Ladies and gentlemen, good day and welcome to Manipal Health Enterprises Limited Q1 and FY 2027 earnings conference call. As a reminder, all participant lines will be in the listen only mode, and there will be 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 touch-tone phone. I now hand the conference over to Diwakar Pingle from EY. Thank you, and over to you, sir. Thanks a lot, Danish. Good morning to all participants on the call. It is our pleasure to welcome you to the first earnings call of Manipal Health Enterprises Limited. Before we proceed to the call, let me remind you that the discussion may contain forward-looking statements that may involve known or unknown risks, uncertainties, and other factors. This must be viewed in conjunction with our business risks that could cause future result performance or achievement to differ significantly from what is expressed or implied by such forward-looking statements. Please note that we have mailed the results, and the same is also available on the company's website. In case you have not received the same, you can write to us, and we will be happy to send the same over to you. To take us through the results and answer your questions today, we have the top management of Manipal Health Enterprises Limited, represented by Dilip Jose, Managing Director and Chief Executive Officer; Sameer Agarwal, Group Chief Financial Officer; and Karthik Rajagopal, Chief Operating Officer. We will start the call with a brief overview about the company and on the quarter gone past, and then move over to the Q&A session. With that said, it is my pleasure to now hand over the call to Dilip Jose. Over to you, Dilip. Thank you, Diwakar. Good morning, everybody, and welcome to our inaugural earnings call. As Diwakar said, I am joined by my senior colleagues, Sameer Agarwal, our Chief Financial Officer, and Karthik Rajagopal, our Chief Operating Officer. I hope you all had a chance to go through the presentation that we uploaded last evening that outlines our robust performance that we had in quarter one. Before we take your questions, I will take just a few minutes to headline the quarter and give you more context as we look ahead to the rest of the financial year. First of all, we are pleased that our growth was driven by volumes, more patients accessing our care during this quarter as well, as we believe that is a sustainable option for growth in care delivery. Our Q1 revenue of INR 3,091 crore represents a growth of over 38% year-on-year. Our network EBITDA was INR 749 crores, a growth of over 26% over last year. Excluding a one-off gain that we had in the first quarter of last year, the growth is over 30%. Our operating margin, excluding Sahyadri, was 25%, and at a network level that includes Sahyadri Hospitals is at 24.2% for the quarter. As I mentioned earlier, we had a volume-led growth this quarter as well. Our inpatient volumes grew by about 39% and OP volumes by 26% over Q1 of last year. Average occupancy across our network was 65%, a 290 basis points increase over Q1 of last year, while we maintained an industry-leading ALOS of just 2.7 days. Excluding Sahyadri, our ARPOB is INR 77,200 per day, a growth of about 9% over Q1 of last year. Our digital revenue grew significantly and contributed about INR 710 crores during the quarter, representing about 23% of our overall revenue. Out of hospital earnings, a set of initiatives that we started a while ago, if you look at that, our e-pharmacy processed over 15,000 orders across 23 hospitals in four metro cities. Our telehealth solutions completed over 17,000 virtual consultations, and our chatbot, including the MAI, what we call the Manipal AI-enabled digital health companion, handled over 9,600 interactions during that quarter one of FY 2027. Our Centers of Excellence, that is six centers that we consider as our high acuity specialties, cardiology, cardiac sciences actually, oncology, neurology, gastroenterology, orthopedics, and renal sciences, continue to be a key growth driver. Their revenue contribution rising to about 65%, to 65% in Q1 of FY 2027. During this quarter, IP revenues across these specialties grew by 45%, so they have really been the growth drivers for us for the first quarter. We also continued our efforts to further strengthen these specialties with investments. To share just a couple of examples, during this quarter, we installed a linear accelerator and a PET/CT at our hospital in Nashik, introduced optical coherence tomography at our flagship facility, Manipal Hospital Old Airport Road in Bangalore, as well as two other locations in the same city. We commissioned an AI-assisted, artificial intelligence-assisted neuro biplane cath lab in our Mukundapur facility in Kolkata. We believe that the interventional radiology program that we have just launched in that city would be able to deliver cutting-edge clinical outcomes for that region. I also would like to highlight just a couple of outstanding clinical achievements, including first-ever and regional first kind of milestones. Our Whitefield Hospital in Bangalore performed the world's first robotic pancreatic surgery on a one-month-old infant. Our Vijayawada hospital in Andhra Pradesh performed the state's first emergency living donor liver transplant, and our recently launched two greenfield facilities, Kanakapura in South Bangalore and Yelahanka in north of the city, completed their first robotic renal transplants. You would recall that both these facilities are in their first year of operations. Let me also give you a brief update on the performance of Sahyadri Hospitals. Sahyadri reported revenue of INR 332 crores in quarter one, a growth of over 13% compared to last year. EBITDA for the quarter was INR 58 crores, a growth of about 19% year-on-year. Operating performance also improved significantly. ARPOB grew by 15% to about INR 45,000 a day. Occupancy reached 63%, and we've been able to improve the length of stay. That is, reduce the length of stay by about 8% compared to last year. In Q1, we reached 2.8 days of length of stay in the Sahyadri network. Work on integration of that set of hospitals to the larger Manipal Hospitals network continues to progress as planned. Key initiatives, including enhancement to clinical programs, talent addition, improved conversion efficiencies, phased digital adoption, and infrastructure upgrades are already contributing as we saw to the Q1 performance. As we progress to a full brand integration over the next few months, we have already introduced an element of a network of Manipal Hospitals into the Sahyadri brand already, like I mentioned. In other updates, we commissioned a brownfield capacity addition of 103 beds, along with the newly installed linear accelerator and PET/CT at our Nashik hospital, increasing its overall licensed bed capacity to 307 beds. You would also be happy to know that we launched our 50th hospital along the promised timelines in the month of July, and it added about 300 beds more to our licensed capacity. Also, as you would recall, the 50th hospital is in Electronic City in Bangalore. This marks our 13th facility in the city, taking the overall licensed bed capacity in the city of Bangalore to nearly 3,000 beds. In addition, a few days ago, the company announced a transaction to acquire the entire business operations and assets of Kinder Hospital in the Whitefield area of Bangalore. As we complete that transaction, post a couple of CPs, the facility will further enhance our reach and capacity in the fast-growing area micromarket of Whitefield. With that brief overview, I will now open the session to Q&As. Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Our first question comes from the line of Damayanti Kerai with HSBC Bank. Please go ahead. Hi. Thank you for the opportunity and congratulations to the management for a good start. My first question is on Sahyadri integration. Just want to understand a bit more in terms of management focus on the areas or segments which will be critical to improve profitability of this unit and closing the gap between Sahyadri and the corporate average margins. You mentioned about mix, efficiency, et cetera. A bit more on the details and how do you see the turnaround time. According to you, how much it will take to bring it on par to the corporate average? Thank you. Thank you, Damayanti. I would start off, and I would request my colleague, Karthik, to really amplify. As I mentioned, in the quarter, we have seen a significant improvement in performance of Sahyadri. We have reached EBITDA margins of almost 17.5% in the first quarter, which is a significant growth, like I probably mentioned earlier. It's been a volume-led growth and really driven by clinical enhancement and also operating efficiency. The integration take, the way we have planned, is over an 18 months kind of a period. I would request Karthik to really give you the granular feedback on Q1 and his priorities as we look ahead for the subsequent quarters. Karthik, over to you. Yeah. Hi, Damayanti. I hope you're doing well. The entire piece is we follow a certain playbook when it comes to looking at acquisitions, and how we look at the integration. The whole process takes about 16- 18 months. But your question on when it will get to the EBITDA for what the network is doing, that obviously is some time away. But in terms of priorities, what we did with people was we've got the regional structure in place, and that's the entire HR organization that we actually go ahead and do for our rest of the clusters and regions as well. That's the first thing that we put in place. And what we do in the three key metros, Bangalore, Kolkata, and Pune right now, is to look at the interoperability of clinicians. There are about 58 of the clinicians now, because we've got nine hospitals in Pune, seven from the Sahyadri network, two from Manipal. So the interoperability has been increased. About 58 clinicians now move across both the brands. From a branding perspective, full-fledged re-christening into Manipal, we're just deciding on the dates as to when we could do that. Usually, it's about 14- 16 months from the day we integrate. But from a logo perspective, as Dilip mentioned, adding the Manipal element into the logo as well. Our digital penetration, as Dilip had spoken about, is about 22%, 23% of our revenue. So that's the start that we've got in Sahyadri as well. So we're going really bullish on the digital channels. We'd also go ahead and look at the other business development channels in terms of upcountry markets and internal processes like conversion efficiencies, et cetera. And obviously, in terms of infrastructure upgrades, we are getting most of the hospitals up to speed with the Manipal system. So for now, this is what we are looking at. Outside of that, we have a lot of emphasis on our service strategies, Damayanti. So that is something that we are actually bringing together in Sahyadri as well. So slowly, actually, you start to see the results coming through. And over the next few months, this will move in completely into a Manipal outfit. That is very helpful. So just a bit on the mix part. So here as well, you will be focusing on your CoE mix, which is around 65% for the network at this point of time. So should we understand that there is more headroom to improve the mix part so that you will see the overall improvement in the profitability for Sahyadri? Damayanti, in terms of the CoE mix, there is not a big difference in terms of the contribution between Sahyadri and the Manipal network. It will probably be very close to each other. It is only the complexity of the CoE cases that Manipal has an advantage, and that is the exact playbook that we are trying to bring into Sahyadri as well in terms of moving up the complexity as far as the CoE mix is concerned, and that will definitely positively impact the ARPOB and the other financial parameters as well. Sure. My second question is on your strategy in the Delhi NCR market for the oncology segment. So what we understand, Manipal has been focusing a lot to build up a very strong doctor team to really step up its presence in oncology space in Delhi NCR. So bit of better understanding on this segment will also help us. Thank you. Damayanti, this is Dilip here, if I may take that question. I think we already have a very strong onco program in Delhi over the last several quarters. It is a program that has been growing steadily. If you also look at our presentation and what I mentioned also during my introductory comments, our CONGO-R mix is growing at about 45%, and oncology is maybe among the fastest-growing in that mix. Therefore, it is not only in Delhi. Around the country, we are looking at growing oncology. Also, if you look at our presentation, there is a pie chart which is given in the presentation. You could see that there is a movement in the oncology proportion in that already. You could see that from 10.8% in last year, it has already grown to 12.2% at a network level. Oncology would continue to be a focus, not only in Delhi, around the country, Damayanti. It is also buttressed by the fact that we have added significant oncology capacity in Bangalore as well. The three greenfields that we have commissioned in the city of Bangalore in the last 12 months, all of them have comprehensive oncology facilities, and that also would drive up our ability to address the growing need of oncology in the country. Thank you. I am really sorry, but you may please rejoin the queue if you have one more question. Thank you. Our next question comes from the line of Neha Manpuria with Bank of America Securities. Please go ahead. Yeah. Thanks for taking my question. My first question is on the ex-Sahyadri margins. If you could give us a little bit color on how we should think about these margins in terms of which market probably or which cluster do you think you see scope for margin improvement. If I were to take a little bit, let us say, 18- 24 months, is this a steady state margin that we should assume what we have seen in FY 2026 or how much scope for improvement there is? Thank you. Neha, thank you for the question. The ex-Sahyadri margin, like we have covered in our presentation, is about 25% for Q1, and that remains robust. You could see actually, there is a marginal dip over last year Q1, and the reason is the greenfields which, like I mentioned earlier, greenfields which are up in Bangalore, they are still ramping up. Although ahead of our plan, greenfields are ramping up, that brings down our composite margin a tad. But barring that, if you look at our portfolio of hospitals, this is with reference to your second question as to how do you see the margin expanding. If you look at our portfolio of hospitals, apart from that network of Sahyadri, which is at a combined margin of about 17%, 17.5% in Q1, a large number of our hospitals are in excess of the portfolio margin that we have, which is 24%. So as these greenfields drift up, the greenfields in Bangalore currently are at the two older ones, older ones meaning six or seven months old, they are already broken even and they are at about 13% margin in Q1. As these trend up over the next year and a half to where they ought to get to, that will pull up the composite margin, portfolio margin. As Sahyadri, like Karthik mentioned earlier, as those initiatives take shape and over the next few quarters, we expect to push up Sahyadri closer to where the portfolio is. We have had a volume-led growth, Neha, like I mentioned earlier in Q1, and complexity-led growth in Q1. We think these are the sustainable trends. This is what will drive up the potential to grow the margins further. We don't want to indicate a specific number where we will get to, but when we look at our portfolio, like I mentioned, we have hospitals at 30% margin, in excess of 30% margin. Several hospitals greater than 30%-32% margin. So we would work towards pushing up our portfolio, entire network to further improving to those levels. I'm not guiding you to a timeline or a number, but this is directionally how we see that we can progress. Sameer, you want to come in? Sameer is our Chief Financial Officer. Sameer, if you would want to come in. No, I think so, Dilip. Hi, Neha. I think so Dilip has covered. If you actually strictly go on the numbers, there is some one-off impact actually. Last year, same quarter, we had a reversal of INR 15 crores that gave us benefit last year. That was a one-off. It was a contract which was pre-acquisition in Medica, which the management team actually negotiated, and we got a benefit. If you remove that, it is almost 0.6% because of that. Some of the doctor cost, as Dilip explained, because of the greenfield. As the greenfield ramp up, we will see the operating and doctor leverage come through in the balance part of the year. Okay. That is very helpful. Just to clarify, we do not have any more greenfield coming in, I think, till the time we commission Mumbai in 2029. That would be right? Based on the disclosures that you have made. No, Neha, after Q1, like I mentioned, our 50th hospital came up- Yes In Electronic City in Bangalore, which was in the month of July, so that would be in Q2 of this fiscal. We have Raipur, which should be coming on stream towards the end of this year or last quarter of this fiscal. That would be the next large, next greenfield in our pipeline. Subsequent to that would be Juhu, like you mentioned. In between Raipur and Juhu, we would also get this Kinder. We mentioned earlier in the introduction that we added 100 beds through an acquisition in Whitefield in Bangalore. We are reconfiguring that hospital. It is a women and children kind of a facility. We are really reconfiguring to add to our profile in that region, in that part of the market. That would also come into play, additional 100 beds between Raipur and Mumbai. That is the line of sight that we have at this point, Neha. Thank you, Neha Manpuria. If you have a more question, you may please rejoin the queue. Ladies and gentlemen, in order to ensure that the management will be able to address all the questions from the participant, we request you to kindly limit your question to two questions only per participant. If you have a follow-up question, please rejoin the queue. Our next question come from the line of Aman Goyal with IIFL Capital Services Limited. Please go ahead. Aman, you may please proceed ahead with the question. Hello. Aman, your voice is very low. Aman, would you like to rejoin the queue? As there is no response from Aman, we will move forward to the next participant. Our next question comes from the line of Bansi Desai with JP Morgan. Please go ahead. Hi, thanks for the opportunity. Firstly, on Sahyadri Hospitals. Historically, when Manipal Hospitals has acquired assets, we have seen that we have invested into those assets in the initial years, and we are likely to do the same with Sahyadri Hospitals as we integrate the asset and as we invest into specialties and everything. How should we then think about the medium term to longer-term build-out here? Any aspirations on growth margins, if you could provide? Bansi, thank you for the question. Like I mentioned in the introduction that Sahyadri Hospitals has already grown by 13%-14%, 13% + in revenue year- on- year, and I think 19% or 20% in EBITDA. This is early in our journey with Sahyadri Hospitals. It is a few months, six, seven months into our fold. And we have been able to move up on this trajectory. Also, Bansi, as you recall, what Karthik Rajagopal talked about, this has happened through the initial efforts of the doctor interoperability, that conversion efficiencies, and also trying to really focus on the Congo mix, and of course, the service standards that we are trying to introduce. Now, all these would cascade into more efficiencies and more benefits to the bottom line as we progress. Now, like you mentioned, there is expansion happening in almost all locations of Sahyadri Hospitals. Deccan Gymkhana is undergoing an expansion. An entire tower is getting added. Hadapsar is adding beds. Like you also know, that we have started a greenfield in Wakad in North Pune. Like I mentioned earlier, Nashik has already added the onco capacity, 100 + beds, Oncology, LINAC, and PET/CT have come. We are introducing onco capabilities at Ahilyanagar also. So I think, like you also pointed out, Bansi, we are investing in capital, in advanced technology, like indeed we have done in all the other acquisitions in the past. Therefore, when Karthik talked about a playbook that we are trying to follow in Sahyadri, it is exactly right, because these are the things which have worked for us in really turning around the past acquisitions, and that's the confidence that we have in Sahyadri. We are really happy to see even in a short time, we've been able to improve ARPOB, significantly drive up volumes, add up to complexities of the work that we have, and continue to really drive on operating efficiencies. That's the way we look at it. Karthik, you want to talk about the next year and a half, how do you see the trajectory? We are not guiding a particular number, but you could talk about how you see efficiencies improving. Yeah. So Bansi, for a start, the amplification for the brand will come in once it's completely re-christened into Manipal, so that the nine units can then function as one. Pretty much it's going to be the same in terms of the concentration on the CONGO-R. Obviously, digital is yet to mature completely. We've also, as I told you, the internal conversion efficiencies and the rest of the stuff that Dilip was talking about in terms of the out-of-hospital care, the revenue opportunities, et cetera. All that will start folding into the brand in terms of what we're actually going to go ahead and look at in terms of the future. So it will be a combination of operational efficiencies, more clinical talent coming in, more initiative in terms of out-of-hospitals, et cetera. Plus, in terms of business development, both in terms of up-country markets as well as the Pune market, and a full integration of all the nine units is what is actually going to go ahead and lead us in terms of the next possible 16, 18 months. Bansi, to top up, you could already see, I mentioned the length of stay improvement in Sahyadri, I think 8% improvement already coming down to 2.8, does come through operating efficiencies. I think that's a benefit. That's what Karthik was talking about. It is a multifaceted approach. A lot of initial efforts would be on operating efficiency as we scale up capacity and investments happen. If you just look at the ARPOB improvement, the volume growth in patients, and the length of stay, which has already come down, despite the complexity of work increasing, I think this is the playbook that we have in mind, and that is what will drive up the margin profile in those hospitals, Bansi. Yeah, thanks. Appreciate the color there. My second question is on the expansion plan. Fiscal 2027, we'd laid out a plan to add about 1,000 beds, and I'm assuming all of this will come in a staggered manner, and even within that, the commissioning of beds would happen in a phased manner. If you could highlight what kind of number of beds should we assume for commissioning in 2027, and what could spill over to 2028? Karthik. Yeah. Bansi, the near 300-bed addition in terms of our Electronics City facility, which came up in Q2, that will happen, and we are expecting Raipur to get commissioned in the Q4 of FY 2027. Nashik is already in terms of the 103 beds. These are the three large parts that will actually go out and come in. As far as the Kinder buyout is concerned, Bansi, we want to do what we do best, which is look at multispeciality where the women care brand will actually be tucked in as a part of the hospital. We're trying to go ahead and look at that as well. It's obviously an eight to nine-month project. So that also might be possible if we accelerate to come in in FY 2027. These are the three major initiatives in terms of bed capacity additions for FY 2027, and Ahilyanagar in FY 2028 could add about close to 80 beds. Bansi, Sameer here. We are on track to whatever we had committed in terms of addition. In fact, what Karthik said about Kinder could be over and above to what we are actually committed in terms of beds. We are on track. In various points of time during the year, these beds will get added. Thank you. Our next question comes from the line of Shyam Srinivasan with Goldman Sachs. Please go ahead. Yeah. Good morning. Thank you for taking my question. Just going back to the ex-Sahyadri margins, like the core margins. There has been a dip, I think what Jose was saying as well. If you were able to give us some quantification of the greenfield losses, is it 1 percentage point of revenue or something like that, so that then we can back out what the like-for-like mature margins were? Shyam, if you could look at the last year versus this year ex Sahyadri margin, last year Q1 was 26.5%. This year Q1 is 25%. That's a dip of 1.5%. Sameer already talked about a one-off gain that we had in Q1 of last year, that material cost benefit that we had relating to a pre-acquisition contract in Medica. That, if you knock it off, the difference, that is 0.6%, like Sameer explained earlier. The difference is 0.9% between last year and this year. The greenfield, there are two elements. The greenfield doctor cost. We have in both Kanakapura and Yelahanka, the two greenfields in Bangalore, which were operational in Q1. While they're in the early parts of their lives, we are fully staffed with all the doctors. So the doctor cost element of that is about 0.5% for the network. That's the impact that we have. The other difference would be, Shyam, that in Q1, some of the collection, particularly the scheme patients collection, has been a little slow, like the whole sector has been talking about. So that's only the two variables that we have. We don't see these as a challenge. Greenfield is as they ramp up, the doctor costs fall into place. Collection is something which would also, as the year progresses, these come through the cycles. Therefore, the dip between last year to this year, Shyam, is not something which we are really concerned about. It is not a dip in terms of any operational issues. It is not a dip which is, to our mind, a sustainable kind of a situation. These are two one-offs. So that's the way we look at last year to this year. Helpful. Thank you for that. My second question is just on overall growth. I'm not asking for Sahyadri or any of that. How should we look at, say, or if you want to call out just the standalone growth. Is there some guidance that you're offering in terms of the path forward? Because 23%, again, I'm talking core growth here for the quarter, appeared strong. Are there elements of it which is one-off in nature or seasonality related in Q1? Or do you think, how should we look at the path forward on a standalone basis? No. Shyam, the core growth is strong. That's the point that we made in the beginning. You are absolutely right in calling it out. It is a strong growth, and it has come through a volume-led kind of a progress. If you look at the underlying features of that, the volume growth, of course, I mentioned both IP and OP, and the high acuity specialty is growing. That we pointed out, the Congo are really growing and therefore ARPOB improving along with that. Greenfields would ramp up. As we get into Q2, we are talking about three greenfields, including the Electronic City one in Bangalore. So these, in our mind, the Q1 trends are not one-off trends. These are fairly secular kind of a tailwind that we see for Manipal. We don't see these as one-off. While we are not guiding you to a specific core network growth, what we are saying is that these are the tailwinds which should sustain in the context of Manipal. That is the way we would look at it, Shyam. Unless, Sameer, if you have anything to add. No, Dilip, I think you captured it well. This is the investment that we had made in the organization almost three, four years ago, about the greenfields. The greenfields have ramped up well for the last six, seven months, and those are adding to the organic growth that we are getting in the city. So 23% growth, which Dilip pointed out, ex Sahyadri, seems quite robust at this point in time, Shyam. Also, Shyam, at the cost of overloading you with information, let me say, when you look at the two greenfields that we had in Bangalore in Q1, the South Bangalore Kanakapura one and the North Bangalore Yelahanka one. The Kanakapura one broke even in the fifth month of operations at an EBITDA level. The Yelahanka hospital broke even in the second month of operations. These are ahead of our own expectations. Those in our home markets when we add capacities like we are now doing in Pune, like Karthik explained earlier, the capacity addition coming in our home market of Pune. I think that would add to the speed at which we can grow. I think these greenfields, like Sameer said, are accelerating. In Q1, we have 13% EBITDA margin from the greenfields. Yeah. Way ahead of any plans that we had. I think that is the confidence that we have that, without guiding you to a specific number, these are the tailwinds that we have as a Manipal network as we head out into the subsequent three quarters of the fiscal. Thank you. Our next question comes from the line of Aman Goyal with IIFL Capital Services Limited. Please go ahead. Yeah. Thank you for the opportunity. My first question is on ALOS. We have an industry-leading ALOS. I just want to know how we have built this ALOS, despite we have the largest hospital chain with a high base, and where our peers are lagging somewhere between 3.5 to four days. Can you throw some qualitative aspect? What is the medical or clinical excellence we have done over the past few years? I only want to say, Aman, welcome back. We missed you at the first round. Glad to have you back on the line. I request Karthik to answer the question on length of stay. Aman, actually, this entire ALOS bit started about few years back when we had actually been there at about 4.2, 4.3. What we did was, the first step to weed out the inefficiencies because we felt that much of 4.3 didn't have a clinical connect. It probably had an administrative connect and some inefficiencies there. We worked on administrative inefficiencies to actually start to go ahead and look at it. That was one reason why very clearly we started to look at a trend down as far as the ALOS is concerned. Reasons two and three would be that from an institutional mix of government payers, we have got 14% there. Again, the ALOS tends to be a little higher, though our international patient growth has actually been very good in the first quarter, about 65% over last year. It still continues to be about 3% of our overall revenue. These are the three things, and within the ALOS, the main emphasis was on actually going ahead and reducing the discharge turnaround time. Be it with cash patients, be it with insurance, et cetera. We had worked significantly, put in a lot of internal operating processes in place, like planned discharges, et cetera, to ensure that we do discharge the patients on time because, one, it turns over the bed faster. Second, we do not want anybody to actually go ahead and spend more time in the hospital as a patient, because that is not good for them. They can recuperate much better at home as well. This is how we actually brought it down. Thank you. That one is very nice one. Second one on this. What is the optimal leverage we will consider in future to post the IPO proceed? We will repay the debt. What level we are actually comfortable going ahead, and what is the CapEx guidance for next two, three years, if you help me with this. Aman, Sameer, our Chief Financial Officer, would respond to that. Yeah, hi, Aman. As Dilip was pointing out about the greenfields that we are going to launch, Mumbai is going to come up. In the next three, four years, as we add the 3,000 beds, we will spend around INR 4,000 crores of CapEx. As far as the leverage is concerned, we are currently the net debt to EBITDA is around 2.8 x. Once we repay this debt, which we will do it in quarter two, since the trigger has already been initiated post receiving the IPO funds, our net debt to EBITDA will go down to 0.9x at quarter one level. We are fairly comfortable. I think so we will continue to use debt judiciously as we look at opportunities to keep growing. I think so our leverage of industry average is currently around 1.5x- 2x. We are fairly comfortable operating at that level. But in case if we have to go higher, it will be only due to an opportunity which cannot be missed. Otherwise, we are fairly comfortable operating at 1.5x-2x leverage, Aman. As far as the CapEx for the current year is concerned, I think so current year we will end up spending almost INR 2,000 crores of CapEx because of the greenfields and brownfields that are coming up. You will also be happy to know that we have spent quite a lot of money in quarter one itself. Almost INR 900 crores has been spent in quarter one. We are trying to front-end a lot of CapEx so that we get the benefit and leverage of that for the entire financial year, Aman. Thank you. Our next question comes from the line of Bala Murali Krishna with Oman Investment Advisors. Please go ahead. Mr. Krishna, you may please proceed ahead with the question. Yeah. Good morning. First of all, congratulations on good listing, and also I would like to appreciate to reduce your average length of stay and also focusing on the volume-led growth rather than improving ARPOB, like other listed players who are focusing on improving ALOS and ARPOB. Secondly, on the margins and also the Kinder acquisition, which you have planned, what is the approximate margin improvement in this acquisition? Bala, if I could take that. Thank you for the comment on length of stay and the volume growth. Like I mentioned earlier, we believe, as you agreed, that's a sustainable way for a hospital to grow, that serve more patients and not really look at a price-led growth. That's been the Manipal philosophy, and I'm glad that you quote that. Kinder, like Karthik also mentioned, Bala, it is currently a women and children kind of a hospital. Our intent is to really modify that asset, slightly rework on it to convert it into multi-specialty. We are really not looking at the current revenue or EBITDA profile. I think current revenue was about INR 22 crores or something. Yeah. INR 3 crore- INR 4 crore a month. Yeah. INR 3 crore- INR 4 crore a month was the current run rate. We are not really looking to build organically on that at all, Bala. The reason that we have acquired this asset is Whitefield in Bangalore is a high-growth area. We already have two large hospitals there, which is really performing at a very high level. For us, adding this 100 beds gave us a good capacity addition in a high-growth geography, and that is the reason for our acquisition. It is really not to build on women and children capability that Kinder has. I think we will, over the next six, seven months, remodel that hospital to multi-specialty, and then we would really take it to its potential, what 100 beds can do for us in that Whitefield area. So it is not at all about current revenue or current margin profile of Kinder. It is frankly irrelevant for our purposes. It is about what the opportunity offers us in that geography to create a third location and really be the leader in that part of Bangalore. This comes with the land and building included, so there is no rental. So as we remodel this hospital, there will not be any leakage in terms of rent. This facility has been bought with the existing building and the land, which will get transferred to us once the necessary CPs are fulfilled. That's great, sir. On the specialization front, so infertility is the one thing, there are some which is super specialty in fertility. There are some specialized clinics or standalone clinics. So what is the contribution in our business, this one, and do we have any views to improve this? If it is available already in our business, then what would be your projections or whether you want to improve that service? So again, Bala, like I said, we are not looking at Kinder specialties to add to the base that we have. Actually, what we plan to do is shut down that hospital for a few months, really to remodel. So currently, you are right, they do infertility work, and they have obs gyne work. We have infertility work happening in our Whitefield hospital already. So we have that infertility capability already existing in that geography, so that is not something that we need to retain at Kinder. Like I mentioned earlier, we will temporarily close down that hospital for a few months for renovations, and as Karthik mentioned earlier, post-renovation, it would be a multi-specialty kind of a facility, really as an extension that our two other hospitals in that area, Whitefield and Varthur, both are multi-specialty quaternary care facilities. This would be, in many respect, an extension of that capability, that capacity. So once again, we are not looking at what Kinder did in the past. Frankly, like I mentioned earlier, it's not relevant for us because those capabilities we already can accommodate in our existing other hospitals in Whitefield. This is really about adding significant capacity in a fast-growing micro market in Bangalore. We believe this was a very attractive transaction that we could enter into. Like Sameer said, after CPs are completed, we expect in the next 60 days the transfer to fully take place, and then take up remodeling that asset. I hope that makes it clear. Thank you. Our next question comes from the line of Alankar Garude with Kotak Institutional Equities. Please go ahead. Hi, good morning, everyone. Sir, firstly, can you comment on the performance of AMRI and Medica in this quarter, and how soon do you expect margins in these two acquired entities to reach the network margins? Sorry, what did you ask, Alankar? AMRI and Medica performance, Sameer. Alankar, do you want to just give a second to pull out the numbers. If you have a What was the second part of the question? Margins? Yeah. The second part there was how soon do you expect margins in these two entities, both AMRI and Medica, to reach the network-level margins? Thanks for the question, Alankar Garude. AMRI, actually, this quarter has grown 17% over last year same quarter, and Medica has grown 15%, so both of them continue to grow at the trajectory. Obviously, East will see some changes that will happen as far as the government mix is concerned. We already started seeing the slowdown of the government mix because the scheme will get maybe re-christened from the current scheme to the national scheme. But one of the things that has worked well in East overall is the cash and TPA business has actually grown 22%, despite the overall growth being 17%. If I mix AMRI, and I always say that it's AMRI, Medica, Columbia Asia, they are three entities that exist in East. We run East as one state and Kolkata as one city. If you look at East as a region, actually we have grown 17% in top line. But the cash and TPA has actually increased 22% because the government business has been pretty flat. All the efforts that has been done in terms of adding doctors, clinical talent, adding investments, our Dhakuria facility will have extra beds. I think so that will come on stream in the next quarter as well with the fully integrated onco program. East continues to do well, and it is on the trajectory that we plan for East in terms of margins as well, Alankar Garude. Just one follow-up there, Sameer, is this transition in the scheme mix, how long do you think this will continue? Would it be a matter of few months or a few quarters? Yeah, I will just ask Karthik to give you an update on that. Alankar, it is on the anvil. Hospitals are in discussion with the authorities, so we should hear from them very shortly as to what the way forward is and what the next steps are. As Sameer mentioned, in the meantime, we continue to actually go ahead and through brand equity, attract cash and TPA patients, and that is what we will do. But it is on the anvil, Alankar, and it should get closed shortly. Thank you. Our next question comes from the line of Karan Vora with Goldman Sachs. Please go ahead. Yeah, thank you for taking my question. My first question is with respect to the Kinder acquisition and the rationale for the size of the hospital, right? When we speak to some of the peers, the general thing which we get for a multi-specialty hospital, the ideal minimum size is 250- 300 beds, right? However, we have been successfully running multiple hospitals with 100 or less than 150 beds, right? Just wanted to get a sense with respect to what's your rationale for the same, and do we provide all the multi-specialty services in such hospitals, or we just provide whatever is not there in our existing other larger hospitals nearby those smaller units? Karan, this is Karthik here, and I'll take that question. The intent of actually shoring up Whitefield is because it's still a high-growth housing inventory micro market, and we already have two hospitals. The intent is to actually bolster that by giving this. If you really look at the original Columbia Asia model, most of them were sub-100-bedded hospitals, which we moved from secondary care into tertiary care. So we're quite adept at handling sub-100-bed hospitals in terms of the super specialty and quaternary mix. What will actually go ahead and happen here is, minus of transplants, which will happen at the hubs in Whitefield, the rest of the specialties will be offered. We're actually going to go ahead and have a cath lab, CT, MRI. We're going to go ahead and provide them with good theaters so that clinical talent coming on board will have good facilities to operate in. Everything minus transplant to a large extent will be here, and that's how we run most of the other sub-100-bedded hospitals as well. To your question of 250, 300, if you were to go ahead and look at a micro-market independently, yes, that's the size that we would like to go with. But given the fact that we are fairly well-served here, a 100-bed addition is only going to be more beneficial for us. So that's the way we are looking at it. Karan, also to your point, if we were to build a new hospital that we are building a greenfield ground up, like Karthik said, we would look at that minimum capacity. We would not build a 100-bedded greenfield facility. That is certainly the case, the point that you made. But this was an addition that we were making in a territory which really would be a third geography, third location that we have in that Whitefield area, and therefore incremental capacity when two large hospital multi-specialty hospitals are already there. It's a running start we get. It's a capacity addition. It's a cluster of hospitals that we have in Whitefield, and like Karthik said, barring one or two specialties like radiation oncology, it would be multi-specialty, and that's the way we would look at that. Got it. Really helpful. My second question is with respect to, I think there has been a regulation change where now even for-profit entities can run medical colleges, right? One of our peers recently highlighted entering into that business. Given that we already have, within the broader Manipal Group, medical colleges, are we planning to bring some of them into the listed entity or do more medical college work into the listed entity? Any plans on that? No, Karan, we have no such plans. We believe Manipal Health Enterprises should remain focused on providing the highest trend of tertiary and quaternary care, the brick-and-mortar hospitals that we run. I think that is what sets us apart, that is what gives us clarity as a management team and gives clarity to our customers that this is what Manipal Hospitals is about. We would not want to dilute that focus. I think we intend to remain a specialty provider. Like we talked about our high acuity mix and centers of excellence, we would want to remain a national player, really leading in clinical outcomes in these complex procedures. I think that's been our growth and our trajectory over the last decade, and that's where we would want to remain focused on, Karan. Thank you. Our next question comes from the line of Ankush Mahajan with Sanctum Wealth. Please go ahead. Sir, thanks for the opportunity for the question. Most of the question answered, but in sum up, sir, we have now INR 2,600 crore of our EBITDA for FY 2026. I just try to understand in some way that what are the growth drivers that could lead this growth, like product mix- Hello. Yeah. We can hear you. Go ahead, Ankush. Product mix is there. Greenfield, that's new beds are there. What are the losses in the new Greenfield, Sahyadri, and relative CONGO-R. Yeah If you sum up all this, then I really appreciate it. Ankush, the answer is exactly like in what you detailed just now. I think, the way we look at our future is around what will drive our growth, in FY 2027 and in the years ahead. The way we look at it is exactly that, Ankush. If I could summarize, we have the largest bed capacity in the country, over 13,000 beds now. And like Sameer talked about earlier, 2,000+ beds are coming on stream in a short period of time. So our bed capacity would continue to increase. Because our length of stay is so low, we've been able to treat a very large number of patients with just occupancy of just 65% is our occupancy level at this current network. So we have headroom to grow in occupancy. We got additional bed capacity coming in. Like you mentioned, CONGO-R are our centers of excellence, high acuity mix is growing. That's the third element. Sahyadri Hospitals came to us as an under-managed asset with low EBITDA margin. We already been able to take up the EBITDA margin to 17% in the Sahyadri network, whereas the ex-Sahyadri network is at 25%. That's the third lever that we have. Then all the greenfields as they ramp up, three in Bangalore, which have already been commissioned in the last 10 months. Our Raipur, which would come towards the end of this fiscal. Juhu in Mumbai following that. Wakad in Pune, which would be following that. These are the four or five levers which have clear visibility for us. This will drive our growth. Operating efficiency would continue to be there, in terms of everything that we can improve in material cost or length of stay further, conversion efficiencies, digital revenue. These are the levers that we have actually as we go ahead to really look at the growth further. Finally, also like Sameer mentioned earlier, we have a de-levered balance sheet post this IPO. He talked about 0.9 x debt to EBITDA gives us the ability to really raise funds to expand to other geographies. So far I've been talking about existing capacities and already committed bed counts, which are coming into play. We have a keen interest to expand to Kerala, as and when an opportunity arises. We would be keen to further expand our presence in NCR. We would want to look at Hyderabad. These are inorganic kind of opportunities that we will keep in mind. This inorganic lever is completely out of the other four or five things that I outlined earlier. Therefore, as a team, we have great confidence in our ability to grow. The healthcare sector in general is poised to grow. It's got all the right tailwinds, which is driving the sector, and we believe Manipal is positioned very well to tap into that for the reasons that I outlined in the last two, three minutes. Thank you so much. Ladies and gentlemen, due to the time constraint, that was the last question for today. I now hand the conference over to Diwakar Pingle for the closing comments. Thank you, and over to you, sir. Thank you, Danish, for that. Thank you all for joining us today and for your continued interest in Manipal Health Enterprises Limited. We appreciate your time and engagement. Should you have further questions or require any additional information, I know there are a few participants still waiting in the line for questions. You could definitely write to us at investor.relations@manipalhospitals.com and we will make all the effort to get back to you with the queries to those questions. Again, I am just repeating the email ID, investor.relations@manipalhospitals.com. Thank you once again, and thanks for joining for the first earnings call of Manipal Health Enterprises. Have a great weekend. Bye. Thank you, Diwakar sir. Ladies and gentlemen, on behalf of Manipal Health Enterprises Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.