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 this conference call, please signal an operator by pressing star and 0 on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mayank Vaswani from CDR India. Thank you, and over to you, sir. Thank you, Neeraj. Good afternoon, everyone, and thank you for joining us on this call hosted by Apollo Hospitals to discuss the financial results for the second quarter of FY 2027, 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, which is on slide two of the investor presentation shared with all of you earlier. Other 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. Thank you, Mayank. Good afternoon, everyone. Thank you for joining us on today's call. I trust you have reviewed the earnings material that we have shared with you. We are pleased to report another quarter of strong performance with all three of our business verticals, healthcare services, HealthCo, and AHLL, continuing to deliver sustained double-digit growth. Ma'am, sorry to interrupt. You are sounding slightly distant. Oh, I think that is the mic issue. Is it better now? Yes, ma'am. Yeah. Let me start by saying the performance of this quarter builds on the momentum of the previous quarter and reflects the strength of our integrated healthcare platform, the underlying demand across our businesses, and our continued focus on execution. It also marks a healthy first half for FY 2027. The broader healthcare sector is witnessing strong momentum, with players across the industry reporting healthy volumes and revenue growth as well. We are also seeing increased participation from multiple players and investments flowing into the sector, reflecting the confidence in India's healthcare opportunity. This is an important development in the country, as it will help to expand healthcare capacity and strengthen capabilities and accelerate the adoption of advanced technologies. With strong structural demand and significant headroom for growth, the sector offers considerable opportunities for value creation. On a consolidated basis, revenues grew by 23% year-on-year to INR 7,615 crore during quarter two, FY 2027. Consolidated EBITDA stood at INR 1,191 crore, registering a growth of 29% year-on-year, with margins improving to 15.6% from 14.9% in quarter two last year. Within this, healthcare services business reported revenues of INR 3,900 crore, delivering a strong growth of 23% year-on-year. Established hospitals' revenues grew by 19% to INR 3,765 crore, and new hospitals contributed INR 135 crore during the quarter. Inpatient volumes overall saw a growth of 14% year-on-year, and occupancy at 73%. Average revenue per patient increased by 8% year-on-year to INR 1,86,880. These metrics reflect sustained demand across our hospital network, alongside continued improvement in clinical complexity and asset utilization. Insurance and self-pay continue to form the core of our payer mix, together contributing 82% of inpatient revenues. International patient revenues grew by 37% year-on-year. Our international patient business is gaining significant momentum, increasingly with patients from across the world choosing India for advanced clinical capabilities, quality of care, and affordability. Apollo's integrated model, supported by the depth of clinical expertise, is contributing to this growing confidence. This is encouraging and a validation of India's potential to become a global destination for healthcare and closer to the government's vision of Heal in India. Our focus on high-acuity CONGOT specialties, cardiac, oncology, neurosciences, gastro, orthopedics, and transplant, continue to form the bedrock of our growth. CONGOT revenues grew 22% year-on-year. These specialties constituted 61% of inpatient revenues, reinforcing the strength of our clinical offering across complex care. Within healthcare services, EBITDA increased 20% year-on-year to INR 937 crore and margins at 24%. However, established hospitals delivered an EBITDA of INR 971 crore, reflecting 22% year-on-year growth, with margins improving by 61 basis points to 25.8% compared to the same period last year. New hospitals reported an EBITDA loss of INR 35 crore, reflecting the ongoing ramp-up of recently commissioned capacity and the hiring of new doctors. We continue to focus on operating leverage, productivity initiatives, and disciplined cost management across the mature hospital network while investing in the next phase of capacity expansion. As you are aware, we have planned to add 1,395 census beds across FY26/27. Of these, 520 have been commissioned, and the remaining will be commissioned in the next 12 to 18 months. Moving to Apollo HealthCo, the business supported revenues of INR 3,286 crore, a 23% year-on-year growth. EBITDA grew by 75% to INR 193 crore. An important milestone this quarter was 24/7 turning cash positive, with digital cash profit at INR 1 crore compared to a loss of INR 39 crore in the corresponding quarter last year. Apollo HealthCo reported a PAT of INR 118 crore during quarter two FY 2027, compared to INR 73 crore in the corresponding quarter last year, demonstrating continuous improvement in profitability. AHLL also delivered an encouraging performance this quarter. Revenues grew 20% year-on-year to INR 429 crore, while EBITDA increased by INR 79 crore to INR 61 crore. EBITDA margins improved 14.3% from 9.5% quarter two last year. AHLL reported a PAT of INR 26 crore compared to a loss of INR 4 crore in quarter two FY 2026. With all three businesses reporting healthy growth and improved profitability, consolidated PAT increased by 32% year-on-year to INR 630 crore during quarter two FY 2027. For the first half of FY 2027, consolidated revenues stood at INR 14,547 crore, growing 22% year-on-year. EBITDA increased by 29% to INR 2,268 crore. Consolidated PAT grew by 33% to INR 1,211 crore. Healthcare services revenue grew by 22% to INR 7,467 crore. Apollo HealthCo and AHLL reported revenue growth of 22% and 19% respectively. This performance reflects the strength of our integrated healthcare platform and our continued focus on execution across the businesses. We continue to make progress on hospital capacity expansion, as discussed in the previous call. We have been investing in new capacity across key markets while remaining focused on phased commissioning and ramp-up, clinical capabilities, and operating discipline. We believe this expansion provides a visible runway for growth over the coming years. We remain focused on the proposed strategic restructuring of our omnichannel pharmacy and digital health business. We believe the transaction is an important step towards a scaled integrated healthcare platform and unlocking long-term value for the shareholders. We expect the demerger to be completed in quarter four of FY 2027. At the center of our growth strategies, our focus on patients, our investments in clinical excellence, advanced technology, robotics, and specialized care pathways are directed towards improving clinical outcomes and strengthening the quality and consistency of care. This remains fundamental to how we build our capabilities and differentiate our healthcare proposition. Patients come to Apollo not for an individual drug, consumable, or procedure, but for the entire continuum of care. What we deliver is an integrated clinical service, bringing together medical expertise, diagnostics, technology, infrastructure, and round-the-clock care. The value of a healthcare must therefore be understood in the context of the complete patient journey and the outcomes it delivers. As we enter the second half of FY 2027, we are encouraged by the momentum across our businesses. Our focus remains on sustaining growth in healthcare services, scaling our digital and retail platforms profitably, and progressing our expansion program with disciplined capital allocation. We believe these priorities position Apollo well to deliver high-quality care and sustainable long-term value for all stakeholders. 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, Madhivannan from Apollo HealthCo, Sriram from AHLL, and other senior management colleagues with me to take your questions. 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 their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. First question is from the line of Neha Manpuria from Bank of America. Please go ahead. Yeah, thanks for taking my question. First question is on the hospital business. I think we've seen a very sharp step up in growth in the existing hospitals in the last two quarters. Based on the performance that we are seeing, is it fair to assume that hospital growth can now be closer to the 20% level versus the high teens that we're guiding? Essentially because I see that, as against our expectation that existing hospitals would probably grow mid-teens, we seem to be growing high teens at the existing network. That's the first question. Second is, I think we'd guided to about 100 basis points margin expansion in the existing hospital network, and that seemed to have come through in the last year. Given we are at close to about 26% margins in the existing hospital, is there more room left for margin expansion in the existing network, or should we now assume the new hospitals ramping up and achieving breakeven and therefore margin expansion from that? Thank you. It'll be a combination of both, Neha. You will see an improvement in the established as well as looking at new hospitals, of course, because they will achieve We have one which is in Hyderabad, which is already at EBITDA breakeven. The other three will break even by the end of the year. So, it'll be a combination of both. About your 20% guidance, I don't want to make forward-looking statements, but you've seen the momentum of growth led by strong structural demand and the fact that Apollo is accessible because of our average revenue per patient is INR 1.8 lakh. Therefore, I think the structural demand for healthcare is very, very strong, and Apollo is a network that's present all over India. Understood, ma'am. That's very helpful. My second question is on the HealthCo business. Now that we've achieved cash breakeven, how should we think about the next milestone for this business, and what would drive that improvement from here? Madhavan, will you take that? Yes, ma'am. I think now that we have achieved the basic level of cash breakeven, our entire objective is to continuously keep improving our unit economics, primarily in the Pharmacy businesses. The intent is to increase our daily orders from the current situation to almost by 20%, 30%. That is something which we hope to do over the next six months. Given the fact that our cost structure is more or less stable, any kind of an increase in margin and unit economics should start adding to the growth. Our intent is to be on par with the offline Pharmacy to begin with. Then once the objective is not just to look at it as pure digital business, but as an omni business with much more synergies between the two groups, the margin structure should start looking up. Give us around two more quarters before this starts playing out. When you say you want to be in par with the offline business, do you mean in terms of pre-ESOP margin? On what parameters do you mean that? Sorry. Primarily pre-ESOP, and then at the EBITDA level, because the cost structure will remain the same, but unit economics, as it keeps improving, should start contributing to that base. Understood. Thank you so much. Thank you. A request to all the participants, kindly limit yourself to two questions per participant, and rejoin for a follow-up. Next question is from the line of Abdul Khader Puranwala from ICICI Securities. Please go ahead. Yeah. Hi. Thank you for the opportunity. My first question is with regards to the pro forma numbers of Apollo HealthCo, that is a combined entity. Ma'am, I wanted to know any specific reason why we have reduced our margin expectation for end of Q4 2027 to close to 6%, as earlier we used to talk about 6.5%-7% for this entity. Yeah. Sanjeev, will you take that? Yeah. I will take this question. Hi, this is Sanjeev Desai. I think the prime most thing that we should always remember in this business is that we strongly believe with time this business would move into a higher single-digit number. In next three to four years, we can expect this to move in that range. As far as the short-term period is concerned for this year, there are two to three things which have resulted into we guiding near INR 1,500 crore of EBITDA for the entire integrated business. One is that there has been investment into manpower across the Pharmacy, private label, and generics lines. There is also a bonus which was paid to the employees this year that resulted into a little bit of dip in the percentile, and apart from the fact that there are one-time scheme and integration-related expenses. Some of these expenses are one-time in nature, and they would also fall into this financial year as we move towards the NCLT approval scheme-related things and get into the listing. So, you would expect certain more expenses to come in into Q3 and Q4, and that is just one reason we thought that it would be rightful to say that we should be hitting a number INR 1,500 crore plus for this year. Trust I have given the answer. But some of them are one-time. Like onwards, these things will not happen, so obviously you would start seeing percentile to be going up. Sure, sir. Very clear. And, ma'am, next on our hospital expansion plan. So, you know FY 2027 expansion plan, what we had discussed earlier, are we sticking to the timelines broadly what we have shared earlier, or any changes to those? Yes, so yes, we are sticking to what we have said. If you look at the next 12 months, Gurugram will be actually launched in the coming quarter, first point. With that, if you look at it, we would have launched all the seven hospitals which we have said between 2026 and 2027 that we have to launch, right? Which is Pune, Kolkata, Hyderabad, Delhi, Sarjapur, and Gurugram. All of this put together have 1,400 beds, 1,395 census beds, which will all have to get operationalized now. We will commission it slowly, but all blocks are ready, and as the demand grows, we will keep opening it up. As of now, we have seen that we are at 520 beds commissioned. Gurugram will get commissioned before the next quarter that we are going to be announcing. You will see this, all of the 1,400 beds also getting fully operationalized over the next 12 months. That's what we are looking at. Beyond that, as you look at FY 2028 and 29, Jubilee Hills expansion is there on, already working on full fledge. Secunderabad, there is an existing hospital which we are expanding. There is a hospital in Bangalore and Mysore which is expanding, and Indore. All of that is also expected in the next two years of another 320-odd beds, which will take it to 1,800-odd beds in the next two years. Then you have some time gap before we launch some of the others, which will all come mostly in 30 and 31, rather. That's when it will all come. But it's all, whatever you have out here, all of that work is started in some way or form. Understood, sir. Thank you. Thank you very much. Next question is from the line of Damayanti Kerai from HSBC. Please go ahead. Yeah, hi. Thank you for the opportunity. My first question is on your offerings on Apollo 24/7 platform. If you can update us on the Pharmacy part, the virtual consultation part, and also if you can comment on your step-up plan for insurance services in view of the regulatory development in the space. That's my first question. Thank you. Let me take that. This is Madhivanan. Apollo Pharmacy has been consistently growing in the range of around, we saw this last year, around 28%. On a sequential basis, we had a very good quarter. It was almost 14%. Similarly, the diagnostic business also grew in the range of around 17%. This is just the digital part which Apollo 24/7 contains. That's another 12% sequential growth. Both these are primarily driven, on one hand, by the constantly increasing number of customers, our ability to cross-sell to the Pharmacy base. These are the two businesses that we evaluate on the GMV. We are reasonably confident that we will continue to grow at least at this base level. All efforts are on to see how we can drive that engine forward. Both of them are steady businesses for us. On the consults business, we treat it based on the revenue. Here again, our revenue story on a sequential business was a 7% increase. We are working very closely with the hospital to build what we call as an hospital mode to expand the access that we can have for more customers, and thereby dramatically drive services. We will also be focusing a little bit more on the digital consults to get more and more of the Apollo medical professionals getting a direct access to our customers. These three businesses are on the baseline. However, on the insurance business, we have been a little bit more calibrating our approach. We are not growing at that speed. In fact, we are consolidating. Given the new consultation paper that IRDAI has put out, some of the economics of this business will be undergoing a very radical change. We are watching the situation. We're waiting for the agreements to come in. In fact, while we showed a growth of around 4% on a quarter-on-quarter basis sequentially, this quarter we are sort of putting the brakes on. But this actually helps on the EBITDA side, because as of now, insurance continues to be a negative business. On the overall monetization, our improvement in Circle, which is our core paying loyal customers, there has been a good sequential growth of 11%. That is another engine which is sustaining itself. Other than the insurance business, which we are looking at a little more cautiously, all the other businesses are on a steady state of business. If there is any specific question that you want me to answer, I'm happy to do it. Yeah. As you are taking a more calibrated approach for the insurance business and other segments going reasonably well, and now you have, I think, broadly optimized the cost, et cetera, we should be seeing consistent margin improvement, right? The insurance part should not be dragging while we get clarity on how the sector emerges. No, I am with you completely. Given the fact that the drag on the insurance business will be much more slower, we will wait for the IRDAI final agreement. The unit economics continues to improve. Our number of orders is slowly shaping up. Our mix is becoming better, which is a mix of private label, generics, and the others. With more synergies with our offline team, I think this story should only pace now. Like I said in the earlier response to the earlier question, give us around two quarters before this entire thing stabilizes, and we should continue to keep growing on our margin basis. Sure. Thank you. My last question will be on your international patient business. If you can comment on if we have seen complete normalization in terms of patient flow from neighboring states and which all your market you are tapping on to sustain growth here. So yeah, we have seen a good rebound coming from Bangladesh. Now, I think we are, if you look at the annualized number, we are close to 85%-90% of what we used to see as peak from Bangladesh. So, I think that is a good rebound that we are now seeing. We are seeing neighboring countries. Apart from neighboring countries, Africa has been one area that we have been focusing on significantly. We have information centers now in many geographies like Tanzania, Kenya, et cetera. We are seeing good growth coming from some of these markets, especially in Africa. Apart from that, yeah, we have also seen growth coming from some developed countries as well this quarter, including from Europe, et cetera. We have seen this, the overall growth has been 35%-36% this quarter on IPS, and we are hoping to continue to see the momentum build up as we move forward as well. Okay. Especially Gurugram coming in next quarter, it is going to be helpful for us because, as you know, Delhi is very well connected also. And this is one hospital where we are going to be looking at all specialties, high-end, including onco, cardiac, ortho, et cetera, which will all bring a lot of IPS to the hospital. Sure. Thank you for your response. I will get back in the queue. Thank you. Participants, you may press star and one to ask a question. Next question is from line of Yash Sidani from Entigrity Ventures. Please go ahead. Hi, sir. Just wanted to ask on the recent regulatory changes that are happening and also the pricing process of getting reviewed. We have multiple businesses which can get affected by these changes. Wanted to know your views on first on hospital business, then on maybe Pharmacy business, how these changes are going to affect and what kind of margin reduction you expect if these changes are lived? If you look at the larger picture, which is what we're sharing with the government and what we need to share with the public, is that if you look at the country, we really need to add more beds. Therefore, the structural demand for healthcare. India will need another 1.3 million additional beds, 1 million doctors, and 3.5 million nurses. Hospitals are a long horizon investment, and predictable regulation is essential to attract the capital that this sector requires. I think that more than anything else, we are also emphasizing the fact that the affordability is high, and with insurance penetration, more people have access. If you look at structural demand, the fact that there are only 170,000 private healthcare beds in India available. If anything, this legislation will impact both small hospitals and large hospitals. Therefore, I think we as a hospital are willing to work with the government to see that more hospitals are built, more beds are built, because this is what the country needs at this time. And having looked at, I think they've not had a We need to continue to sensitize them on the fact that this is the way that they're looking at it in terms of cost of, let's say, cancer medicine or like a consumables. It's not a cost-plus model. It's a model where the entire service is delivered and the costs are attached to it. I think the product pricing was a proxy for the service earlier, but we hope to move to service pricing, and we continue to stay in touch with the government. The government has represented its case very strongly in the Supreme Court, and I think that this engagement will continue. Meanwhile, we will continue to keep our growth and margins growing and strong. I think that I hope I've answered your questions. If you see the government- Yeah. Yeah. Yeah, I agreed on hospital space. What about the Pharmacy business and can you tell me maybe on the Keimed distribution business? If this price cap is lived across all the medicines, are we expecting any margin reduction in those businesses? We are awaiting the revised MRPs and then analyze the impact. There will be some impact, but we will be quantifying it going forward once it is effective from November 9. Okay. What is the progress on our demerger process, and is the timeline intact? Yeah. We are on time on the schedule of activities as planned. We expect to complete it and then announce it in the last quarter of 2027, as stated earlier. Okay. Thank you so much. Thank you. A reminder to all the participants, you may press star and one to ask a question. As there are no further questions, I will now hand the conference over to the management for closing comments. Thank you, ladies and gentlemen, for taking time this afternoon just before Deepavali. Our Q2 and first half of FY 2027 reflect the strength of our business and the progress we are making across integrated healthcare platforms. We remain focused on building clinical capabilities, expanding capacity in a calibrated manner, and scaling our digital and retail businesses profitably. The structural demand for healthcare in India, coupled with our investments in clinical excellence, technology, and capacity, provides a strong foundation for the next phase of growth. Our priorities remain clear: delivering superior clinical outcomes, improving access to quality healthcare, and creating long-term sustainable value for all stakeholders. On behalf of Apollo Hospitals, I wish each one of you and your families a very happy Deepavali and a prosperous year ahead. Thank you once again, and look forward to connecting with you next quarter. Thank you very much. On behalf of Apollo Hospitals Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you.