Good afternoon, everyone, and welcome to the quarter two FY 2027 earnings call of Narayana Hrudayalaya Limited. We thank you all for joining us today. On the call with us from the management team are Mr. Viren Shetty, Vice Chairman, Dr. Emmanuel Rupert, CEO and MD, Ms. Sandhya Jayaraman, Group CFO, Mr. Venkatesh, Group COO, Dr. Anesh Shetty, MD of the International Business, Mr. Ravi Vishwanath, Board Member of NHIL, Mr. Nishant Singh, Vice President, Finance and Investor Relations, and Mr. Vivek Agarwal, Deputy General Manager, Finance and Investor Relations. The results presentation and financial statements have already been uploaded on the stock exchanges and are also available on the company's website. Before we proceed with this call, we would like to remind everyone that everything that is being said on this call that reflects any outlook for the future or which can be construed as a forward-looking statement must be viewed in conjunction with the uncertainties and the risk that they face. Please note that this call is for a duration of one hour. We will address questions pertaining to the India business in the first 30 minutes, followed by the international business. Given the limited time available, participants are requested to ask maximum two questions at a time and join the queue for any follow-on questions. We also request participants to avoid chat questions and ask the questions live. With that, we would like to start the Q&A. I request everyone to now use the raise hand feature to start posing their questions. First question is from Prithvi Raj. Prithvi Raj, kindly announce your company name and go ahead with your question, please. Hi, this is from Unifi Capital. Firstly, on the India business margins, this quarter, the margins are around 25%, and it's now almost on par with the larger players. However, the ARPOB is still at INR 55,000 compared to INR 70,000 for others. Is there further scope for margin improvement as structurally ARPOBs improve? Or do you think margins can be at this level for quite some time, and then you will focus on revenue? I'll take this. Hi, Prithvi Raj. Q2 we've seen is generally a strong quarter, as we've seen in all the financial years. In this particular quarter, we have seen good growth both from the volumes and price mix. On volumes, we've seen 4% increase year-on-year. On OP footfall, that is, in the IP, we've seen 4% year-on-year. OP footfall, we've seen around 12% growth. ARPOBs, as you said, ARPOBs actually have increased from INR 17.5 million to INR 19.5 million a year. We are basically focusing more on high-end procedures and higher use of robotics. What we have seen is that a very moderate price increase and the balance in pricing has actually seen a lot of increase in the IP volumes and OP volumes eventually for this year. We will continue with the same type of workaround strategy to ensure we have a balanced growth both in terms of volumes and realizations in the coming quarters as well. On the margin side, yes, it has gone up to more than 26%, 26.8%. Along with these realizations, we've also seen that we've had the benefit of operating leverage on the costs, where our doctors and nursing costs have come down by 1.8%, which is added also to the margin. Our focus will remain on seeing how we can sustain these margins at current levels. Is there a further potential for margin improvement? Because your ARPOBs will anyway structurally go up, given the gap between competitors. Can we look at a 200 basis kind of higher margins as a peak level? That is what I was trying to say is that we- I'll jump in here, Mr. Venkatesh. Yeah. See, just to clarify, we don't target any specific margins. The margins what you see are a reflection of the huge amount of effort we've put in over the past 10 years in our digitization, in the process improvement, in supply chain efficiency, and addressing every single driver of unnecessary cost in the company. Our mission has always been to cater to people who cannot afford treatment in most of the other private hospitals and to price our surgeries and procedures extremely affordably. The margin is a reflection of what we do once we end up paying for the very high cost of services, balanced out against all the efficiencies we're able to bring in. So, margin expansion isn't the thing that we target. What we're looking for is accessing the largest pool of patients in all the cities that we operate in. As a volume story, this is something that we want to pursue. On the recent regulatory news on oncology, price cap, et cetera, what exactly you're hearing from the government, and if any price caps that will get implemented, how will it impact Narayana? We need to calculate the oncology is 15% of India hospital revenue, and drugs that have come under the cap are only a part of it. I think the caps will go live from 9th of November, and we will have a better idea at that point in time. The only thing we want to call out is that we are not a very margin-focused company, and a lot of our focus is on how efficiently we can run a high-volume, standardized protocol, cost-discipline-driven care. So, anything that offers transparent and affordable pricing, we will support. It will obviously come with ups and downs, which we will go through as we understand this more. My final question on India- Go ahead. My final question on India business is on the insurance. If you have to look at your combined ratio, it is as high as 280%. Generally, for the established players in the industry, it is all around 100%-110%. So, how should we look at this trajectory over the next two years, and how long will the losses continue? Is it possible for you to quantify in terms of combined ratio or any other profitable metric that you track? Do you want me to take that, Viren? Yeah, please, Ravi. Sure. Prithvi, couple of things on this, right? One is that, in terms of the ratios, they do get a little bit distorted quarter- by- quarter, because Q1 versus Q2, et cetera. I think some of the things that give us confidence in terms of the overall kind of book moving in the right way, right, is one is, of course, if you look at the growth versus last year to this year, the growth has been substantial. I think that gives us confidence. The other thing that gives us confidence is that the claims ratio, which is the more important kind of metric, right? One is you have the top line in terms of revenue, that's growing. The claims ratios themselves, if you look at quarter- to- quarter, that has come down significantly and is trending also, continues to trend in the right direction. Our model, just to remind you, is a little bit different from the traditional models. We are focused largely on building our retail business. That is something we're doing directly, and that, as you probably know, is something that does take time. While that is happening on the one hand, we are building our SME book and engaging with customers to make sure that we are positioning ourselves as their health partners. We are the first health insurer that is promoted by a hospital, and we want to not just be a transaction in terms of health insurance claims. We're positioning ourselves as health partners. Across this journey, I think even those partnerships and that engagement has been going well with our customers. Generally, we feel that this is going in the right direction. It is still too early to give you a timeline in terms of when it will break even, et cetera, but it is trending in the right direction when we look at claims ratios. When we look at actual expenses as well, the entire book is trending in the right direction. We are quite happy about that. We are quite focused on the things that we want to do, which is the retail business that is direct, focused, controlled, group business, and really engaging with customers to make sure they have a great experience. We use our healthcare data to help improve their lives and help them get well and stay healthy. I think in all those areas, it is moving in the right direction. For us, see the point, I think this entire journey towards clinics and insurance started two and a half, three years back. Back then, there were some committed investments that management has mentioned, and there were some timelines also mentioned. However, this journey is taking too long, and with every quarter or with every year, the losses are actually increasing. At least at a management level, do you have any numbers saying you will try till you make certain losses and then you will end up giving up on insurance, or do you want to just keep pursuing at any cost? How should we look at it? Neither we will give up on insurance, nor we will pursue this at any cost. There are a set of strategies that we had in mind when we first started out. It did not work as well. We are adapting and pivoting, and we are keeping the amount of money spent as low as possibly we can. There was an amount of money we had committed towards spending on the clinics, which have proven themselves to be an extremely valuable resource for all our patients and for doctors to run their evening OPDs. That will continue, because its value to the larger network is proven. With insurance as well, this is a brand new business started by a company that has no idea how to sell insurance. It takes time. We will spend in moderate amounts to keep our customers very happy, to make sure that the claims don't go above and beyond what we had estimated for, and to cut the costs in insurance distribution, which right now the IRDAI chairman has a very high priority for making sure that we can break even at a much smaller book than what is the peer set. Prithvi, just to s orry. Go ahead. Yeah, just to correct, the numbers are not worsened. The numbers, the loss between the last quarter was around INR 33 crores in the two businesses put together, and this quarter, the loss is INR 20 crores. The losses have come down, actually. Even for Cayman, if you look at the insurance losses, the number is down from $3.5 million to $1.4 million. Actually, the trend is lower. I'll get back on queue fro international business cost. Thanks, Prithvi. Thank you. Next question is from Sajal Kapoor. Sajal, please introduce your company name and go ahead with your question, please. Yeah. Hi, team. Thank you for taking my questions. This is Sajal Kapoor from Antifragile Thinking. I have three questions, but I am happy to ask two and then rejoin the queue. First is regarding the AI and organizational learning, if I may. I know Narayana has been deploying AI across clinical and operational workflows for some time now. Question is, where did AI initially create problems? False confidence or unintended consequences. What have you, as the team, learned from those failures that now shapes how you deploy AI across the network? Thank you. Hi, Sajal. It is Viren. The AI use cases that you may be referring to is maybe what other healthcare organizations have been adopting. For us, our AI use cases are much more measured and more grounded in practical application. AI in radiology, it predates LLMs. This is a technology that is fairly proven and is not prone towards making mistakes. AI-based interpretations are gold standard the world over. We have been using it with great success. The rest of the applications we are using are using, say, voice bots or just simple data interpretations from the information that we have to generate, say, for example, a set of patients with out-of-range biomarkers or the OT list and trying to create a more efficient way to populate it. These will not cause any errors in the overall decision-making. That is a tomorrow problem. We're looking at the lowest hanging fruit that we can use AI to make things slightly more efficient today. That's helpful. Thank you for that, Viren. Second is, for maybe you, Ms. Sandhya, it's related to the ROCE, regarding the U.K. and the insurance. As we know, both the U.K. and insurance businesses are at different stages of development. Over what time horizon should investors evaluate the ROCE of these ventures, and what milestones should we track along the way to distinguish a temporary investment phase from a structurally attractive return profile? Thank you. Sure. For the U.K. business, I think a five to seven-year time horizon is a good way of looking at the business because we have just entered, and there is a journey that we have to achieve on that business. As far as the insurance business is concerned, we are not running a standalone health insurance company. It's part of the continuum of care. It is a way of financing healthcare for us. There's no standalone measurement of ROCE for insurance, so I'm not sure if that's how we would look at it internally or we would measure ourselves. We want to get to a point where we are not burning cash in insurance, and we are able to deliver the care that we want to deliver to our customers while taking care of the financing supported by the insurance arm. That's really where we have to get to. Of course, there's a journey, and we're going through different models to get there. I don't think in the longer run we would want to report on ROCE for the insurance business. Yeah, no, absolutely, Sandhya. Just to clarify, I wasn't looking for segmental reporting of ROCE anyway at a console level. At a group level, currently, the ROCE is not giving us a true reflection. Yes, I completely agree with the strategy around insurance and what you suggest. At some point in future, we should get a higher level of ROCE at an aggregate group level. That's precisely the question. Sure. Our group ROCE is hovering around 15%-16% at the moment, but that's also because we've just come off a huge CapEx in Cayman. We have done this huge investment in U.K. and Sandhya, it's not very clear at your end. Could you please move closer to the mic? Is it better now? Yeah. At a group level, our ROCE is between 15%-16%. That is because we have come off a huge investment in Cayman, as well as the investment we have made in U.K., and India entering a CapEx phase. But the dilution which is coming purely because of U.K. is about 4%-5%. That we will want to bridge over the next five years or so. As India also comes off the CapEx cycle, I think that is when the full effect of all the measures will show on the ROCE. That is helpful. Thank you so much. I will rejoin the queue. Thank you. Thank you. Next question is from Shruti Mimani. Shruti, kindly introduce your company name and go ahead with the question, please. Hi, thanks for letting me ask the question. I am from Clearstone Family Office. Just wanted to check on India. We have seen growth in revenues as well as margins have been better on the back of cost efficiencies and payer and case mix. But just wanted to check on the IP footfall, which has been around 60,000 for a few quarters. Just what is happening there, and how do we see that going forward, or how that impacts the drivers overall? Ask Mr. Venkatesh to take this. Yeah. If you look at the numbers, the primary drivers in our Bengaluru cluster and Kolkata cluster have done reasonably well in terms of footfall, which is the main area from where we generate the major part of the revenues. When it comes to Bengaluru clusters, we are growing steadily quarter on quarter. On the eastern cluster, there was a little bit of a change in terms of how the current existing scheme, because of change in the government in Bengal, there was a little bit of a porting issue in terms of scheme, certain categories of scheme patients, which should get settled down in the coming quarter, from where again, these IP footfalls will gradually grow up. It is just a matter of time when in Q3, we will have much more stronger growth in terms of footfalls in the eastern region. When it comes to smaller units in the Karnataka cluster, there was a little bit of a workaround in terms of rationalizing our payer mix, which we continue to strive on, to ensure we have reasonable volumes and good realization, which is again a journey, and we expect these volumes to eventually pick up in the coming quarters. All in all, we have done in the last two quarters, we have seen good growth both in the outpatient and inpatient volumes, which was not there as such if you look at a couple of quarters back. With the strong base and good funnels which have been created over the last two quarters across all the regions, we foresee good footfalls to come up both from inpatient side and outpatient side in Q3 and Q4. Got it. That will be in addition to the upcoming beds that we are anyways having in two years' time. That is right. Right. And just- One small data point, Shruti, I wanted to add. Our IP footfalls have actually grown 6% quarter-on-quarter and almost 4% year-on-year. So, we have been seeing IP growth on a continued basis quarter. That is just from a clarity point of view, though Mr. Venkatesh answered it in detail. Thank you. And just- On the back of no bed addition. Yes, correct. On international patients, I have seen this quarter we called out that there was increase in the payer mix also because of that. What happened there? I just wanted to understand how are we thinking about international in the mix in India? Yeah. This is not an area we are specifically looking out or targeting. This growth is basically purely organic. It is coming mainly from Bangladesh, because of that brand and loyalty which we have gained in that area over the last two and a half decades. Over and above that, it has been supported by better travel conditions and visa. The reason why the international patient footfalls and the revenues have come down 6%-7% of hospital revenue, but that is not something which we are specifically targeting. When it comes to the volume, it is subject to a lot of these macro issues which can fluctuate quarter on quarter. There cannot be any specific explanation as to why the revenues are increased, and it is subject to more and more fluctuations as things keep varying over quarters. But on the whole, our focus has been more on domestic, and we have done well in terms of footfalls in domestic, while the international on organic basis has complemented it. Okay. And just maybe- Shruti, I request you to rejoin the queue, please, as we have participants waiting. Thank you. Next question is from Aryan Jain. Aryan, kindly introduce your company name and go ahead with your question, please. Kindly unmute your microphone. Yes. Hi, am I audible? Yes. Hi, thank you. This is Aryan from Groww Mutual Fund. So, I have a couple of bookkeeping questions. So sir, what would be our occupancy ballpark in the India hospital business, and what would be the optimum level we can take it to from here? Aryan, occupancy is not something that we track. Typically, it is 60%-65%, but we follow the throughput model because occupancy usually is calculated on midnight beds. When you are doing more and more efficient turnaround on care, that gets distorted if you only look at occupancy. One good way to look at our numbers is that if you could see even at any capacity, our occupancy has also not increased in the past several quarters. We have been hovering at 60%-65% in the way it is traditionally calculated. You could see that leverage impact of higher throughput going through the facilities, both in terms of the revenue uplift that we have seen, the higher volumes that we are able to process, the cost leverage that we have earned, which allows us to pass that benefit into margins. It is coming through because we focus on throughput and not on occupancy. Okay, understood. My second question would be, would you be able to break down the $ 250 million of the insurance and clinic business? Okay. INR 230, I think INR 23 crores, roughly half-half. Insurance is slightly higher. Insurance will be slightly around INR 14 crore, and clinics will be around INR 8 crore. Okay, understood. Insurance for the last quarter was INR 20 crore, which has now become INR 14 crore. And clinics from INR 13 crore to INR 7 crore. Okay. Understood. And just one last one. Aryan, I request you to rejoin the queue, please. Thank you. Just one call out, Aryan. We are merging the integrated care. We are demerging the clinic business into hospital. Therefore, I think going forward, it will be only useful to look at the insurance number. The clinic model is proven successful and merged into the numbers we will report out for the hospital going forward. For the past several quarters, we have given both the numbers, so I think you will have a view of the trajectory already. Yeah, back to you. Thank you. Next question is from Jaspreet Singh. Kindly introduce your company name and go ahead with your question, please. Thank you for the opportunity. I am an individual investor. So, sir, my first question is, what evidence today we have that operating or having integrated care insurance gives us an advantage compared to other standalone operating hospitals? That is my first question. Today, when a patient walks into our clinic, they may come in for any minor procedure, come to pick up some medicine, and they will leave. But in that time, we have collected sufficient data about them, about their illness, and they have entered our medical information. Every patient benefits from timely health. Sorry, you are sounding muffled, sir. Can you just repeat, please? Sorry. The advantage of an integrated care model is one in which you do not treat every patient interaction as a one-off. A patient walking into a clinic, a patient coming for a scan, or a patient coming for a procedure is not just one interaction or one transaction for us. We build comprehensive health profiles of all our patients, and we are able to better serve them with annual checkups, with diagnostic scans, with blood tests, with vaccine camps. This increases the number of interactions our customers will have with us over a lifetime. It is superior, we feel, because we are able to do more for our patient rather than just doing surgeries or just doing walk-in clinic appointments. The insurance is part of how all of this gets paid for. Our belief is that insurance in India will also evolve towards one where it is just paying for some amount of healthcare expenses to a plan that combines preventative care, wellness, outpatient benefits, as well as inpatient hospitalization in a closed network. Jaspreet? Sir, my second question is, with the U.K. acquisition entry and the foreign integrated care insurance and expansion coming in India, what is Narayana trying to become going forward? Anesh, are you there? It is on mute, Viren. I think the question was, what is NH trying to become with all these activities happening in India and everywhere else? With our U.K. expansion and those things. Do you want to take that question now? I think one way to think about it is that we have developed a set of capabilities in India with running highly efficient hospitals, and there is a natural rate of growth that we have experienced within our existing network. We are adding more beds, we are adding more facilities in the hospitals over here, but our ambition is a lot more than that. And we saw in the U.K. and in the Caribbean an opportunity to expand our skill set and capabilities into a market where, for the same amount of work, the realization is much, much larger than what is available in India. The thing we are trying to build is a very large integrated healthcare system across at least two or three geographies so that we are not exposed to any one country's, let us say, vagaries of whether it is currency depreciation or any sort of macroeconomic risk, or be able to cater to different patient profiles across countries and leverage cross-country learnings from one country and then apply it to another. So there are definite synergies that we have seen with running a very large GCC for all our international operations out of our corporate office in Bangalore, and there are cost savings that have been enacted across not just all our hospitals here, but also across the hospitals we run in the U.K. and Cayman. Thank you. Next question is from Vinay Nadkarni. Vinay, kindly introduce your company name and go ahead with your question, please. Yeah. This is Vinay Nadkarni from Hathway Investments. First of all, thanks, Sandhya ma'am, for conducting this within 30 days of the end of the quarter. I appreciate the efforts put in. Now, on the U.K. business, I just wanted to have, is it going as per what you had anticipated when you took it over? I'm just asking from the point of view of dropping revenues quarter-on-quarter and the EBITDA after IFRS. Hi, Vinay. Thanks for your question. Before answering, Sandhya told me to give you an extra question because you complimented her. Anyway, I know the team has put in a lot of effort because our operations are not only in India, so it's consolidating across the geography. So they've really put in a good effort, and a lot of systems have been improved to get this at the pace it is happening right now. Back to your question, Vinay. I think we are on a good track and very confident with our synergies and cost efficiencies that we planned during the acquisition. So things like implementing software, automation, setting up the GCC, which is just rolled out a few days ago for patient-facing communication and is working ahead of plan. With those things we have direct influence over, we are on plan, in some regards slightly ahead of plan, and confident and happy. There are certain aspects which, given it's a new market, A, we are still learning about the nuances, and B, a little out of our control with regards to NHS revenue commissioning and external patient acquisition. So those, as you can see in the results as well, there is some volatility and unexpected small dip that we are seeing. We are still wrapping our hands around that and hope to get the revenue trajectory back to where it should be just a few quarters ago. But when it does, we will see the benefit of our cost efficiencies and the operational changes we've already implemented, even though it's early days. It's just that today it's getting masked out and not flowing into earnings because of the revenue dip on a very low margin base to begin with, from where we started. Yeah. Thanks a lot. I am sure, like Cayman, you would turn that place around as well. My other question is on, you are now so dependent on your IT systems. With the cybersecurity risks really climbing up, how assured are you of not impacting the businesses if, by any chance, there is any cybersecurity risk coming across in your business? Yeah, it is a huge concern for us. The number of attacks that have been happening recently, and healthcare organizations have a especially large surface area. There was, for example, very recently a PHP vulnerability that we were able to patch up very quickly. But in the end, this is never-ending, and it is something you just have to spend a lot of time and effort towards. The opposite cannot be true. The wrong response to AI-powered attacks on critical infrastructure, the wrong response is to say, "Okay, let's go back to pen and paper." We cannot go back to those days. We have seen so much efficiency gain. Our patients are able to go much faster. Our nurses are less hassled at work. There is so much information flowing in our systems that going back to pen and paper is impossible for us. We just need to spend more money and build better systems, and obviously hope and pray that bad things don't happen that are well beyond our control. But this is just a reality of any interconnected system these days. Yeah. Lastly- Thank you. Vinay, I request you to rejoin. Okay. Thank you. Thank you. Next question is from Damayanti Kerai. Kindly introduce your company name and go ahead with your question, please. Yeah. Hi. Thank you for the opportunity. This is Damayanti from HSBC Securities and Capital Markets Limited. My first question is to Sandhya. We have been discussing you are setting up GCCs to manage the international business. Any impact we should broadly assume due to the currency volatility, say INR against USD or GBP, in your reported console numbers? Not linked to the GCC per se, because it is still a small number in the overall scheme of things of the company. But you could see that, when you look at our console numbers in the OCI, you can see that there is a significant positive movement in the OCI coming in because of currency conversion. There is some benefit of the currency because of all the work that we are doing from India for the international markets. But I don't think you will need to factor something specific on that in the way you are forecasting our business numbers. Sure. Just to understand, say, operations in Cayman or operations in U.K., costs are in local currency terms, right? Yes. Revenue, cost, everything is in local currency terms. Even when we are billed from India, we bill in the corresponding currency as per the transfer pricing guidelines of India. Therefore, it is kind of BAU, and you don't have to factor anything exceptional for that. Sure. My second question is on India insurance business. As we have been discussing, it is still in a build-out phase. However, I just wanted to understand the team's thought process after recent regulatory development in the insurance sector. Like, after the announcement by the IRDAI, was there any change in the way you want to progress in your journey for the insurance, compared to when it started some time back? Yeah. No change really, but I will ask Ravi to elaborate. Sure. The headline, Damayanti, as Viren just said, is no real change at the moment. Overall, we do welcome the IRDAI's regulations. I think any move that adds value for the customer is welcome for us. We are the first hospital group to directly promote a health insurer. We agree that, for example, hospitals are a good channel to offer health insurance to customers, which is one of the distribution channels proposed. It can make the process simpler for the customer, reduce cost. As a hospital, we also have greater understanding of the customer's health, not just at time of sale, but over their lifetime, because these are lifelong policies, and that is important. This can therefore help us manage risk better and evaluate the portfolio better and bring on some of the synergies that Viren was referring to earlier. As I mentioned earlier, we are focusing on growing our retail business with sales to hospital customers. We expect to remain focused on the same. Other parts of this, whether we should become an insurance distribution entity, et cetera, is too soon to say. The final guidelines are going to come out at some point. Once they come out, I think we will take a call on it. Based on what we are seeing at the moment, we think that the regulations will actually support our current strategy, and we welcome it in general. We do not, at this point, anticipate any significant changes to our strategy. Sure. So, Ravi, right now, all the insurance schemes are sold inside the hospitals only, right? Hospitals or clinic to the patients who are coming in? We sell to employers and employee groups. We also sell on a retail basis. It's largely to people that we have a relationship with at NH. Not exclusively as such, but largely. And we feel that will continue. Sure. Okay. Thank you. Thank you. Next question is from Prithvi Raj. Kindly introduce your company name and go ahead with your question, please. Yeah, hi. This is from Unifi Capital. I have two questions on international business. First is on U.K. Anesh, is it fair to assume that your topmost priorities for U.K. is to increase revenue, as well as margins? What are the challenges that you have faced after you acquired this company, which happened a year back? Could you also elaborate the actions that you have taken, especially on the revenue front? I mean, in the past, you have spoken a lot on the cost front, but especially on the revenue front, what are the initiatives that you have taken, and why is it not translating? Sure. So, Prithvi, you are right. Our initial and topmost priority is to improve earnings, which will come from a combination of both reducing our costs and growing revenue, both of which, compared to peers locally, are disproportionately low from a very low base. As you said, we have spoken about what we are doing on the cost side. As far as revenue is concerned, there are three major channels: NHS, private insurance, and self-pay. So, public and private pay. NHS is a once-in-a-year contracting relationship. It gets reset in March. Their financial year starts from April 1st every year, so it gets reset every March. So that we will see any change only effective April 1st the following year. Our goal really is to grow the non-NHS sources of revenue. This requires a lot of interactions and transactional changes in the business, because a lot of these hospitals were not even empaneled by the insurance companies. A lot of our doctors are not recognized by the insurance companies. Because the business was run predominantly this way for decades. A lot of what we have done is setting up the building blocks to be able to open up those private channels. It does take time. It's a very, very heavily regulated market. These processes take a lot of time. Something that would take a few weeks for us in India takes months here, for various other reasons. We have made progress on the building blocks, but as you rightly identified, it's not yet translating into additional revenue into the business. But we hope that will change fairly soon. On the cost side, we have seen good changes. We've made a lot of changes in our consumables and supply chain strategy. Those results are active in the business. As Sandhya and the colleagues pointed out, we've set up our GCC that's growing quite well. That is another cost efficiency. We are making good progress with getting our digital platform certified with the regulators and compliant. We think that's about four to five months away from getting all certifications, and then we'll start the implementation of Athma, which will be a significant change forward. Again, on the cost side, I think things are on track. On the revenue side, there is a learning curve. It is a new market for us. There are some initial building block steps that we are working through, but it will take some time for us to get a better grip of how to acquire private patients and start that. We're seeing early results, but at the end, the NHS did slow down contracting for all providers in the market. This is temporary. The patients are not going to go anywhere. They're just piling up more. We were confident of that being reversed soon, but the private patients will require some more homework and some more efforts to unlock. Just a quick follow-up. If I have to ask for some time period, will it take a year or two years for you to at least get back to a decent level of revenue pool? It depends what decent is, Prithvi. But no, I don't think it's going to take us. See, the NHS, like I said, there is seasonality to it. There are both political compulsions to contracting as well as the practical realities of patient waiting lists and the activity plans being reset once a year. So I think that is a little more predictable. With the private sources, we are seeing already small steps flowing in, and the percentage of our business from private sources is increasing, which is what we want to see. But as long as we're so heavily dependent on NHS, any small move forward in private will be completely undone and more by even a tiny deterioration in NHS, because it's such a big constituent of the revenue pool. But we'll have a much better idea over the next few quarters, and we will ourselves get a better sense about predicting how long these things will take in this market. Just one final question from my side on your Cayman Islands business. Obviously, hospitals continues to do exceptionally well. On the insurance piece, this quarter, there has been a significant reduction in the losses. As per the last con call, I think in the month of January, there will be further reset of the insurance contracts. Once that happens, starting from Q4, should we expect a further significant reduction in the insurance losses? Shall we look at H2 FY 2028 for the break-even? Sure. So, no, because if you look at the quarterly trend of insurance losses, approximately, I could be a little wrong, it was two quarters ago, $5.4 million. The previous quarter, $3.7 million. This quarter, $1.7 million is more accurate and genuine. The $3.7 million- $1.1 million is a huge reduction. Obviously, we are seeing significant reductions in the insurance losses as we are repricing and purging poorly performing accounts, improving processes, et cetera. But the $1.1 million does have some one-off because it includes the summer month in the school holidays month. When it's school holidays in Cayman, people are going to defer elective care. They'll be on holidays, travel with family, et cetera. So there is some one-off in that. But directionally, we are seeing our losses come down very rapidly, which is our stated intention. We said that's the direction we're taking. We're not focusing on growth in insurance until we bring the losses down. It is going according to plan, actually better than plan. We're very happy with the trajectory there. You are right, January prices will get reset, but that's for a smaller cohort. The big reset will happen in the next one, which is July of 2027. Even before that, we'll see negligible losses. From July onwards, we will exit most all unprofitable books. Thank you. Thank you. That's all from my side. Next question is from Devang Patel. Devang, kindly introduce yourself and go ahead with your question, please. Devang, kindly unmute. Hi, this is Devang from Sameeksha Capital. My question was on the India insurance business. You earlier mentioned we were trying to build up our SME book. My question was that, generally, we understand corporate is the more competitive part of the insurance business. What is our current mix of retail versus corporate, and what is the ideal target mix for us? I can kind of take that. I mean, see, retail, when these books start to build, group business will always be a larger proportion, just because it's larger and retail business takes a lot of time to build. I would say that I would look at it a couple of ways. I do not think there is an ideal proportion. What matters is at a portfolio level, what are the losses and loss ratios? Are they in control and in line with what we want? Are we able to provide the services to those customers within our network? I think these are the more important things that we look at as opposed to just a random mix of group versus retail. Initially, of course, it is going to be more group-heavy, and that will moderate out over a period of time. Devang, does that answer your question? Yes. My second question was on ALOS. You mentioned earlier we are trying to improve throughput, but we are seeing ALOS between 4.3- 4.5 days. For our given case mix, what kind of improvement should one look forward to in the ALOS? Yeah, like I mentioned, even the last quarter, over the next four to six quarters, we want to come closer towards four or 4.1, because we have a higher mix of certain very high ALOS procedures, maybe the transplants, the bone marrow transplants, and certain very high-end medical admission patients. The very high acuity medical admission patients. These are some of the things which actually puts us at a number which is like 4.3 and things like that. But our endeavor is to reduce wherever we have the procedure-driven patients to get that down as much as possible so that we will be closer towards 4.1. Thank you. Move over. Thank you. Next question is from Shruti Mimani. Shruti, kindly introduce yourself and go ahead with your question, please. Hi, Shruti again from Clearstone. Just on Cayman Hospital space, I mean, it has been excellent growth and margins are north of 45%. Partly wanted to understand how have we been able to do this to get to this scale? Naturally, the second piece is that given it is a small island, limited population, where can this max out, or is there a cap to the revenue growth over time at some point? Sure. Shruti, so the hospital is a several-year-long story. We have seen this margin profile for quite some time. Having said that, given that, as you identified, it is a small island, you are physically constrained by the size of the market. That is where the insurance play, the integrated care play, that is why it was started in Cayman. The current growth you are seeing is a result of the integrated care strategy working out, as well as us focusing on reducing costs holistically, not just at the hospital level, but also for the employers at an insurance, for the entire system cost, essentially, in that market. The new hospital did add a few new service lines. It is now about a year and a half since we started that. But we have always maintained, the best days of growth for Cayman are behind it. Our size is a limiting factor, is an anchor on our growth in that small island. We continue to see good growth from non-Cayman sources, that is international patients. But for the Cayman story, the best days of growth are behind. We now are focusing on securing the patient base we have, being a more comprehensive provider for the patient's need, and executing on the integrated care strategy, which will allow us to have a non-volatile, sort of safe patient and locked-in patient relationship for many decades to come. Okay. Where are these international patients coming to from Cayman, if I may? Other markets in the Caribbean. We are the only tertiary healthcare provider in the English-speaking Caribbean, and we are the preeminent healthcare brand in that region. All the other islands and the nearby Latin American countries as well, but principally the other Caribbean islands. Right. Is there a run rate number that we have for what we are thinking about Cayman Islands Hospitals business? I am sorry, what do you mean by run rate number? As in the max revenue at some point that we think. No, that's tough to say. We don't talk about that. Just maybe one or two- Shruti, I request you to rejoin the queue, please, as we have participants waiting. Thank you. Next question is from Sajal Kapoor. Kindly introduce your company name and go ahead with the question, please. Yeah. Hi, this is Sajal again from Antifragile Thinking. Thank you for taking my question again. Just one more for you, Sandhya, if I may, on cash flow and working capital this time. We know that the U.K. business currently carries approximately INR 1,700 crore of net debt. While the EBITDA margin has declined from, I think, 8.8% to closer to 7% sequentially. More broadly, how are operating cash flow and working capital evolving across the group at a console level, particularly the receivables and the cash conversion? I will explain the context where I am coming from. Historically, if you go back last 10 years since the IPO, we have converted roughly 93% of EBITDA into operating cash flow, of course, after working capital adjustments. However, in H1, this appears to have been closer to 88%. And so, what explains the shortfall and how much is timing related. Should we expect cash conversion to return to its historical levels by the time we exit this fiscal, or are we going to be doing less than 93% over the next four or five years until U.K. operations finally become normalized? Thank you. Sure. The cash conversion for U.K. is not a problem. In fact, NHS is a very good payer, pays on time, also in advance partially. So the cash conversion is not a problem for the U.K. The reason you have seen a slightly lesser cash conversion in H1 is coming from India and Cayman. There has been a slight delay in both India and Cayman in terms of collections. Typically, Q2 is a good collection quarter, especially with the government payers, but there has been some slowness that we have seen there. But we have also seen slight slowness with the insurance payers as well, similarly in Cayman. So typically, as you look at on a full-year basis, we kind of normalize. In few quarters, the collection goes little slow, but then we catch up in the next month or a few months, and it normalizes. That is what we are expecting. Our overall cash conversion cycle is not going to be negatively affected because of the U.K. business. All right. No, that is helpful. Thank you. That is all. Thank you. Thank you. Next question is from Rajit Aggarwal. Rajit, kindly introduce your company name and go ahead with the question, please. Hi, I am Rajit from Nilgiri Advisors. Just a couple of questions on the U.K. business. If you can provide a few more details on the cost side that led to the decline in EBITDA margins, given that there is a comment also which says, the margins reflect near-term separation-related costs. So what was the extent of this impact and how long is this supposed to last? The second question is on the payer mix. When we started, it was around 7% of revenue. Is it still the same or is it a couple of or a few basis points above or lower than 7%? Sure. Rajit, to your first question, when we acquired the business, the company we acquired was a division of a larger group that ran three business divisions. We only acquired the hospitals. Therefore, all our external vendors, for example, Microsoft or any and every kind of vendor, we had to novate agreements and have essentially fresh agreements with these people. Naturally, as you can expect, there are certain diseconomies of scale when we went from a larger group to a smaller company, and it was also an opportunity for them to raise prices. That was what we mean by separation costs, where a lot of the day-to-day costs of the business, once we separated out the company, were higher for us. Now, there is no way to quantify this prior to the acquisition, but we do know what those costs are now, and we are working actively to mitigate that. To the second part of your question on the cost changes we are making are definitely, some of them are flowing through already. But because of the slight revenue decline that we are seeing quarter-on-quarter, we are not seeing any cost efforts flowing into earnings yet. But when the revenue picks back up, that is when we expect these things to start being more visible. Also on an annual basis, these are initiatives that have just started flowing through this month or a few weeks ago or one or two months ago. The annualized effect will flow in as we go. We are more comfortable around our execution pace on the cost synergies. We have some homework to do and work to do on the revenue front. To the last part of your question around the private, that is the non-NHS, we are seeing an increase. We are not yet disclosing exactly what that percentage change is, but we are seeing small steps towards growing the non-NHS books of business. Right. Just as a quick follow-up, would you be able to share some top-line number where these costs or you start to see the EBITDA benefits? Would it be 67% or 70% or something like that? No, I mean, in a very simple level, we are comparing it to where it was. So even if you go one or two quarters back, which is just 3 million, 4 million additional revenue for the quarter, we will start seeing these benefits flow in. But more significantly, once with time, because these are changes we have made very recently, so the effect of them will flow in over a few quarters. All right. Thank you. Thank you. Next question is from Vinay Nadkarni. Vinay, kindly let us know your company name and go ahead with your question, please. Yeah. Vinay again from Hathway Investments. Just one question. The doctors and nurses cost has gone down to 26% this quarter. Is it just because of the Q2 effect or is this a structural change that we are looking at? Venkatesh, you want to take that? Yeah. Basically, it largely reflects our operating leverage. If you look at quarter- on- quarter, our revenues have gone up by 9%, and it has gone up mostly on a largely fixed clinical cost base and the nursing cost base. That is the reason why, because of this leverage, we are able to get these costs much lower than what it was in the previous quarter. So that's the reason why around 1.8% has come down. We continue to work on the costs and the disciplines around the cost while we keep growing the volumes and revenues, which will keep giving more and more benefits in the coming quarters. All in all, the summary of it is because of the operating leverage which we've gained because of the revenue growth quarter- on- quarter, with the clinical cost base and the nursing cost base being largely on the fixed nature. So going forward, should we factor in around 26%-27%, or should we not? We do not tie down margins, but you do know that quarters are seasonal in healthcare. Q2 is a higher margin quarter. Q3 is slightly muted. So you should go with the trend that you've seen in healthcare and not just take the current base as a And there are also a lot of headwinds and tailwinds that keep operating. So, you should follow the trend of the industry when you're forecasting. Okay. Thank you very much. Thank you. Next question is from Aryan Jain. Aryan, kindly introduce your company name and go ahead with your question, please. Yeah. Hi. Thank you for the follow-up. I'm Aryan from Groww Mutual Fund. My question was on Cayman. This quarter, our ARPOB saw 13% growth. Just wanted to understand, what drove this growth? Yeah. Aryan, in Cayman, like we've said before as well, any quarter-on-quarter changes in ARPOB or RPOP or ALOS, it wouldn't be informative. Those are not the metrics to look at. There is a lot of seasonal variation. In relative terms, it is still a low-volume base that we're talking about because it's a small island. Those will not I wouldn't be able to identify anything that would do that. These things would one large patient discharge would distort that meaningfully. I think the trend to follow would be volumes, revenue. We disclose discharge volumes, outpatient volumes, revenue, obviously, you can see over several quarters. It's both insurance and hospital services business in Cayman. Any quarter-on-quarter measure would be very, very hard to justify. Okay. Understood. Fair enough. One last question. How do we generally manage attrition in our India hospital business on doctor level? We don't see too much of attritions at the senior level. We hardly have much of attritions, but we do have a strong program of mentoring, and a lot of people do come to us as primary associations at the doctor levels. We have a very strong DNB program across most specialties, especially the tertiary and quaternary specialties. We have close to around 900 postgraduates in training across the entire network. We do have a strong mentorship and people joining us and progressing through the one level to another level. We do have that reasonably covered. There might be some odd challenges here and there in tier two and tier three cities, but this is generally not something that we worry too much about, at least senior level. Nursing has this usual attritions at every level, but we are fairly stable. We do have nursing schools and colleges. We have more than 3,000 nursing students in training. They have a very strong training program within the existing hospital network. Also with the use of this technology, and especially the NAMAH app and the Athma, their non-clinical workload has come down significantly. It has come down by more than 50%, 60%. That makes that burnout and other things far, far lower, and they are much more amenable to having a clinical care. So we generally don't have too much of a problem as far as this level. The attritions do happen over a period of time because of various other things. They want to go back to the home place or for better opportunities and things like that. But in general, we are reasonably covered. Okay. Thank you for answering my questions. All the best. Thank you. Ladies and gentlemen, to ask any further questions, you may use the raise hand option. We have a follow-up question from Vinay Nadkarni. Please introduce and go ahead. Yes. Vinay Nadkarni from Hathway. Just add one question before you disable the chat. Just wanted to know, since we are adding almost 635 beds in FY 2028, when would you be able to give us rough quarterly additions for the next year? I don't know whether we should look at it at such a short measure for bed additions. But as and when our facilities are going to commission, we will share that guidance one quarter advance. One quarter advance. Okay. Thank you. Thank you. Ladies and gentlemen, that was the last question for today. We thank you, everyone, for joining the call and for your continued interest in Narayana Health. We appreciate your participation and support. Should you have any further queries, please feel free to reach out to the investor relations team. Have a good day, everyone.