Ladies and gentlemen, good day and welcome to Q3 FY 2023 post-results conference call of Fortis Healthcare Limited. 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 then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anurag Kalra, Senior Vice President, Investor Relations at Fortis Healthcare. Thank you, and over to you, Mr. Kalra. Thank you, Neerav. A very good morning and good afternoon, ladies and gentlemen, thank you for taking the time to join us on our Q3 FY 2023 earnings call. The call today is being chaired by Dr. Ashutosh Raghuvanshi, our Managing Director and CEO. With him we have Mr. Vivek Goyal, our Chief Financial Officer. Anand, the CEO of SRL joins us here, along with Mangesh, who is the Chief Financial Officer of SRL. I have my colleague, Gaurav, as well with me. I hope all of you got a chance to go through the presentation in the press release that we had sent out on Friday evening. Both these documents are also uploaded on the Fortis website for those who haven't got a chance to see it. We will start with some opening comments by Dr. Raghuvanshi on the performance for the quarter, post which Anand will take you through some highlights of the diagnostics business, and then we can open the floor for question and answers. Over to Dr. Raghuvanshi. Thank you, Anurag. Very good morning and good afternoon, everyone. Thank you for taking time to join us on our Q3 financial year 2023 earnings call today. I wish you all a Happy New Year. Hope all of you are doing well. I shall come straight to the results of the quarter and my thoughts on the business performance and the way forward. Q3 for us has been reasonably well. However, this is a quarter which is impacted due to seasonal impact of festivals in some of our larger geographies. The business performance has been relatively better vis-à-vis the corresponding previous quarter, expectedly marginally lower than the trailing quarter. Our consolidated revenues were at INR 1,560 crore, a growth of 6% versus the corresponding previous quarter. This compares to INR 1,467 crore in Q3 of FY 2022. Our consolidated EBITDA margins are at 18.5% versus 20% in the corresponding previous quarter, and versus 19.8% in the trailing quarter. This is largely due to the decline in the diagnostic business as a result of fall in COVID volumes. Our profit before tax stood at INR 175 crore versus INR 185 crore in Q3 of FY 2022. Our profit after tax was INR 142 crore, similar to the previous corresponding quarter. Our balance sheet remains healthy, and given our cash flow generation, we have further reduced our net debt by approximate INR 100 crores during the quarter. Our net debt as of end of Q3 of financial year 2023 stands at INR 471 crore against INR 565 crore at the end of Q2 of financial year 2023. This reflects a net debt to EBITDA of 0.41x compared to 0.53x in Q3 of financial year 2022. Our hospital business has witnessed a healthy performance in the quarter, allowing us to offset to a large extent the decline in diagnostic business. The consolidated profitability numbers that I shared with you just now clearly reflect this. We have witnessed an occupancy of 66% in Q3 versus 65% in corresponding quarter and 70% in the trailing quarter. Higher complex surgical volumes in select medical specialties and strong traction in the international business has resulted in an 8.4% increase in ARPOP to INR 2.02 crore. All this has enabled the hospital business revenue to reach INR 1,267 crore in the quarter, a growth of 13% versus Q3 of financial year 2022. The hospital business EBITDA grew 14% to touch INR 217 crore, reflecting a margin of 17.1% similar to the margin in Q3 of financial year 2022. If we exclude our Vadapalani facility in Chennai, which is still in red, the overall hospital business margins are at approximately 18%. The international business witnessed a strong recovery in the quarter. Revenue from international business grew 73% versus Q3 of financial year 2022. INR 114 crore, it contributed 9% to the hospital revenue versus 6% in the previous corresponding quarter. On the diagnostic side, the business is still witnessing muted performance due to the decline in volumes related to COVID and COVID-allied tests. However, revenues excluding COVID and COVID-allied tests stood at INR 321 crore versus INR 300 crore for the Q3 of financial year 2022, a growth of 7% for the quarter. Overall, the diagnostic business gross revenues stood at INR 331 crore versus INR 388 crore in Q3 of financial year 2022. We do believe that the diagnostic business will continue to witness challenges in short term. At the same time, there are initial signs of stabilization through the pace of recovery, though the pace of recovery would be gradual as we see the environment currently. We continue our focus on channel expansion, our specialized tests portfolio and customer touchpoint to lab ratio, all of which continue to be further strengthened. Let me briefly touch on the nine-month performance of the company. For the ninth month ended on December 22, the company's revenue grew 7.3% to INR 4,655 crore versus INR 4,340 crore. In the corresponding previous period, EBITDA for the period stood at INR 878 crore, a margin of 18.9% versus INR 869 crore, a margin of 20% reported in the corresponding previous period. PBT before exceptional items stood at INR 567 crore compared to INR 547 crore. PAT was at INR 495 crore versus INR 703 crore in the corresponding previous period. I will briefly highlight a few qualitative comments on both our businesses. On the hospital side, investments are on track to increase our bed capacity by 260 to 300 beds per year for the next few years and further bolster our medical and clinical infrastructure. During the quarter, the company onboarded eminent clinicians in medical specialties, surgical oncology, pediatric cardiology and orthopedics. In the terms of medical infrastructure, the company inaugurated a new digital X-ray service suite at Fortis, Vadapalani, introduced a state-of-the-art surgical navigation, neuro navigation system at Fortis, Amritsar, and launched Mako robotic technology for joint replacements at Fortis, Bannerghatta, Bengaluru. In addition, the company commenced its EMR, electronic medical record implementation project, which we believe will significantly enhance patient care, allowing quick access to healthcare records and faster diagnosis and treatment. This would be rolled out across the Fortis network in a phased manner, as and when it is developed and ready. Another important aspects to highlight is that our digitization initiatives continue to yield encouraging results. Revenues from digital channels such as our website, app and digital campaigns have witnessed a year-on-year increase in digital revenues of almost 12% versus the corresponding previous quarter, and their contribution to overall hospital revenue stood at 23%. On the diagnostic business, I will briefly touch upon few things. SRL's performance was impacted by the decline in COVID volumes. However, non-COVID revenues grew 7% for the quarter and 12% for the nine months of financial year 2023 versus the corresponding previous periods. As I mentioned previously, the business is now showing initial signs of stabilization in the aftermath of the COVID surge and the challenging industry environment. SRL continues to focus on improving its channel mix and adding to its specialized test menu, such as those in the area of genomics. In parallel, it continues to optimize its network and customer touchpoints to lab metrics in order to improve utilization. Just to highlight, during the quarter, SRL added 362 customer touchpoints, reaching over 3,300 customer touchpoints. Anand will take you through further details on this in a bit. The quarter gone by has seen the hospital business emerge stronger, while the diagnostic business we expect would see better recovery in the next fiscal. We continue to invest in expanding our bed capacity through brownfield expansion across our network and introduction of new medical technologies. It is also important to highlight that while we are in a relatively stronger financial position, were we to focus on large inorganic opportunities to drive our next phase of growth, we would need to adequately calibrate our capital requirements and the need for the same. This would help us to further expand our reach and accessibility and enable us to drive future performance and value enhancement for all our stakeholders. Thank you for your time today. With that, I will hand over to Anand for the diagnostic business update. Thank you. Thank you, Dr. Raghuvanshi. A very good morning to everyone on the call. Thank you for joining us today. On behalf of SRL Diagnostics, I warmly welcome you all to our Q3 FY 2023 results conference call. During the quarter, we reported a revenue of INR 332 crore, with 97% of our revenues coming from non-COVID testing. Our EBITDA stands at INR 71 crore with a margin of 21.5% for Q3 FY 2023. We conducted 9.4 million tests and serviced 4 million patients during this quarter. SRL B2C to B2B revenue mix stands at 55/45, consistent with our Q1 and Q2 ratios. Our non-COVID business revenue registered a growth of 7% as compared to Q3 of FY 2022, and 12% for the nine month FY 2023 period versus the same period last year. Our preventive health portfolio posted a growth of 20% in this quarter versus Q3 FY 2022, and 30% in the nine month FY 2023 for the same period compared to the same period last year. Keeping in line with our network expansion strategy, we added 362 new customer touchpoints in Q3 to 2023, taking our total number of CTPs to 3,317. We also added seven new laboratories in strategic markets during Q3 of FY 2023. These labs help deliver a quick turnaround time to customers in these markets, thereby making us the preferred laboratory choice for their testing needs. Our customer NPS is constant at 82 for the quarter. Apart from delivering accurate and timely test reports, we have also built a convenient customer experience processes at our centers for home visits and across our mobile app and website. On the people front, we have always prided ourselves on a strong internal learning and development program. One of our endeavors is to be the preferred employer in the diagnostic industry, and we are progressing well on the NPS parameters for the Great Place to Work assessment. SRL has been a pioneer in setting up a robust research and development department. Our R&D team undertakes clinical research studies, co-marketing projects, contract validation studies, and collaborative studies for companion diagnostics. We are also in the process of registering our R&D department for contract evaluation of IVD kits under the CDSCO, as well as acquiring a membership of the INSACOG. Under clinical research and co-marketing studies, we have assessed feasibility of 22 studies, and eight studies have been awarded to SRL. We are progressing well on contract validations and collaborations for publications. We participated in 13 scientific and academic conferences across the country. This has helped us strengthen brand recall and our relationship with doctors. As an organization, we have always been driven by the science of diagnostics. Therefore, we have built a sustained focus on genomics and next generation diagnostics. Revenue from genomics showed 29% growth. Number of tests increased by 22% versus Q2 of FY 2023. During the nine months, our genomics revenue went up by 43%. Number of tests increased by 36% compared to the same period last year. We will continue our concerted efforts in the chronic diseases category, lifestyle diseases, preventive healthcare category, and our specialized portfolio that comprises of autoimmune diseases, transplant immunology, infectious diseases, and oncology. Thank you for your attention. I would like to hand over the call now to Mr. Anurag Kalra, Head of Investor Relations. Thanks, Anand. Ladies and gentlemen, we will now open the floor for question and answers. May I request the moderator to please begin the session. Thank you very much. We now begin the question and answer session. Anyone who wishes to ask a question may press star one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star 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 one to ask a question. The first question is from the line of Amit Khetan from Laburnum Capital. Please go ahead. Hi, good morning, and thanks for taking my question. Just wanted clarity on the number of operating beds. If I look at your Q2 presentation, we had about 4,000 operating beds. This has gone down marginally this quarter despite opening a 200-bed hospital in Greater Noida. If you could just clarify what's going on? Greater Noida being the O&M, we are not reporting, including that into the total overall number. Okay. That's maybe the reason. Yeah. Got it. The income there, how is that reported? Is that just like a fee income? Yeah, it is just like, you know, whatever fees, O&M fees we are getting, it is getting into the operating income. Okay. And you do not calculate... You do not include this as part of the ARPOB and all that? No, not really. Got it. Thank you. Thank you. Ladies and gentlemen, you may press star and one to ask a question. Next question is from the line of Kunal Randeria from Nuvama. Please go ahead. Good morning, and thanks for giving the opportunity. On the hospital side, some of the more profitable hospitals like FMRI continue to better their performance. I guess now in future, you know, if you want to continue to increase your margin, this will depend on how some of the laggards, you know, perform. I just want to know some of the things, initiatives that you have taken and if you already have started to see some impact in the operational performance. Yeah. As we have mentioned in the earlier calls also, this is an ongoing exercise, and we are now seeing, you know, some very good results, in improvement in the operating margins as well as, you know, not only in the percentage term, but in the absolute term also. That is, that has become possible. One is bringing the operating efficiency, improving productivity and controlling cost the best way possible, by better negotiation, by, you know, improving the processes and things like that. As regarding your question on the, you know, bigger unit. Our bigger unit like Mohali, FMRI, Shalimar Bagh, BG Road and Mulund. These are the five key facilities which we have continued to improve and are operating at a decent occupancy level. We expect to grow there further. FMRI performance has further improved because of the higher international business load into the unit. Having said that, the other unit like Noida units, the, you know, the Ludhiana unit, those units are also doing okay. The smaller unit are also doing quite okay. Yeah, I hope I able to answer your question. That was helpful, but just to follow up on this. You know, if I were to look at your metrics of, you know, the hospital margin metrics, now there are three hospitals between 10%-15%. Now, these are at 65% occupancy. The ARPOVs are also pretty much near the company average. In terms, you know, I mean, in revenue terms, I don't really see a lot of upside here. I mean, are there scope for cost cuts in these hospitals, or you believe that these hospitals will remain in this 10%-15% kind of range? Yeah. 10%-15%, hospitals are, five. Nine months. Nine months. Yeah. Which are these hospitals? Ludhiana, Mohali and FEHI. Yeah. These are the three hospitals which are, you know, which in two are very small hospitals. One is Mother and Child Hospital in GK, another is the CH r oad in Bengaluru, and third is the FEHI, Gurgaon. FEHI one, as we are saying, it is reaching double-digit margin and it is operating at that level, and we are taking some more steps to bringing it to closer to 15% EBITDA margins in the mid near future. That is where we are. I think there are steps which we are taking. For example, in CH Road, there is some renovation we have done, and that has really impacted the performance of this unit, which has we are now being completed. It has not only given us some more operating debt, but you know, the look and feel of the hospital has also improved. We are hoping that this hospital will very soon be moving towards 15% EBITDA margin category. Got it. I have a couple of questions around diagnostics too. In this quarter, you know, there's a healthy growth in realization per patient, which you attribute to product mix, test mix, sorry. I mean, can you continue at these levels or do you see it increasing or is it preventive tests that you earlier mentioned that has driven some growth in the business? Is that contributing? you know, some color on that will be helpful. Yeah. Thanks. This preventive health portfolio has grown by about 30% on this nine months. Also what you can see is here, our ARPT has shown a higher growth because last year we had the HPPP business as part of our Q3, and this year we don't have. As you know that, the PPP businesses, ARPTs are much lower than the overall ARPTs. That has also contributed to some extent. Otherwise, it's the overall test mix that has changed. I think, overall, I would say about 2%-3% contribution from ARPT will be there in the coming quarters as well. Right. preventive contribution, that would be how much of your, you know, diagnostic revenue, and how does the realization differ from sickness? It is about, 10% of the revenue, you know, total revenue as far as preventive wellness is concerned, as a part of the total volume. The realization would be what, 20%-30% higher than the typical sickness? The average revenue per accession, that is ARPA, will be higher. Because of the, you know, it being a more of a bundled offering, the realizations per patient will be higher. Okay. Okay. I have a few more questions, then back with you. Thank you. Thank you. Operator, please mute yourself star and one to ask the question. The next question is from Shyam Srinivasan from Goldman Sachs. Please go ahead. Good morning, and thank you for taking my question. I just want to understand how we should look at occupancy trends for, say, Q4 or what we are trying to project or aspire for in fiscal 2024 in terms of utilization improvements. If you could also understand if you could split it into either mix, local patient market share as well as international patient market share. If you could help us understand where those utilization improvements could come from. Sure. Occupancy numbers are definitely trending little higher than the previous quarter, but not in a very large quantum. Regarding the international business, as we said that, you know, it has grown, which in the previous quarter was about 6%-7%, has grown up to about 9%. That trend is continuing and is likely to continue this quarter as well. Some of the, you know, units, especially in northern belt and Punjab, as well as little bit towards the NCR. Also, I think, see a winter effect. That also as winter goes away, generally this quarter we should see upswing there as well. Dr. Ashutosh, we earlier had an aspiration to reach 70%, like on a full year basis, let's assume fiscal 2024. Do you think we are on track for that? Most of the larger hospitals are tracking 70 or above, but there are many units in the system which are still at a lower occupancy level. One of the larger units which is still at slightly lower occupancy is Bangalore, where the occupancy levels are about 55%, 56%. There we expect some upside because some new clinical talent and new programs and technology has been added recently. Sam, if you look at the margin matrix also, about 2,800 beds in the top three vintage buckets are already trending, as Dr. Raghuvanshi mentioned, between 71% and 72%. Another about 500 beds are at 65%. Just the bottom category, beds which are lower, which bring down the overall company occupancy. That's helpful. Second point is on clinical talent. Dr. Ashutosh, you actually started off by saying, you know, in your opening remarks that you have managed to attract talent. If you could walk us through what's happening on clinical talent. Is there a bidding war, if I can say it? How are you know, in terms of compensation, either clinicians fee or employee fee? Are you seeing any kind of an inflation there, which is probably, you know, something that you need to compete in from an HR or a talent perspective? Right now the situation seems to be pretty stable. Not too many movements are happening, nor is there any kind of an appearing war. I mean, of course, in future that can happen. The slightly higher payouts on the clinic on the doctor's fee, what you see is related to the surgical revenues being higher. At the moment, we are not seeing any great pressure on this front. Dr. Ashutosh, still single digit attrition, if we were to measure some of the numbers? Yeah. Among the senior, doctors we see attrition of about less than 6%, which is even lower actually in some of the categories. Got it. Thank you. My last question is on the SRL bit, non-COVID. I think we witnessed about 7% non-COVID revenue growth. Remind me, there is no issue of DDRC consolidation or JV, right? Is it a clean number, is what I'm trying to see at 7%? Is it organic growth, including, say, DDRC in the past and currently? It's a like to like growth, because, you know, we consolidated DDRC in April of 2021, so the entire FY 2022 has DDRC numbers. It's a 7% growth on, you know, quarter-to-quarter basis. Yeah. If you could help us then disaggregate that seven into, say, volume and price, because I don't think we can infer directly using whatever reported numbers. You know, what are you seeing on volume trends? You know, different listed players have given different numbers, in the sense between 7%-10% volume growth has come. What are we seeing for our SRL non-COVID business? On the non-COVID business, if you see, compared to last year's quarter as I was covering earlier as well, we had Himachal Pradesh PPP business, which was a high volume, low ARPT business. That business is not there with us now. If you see, if you remove that, our growth is about 11%. Out of that if you see the volume is about, you know, 5%, growth on volumes. Accordingly, you know, you can see that the ARPT growth is there to that extent. 50% coming from volume, 50% from price looks like or mix change or whatever. Maybe there's a higher wellness content. There's no price increase. It's a mix change. Okay. What's the outlook here from a volume development perspective, say fiscal 2024? Do we think we go back to a high single digit or a low double digit volume environment for just SRL? Overall, if you see, we are growing the volume without the H PPP, non-COVID volumes are growing at about 12%. I think a similar trend will continue here in the range of 10%-12%. Okay. Thank you so much. All the best. Thank you. Thank you. Operator, please remember to star and one to ask a question. Our next question is from line of Neha Manpuria from Bank of America. Please go ahead. Thank you for taking my question. Dr. Raghuvanshi, in terms of the expansion strategy going forward, I know we have brownfield expansion plan which are underway, as we look at, let's say, growth over the next two or three years, are there any pockets where we see the need to probably add more capacity in terms of greenfield capacity or M&A based on your presence? Would you like to see more capacity in some markets? Are we pursuing that more aggressively versus the past? Yes. Essentially, you know, our focus has been on the brownfield expansion because it's a low-hanging fruit, comes at a lesser CapEx. And has a relatively shorter period in which it gets into a profitable zone. Having said that, you're right that now the time has come where we have to think of inorganic expansion as well. We certainly are looking for opportunities which will be complementary and synergistic to our existing operations, as we have said earlier, that in the given geographies clusters where we are present, and/or a fully formed cluster if it was to be in some other geography which is attractive. Those are the things which we are going to look at. Some of the cities like NCR, Bengaluru and Mumbai are our preferred geographies where we are looking for possible opportunities. Based on your assessment, sir, you know, valuation for assets available, you know, has that come off, you know, over the last, few years? I know at one point of time, you know, it was fairly unreasonable, or you don't think there's been any change in valuation for assets available? I think, the expectations are still quite high in most cases. I think, it is for us to evaluate whether it is a project where we can add further value. If that is a possibility, then of course, even in some of the prime location, even if the asset was to be of a high value, but we think that we can add further value, we would consider those. I don't think things have changed dramatically in terms of expectations in the hospital space for valuation. Understood. My second question is, you know, in relation to the brownfield expansion that we're doing. Does this, you know, brownfield bed addition allow us to, let's say, improve ARPOB, you know, I'm asking this from a point of view of, are you adding this capacity to, let's say, increase our high ARPOP specialty mix, and I should see these beds as being higher realization versus the average realization in that particular hospital. Would that be a fair way to look at a brownfield bed expansion? Yes. Essentially, most of these beds, what they would lead to do is that the surgical work, which is typically a higher ARPOP business, is likely to grow. The net effect would be that. However, it's not necessarily that we are building it for that reason alone. The second thing which these things are doing is that some of the hospitals which are older, they are also simultaneously getting refurbished and, you know, the look and feel of the facility is improving, service standards will be improving. As a result of all those factors, I believe that the ARPOP will certainly improve. Understood. My last question is on the payer mix. you know, I think if I look at the chart, you know, our sort of government CGHS, ECHS is roughly at about 20%. you know, if I go back in history, this used to be sub 15%, right? Is there efforts to sort of increase our cash and TPA mix to thereby reducing the, you know, patient, payer mix in these, you know, institutional, government business? Yes, you're absolutely right. Some of these categories have gone higher, and that is because of some newer schemes coming in Rajasthan, for instance, et cetera, which we had to take in West Bengal. We are calibrating this. Our aim has always been to keep it around 15%, and we want to go towards that. It may not happen in one or two quarters, but definitely over the next two or three quarters, we should get it back to about 15% or lower. Understood. Thank you so much for taking my question, sir. Thank you. Ladies and gentlemen, you may press star and one to ask the question. The next question is from Dheeresh Pathak from WhiteOak Capital. Please go ahead. Yeah, thank you for the opportunity. Just to the earlier question, you just replied that we had to take the government business in Jaipur and West Bengal. Can you just please elaborate on that? Yeah. There are two schemes in the respective states which cover a very large population. Because of the kind of local pressures, et cetera, we had to sort of open that up. Second factor was typically these two hospitals were working at slightly lower occupancy levels as well. We did have a kind of capacity available and on marginal cost basis it made sense to increase that. We had to increase that because of those. Is the land there, based on some concessions with the government, or can you just explain the asset ownership there? No, no. In fact, both these places there are no such constraints. Just nudging by the government that you had to take it or you wanted to take it? Sorry, I'm not clear right now. It was more than a nudge, I would say. Okay. You want, you can drop it, right, later on? There's no mandate from the government to take these schemes, right? No, there is a mandate. There is a mandate. The mandate is being, sort of, you know, petitioned and initially, then we would see how we can work towards that. I think it's an industry-wide issue in these two cities at the moment. Definitely there are going to be initially probably, you know, there is going to be more demand also when such a scheme comes and then demand sort of, goes down as well. We are pretty hopeful that we should be able to calibrate it down to our desired level of 10%-15%. How much lower are the realizations on these schemes versus the cash and insurance, private insurance patients? Typically about 30%-40% lower. Okay. Are these two hospitals also in that 10%-15% EBITDA margin bucket when you say number of facilities, three facilities? Which bucket are they part of, these two hospitals? Yeah. Kolkata for this quarter is in that category, but because there were some couple of one-off payments, otherwise Kolkata is above 20 generally. Yes. Jaipur is in the other category, which is about 10%-12%. Okay. Out of the three facilities between 10%-15% bucket, margin bucket, one is Jaipur. Which are the other two, sir? One is, because one is La Femme, the other is CH Road, and the third one in the 10-15 is FEHI. The below 10, Jaipur, as Dr. Raghuvanshi mentioned, is at 10 or below 10. Last time is 10-15%. Last time, I thought was a very high occupancy, high catchment area. Why is Last time in 10-15% bucket? It's a small facility. It's just in the fringes. It's actually closer to the 15% mark. It's a smaller facility that way. Okay. Okay. Thank you for taking my question. Thank you. Ladies and gentlemen, you may press star and one to ask a question. Participants, you may press star and one to ask a question. Next follow-up is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead. Yeah, thank you for taking the follow-up. Just, team, is there any update from a legal perspective? When is the last hearing at the Delhi High Court? Is there any some kind of a guided timeline on what could happen in the next three, six months? Shyam, Vivek here. There are, actually, we are not part of any legal proceeding right now. We are just waiting High Court to, you know, convene a meet, a sort of hearing where the decision regarding whether they will be doing or, you know, ordering forensic audit or not, that decision need to be taken in that. Our lawyers will be present there. There were a couple of hearings previously with no conclusion, and I think next hearing is on 17th of this month. 17th of Feb? Yes. Yes. 17th of this month. Yes. Okay. Got it. That's helpful. Second question is just on balance sheet. You know, there has been some net, the net debt has been reduced. Just want to understand the usage of cash that comes through. What is our CapEx for the remainder fourth quarter, even if you want to guide for fiscal 2024, if you could help us understand that, please. Thank you. Yeah. So the funds from our placement were useful and because of that we're able to reduce the debt to the current level. As regard the CapEx outflow is concerned, we are spending at a run rate of INR 100- INR 125 crore per quarter on the CapEx. We expect this to go up in next financial year slightly because we are planning to increase our invest in the technology. Like Dr. Raghuvanshi mentioned in the initial call, we want to move in a gradual manner for robotic program. That will require some investment. Plus this Brownfield expansion will also be kicking in. All those things may increase the capital outlay from current INR 100- INR 125 crore per quarter to maybe INR 150 crore per quarter. Got it, sir. Last question, Dr. Ashutosh started his opening remarks talking about capital allocation and maybe potentially an inorganic thought process. If you could just clarify that, sir. Thank you. Yeah. As I was saying earlier to Nehal's question is, the possibility of, you know, inorganic acquisition is there, and we are at this time, you know, in a position to consider those. Though there is nothing conclusive at the moment, but we continue to be open to evaluate those at with much more rigor than what earlier we were doing. In the geographies which are our clusters which are currently operational, we are continuing to look if there are any opportunities. Of course, the question of valuation comes there. If it is at an attractive price point, then we would definitely consider them.... moment. Yes, we are very open to that now. Sir, last data point. Vadapalani, what is the losses? It used to be INR 8 crore, I remember from historically, per quarter. It is around same level. It is around same level. We had like a soft guidance of this breaking even in fiscal 2023, maybe. I don't know whether that's moved around. It is taking slightly more time looking like. Earlier we were planning, we were expecting to break even in next six months time. It may take slightly more time. The reason is, what's the reason Vivek sir? What's, why the delay? Reason is twofold. One is there are some infrastructure work is going on in front of the facility, and that is affecting the patient flow, and that is the main reason. Apart from that, I think the clinical talent we were thinking, you know, we will be able to attract easily. We are facing some challenges in getting good clinical talent in that locality. Got it, sir. Thank you. Thank you. Next question is from the line of Tushar Manudhane from Motilal Oswal. Please go ahead. Thanks for the opportunity. Just from the international patients now as a percentage of sales, it's more or less at 9%-10%, which is pre-COVID level. First of all, geography-wise, which geographies these international patients are coming from, and how do you see the growth in terms of volume for this category of patients? Patients are coming from a kind of a widespread geography. Mainly we get lot of patients from Africa, both from East as well as West side, but mainly East Africa, and some patients from Middle East, essentially from two countries like Yemen as well as in from Qatar. Those are the larger numbers. Other than that, there are for few specialties like liver transplant, et cetera, we do get patients from Central Asia as well as from sometimes as far off places as Fiji and Philippines as well. As far as the growth in this is concerned, I think, we have seen a good growth as we said, and it should grow further. It's difficult to guess how much more growth will be there on this segment, as we continuously see our domestic patients also going up. As a percentage, I believe that it is likely to remain in 10%-11% for some time. Got it, sir. Just broadly, the breakdown of Gross Block into hospitals and diagnostics business, please. Sorry, which one? Gross Block. Gross Block breakdown into hospitals and diagnostics business. Do you have the numbers in hand? Diagnostic business the number I think. Gross Block. It is, I will say, around not even 10%. Diagnostic is not even 10% of the total. Okay. Okay. Roughly we are at 1.2 times asset turn for the hospital business, right? Asset turn no. We are lower than that. Okay. Is there any scope of improvement in the asset turn, when there is an improvement in profitability, such as for the hospitals which are yet to reach to a steady state, good, mature hospital level or this is what is the asset turn one should think about? No, there is an improvement possible. As Dr. Raghuvanshi mentioned earlier, the BG Road facility, which is the bigger facility, is operating at around 60% occupancy level. Same is the case for our another big facility at Mulund in Mumbai. Both these facilities are having some capacity sitting there. Plus, you know, existing capacity also they are operating at 60%, so there is a opportunity to increase it. Apart from these two, there are the Chennai facility, both the facilities are operating at suboptimal level, so there also there is a scope. Okay, sir. Got you. Thank you. Thank you. Next question is from the line of Amit Goela from Rare Enterprises. Please go ahead. Hello. Sir hi. It's a good set of numbers. I'm just wondering that any kind of M&A or inorganic growth, is it prevented from the growth, the court proceedings which are on now or you are free to do that kind of stuff? Because now your balance sheet is strong, sir. No, Amit. There is no constraint on that. That is why, I said earlier that we are looking at opportunities which come at an attractive valuation and also synergistic. There is absolutely no constraint otherwise. Okay, sir. Okay, sir. Okay, sir. Thank you. Sir, you are expecting or would you expect a significant improvement in the capacity utilization for this quarter? The capacity utilization certainly should be better than the third quarter, but it is slightly below our expectation of 75%. Certainly it would be better than the previous quarter. Okay. Okay, sir. Thank you so much. All the very best, sir. Thank you, sir. Thank you. Next question is from the line of Damayanti Kerai from HSBC. Please go ahead. Hi, thank you for the opportunity. My question is for Dr. Raghuvanshi. Sir, international business is focused for most of your peers. For you, how do you see this piece moving up in next few years? Like, where do you aspire to reach, say, next two to three years? How do you see competition in this space from the local peers? Yes. No, you are absolutely right. This is a competitive space, and all the players are focusing on this, especially in NCR region and other medical hubs like Chennai, et cetera. Our main flagship facility in Gurgaon has a large percentage of international patients coming. As the more capacity we have, we are creating in both Shalimar Bagh as well as in Noida, we would have more capacity available to serve these patients. I expect a steady growth in this segment. That growth should probably take the contribution at an overall basis to about 12%-13% of the revenues. This 12%-13%, you are, like, hoping to reach in next, like two to three years, or it can come much earlier? Yeah, it should come within two years. Within two years. Okay. Sir, how do you see government initiative for pushing this business? Again, I think, easing the flow of international patient to India. What's your opinion or view on the Heal in India initiative by government of India? I am quite, sort of, hopeful that this will help it in a positive way, because one of the reasons, as, you know, that it is completely deregulated kind of business and there are multiple agents, et cetera, who function in this space. Once the Heal in India program is matured, then there would be a visibility as to, you know, where the patient is coming from and through what channel, et cetera. That would make a better playing field, and it would to some level control the agents, which at the current time are sometimes a little unscrupulous, to say the least. Okay. Sir, the last question is for international patient realization against a domestic patient, how better it is, if we can quantify some numbers, say one and a half times, two times? How do we see realizations here? Yeah. Typically we mark up for the international patients. At the same time, the facilitator fee, sort of brings it down to a level where it is comparable to the domestic cash patient only. In effect, there is, it's not very different from the domestic patient because, that, the markup essentially goes as facilitator fee. Okay. That's very helpful. Thank you, and we wish you all the best. Thank you. Thank you. Next follow-up question is from the line of Dheeresh Pathak from WhiteOak Capital. Please go ahead. Yes, thank you. Just to confirm again, in that bucket, where the last bucket is less than 10% margin and number of facilities are high. one is Jaipur, Vashi, Arcot, Malar. Which is the fifth one? FEHI Bengaluru. Okay, understood. For this SRL margins, like if you were to do an Ind AS adjustment, it will take away another 1.5%-2% of margin, right? Is that a fair understanding? Sir, sorry to interrupt. Dheeresh, there is a lot of background noise from my end. May I request you to mute your line, please? Yes. Thank you. Sir, please continue. The current reported EBITDA is after Ind AS adjustment. The EBITDA percentage reported and EBITDA reported in the presentation is after. No, I'm asking on a pre-Ind AS 116 basis, where you have to take the impact of rental in the other expense. If you do that, there will be a lower margin there. Instead of 20%, it will be slightly lower. Yeah, that's right. All our EBITDA are reported as per Ind AS. If we adjust for pre-Ind AS, then the margin will be lower. That's right. That impact is roughly 2% of revenue, right? Is that a fair understanding, 1.5%? In SRL, because I can work out on a total company level. I'm not able to work out at SRL level. I'll have to check that. It will be in the range of 1%-2%, but exact percentage I'll have to check. Okay. Thank you, sir. Thank you very much. I now hand the conference over to the management for closing comments. Thank you. Ladies and gentlemen, thank you very much for joining us on the call today. I just want to mention that some of the statements and discussions by the management, as also mentioned in the IR presentation and press release may be forward-looking in nature and may involve a certain element of risk and uncertainty. Kindly keep in mind the disclaimer that's been mentioned in the presentation and the press release. Gaurav and I are here to answer any further questions, clarifications you may have. Please feel free to email us or talk to us. Thank you very much, and have a good day. Thank you very much. On behalf of Fortis Healthcare Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.