Ladies and gentlemen, good day and welcome to the Yatharth Hospital & Trauma Care Services Limited Q2 FY 2027 Earnings Conference Call hosted by Elara Securities. 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. I now hand the conference over to Mr. Kashish Thakur from Elara Securities. Thank you, and over to you, sir.
Thank you so much, Ritija. Good morning, everyone. On behalf of Elara Securities, we welcome you all to Q2 FY 2027 earnings conference call of Yatharth Hospital & Trauma Care Services Limited. We have with us senior management of the company represented by Mr. Yatharth Tyagi, Whole-Time Director, Mr. Amit Kumar Singh, Group Chief Executive Officer, Mr. Nitin Gupta, President Finance and Group Chief Operating Officer, Mr. Pankaj Prabhakar, Group Chief Financial Officer, Mr. Ashutosh Kumar Jha, Group Chief Strategy, Merger and Acquisition, Investor Relation, and Mr. Sonu Goyal, Group Chief Financial Controller. I now hand over the call to Yatharth management for the opening remarks. Over to you, Yatharth sir.
Thank you. Good morning, everyone. This is Yatharth Tyagi, Whole-Time Director. Welcome to Yatharth Hospital & Trauma Care Services Limited earnings conference call for the quarter and half year ended September 30, 2026. Our earnings presentation has been uploaded to the stock exchanges and our website. I hope you have had an opportunity to review it. Well, this is an important moment in Yatharth Hospital's journey. Quarter two FY 2027 was the strongest quarter to date, with revenue growth of 52% year-on-year and EBITDA growth of 50%. Our existing hospitals at Noida, Greater Noida Extension, and Jhansi-Orchha continue to deliver sustained performance with 24% year-on-year revenue growth. These have been true contributors to our profitability, with an EBITDA margin upwards of 28% for these specific hospitals.
At the same time, our newer hospitals continue to ramp up, now contributing 28% of group revenue compared to 11% in the corresponding period last year. Collectively, these hospitals have moved from an EBITDA loss a year ago to positive EBITDA during H1. Notably, since our listing in August 2023, Yatharth Hospitals has not only more than doubled its capacity from 1,405 beds to about 2,800 beds, but also tripled its revenues and profits. In our earlier communications, we have shared our target to further doubling this capacity in the coming few years. However, the opportunity in healthcare sector is much, much bigger. Hence, to accelerate our journey growth further, we have entered into a strategic partnership with Advent International for a primary capital investment of INR 3,150 crore through a preferential issue of equity shares and warrants. The transaction is awaiting necessary regulatory approvals.
We view this partnership as much as more than just a capital infusion. Advent brings over 35 years of healthcare investment experience and a significant expertise in building and scaling healthcare platforms. We believe this combination of long-term capital and institutional experience will strengthen our ability to pursue growth opportunities with greater scale and discipline. With Advent as a partner, we now aim to build a larger franchise of 7,000 to 8,000 beds over the next three to five years. We can now move faster and act on larger opportunities while ensuring the same discipline in execution. This partnership is also a vote of confidence in what our team has built, a growing network, a proven ability to turn around the hospitals we acquire, and a steady focus on clinical quality.
I would like to acknowledge the people behind this progress, our doctors, nurses, management, and all our employees for their commitment, our patients and their families for the trust they place in us, and our shareholders for their continued support as we have expanded the network. Against the strategic backdrop, our teams continue to remain focused on clinical excellence. At a cluster in Noida and Faridabad, we are now among the most reputed hospitals of the region. At Greater Noida, our teams managed a rare liver condition and reconstructed two nerves in a single sitting for a brachial plexus injury, a procedure very few centers in the region offer. At Faridabad Sector 20, we launched the region's first memory clinic. In recognition of clinical excellence, we have received the Hospital Excellence & Innovation Award at the Health & Wellness Excellence Awards 2026 for the ASSOCHAM organization.
Our Noida and Greater Noida hospitals ranked among the top in the Noida-Ghaziabad region in Times of India ranking. We were recognized across multiple specialties in the Outlook Best Hospital Rankings 2026. Now shifting to the operating highlights for the quarter. Our ARPOB rose 11% year-on-year to approximately INR 36,000. Our occupancy stood healthy at 72% on the currently operationalized beds. As we ramp up, about 350 to 400 beds are yet to be operationalized across Faridabad, Model Town, and Agra, presenting a meaningful headroom for growth. While existing hospitals continue to compound, our newer hospitals are scaling well and contributing more to the network every quarter. Faridabad Sector 20 shows what our acquisition and turnaround playbook can deliver. The hospital has turned EBITDA positive in a record period and generated revenue of approximately INR 40 crore in the last quarter.
More than 80% of its business comes from cash and private insurance patients, with ARPOB of approximately INR 40,000. Our New Delhi hospital at Model Town is following the same path. In Q2, it reported revenue of approximately INR 26 crore and ARPOB of around INR 50,000, which places it among the premium hospitals in NCR, alongside Noida Extension, where ARPOB has also crossed INR 50,000. We expect it to break even, the Model Town Hospital, Delhi, in the second half of this financial year. Agra, which is our first corporate hospital in that region, has improved steadily since we took it over. In Q2, the hospital remained EBITDA positive on the revenue of approximately INR 20 crore. Next is Gurugram, our upcoming 250-bedded hospital in Sector 40, which is progressing well and is expected to operationalize in the next financial year.
The hospital is expected to serve the premium Gurugram market, giving its location in a highly potential catchment and its proximity to the Delhi airport, with an anticipated ARPOB of above INR 50,000. We will continue to evaluate further expansion opportunities with a careful view on strategic fit, quality, and returns. We have a model that has been tested, a network that is delivering growth and profitability, and the resources to scale it further. Our aim is to build a high-quality, scaled healthcare network and to create lasting values for all our shareholders. We begin this next phase from a position of strength and with confidence in what lies ahead. Thank you once again for your continued trust and support. I will now hand over to our Group CFO, Mr. Pankaj Prabhakar, who will take you through the financial performances in greater detail.
Thank you, Yatharth, and good morning, everyone. I will take you through the group's financial and operating performance for Q2 and H1 FY 2027. The group delivered its highest-ever quarterly revenue of INR 4,314 million in Q2 FY 2027, representing growth of 52% year-on-year and 10% sequentially. Revenue for H1 FY 2027 stood at INR 8,241 million, up 52% year-on-year. This performance reflects the contribution of our established hospitals as well as the increasing scale of our newer facilities. Our existing hospitals at Noida, Greater Noida Extension, and Jhansi-Orchha contributed INR 3,109 million in Q2, registering year-on-year growth of 24%. Inpatient volumes across these hospitals increased 28%, while occupancy improved to 78% from 71% a year ago. Noida and Jhansi-Orchha operated at occupancy level above 90%, while Greater Noida reported 78% and Noida Extension 61%.
Our newer hospitals at Greater Faridabad, New Delhi, Faridabad Sector 20, and Agra contributed INR 1,205 million, representing 28% of group revenue. Greater Faridabad achieved healthy occupancy of 77%. Faridabad Sector 20, Agra, and New Delhi continue to ramp up their operational census bed. Group ARPOBs reached an all-time high of INR 36,000, up 11% year-on-year. Noida Extension and New Delhi reported an ARPOB of approx INR 50,000, Greater Noida approximately INR 43,000, Faridabad at INR 40,000, Noida INR 37,000, Greater Faridabad INR 35,000, and Agra at INR 33,000. As some of our newer and premium hospitals are scaling up and the specialty mix continues to improve, we expect our group ARPOB to improve meaningfully in the coming years. Talking about margins and profitability. Q2 EBITDA was a record INR 1,020 million, increasing 50% year-on-year and 11% quarter-on-quarter. EBITDA margin improved to 23.6% as the newer hospitals are running profitable.
Excluding the ramp-up losses at New Delhi and Faridabad Sector 20, our adjusted EBITDA margin were healthy at 28%. Profit after tax stood at INR 485 million for quarter two, up 17% year-on-year, and INR 939 million for H1. However, cash profit, which add back the impact of depreciation to the PAT, actually increased 36% year-on-year. Our operating cash flow during H1, INR 1,113 million, an increase of 49% year-on-year. As of September 30, 2026, the cash and bank balances stood at INR 4,289 million, and net debt stood INR 392 million. This provides us with a comfortable balance sheet position as we continue to invest in the network and prepare for the next phase of expansion. To summarize, quarter two and H1 FY 2027 has been marked by a strong revenue growth and improving contributions from our newer hospital.
We have also maintained healthy cash generation and a comfortable leverage position. With the proposed Advent partnership, we believe we are well-positioned to pursue the next phase of the growth while remaining focused on execution, returns, and quality of care. Thank you for your time. I will now hand over the call back to the moderator for question and answer session. Thank you.
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 the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets and also to restrict their questions to two per participant. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Aryan Jain from Groww Mutual Fund. Please go ahead.
Yeah. Hi. Thank you for the opportunity, and congratulations on a great set of numbers. So my first question was, what would be your payer mix for this quarter?
So payer mix for this quarter is close to 34%, which is down a few percent from the last quarter.
That is the government institution business.
That is the government institution business, and the rest is equally divided between private insurance and cash patients, with private insurance having a few percentage more than the cash business. International business remain close to around 4%-5% at the current payer mix level.
You said 34%, right? The government mix. How much was it last year?
34% is the quarter government mix, and last quarter it was 37%.
Okay, understood. My second question was, sorry if I missed it in the initial remarks, but what are our occupancy levels at Delhi, Faridabad, and Agra?
We have ramped up the kind of occupancy from 68% in the last quarter to 72% in this quarter on a blended level. However, as you have been mentioning about the Model Town, it has increased to 41% in this quarter. The new hospital at Faridabad has increased to 59%, and the Agra has been at 58% as of now.
Okay.
Also to note is that all the beds are not operational in these hospitals, so there are beds yet to be opened.
Yeah, that was my follow-up actually. Since now the occupancies are closer to 60%, any timelines for further opening of the rest of the beds?
I think within the next couple of quarters, maybe two to three quarters, we should be opening all the beds.
Okay. Just one last question. What would be the share of pharmacy business to our overall revenue?
I think that lots of procedures comes with the packages and all, so we do not calculate and we do not look at it in that way as a pharmacy business standing on, right? If the questions would be to draw some inferences about that, what is going on in the government and the court comments on all these things, I think it is very premature as of now. That is how being directed. I think the industry also has represented the government is part of it. Let us see how it goes up. Just giving you this thing, I think we do not look at it in that way, the absolute pharmacy percentage.
Okay, understood. Thank you. I will join back the queue for further questions.
Thank you. Next question is from the line of Praveen from Fortune Towers Investment. Please go ahead.
Hello, sir. Can you hear me?
Yes.
Good morning. Congratulations on good set of numbers. Let us address the elephant in the room. Can you guys comment on what will be the implication on your top line and bottom line because of cancer medication capping? That is my first question. Second question is, any new assets we are planning in this year? When can we expect the closure of the Advent deal? Thank you. These are my two questions. Thank you.
On your first question about the capping on the certain list of cancer drugs, we have did our homework. We have calculated that at the existing list for cancer capping of the margins to 30%, the overall impact that it will have on our EBITDA numbers is around 0.3% reduction because of that specific pricing on the onco thing. However, because of the 0.3% reduction due to cancer drugs, our guidance for the overall company level EBITDA, which is in the coming quarters and years ahead close to 24%, that remains unchanged. Because this 0.3% reduction in the cancer, we are already figuring out and coming up with strategies to compensate this into other operational efficiencies and line items and other ways of compensation of this. Our overall group level EBITDA will not change going forward because of this policy.
Understood. Thank you. Can you comment on the second question, please, Advent deal?
Yeah, I think the Advent deal is at the CCI approvals final stages. I think post Diwali, we can expect it to get the approval this month itself. We are looking forward for that.
All right. Yeah. Thank you so much. I wish you all the best and let more people be treated from your hospitals. Thank you so much.
Thank you. Next question is from the line of Shrikant Akolkar from Nuvama. Please go ahead.
Hi, good morning. Thanks for taking my question. Just on Advent deal, just want to know in how many tranches will they receive this money?
Yeah. The Advent money of INR 3,150 crore will come in two tranches. The first tranche will be INR 1,750 crore, which will be received after the CCI approval this month. And the next tranche will be received after 15 -18 months based on certain conditions. So in terms of the utilization of funds.
Understood. And on the expansion strategy now, because we've got a solid partner as well. So how are we thinking of the expansion? So in terms of the size of the asset, maybe potentially ARPOB, kind of ARPOB that we will look at, if it's multi-specialty, single specialty, or maybe standalone hospital or chain of hospitals. So what should be our strategy?
Our focus remains on multi-specialty hospitals. Now we are, of course, looking at much larger deals, and we are looking for a chain of hospitals also. I mean, we are looking for hospitals which potentially can have a better ARPOB than us. And we are looking across North India as a priority, and we are also open to other areas if we have a chain of hospitals available.
Also, the assets that we will continue to acquire from this fund will always be EBITDA positive hospitals. There will be no absolute drag on the absolute EBITDA because of these acquisitions going forward.
Understood. In terms of the timeline, you have said that in next three to five years, you want to more than double the capacity. At the same time, we also have our own expansion ongoing, and now we have got additional money. If you can little bit to the detail of this, how many beds will get added next year, and maybe if there is a schedule, broad schedule, that will really help us.
I think we do not have a specific one-year or six-month guidance. The breakup of the expansion is that on our existing organic plan, we had announced going to 5,000 bed capacity, close to three to four years going forward. That remains same. On top of that, around 2,000 to 3,000 beds we expect to add because of this recent deal, again, in somewhere in close to four years going forward.
Understood. Thank you very much for responding to me. Thank you.
Thank you. Next question is from the line of Aanchal Maheshwari from Naredi. Please go ahead.
Sir, if I may, can you please repeat the ARPOB for each of the hospitals?
Yeah, sure. As we said about it, the blended ARPOB for this quarter is nearly around INR 36,000. And we are pleased to share with you that the highest ARPOB has been at the Noida Extension Hospital, nearly around INR 51,000. Likewise, near in the Delhi of around INR 47,000. Preceding by the Greater Noida of INR 43,000. Faridabad of INR 33,000. Noida at INR 37,000. The new Faridabad Hospital of INR 37,000. Agra of around INR 33,000. And Jhansi is around INR 14,000.
Thank you so much.
The YoY growth of the ARPOB is around 11%.
Right. Thank you so much.
Thank you. Next question is from the line of Surya Narayan Nayak from Sunidhi Securities. Please go ahead.
Hello. Congratulations for the excellent set of numbers. One question is that now, considering the EBITDA to CFO conversion of historically 70%, this quarter, this half, we have seen some kind of softness. When can we expect the things to improve as the payer mix has improved also compared to last year? What is the take on that?
Surya, normally the collection in the H1 is lower than the full year collection. That is why you would see a slight dip in the OCF conversion rate. But at the end of the year, we should expect upwards of 70% conversion.
Okay. Secondly, you are saying that you are looking for the hospitals which are actually having ARPOB potential higher than ours. So in that case, will your stand of increasing to bed capacity beyond 5,000 will stand, given the cash flow or the cash in hand you are having?
Yes, our existing plan of 5,000 beds organically within our internal resource accruals remains as it is. The additional money that we are receiving from Advent, this is more for further expanding the growth, as we have mentioned, to buy about 2,000+ beds.
So these 2,000 beds you are planning in which year? I mean, is it FY 2028 or 2029 scenario?
You see, I mean, the way we're looking at it is the total beds should, or close to 2,000 beds should be clocking the combined revenue within next three to four years. However, the acquisition of the because we are receiving the first tranche anytime this month, we would like to deploy the first tranche as soon as possible. So maybe around 40%-50% of that bed can actually come live from next financial year itself.
Okay. Can you give some traction? We have some understanding till FY 2028, but how will be the incremental flows to come so far as the P&L traction from FY 2029? Because if you can guide, because I understand that now there are some which will be related to the kind of hospitals we are going to acquire. So maybe if it is a running hospital, obviously the CAGR will be improving and obviously there will be not a EBITDA drag. But if you can give some color for FY 2029 sake, because we have clarity till FY 2028.
Our existing organic plan of 30% revenue growth, as far as by basis concerned, is easily visible for next three to four years on the existing plan before the Advent deal. So that will continue on that same trend. What we expect is, how we're looking at it, we have not made a year or two target. How we look at that is the INR 3,150 crore, that additional, we will be deploying to acquire more assets of absolute EBITDA and revenue. So this will be above and beyond that. I mean, even if our existing plan of 30% revenue growth in next three point five years, that is almost around 2.5x.
If we add the INR 3,150 crore of deployment to that, I think easily EBITDA can be added on top of this 2.5x, which should be easily able to cross us at 3x from the current numbers in next three point five to four years.
Okay. Lastly, from Model Town point of view, when the ramp up will happen, let's say occupancy will improve to close to 50%-60%, are you facing any kind of competition in that property area?
The Model Town, yes, there are a couple of hospitals in there, but we are very clear in our thought process where we are. It is an absolute, very mostly populated area, right? So very densely populated. So far, the growth is very good. I think the next quarter, probably end of the quarter, this would be EBITDA positive.
Okay. Thank you.
Thank you. Next question is from the line of [audio distortion] from [audio distortion] Money. Please go ahead. Mr. [audio distortion] , please go ahead with the question. Your line is unmuted.
Can you hear me?
Yes.
Sir, my first question is regarding the medical tourism. What is your strategy to increase the contribution of international patients to your overall revenue? Which international market are you targeting, and what incentive you are taking to attract more patients, such as partnership with the overseas hospital or international healthcare agencies? Additionally, what are the target are you aiming for over next three to five years, and how could this segment improve your ARPOB, revenue growth, and overall profitability?
International, like we started focusing on international market last financial year, right? I think I am very happy to see the kind of strategic alliances, partnership which we did in the various international market. I think it started paying off. Just to give you the perspective that last year H2 versus this year H1, we had grown over more than 35% of international business. However, still it is in a single digit as compared to the top line, but we are making a very significant move and various areas like CIS is contributing. However, it has got affected with the last couple of months because of the war, Gulf and other things.
Still, I think we are making a very steady progress in this region. CIS particularly and African market is contributing very well, right? Lots of tie-ups which we have done it, whether it is Mauritius, whether it is Ethiopia, South Sudan, another region. So we have a channel partners there. There are a couple of alliances which we have done with the hospitals as well, right? So we are doing good and as far as contribution is concerned, I think that is the ARPOB always, and we all know that the international business contribute a very high ARPOB. So I think it is going as per expected line. Next three, four years going to be fantastic because still, Noida airport has not opened for international market. That is what going to be a significant addition for us. That is what we are hoping for.
And we have a great plan as far as international is concerned. There is a separate team working on it. So it looks very, very positive.
Yeah, interesting. So next question is regarding Advent International. So Advent International, what would be the CapEx per bed for the greenfield expansion you are planning?
So mostly we are not planning any major greenfield expansion from the money that we have received from Advent. As we said that we will be acquiring running assets, we will be acquiring EBITDA positive assets, and the total bed capacity that we can look to add from that amount should be close to 2,000 beds in total.
Okay. So from INR 3,000 crore of money, you can additionally acquire 2,000 beds. Yeah? That is right?
Roughly around that mark, yes.
Thank you. My questions are.
Thank you. Next question is from the line of Akshat Mehta from Seven Rivers Holding. Please go ahead.
Hello, sir. Am I audible?
Yes.
Hi, sir. Congratulations on another great set of results. I had a few questions on the business. One is, sir, we have seen that the debt number on a gross level is increasing for you in FY 2026 end and then in H1 end as well. I just wanted to understand where the debt is going and what is the kind of repayment that we see over the year?
I think as far as the total debt is concerned, the addition to the debt from the last financial year has been primarily for the INR 100 crore that we have spent on the Gurugram facility. Plus, around INR 100 crore or more has been taken for certain medical equipment that will be and that have been added to both the Model Town Hospital, the Sector 20 Faridabad Hospital, as well as certain construction that is already happening at a full swing in the Gurugram Hospital. But we feel that this is the peak level of debt for us, at least for next few quarters to come. Debt will definitely eventually could go down also from here.
Even we feel that going forward, even though the full focus is on acquiring new hospitals with the Advent money, but if the acquisitions are taking time as far as certain assets are concerned, we can also briefly look to certain at a minute level reduce debt from that amount also, from a small amount. I think this is the peak level of debt that the company is expecting in the coming quarters.
Okay. My next question, sir, would be on your Agra hospital, sir. What is happening there? In one quarter, you have seen the occupancy go down sharply, but then your ARPOB has also gone up. Are we seeing a big mix change, case mix change in Agra? What is happening there?
I think as far as Agra is concerned, we are very happy with the numbers and the way that hospital has ramped up and scaled well. We have become the most preferred hospital in that area. I can also say that the number of robotic surgeries that we are doing in Agra is probably at par or even higher than certain NCR hospitals. Definitely, Agra is on a similar monthly trend now as to what it was in quarter one, as well as earlier months of quarter two. I think going forward, we are not just optimizing payer mix there, but we are in the line to renovate the facility as well as add certain more beds, and certain floors are also in a renovation stage there.
In terms of the case mix or the treatments, any new additions have been done or anything that you're planning to add in Agra?
Yes, absolutely. We recently added CTVS surgery and cardiac surgery. We recently, we are planning to add pediatric cardiac as well. We are also strengthening couple of the specialties which we felt that was not that up to the mark. That's happening, and I just said it that robotics is happening there. I think in a way, largely we are doing everything except, you say that, the radiation onco and then the transplant program. Agra is doing good. Yes, there are few changes going to happen, depends on how the specialties or the department perform in the future.
Okay. Last question, sir. What's happening on the IT matter, sir? We've seen the demand notice after that. What has happened? What is the formal plan?
I think as we said that the IT matter has been resolved, and then we have received the final demand. As far as we were saying that the final demand has come and the matter is resolved now. There has been no. Earlier also all the assets and the FDs were released for the company. As far as even going forward is concerned, because even the existing demand, we feel can significantly reduce. That is the only reason why we feel that, and because of taking legal opinions and even with the talks from the department itself, we have been advised to go into appeal against that. However, it is a normal course of appeal. It is not that the whole matter is still pending at a larger scale.
The capping has been done as far as the demand is concerned, and we also feel that this will significantly reduce. That's what we are doing, and we expect this also to reduce in the coming quarters ahead.
Okay, sir. Thank you and congratulations once again.
Thank you. Next question is from the line of Meet Mehta from Integrity Ventures and Partnerships. Please go ahead.
Yeah. Hi, team. Congratulations on great set of results. My first question is on the onco status of the Model Town and the Faridabad hospitals. When are we expecting the oncology segment to go live in both of the hospitals?
Faridabad, I think everything is done now. The equipment has already been installed. Now it's in some formalities with the AERB. We take the 40, 45 days. So we are in the last leg of these things. The clinical manpower has already been on roll, right? So probably we'll think that the next 45 to 60 days, the entire spectrum of the oncology, medical and surgical already we are doing it. So the radiations and nuclear, we're going to start in next two months. So, this is Sector 20. Model Town, it's going to take time. I think that's still in a drawing phase as of now because we have to complete, we have to start new setup for this entire radiation thing, bunkers and all, because in Faridabad it was already there. Here we need to start it. So it's on a planning phase.
I think already the drawing and already the drawing already been come. So we will work it out. As you know that Delhi has got a GRAP 2 now, the constructions are on hold. So probably it will take two, three months we will take to start our work. So another six months we will share.
However, we've already started medical and surgical oncology in Model Town, and recently we've hired certain star doctors as far as oncology for those specialties is concerned, and we have already started seeing good numbers. As Amit mentioned that we will be adding radiation oncology in that hospital. I think the timeline should be somewhere around close to eight to nine months.
Got it. Are we on track to break even on the Delhi Model Town Hospital?
You said that the next quarter, I think we should be. It is very much Delhi is doing as per the expected line. Next quarter, I think Delhi should be better than.
If you see, losses of Model Town has been reduced quarter-on-quarter. For Q1, losses was INR 55 million. This quarter we reported losses of INR 38 million. Next quarter, we are very much sure, in the month of December is a break-even month for the Delhi quarter, for the Delhi hospital.
Got it. Last on the bed addition, anything on the Noida, Greater Faridabad Hospital, and the Jhansi Hospital? We are reaching to optimum utilization of the capacity. Any color on those three facilities?
There is not much scope for expansion in those three hospitals. However, we are looking to improve marginally in terms of the ARPOB and the payer mix is concerned in those hospitals. But there is no specific plans for any brownfield capacity expansion in those hospitals.
Sure. Any new hospitals that we are looking in those geographies?
I mean, as we said that we are targeting a huge capacity addition in terms of new hospitals and new beds. We are focusing across other areas of NCR, micro markets of NCR where we are still not present, and at a larger scale within the whole North India market. I mean, especially we still feel U.P., Haryana, Punjab, and of course Delhi NCR has good scope for growth. As I said, now along with the Advent deal, we have expanded our horizon. The priority still remains north, but if there is a good cluster of hospitals available outside north, we will be actively looking to evaluate that.
Yeah, sure. Sure, yeah, Yatharth, very congratulations on the great set of results and all the best for the coming future.
Thank you. Next question is from the line of Aryan Jain from Groww Mutual Fund. Please go ahead.
Yeah, hi. Thank you for the follow-up. My first question was, is there any change in our 24%+ margin guidance for the year, given that both our new assets actually see assets are seeing a faster ramp up?
I think the guidance remains same. In fact, we also have to cover up the difference from the onco pricing differences. But we remain sure that the guidance we have for the EBITDA margins will continue to be same.
Okay. With Gurugram coming up next year and also the Advent funds being deployed next year, should we expect the margins to be kind of flat over the next couple of years from FY 2027 level?
I think we have not made a blended margin plan because that will depend upon the type of assets and the type of deals we are able to close from the first tranche we get. However, what we are forecasting is our existing plan where the EBITDA margins will continue to be on a rising trend, but they will be upwards of 24% for the upcoming years. The blended margins from the new hospitals will depend on the type of deals we are able to close.
Just remember that our existing hospital, particularly the Faridabad and Delhi, will start contributing to whatever the drag would be.
Okay, fair enough. One last question. How soon do we expect our Gurugram facility to break even, given that it is a competitive market?
I think Gurugram, we are also targeting to break even in 15 months. But it will be a very high premium ARPOB facility with very high payer mix of cash and private insurance as well as international patients. As far as breaking even is concerned, I think 15 would be right on the conservative side.
Okay, thank you. Those were my questions.
Thank you. Next question is from the line of Akshaya Shinde from Centrum Broking. Please go ahead. Akshaya Shinde, please go ahead with your question. Your line is unmuted. Akshaya Shinde, may we request you to please unmute yourself and proceed ahead with your questions. As there is no response, we will move to the next question, which is from the line of Praveen from Fortune Tower Investment. Please go ahead.
Sir, thank you for the follow-up question. Sir, my question is on your next leg of expansion. So, what kind of assets will you be more interested in? Will you be interested in acquiring more of operational assets, or you want to follow this operational maintenance asset-like model? If you are planning for both, can you help us, what would be the kind of breakup there, please? Thank you.
Yeah, I think because it would be a mix of both, but primarily they would be 100% equity-owned assets. Because with the large capital we have to deploy now, we can look at larger chain of hospitals that we can deploy. There are few chain of hospitals that are available within the North market itself that we are capable and evaluating. Those are mostly asset-owned, 100% equity-owned chain of assets. I think, yes, going forward, we can even look to have certain hospitals which are available on O&M, but they would be mostly standalone hospitals, which would be mostly part of our initially 5,000-bed capacity expansion is concerned. But from the new Advent capital, it would mostly be fully owned assets.
Yeah. Thank you. Thank you for the answer.
Thank you. Next question is from the line of Prashant Sharma from Hem Securities. Please go ahead.
Hello. Good morning, everyone. Sir, as you mentioned in the previous call to bring down the government business from 35% to 20%, and sir, by keeping the government business in certain ways, like 20% in the newer hospitals. Sir, are we following that trend in the new hospital, and what would be the outlook going forward for the government business in the next two to three years, sir?
The new hospitals, as you can already see from the performance of Model Town and Sector 20 Faridabad, and even the Greater Faridabad, which was the newest before them, the government business in the two new hospitals is not more than 15%-20%. So we're actually not following that playbook only, but also showing the results of that. As the scale of these hospitals ramp up, that will significantly help us to reach that initial government business target is concerned. Even Gurugram would be on a similar line next year when it starts. So I think we are very much following that trend, and the guidance on that remains similar.
Okay, sir. Thank you. That is all from my side, sir. All the very best, sir.
Thank you. Next question is from the line of Akshaya Shinde from Centrum Broking. Please go ahead. Akshaya Shinde, please go ahead with your question. Your line is unmuted. Akshaya Shinde, may we request you to please unmute yourself and proceed ahead with your questions. As there is no response, we will move to the next question, which is from the line of Rushikesh Bhoi from Purnartha Investment Advisers. Please go ahead.
Yeah. Hi. Thanks for the opportunity. I just have one question around the onco share. So, in close proximity of Greater Noida, a hospital has recently launched a comprehensive cancer care center. Are you seeing any pressures from these onco patients itself or on retaining onco talent there?
In Greater Noida, I think the full scale of onco, if you say, I think, except that one hospital which has more of the medical college, I think I do not think so any other hospital has got, but Noida has got a couple of hospitals as far as full spectrum of onco is concerned. What is your second question? I missed that, second part of it.
Okay. The next update I want, what is the current status for Gurugram Sector 40 facility in terms of construction?
Construction. We are on the revamping the existing building, and we are kind of adding more capacity there. We have submitted the plans also, and we have started modifying the existing building according to the plan. As soon as we get the plan approval, we will start the construction on the remaining part of it.
This facility is being created on a very premium end. We have gone for one of the largest room sizes across the Gurugram market other hospitals have. I think we are eagerly waiting for the full launch of this facility.
Okay. Just want to add my first question. I think you missed the second. For that one, are you seeing any pressure from the onco patient footfall, or in the retaining onco talent in the Greater Noida for onco in the Shahdara area?
No, Greater Noida, we have two hospitals technically, because Greater Noida and even Noida Extension, the Noida Extension is technically Greater Noida West also. So, we both at that facilities are catering the highest number of oncology patients as far as any other hospital is concerned in Greater Noida. So, I think we do not see any impact. In fact, if you look at it, our absolute volume of oncology business has increased in both these hospitals. We are adding more doctors also in terms of leading doctors of NCR. We have planned to add in these two hospitals as far as oncology is concerned. So, so far there is no impact in terms of the volume.
Okay. And in terms of talent?
I think that we have enough pool of the doctors, right? So, we have got eight hospitals and have enough pools of doctors. And then, if you see the more and more hospitals coming up in that particular region, it is also attract clinical talent. So, I think that is not going to be a I think clinical dearth is not there in that particular market. And we are very confident that in Greater Noida, when we have our entire spectrum, which is very soon we are going to add nuclear as well as radiation oncology in Greater Noida facility as well. So, the doctor's level, I don't think so there will be any challenge.
Okay. Got it. Thanks.
Thank you. Next question is from the line of Kashish Thakur from Elara Securities. Please go ahead.
Hi, sir. Thank you for the opportunity. One question. Sir, how are we pursuing the Supreme Court's judgment probably that along with onco, we should be having a capping on other drugs as well? That will probably erode much of our profitability and all. Just wanted to get some view from your end on that aspect.
No, as I said in my early commentary, it is still nothing has come up. There is discussions going on. The matter is in before the court, so we don't want to comment as such. But yes, as I said that hospital industries has already made their representations and there is talk going on. What going to happen, we don't know. But I think that whatever will happen, it will be for the best, and the industry and government will definitely be in discussions, and we have made our representations. Nothing much comments on it, but whenever it will happen, we'll see accordingly and then we'll plan.
See, we have always, as an organization, tried to restructure and evolve our strategies according to regulatory policies and new framework. Just like in oncology, yes, there was a marginal and a small impact for us, but that impact was not high. But even then, we have already worked out on certain other line items and operational efficiencies so that our EBITDA target guidance doesn't change. So, I think any regulatory policy changes going forward, maybe in the pharma or any other aspect, I think we would be looking to evolve our strategies and work, still trying to meet the guidance that we have for the next few years.
That was very helpful. Thank you so much.
Thank you. Next question is from the line of Meet Mehta from Integrity Ventures and Partnerships. Please go ahead.
Yeah, thanks for the follow-up. Just wanted to get a sense on the CapEx per bed. Historically, we have acquired assets which were stressed. If you can give some color on the CapEx per bed that we are looking for the next phase of expansion with the Advent money coming in. Any sense on that, please? That would be helpful.
I think because of specifically from the Advent money, we are not creating any greenfield assets, and we might not be going for absolute stress assets. We would be going for assets, yes, there would be huge upside and potential for them. It would not be saturated hospitals. But we are seeing more of a, in terms of the total bed capacity as far as the and the absolute EBITDA that we can add. With the options that we have purely evaluated and certain more options can come going forward, we feel that close to 2,000 beds can be added, but it shouldn't be looked at purely CapEx per bed just on the bed angle, because these 2,000 beds would be significantly contributing to the top line and the EBITDA.
I think that's where the real value will come, and not just from the bed addition of these further expansion.
Yeah. Yeah, that was helpful, and thank you.
Thank you. Next question is from the line of Sanath Vaze from Centrum Broking. Please go ahead.
Hello, sir. Am I audible? Hello, am I audible?
Yes.
Yes, you may please go ahead.
Yeah. Given your preference for acquiring large-sized and EBITDA-positive hospitals, what kind of asset and valuation multiples are you currently targeting? Second one, how do you evaluate paying a premium for hospitals with the higher growth potential?
See, I think it is very difficult to put a number to what multiple the deals will happen. For us, the way we look at it is, if a hospital has a good upside of potential of where it is and if we can really expand, only that is the biggest criteria. For that also, premium really depends upon the percentage of the growth that a hospital is possible. Also, another factor that we can also consider in terms of a case of a premium given to a valuation, if that hospital's ARPOB is higher than our group average, or if the payer mix of that hospital or a chain of hospitals has more cash and private insurance mix than even our existing platform. So that also becomes another criteria for us to consider a premium as far as the deals are concerned.
Okay, sir. Thank you.
Thank you. Next question is from the line of Shubham Rai, an individual investor. Please go ahead. Mr. Shubham Rai, please go ahead with your question. Your line is unmuted. Mr. Rai, may we request you to please proceed ahead with your question? Your line is unmuted. There is no response from the participants, and as there are no further questions from the participants, I now hand the conference over to management for closing comments.
Thank you everyone for this H1 presentation. Looking forward for the next quarter result and meeting you soon. Thank you.
Thank you, everyone.
Thank you. On behalf of Elara Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.