Ladies and gentlemen, welcome to the Q3 and nine months FY 2024 earnings conference call of HealthCare Global Enterprises Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company. As on the date of this call, these statements do not guarantee the future performance of the company, and it may involve risks and uncertainties that are difficult to predict. As a reminder, all participants' 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 touchtone phone. Please note that this conference is being recorded. Now, I hand the conference over to Dr. B.S. Ajaikumar, Executive Chairman of HealthCare Global Enterprises Limited. Thank you, and over to you, sir. Thank you very much, and good morning to everyone, and a very warm welcome to those who are all present on this Q3 nine-month FY 2024 earnings conference call for HealthCare Global Enterprises. I just want to take a few minutes and give a little bit our background, how things are evolving in India and how this has made a difference for HCG. India is on the cusp of significant demographic change, leading to doubling of population aged over 60 years by 2050. Cancer incidence is expected to increase by 77% during this period. Significant increase. HCG, with its network of our present 22 cancer centers and expansion plan, is poised to play a dominant role in serving the diagnostic treatment needs of the forecasted demand, and also play a role in preventive aspects of cancer. HCG's performance for the quarter serves as an evidence of its progress in advancing towards focused cancer care, where research and collaboration are the key drivers for improving patient outcome. By leveraging this unique value propositions, we are able to provide targeted treatments such as adaptive radiotherapy and immunotherapy to our patients. Moreover, our integration of technology into patient care process, including computational work and AI platforms, allows us to be continuously on the leading edge of the change, creating a differentiating in the way that cancer has evolved. This has truly made us a global leader in oncology, not only in terms of service, but R&D work. Our outcomes today, I can proudly say, are equal to the best of centers in the world. At HCG, we have always embraced technology and innovation to be in the forefront of advancement in cancer care. We have consistently adopted cutting-edge solutions to ensure that we provide the highest quality healthcare to our patients. Our ability to deeply connect with patients is built on foundation of compassion, trust, that is unmatched, which is what truly sets HCG apart from others in our field. We remain committed to continue making a meaningful difference in the lives of those we serve in making cancer truly a chronic disease. Embracing a collaborative approach, our tumor board discussions prioritize patient-centric conversations utilizing multidisciplinary clinic across our extensive network. Entering 2024, our dedication to excellence in cancer care remains a high priority. We are focused on our goal of making quality cancer care accessible to all. Through continued investment in research and development, we endeavor to push the boundaries of medical science, uncovering novel treatments and enhancing existing ones to offer the best possible outcome to every patient. I now hand over to our CEO, Mr. Raj Gore, for his comments on the strategies going forward and operational performance for the quarter gone by. Raj? Thank you, Dr. Ajaikumar. Good morning, and a very warm welcome to all the participants on the call. Last Sunday, on February fourth, the world observed World Cancer Day. I want to emphasize the crucial role of awareness and early detection in cancer care. Awareness regarding key risk factors like HPV, alcohol, and obesity remains very low in India, and less than 1% of Indians undergo screening for major cancers such as oral, breast, and cervical cancer. Unfortunately, over two-thirds of cancer cases in India are diagnosed at advanced stages, contributing to a higher mortality-to-incidence ratio compared to other nations. The first line of defense against cancer is awareness, and it is instrumental in saving lives. We welcome the government's initiative to promote cervical cancer vaccination for girls aged nine to 14. This is a pivotal step towards raising awareness and taking preventive measures to reduce cervical cancer cases burden in India. Now, I would like to update all of you on some key growth initiatives of the company. Few quarters ago, we had embarked on our digital transformation journey to create an omni-channel, end-to-end patient engagement platform. Our vision is to increase accessibility to HCG by making it easier for cancer patients across India to find and reach HCG Care from wherever they are. I'm happy to introduce our first of its kind app, HCG Care, specifically designed to serve needs of cancer patients, and one-stop solution for patients to navigate seamlessly from consultations to second opinion, diagnostics, pharmacy needs, rehab services and home care support, and post-discharge follow-ups, ensuring a smooth and a personalized journey. With this, we are confident of building a long-term relationship with our patients to be their trusted advisor over a lifetime. With over 30% market share and growing, we have a dominant leadership position in our home city of Bangalore. To further reinforce our dominance, I take great, great pride in announcing a new 100-bedded hospital, a comprehensive cancer care center, in the thriving North Bangalore market, a strategic move aligned with our philosophy of going deeper in the markets of our strength. The hospital is expected to be operational in 15-18 months. As you remember, we also have a project in Whitefield, in East Bangalore, that is under construction right now. With a network encompassing four strategically positioned hospitals and three daycare centers across Bangalore, we remain steadfast in our mission to provide advanced and comprehensive cancer care solutions to our discerning community. Our recent acquisition in Nagpur and Indore has progressed in line with our plan, and we are rightly placed to consolidate our position in the central India region. As we move forward, we are confident of offering quality healthcare to our patients through integrated physical and digital health systems, accompanied by advanced technology and research, and more importantly, make quality healthcare accessible to all. With this, I hand over to Ms. Ruby, our CFO, for financial and operational highlights. Thank you, Raj. In reviewing our performance for the quarter, I am pleased to report an 11% year-on-year growth, culminating in a top line figure of INR 470 crores, despite a seasonally muted nature of quarter three. Some Some of the growth highlights for the quarter are as follows: We operationalized four radiation machines in H1, and with their successful ramp-up, the revenue mix for the quarter has improved due to higher growth of 13% in the radiation business. Investment in building superior clinical talents and business promotion has started showing results in two of our focused markets in Kolkata and Mumbai, which has delivered 57% and 17% growth respectively. Additional offices at Kolkata has reduced by half on a quarter-on-quarter basis, from INR 2.2 crores in the previous quarter to INR 1.1 crores in the current quarter of quarter three FY 2024. Other centers that have notably increased revenue are Nagpur, showcasing an impressive 59% rise, and Ranchi exhibiting a robust 31% growth in quarter three of FY 2024. The average revenue per occupied beds, RPOB, saw no notable increase, standing at INR 42,800, reflecting a significant 15% year-on-year growth. We have increased 59 beds during the quarter across our network hospitals. On the EBITDA front, our OIBDA EBITDA witnessed a growth of 7%, reaching to INR 82.6 crore, compared to INR 77.3 crore in the quarter three of FY 2023. Notably, contribution margin improved during the quarter, driven by a better revenue mix. However, due to the seasonal nature of the quarter, operating leverage did not come into full effect. Our cyclotron operations in Chennai were adversely affected by floods, resulting in a 30-bed impact on EBITDA. Additionally, strategic decision of coming out of the last shop-in-shop model led to a scale back of operations in M.S. Ramaiah Bangalore, affecting profitability for the quarter. Tax for this quarter stood at INR 5.7 crores, as compared to profit of INR 7.5 crores in quarter three of FY 2023. The decline is on account of depreciation for acquisitions of Nagpur and Indore. Our CapEx for nine months in FY 2024 stood at about INR 118 crores. Net debt stood at INR 367 crores as of December 2023. We are very comfortable with the current debt levels and project a better cash flow in the coming quarter. With this, I would like to open the floor for question and answer. 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 touch tone phone. To remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Kabir from Blue Star. Please go ahead. Hi, morning, everyone. Wanted to know, what are the strategies for Milann going forward? Are we looking to hive off this business completely? Yeah, I think we have made the statements in the past. We are working on it. As we know, post-COVID, there was a downtime, and we are putting efforts to bring it to the level where it was pre-COVID. We are looking to see at the right time to divest. Certainly we'll inform when the time comes. Okay? Okay. When do we expect this to happen? Like, I can't, I cannot really give you a time frame. Okay? So certainly because we are working to see at what time we can maximize our value. All right? Okay, okay. Now, my second question is with Dr. Ajaikumar. So there have been rumors about CVC exit, and being a PE, everyone expects them to exit sometime. So just wanting to know, what's your future at HCG, like, healthcare? Hey, Arunav, the way I see it is, you know, CVC is an investor who came to HCG, and, it is you should really ask them to see at what point they have to exit. But as far as we are concerned, we are interested in the HCG to grow. And as a stockholder, I know they will come... They will get their, return with 15 at what time they got their return, they will make by QCA. But it really, the comment should be made by CVC on this. So at this point, I would like to not say anything about this aspect, but, I'm sure you will be able to contact them and get a comment from them. Sure. Thank you for your time. Thank you. Thank you. And the next question is from The line of Pritesh Chheda from Lucky Investments. Please go ahead, sir. Yes, sir. In your mature center, where the growth rate is about 8%, are you constrained by any capacities there? And second, when I'm looking at your occupancy number, so despite your initial comments on oncology and the demand in India, the occupancies look lower. So, you know, the single digit growth and occupancy, if you could give some more comments there. Yeah. So, this is Raj. Let me take that question. First, I'll answer your occupancy question. I think this occupancy is based on next 60 additional beds, as we have added some beds in Baroda, and some minor beds in other hospitals. So I think you should look at it from that perspective. That's number one. What- Number two- Sir, what is the bed addition, you said? Sixty beds. On a total count of? Close to 2,000. Close to 2,000. Yeah, I think it's mentioned on the footnote of the same slide. Okay. Second question, you asked about the capacity constraint, if there is any capacity constraint on any of our mature centers. We have addressed this before also. Let's take one by one. You know, KR Bangalore, which is our center of excellence, we had informed you earlier that we have added about 20+ beds, you know, in a newly premium wing. Our occupancies are around 65%-70%. We still have enough headroom there, you know, in all modalities, including beds. You also know that we just made an announcement that we are, we have a project in Whitefield for, you know, comprehensive cancer care center, 25-bedded. East Bangalore is one of the affluent and fast-growing markets, which will be ready early next year, in FY 2026 or calendar year 2026. We just announced another project in North Bangalore. Again, you know, towards the airport. City is growing very fast, attractive market, new development. We are, you know, strengthening our presence in Bangalore by adding another 100-bedded comprehensive cancer care center in North Bangalore. So that addresses, you know, Bangalore, which is our most mature market. Second mature market is Ahmedabad, where we have a 100-bedded facility, which is doing very well on all parameters. As announced earlier, we are relocating to a newly constructed premium state-of-the-art hospital, in first quarter of the coming year, new financial year. And therefore, you know, that hospital will continue to grow for, you know, near foreseeable future. So these are the two big markets. I'm just giving it an example. However, for every hospital, whether mature or emerging, we have a 3-year plan where we are forecasting which capacity will become constrained at what point, and we are taking, you know, preemptive action to make sure that if radiation is coming to capacity, we will add one more machine. If beds need to be added, we will add beds. If OTs need to be added, we will add OTs. So we don't see any capacity constraints for next three-four years in any of our mature centers going forward. So your answer mentioned about all incremental. So when I look at the 8% growth as of now, and based on your answer, can I conclude that at least today you are constrained by capacity? No, no. No. So if you are not constrained by capacity, why in the mature centers, the occupancies are lower, and why then the growth rate is 8%? To simplify this, what we just informed is that we have added 44 beds or 45 beds in our Baroda center, so that has increased the bed capacity. Second question on ARPOB, sorry, in emerging center of 8%. In our CFO speech, she said that now we have scaled down our operations at MSR. That contributes to about 3%-4% of growth at our emerging centers. If you adjust for that, our emerging centers growth would be close to about 30%. So I want to say this- Okay. I think your question mainly is, in last year, we had an occupancy of 65.7%, and we are now saying 58. It is exactly for the reason what Raj explained, that we have expanded our bed. Because we feel when you reach close to 70 overall, you're reaching the capacity, more or less 70, 72. But now with the need, because some of our center of excellence, others, we are seeing the need for expansion. So that need will be met from this expansion, and that is why we are doing it. So this is, I think, is positive, that is showing the growth we are having. Okay. My second question is, sir, with respect to the pre-Ind AS EBITDA margin. What is the pre-Ind AS EBITDA margin in our business on a nine-month and a quarter basis? Yeah. In this, you can have a rental impact of capital leases is close to about INR 20-22 crore. And, I think if you adjust for INR 22 crore, that's will start our EBITDA by about five-10. Eighteen months. Four. Sorry, I couldn't understand. So INR 78 crore is your reported EBITDA, minus 22. So you take it about 56. 56 divided by 470, that's the number? That's the number. So INR 22 crore on 470, that's the number. That's the rental amount. Oh, okay. Okay, okay. And lastly, this 2,000-bed which is there today, what beds will we see at the year-end and what beds we'll see at the FY 2025 and 2026, based on your expansions? I think over the next three years, we will be adding about 350 beds, including our Ahmedabad project and Whitefield project. And at what CapEx? I think we had announced earlier for Whitefield facility, it's INR 25 crore. And for Ahmedabad, 200-bed facility, it's INR 106 crore. So 106 + 25, about 130, 140 crores for 350 beds? Yes. And what asset turn? See, the Ahmedabad hospital is already an operational hospital. We are just shifting whole... shifting to a newer facility. It's a hospital which is, you know, has an EBITDA margin in higher twenties, growth is in, you know, around 30%. So it's, we are, we, we are, it, it was a hospital where we are hitting capacity constraints, and in another quarter, we will go to an expa nded facility. Okay, sir. I'll come back to you. Ladies and gentlemen, please press star and one to ask questions. The next question is from the line of Bino from Elara Capital. Please go ahead, sir. Hi, good morning. This Whitefield facility would be a standalone facility, right? Yes. Whitefield facility is a standalone, comprehensive cancer center facility. We are focusing on women's, you know, cancer diseases. We'll be treating, you know, primarily focusing on women's cancers, there. Yes. Okay. And how many beds would be there? Twenty-five. 25, okay. The Ahmedabad one would be 85 beds, the expansion that you are doing? We are moving from a 100-bedded to a 200-bedded facility. 100 additional bed, beds are coming up? Yeah. Understood. There was an Indore additional 100 beds that you had planned for Indore, which I'm not now seeing in your slides. Is that planned to go on? What is the question? Yeah, sorry, can you repeat your question? Sure. Earlier, you had also guided to adding 100 more beds in the indoor facility, in couple of years' time. So I couldn't find that in your slides on the CapEx program. So if you have plans to go on? Yeah, I think you are right. You know, we would like to increase our capacity eventually in Indore. As in, you know, it's a phase two plan. We recently, a quarter ago, we have acquired this hospital. And, you know, as and when we have, we firm up the plan, we will, you know, share it with you. Understood. And, for this 100-bed facility in North Bangalore, what's the timeline? Again, I can't find that on your slide. Yeah. We are looking at operationalizing this facility in 15-18 months from now. Understood. Thank you very much. The next question is from the line of Abdul Kader from ICICI Securities. Please go ahead. Yeah. Hi, sir. Thank you for the opportunity. So just, if you could shed some more light on how Indore has been this particular quarter, and if I refer to your slide among the clusters, which you have shared, you know, we could better track this from from the next quarter onwards? Yeah. I think the cluster question, I think it's added to in North India cluster. So as you know, third October, we took charge of our Indore operations. This is a market which is, you know, Madhya Pradesh is a very attractive market. Many cancer patients from Madhya Pradesh travel to Mumbai, as well as Ahmedabad. Mumbai, Ahmedabad, we have our own hospitals. Nagpur, we have a hospital which is doing very well. We have a sense of that market, and we understand the potential. We have, you know, already a brand presence from treated patients in that market. This is an important entry into a newer state for us. Right now, you know, we have, you know, we have an integration plan for this hospital, so let me give you an update on you know, what is going on. So far, you know, we have been able to plug this hospital, newly acquired hospital, on our entire digital platform, whether it's HIS, ERP, CRM, you know, our websites, et cetera. So we've been able to successfully integrate from an IT perspective. This is a hospital which is, older hospital. We have done an infrastructure assessment from an infrastructure as well as clinical perspective. We have identified gaps, and we have created a upgradation project. Right now, that project is underway. We want to... When we enter in a new market, we want to ensure that the facility that we have, the clinical services and the quality that we have, it's as per our HCG standards. We are upgrading that facility, including rooms, ICU, facade, et cetera. That project is almost about to complete in this month, end of this month. And, you know, so the integration is going as per plan, and we're very excited about this opportunity. Sure. So understood. And, so then just commenting on your CapEx. So if I see the nine-month CapEx from mature center, you know, that has already surpassed where you were at FY 2023. So for next year, how do we, you know, look at this CapEx number on the spending side as well as on the debt front? And on debt, again, in this quarter, Q1, too has gone up slightly. So is it entirely due to the spending on Indore or any other factors you'd like to highlight? So CapEx is not included in the. Sorry, Indore acquisition investment has not been included in the CapEx table. However, the CapEx in mature centers can be on account of the expansion we are doing in Ahmedabad center. We have so far spent about INR 48 crore in Ahmedabad. That is included in our mature centers CapEx. Now, question on your CapEx going forward, I think we have indicated in our previous calls as well, that our maintenance CapEx remains in the range of about INR 70-75 crore, and that is what one can expect. This is apart from the growth plans that we have. Yes, you're right. In the net debt number, it has slightly inched up because of our acquisition in Nagpur and Indore, partly funded by debt and partly funded by our internal accruals. Sure. Understood. One final one, if I may. So with Ahmedabad now coming in Q1 of FY 2025, I mean, how do we, you know, see the cost element going up, you know, in percentages? Are we still confident of maintaining this 16%-17% EBITDA margins? Or, you know, how should we look at the entire cost profile going ahead? Yeah. So very good question. So, let me again refresh everyone's memory on Ahmedabad. This is our second center of excellence. It's performed exceptionally well. As I mentioned earlier, our EBITDA margins are in higher twenties. Returns are very good. It's, we have a very strong team of clinicians, and we have a very dominant market share in Ahmedabad. It has been growing about 15% CAGR in, you know, last few years. Now, that we have an ability to go into expanded, you know, more advanced and more, you know, facility, which is more keeping pace with the increased expectations of our patients, I think, you know, the way we want to do it is first, because it's an existing profitable operation, I think we will continue on that track. Though we are going from 100 to 200 bed facility, we know the way we work is we will release the additional capacity gradually as and when we need to operationalize it, staff it accordingly, so that we are, you know, we are not incurring costs first and, you know, getting revenue earlier. So we'll try to balance that equation. And, you know, we, I think we are very excited. I think it will be a really showcase facility for HCG going forward. Got it, sir. Thank you so much, and wish you all the best. Thank you. Ladies and gentlemen, we would like to remind you, please press star and one to ask questions. The next question is from the line of Dhara Patwa from SMIFS Limited. Please go ahead. Thank you for the opportunity, and good morning to all. So will the previously provided guidance of achieving 20% EBITDA margin, either by Q4 or, you know, Q1 FY 2025 be upheld? If yes, then what will be the factors driving the anticipated margin expansion of 200-300 basis points going forward? So, yeah. As in our CFO speech, you would have heard that our EBITDA margin is, of course, subdued currently in the current quarter, primarily due to operating leverage not being played out. One good thing to inform here is that, as we had announced in the previous quarter, that we are installing new machines, LINAC machines, in our various centers. Those have already started showing results. And happy to announce that while the overall one quarter, quarter basis overall revenue has gone down, but our radiation business has gone up. That helps our contribution margin to go up. As we go in quarter four and when the revenue comes back, we feel that the higher contribution margin coming from better service mix should help us help our gross margin improve. That will improve our profitability. Along with that, I think we are focused towards maintaining our fixed cost and overheads the way it is. That would help us reach EBITDA margin going forward. we are still upholding that guidance of 20% by at least, in the next two quarters, right? Like, from 17.5% margin, we'll at least achieve 20% something in the next two quarters or something, right? I think, Ronak, just to go back and clarify, now we have acquired Indore. We have done all this because those will be, will pull down our EBITDA margin to some extent, because Indore is not going to deliver the 20%, so it will bring it down. So we have to take into consideration that our Whitefield project also becoming functional. So we put all together, obviously we are the, you know, we are striving towards 20% margin, but we feel we may fall short of it to this coming few quarters because of the reasons I mentioned. And we also are very cognizant of some of the government functions, you know, increasing. We have taken some measures in that area also. We want to make sure a significant percentage of our is cash and private pay. All of these are happening, so I would like to state that our 20% may not be achievable in the first quarter or second quarter, but we'll certainly strive to achieve towards the end. Sure, sir, that's helpful. One more question: What could be the peak occupancy for our mature centers, that beyond that, we might think of adding more beds? So will it be something like 90%, like the other multispecialty hospital, or 80%, after 80% occupancy, we might think of adding new beds or something? Historically, I don't know which multispecialty hospital you can say 90% is the peak, because most of them, you know, we, when they reach in the 70s, we start looking for expansion. Because, you know, because of the turnover, particularly in oncology, where we have day care, people coming and going, it is very important to have the beds and not put them on a waiting list. Because, particularly oncology patients, as you know, it's not a good idea to put anybody on a waiting list or defer their treatment. So in this area, historically, the function of our testing, when you reach close to mid-70s, we look at, whether it is now occupancy we need to look for. And we also look at the daily census in the hospital. Is there a waiting list? Is there an issue? So we get feedback from the center heads and all to decide. So it's sometimes it is a moving target, but we certainly feel with all this 20 years experience in oncology, more than 20 years, that mid-70s is when we should start looking for, okay? Okay, sure, sir. Sir, our occupancy in our emerging centers now have reached a good occupancy rate of 60%, and ARPOB is also similar in line with the mature centers. So, but we haven't seen much improvement on the EBITDA margin side. So at least in the next two, next two years, can we see some improvement on the EBITDA margin side for our emerging centers, at least, you know, 15%, 16%, something like that? Is this question on emerging centers or again? Emerging. Emerging centers. So if you look at last four, five quarters, our emerging centers have been steadily growing its EBITDA, and I think our margins have also improved. In CFO speech, we also heard that Kolkata center has reduced its losses quarter-on-quarter by half. Our previous quarter Kolkata losses were close to about INR 28 million, 22 million, that has come down to INR 11 million. And in the current quarter, our emerging centers EBITDA is close to about INR 13 crore. And if you look at it in the slide, if I can draw your attention to slide nine, you would look at it, our EBITDA has grown by 66% against the revenue growth of 19%. Correct. So, if I want to see it at a console level, emerging, mature centers will grow steadily and emerging centers will pick up, more growth going forward. That's how, it should be, right? Absolutely. Absolutely. And I just want to clarify your question about occupancy of emerging centers. See, we have stated it earlier, our capacity is much larger. We have not operationalized entire capacity in emerging centers, and therefore, it's showing higher. As and when hospital by hospital, we feel that we need to operationalize already installed capacity, we will continue to release that. We don't see any capacity constraints in terms of number of beds in any of our emerging centers. And just to add one more point, our emerging, sorry, mature centers are already delivering 20%+ EBITDA margin. I think that is an important- Yeah, mature centers is definitely- In answer to your question, that we have reached, and if you look at our center of excellence and all, we are close to 30%. So, and our ARPOB incomes are close to INR 1 lakh. So our goal is to see the mature centers also reach that level. And I think, like what you heard from Raj, and our CFO, Ruby, I think we are on the track to achieve that, which will obviously bring us to the 20%. The only caveat here is our new centers coming, which you should be well aware of. Our, like, Indore or, Whitefield, and later on our North Bangalore. They could have some drawdown in terms of EBITDA margin, but we are confident that will be compensated by the growth happening in the emerging centers. Yeah. I think Dr. Ajay made an important point about ARPOB. If you look at our ARPOB this quarter, it's about 16% higher than the same quarter last year. We've always insisted that historically, most of our hospitals have been in Tier Two and Tier Three cities. When we embarked on our expansion journey in last five years, most of our emerging centers are in cities that are bigger and, you know, with a population which is more affluent. As we and we kept saying that as the share of emerging center revenue goes up, our ARPOB will continue to grow, and we've demonstrated that on previous many quarters. If I have to give you a sense of our ARPOB, our centers of excellence you know in KR is you know in higher seventies ARPOB. Our center of excellence in HCG is about INR 90,000. Now, to give an idea of our emerging centers, our Colaba center is in, you know, higher 80 ARPOB. Our Borivali is in 50. In Kolkata, we are touching 60. In Baroda, we are at 60. In Nagpur, we are closer to 50. As these centers continue to grow the way they have grown this year in terms of top line as well as profitability, our overall numbers will continue to look better and better on all operational parameters. Sure, sir, that's very helpful. Thanks. That was my last question. Yeah. Participants who wish to ask questions may please press star and one. The next question is from the line of Shyam from Goldman Sachs. Please go ahead, sir. Yeah, good morning, and thank you for taking my question. I joined a little late, so if this question has been asked, I apologize. But just on the disruptions that happened, one at Chennai, as well as the shop-in-shop that we have now scaled down, right? How should we look at, like, Q4 from an occupancy perspective? Have they improved now? And what is the kind of outlook for utilization that we look forward, say, for fiscal 2025? That's my first question. So, see, Chennai, let me just remind everyone, we have a Cyclotron facility there. Due to flooding, you know, as you remember, November, it was a big flood. It got flooded, so we had to, you know, we had to take a downtime on it due to flooding. The Cyclotron is still, you know, down. We expect it to be up by end of this month. And it's a, it's a highly profitable business. As soon as the Cyclotron facility is up, I think we will get back to the normal operation. On MSR facility, as we said earlier, it's a smaller, you know, 30-odd bedded, you know, shop-in-shop facility, in a medical college trust-run hospital setup. It was one of our last shop-in-shop facility. As you know, you know, if you look at our track record last few years, we've scaled down, you know, or exited some of the shop-in-shop. What we've also done is in our dominant market, in hospitals that are performing well, we've consolidated dated our position. We look at Cuttack, well-performing, we took a majority. We look at Nagpur, well-performing, we acquired that. So our endeavor is to, you know, continue to consolidate in our dominant market and well-performing hospitals. As you know, Bangalore is our, you know, home market. We have a, you know, in spite of all major players having oncology presence, multiple hospitals, we have a dominant 30%+ market share. This MSR facility, a smaller facility, was in the vicinity of North Bangalore. We felt that it's time to put our own facility premium on this airport road, which is a 100-bedded facility, because, you know, 30 beds, you can't do much. With a 100-bedded facility, we feel we have a growth path in North Bangalore, as well as total Bangalore market share going forward. So it's a strategic call to get into North Bangalore and move to our own facility, and we're very excited about it. Yeah. Yeah. Just outlook on how should we look at AOR going forward? AR Sham, I mean, you know that, you know, Q3 is usually because of festivities, footfalls are down, and in general, in the industry, it's little muted. I think it's a blip. We are already seeing, you know, business back to, you know, our growth, you know, trend in the current quarter. I mean, it's just one quarter of seasonal mutation. Got it. Helpful. Just second question is on the competitive landscape. And I remember in, I think, a year back, maybe, we did a complete price rationalization exercise, right? Or rather, price comparison benchmarking exercise. So my question ties into the ARPOB dynamics, right? You've given us different centers with higher ARPOBs. You know, this quarter again, ARPOB has grown healthily. So just want to understand the outlook for ARPOBs as we go forward. Is there an element of price changes upwards that we can think of as well? And just the competitive dynamics to link it with. Yeah. I think, one of the things we have to remember is, like, what Raj also said, we have a differential. Our ARPOB in our main centers, like particularly Bangalore and Ahmedabad, is high, and we do not feel that there is... Because of our technology mix and the type of patients we deal, those also we being a destination, naturally, our ARPOB will be higher than the competitors. And we are also maybe somewhat equal or when, when the technology is not there, which we have, we could be higher. But that is something we feel if we continue to grow, as we bring in more technology, more multidisciplinary clinics, and also provide better excellence of medical care. For example, if you look at our, our mortality rate, you know, some of you look at it, we are only 17,200 discharges happened in the month of November. Our mortality rate was below 1%, and we have brought it down. At one time, five years ago, it could be keeping at, from 3.4%. So center of excellence, so repeat patients coming in, we, and the first time the right treatment makes a difference. So that involves obviously, you know, cost. That is why the ARPOB could be high. So can we compare it to the multi-specialty hospitals, what they provide? I, I don't think you can, because being a specialized oncology service, ours will be little bit different from compared to multi-specialty, which is also providing cancer care. Okay? Because our cancer care patients who come are also complicated, because they may go to multi-specialty hospital, get their first line of treatment. When they recur, they come to us as a destination. My own clinic is an advanced and recurrent tumor, seeing complicated cases. So naturally, it will make a difference. And also our technology, like CyberKnife, Digital Pathology, also will make a difference. Whereas if you go to the Tier 2, Tier 3 cities also, I think the difference may not be that much, because it is smaller centers. So when you aggregate all of this, our ARPOB growth future will be very good. And also there will be a differential between the major cities, particularly our center of excellence and others, compared to the other competitors. We feel one more thing, Sham, is we have to really, in my view, it's my personal, you stop looking at the competitors, really look at where is the oncology center of excellence, where the growth is going to happen. As I said in my beginning statement, the oncology cases are going to increase. One in nine in India have cancer, and, you know, breast cancer is increasing. It is also affecting the affluent population. So we should focus really on what is the type of quality of care we are providing. Are we the quality? Like, that is what we should focus, and that is where I think, even like Raj mentioned, our dominance in Bangalore, Ahmedabad will play out. Yeah. Thank you, Dr. Ajay. Just to add to what Dr. Ajay said, Sham, pricing is just one of the levers to drive ARPOB. High-end treatments, you know, as you know, we have, you know, introduced robotics in three more centers. That gives us the ability to, you know, differentiate as well as, you know, increase realization per patient, and reduce the ALoS. ALoS is the second factor. As surgeries are becoming less invasive, we are able to turn around the patients faster on the same day. As we are introducing more linear accelerators, radiation machines, we are able to drive radiation business. You know, so, combination of high-end treatments, faster turnaround, lower ALoS, I think will be the main levers more than pricing for us going forward, which will also help us to drive volumes going forward. As we will see about, you know, we, you know, 5%-7% improvement in ARPOB year-on-year is something that, you know, we should expect going forward. Got it. And just lastly, I'm just being greedy here. You know, is there any growth guidance that you would like to share for, say, the medium term in terms of how we should look at top line growth going forward? Sham, we've never given growth guidance in the past. What we've always said is our endeavor and our track record has been to grow faster than market, and we will continue to drive, you know, that going forward. Raj, help us know, what is market growing at? Sorry. Market is growing about 10%-11%. You know, and we, you know, we plan to grow at a higher rate. I think we have a good, you know, track record on our existing hospitals. We have good growth pipeline. Combination of that, we will, you know, you know, I'm sure we'll beat, you know, market growth rate going forward. Helpful. Yeah. Thank you, and all the best. ... Thank you. The next question is from the line of Ankit Pandya from InCred Asset Management. Please go ahead. Yeah, hi. Thanks for the opportunity. This is Aditi Kaintaraya. Sir, I'm just a little concerned with the revenue growth rate that we have reported in the mature centers. I understand that we expanded beds in the mature centers, and therefore, that has impacted occupancy and margin. But what I'm failing to understand is the mature center revenue growth rate of 8% year-over-year. If you look at what your other counterparts are reporting, you know, that seems to be a significant gap between the growth rate that HCG is doing and your peers are doing in the hospital space. So could you talk about why mature centers grew only 8% despite expanding beds? Yeah, I think, you know, I, I think we mentioned it earlier also. You know, we have scaled back our operations in one of the facility in Bangalore, which was categorized as mature center. There is an impact in Chennai due to flooding, which again, was classified under mature center bucket. If I say adjust for these two, that 8% becomes 12%. I don't see issue in our growth rate. Again, this is something that has happened this quarter. I think, you know, we have a good track record and driving mature center growth year-on-year, and you will see it in Q4, it's coming back to, you know, normal rates going forward. Understood, sir. Thank you so, so much for that. Secondly, just to understand the margin profile, and again, I'm comparing HCG to the other hospitals that we know of and they report. You know, EBITDA margins for most of these hospitals are 25% and north of 25%, and these are also national chains like you are. They are also expanding like you are. They also have some new centers, emerging centers like you have. So, and, you know, it's not like a quarter or two that you are lagging behind their operating margins. I mean, they have been consistently doing more than 25, and we are consistently hoping for a 20% number from HCG. So is there something in the business model that leads to a lower margin compared to our peers? Or is it that we have too much overhead, or is it that the cost of physicians is higher in our business model compared to what, you know, these guys have? Let me answer this question in two parts. One is, there are hospitals which are based in big cities, who could have a higher EBITDA margin. I don't know why you made a statement all hospitals have a 25%. I don't think all hospitals have below 20%. Even look at some major corporate hospitals which are across India, across India in different cities, their EBITDA margin is low. As you come up with more growth opportunities and put more new hospitals, your EBITDA margin will come down. So 25% is the limit, but I feel that is only anomalies in terms of few hospitals showing, they're individual hospitals. For example, if you take the GI hospital at Puducherry, I know, they have a good margin, maybe 28%. But we have a good margin in Bangalore, we have 30% margin, Bangalore Center of Excellence. Our Center of Excellence in Ahmedabad has close to 23%. So we, we cannot... If you take it as a group, our EBITDA margin is low because, as I explained to you- Established centers. Established centers, for your information, are 24% EBITDA margin, and particularly in cities, we are higher. So we have to segment it out, segregate and see what is in it deeper, rather than looking at overall. Which centers are higher and which centers... Because we can't expect, our Cuttack center, for example, produces 30% EBITDA margin. It is there for a long time. So I think that appreciation has to be there. It is nothing wrong in the business model. I think our business model is very robust. When you look at our oncology doctors, our doctor retention is extraordinary. Our percentage we pay to doctor is also below the market. Our staff cost is low, but it is the growth. You know, we are in a growth mode. As you mature and we some growth comes in, it will cause this to change. As I said before, and as our Raj also said, I think we are looking at reaching the 20%, but it will be push and pull because some of the new centers, Indore, we acquired, we made in Indore. So that is how the, the investor community should look at. They should look at it and see how this is going to be and what is the future. Like, you know, what happens when all the centers reach 25%, 20% in the next three-four years? Where will it be? So we should look at it that way rather than making a generalized statement, in my view. Just if I can add, Dr. Ajay. As you rightly mentioned, our established centers, our mature centers are delivering 24% margin. As our emerging centers continue to grow, we should be able to expand our EBITDA margin. Just a point of reference here is, if you look at last year's same quarter, our EBITDA margin in our emerging centers were 7%, which has grown to 10%. Yes. Now, as this 10% keeps growing towards and we keep inching towards our established center, we should be able to expand our EBITDA margin, our but you know, contribute, yeah, but a center like Indore can come, which is great for long-term opportunity, that can pull down your EBITDA for a while. So that is how we have to calculate this, you know? Otherwise, we have to do only M&A activities, where all of them give us EBITDA margin of, say, 25%, then only we acquire. Then where is the growth? Where is the opportunity for growth for any investor? Tell me. Do you see any growth if you do that? That's right, sir. ... No, no, sir, I understand what you're saying, and I appreciate it. Thank you so much for that response. So one last question on the EBITDA margins of, so I just wanted to understand, you know, you gave examples of certain centers which have 30% EBITDA. I understand these are your center of excellence centers, right? So is there a difference in the peak potential margins of your center of excellence centers and some other centers which may not be centers of excellence? If yes, could you quantify what a center of excellence could achieve and what another center could achieve? So I think as is, as we said, center of excellence reaching 30% is extraordinary in the single site. That has to be appreciated, I think. Will that sustain as it is sustained? But do we want it to be higher? I think that is not our objective. Okay? We are satisfied in the higher 20s-30s. But as the technology improves, as the mix improves, as the footfall improves, our growth will happen. Even in the, centers of excellence, we saw, you know, growth happening significantly. That growth will continue to happen, but that doesn't mean your EBITDA margin will also continue to increase. So we have to look at it, what does a center of excellence mean? How, what are the revenue growth opportunities and what are the concomitant EBITDA growth opportunities? Will the EBITDA growth always happen higher than the revenue? It may or may not happen. It depends on the mix. Okay, so we have to look at it in a twofold way. I get it, sir. One last question, sir. On the payer mix, so what percentage of our revenue would be out-of-pocket? What would be private insurance, and what would be public insurance? All together, we can say about close to 45%-50% is cash mix, cash. So 35%, it is increasing. The payer mix from the private insurance grows to 30%, and 30-35, and the rest, 15%-20%, is government schemes, including ECHS and state schemes. As Raj mentioned, Raj, maybe you want to comment that we are trying to obviously maintain this and improve our cash and payer mix more. Right, you want to say? Again, just to, you know, most of our new centers, emerging centers, are in bigger cities, where affordability as well as insurance penetration is higher. Because of our historical presence, larger presence in smaller cities, you know, our mix was in a certain way. But as these emerging centers start contributing more and more towards our revenue, our mix will improve, going forward. So when you say improve that, you mean more out-of-pocket and lesser public, or do you mean more out-of-pocket and lesser private and public? No, so I think we should not look at it, you know, cash only. I think we should look at cash plus TPA, because TPA insurance, as insurance penetration is growing, cash will get cannibalized as people will have more and more insurance policies. I think we should some club insurance and, cash together and look, target at that segment. No, I just want to add- Understood. What is our wish list? Our wish list is, obviously, we don't want patients to spend out-of-pocket. There is no question. If you look at advanced countries, majority of them are cashless. I was practicing there for 28 years. I never bothered about what is the cost, because the insurance company will say, "You do the right thing." So for us to do the right thing for the patient, ultimately dropout rates will be less, everybody should be in the private insurance. You know, so that is what we should strive for. But fortunately, post-COVID, what we have documented is the private insurance has increased. That means, people have become more concerned about healthcare, and until then, I can attest to that, the people were not bothered about insurance. They thought they are immortals. But now people are beginning to realize they are coming into that, that there are more insurance companies are also opening. So I think it is a definitely a positive trend for healthcare industry. Not just insurance penetration is growing, but I think the covered amount is also... Yeah, historically, it was about INR 3 lakh. Now, it's, you know, closer to INR 10 lakh. Wow! So more and more people have understood the importance of having sufficient cover. I think it's a good sign for entire industry going forward. Raj, would it be fair to say that public insurance patients would be at a lower EBITDA or whatever gross margins compared to private insurance slash out-of-pocket patients? Yeah, I think one of the important things to realize is it is state by state. You look at Odisha, for example, we think when we return to the government, we say that's the model, because their payment mix is quite, that is why our EBITDA margin is good, and the patient care is also extraordinary, which is what we focus on. What is it can provide? For example, you take a drug, like Herceptin, which is needed for, let's say, breast cancer patient. If the insurance company, the scheme says they won't pay, how can you say for a 28-year-old woman, "I won't give you the right drug?" So it is a, becomes a more significant moral issue, ethical issue for us. But what Odisha has done, to some extent what Gujarat has done and Maharashtra, they are opting. They are even, some of them are even covering immunotherapy. So I think they are moving in the right direction, state by state. So we, we are encouraging that. So some states have a good EBITDA margin, but some states are very bad, very poor. So we need to now develop those states which are not good to encourage them. We are showing them the comparison with Odisha and other states to the state government and see that they also concur in paying, paying this. But the standard answer is that they give up is, "We don't have money." So we need to address that, obviously. Also just to add, I think the beauty of HCG model is, you know, let's take Andhra. Andhra is the state which pioneered state schemes, right?... But, you know, because of higher turnover, higher asset turn, we've been able to, even at a government rate, we are able to deliver 20+ margin, 20+% EBITDA margin in Vijayawada, Vizag. Similar case in Bhavnagar. So I think, you know, you just need to figure out how to tweak your model to make it work for you. The reality is, you know, some of these, you know, tier two, tier three, tier four cities, that it's a government scheme which brings affordability and quality care to these, you know, patients. And as, as HCG, as cancer care provider, you know, we want to find a model to make sure that our care is affordable and accessible to them in this market, which otherwise wouldn't be. I got it. Thank you so much, Chitranjan, and all the best. Thank you. Thank you. The next question is from the line of Rishabh Tiwari from Edelweiss Capital. Please go ahead, sir. Hi. Our understanding was that the Ind AS adjustment was around INR 17 crore till FY 2023. Has it increased significantly to INR 22 crore? Is it because of- It increased to INR 24 crore in the nine months of FY 2024. 24 crore in nine months? Yeah, yeah. Even that doesn't look right, because INR 17 crore is quarterly till last year, right? Sorry? Our understanding is that INR 17 crore was the India adjustment per quarter, right? Per quarter. Last year. In the nine months, it is INR 73 crore. Okay, that is also a significant increase, right? From 17 going to 24. As we acquired the assets of Nashik and Indore, these centers have also come under ROU capital lease. Okay. Okay. What is the, what is the corporate cost right now that you are incurring per quarter? Yeah, about 4%. Can you also comment on the performance of Borivali and South Bombay centers? Yeah. So, look, Mumbai, you know, has been doing very well. We have, you know, Mumbai growth about close to 20%. Borivali is doing fantastic. Its EBITDA margin is 20%+. We were running out of capacity in our LINAC. We've added one more LINAC in the last quarter. We've also added robotics in Borivali. Kolhapur, we had earlier indicated that we want to position it as a destination for international patients. We've had a tremendous success in last three, four months in attracting international patients to Kolhapur. For Kolhapur, international patient is almost mixed, is about 30%+ now. I think both we are on track. You know, as combined HCG in Mumbai, we are one of the few players, one of the two players who've been able to grow our market share in oncology over last two to three years. So I think Mumbai is an important market for us strategically. It's a competitive market. We, I think we have a right plan, and we are growing as per our expectations in these two markets. What, what margins were you able to achieve in the last quarter in Mumbai? Margins. So, Borivali is about 24%. I think in Colaba, the South Mumbai, we are—it's still not making. We are expecting in couple of quarters to get to a break-even point. Our focus right now is, you know, as we indicated earlier, we got our clinicians, we've started building brands, we've started driving specific products, specific, from specific markets, international markets. And, you know, we feel that in couple of- Yeah, couple of months. Yeah, we... Yeah, Dr. Ajay was just prompting that apart from being a destination for international patients, for South Mumbai specifically, we have opened a women's wing, specifically focusing on women's cancer, breast cancer, cervical cancer in this unit. So I think, you know, we're very hopeful that, you know, combined, we will grow our market share in Mumbai. Understood. Just one more question on Borivali. This 24% is pre-rent, right? What is the rent cost that you're incurring for Borivali? 92 lakhs per month. INR 92 lakhs, okay. And just one more question. What is the CapEx that you are planning to spend on North Bangalore? Yeah, so it's a 100-bedded facility, where we are. Yeah, it's a, I mean, as you know, our current center of excellence, we started our journey here. As we grew, we started, you know, taking more and more buildings. It's not a pre-planned, pre-designed hospital. We, you know, as we became more successful, we just added buildings there. In North Bangalore, we want to make a statement by building a state-of-the-art, advanced premium facility, just like what we are doing in Ahmedabad. It's a 100-bedded facility. The expected capital outlay for that is about INR 90 crores. Okay. Understood. Thank you. Thank you for taking the questions. Okay. As there are no further questions, I would now like to hand the conference over to management for closing comments. Yeah. Once again, I would like to thank all of you for your active interest, participation in HCG's journey. We are, as you see, we are very excited about our growth initiatives. We are, we feel that as a, as a dominant oncology player in the country, it, it's up to us how we take HCG cancer care across India to more and more markets. We will continue to, you know, make cancer care accessible and affordable across India. Please stay in tune, stay tuned, and thank you very much, and have a good weekend.