex work, as well as on the financial side. We have everything there is state of the art. It is not like it is anything less than the kind of clinical talent, the kind of equipment. We've already, most hospitals, day one, you do not open with a DaVinci XI robot, right? We've already got all of this stuff there. The radiation oncology machine in Lucknow, we brought in, I think, after three to four years of operation. We've already got that on site. It's getting installed now. I think we are fairly gung-ho on this opportunity and fairly gung-ho in terms of putting in whatever it takes to deliver a complete solution. Now, if that breaks even in one quarter or two quarters or three quarters, I do not know. We are not holding back in terms of investing into the unit.
Got it. Thanks.
Thank you. Next question comes from the line of Santhiya with Unicorn Assets. Please go ahead.
Hi. So my question is more on the EBITDA margin side. When we see the difference between the mature versus our developing hospitals, what we see a trend has been that as soon as we launch a new facility, likely a large facility, like we are launching Noida right now and expanding our existing Ranchi and other hospitals. What we see is there is a certain kind of, say, depressedness in the EBITDA margins that we see for a shorter period. Eventually, our EBITDA margins more align with the long-term trajectory. Do you think that's what the company is going through right now, this quarter, maybe even next quarter as well?
I mean, I'm not sure what EBITDA margins you have been analyzing over the various units. What I can tell you is that if you go back in history, in the first year of operations, Lucknow delivered somewhere around 15% EBITDA, if I remember correctly. Patna delivered somewhere around an 8%, I think, if I'm not mistaken. Different units play out differently. I think Gurugram took about 18 months way back when to break even. Different units behave slightly differently, right? It's difficult to tell exactly how Noida will behave. Obviously, any unit starts up, there's some incremental initial costs that come in. I think also, if you really look at the way we categorize our developing hospitals, Lucknow has just completed six years.
We'll probably, as per this definition, maybe from maybe next financial year onwards, kind of move into what may be considered to be the mature hospital phase. I think these are just nomenclatures that are there in investor presentations and talks. I think if you really look at each unit slightly more individually, you will find that all of them continue to perform extremely well, especially in context to their individual location and situation. It's not like we say that a hospital like Gurugram, which is 15 years old, is finished. We've been delivering strong growth even in a 15-year-old hospital. I think each unit plays out slightly differently. We will see this in Noida, sorry, as we scale up. We will understand how similar or different Noida is to any of the other units.
Our internal management approach is to consider each unit differently and not worry about whether it's like Patna or like Lucknow or like Gurugram, but to run that unit for what it is. We feel quite excited about Noida. We are very happy that it's up and running. I think that was the first step. Now we have to get it open properly, get everything finished, get the inauguration done, and be ready to serve all the people that are hopefully excited to come to Medanta facilities if they need any kind of medical care.
Yeah. I understand. Just on the follow-up for the same question. I heard you saying that when we look at Lucknow versus Noida, we are on the way all through going into in terms of technology and all the machines that we need from start in the Noida facility. My question is more on the approach the management is taking when it comes to Noida versus how we have been doing in the past when it comes to, say, Lucknow or Ranchi or Patna. How different is our approach when it comes to Noida?
I think the main thing is that Noida is very much part of the daily NCR market. Obviously, we are a fairly well-known and important player in the NCR market with our presence in Gurugram for so long. Noida, we have kind of falls in that same territory. Therefore, we have a lot of patients from this area. We have a lot of brand recall in this area. There is also maybe a little bit more familiarity, easier potential availability of clinical talent in the NCR market.
Patna and Lucknow are new territories, right?
Most of the private healthcare industry had never even been there. If you look at when we walked into Lucknow, there was a lot of question marks about how successful we would be. Many of the other members of the industry saying that they would not be interested in that market. Now, we proved many doubters wrong. We see a lot of people following us and copying us into these territories. Same was the story in Patna. There were a lot of question marks about whether Patna can be not just clinically successful, but financially successful. We have proven that as well. Very likely, we will see people follow us there.
I would not be surprised if people follow us into other markets which we've gone into. We've kind of established ourselves as a trendsetter on this front. We've always said that Medanta will go where the people need us, not necessarily just where the perceived high per capita income is, but we will go where the people need us. We have made all those units financially and clinically successful. Noida, given that it's part of the NCR market, we were a little bit more confident to go in with more talent and more investment sooner rather than actually going into a newer city like a Lucknow or Patna where we had to learn also about that facility center, learn about those cities. The doctors had to also learn about us. I think in Noida, we are maybe a little bit more familiar to the community.
Yeah. Thank you greatly. All the best.
Thank you.
Thank you. Next question comes from the line of Rahul Jeewani with IIFL Capital. Please go ahead.
Yeah. Thanks for the follow-up, sir. We did quantify the EBITDA loss from the Noida hospital. Can you similarly call out the number for the new Ranchi hospital where we commissioned 110 beds? What was the EBITDA loss from the new Ranchi hospital in Q2?
We can't because that's part of the Ranchi unit. I don't know if you have more collaboration.
We are running both the units as one single campus. There are a lot of shared costs and shared management. We really do not track what is the loss of the new hospital. That will be unfair.
Sure, sir.
We are not working as two separate unit.
Yeah.
We are working as a single unit.
Single unit.
The doctor is working here and there also.
Correct.
Right? The same management is managing that unit also. That is why we have called it out separately.
Okay. Point noted. Sir, second question is with respect to price increases across your network. Let's say I think we were supposed to take price increases across Lucknow and Patna. Have we already taken that at the beginning of the year, or when do we plan to take those price increases?
No. We have not taken Patna increases. I think, correct me if I'm wrong, Yogesh, but I don't think we have taken a Patna price increase since starting of Patna at all.
Yeah. Patna remains in the same territory.
Same tariff from what we started. Never taken a tariff increase in Patna. It's now our fourth year of operations, I believe. Lucknow, also, we haven't taken any tariff increase. We have taken some nominal. Nothing this quarter to call out. I think maybe last quarter or even I think at the start of the calendar year, we had mentioned that we would be taking nominal increases in Lucknow and Gurugram. Those, I think, have mostly already been taken before the quarter. I don't think there was any major increase this quarter, if I'm not mistaken. Maybe.
No. Lucknow.
Maybe something like that.
Somewhere in this quarter.
It would be hardly a few percentage points increases.
Sure, sir. Does the PPP agreement in Patna stop us from taking price increases or because you said you haven't taken price increase in that market for four years now?
No, no. There are no constraints on taking any price increases for the non-PPP part of the business, which is currently about 75%, 80% b ut 25% is reserved for PPP. No constraints on the remaining 75%. Frankly speaking, we have not taken price increases because the unit is doing so well. We have always been an organization that wanted to be conservative on how much we charge to patients. With the kind of financial performance we see in Patna, we do not really see any reason to charge more to our patients just because we can. We would like to be as reasonable and as conservative on pricing as possible.
We open.
We continue to open more beds there. We continue to see growth across the board there. What is the need to just blanketly take a price increase because you have to? That is our philosophy and our approach, and I think well stated for many years. As and when we feel that there are some inflationary impacts to manage in Patna, we will look at that as well.
Sure, sir. Thanks for answering my questions.
Thank you. Ladies and gentlemen, as there are no further questions, we have reached the end of the question and answer session. I would now like to hand the conference over to the management for closing comments.
Thank you, everyone, for your questions and for joining us today. Please feel free to reach out to our investor relations team in case you have any questions that remain unanswered. We look forward to speaking with you and meeting many of you soon. Thank you.
Thank you. On behalf of IIFL Capital, that concludes this conference. Thank you for joining us. You may now disconnect your lines.