Ladies and gentlemen, good day and welcome to Apollo Hospitals Limited earnings conference call. 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. Devr ishi Singh from CDR India. Thank you, and over to you, sir. Thank you, Yusuf. Good morning, everyone, and thank you for joining us on this call. Hosted by Apollo Hospitals to discuss the financial results for Q2 and H1 FY 2026, which were announced yesterday. We have with us today the senior management team represented by Mrs. Suneeta Reddy, Managing Director, Mr. A. Krishnan, Group CFO, Dr. Madhu Sasidhar, President and CEO of the Hospitals Division, Mr. Madhivanan Balakrishnan, CEO of Apollo HealthCo, Mr. Sriram Iyer, CEO of AHLL, Mr. Sanjiv Gupta, CFO of Apollo HealthCo, and Mr. Obul Reddy, CFO of the pharmacy business. Before we begin, I would like to mention that some of the statements made in today's discussion may be forward-looking in nature and may involve risks and uncertainties. Please note the disclaimer mentioning these risks and uncertainties on slide number two of the investor presentation shared with all of you earlier. Documents relating to our financial performance have been circulated earlier, and these have also been posted on the corporate website. I would now like to turn the call over to Mrs. Suneeta Reddy for her opening remarks. Thank you, and over to you, ma'am. Good afternoon, everyone, and thank you for taking time to join our earnings call. I believe that you have received the earnings documents which we shared yesterday. Consolidated revenue was at INR 6,304 crore, a 13% year-on-year growth. Consolidated EBITDA was at INR 941 crore, registering an increase of 15% year-on-year. Within this, the healthcare services EBITDA was at INR 781 crore, registering a growth of 8% year-on-year, and healthcare services margin remained robust at 24.6%. We are pleased. To talk about the sustained and strong momentum for Q1 into Q2, delivering strong growth across all three verticals: healthcare services, Apollo HealthCo, and AHLL. Despite the seasonal impact from the onset of the festival period, focused execution has enabled us to report broad-based growth and resilient operating metrics. Healthcare services business has delivered a 9% year-on-year revenue growth to INR 3,169 crore. The revenue growth was driven by insurance and cash patients, together accounting for 83% of inpatient hospital revenue. Quarter two FY 2025 had a higher incidence of seasonal medical admissions, leading to a high base. Medical admissions were low in quarter two FY 2026. The low growth in medical admissions was offset by a 14% increase in revenue from CONGO specialties. The reduction in number of patients from Bangladesh has had a 1% impact on healthcare services revenue in quarter two FY 2026. Surgical volumes grew by 3%, supported by a continued focus on CONGO specialties: cardiac, oncology, neurosciences, gastro, and orthopedics, which remain a key growth engine, delivering a 6% volume and 14% revenue growth on a year-on-year basis. Group-wide occupancy stood at 69% in quarter two FY 2026. As shared earlier, we have withdrawn the ARPOB metric and introduced the average revenue per patient (ARPP) as a more accurate measure of realization. ARPP in quarter two FY 2026 was at INR 173,318, recording a growth of 9% through a combination of better clinical mix and regular tariff increase with inflation. Within the healthcare services business, we have delivered an ROC of 30.3%. With a balanced ROC across all geographies: Metro, Taiwan, and Taichung. Moving ahead, Apollo HealthCo reported revenues of INR 2,661 crore, marking a 17% year-on-year growth. Apollo Health and Lifestyle revenues also increased by 17% to INR 474 crore during the quarter. Private label and generics were at 15.2% of total pharmacy revenues. Our digital platform, Apollo 24/7, added 3 million new users. Taking the total to 44 million users. The platform GMV was at INR 723 crore, growing 16% over the same period in the previous year. The pharmacy distribution business in Apollo HealthCo recorded an EBITDA of INR 181 crore, as against INR 153 crore, higher by 19%. The offers in the digital vertical were at INR 71 crore, compared to INR 101 crore in the same quarter last year. As a result, Apollo HealthCo reported an EBITDA of INR 110 crore in quarter two FY 2026, up from INR 52 crore in quarter two FY 2025. AHLL delivered an EBITDA of INR 50 crore, representing a 21% year-on-year growth, with margins improving to 11% from 10% in quarter two. During the quarter, the Chief Minister of Delhi inaugurated Apollo Athenaa, Asia's first dedicated cancer center for women, in Defence Colony. The facility is designed to tackle the growing burden of breast and gynecological cancers and integrates precision medicine survivorship programs and world-class treatment protocols. We also performed a soft launch of the multi-specialty tertiary care hospital in Pune. We continue to make steady progress on our other expansion projects across key metros, including Kolkata, Hyderabad, Bangalore, and Gurugram, with commissioning lined up in the upcoming 12 months. The statutory processes for the restructuring within Apollo HealthCo and the KEIMED merger continue to proceed as per plan, and we remain well-positioned to capture the full benefits at scale within Apollo HealthCo. Half-year H1 FY 2026 results: the consolidated revenue for H1 FY 2026 stood at INR 12,146 crore, a growth of 14% on a year-on-year basis, supported by balanced expansion across all three verticals. Healthcare services revenue at INR 6,104 crore, up 10% year-on-year. Driven by continued traction in high-end specialties and improving clinical mix. Apollo HealthCo delivered revenues of INR 5,132 crore, registering an 18% increase year-on-year, while AHLL grew 18% to INR 909 crore. Consolidated EBITDA for the first half was INR 1,793 crore, reflecting a 20% increase year-on-year. PAT stood at INR 910 crore, up by 33%. This is a strong half-year performance, which reinforces our ability to sustain growth momentum while maintaining financial discipline and operating efficiency. Let me close by saying that our quarter two and H1 performance underscore the continued strength of Apollo's integrated healthcare ecosystem and our commitment to delivering clinical excellence at scale. We remain focused on deepening our leadership in core healthcare services, accelerating digital and retail health, and expanding our network through strategic capacity additions across key markets. With a disciplined approach to execution and a clear roadmap for growth, we are confident of enhancing our performance in the coming quarters and will continue to create long-term value for patients, partners, and shareholders. On that note, I would like to hand it over to the moderator and open the line for questions. I have Krishnan, our Group CFO; Madhu Sasidhar, CEO of Hospitals Division; Madhivanan, CEO of Apollo HealthCo; Sriram Iyer, CEO of AHLL; Obul Reddy and Sanjiv from Apollo HealthCo. We'll take all of your questions. Thank you. Thank you very much, ma'am. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question is from the line of Binay Singh from Morgan Stanley. Please go ahead. Hi team, thanks for the opportunity. My first question is how to think about organic growth for hospitals, keeping in light two points. First is that the Bangladesh impact incrementally will go away, so that'll be 1% +. Secondly, there's a lot of news flow on insurance pricing that hospitals are planning to keep steady for next year. Keeping both these, could you comment on this and then guide on organic hospital growth for next year? Thanks. Yes, I think we are quite confident that we will get back into 30%. We say this because Bangladesh, at least 60%, has started coming back in October, and we believe that we will mitigate the impact of losing one territory. Also, we are exploring new markets, including the northern markets in Uzbekistan, et cetera. Those that are surrounding markets, Africa, some with Indonesia, Iraq. New markets added to Bangladesh coming back will definitely give us an upward trajectory. With regard to insurance, we continue to stay in dialogue with the insurance companies, and I think that there is a very good way forward because all of them represent different parts of the value chain, and we recognize how important it is for us to cooperate and work together. On the pricing front on insurance also, I'm not sure about this commitment that you're talking of. Typically, as you know, in any case, our insurance contracts are once in two years. By that definition itself, we don't get a price increase every year. What happens is every two years it gets reset. If you have reset the contract this year, the same pricing applies for two years while our inflation is always annual, which you know. That's the way it has been working, and it's the same way that it continues to be. Certain contracts will come up for renewal this year. Certain others will come up for renewal the next year. It's a rolling contract renewal that works across the system. It continues the same way. Binay, if I can add, even within this quarter, you will see that there is, I think Mrs. Suneeta also spoke about it, a significant improvement in the quality of the revenue. There has been an increase in the complexity of cases with substantial improvement in our onco specialties and high-complexity cases. We have also invested a lot in the past two quarters in building solid programs and heavily into recruitment, especially in our mature units. I think these will all add to that organic growth that you are asking about. Thanks, team, for that detailed answer. Secondly, just one question on the presentation on slide 16, where we talk about capacity expansion. Here we used to say FY 2026 commissioning number. Now we are putting it under FY 2026-2027. Is there any change in ramp-up plans? Just to check that for next two years. The way we are looking at it is this. Today, if you are looking at it, I'll comprehensively handle this slide because there are a couple of questions also which have come up. One was six new hospitals is what we are looking at adding. In the next year, this year to next year. This coming quarter, you would see us already started commissioning. We already soft commissioned the Defence Colony cancer hospital. We have also soft commissioned Pune. You will see that Pune and Defence Colony both will start. We will start reporting numbers from this quarter itself, which is Q3. Come to Q4, we will be starting the Sarjapur, Bangalore hospital as well as Kolkata. Come to end of Q4 or early Q1 is when we are looking at Hyderabad because there are in Hyderabad, as you would have seen, we have the cost has gone up by INR 35 crore because we have now decided to add a comprehensive oncology program also there, which includes the radiation therapy equipment, which results in us. That requires some more time to build. This is why it will be more around Q1. Even in Gurugram, it will be more around Q1 because we have enhanced overall facilities and doing some more of private rooms, et cetera, in line with what the market demands. The way you should look at it is Q3, Q4, Q1. In that order, we will be looking at starting all these six hospitals. The balance brownfield, which is also something that we have now added, we have also started work on Jubilee Hills and seconds about now. So all those brownfield expansions will also come next year, mid of next year, et cetera, mid to end of next year. In Bangalore, Malleswaram and Mysore expansion work is started on both. You should see it happening next year. We will open out those bids. By end of next year, all the census bids that you're seeing should be fully operational. Of course, as you know, we start 50% as we start and then keep ramping up. Next year is going to be quite a busy year for us, and you will see all of these fully commissioned by end of next fiscal. Great, great. Thanks, team. Very clear. Thanks. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please restrict your questions to two per participant. If you have follow-up questions, please rejoin the queue. Next question is from the line of Damayanti Kerai from HSBC. Please proceed. Hi, good morning all, and thank you for the opportunity. My first question is again on hospitals. Between now and end of FY 2027, as you indicated, six hospitals coming up. I understand 2026 Pune will be key addition, and the majority will be coming in 2027. If you can comment a bit on the impact on EBITDA margin trajectory due to the new costs coming up. Pune and Defence Colony is this quarter. Sarjapur and Kolkata is also Q4. From an FY 2026 perspective, these four hospitals come in FY 2026 itself, and Hyderabad and Gurugram will come into the next year. We continue to believe that next year, overall EBITDA losses from these hospitals should be around the INR 150 crore number, which is what would be the EBITDA losses from these hospitals. We will come back to you closer to Q3, Q4 once we commission some of these hospitals, but we do not expect it to be higher than that. These losses include fully built-up costs, right? Once you commission a unit, most of your doctor costs, your facility costs, et cetera, are already in place. Yeah, that's correct. Okay. My second question is on your spend on Apollo 24/7. Last two quarters, I think somewhere INR 94 crore, INR 96 crore kind of spend, which we have seen. What kind of headroom do you have to reduce from these levels, or these are more sustainable cost levels to look at? Madhi. Yes, ma'am. Madhi. When you say spend, you mean. Yeah, can you hear me? Yes, I can. Am I audible? Yeah, you are. Yeah. Damyanti, when you say spend, it's a cost structure. A big chunk of the cost has been. As an individual entity, we have reduced it quite a bit. This would be, in a way, a new normal. As we get into the program of aligning between the three entities, KEIMED, Apollo Pharmacy, PD, we will see a little bit more of synergies coming through as both the teams will merge. Our biggest expenses are primarily on the marketing side, which has come to a very rational level. You'll see some more, but that will typically happen from the next financial year. Q3, Q4, more or less, there is nothing much more to bring down on the spend line. Focusing on the revenue side of the story. Sure. The target of achieving cost, they've even put 24/7 by end of this fiscal remains, or we can? We are on course. No, no, we are on course. There might be one hiccup in the form because we are investing reasonably strongly on the insurance side of the business. We are seeing some very good traction. We have completed some of the integration with the health side. We are exploring the life. So there might be a little bit of a hiccup here or there, but we are on course as we speak. Okay. That's helpful. I'll get back in the queue. Okay. Thank you. Next question is from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead. Yeah, thanks for the opportunity, sir. Again, just on Apollo 24/7, on the GMV side, probably INR 7,200 crore-INR 7,300 crore seems out of a stable for last three or four quarters. While you already highlighted in terms of how the cost measures is helping. Getting a better profitability, if you could share your thoughts on how do we think about improving the GMV. You have to look at the GMV from three perspectives. One, how is the pharmacy business growing? Within the pharmacy business itself, there were two levers. One, what we call as a platform revenue, which is primarily driven by Apollo 24/7, the app and the website, which has been growing at a very good pace of around 30% on a year-on-year basis. On a quarter-on-quarter basis, we are in the range of around 5%-7%. In this quarter, we actually exited out of a few B2B businesses because we were constrained to walk out of them because of some of the bottom line related and our quest of trying to break even. This GMV reduction, that is why you are seeing just a 16% growth. That is coming primarily from the pharmacy side. That was one reason. The third was the GST. Because earlier, we used to report the total numbers on a total GST basis, given the advantage that we have received as an industry, it has shaved off around 6% from the top line. This does not impact us on the bottom line side. That is the only reason. You will start seeing the increase on a quarter-on-quarter basis because now it is a new normal. Okay. In terms of any other, let's say, business aspects, which can, so GST is more like a transitionary period, probably. Any other aspect in terms of to drive the GMV? We will continue to grow what we have, our original guidance of growing between 25%-30% on the overall. Our diagnostic business is picking up. In fact, we buck seasonality. We will be back on course again on that side of the story. On the hospital side of the business, the business that we try to drive on the consults, we are re-looking at our approach so that we can become much more relevant in the overall scheme of things as far as the hospital is concerned. The last one, the insurance, like I told you, will take a little bit of time. We have started clocking in some good numbers with just two cities in play, which is NCR and Hyderabad. You will start seeing the new businesses picking up from Q4 onwards. Okay. So just from the hospital side, the Karnataka cluster has seen IP volume decline. If you could share a bit. Karnataka region, there was a drop in the medical admission significantly in that region, particularly. If you look at the drop overall of the 6% that we reported in this region, there is a medical volume drop of 15%, while surgical volume went up by 2%, and cath also went up by 13%. I think it is really a seasonality. Seasonal medical admissions that we see in Q2 in Karnataka, or we saw in Q2 of last year, definitely was not there this year. Otherwise, which is why if you look at the average revenue per patient in this region, it has gone up by 14% because the balance cases, which is surgical and cath, that makes us a higher ARPP compared to the ARPP of medical admissions. Clearly, that is the reason. The core continues to remain intact. Yes, that is correct. If you trace those medical admissions back to last year, it was almost entirely a very bad dengue season, which we have not seen this year. I think it is the year-to-year seasonality. The remaining volume that we grew, especially in the high-complexity facilities, continues to be strong. I think that growth will continue into this quarter. All right, sir. That is helpful. Thank you. That's it from me. Thank you. Next question is from the line of Harith Ahamed from Avendus Spark. Please go ahead. Good morning. Thanks for the opportunity. My first question is on Madhu for KEIMED. We've seen some softness there for around 30 basis points-40 basis points decline on a year-on-year basis. In the past, we've talked about some restructuring and buyout of minority stakes, et cetera. Within KEIMED, is that activity over? How should we think about KEIMED margins, especially in the context of the overall margin guidance of 7% by Q4 next year? Sanjiv? Yeah. May I take this question? Yeah, thank you, sir. Yes, you're right in seeing this Q2, we had slightly a drop in the EBITDA margins for KEIMED, but this is only one-time. Integration and scheme-related expenses which got accounted in Q2. You would not see the same happening from next quarter onwards. As suggested earlier, also over a period of time, we're looking at 20 basis points-30 basis points over and above 3.1%, which normally used to be KEIMED EBITDA since last two, three quarters to be happening as we move forward. As far as the overall 7%, which I think you're referring to the guidance of Q4 FY 2027, wherein we are suggesting about INR 25,000 crore of revenue run rate with a 7% EBITDA, I think we are hopeful that we should be able to hit that mark. Progress is there quarter-on-quarter. This quarter, if I look at the H1 of FY 2026, we are at about INR 9,200 crore of turnover, which makes it to about INR 18,000 crore +. EBITDA is 4.4%. I think once we get into break even, the margin should come closer to 7%. If you exclude the digital losses, we are already at about 6.2%. As Mr. Madhivanan suggested, somewhere in Q4, we will be very near to break even. I think after that, you would start seeing overall EBITDA also to be in the range of 6% +. One year forward, we should be in the range of about 7%. Thank you. Got it. My second question is on specialty care segment within AHLL. Growth has been a bit soft there, and you called out competitive headwinds in the segment. Trying to understand which verticals within specialty care we're seeing higher competition and what's the outlook here. Yes, sir. Yeah, Sriram? Ma'am, the line for Mr. Sriram got disconnected. Okay. Could you repeat the question? We'll take it. Yeah. I was asking about the specialty care segment within AHLL. We've seen a relatively modest growth there for that segment in this quarter. In the presentation, you called out competitive headwinds for the segment. Within, I understand there are multiple verticals like Cradle and Spectra within specialty care. I'm trying to understand which vertical we're seeing greater competition and what is the outlook here. In terms of competition, clearly, the only one that has serious competition is diagnostics because Spectra, there is no competition. In Cradle, it is only where our Cradles are present. There is very little competition, except in Karnataka, where Cloudnine has a big market share. Having said that, I think that our focus will be on primary care. It will continue to be focused on growing diagnostics as well as growing the clinics, which is really primary care, creating clinics with GPs at the center to be able to look after communities and act as a funding to follow hospitals. This is what we are currently focusing on. Of course, the dialysis continues to do well. Sure enough. Thank you. I'll get back in queue. Thank you. A reminder to the participants, please restrict your questions to two questions per participant. Next question is from the line of Neha Manpuria from Bank of America. Please go ahead. Yeah. Thanks for taking my question. Ma'am, I think you mentioned that you expect growth to get back to 13% for the healthcare services business. This, I assume, would be organic growth, and the expansion should add to this growth. Would that be a fair assumption? I think over a three-year period, you will see that there is headroom for growth within the system. This should result in 13% growth in the existing beds and an additional 5% coming from new beds in the next 26 months. The 5% will get added over the next three years. Would that be right? Next two years, six years, you'll see another 5% come. Okay. Got it. On the GMV growth in the digital business, could we get a breakup of what would be the split from GMV in pharmacy, in insurance, new businesses? How should we see this, let's say, when the business achieves break even? What would be the mix of that GMV? Just trying to understand how the revenue and margin should move based on this mix. Yeah. Let me not give the exact breakup, but typically, the pharmacy business constitutes the biggest chunk out of this. And this is the one which has a direct impact on our profitability because the unit economics is what drives this break even that we are working towards. Any kind of a growth in GMV, which is on a profitable basis at a unit economics level, straight away contributes to a break even. The way to read it would be what percentage of our total GMV is being contributed through the e-pharmacy business. That's layer number one. Diagnostic business is, again, directly linked to GMV, albeit the numbers are not as large as that, but the margin structure is reasonably better. That constitutes the second portion. The third layer of business, which is the hospital business, is predominantly fee-driven. We are more a tech services and a lead operator for the hospitals, being driven through the digital mechanism. That is more or less independent of the GMV growth. As far as insurance is concerned, this is more of the GMV equivalent in the financial services industry, is gross return premium, which is what we log in. Here again, because we are approaching a model wherein we want to make insurance as affordable as possible, we are actually promoting a more EMI-driven kind of a business in this model. Here again, we will start reporting the collected premium into our numbers. These are the four layers: e-pharmacy, the biggest constituent; diagnostics, the second big one; the hospital contribution of the GMV is primarily driven by fees, and therefore, we will not make such a big play. The fourth one is the insurance business, which will come to the party in another maybe a quarter or so. Like I said, 55%-60% of the total pool comes from the pharmacy. From a profitability perspective, the increase, I mean, for us to improve margins to, let's say, the 20%, the pre-operating margin for 20%-25%, would essentially then depend on pharmacy business growing, or would it, as insurance picks up scale, that would be a bigger driver of the margin? Oh, no. No. Pharmacy is a current driver of the business because that's a reasonably established business. Insurance, at this point of time, is still on a break-even mode. Once that gets into break-even mode, it starts contributing to the profitability in a much more disproportionate sense. To read it for the next two quarters, I would focus on the pharmacy business. Understood. Thank you so much, sir. Thank you. Just to highlight, sorry. Sorry, sir. No, no. I just wanted to highlight one more point. As we speak, just to give some confidence back to how our path to profitability is growing along, all the three lines of businesses that I spoke about, pharmacy, diagnostics, and consult business, at a CM1 level, has turned positive, each one of them at an individual level. Our immediate objective in the coming quarters is to drive the CM2 and then the CM3. Like I told you, maybe the insurance business will take a little bit more time, but we'll bring that also up the curve. Thank you. Next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead. Yeah. Good morning. Thank you for taking my question. I know you mentioned about the seasonality and the reason why the utilizations fell from 73 overall to 16, and I get it. I am just trying to look from a forward path perspective. Right? ALOS has been consistently declining. This is obviously as we are able to be more efficient in terms of our processes and stuff. Is there a theoretical lower limit where we reach on ALOS? I think that is question one. My larger point being, when will we start seeing better volume growth? Because utilizations have been below 70. Is there a plan where at some point of time, we need it to go to 70, above 70 at all, or our business model does not need to be like that? I'm just trying to compare ourselves with some of our peers whose utilizations are higher. Seventy is definitely a benchmark that we're looking at. ALOS has dropped by 7%. This is the use of new technology, whether it's cardiac where we have minimally invested, as well as robotics. This is really driving down ALOS and allowing us to discharge patients much faster. With regard to occupancy, I think that 70% is definitely the target that we hope to reach. Having said that, we are looking at improving payer mix. We're focusing on the corporates, which earlier, I think we had not put enough focus there. Lots of focus on retail, as well as international coming back to us. With some of these initiatives, I think that we will move closer to 70%. Having said that, our metro hospitals have actually crossed 70%. In October itself, we are looking at higher occupancies coming from metro. We have a separate plan for the non-metros. Do you want to add something? Yes. It is a good question. I will take the ALOS question first. A lot of, as Ms. Suneeta said, the benefits that you are seeing are the results of us putting in, driving our digital transformation, putting in electronic command centers in each of our hospitals, and reducing variability. I think we are probably not going to see sustained reductions in ALOS other than a few of our units that still need to catch up. I think where this puts us is in a place where we can drive utilization higher. We can more easily take on much higher levels of occupancy with less variation and more predictability because the barrier to driving occupancy to much higher in acute care hospitals is the need for beds when there is high variability in patient admission. I think our digital transformation allows us to address this more efficiently. Clearly, we are targeting much higher levels of occupancy. In some hospitals, it is possible to drive it to 80% and higher, especially when we are targeting more elective and semi-elective patients. Got it. Very helpful. Just a second question on the EBITDA loss guidance that you shared for the six hospitals. I heard it's INR 150 crore. I think, Krishnan, you called it out as INR 150 crore. Just want to understand, does this hit us in the full fiscal 2027? Is it spread around? Just from our past experience 2015 to 2018, where some of the bed additions at that time led to very volatile margin trajectory, is there something that we're doing this time differently to ensure even some of the financial metrics are a little bit smoother, if I say so? Thank you. No, no. Surely we are. These are all in existing markets. These are all in existing markets. If you look at places like Delhi, Hyderabad, Kolkata, etc., we have a very clear plan on how we can ramp up. As we have said, our internal target is to get all of them to break even in 12 months. Given that it's all going to be in a, if you look at it, it's going to be first two hospitals in Q3, followed by another two in Q4, and then Q1. That is a kind of, it's being spaced out a bit. Yes, in the first half of next quarter, there could be a bit higher than this. It will not be equally spread, but then first half would be a bit higher, and then it will come off. We will start showing that separately in our earnings presentation as we have done in the past as well so that you get the confidence that we are on track to achieve these numbers that we have stated. I believe that it won't be a significant impact on EBITDA margin because we'll have strong cash flows, EBITDA to close to 3% growth as we open these new hospitals. As Dr. Madhu said, the existing hospitals also, we have room for growth, and we are working on that. That also should start supporting in the next year on the volume as well as the RPP-driven growth. We are working on both. Got it. Thank you and all the best. Thank you. Thank you. Next question is from the line of Bino Pathip arampil from Elara Capital. Please go ahead. Hi. Good morning to all of you. Most questions answered. One on the insurance business. How are you selling the policies now? Is it mostly online? Madhi? It's a combination. Yes, ma'am. It's a combination of all the three. Our first attempt is to try and sell it digitally because we have no intentions of going and spending on marketing spends and trying to get new customers. We are primarily focusing on this one crore plus customer and a 44 million registered customer. It's predominantly driven by digital. However, insurance being such a complicated, these are small ticket items sell very well on digital. However, the moment the ticket sizes go into the range of INR 20,000-INR 30,000, people seek out an assistance. We are building a capability of a call center, which is right now 300-seater. We intend to take it up to around 500 as a capacity building, and the productivity norms work out. Think of it as a combination, an omni model of. Leads and some business through digital and the corresponding ones through a call center mechanism. We are not in the process of putting any kind of a manpower on the field. If at all any, it would be more from a services perspective, but that's not the channel that we are focusing on. Do you plan to promote it through your physical pharmacy stores at all? Yet again, we will come out with some specific products, such as, let us say, a vector insurance or a personal accident, which will be done more under the POSP model, but that is expected only around the next financial year. We would like to get the basics right first and then go into some of those models, in which case, maybe out of the 7,000, we might identify 1,000 odd outlets. Without putting a person in the place, we are not intending to increase the cost, but we'll work very closely with the APL outlets, with the right kind of outlets to sell products which can be sold as a part of the normal journeys and flows. Got it. In HealthCo, when you say the diagnostic business, it is sourcing of diagnostic business, right? Your backend would be AHLL? Yes. Got it. Got it. Got it. We are primarily into originating business for them. The final labs, etc., rest with AHLL. Think of us as a digital arm for AHLL. Got it. And finally. Sorry to interrupt, Mr. Bino. May we please request you to rejoin the queue, sir? Sure. Thanks. Thank you, sir. Next question is from the line of Kunal Damesha from Macquarie. Please go ahead. Hi. Thank you for the opportunity. The first one on the hospital business. If you look at the EBITDA margin in this quarter, it has remained same despite strong ARPP growth of around 9%. We also suggested that the acuity mix is kind of positive. What is driving profitability to kind of remain same? Since EBITDA margin in existing hospitals are not expanding despite the strong ARPP growth, how comfortable are we with offsetting the losses from the new units that we are expecting over the next four quarters? With regard to the ARPP growth, we showed a 9%. Which really indicates that we've really moved up in terms of complexity. To move up in terms of complexity and to make sure that we are prepared for the new hospital expansion, as well as growing, getting new volumes into the old, there was a considerable amount of INR 67 crore spent on doctor hiring. I think we have created an organization structure that will make sure that we will grow in terms of we have improved sales and marketing, and there is certain costs attributed to that. We've created teams that strengthened our project civic team, as well as started recruiting for the new hospitals. It's a little of the cost coming ahead of the opening, which is why it seems it is at 24.6. It is flat. Going forward, we should see the benefits of all of this. Therefore, the impact of the losses in the new hospitals will remain at INR 140 crore-INR 150 crore. Also, if you look at it in a very different manner, yeah, if last year, same quarter, we did see an increase and spike in the margin because of the medical admissions that we spoke of. However, full-year margins were at 24.2% full year. Whereas if you look at H1 of this year, we are at 24.6%. The way you can look at it is, we have taken steps, which is evident in terms of ensuring that there is a margin flow-through which happens because of the ARPP, etc. We're not seeing it because of looking at it on a quarter-over-quarter basis. When you look at it on an annualized basis, you will see that this year margin should be higher than last year reported margin. There is a plan to cut costs by about INR 120 crore. I believe that we have achieved about INR 60 crore of it. Clearly, this will continue to support the EBITDA margins in the range of 24.6%-25%. This INR 120 crore cost cutting, is it related to hospital business and which are the areas within hospital? Yes. It's a broad-based approach to managing our costs. We found opportunities in our materials management and supplies. Certainly, we are looking at how we utilize our HR more efficiently, given that we've made huge commitments and huge investments in our digital technologies. Therefore, that is driving a lot of efficiency in how we do our work. As we bring online new hospitals, rather than recruitment, we are actually looking at redeployment that is leading to better efficiencies in how we use our HR. Beyond that, I think there will be some opportunities to reduce our ongoing costs in IT and some other costs as well. Sure, sir. My second question is on the. Sorry to interrupt, Mr. Kunal. May we please request you to rejoin the queue, sir? Thank you. Next question is from the line of Avnish Burman from Vaikarya. Please go ahead. Yeah. Hi. Good morning. Thanks for taking my question. My questions are on KEIMED. I wanted to know that because of the GST change that happened in this quarter, how much sales did the business lose? As in only the KEIMED. How much sales loss was there? Over the three sectors. You will see somewhere about 4% of the sales revenue coming down because of the shift from a lot of 12% items into 5% items. Something like 10%, 12%. GST slab is removed, and that consists of almost 70%. That moved to 5%, and we expect about 4%-4.5% revenue drop. So 4%-4.5%. Okay. Is the inventory back to normal at the customer end, at the pharmacy end? From day one, we have been managing that. We have planned it well. The transition was smooth that including our 700 front-end stores, we could implement the software and see the new billing is done at 7:00 A.M. on 22nd. Everything is passed on to the customer as per the regulation. No. Even from our possibility. Yeah. My question was that in that interim period, we saw the inventory coming down. At the retailer level. Is that back to normal? That's back to normal. Back to normal. Okay. One question on the margin compression. We've seen KEIMED margins getting compressed by about 40 basis points sequentially and YOY. Is there a reason for that? Sanjiv, you have already answered it right. Sanjiv, you can answer that again. Yeah. Okay. Sanjiv, you said that. This is only one time. This is related to the scheme and integration-related expenses, sir. You would not see that happening in the next coming quarters. Even if those expenses are there, they will be very low. They will not be material to pull down the EBITDA percentile. Q2 has happened because of these expenses. Okay. Thank you so much. Thank you. Thank you. Next question is from the line of Kritika Damani from Prospera Financial Solutions. Please go ahead. Hello. Yes. Congratulations on another strong quarter. I had a question about. We are seeing that the healthcare services has grown 11% in this quarter, and your average revenue per patient is up 11%. Though the occupancy has eased up to 69%. In prior quarters, you have mentioned balancing occupancy and realization. Could you elaborate whether this quarter's average revenue per patient growth was primarily led by tariff revisions or richer case mix or structural shift in patient segments? Most of the tariff increases have already been realized previously. Almost all of our improvement in the average revenue per patient has come from an improvement in our case mix. That is evident across all of our higher complexity specialties, including cardiology, gastroenterology, and orthopedics. It has also been a broad-based increase in ARPP, primarily in large hospitals and metro cities, but across pretty much every single job. All right. My next question is, that you have highlighted that the artificial intelligence-led interventions in oncology, radiology, and stroke care, beyond their patient outcomes, are you seeing any measurable operational efficiencies? Because how scalable are these models across your own hospitals? Thank you for that question. Yes, we are using artificial intelligence technologies very broadly. I think today, if you go to our front-end website, there is an artificial intelligence agent that connects patients with complex medical conditions to the right doctor and allows them to book appointments. That business, which is from the website, grew from last year to this year by 318%. Mostly due to the adoption of very scalable AI. Technologies that are patient-consumer-facing. Internally, we have, as I said before, we've implemented command centers, digital command centers that have real-time intelligence, can see patient flow in each of our hospitals in real time. On top of that, we are layering inventive technologies to autonomously anticipate patient issues and proactively solve them. I think there is tremendous potential for us to have better efficiencies through the use of AI technologies. All right. Thank you. That was very helpful. Thank you. Next question is from the line of Lavanya T. from UBS. Please go ahead. Hello. Good morning, everyone. Just a clarification. You mentioned that Q2, there was an increase in costs related to hiring for hospitals next quarter. Is it right to assume that this was related to the two hospitals which are expected to open in Q3, and there will be a jump again in next quarter once the hiring for the other two hospitals to open in Q4 will happen? Is that the right way to think? No, I think some of it is correct. For example, in Pune, there is a HR cost in the hiring of doctors, and we are just about to do the full-blown launch of Pune. We do have to hire some of our doctors ahead of the opening. This will happen in Gurugram as well. I think that for this quarter, we have captured some of the costs. There will be a little additional cost that will come in in March. Okay. For the hospitals which are expected to open in Q4, there will be hiring which will happen ahead, right? That should come in from Q3. Yes. It is not a huge number like we need to figure for this year, for this quarter. It is not huge, but it is there. Okay. Got it. Thank you. Thanks. Thank you. Next question is from the line of Madhav from Fidelity. Please proceed. Good morning. Thank you so much for your time once again. Just wanted to check that we are at about 24.5%-24.6% EBITDA margin in the hospital business. We seem to have already added some of the OpEx for newer beds. Could you give some sense in terms of what the base network margins are adjusted for some of these costs which you're already building in for the newer hospitals? Those margins, like you said, you'll report the OpEx from some of the newer hospitals separately, which I think is a good idea. The base network margins in your view, how do you think that could progress over the next couple of years, excluding the new beds? In the base, we would like, approximate cost, which is there in this quarter, would be roughly around INR 10 crore in this quarter. Next quarter onwards, you'll see it increase. We will show you the split from the next quarter of our established hospitals and the new hospitals, both the revenue and the EBITDA, such that it's clear for you on how much the existing or the established is progressing, as well as the new is coming in. That will clearly give you the perspective. As of now, there are costs of roughly around INR 10 crore, which is built in. On the doctor side also, there will be almost around INR 5 crore in the doctor now. You will see that it's being separated out from the next quarter. We are clearly hoping and working on ensuring that we should get the overall margins over 25% in the next year and even higher on the established hospitals, which is the 24.6%, which is the combination of both revenue as well as costs that we spoke of. The INR 15 crore cost, which is built in quarter two, that's roughly 50 basis points, right, of our revenue. It's correct. Right? Basically, the base network is above 25% in quarter two already, right? You are right. You are right in the way that you're looking at this. But once we start splitting out from the next quarter, you will see the exact difference coming in. Yeah. That 25.1%, which we are at in quarter two, just that number, of course, excluding the new beds, do you think there is scope to expand those margins over the next one or two years? Yes. Clearly, there is because there is headroom for growth. We are working on the clinical program. Clearly, we would. The internal target is to take it higher by at least 100 basis points. Okay. Maybe just one more question. Sorry to interrupt, Mr. Madhav. Sorry to interrupt, sir. May we please request you to rejoin the queue, sir? Thank you. Next question is from the line of Nitin Agarwal from DAM Capital. Please proceed. Hi. Thanks for taking my question. Ma'am, recently, there has been a significant hike in CGHS rates by the central government. The question here is that, A, I mean, does these hikes in CGHS, I presume it will be followed by other central government agencies, does that, A, change our perspective towards government business? And two, how much of an impact does it really have on our business right now? Yeah, it's at least a marginally better number that they have given. From a base perspective, it doesn't change the views that we have been having on the business. Okay. Thank you. Thank you. We'll take a last question from the line of Kunal Dhamesha from Macquarie. Please go ahead. Hey, thanks for the opportunity again. Just on CGHS rate revision, have we kind of done an exercise where we can kind of suggest what is the average rate hike that we have received or the government has given for the key therapies like onco, cardio, etc.? Your point is correct. See, there are certain specialties where they have increased the prices reasonably. Cardiac, onco, ortho, etc., would be reasonably better now. The point is, when you empanel yourself for CGHS, under the rule book, you have to take whichever patients they send to us or whoever comes to us. You cannot deny admissions for the others. It is not appropriate that we take that route unless the government allows us to do that. We could actually have selected some of these specialties and worked on those specialties. It is a bit of a difficult way of doing that. It is not something that we have been doing in the past either. With that, it is very different. When you look at the overall average realization and compare it to the insurance business or even the cash tariff, it's still a good 65% discount to the overall realization that we have. So we don't make that kind of margins, you know that. Sure, sir. Sure. Thank you. Thank you enormously. Thank you. Thank you. Ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to the management for the closing comments. Thank you, ladies and gentlemen, for joining this call. I do want to say that the management is always available. I could see there were many more questions that needed to be asked. Please feel free to reach out to us. We are encouraged by the robust growth in revenue across all verticals. The EBITDA we have delivered, despite seasonal market factors, our integrated healthcare ecosystem spanning hospitals, diagnostics, pharmacies, and digital platforms will continue to deliver balanced growth and improved asset utilization. Our footprint expansion will go on stream as planned and will add strength to our clinical delivery as well as to volumes and revenue growth. We really appreciate your continued interest and look forward to communicating with you throughout the year. Thank you. Thank you, ma'am. On behalf of Apollo Hospitals Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.