Ladies and gentlemen, good day, and welcome to Jupiter Life Line Hospitals Limited conference call hosted by ICICI Securities 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 the 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. Abdulkader Puranwala. Thank you, and over to you, sir. Yeah, hi, good morning, everyone, and on behalf of ICICI Securities, I welcome you all to Jupiter Life Line Hospitals Limited Q3 and nine-month FY 2024 earnings conference call. Today on the call we have with us, Dr. Ankit Thakker, Executive Director and CEO, Mr. Anand Apte, Chief Strategy Officer, and other members of the senior management team. We'll begin with the call with opening remarks from Dr. Ankit, and post that, we'll have a Q&A session. So now I hand over the call to Dr. Ankit for his opening remarks. Thank you. Thank you, Abdul. Good morning, everybody. So thank you all for joining us on our earnings call to discuss the business and financial performance of third quarter and nine months of FY 2024. I hope you've had a chance to see the financial results and the presentation on the website and the stock exchanges. With me on the call today is Mr. Anand Apte, our Chief of Business and Strategy. I'm also accompanied by Falguni Shah, our Business Controller, and Suma Upparatti, our Compliance Officer and Company Secretary, and of course, our IR team represented by SGA. Throughout our journey, we prioritize a patient-centric approach, and we've always had the aim of delivering high-quality medical services and a hospitable experience to the patients and their families. This commitment has not only garnered greater trust from our patients, but also our doctors and the entire team, which has primarily contributed to our year-on-year growth and performance. We continue to remain optimistic about the tremendous scope of expansion for quality health services in India and especially in Western Indian region. With the growing aspiration of the average Indian consumer, the rising middle class, and the increased penetration of the health insurance, more and more people are demanding a higher quality and a better experience in their health care. Jupiter's brand and offering has therefore become more relevant in these times. We are committed to our greenfield hub-focused growth strategy in Western India, but shall also continue to evaluate suitable growth opportunities for the company as they present themselves from time to time. As you know from our previous communications, we are in the process of establishing a new 500-bed quaternary care hospital in Dombivli in the Mumbai metropolitan region, which will be constructed over 600,000 sq ft. The construction is currently in full swing and working as per our scheduled times. As the stated objective of the IPO, we mentioned last time, we have repaid all our debt obligations, and we have now got an annualized finance saving of over INR 40 crore. In the previous quarter, we also completed empanelment with the insurance companies in Indore, and consequently, our occupancy has increased from 51.2% in the last quarter to 56.2% in Q3 FY 2024. The contract renegotiations with insurance companies at the Pune hospital is also concluded, and, it has been one of the factors which has helped to increase the ARPOB from 49,000-odd in Q2 2024 to 53,400 in Q3 FY 2024. Specific numbers for the current period. In Q3, our total income stood at INR 273.6 crore, which is an increase of 19.8% YOY. The EBITDA for the quarter stood at INR 62.9 crore, that is an increase of 39.2% YOY, the margin representing 23%. The PAT for the quarter was INR 43.7 crore, representing a PAT margin of 16%. For the nine-month period, the total income has been INR 782.1 crore, 19.8% growth. The EBITDA for 9 months is INR 178.9 crores, that is a 17.6% increase YOY, and the EBITDA margin is 22.9%. The PAT for 9 months is INR 131.3 crores. The average occupancy for these 9 months has been 63.2% as compared to 60.6% in the previous year, same period. ARPOB for 9 months, FY 2024, is 53,585, and the ALOS is 3.92 for these 9 months. So that is a quick summary. You have probably seen this. We can use this time better to talk and answer your questions. So the floor is open. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have our first question from the line of Akshay Jain from Jain Capital. Please go ahead. Yeah, good morning. I have a couple of questions. So firstly, so we've always focused on the latest technology and the instruments, equipment, which have very high AMC packages. So how much do we spend yearly as a whole new instrument or, or you may say, what would be the maintenance CapEx? Yes, we have focused on, you know, buying the appropriate technology for helping us provide the quality of care that we would like to. In terms of annual CapEx, it is hard to answer because we are, you know, in the stage of various new developments from time to time. So in the year of new hospital, it is big. In the year of launching a new department within a hospital, it comes up. Suddenly, there is nothing happening in the year and just the AMC, then the number does not look big. AMC for different equipment would range between 5%-10% of the capital cost of procurement. Hello, Mr. Akshay. As Mr. Akshay has left the queue, I would like to take the next question. The next question is from the line of Sagar Deha. Please go ahead. Hi, thank you for the opportunity. I have two questions. One is: have you identified any other expansion opportunities apart from the Dombivli Hospital? Hi, Sagar. So we are evaluating a few opportunities in Maharashtra currently. A couple are in serious stages of discussion, but I don't have anything concrete to announce today, which means nothing is signed, sealed, and delivered. But we are looking at some opportunities in Maharashtra as we speak. Okay, understood. Thank you. And also, I wanted to understand at what extent can the bed capacity be expanded in Pune and Indore hospitals, and by what timeline can we achieve this? So Pune, there is just... I mean, the CapEx for expansion is over. We just have to activate the last 30 beds, which we can do in Pune. Currently, as probably if you look at this quarter, the Pune occupancy is something like mid-60%. So maybe in sometime in the coming financial year, we'll activate the last balance capacity of Pune, and that would be the end of, you know, new bed capacity for the Pune hospital. For Indore, we have close to 200-bed growth opportunity possible. This quarter, we have shown an occupancy of, again, mid-50%, and 56.2, I think, is the number for this quarter. Previous communications I said that usually when we are between 60% and 65%, we think of adding new beds. So I anticipate that milestone to be achieved, quite soon, and we should be thinking of adding new beds in Indore. Okay, understood. Thank you. Thank you. Thank you. Before we take the next question, a reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Rohit Mehra from SK Securities. Please go ahead. Hi. Good morning. Am I audible? Yes, Rohit. Yeah. So my first question is, which are the key therapies that you have focused on at your hospitals? Which are the what, sorry? Key therapies. Key therapies. Okay. Yeah. So there is no key therapy that we focus on. We have always maintained that we would like to have comprehensive, service offerings, which means, we focus on everything beginning from childbirth and newborn care. We do, oncology, orthopedics, cardiology, organ transplants, all of it. So there is no key therapy area because we, believe that healthcare has to be treated as a whole, and, we need to excel in all the branches of medicine to do justice to our patients. So we don't have a key focus area. Our decision is that we should have a, comprehensive offering. Yeah, that's good. My second question is, is cash realization different compared to the insurance, and why is government payment such a low number? So government, such a low number is by choice. We don't have empowerment with the government schemes. In the communities where we are present, there is significantly high insurance penetration. So most of our patients come with a health insurance, either one which they have bought on their own or which is provided by their employer. So that is what forms the bulk of our payer mix, and the balance pay out of pocket. So because we don't have any government obligations, that is, we have not taken any free land or any subsidy or any undue favors from the government. For that reason, we are not even compelled to, you know- ... Yeah, got it, got it. Thank you for your detailed answer. That's it from my side. Thank you. Thank you, Rohit. Good day. Thank you. A reminder to all the participants, you may press star and one to ask a question. The next question is from the line of Akshay Jain from Jain Capital. Please go ahead. Yeah, hi. Sorry, my call got disconnected earlier. So, yeah, I had one more question. That our Thane Hospital is quite mature, so we can only expect inflation or some price hike led growth. However, in the Pune and Indore location, the hospitals can grow faster in order to have better growth. So, do we see adding bed capacity at a rapid pace over there? Yeah. So you already answered a part of my question in your question. So, your analysis is correct, and I agree with that. In Pune, I just answered the previous question where I said we just have another 30 beds left to be commissioned, which are in a semi-ready state. Hopefully, in the next year, we should start those, and then that is the end of capacity expansion for Pune. Indore, also, we think in the next year we should be adding beds because we will reach that 60+% occupancy is what we believe. So, that is where we are on bed expansion. Oh, okay, understood. Apart from that, what is the overall expansion plan, say, five years, within five years or five years down the line? Our stated objective is to go to 2,500 odd beds in the next five years with a greenfield strategy. That is the kind of key focus, and that is the direction to which we are working. In the meanwhile, if some interesting opportunity does present itself on the M&A side, we will evaluate it as it comes. Okay, understood. Yeah, that's all from my side. Thank you. Thank you. Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Nishi Shah from Aditya Birla Capital. Please go ahead. Yeah. Good morning. Thank you for the opportunity. I have a couple of questions. First is building a new hospital, stamping of them requires a good amount of time. So why don't we aggressively plan for the inorganic acquisition? So we prefer the organic acquisition for a few reasons. One is control. That means it helps us decide exactly where we want to be located. It helps us decide the size, scale, scope, and design of the infrastructure. It helps us decide what kind of technology to buy. It allows us to set our own culture from the word go, rather than inheriting something. So the degree of autonomy in a greenfield is much, much higher, and we don't look at this business or this hospital as a you know short horizon, quick turnaround, quick exit kind of a story. We think of living in those buildings for life, and for that reason, we believe that the first two or three years invested in doing it right help us reap the reward in the future for a very long time to come. So that is a key reason. Then also on the capital side, a great asset available for acquisition with everything that you like, including financial metrics and locations and in assets generally does not come at the cost at which you will be able to build yourself. It generally comes with a huge premium associated to it. In our assessment, those kind of premiums are not something that we are looking to pay, which is why previously I said that we do evaluate opportunities from time to time. We found Indore as a great opportunity for acquisition, and we did that. So if again, some good opportunity does present itself, we are absolutely for it. But in our assessment, they are few and far between. So that is why I don't call it my strategy, but we are, we are open to it. Okay, okay, that answers my question. I have one more question. What would be the key drivers for EBITDA growth in FY 25? So EBITDA growth, Thane will again, as discussed earlier, will be predominantly, pricing, inflation, et cetera, related growth. Pune, there will be a combination of pricing and occupancy-led growth. And Indore will have the third factor as well, that is pricing, occupancy, and, improved case mix, because, it is just about getting mature, but I wouldn't say it is a fully matured hospital. So in terms of complexity of case mix, it has a little bit of catching up to do. So that is the third driver for, Indore. Okay, okay. That answers all my questions. Thank you so much for the opportunity. Thank you, Nishi. Good day. Yeah. Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Ankit Shah from Canara Robeco AMC. Please go ahead. Hello. Hi. Hi, thanks for the opportunity. My first question is on the employee cost. So if I look at the employee costs have risen, like, 17% YOY and even on a Q1 QoQ it's higher. So any particular reason, reason for this, and what would be the sustainable number going forward? Hi. So employee cost in this quarter is higher. Traditionally, it has been higher in Q3 because in third quarter, we generally award the annual bonuses and the third quarter number is higher on account of those bonuses. So if you remove that bonus, the employee cost generally does not vary too much from quarter to quarter. It is generally flat throughout the year. The professional fee component sometimes does vary because that is dependent on the volume of work and the kind of work that the doctors do, and it may sometimes vary with that, but employee cost is largely flat. Q3 is higher on account of bonuses. Got it. So this is expected to normalize going forward? Yeah. So whatever you saw in Q2, I think again you should see in Q4, logically. Got it. And my second question is related to Dombivli expansion. So here, how much CapEx has been incurred so far? And for FY 25, what is the number you're expecting? So far, we have finished excavation, and we have just started constructing. So, in terms of number, it is not a big number. In the FY 25, we would probably be spending about INR 100 crores on the Dombivli project. Got it. Got it. And, thirdly, so last quarter you had mentioned that Indore Hospital had achieved a EBITDA break even, but PAT break even is still not achieved. So can you give some sense, when would Indore achieve optimal levels of EBITDA margins? Because, you know, there you highlighted some key levers for, you know, overall improvement over there. So, when would that optimal EBITDA margin be achieved in your view? I believe that hospitals, greenfield in nature, take, say, you know, in the year 4 to 6, that 3-year period, sometime they should reach optimal EBITDA margins. Currently, Indore is probably third year. In the next year or 2, we believe it should be in a comfortable position on the EBITDA margins. Got it. Yeah, those were my questions. Thank you so much. Thank you. Thank you. A reminder to all the participants, you may press star and 1 to ask a question. The next question is from the line of Akshay Jain from Jain Capital. Please go ahead. Yeah, thanks. Thanks for the follow-up. So, couple of questions. So, probably in the tier two cities like Indore and Pune, how like hunting for a good talent is an issue or it is not? And how do you safeguard or maintain the employee retention levels at your end? So both Indore and Pune are quite prominent cities today. Pune, of course, would probably rank higher than Indore in terms of its stature in the country. So Pune has absolutely zero challenge. Indore also for, I would say 90% of the problems, there are great doctors available locally for some super specialized kind of work. Indore, because it did not have great, you know, infra on the healthcare side, it was not able to attract doctors. The problem was not with the city, the problem was with the, with the offerings of, you know, hospitals. Now, if whenever we have tried and we have been successful in attracting talent to the Indore hospital from other parts of the country as well. I don't see that as a challenge for both the hospitals. Okay, understood. One last bit. So, do you give out any ESOPs? Is there a structured policy or something for the same? We don't have an ESOP program currently. Okay, understood. Yeah, that's all. Thank you. Okay, thank you. Thank you. The next question is from the line of Abdulkader Puranwala from ICICI Securities Limited. Please go ahead. Hello, Mr. Abdul. Yeah, am I audible now? Yes, yes, now you're audible. Yeah. So hi, my first question is on the Thane Hospital. So, if you could explain, you know, how the ramp-up has happened in this particular quarter, and, while, you're seeing some margin improvement in Indore and Pune, how has the margin profile of Thane been with us since last year? So Thane is kind of in a, I don't know, I would say steady, nearing peak kind of a situation. So nothing much has changed in Thane. In Pune and Indore, both being growth phases, you know, the occupancies are improving. Pune, we added beds last year. Indore is community, and for those reasons, we are seeing increased occupancy in Indore and Pune. Again, as I had said that, Pune also had a rate revision due from the insurance companies, which we did negotiate. That has also helped to improve the revenues and ARPOB profiles. So those are some factors for these three hospitals. Okay, okay. And, so the balance 200 beds, so what you may add at Indore maybe next year. So out of that, if you could, you know, help us understand what would be the split in terms of the number of ICU beds which will get added or the tertiary care beds over there? So we still have to, you know, plan which way we will, you know, what all we will add and how to do the offerings. We have flexible space available, so it will definitely be a mix of ICU also and, ward beds of different kinds, maybe some operation theaters. So it will be a combination of all, but today I don't have an answer of exactly what that breakup will be. Okay, okay. So I mean, at, then at, you know, the 60-68% kind of an occupancy, what Indore will reach, I assume, you know, you will reach at the optimum level of margins as well. So, so I mean, directionally, if you have to see in terms of the ARPOB or, you know, what would be, the growth drivers from there on? I mean, it could be only the new bed addition or there are certain specialties where you're not seeing a ramp-up right now and, you know, that you are currently working on? Yeah, Indore will see both, occupancy and specialty drivers both. So it is not that, you know, you are not focusing on, specialty, but it is just a part of maturity of a hospital in a community, as we have noticed, earlier than our understanding of the space. That you may have, for example, a neurology department, but you will not, you know, if someone gets a stroke in the middle of the night, in the first, year, there may not be either a top of mind recall or, a confidence of the community in a new hospital. So establishing of medical teams, establishing a root in the community, slowly, you know, growing volumes of all the branches, slowly, attracting more and more, tertiary care and quaternary care referrals. So some of these things are a function of time, not necessarily the function of focus. Of course, in some other places, you'd like adding a specialty. You know, you don't start with heart transplant in the first six months of operations. You start and establish your cardiology or cardiac surgery or critical care, and once all of that is established, then you start venturing into those things. So some specialties do get added from over a period of time, and some are already there, but they take a little time to mature. Got it, sir. And, final one, if I may. So in the past, you have spoken about evaluating certain acquisitions in the western region. So where are we on that? Have we, you know, in some initial talks or evaluating any of those assets where you have liked? Nothing really worth reporting right now. Nothing that is very exciting and on the table. But of course, whenever there is, I will obviously reach out to everyone to inform you, but currently nothing worth informing. All right, sir. Thank you, and wish you all the best. Thank you. Thank you. Before we take the next question, a reminder to all the participants that you may press star and one to ask question. The next question is from the line of Nishi Shah from Aditya Birla Capital. Please go ahead. Hello, Ms. Nishi? Hello. Yes, yes. Please go ahead. Yeah. Am I audible? Yes, yes. Yeah. Thank you for the opportunity. I believe the acquired hospitals are 96%, so do we intend to take balance as well? So the balance, small 2%-3% is with the local doctor there who was part of the group from the beginning. Currently, he has a desire to hold on to his equity, so that is where it stands. Okay, okay. Thank you. That answers my question. Yeah. Thank you. A reminder to all the participants that you may press Star and one to ask a question. The next question is from the line of Chintan Shah from JM Financial. Please go ahead. Hi. Thank you so much for the opportunity. So I just have one question. So recently, there have been news flows. I'm not sure whether the regulations are applicable, but the news flow is that the healthcare insurance customers, basically, they can encash or use the actual facility at any of the hospitals. Now, since we have such a huge share of insurance in our payer mix, so just wanted to understand, does this impact us, say, from a medium to long-term perspective in any way? Just wanted to know your thoughts on this. Thank you. Yeah. Hi, Chintan. So I don't see how it affects us in short to medium term at all, because, I mean, we already have empanelment with all the insurance companies, so nothing much should change there. In the long term, I think it is good because it makes insurance as a product more attractive to the community, and I think if this does get implemented eventually and reduces the hurdles for, you know, claiming your insurance, then I think more and more people would choose to get insured. So in the long term, it is favorable. Short to medium term, it does not make any difference in my view. And, yeah, so. So got it, understood. So from an industry perspective, it's good, but now say for hospitals, when we have this partnership in place, so and we have a certain payout structure, so how does that get impacted, say in from a longer perspective or there's no impact, how should we see this? I did not understand your question. Payout structure meaning? No, so basically we have a partner that we would have partnered with a lot of insurance companies. So now when, you know, customers have the option ex, et cetera, to go to any sort of hospital, so how does this partnerships basically get impacted? No, so I don't think people are coming to us because the hospital of their choice is not accepting a health insurance. So I think that premise is probably slightly flawed because, Mm. Generally, any hospital, even of medium, forget large size, should have some kind of insurance tie-ups, yeah. It is generally the smaller ones which don't have tie-up. So I don't think that, now because they are allowed to go, you know, to some of those smaller hospitals as well, that is why they will choose to go there and they'll stop using Jupiter as their provider. So I really don't think that has any role to play. Okay, got it. Understood. That was really helpful. Thank you so much. Thank you. Thank you. A reminder to all the participants, you may press star and one to ask a question. The next question is from the line of Sanketa Kohale from Prabhudas Lilladher. Please go ahead. Hello, am I audible? Hello, ma'am. Hello? You're sounding little low, ma'am. Hello. Yeah, I can hear you, but you're very, very soft. Just a second. Now can you hear me? Yeah, we can make do. Go ahead. Yes. So, I have one question regarding ARPOB. How should we see ARPOB across the unit going forward now that we have taken the Pune insurance rate revision contract negotiation has been done? Oh, I'm sorry. I could just partially hear that. How do we see ARPOB growing across all the units? Was that the question? Can you please move closer to your device or speak louder? Hello? Yes, it's regarding ARPOB across the units going forward. Yeah. So I just said a couple of minutes back that the ARPOB driver in Thane will be inflation, in Pune will be inflation and occupancy, and in Indore will be inflation, occupancy, and case mix. Oh, okay. Thank you. Thank you. The next question is from the line of Jinal Shah from JM Financial. Please go ahead. Hi, good morning, and congratulations on a good set of numbers. Just a bookkeeping question. Our employee costs have risen in almost 16% quarter-on-quarter. So is this largely related to Indore Hospital or Pune pediatricians? And have we completed our doctor hires or, or, you know, our employee additions? Yeah, Janil. So this is related to the annual bonuses, which we pay in third quarter. That is the add-in component on this quarter's numbers for employee cost. In the next quarter, again, it will be similar to what you saw in Q2. Okay. Okay, that's helpful. Thank you so much. Thank you. Thank you. A reminder to all the participants that you may press star and one to ask a question. As there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments. Thank you, and over to you, sir. Thank you, Vinay. Thank you everyone to join us for this call today. I hope the answers were satisfactory. If you need any more questions, feel free to reach out to us or, to the SGA team, and, they will get in touch with us for appropriate responses. Thank you, everyone. Have a great day and a great week ahead. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.