Ladies and gentlemen, good day and welcome to the Rainbow Children's Medicare Ltd Q2 FY26 Earnings Conference Call hosted by IIFL Services Ltd. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. I now hand the conference over to Mr. Rahul Jeewani. Thank you, and over to you, sir. Hi, good morning, everyone. This is Rahul from IIFL Capital. I welcome you all to the Second Quarter Earnings Conference Call of Rainbow Hospitals being hosted by IIFL. From Rainbow, we have with us today Dr. Ramesh Kancharla, Chairman and Managing Director, Mr. Vikas Maheshwari, Group CFO, and Mr. Saurabh Bhandari, Head of Investor Relations. Over to you, sir, for your opening comments. Thank you, Rahul. Good morning, everyone, and thank you for joining us for Rainbow Children's Medicare Ltd Earnings Call for the Q2 FY26 and first half of the year. I would like to start with a few key strategic and operational updates for the quarter. During the quarter, our operational performance showed some softness, largely influenced by low incidence of seasonal illnesses, resulting in lower patient volumes in general pediatrics and also pediatric intensive care. In addition, early festive seasons like Ganesh Chaturthi and also Dussehra compressed the typical peak period for admissions. These factors collectively led to lower occupancy levels and a transient impact on the financial performance. However, the underlying business fundamentals remained strong, with continued growth in specialty services, disciplined cost management, and steady progress in operational efficiency. These challenges are temporary, and we expect normalization in upcoming quarters. I'm pleased to inform you that the acquisition of Prashanthi Hospital in Warangal, Telangana State, and the Pratiksha Hospital in Guwahati made Rainbow a strategic entry into the Northeast region. Both hospitals have now been fully integrated into the Rainbow network, and initial traction has been encouraging and in line with our expectations. Further, we commissioned our new hospital in Rajahmundry of 100 beds in East Godavari District of Andhra Pradesh. Having the regional hubs in Visakhapatnam, Rajahmundry, and Vijayawada would cover most of the affluent parts of Andhra Pradesh. We are now gearing up for the upcoming commencement of two hospitals in Bangalore, Electronic City, and the Hennur branches, further expanding our penetration in this key metropolitan city. With this addition, Rainbow Children's Medicare Ltd will conclude its current high-bed addition, having added 780 beds over the past two years' time through expansion as well as acquisitions. To dwell on the financials for Q2 FY2026, the revenue registered a growth of 6.5%, amounting to INR 445 crores. EBITDA increased by 1% to INR 149 crores, while the PAC was degrown by 4%, registering INR 76 crores. The overall occupancy rate for the quarter was 52%. I would like to share the project update. The Electronic City in Bangalore city of 90 beds is fully ready for clinical commencement, waiting for the government approvals. The Hennur facility of 60 beds is in the final stages of conclusion and is expected to commence operations by January 2026. The regional hub hospital at Coimbatore is in the project phase now and is expected to be ready by the end of FY2027. In Gurugram, the construction work was progressing rapidly at both Sector 44 and Sector 56, but the work has been stalled by the government temporarily because of dangerously high pollution in Delhi NCR. We have signed up for a 150-bed hospital in Pune on Bangalore Highway and is currently in design phase while waiting for the permissions. I'm pleased to announce the appointment of Mr. Abrara li Dalal as Group Chief Executive Officer for Rainbow Children's Medicare Ltd, effective from January 20th of 2026. This appointment marks an important milestone as we fortify the leadership team to drive the next phase of growth and strengthening our business operations. On international business, though some of the issues regarding the medical visas persisting, we have seen some progress on the international business front with a monthly revenue tracking INR 3 crore. We see the business returning to normalcy in the coming quarters. Clinically, we continue to do very well in our pediatric specialties and cortic care with improved case mix and the revenue contributions. I would like to share one of our remarkable clinical outcomes during this quarter. A 27-year-old expectant mother with an underlying complex cyanotic congenital heart disease, having a single ventricle, underwent shunt surgery called the Glenn procedure to improve her oxygenation and quality of life during early childhood. Though the definitive procedure was planned, the family never turned up to the hospital because of decent quality of life. She got married and planned for pregnancy. Unfortunately, she lost three pregnancies in her sixth and seventh month of pregnancies because of intrauterine deaths of the babies. Congenital cardiac conditions, which are missed, diagnosed, and neglected, would end up causing significant problems in the early adult and adulthood hours. This group of conditions is usually called as GUTS, which is a grown-up with congenital heart diseases. These conditions are best dealt by the pediatric cardiologists along with the cardiac surgeons. This lady has come to us, to Rainbow Children's Hospital and Cardiac Institute, with a hope to save her baby from a current pregnancy. During the evaluation, she was found to have oxygen saturations of around 75. This clearly indicates that the continuation of the pregnancy may result in intrauterine death of the baby because of poor oxygen saturation. Scientifically, this could have happened to her in the previous pregnancies, resulting in intrauterine deaths. Since any surgical options carry high risk of maternal and fetal mortality, our cardiac and perinatal teams had extensive deliberations and finally decided to rescue the baby through non-invasive procedures. The pediatric cardiac team planned an innovative procedure, first of its kind, through catheterization, tracing a strand from the single ventricle through the pulmonary wall, which is atretic and perhaps malformed, into the pulmonary artery. This was the plan. This plan was executed meticulously, and post-procedure, the oxygen saturation has gone up from 75% to 94%. The mother's cardiac assessment post-procedure was extremely satisfactory, and the fetal viability was good. This pregnancy was followed up very carefully by the cardiac as well as the perinatal teams, and successfully delivered a full-term healthy baby. I was so excited and went down to the teams to celebrate the success. Looking ahead for the second half of FY2026, ensure the timely commission of our two spoke units in Bangalore, focus on strengthening business operations, delivering sustainable growth across its network, strengthening our sales and marketing function across a few markets to deliver sustainable growth. Let me take this opportunity to thank our medical teams and also leadership teams for their dedication and hard work. We are grateful to our stakeholders for their continued trust in building this incredible healthcare for children and perinatal services. With that, I now hand over the mic to our Group CFO, Mr. Vikas Maheshwari, to take you through the financial details for the quarter. Thank you. Thank you, sir. A very good morning to all of you, and thank you for attending this investors' conference. I'm pleased to brief you on the financial performance and the key developments of Rainbow Children's Medicare for the second quarter and the first half of 2025-2026. Our operating revenue for the quarter stood at INR 445 crores, reflecting a growth of 6.5% when compared to the corresponding quarter of the previous financial year. For H1, our revenue stood at INR 798 crores, reflecting a growth of 6.7% when compared to H1 of the previous financial year. Our EBITDA for the second quarter amounted to INR 149 crores, marking a muted growth compared to the same period last year. For H1, EBITDA stood at INR 253 crores, reflecting a growth of 5% when compared to H1 of the previous financial year. The EBITDA margin for the current quarter is at 33.5%, while our H1, our EBITDA margin is 31.7%. The profit after tax for the quarter is INR 75.6 crores, which is marginally lower than the last financial year. For the H1, our PAT is stood at close to INR 130 crores, reflecting a growth of 9% when compared to the H1 of the previous financial year. In terms of the operational performance, outpatient volumes witnessed a growth of 5.7% when compared to the corresponding quarter in the last financial year. The deliveries grew by 6.8% compared to the corresponding period of the last year. Inpatient volumes witnessed steady volumes when compared to the corresponding periods in the last financial year due to the reasons outlined by CMD sir earlier. Our payer mix continued to remain robust, with 53% of the revenue coming from the insurance and the balance 47% coming from the cash patients. For the H1, the payer mix stands at 48% with cash and 52% with insurance. I'm pleased to inform that the company's balance sheet remains very strong, with a net cash position of roughly INR 556 crores as of 30 September of this year and will support our ongoing capital expenditure plan. Given our current cash and anticipated internal accruals in the coming years, we remain confident in our ability to complete all the planned capital expenditure through internal accruals without any debt financing. During the quarter, the company invested close to INR 261 crores in the capital expenditures towards expanding and enhancing our services at existing and upcoming hospitals, and that includes the acquisition of the Guwahati and the Warangal hospitals. With these insights, I conclude my financial update. I'll now invite questions and suggestions from the participants. Thank you very much. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Damayanti from HSBC. Please go ahead. Hi, good morning, and thank you for the opportunity. My first question is for Dr. Ramesh. With the appointment of CEO, how will your involvement or how will your role change in the company? Yes, Damayanti, I've been on the front line for a long, long time. Also, the time has come that there is a professional management of this company. We have expanded significantly and also the multi-city. It is important that, of course, I'm there as the Chairman, aligning with the CEO and the strategic team. The drive of the professional CEO is definitely much needed for the organization of this size to drive the operation, to kind of guide the administrative directors across and functional heads. It is a professional job. I think it is very, very important to have a proper Chief Executive Officer who's kind of had significant experience in driving independently of the operations panel for the organization. That is why we've done extensive deliberations and interviews, and then finally, we chose to have Mr. Abrara li as the CEO. Okay. So, obviously, I think you will be there to handhold and advise the company as we progress ahead. Thanks for that. My second question is on your new unit, Prashanthi and Pratiksha who both integrated during second quarter, as you mentioned. Just some color on the revenue contribution which came through these new units and your plan and expectation for scaling up operations in these two units. Yeah. So, it's an early phase. They were doing about INR 8-8.5 crores because when we've taken away, changed over completely the management and also even the insurance, everything has got changed. We are applied in the process of getting all the permissions. Of course, the revenue is decent enough, but I think it will show up, actually, uptick on the revenues probably by December onwards. Now we have all the permissions and all the influence and everything on board. The same thing with Warangal also. It did take some time being a site tied to a city to obtain all the insurance and those things. There was some decline in the deliveries and those things because all the insurances have not turned up. Now they're all on the board. Now we expect to see revenue doing very well in this. We're very happy with these two acquisitions. The integration went very, very well and seamlessly. Both the doctors as well as the staff, nursing, our operating model has been instituted very well. I think that's where we are kind of very optimistic about the growth of these two units. Sure. You are largely done with integrating the entire two units. Maybe from the March quarter, we will see meaningful pickup in revenues. Just to follow, I think Pratiksha, you mentioned INR 8 - 8.5 crore kind of number which came into Q2, or what was that number? Yeah. It is about lower than that because of the insurances and those ones. The integration was actually with SAPS, Supply Chain, and HRMS, and HAS. A lot of things have done because it was a company which is operated in multiple heads because pharmacy was in a different company, operations in a different company. They were operating in three, four companies. That was the challenge was to integrate all those things and then drive it. Our team has done a great job. I think now it completely operates like a Rainbow Children's Hospital. Got it. That's helpful. My last question is on your international business. Can you remind us? You mentioned there are some issues which should be normalized in coming quarters and then you expect things to pick up? Yes. Still, the issues remain with Bangladesh and some other markets. The visa has not been obtaining for the patients. The overall other areas, the African markets have started becoming more active. We have kind of what we have left about one and a half years ago. We come back to the business of INR 3 crores per month, which was the business before. Slowly, I think it's improving month on month. That's what we can say now. We are hopeful that it will come back to normal. It's not going to be too long time. Okay, sir. Thank you for your response, and I'll get back in the queue. All the best. Thank you. Thank you. A reminder to all participants, you may press star and one to ask a question. The next question is from the line of Kritika from Prospera Financial Solutions. Please go ahead. Yes. Congratulations on strong quarter. I actually want to know, like you have mentioned earlier, that the payer mix was roughly 52% insurance and 48% cash in Q1. Has that ratio changed meaningfully in Q2? More importantly, where do you stand on pricing renegotiation with issuers in your key market? Because with rising specialty case mix and inflation in clinical inputs, are you confident that the price revision in Hyderabad, Bangalore, and Chennai will come through with the timeline you had guided earlier? Yes. The payer mix for the quarter one and the quarter seven is more or less the same line. There is not much of a change. This is a very balanced mix which we are driving. The good part is that we do not do any government-related schemes businesses since it is pediatrics. Our payer mix is only cash and insurance. As far as the insurance renegotiations are concerned, I think our team has already concluded for Hyderabad. For the Bangalore cluster, it is under negotiation and it is happening. It is a routine business for any healthcare operator, right, for the hospital company because the insurance keeps falling on some multiple timelines of the life cycle. When it comes, we keep negotiating. So far, we have been very successful in terms of the pricing and hedging against the inflation cost and the type of facility we have built and the type of complex work we do. We have been able to negotiate it properly with the insurance company so far. We expect that, yes, we will be able to manage that going forward also. Okay. My second question is, one of Rainbow's biggest differentiators is the strength in neonatal and pediatric intensive care. Could you share whether NICU and PICU utilization improved in Q2 relative to Q1 and whether that was a meaningful driver for the RBAB recovery? Do you see that NICU capacity approaching constraints in any of your hubs which may require further expansion? As far as the capacity constraints of the PICU and MICU are concerned, I think whatever the facilities we have is very well built, keeping in the future requirements. We have a headroom available in most of our hospitals to accommodate these types of patients in our MICU and PICU. We do not see as of time any constraint on such capacity utilization. Moreover, we do a hub-and-spoke model. I do not think there is a problem anywhere accommodating the patients. We always try to see that the basis on the demand. Then when we do spokes, should we increase the bed capacity or reduce the bed capacity? We always adjust among the units between them. That optimization is always done. I think as we move forward in future, what we had earlier, the number of beds in ICUs may be kind of the numbers-wise, we probably need to optimize a little bit down because a number of the units are distributed within Rainbow Network itself. Because in the past, we used to think about the hospitals to have larger units. Now, because there is a lot of micro-market-driven business, we try to optimize the number of beds to see that efficiency is improved. Thank you. Thank you. That was very helpful. Thank you. A reminder to all participants, you may press star and one to ask a question. The next question is from the line of Bansi Desai from JP Morgan. Please go ahead. Yeah. Hi. Firstly, congratulations on the CEO appointment, and we look forward to speaking with him. Sir, my first question is that if we just step back and look at the last three to four years, while Rainbow has done very well operationally, we've seen seasons impacting our business probably twice in the span of the last three to four years. I'm just trying to understand that, is this impact felt similarly across all your units, or is this more pronounced in one region over another? The second question in continuation to that is that as we look ahead and as we diversify our presence in north and northeast, should that in any way lessen the impact of seasonality that we are feeling? Yeah. See, the seasonality, by and large, what we see is the southern states behave very similarly. Whether it is Hyderabad, Bangalore, and Andhra Pradesh behaves in one cluster. Chennai may be slightly different because the level of monsoons comes a little later. Andhra Pradesh and Hyderabad and Telangana and Bangalore kind of follows one pattern. When we look at the Northeast, Northeast follows a fairly different pattern of seasonal illnesses. I think in the north, it is fairly kind of again, the peak seasons are always going to be October, November, December, January because more of pollution-driven in the NCR. Some degree of variation will be there. South largely behaves as one unit. And, sir. And. Yeah. Please, yeah. Go ahead. Sir, I was just saying that we went to our Northeast with Prashanthi's acquisition, but do we have plans to scale up our presence there? Yeah. Firstly, we would like to kind of see how we can build our specialty footprint there. We already started some very interesting things in the Northeast. One is that we started transport services. In the last one and a half months, we've done about 14 road transports which never had been done from Guwahati based and entire Northeast. We've gone far off distances to Shillong and all those areas and done the transports of critically sick children. That's one thing we've done. We're adding specialty one after the other. We have pediatric neurology service in Guwahati, pediatric nephrology, and pediatric respiratory medicine. I think one of the important things is to build this as a hub hospital. That's what our focus is on. We're trying to see how early or fast we can do a pediatric cardiology cardiac surgery in that area in our Guwahati hospital. We want to see that the base business is very good and very strong and reputation is very good. We would like to see that this hospital pediatric services to be kind of for the northeast. Then we can look out for the spokes in the smaller cities like Silchar is a good place, and there is a Shillong is a good place. There are opportunities out there. They are all very greenfield. We would like to strengthen ourselves first here. Next near time and start thinking about it. Thanks for that, sir. Secondly, if you could also update us on how our IVF centers are performing. It's been a year. If you could comment on how they're doing operationally and also in terms of patient volumes. Yeah. As expected, our IVF growth is coming mostly through our own networks plus B2C. B2B is almost kind of close to kind of very negligible because obstetricians feel competitive because to send their infertility patient to Rainbow, which is a strong obstetrics network. We have a sales team, but that did not work. See, what is working for us is that one is in-house growth, number one. Second thing is B2C. Collectively, actually, we are growing pretty impressively about the last year, the same quarter to now, is about 40% growth is there. It is a low base, but we would like to see that we continue to grow impressively 25% in future. All right. I have questions. I'll join back in the queue. Sure. Thanks. Thank you. Thank you. A reminder to all participants, you may press star and one to ask a question. The next question is from the line of Rahul Jeewani from IIFL Capital. Please go ahead. Yeah. Thanks, sir. Sir, you did talk about seasonality in terms of obviously impacting our performance this quarter. Now, if we look at the IP volume growth between the mature and the new hospitals, it seems that the IP volumes in mature hospitals have declined a high single-digit kind of a number between 8%-9% year over year. So, why is the impact of seasonality more pronounced in the mature hospitals given that for some of these mature hospitals, we would be doing other services as well, like at the Banjara Hospital? Yeah. So, the mature hospital has got a standard regular business, which is about 50%. We expect them to do in the Q2 and Q3 about 60% plus. If you go back and see that last year, we were down about 65%-66%. When there is that 66%, the 10% growth comes from the seasonal business. When we see our occupancies, that 10% comes from the seasonality. The revenue generation will come about 12%-14%, which is why we typically guide about our occupancies goes up by about 8%. Our revenue grow by 12% in the Q2 and Q3. This typically happens most of the years, but sometimes it is cyclical when there are no seasons. That is what exactly we have seen. We have seen our base business is pretty good. Our EBITDA stands still robust, but your occupancies are down by 8% and your revenue down by probably 10%-12%. If there is a kind of seasonality was there, probably we would have done about 16%-17% of a growth. This is exactly the clear cut. Why the mature hospital stays? Because when there's no seasonality, people get attracted to come to popular hospitals in the seasons. The second important thing is pediatric intensive care. When there is a seasonal illness in the high end, there's a significant number of some portion of children become sicker because of pneumonias and some of them becomes more sicker. They require intensive care services. These two play hand in hand, general pediatrics and pediatric intensive care in the seasonal illnesses duration, which is why we have seen about 8%-9% of the overall in our occupancies. More we see because in the new units, because they are low base, we do not see much of a difference in the new unit because they are about 40%-42% businesses. Here you see what higher percentage of businesses. There is a regular fixed businesses there about 50%-54% of the business, which is pretty standard. Sure, sir. So, this 8%-10% occupancy contribution and 12%-14% revenue contribution from the seasonal business, you seem to indicate that's the contribution at the mature hospital level for 2Q and 3Q generally. Yeah. That's exactly what you said. Sure, sir. Sure, sir. And, sir, with respect to, let's say, the IVF revenue, can you talk about in terms of some of the levers which could help us to reduce the impact of this seasonality in the overall business? Obviously, northeast expansion would help. Can IVF scale-up also help us in reducing the impact of this seasonality? What is our IVF revenue contribution right now, and where do you see that number settling over the next, let's say, three to five-year period? I think about we come up to about 3.2%. 3.2%. 3.2% of total top line this year. I mean, it would go up, but I'm not sure how much it's going to the percentage. Overall, I think we would do about clock about INR 40 crores plus in the current year, which has grown almost 50% in the last year on year. Obviously, you have specialty growth and super specialty growth, and also some of the specialized services what we do, and the rare diseases. These are all the areas we'll occupy as we kind of mature more and more hospitals, mature the hospitals. Sure, sir. Sure, sure. Sir, the next question I have is, as you indicated, that now most of our expansion plans would get completed by FY 2026, and the next round of expansions would come online in FY 2029 only. Now, as some of these newer hospitals scale up over the next two-year period, can we see a margin expansion playing out for Rainbow over the next two years as some of these newer capacities scale up? No, certainly. I think what is more important for us is to drive our operations. As I told in the last earnings call, now we have a leadership in sales and marketing, and who is doing very well. Also, now the CEO joining, I think, is strengthening the overall leaderships. What we have in the next couple of years' time is a very pure play of driving the growth and driving the revenue growth. We love to see that. We always guide about 25% is our base EBITDA, pre-year EBITDA. We will stick to that. We will continue to drive more top-line growth. Sure, sir. Any comments in terms of what kind of a top-line growth are you looking at from a next two-year perspective? I think moving forward, we should do 20% growth. That's what next two years is which we aim at because we have done all the expansions. We've added plenty of beds in the growing business and the growth areas. As long as we stabilize our mature units to kind of 8%-10% of the growth, the rest of them grow at about 25%. Consolidated, we do 20% growth. Sure, sir. So this 20% growth includes the contribution from M&A, or you are talking about the organic growth for the business? Including M&A. They're integrated now, so they're part of the business now. Sure, sir. Last question before I join back the queues. We continue to generate very healthy cash. Right now, also, we have around INR 50 crore-INR 60 crore of net cash on books. With the Guwahati and the Warangal acquisitions being done, are you looking at more M&A, or would you slow down, let's say, from a two-year perspective, scale up these newer assets and then only evaluate fresh M&A? Any color there would be helpful, sir. Surely, if there are M&As which are appropriate, we would definitely be kind of interested. Such opportunity comes, we would obviously be looking at it. There is cash on the balance sheet. We have got execution capabilities. What we look at is that M&As where we can add scale, we can include them into our operating model and add the scale further. We would definitely look at them. Sure, sir. I will join back the queue. Thank you. Thank you. Thank you. The next question is from the line of Ishaa, an individual investor. Please go ahead. Hi, good morning. I'm fairly new in analyzing the hospital industry. Sir, my first question is, how is the company able to maintain such high gross margins of 86%-87%? When the industry average is around 73%-74%, how are you able to maintain such high gross margins? My second question is. Yeah. Yes, sir. You can go ahead. With respect to the gross margin, there is a difference in our specialties and the multi-specialties which are mostly listed. I think the pediatrics and then on the maternity space, we are the only company. In our industry, that is what is the cost of the consumable, which is between 12%-14% depending upon a mix of the services which you are providing. That is why the gross margins are higher. Yeah. See, because most of the adult hospitals are surgically driven. We are a medical hospital. So in medical hospital, the cost of implants and the other is much lower, and hence you see higher gross margins. Okay. Sure. Sir, my second question is, what CapEx do we expect to incur in H2FY 2026? What projection should we make for the hub and spoke modules bed? What CapEx per bed should we project going forward? I think the project which is left out is Hennur and Electronic City, which is Bangalore, is happening. I think it is the leftover payment and the Gurugram project which is happening there. I think for the second half, I think close to INR 100 crore amount should go. For our Pune and Coimbatore project for the next three years, you should budget close to amount of roughly INR 600 crore. Okay. Sir, my third question is, how do we see competition affecting the occupancy rates in especially the hub region? Sir, competition will always be there. Also, the market is expanding. It is all a question of how do we navigate ourselves, keep ourselves to grow. The competition in Hyderabad has been there for the last 15-18 years. That competition will continue to grow. That is life. I think we just have to work around and play out our strengths and expand more micro markets and be a dominant player. I think that's the only way forward. Okay. Thank you, sir. Thank you for taking my questions and all the best for your future endeavors. Thank you. Thank you. Bye. Thank you. A reminder to all participants, you may press star and one to ask a question. The next question is from the line of Vishal from Systematix. Please go ahead. Thanks for the opportunity. Good morning, everyone. I heard that you talked about expanding in Pune. Can you kind of give some color as to what size of a hospital you are looking there and any competitive? Are there any large pediatric hospitals already there in Pune? See, in Pune, we are looking at a 150-bed children's hospital with perinatal services. A lot more focus on children. This is going to be on the Bangalore Highway closer to the Baner. When you look at the landscape in Pune, Pune is kind of another city like Hyderabad and Bangalore today. There are a lot of mom-and-pop stores which are doing well because a lot of deliveries are happening and also a lot of child population is there in Pune. Also, you've got a fairly decent draining area into Pune. This is the competitive landscape. The real children's hospitals who are doing significant work are more on the trust and medical college side, not much in the pediatric file. For example, Deenanath Mangeshkar, they have a fairly large department. Also, a couple of medical colleges got a large department. There are some pediatric units out there which are small, about 50 beds and 60 beds, doing some degree of ICUs and those things. Not a comprehensive pediatric hospital. There is a need and there is a demand. Both of them are there. It all depends on what kind of professionals you are going to have, how you are going to drive your outcomes. Understood, sir. So probably this would be the first pediatric hospital that would have the kind of the most broadest suite of services for pediatric. Exactly. That's exactly. With respect to your existing business, if you could share what percentage of our business is generated from high-end services like transplant, oncology? I think we do within tertiary quaternary care services together. It's very difficult to separate in children's hospitals. So all put together, about 40% is our tertiary care and quaternary care together, including about 40% of the business. Okay. Is this part of the business growing faster than the rest of the business? I think, see, when you do a hub-and-spoke model, it gets diluted, isn't it? Because you're doing a lot more spokes also. The spokes don't do too much of the high-end care. So it'll kind of remain in the same proportions. For example, if you do more and more spokes, the obstetrics also, kind of what we have seen, obstetrics from 20% to 25%, now to 30%. So it keeps growing. Dynamics keep changing because when you do a bad mix of hub-and-spoke model, this is bound to happen. Okay. Okay. Within our large hub hospitals, Hyderabad, Bangalore, Chennai, would a large part of the high-end care be delivered from Hyderabad, while Chennai and Bangalore are yet to catch up? Yeah. It's not catching up. Actually, it takes a long time to build the high-end services for children. One is the expertise. Number two is awareness. Number three is outcomes. All these things will take its own time. This is a long, it took a long time for us in Hyderabad, but we have started doing transplants. We do liver transplants, renal transplants. We started doing liver transplants in both Chennai and Bangalore now. To come to a kind of level of maturity, it will take time, long time. Okay. Okay. Just one final one on international patients. Two things. One is getting international patients in pediatric care, is that more difficult than probably a general hospital? Second, what is the current state? Do we have a minor contribution coming from the international patients? See, it's a long shot. We are working on it. We started working on international business, and it was going fairly well till the recent geopolitical situations, whatever has happened, the drop in international business with Africa as well as Bangladesh and all over. I think we are optimistic. As we move forward, moving into the future, the international business, even for the pediatrics, is going to be a significant component. That's what my belief. I'm sure we need to do a lot more networking with the doctors in the international markets. For example, the pediatricians or pediatric cardiologists or pediatric specialties, wherever they are. I think that relationship is going to build more business for us. Got it, sir. Got it. Any sense on how large this can become, 10% of the top line maybe next five years or so? I won't put a number, but I think we should aim at 10% at least. Okay. Okay. Thank you. Thank you very much. Thank you. The next question is from the line of Anshul Agrawal from Emkay Global. Please go ahead. Hi. Thank you for the opportunity. Home of Audible? Yes, yes. Great. First, a clarification. I think I mentioned saying that the top line target that we are aiming or targeting is at about 20%. Now, considering that H1 was at 7%, is that any indication around H2 being stronger than the usual H2 versus H1 kind of growth? Anshul, let me take this question. What sir has told is that 20% CAGR growth is over a period of time. The basis is two. One is that whatever the capacity which we have added, which is a large capacity, is around 47% from the low base, right? There are around 780 beds which we have added. All the capacity expansion and the super specialty services in our hub hospital at Bangalore, Chennai, and ramp up of the two acquisitions which we have done, the Guwahati and Warangal. Over a period of time, next two and a half years, three years, you should look at the revenue growth of roughly close to 20% CAGR. This is one. Second, second half, how it will pan out, it's very difficult to tell. Obviously, we should be just not on the quarter-on-quarter, but over a period of long trajectory. So far, we have been able to deliver three years or five years CAGR. If you look at it, it is roughly 16%-17%. Since the bed capacity is large being added, we are optimistic that we should be able to deliver at around 20% of the growth in next two and a half, three years CAGR. All right. So growth could be back ended is what you're suggesting on back of expanded capacity? Acquisition integration. Got it. Sort of a follow-up on this only, sir. Our depreciation number has not increased on an HONH basis. Would this also sort of grow in line considering that we have added almost 800 odd beds in the last couple of years? The commercialization of the Rajahmundry and the two hospitals at Bangalore, which will happen in the quarter of December, right? We will see some uptick of the depreciation on that side. Plus, in our case, depreciation includes some part of this Ind AS working, like this lease which gets divided into finance cost and depreciation. As a percentage, you should look at the similar type of trend, except one or two quarters where there are some three facilities getting open, a little bit of the bump up. Otherwise, it should be in the same range. Got it. Third question I had was, any update on the break-even of the Bangalore and the Chennai hospital that we opened in 2024, the Anna Nagar and the Sarjapur Hospital? Are we closer to break-even in Bangalore? The Sanjapur Hospital was break-even in about 15 months' time. Anna Nagar took about, yeah, exactly what we guided, about 18 months' time. The last few months, there is a cash break-even. I think whatever we have guided, they're kind of following the line. Despite seasonality impact in the current quarter, the ramp-up on these hospitals has been in line with what we had guided? Yes. Got it. That's it from mine. Thank you very much. Thank you, Anshul. Thank you. Thank you. A reminder to all participants, you may press star and one to ask a question. The next question is from the line of Dhananjay from Alchemy. Please go ahead. Question number. Just wanted to ask you something. Dhananjay, we are not able to hear you at all. Dhananjay? Ther`e is no response. I take the next question from the line of Rahul Jeewani from IIFL Capital. Please go ahead. Yes, sir. Just a few clarifications. Yes. Sorry. You indicated CapEx of INR 100 crore in second half, but I missed the number which you said for Pune, then Coimbatore and Delhi NCR combined. Did you say INR 600 crores? For including Coimbatore, Pune, and Gurgaon, we should be doing some CapEx of roughly close to INR 600, Rahul? Sure, sir. Are you including the initial or let's say the CapEx which you would have already incurred for the two NCR hospitals, or is this the incremental CapEx over the next, let's say, two to three years? Rahul, we are building, let us talk about Gurgaon. We are adding roughly close to 450 beds, right? Here, the land and building is owned by the company which we are building it up. It will cost close to INR 1.5 crore plus onward for the construction of the whole facility, right? The capex is large. For that, we have already spent for the land close to INR 180 crore and roughly INR 20-30 crore for the other work for which we have already spent the money. The balance construction, which is progressing over a period of next two and a half, three years, we will be spending that much of the amount. Balance out of that, whatever the amount I have told you, the maximum amount pertains to Gurugram project. Sure, sir. So INR 600 crore over, let's say, 2027 to 2029? Yes. Three years. Sure, sir. Sir, with respect to the break-even for, let's say, the spoke hospitals, your spoke hospitals in Bangalore and Chennai achieve break-even within 12-18 months. Can you similarly talk about the timelines for some of these regional hospitals which you are setting up in, let's say, the core Andhra Pradesh Telangana market? How much time would Rajahmundry and Coimbatore, once they are commissioned, how much time would those hospitals take to achieve break-even? Yeah. Rajahmundry would do it in about 15 months, 15-18 months' time. Because the brand visibility in Rajahmundry is very, very high. If you look at the coastal Andhra Pradesh, every household knows about Rainbow Hospitals. It has a huge reputation. Every family knows about it. Rajahmundry is actually, we started about a month and a half ago. The traction is already pretty good. That is why we look at Rajahmundry. Rajahmundry will get integrated very, very soon. The network between Rajahmundry, Visakhapatnam, and Vijayawada would cover a vast area, almost from Srikakulam to right up to Bengal, which is the most potential area for Andhra Pradesh, and is going to be covered by these three hospitals. Another Nellore district will be covered by the Chennai hospital. We are there almost from the entire Andhra Pradesh coast till Chennai. That is going to be. Warangal, anyway, is acquisition. We need to just build on more pediatric business. Obstetrics, they do very well. The two, Electronic City and Hennur, Electronic City might take a little longer time, about 15 months' time. Hennur would actually break in one year time. Sure, sir. Sir, with respect to, let's say, the spoke or, sorry, the regional hospitals which you are adding in these, let's say, tier two kind of markets, can you talk about how your pricing varies in terms of pricing between tier one markets and some of these tier two markets? Again, the tier two markets, we have Vijayawada. Vijayawada is a matured hospital, which is almost 18 years of operations. The pricing of that hospital to Hyderabad is almost like 75%-80% of Hyderabad cost. If I go to Visakhapatnam and Rajahmundry, I would probably be about 70% of Hyderabad cost. 60%-70% of Hyderabad cost. Because they are a little more of a cash-oriented, less of an insurance business and those things. You tend to drive more of occupancy, more of a popular for some time. Then you'll get settled after three, four, five years' time as your reputation builds further. Sure, sir. Let's say pricing in these tier two markets could be 25%-30% lower than what we have in tier one markets? Yeah. 30%-35%, Rahul. Yes, sir. 30%-35%. At a steady state level, these hospitals should be doing margins which you make in your tier one hospitals, given the cost structures also would be lower in these markets. That's true. That's true. I mean, for example, Vijayawada market has margins of like Hyderabad only. I mean, there may be a place like Visakhapatnam, there may be the 4%-5% less because it's a city of difference. There is a lot of public sector and a lot of district populations who are price-sensitive, those things. Rajahmundry is pretty good. Rajahmundry is an affluent part of Andhra Pradesh. Sure, sir. Sir, last question from my side would be on the Delhi hospital, the Madhukar Trust Hospital. Can you talk about in terms of the ramp-up at the Madhukar Hospital in terms of how the EBITDA margins are playing out? What is the balance receivable from the Madhukar Trust in terms of the loan which we have extended to that hospital? Thank you. Yeah. I think this year we are, I think we're encouraged to see that it is doing a double-digit EBITDA finally. Considering this cost structures and more, I think the last four, five months has been consistently doing about double-digit EBITDA. We see that this business to grow in the next couple of years fairly well. However, the EBITDA in this hospital are not going to be in the best case scenario, maybe 15%-16%, even the best scenarios because of the free beds. What happens in the free bed in children's hospital? When you get sick patients in ICUs and free beds, it drains away a lot of revenue. That's why it's a low EBITDA margin hospital. Sure. In terms of outstanding receivable from Madhukar Trust? The principal outstanding remains same, Rahul, is at around INR 23 crore-INR 24 crore plus whatever the other things which is there. If you read through our financials, last year we have restructured the repayment schedule of theirs for moratorium and then given us some timelines for the repayment of that. As on date, the status is same as was as of 31st March. Sure, sir. And we is also supposed to convert the Rosewalk Hospital from a premium birthing center to, let's say, a regular birthing center. Has that played out? Yeah, it's been done. It's doing well. It's doing much better now. It's difficult to erase the name of luxury from people's minds, but it's doing much better now. I think it's also starting to really run. Sure, sir. That's it from my side. Thank you. Thank you, Rahul. Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Thank you for joining today's conference call and for your thoughtful and thought-provoking questions. It is always a pleasure to speak with all of you and take all the questions to clarify. Your continued support is instrumental to our strategic journey. If there are any other further questions, please do connect with Mr. Saurabh Bhandari, who heads our Investor Relations, at the emails which are given in our press release. Thank you very much. On behalf of IIFL Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.