Ladies and gentlemen, Good day and welcome to KIMS Hospitals Q2 FY27 Earnings Conference Call hosted by IIFL Capital. 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 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Jeewani, from IIFL Capital. Thank you, and over to you, Mr. Jeewani. Yeah, hi, good morning everyone. This is Rahul from IFL Capital. I welcome you all to the 2nd quarter earnings conference call of KIMS Hospitals being hosted by IFL. From KIMS, we have with us today Dr. Bhaskar Rao Bollineni, founder and managing director, Dr. Abhinay Bollineni, executive director and CEO, and Mr. Sachin Salvi, CFO, uh, Dr. Nitish Kumar, the CEO for the Bangalore cluster, and Srinath Reddy, Head of Business Development. Uh, over to you, sir, for your opening comments. Good morning, everyone. We are amidst a hectic festive season that commenced with the patriotic Independence Day. Followed by devotional Ganesh Chaturthi and recently concluded spiritual Navaratri. We are now on the threshold of joyful Diwali. Let me start the meet by conveying our festive greetings to you. Now I am going to unfold the financial picture of Q2. I am sure the results I am going to announce now will wonderfully blend with the festive fervor. We have recorded a growth under all key parameters, both in quarter-on-quarter and year-on-year basis, with significant rise in revenue. A snapshot of consolidated financial operational highlights are as follows. Q2 FY27 updates: total revenue of INR 1,363 crore, a growth of 41.3% on year-on-year. And 14% on quarter-on-quarter basis. EBITDA of INR 279 crore, a growth of 34% on year-on-year and 16.3% on quarter-on-quarter basis. EBITDA margin stood at 20.5% versus 20.1% in Q1 FY27. And 21.7% in quarter 2 FY26. That at INR 76 crores in quarter 2 financial year '27 against INR 37 crores and INR 72 crores in quarter 1 FY27. And quarter 2 FY26 respectively. Consolidated EPS for a period ended with 30th September 2026 of INR 1.8, a growth of 8.5% on year-on-year basis. Cash and cash equivalents including cash, bank balance deposits with maturity of less than 12 months, and investment in mutual funds of INR 420 crores. As on 30th September 2026. Quarter 2 financial year '27 finance— financial highlights consolidated. A consolidated revenue from operations of INR 1,344 crore, a growth of 39.9% on year-on-year and 14% on quarter-on-quarter basis. Consolidated EBITDA pre-index of INR 250 crore. There is a growth of 24.7% on year-on-year and a 12.7% on quarter-on-quarter basis. Consolidated EBITDA pre-index and excluding other income of INR 232 crore, a growth of 17.9% on year-on-year. And a growth of 12.6% on quarter-on-quarter basis. Operational highlights consolidated quarter 2 financial year '27 updates. Average revenue per operating bed grew by 14.9%. And 2.3% on year-on-year and quarter-on-quarter basis respectively. Average revenue per patient grew by 99.9% and 1.2% on year-on-year and a quarter-on-quarter basis. The IP volumes, 81,668, grew 27% year-on-year and 12.7% on quarter-on-quarter. The OP volume, 7,31,010, grew 23.3% year-on-year and 11% on quarter-on-quarter basis. I would like to appraise you about the acquisitions we have made recently to strengthen our network and growth path. KIMS Trust Hospital, Kakinada, 183-bed. We have acquired 51% of equity stake in Sarvatham Healthcare Private Limited, that is Trust Hospital, by investing 80 crores. Now it will be known as the KIMS Trust Hospital. The acquisition holds high potential and prospectus. शकला विनय स्पेशलिटी हॉस्पिटल सांग्री महाराष्ट्र With 316 beds. We have acquired 6% stake by investing about 15 crores. KIMS Kompally, Secunderabad, 225 beds. KIMS Sikra, Guntur, Andhra Pradesh, 150 beds. will be made, or company will acquire these 2 acquisitions in— will be made over a period of time whenever our internal resources are comfortable. We have entered into an agreement with the Arit Hospitals in Gachibowli, Hyderabad, which has a bed capacity of 300 beds. We also entered into O&M agreement with Westport Hospital in Thrissur, Kerala. It is a well— it is an established and reputed hospital with a 300-bed capacity. These initiatives will result in increased financial and operational leverages as all these units hold good potential and prospects. Our aim and objective have always been to create and multiply the wealth for our investors. The latest acquisitions along with the recent expansions will ensure stable and sustainable growth of iRange. Other highlights: making healthcare available and accessible has been our prime motto. In this connection, we are pleased to state that organ transplantations are performed across even Type 2, Type 3 cities in entire Andhra Pradesh. All these years, transplantations involved long distances. As they were performed only at a very few centers. It is no longer so. With all our units spread across the state handling such cases. We have doubled the capacity of our KIMS Savera Hospital, Anantapur, from 250 to 500 beds. The upgraded hospitals includes a new comprehensive oncology block and a dedicated mother and child block that includes neonatal care facilities, support maternal newborn and pediatric services in the hospital. The new buildings and facilities were inaugurated on 1st November 2026 by the Honorable Minister of Health and Honorable Minister of Finance, Government of Andhra Pradesh. Ryalseema is considered a backward region in the state, and the latest facilities will greatly benefit the people of this region who otherwise were required to travel long distances. Our international collaboration— at the invitation of Honorable Chief Minister of Telangana, recently a high-level delegation from Liverpool, UK visited Hyderabad to advance cooperation across healthcare. Life sciences research, innovation, trade investment, skill development, and sports. In this connection, I am happy to share that KIMS and NHS University Hospitals of Liverpool have advanced an agreement for cooperation in research. Clinical collaboration, education and training. We feel honored that the appointment of our independent director, Sri Sureshan Patel, as a chairman of high-level committee constituted by Government of India to undertake a review of India's banking sector. And recommend structural, institutional, regulatory, and legislative reforms. We are being greatly benefited by his valuable contribution to the company as our distinguished board member. I would conclude now, once again offering my multiple festive greetings to you and your families. I wish you all prospects and happy Diwali. You have done well, and we hope to do even better in the coming year with our continued your continued support. Over to you, Iain. Operator, thank you. Yes, okay, I was waiting for the opening remarks, but okay, thank you. We will now begin the question and answer session. Anyone who wishes to ask a question, I want to touch, uh, 1 on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Shubha, uh, Shubh Kalra from Asset Team at Investments Intermediates Limited. Please go ahead. Hi, thanks for the opportunity. So first of all, congratulations on a good set of revenue numbers. So I wanted to ask, with the implementation of the trade margin rationalization on the anti-cancer drugs by the government, Uh, could you help us understand the potential impact on the KIMS revenue and EBITDA margins? And if possible, could you quantify the expected impact, particularly in terms of the revenue and profitability? No, so the final details are yet to be disclosed. So November 9th is when we are going to get all that information. Once we do get the information, we can quantify it. Right now, because oncology is not a big part of our revenue stream, the impact may not be significant. Okay, sure. So let's say for the potential margin impact, uh, is there any measures that the management is evaluating to mitigate the same? Like, uh, is KIMS considering revisions to the package rates or other treatment-related tariffs to offset the impact, uh, the potential impact, or should we expect some degree of margin compression, uh, as a result of this regulation? Once we get clarity on the pricing on November 9th, that's when we'll be able to decide on what the impact is and how do we mitigate this. Fair enough. Thank you. That was my question. Thank you. A reminder to all the participants that you may press star and 1 to ask a question. The next question comes from the line of Karan Vora from Goldman Sachs. Please go ahead. Thank you for taking my question. My first question is with respect to the Telangana cluster. So can you help us understand what was the growth and margin ex the new Kondapur expansion, or alternatively you can just highlight what's the numbers we are doing at the new Kondapur unit. I think the quarter-on-quarter growth from ₹625-623 crore, we moved to ₹700 crore. A large chunk of that revenue growth has come from Kondapur and Chikkanavat unit. Even Chikkanavat unit has ramped up quite well. The recent new clinical programs that we started. Though the revenue grew, the percentage— there's a dip in the EBITDA percentage. The absolute number has actually increased. When Q1 to Q2, and this is only one quarter of Kondapur being commissioned. So over the next 3-4 quarters, we should see the margins come back to how it was. before the new hospital. That is an extremely fast ramp-up. We also did not expect this kind of growth. From what we moved to the old facility to the new facility, the revenue has grown by at least 70%. In just 3 months. Okay, got it. And second, so just trying to understand, so are we— so you mentioned last quarter that in the first month you were breaking even. So is that breakeven sustained or we are seeing minor, minor losses at the new unit? Look, so there is a higher fixed cost. There is no losses, fortunately, but the fixed cost has gone up, and as the revenue ramps up further, it will go back to those stable EBITDA margins. We thought this period— there would be a period of losses this financial year, and then stability would come in the next financial year, but because of the ramp-up, we don't see any losses. In fact, the margins also have not compressed. The absolute number has further expanded. Over the next 3-4 quarters, it should come back to a 30% kind of a margin. Got it. And secondly, on the Andhra Pradesh cluster, so can you highlight with respect to what's happening there with respect to margins? Because top line growth continues to remain strong, but we've seen some, you know, deceleration in margins versus what we had last year. So any color and what's the outlook there? So again, overall growth perspective, everything looks positive. It's just that in the— in Q2, at the end of Q1, we have launched 2 large onco programs. In 2 of our hospitals, one in Vizag and one in Anantapur, and because of which there is some drag on margin. That is one part. Though the revenue came in, the fixed costs and all are a little higher currently. Over the next 2-3 quarters even that should normalize. But if— and also there's a one-time cost towards PBDD which is to the tune of 8 crores which got impacted in Q2 which will potentially get reversed once the money comes in Q3. Sorry, what's PBDT? Uh, provision for doubtful debts. Okay, okay, okay, okay, got it. Is this related to the government business by any chance, as in scheme? I, I— yes, yes, yes, only the government business because sometimes there's a delay, we have to take provisions for it. Okay, got it. And just one last one, if I can quickly, uh, just squeeze in. So, uh, uh, in Maharashtra cluster, I see that, you know, your occupancy has already crossed 60%. And the operating beds are just under 700 while our capacity beds are more than 950. So, uh, like, do we see us just operationalizing more beds, which is the region where we've not operationalized. Is it Thane? Is it Nashik? Any color there will be helpful. So Thane also, we have around 75 beds that are not operational, and Nashik, we have close to 200— 150-odd beds that are not operational. Any plans to operationalize those in the immediate future? As and when the ramp-up is happening, we will operate. Okay, thank you. Thank you. A reminder to all the participants that you may press star and 1 to ask a question. A reminder to all the participants that you may press star and 1 to ask a question. The next question comes from the line of Rahul Jeewani from IIFL Capital. Please go ahead. Yeah, uh, uh, Dr. Abhinay, I missed your comment in terms of the ramp-up which you have seen at Kondapur in terms of occupancies. Can you please repeat that? I'm saying the revenue ramp-up in, uh, from before the opening the new hospital to the last month, the revenue has grown by 70%. Oh, okay. And would you want to call out occupancies as well at the Kondapur unit now, as in, uh, with respect to this new 500-bed hospital? Yeah, we've not commissioned the full hospital. We've only commissioned 500 beds, uh, 500-odd beds of the total capacity, of which we are already at a 70-75% kind of an occupancy. So in the next quarter, we actually thought of commissioning the remaining beds next year, but we'll— we're going to commission the beds in the next quarter, next 2 quarters. Okay, so on 500 beds you are at ballpark around, uh, 70 to 75%. Yeah, 70% on 500-odd beds. Uh, sure, Dr. Mene. And in terms of the AP margins, uh, impact which you called out, which is ₹8 crore of doubtful debt, if we adjust that then let's say AP margins right now are trending at around 22%, and in the past we were at around 24-25%. So obviously this onco launch across some of these hospitals is hurting AP. So when do you expect, let's say, the operating leverage from this onco business to start playing out and AP margins getting back to the earlier trajectory of 24-25%? Actually, one of the hospitals where we launched the onco, which is Vizag, actually towards the end of October we have seen it come back to 28-29% kind of margin. There's been a very impressive ramp-up there. Anantpur just got commissioned, though we had incurred the cost in advance, it just got commissioned a month ago and officially inaugurated on November 1st. So that will take at least a year before it comes back to healthy margins. Oh sure, sir. And this 80— sorry, 8 crore doubtful debt, we, we in the past as well we have seen you booking these doubtful debts. within the AP cluster. So what's the thought process in terms of some of these doubtful debts? Because they are from the government channel, do they ultimately— as in, you receive that money, or how does it work? We received that money, Rahul. In fact, in the last quarter, if you recollect, already we have received some 70+ crore from the AP government. It's just that in the— in this quarter we haven't received that much money, and because we are following the metrics for providing for these doubtful debts, we are— as per the Indian standard, we are supposed to provide. For the current quarter, we have provided ₹7.5 crore, ₹7.8 crore to be exact, uh, towards provision for doubtful debts. I think in the next quarter or the next to next quarter, once the money receives, the same provision which we have done will get reversed. Okay, sure. And, uh, the last question from my side before I join back the queue is with respect to your newer hospitals, so Thane and the, the 2 Bangalore So if you can talk about, let's say, whether we are done with the insurance empanelments across all these 3 hospitals. Obviously, Thane and Mahadevapura have achieved the breakeven. So how do you see the trajectory on those 2 hospitals? And let's say, when do we see the, the margin, the, the breakeven for the Electronic City Hospital in Bangalore? As far as insurance is concerned, that struggle is still on, Rahul. Even today, Tane does not have empanelment with 3, 4, or 2, 3 major companies. Otherwise, rest of it is all done. Uh, same is the case in Mahadevapura. We have yet to get Jipsa, Star, and some other insurance companies, in spite of which both these hospitals have ramped up and broken even. As far as Electronic City is concerned, the month of September we have broken even, but yeah, I think by Q3, end of Q3, we should— that also should become EBITDA positive. And the fight for insurance entitlement will still continue for some more time. Maybe towards the end of the year, all, all the other smaller companies and some major companies in some of these hospitals should be complete. Sure. So, so, so Electronic City, for you, you, do you expect quarterly breakeven in 3rd quarter, or the, the, the quarterly breakeven would slip into 4Q. And just on these insurance empanels, Dr. Abhinay, as in, what's the key challenge or issue in terms of getting these empanelments done? Yeah, I think now you'll see from the beginning of the year to today we've made significant progress, but there is some 2-3 companies left for each hospital. And because we want a good rate and we also want a good rate from their perspective, uh, if that negotiation is still going on. Sure. And on the Electronic City, do you expect quarterly breakeven in 3rd quarter or 4th quarter? Yeah, I think it's safe to assume Q4 rather than Q3, though we've seen the month of September breakeven. The trajectory for October also has been good, uh, but just to keep some buffer in case of any unforeseen Yeah, yeah, no, you are right, Dr. Abhinay. So quarter 4 is where, where we are looking at the quarter break-even. Okay, sure, sir. I will join. Wait a second. Thank you. The next question comes from the line of Damayanti Kerai from HSBC. Please go ahead. Yeah, hi, uh, good morning and thank you for the opportunity. Uh, my first question is on your, uh, margin trajectory. So as you mentioned, Kondapur is off to a very good start, uh, and it's a fixed— high fixed cost, uh, setup, uh, where better scale will result in operating leverage, etc. And then AP also you have it listed in the oncology, uh, infrastructure. And, uh, how should we look at, uh, the margin trajectory moving from here? Uh, should we assume like 2Q was the bottom, uh, bottom quarter in terms of, uh, the losses from new units, etc.? And, uh, from, say, next quarter onwards or so, we should be back to, uh, 20% plus, uh, margin? Like, what will be the exit, uh, run rate for, say, FY24? 7 for margins? Yeah, I think among all the hospitals that are now commissioned, except for Electronic City, all of them are EBITDA positive. Uh, it's among the 28 hospitals. that are getting operational. Only one hospital is still in the drag, which over the next— because it's less than one year old. But I think, yeah, this is the bottom Q2 number. I think from here the trajectory should be upward. Unless we, we don't see any new hospitals that we are commissioning over the next few months, so the trajectory should be continuing to grow. Sure. Uh, then my second question is on, uh, the insurance empanelment part, uh, where you mentioned, uh, Kanpur is still not done and you are also, uh, like pursuing for other new hospitals. So just want to understand what's taking, uh, like sizable amount of time to really, uh, get into the contract with big incidents. in units like Kaning? So some of the insurance companies we've been able to negotiate mutually, able to close. Some of them we are still negotiating with them to get the right pricing that we believe is the right pricing for the hospital. Uh, so that negotiation is what is taking time. But now, Sita Neem and Mahadevpora, we have just left with 2 or 3 insurance companies, not more. Majority of them are done. Sure. So, uh, if I recall correctly, I think it took us a significant amount of time to get all the insurance empowerment done for NASSIC. Compared to that, Kane, Mahadevpora were, uh, like progressing much faster, right? That's, uh, that's, uh, that's the logical way to assume. Yeah, NASSIC, we had challenges in getting the pricing because, uh, there were different challenges in that micro market from an insurance company. But the last, uh, empowerment was Jipsa, which we got that also officially will be able to take patients from tomorrow and in NASIC on Jipsa. So that's a big chunk, that's usually 40-50% of the overall insurance volume, uh, which we got confirmation letter just last week. There have been some inherent challenges, some learnings from the empowerment process the last 12 months. Hopefully we'll rectify those in the next few when we commission the next few hospitals. Sure. And my last question is on your, uh, transplant, uh, offerings. So first of all, uh, which all units are offering transplant at this point of time? And, uh, Please help us understand if this segment is a high realization, high cost segment, uh, from operation perspective. Kidney transplant we offer in almost all the units except for one or two. Liver transplant, we do them in 5 of our— 5 of the hospitals. Lung we do only in 3 or 4, uh, 3 of our hospitals currently, heart and lung. Bone marrow transplant also we do in 8 of our hospitals. Okay, so mostly, uh, it's widespread. And just in terms of the economics, is it like high realization, high cost segment? Uh, So the EBITDA margin, etc., will be, uh, like, how, how does it look versus a corporate average on a steady-state basis? We don't track EBITDA by therapy. Uh, definitely the, uh, the cost of treatment for a liver and kidney— liver and heart and lung transplant It is a very expensive procedure, and also because of prolonged stay before and after surgery, the realization is definitely higher than the rest of the therapies. But we don't look at it from a lens of profitability or an EBITDA margin at the therapy level. Sure. All right, thank you. Thank you for response. All the best. Thank you. The next question comes from the line of Karan Vora from Goldman Sachs. Please go ahead. Thank you for taking my question again. Just one clarification. So Sikandarabad, you mentioned there are some new programs which we've started, right? So What are those? Can you throw some light on that? And also secondly, in the Telangana cluster, if our Kondapur unit is doing such high occupancy, and our overall occupancy is 50%, then which is the hospital which is kind of dragging the occupancy down, or any color there will be helpful. So, uh, actually we rectified that in the presentation this time. So in Sikandarabad, the capacity is 1,000, but what we have operational is only 700 beds. And in that 700 beds, we have a lot of non-senses beds because this being a very large facility, we have almost 80 dialysis machines. All of those are non-senses beds, and the occupancy, uh, it's bringing down the occupancy. Also in Sunshine, both the hospitals We're still at around 60%, uh, kind of an occupancy. We have not reached that 70-75% kind of an occupancy. Got it. And what are the new programs you've started in Sikandarabad? Sorry. So we further strengthened our onco and orthopedic practice. We launched a very large sports medicine program in the Sikandarabad unit, and we also acquired a lot of clinical talent for our oncology hospital, which we're going to commission, uh, the end of next year, which is the new hospital that we're building. Oh, okay, sorry. So this, uh, sorry, how, how many beds are we adding in Sikandarabad next year? 200. First phase, we will only, uh, get the 250 beds that are not operational today operational because they're under renovation. And once those ramp up, then we'll add another— we have a potential to add another 200-250 beds. And take it to a full capacity of 1,250 beds. Okay, and the land is already there in place. We just have to add a building or floors. A building is also getting constructed towards— in the next 2 months, the building, the structure will be ready. And then we'll keep doing the interiors as and when our requirements are met. Okay, got it, got it. Um, helpful. Uh, second, just one clarification again here. Uh, so, uh, just to get a sense on the overall Secunderabad unit, so You're saying today we only have 800 beds operationalized, 200 we are working on operationalizing again, and that's now removed from the numbers, right? So it's reflecting as the bed capacity, but they are non-operational beds. So the difference between capacity and operational beds is at 250 beds. Okay, got it, got it. And given that we have so many non-census beds in, uh, Secunderabad, any plans to 60 will come. See, in the 250 beds in Sikandabad are non-operational currently. Also 250 beds of the old Kondapur Hospital which we are yet to decide what we want to do are also included in the beds here. So if you remove that 500 beds and look at it, the occupancy will further tilt towards 55-60% of the operational beds. like revamp the structure or anything so that our occupancy kind of improves? Because Telangana occupancy for us seems to be stuck in that low 50s kind of a number. Um, so how do we get there to at least 60? That's what I'm trying to understand. Okay, got it. And those 250 old beds in Kondapur are empty right now? Yeah, they're empty. We're yet to decide what we want to do with those beds. We wanted to see, observe the ramp-up of the current hospital and then decide what we want to do with them. Okay, got it. Really helpful. Thank you. Thank you. A reminder to all the participants that you may press star and 1 to ask a question. The next question comes from the line of Kunal Randeria from Axis Capital. Please go ahead. Hi, good morning and thanks for the opportunity. Uh, first question is on Madhavpura and Thane. So are all the investments behind you— I mean, in terms of doctor hiring or whatever specialties you wanted to commission Has everything been done? So, uh, Shriram, do you want to take that? Yeah, so in Bangalore, yes, we are done. At Mahadevapura, we have done all the specialties have been added and investments also have been added. Okay. So there's a process, investments for both these hospitals are done, but doctors is a continuous process. We keep adding these doctors as and when we find the right clinical talent, we'll start new clinical therapies. So that cost will keep coming and it'll take time for it to achieve stability. That's, that's true for any hospital. Right, right, right. Okay, so which basically means investments will continue and maybe then, you know, the margin ramp up, uh, you know, might be a bit slower than what we are kind of, you know, thinking of. Yeah, I think what we've seen in Nagpur is a good trajectory, or Sunshine is a good trajectory to assume. Uh, first we become EBITDA breakeven, then we take— we get to a height Uh, single digit. Then get to mid-teens, and then the 20-plus percent kind of margins start coming in. Okay, got it. So second, on the Andhra cluster, I'm not sure I completely understood, but so, you know, when we look at all the operating metrics and improvement in RPOP you know, volumes. Your total revenue is up, but I can't understand why your absolute EBITDA is down, even if I consider that, you know, the bad debts kind of provisioning also. So is the case mix which has changed drastically that has kind of led to a margin compression? If you can kind of, you know, just give a few more details. No, so 55 crores, if you add back 8 crores to it— 55 crores is the declared EBITDA. If you add 8 crores back to it, we're talking about a 63 crore kind of a number. Which puts the EBITDA margin at almost 25%. And because there has been fixed cost towards 2 onco programs in 2 of our hospitals, 2 of our hospitals that has dragged the EBITDA margin by 2 crores per month in each of the centers, which as the hospitals ramp up, that will get amortized. Right. So these are the only 2 factors, right? There's only 2 factors. Okay, got it. And so just one more, if you don't mind. Uh, see, I understand that, you know, in some of the hospitals where you have O&M, uh, you have converted into or trying to convert to ownership, right? In the service, some healthcare Uh, and Insignia Healthcare. So I just want to understand the economics behind it. At what multiples do you buy a partner out? So we have a call option to buy these O&M assets anywhere in the range of 10 to 12, uh, trailing EBITDA. Right. And so is this decided at the beginning when you enter into a contract, or it's more of, you know, as the things go? If hospital is more successful, then perhaps you kind of end up paying, you know, at the beginning of the contract. At the beginning of the contract, right? Right. And recently you have done 3, right? Uh, when the message will be done to show, Arif? Yeah, these are the 2 hospitals that we, we now currently have 6 OMM hospitals. Right. No, so sorry, I meant the one which you're converting to ownership. Oh yeah, yeah, click, click. Okay, okay, sir. Got it, sir. Thank you, uh, and all the best. Thank you. A reminder to all the participants that you may press star and 1 to ask a question. The next question comes from the line of Yuvraj Sehrawat from ChrysCapital. Please go ahead. Hi, congratulations on a great set of results. My question was on the Bangalore cluster. So we have a capacity of 800, but currently only 340 are operationalized. And given both the units are breaking even now, can you share some color on how we can operationalize the remaining beds as well? With this. Yes. Nitish, are you there? Hello, uh, am I audible now? Yeah, yes, uh, I'm getting, I'm getting mute. So I, I'll take this question because this is— so, uh, you know, both these, uh, 3 of these hospitals, Thane, Bangalore, and Electronic City These are the first time we went to a new city and set up large format hospitals with the intent that it will reach a 70% occupancy only in the 4 to 5— 4 to 6 years after commissioning these. So I think we are pretty much on track to achieve that kind of an occupancy in that timeline that we've stated earlier. And these are really large format hospitals from what we've traditionally done. So it will take us a little time to get to that kind of an occupancy. Sure. So would 70% be the right occupancy number where you would add more beds? Uh, yes, 70% will be a right number before, but also, um, see, some of these therapies, sometimes you need, uh, to be able to add beds as standalone in the same campus but in standalone. So we might— though you might see bed capacity available, we might end up adding some beds here and there to introduce new clinical therapies. And unfortunately, these therapies only work when they are given that importance and standalone presence within the same campus. So you might see some bed addition in, in, in this, uh, in these campuses, but Overall, the trajectory for growth, we're pretty confident. This is the first year of operations. In case of Tane, it's 15 months, but over the next 48 months, we should get to a healthy occupancy. Got it. Thank you. That's all for me. Thank you. A reminder to all the participants that you may press star and 1 to ask a question. The next question comes from the line of Anshul Agrawal. From MK, please go ahead. Hi, thank you for the opportunity. Just a few bookkeeping questions. Uh, the rentals, the rental payouts have sort of gone up, uh, in the current quarter. Could you please help us understand why this has happened? I understand Beas is on rental model, so— but that would have been commissioned last year itself. Any particular reason why our rental payouts are up so drastically? The major reason, Anshul, is the Kondapur Hospital, which has commenced operations only in the month of June. So last quarter there was an impact of only 1 month, whereas in this quarter there is an overall impact of 3 months. That is Uh, one of the reasons for rental costs going up, or India's 116 impact on account of rental going up? Got it. Uh, is this quarterly rent rate now established, or do we expect, uh, increase or escalation here as well? No, no, this is, this is established rentals, uh, which, which will be coming in the forthcoming quarters. Got it. Uh, secondly, how do we account for, uh, the O&M units, uh, currently? Uh, what I was trying to get at is, do we just add the EBITDA number, uh, in into our cluster-wise EBITDA, or do we account for the revenue as well, or is it different for every unit? So the call option which we are having enables us to get 9% of the top line at our revenue, which gets added to the revenue. As far as the call option accounting is concerned, as it is an option, we, uh, we do a fair valuation of call option for all these units at end of every quarter, half yearly, as well as at the end of the year. Uh, then we reverse the, uh, the gain which has been accounted. But till this time, there is no loss as such which had happened. The gain on account of call option, we account it as extraordinary— just extraordinary items in the adjustments below EBITDA. If there is a loss And in fact, in the current quarter also, uh, the fair value of the call option is enhanced by ₹13.2 crore, which we have accounted below EBITDA. Yes, so the 9% revenue that we add to our revenue would be a complete flow-through to the EBITDA in that cluster. Would that be fair? Well, we can say so, but there are certain corporate costs which we incur, so there is no, there is no direct linkage, or we do not assign as such cost to that particular unit. But, uh, you can say your assumption is correct. Okay, so, uh, the Kumbhali losses, would that— would they be part of the Telangana cluster or no? Because just account 9% of the revenue that we generate in Kumbhali, it wouldn't be part of the— the EBITDA losses wouldn't be part of Telangana cluster. Would that be correct? No, no, it would not be forming part of the Telangana cluster. We account only 9% of the top line. Perfectly. Uh, also, uh, now that, uh, uh, contribution from Bangalore unit is going up, or Bangalore cluster going up, are minority interest The percentage out of EBITDA will be how much? Uh, so as of now, at a comfort level, the percentage is 11%. Uh, I do not think it will exceed 15%. It will hover around between 10 to 15% over the next several quarters. Okay, thank you. Those were my questions. Thank you and all the very best for the remainder of the day. Thank you. A reminder to all the participants that you may press star and 1 to ask a question. The next question comes from the line of Anubhav Sangal. From Anand Rathi, please go ahead. Hi sir, thank you for the opportunity. My question is related to the old Tondapur Hospital. Uh, what is the fixed cost drag that you are expecting? And, uh, for how many more months is it expected to be— to remain operational? We are incurring a fixed cost of 1.5 crore a month for the old hospital. Um, and that will— that includes the rental cost. That should continue for the next, uh, maybe, uh, 4 to 5 months before we decide on how we should Sure, sir. Thank you. Thank you. The next question comes from the line of Simran Thakkar from Beas Capital. Please go ahead. Thank you for taking my question. Uh, the question is the cash outflow, uh, on the CapEx front. So we see it's ₹6,500 million approx. is, uh, the number. If you could just help split it into the payment for FY26 Kondapur mainly, uh, B, the new CapEx which is incurred in S1, and see the new assets that we have acquired, um, and if you could also give the revised guidance for FY27 on the CapEx side. Please. So out of the current CapEx which we have spent up to H1 of ₹650 crore, around ₹275-odd crore went into 275+ About ₹300 crore went into, uh, Kondapur. Uh, as regards to the future CapEx, there are 3 projects which we have announced and we are yet to complete— Secunderabad, Rajamundry, and a bit of Kondapur, because still there is some CapEx which we have to incur at that unit. The total CapEx outflow over the period of next 18-odd months would be about ₹1,100 crore on these 3 projects together. Understand. Thank you. And second is on the ₹3,600 million of new long-term debt that you could see in the first half. Uh, so Since we have already raised the QIP and the money sitting in the bank, uh, any, any, uh, As to why this debt? So, uh, if you see, uh, the objective which we have filed for QIPO as well as the share warrants, uh, we have allocated 25% of the total proceeds which we are receiving towards general corporate purposes. So we have parked it for— in the mutual funds or in the bank account as of now. The money is to be used for general corporate purposes, which includes loss funding, which includes smaller acquisitions, which includes minority acquisition. As and when we decide to do so. That is the only reason it has been parked there. As of now. Yeah, but then the new long-term debt that we could see of around ₹3,600 crore, so, uh, if you could just state the reasons of the utilization. Sorry, I, I couldn't get your question actually. Okay, and, uh, so, uh, there was this new raise of ₹3,600 crores, uh, sorry, it is ₹3,600 million. Uh, of new long-term debt. In the, in the first half. The new debt, as I've said, as I have said, we have 3 projects which are up and running, uh, Sikandarabad and Rajamundry. For completing these projects, already the debts were tied up. So as and when we require to spend the capital on it, we are raising that debt and we are paying the CapEx. Understand, understand. Uh, so my third and last question is on the Sarbitsan Healthcare, right? So, uh, in Q1 FY27, uh, it was an O&M agreement, um, And in this quarter, we have acquired 51% share for, uh, ₹795, if I'm not wrong. So, uh, firstly, it was just hitting our top line. Uh, now it would, uh, it would change completely because it will also be a part of our P&L. So I just wanted to understand, one, uh, what, what was the valuation like, EV/EBITDA basis or EV/EBIT? Uh, second, uh, what's the current monthly revenue on this? Uh, and the third, uh, what are the terms on the remaining 49% stake that we would be acquiring? So, uh, Kakkinada, this trust hospital, currently, uh, we are doing approximately, you know, ₹8 to ₹10 crore of revenue. With a bit of positive EBITDA of ₹1.2 to ₹1.5 crore. Axis Capital. Yeah, see, it's a 150-bedded facility and then we have about 38-40% occupancy. They could not able to ramp up with the uh, consultants. That's why they are given a partner with us. In the last year, the EBITDA was around 15 crores. With that, we bought about 51% at 80 crores. There is no debt as on today in the books. So we need to be able to ramp up by adding more therapies. We are very, very confident that it's enabled to ramp up next 1 or 2 years, about 7 to 8 crores per month can go up to 12 to 15 crores. Understand, sir. And what are the terms on the remaining 49% keys? Sorry, so for the remaining 49%, we, we can acquire that stake, uh, in the, in the coming years. There is no immediate Question on our part, there is no— there is, as such, this 49% is held by the existing promoter doctor. Uh, so as and when it is required, as and when they are offering it for sale, we may consider to buy it. Like any of our other subsidiaries. All these 49% is an existing doctor. They were promoted this hospital, as pointed out, 51% of the stake of Doctors has given to us that 49%, they will continue to hold and they are going to practice there. Anybody who wants to resign, to go, when we have an option to buy If it should have multiples. Understand. Thank you so much. Thank you. The next question comes from the line of Rahul Jeewani from IIFL Capital Services Limited. Please go ahead. Yeah, uh, Sachin, with respect to the, the rental cost increase which you attributed to the Kondapur Hospital, I was under the impression that we are buying out the rental partner there. So ideally, if that is the case, then these rental should again reverse going forward. So is that understanding correct? Uh, we are, we are planning to do that, Rahul, but as of now we have not announced it. That is the only reason I am telling that as of now the cost sitting on the books In case we decide to merge that company into our Kondapur subsidiary, of course the rental cost will go up. Not only the rental cost, Rahul, we are also paying 18% GST on that rental cost. Therefore, there will be a significant saving on account of rent, and that will also help us to improve our PBT. Sure, Sachin. So what is the, the rental component for the Kondapur Hospital including GST, let's say on an annualized basis? Per month it is 5.5 crore, so on an annual basis you can say 60-65. Okay, so that's great. Okay, okay, okay. And when do you, uh, let's say if you decide to, to, to do the acquisition of the rental partner, when do you think that can essentially play out? क्या है मेंटी है debt that is there in our books. So Rahul, as sir has pointed out, there is already a debt which is sitting on the books of this associate company. We are currently holding about 40% in this company. Uh, we may take a call to acquire the 60% by way of a merger, in which case, uh, the flip side of it is the additional debt comes on our books. But the positive side of it is the PBT gets improved every year by about ₹60 crore. So we are just evaluating what is the best option. Based on our analysis, we will go for it in another— we will decide on it in another, say, 12 months or so. Rahul, this basically whatever is the rent that we are paying, it will go to the bank EMI of that particular facility. And, uh, so whether we able to merge today and tomorrow— if we merge today, the another 400 crores of, uh, 500 crores of debt will come into our books. Uh, it's only the loss is only the GST. We will take a call depending upon our, uh, the Sure, sure, sure, Sachin. And let's say, what is the net debt component as of now? Is it close to ₹2,100 crore post the QIP and warrants? Yes, ₹2,150 to be exact is the net debt, and net debt to EBITDA ratio will be about 1.9 or Sure. And let's say in the past we have talked about buying out the minority interest in some of the subsidiary hospitals, so Uh, if you can also, uh, let's say elaborate on that as well. So with, with the, with the, uh, with the, the warrants and QIP money, what is the thought process in terms of buying out some of the minorities? We haven't firmed up that plan yet, uh, Rahul. Maybe towards the end of the year once all the units are more stable in terms of its operations and capital requirement, we will then figure out what we want to do with minority or use internal accruals for new growth. Uh, we're ready to consolidate those thoughts. Okay, sure, sure, sure, Dr. Abhinay. And the last question from my end, Dr. Abhinay, is to you. Let's say now we have embarked on, let's say, a mass massive CapEx expansion plan over the past few years. And now if I see the next 2 to 3 years, we would not have any significant capacity coming online except, let's say, a Sikandra Bar, then a Kondapur. which are primarily core markets for us. So what is the key focus for the company in terms of, let's say, the next 2 to 3 year period? I think, uh, in addition to the 2 hospitals you mentioned, we have Rajamundry and Ongole expansion that's going on, both of which will get commissioned in the next 4 to 5 months. So beyond this, over the next 24 months, we are not looking at any significant bed addition, maybe, you know, on the lower side, around 400 to 500 beds. Uh, that's what we're looking at over the next 24 months. The idea is to stabilize the operations here and then be ready for the next phase of expansion and CapEx outflows. And that next phase of expansion would be, let's say, would start with the 300-bed hospital in Chennai, which should come in, let's say, '29 onwards. Yeah, '29-'30 onwards. And then there is more expansion that we want to do in Andhra, Telangana, Karnataka, Kerala. Kerala and Tamil Nadu. It's largely in the states that we're already operating except for Chennai. Uh, the whatever expansion we see over the next 4 to 5 years is going to come from the states that we are already operating. Sure, sure. And just because you touched on Kerala, so, so the Kerala government is thinking about introducing a bill in terms of regulating the, the private hospital charges. So Obviously for us it's an O&M model in that market, but your comments in terms of whether that is doable and if it gets done Uh, what kind of an impact do we see for business in Kerala? No, we have no idea what they are going to do, Rahul. So unless we know what it is, what kind of impact, it's difficult to anticipate that today. Yeah, but Dr. Binay, do you think as in it's easy to regulate, uh, private hospital charges because obviously depending on the, the, the, the infrastructure of particular companies, the doctor talent of particular companies the cost would vary. So what is the Kerala government actually trying to do here? Not just Kerala government, I think many governments are trying to do this, but we are yet to figure out a method to be able to create more transparency on billing. And when we are able to create that transparency, we're more than happy to figure out how we can work together and make this happen. I think right now we have no visibility on how we want to do this or how they are proposing to do this. Okay, sure, Dr. Abhinay. Best of luck, and that's it from us. Thank you. Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of question and answer session. I now hand the conference over to management for closing comments. So the quarter has ended on a high, bright note of sound financial results, expansions, and clinical accomplishments. It augurs well for the coming months, and we will work with the renewed energy and enthusiasm with your valued support. Thank you very much for a good number of questions and has been enlightened us. Then we are on the job that we'll be able to see that you do get a good growth in the company. Thank you. Thank you. Thank you. On behalf of KIMS Hospitals and IIFL Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.