Q1 2027 Apollo Hospitals Enterprise Ltd Earnings Call

Speaker #1: Ladies and gentlemen, good day and welcome to the Apollo Hospitals Limited Earnings Conference Call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Operator: Ladies and gentlemen, good day and welcome to Apollo Hospitals Limited earnings conference call. 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 and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mayank Vaswani from CDR India. Thank you, and over to you.

Speaker #1: Should you need assistance during the conference call, please signal an operator by pressing star, then zero, on your touch-tone phone. Please note that this conference is being recorded.

Speaker #1: I now hand the conference over to Mr. Mayank Vaswani from CDR India. Thank you, and over to you.

Speaker #2: Thank you, Sagar. Good afternoon, everyone, and thank you for joining us on this call hosted by Apollo Hospitals to discuss the financial results for the first quarter of FY27, which were announced yesterday. We have with us today the senior management team represented by Mrs. Suneeta Reddy, Managing Director; Mr. A.

Mayank Vaswani: Thank you, Sagar. Good afternoon, everyone, and thank you for joining us on this call hosted by Apollo Hospitals to discuss the financial results for the first quarter of FY27, which were announced yesterday. We have with us today the senior management team represented by Mrs. Suneeta Reddy, Managing Director, Mr. A. Krishnan, Group CFO, Dr. Madhu Sasidhar, President and CEO of the Hospitals Division, Mr. Madhivanan Balakrishnan, CEO of Apollo HealthCo, Mr. Sriram Iyer, CEO of Apollo Health and Lifestyle, Mr. Sanjiv Gupta, CFO of Apollo HealthCo, and Mr. Obul Reddy, CFO of the Pharmacy business. Before we begin, I would like to mention that some of the statements made in today's discussion may be forward-looking in nature and may involve risks and uncertainties. Please note the disclaimer mentioning these risks and uncertainties, which is on slide 2 of the investor presentation shared with all of you earlier.

Speaker #2: Krishnan, Group CFO; Dr. Madhu Sasidhar, President and CEO of the Hospitals Division; Mr. Madhivanand Balakrishnan, CEO of Apollo Health Co.; Mr. Sriram Iyer, CEO of AHLL; Mr. Sanjeev Gupta, CFO of Apollo Health Co.; and Mr. Obul Reddy, CFO of the Pharmacy Business.

Speaker #2: Before we begin, I would like to mention that some of the statements made in today's discussion may be forward-looking in nature and may involve risks and uncertainties.

Speaker #2: Please note the disclaimer mentioning these risks and uncertainties, which is on Slide 2 of the investor presentation shared with all of you earlier. Documents relating to our financial performance have been circulated earlier, and these have also been posted on the corporate website.

Mayank Vaswani: Documents relating to our financial performance have been circulated earlier, and these have also been posted on the corporate website. I would now like to turn the call over to Mrs. Suneeta Reddy for her opening remarks. Thank you, and over to you, ma'am.

Speaker #2: I would now like to turn the call over to Mrs. Suneeta Reddy for her opening remarks. Thank you, and over to you, ma'am.

Speaker #3: Good afternoon, everyone, and thank you for joining us on today's earnings call. I trust that you have reviewed the earnings material that we shared yesterday.

Suneeta Reddy: Good afternoon, everyone, and thank you for joining us on today's earnings call. I trust that you have reviewed the earnings material that we shared yesterday. We are pleased to start FY27 on a strong footing, carrying forward the healthy momentum from this year. We have delivered strong double-digit revenue growth across all three of our business verticals, healthcare services, Apollo HealthCo, and Apollo Health and Lifestyle, alongside continued improvement in profitability. The performance in Q1 reflects sustained demand across our integrated healthcare platform, continued traction in high acuity specialties, and disciplined execution across all three businesses. On a consolidated basis, revenue grew by 21% year on year to INR 7,043 crores. Consolidated EBITDA for the quarter stood at INR 1,092 crores, registering a growth of 28%, with EBITDA margin improving to 15.5% from 14.6% in Q1 last year.

Speaker #3: We are pleased to start FY27 on a strong footing, carrying forward the healthy momentum from previous years. We have delivered strong double-digit revenue growth across all three of our business verticals: Healthcare Services, Apollo Health Co., and AHLL, alongside continued improvement in profitability.

Speaker #3: The performance in Q1 reflects sustained demand across our integrated healthcare platform, continued traction in high-acuity specialties, and disciplined execution across all three businesses.

Speaker #3: On a consolidated basis, revenue grew by 21% year-on-year to ₹7,043 crores. Consolidated EBITDA for the quarter stood at ₹1,092 crores, registering a growth of 28%, with the EBITDA margin improving to 15.5% from 14.6% in Q1 last year.

Speaker #3: Healthcare services reported revenues of ₹3,567 crores, delivering healthy growth of 22% on a year-on-year basis. The established hospitals grew revenues by 18%, to ₹3,475 crores, while new hospitals contributed ₹92 crores for the quarter. This was driven by a combination of 11% volume growth, 4% from pricing, and 3% from clinical case mix, bed and payer mix.

Suneeta Reddy: Healthcare services reported revenues of INR 3,567 crores, delivering healthy growth of 22% on a year on year basis. The established hospitals grew revenues by 18% to INR 3,475 crores, while new hospitals contributed INR 92 crores for the quarter. This was driven by a combination of 11% volume growth, 4% from pricing, and 3% from clinical case mix, bed and payer mix. Total inpatient volumes grew by 13% year on year with occupancy at 70%. Average revenue per patient increased by 8% year on year to INR 1,86,630. The enhanced operating metrics reflect the incremental improvements in patient mix, clinical complexity, and clinical technology utilization that have been able to drive in recent quarters. Insurance and self-pay continue to form the core of our payer mix, together contributing to 83% of overall inpatient net revenues. Insurance revenues grew by 25%, while self-pay revenues increased by 16% during the quarter.

Speaker #3: Total inpatient volumes grew by 13% year on year, with occupancy at 70%. Average revenue per patient increased by 8% year on year, to 1,86,630 rupees.

Speaker #3: The enhanced operating metrics reflect the incremental improvements in patient fleets, clinical complexity, and clinical technology utilization that we have been able to drive in recent quarters.

Speaker #3: Insurance and self-pay continued to form the core of our payer mix, together contributing to 83% of overall inpatient net revenues. Insurance revenues grew by 25%, while self-pay revenues increased by 16% during the quarter.

Speaker #3: Revenue from international patients grew by 26% over the same quarter last year. The volume growth was broad-based across the network and across all specialties. A focus on high-acuity, complex care specialties—cardiac, oncology, transplant, neurosciences, gastroenterology, and orthopedics—continues to strengthen the quality of our clinical offering.

Suneeta Reddy: Revenue from international patients grew by 26% over the same quarter last year. The volume growth was broad-based across the network and across all specialties. Our focus on high acuity CONQT specialties, cardiac, oncology, transplant, neurosciences, gastroenterology, and orthopedics continues to strengthen the quality of our clinical offering. CONQT volumes increased 15%, while revenues grew 24% year on year. These specialties now contribute to 62% of in-patient net revenues, underlining Apollo's leadership in complex tertiary and quaternary care. Healthcare services EBITDA increased by 20% year on year to INR 862 crores, with margins at 24.2%. Established hospitals delivered EBITDA margins of 25.9%. This improvement is because of higher operating leverage, clinical case mix, and the benefit of ongoing productivity optimization initiatives. We believe there is further headroom for structural cost savings, which will support our margins in the upcoming phase of capacity growth.

Speaker #3: Congo tea volumes increased 15%, while revenues grew 24% year-on-year. Tea specialties now contribute to 62% of inpatient net revenues, underlining Apollo's leadership in complex tertiary and quaternary care.

Speaker #3: Healthcare services EBITDA increased by 20% year-on-year to ₹862 crore, with margins at 24.2%. Established hospitals delivered EBITDA margins of 25.9%. This improvement is due to higher operating leverage, clinical case mix, and the benefit of ongoing productivity optimization initiatives.

Speaker #3: We believe there is further headroom for structural cost savings, which will support our margins in the upcoming phase of capacity growth. New hospitals reported an EBITDA loss of ₹38 crore, reflecting the initial ramp-up cost associated with the recently commissioned operational beds.

Suneeta Reddy: New hospitals reported an EBITDA loss of INR 38 crores, reflecting the initial ramp-up costs associated with the recently commissioned operational beds. Healthcare services ROC was at 28.5% during the quarter, supported by balanced performance across our network spanning metro, tier 1, and tier 2 markets. We continue to make steady progress on our hospital capacity expansion program. Our 180-bed facility in Sarjapur, Bangalore was operationalized this quarter. Gurgaon remains on track for operationalization in Q3 FY27. We are committed to ensuring that our portfolio of new units perform to our expectations and losses are restricted within guided limits. In our earnings update, we have also provided a breakdown of our expansion plans up to FY31, which will take our census bed capacity to 14,100 beds. This is a carefully thought-through expansion in the north and west along with brownfield expansions in current units.

Speaker #3: Healthcare services ROC was at 28.5% during the quarter, supported by a balanced performance across the network, spanning metro, Tier 1, and Tier 2 markets.

Speaker #3: We continue to make steady progress on our hospital capacity expansion program. Our 180-bed facility in Sarjapur, Bangalore, was operationalized this quarter. Gurugram remains on track for operationalization in quarter three, FY27.

Speaker #3: We are committed to ensuring that our portfolio of new units performs to our expectations and that losses are restricted within guided limits. In our earnings update, we have also provided a breakdown of our expansion plans up to FY31, which will take our census bed capacity to 14,100 beds.

Speaker #3: This is a carefully thought-through expansion in the North and West, along with brownfield expansions in current units. We expect to fund this expansion largely from internal accruals and have a comfortable debt position on our balance sheet.

Suneeta Reddy: We expect to fund this expansion largely from internal accruals and have a comfortable debt position on our balance sheet. Moving to Apollo HealthCo, the business reported revenues of INR 2,977 crores, representing a strong 20% year on year growth. EBITDA stood at INR 171 crores compared to INR 94 crores in Q1 FY26. The company continues to demonstrate the scalability of its integrated retail and digital healthcare model, even as it has made significant progress on unit economics. Digital cash loss was reduced to just INR 10 crores during the quarter compared to INR 49 crores in Q1 FY26 and INR 16 crores in Q4 FY26. The digital vertical is poised to achieve breakeven in the upcoming quarter. Platform GMV stood at INR 535 crores, representing a 23% year on year growth for the closure of the non-profitable corporate partnership. Digital revenues increased 24% on a like for like basis.

Speaker #3: Moving to Apollo Health Co., the business reported revenues of ₹2,977 crore, representing a strong 20% year-on-year growth. EBITDA stood at ₹171 crore, compared to ₹94 crore in Q1 FY26.

Speaker #3: The company continues to demonstrate the scalability of its integrated retail and digital healthcare model, even as it has made significant progress on unit economics.

Speaker #3: Digital cash loss was reduced to just a 10 crores, during the quarter compared to 49 crores in quarter one FY 26, and 16 crores in quarter four FY 26.

Speaker #3: The digital vertical is poised to achieve break-even in the upcoming quarter. Platform GMV stood at ₹535 crore, representing a 23% year-on-year growth. Following the closure of the non-profitable corporate partnership, digital revenues increased 24% on a like-for-like basis.

Speaker #3: Apollo Health Co. reported a PAT of ₹101 crore during the quarter, compared to ₹57 crore in the same period last year. AHLL also delivered a good quarter, with revenues increasing 15% year-on-year to ₹499 crore. EBITDA grew 46% to ₹59 crore, while EBITDA margins improved to 11.8% from 9.6% in the same period last year.

Suneeta Reddy: Apollo HealthCo reported a PAT of INR 101 crores during the quarter compared to INR 57 crores in the same period last year. AHLL also delivered a good quarter with revenues increasing 15% year on year to INR 499 crores. EBITDA grew 46% to INR 59 crores, while EBITDA margins improved to 11.8% from 9.2% the same period last year. PAT loss reduced to INR 1 crore, compared to INR 8 crores in Q1 FY26. Within AHLL, the diagnostics vertical reported 31% revenue growth and healthy improvement in margins, well on the way to its next milestone of INR 1,000 crore annualized revenue. Consolidated PAT increased 34% year on year to INR 581 crores. The proposed strategic restructuring of our omni-channel pharmacy and digital health business remains on track for completion within the disclosed timelines, with multiple regulatory steps proceeding as planned and the scheme being concluded in the current fiscal.

Speaker #3: Part loss reduced to ₹1 crore, compared to ₹8 crore in Q1 FY26. Within AHLL, the diagnostics vertical recorded 31% revenue growth, and a healthy improvement in margins, well on the way to its next milestone of ₹1,000 crore annualized revenue.

Speaker #3: Consolidated parts increased 34% year-on-year to ₹581 crore. The proposed strategic restructuring of our omnichannel pharmacy and digital health business remains on track for completion within the disclosed timelines, with multiple regulatory steps proceeding as planned and the scheme being concluded in the current fiscal.

Speaker #3: With this, I would like to add our views on the Parliamentary Committee recommendations, which we have thought through as healthcare providers who have been part of the healthcare ecosystem for the past 40 years.

Suneeta Reddy: With this, I would like to add our views on the parliamentary committee recommendations, which we have thought through. As healthcare providers who have been part of the healthcare ecosystem for the past 40 years, we are aligned with the government's objective of making quality healthcare affordable and accessible to every Indian. We welcome the commitment of healthcare spending, the fact that it will rise to less than 3% to 5% of India's GDP. We support the government's focus on better clinical governance, greater price transparency and clear patient communication, and an effective grievance redressal mechanism. We have reversed the trends of Indians traveling abroad for good care. Today, patients from 150 countries come to us because we deliver world-class outcomes at one-tenth of the international cost.

Speaker #3: We are aligned with the government's objective of making quality healthcare affordable and accessible to every Indian. We welcome the commitment to healthcare spending, and the fact that it will rise from less than 3% to 5% of India's GDP.

Speaker #3: We support the government's focus on better clinical governance, greater price transparency, clearer patient communication, and an effective grievance redressal mechanism. We have reversed the trend of Indians traveling abroad for good care.

Speaker #3: Today, patients from 150 countries come to us because we deliver world-class outcomes at one-tenth of the international cost. The government has recognized the fact that high-quality care comes with a cost and has given a roadmap—zero-rated GST, reducing custom duties, et cetera.

Suneeta Reddy: The government has recognized the fact that high-quality care comes at a cost and has given a roadmap, zero-rated GST, reducing custom duties, et cetera. We believe that the big picture on healthcare in India is very strong structural demand for healthcare remains intact. India still needs to add 2.4 million high-quality beds. The private sector needs to invest capital to fulfill this goal. Healthcare is at the core of a developing economy and a vital contributor to infrastructure, jobs, foreign exchange earnings, and building a healthy and productive workforce. India needs a vibrant innovation research and academic ecosystem. Our country's R&D budget is lower than that of any large European pharmaceutical company.

Speaker #3: We believe that the big picture on healthcare in India is very strong, with structural demand for healthcare remaining intact. India still needs to add 2.4 million high-quality beds.

Speaker #3: The private sector needs to invest capital to fulfill this goal. Healthcare is at the core of a developing economy and is a vital contributor to infrastructure, jobs, foreign exchange earnings, and building a healthy and productive workforce.

Speaker #3: India needs a vibrant innovation, research, and academic ecosystem. Our country's R&D budget is lower than that of any large European pharmaceutical company. Price controls on private enterprise may have the unintended effect of disincentivizing investments in capacity creation and innovation, and we believe that a one-size-fits-all approach to pricing will not work, as healthcare is more than merely a linear sum of inputs.

Suneeta Reddy: Price controls on private enterprise may have the underside effect of disincentivizing investments in capacity creation and innovation, and we believe that a one-size-fits-all approach to pricing will not work as healthcare is more than merely a linear sum of inputs. We look forward to continued engagement with all stakeholders, insurance providers, as well as the government to shape a framework that is trusted by patients and sustainable for providers, attractive for investment, and capable of meeting the healthcare needs of the next generation of Indians. With this, let me hand over for questions to the team that is present here today. Madhu Sasidhar, CEO of Apollo Hospitals. Krishnan, our CFO. Gogul Reddy, who is CFO of the pharmacy division. Sriram, Apollo Health and Lifestyle. Madhivanan, Apollo HealthCo. And Sanjeev, CFO of Apollo HealthCo. Thank you, ladies and gentlemen.

Speaker #3: We look forward to continued engagement with all stakeholders, insurance providers, as well as the government, to shape a framework that is trusted by patients, sustainable for providers, attractive for investment, and capable of meeting the healthcare needs of the next generation of Indians.

Speaker #3: With this, let me hand over for questions to the team that is present here today: Madhu Shashitar, CEO of Apollo Hospitals; Krishnanath, CFO; Ubal Reddy, who is CFO of the Pharmacy Division; Sreeram, Apollo Health & Lifestyle; Madivanan, Apollo Health Co.; and Sanjeev, CFO of Apollo Health Co.

Speaker #3: Thank you, ladies and gentlemen.

Speaker #1: 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 then one on their touch-tone phone.

Operator: 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 then one on their touch-tone phone. 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. Again, to register for a question, you may press star and one now. Your first question comes from the line of Binay with Morgan Stanley. Please go ahead.

Speaker #1: 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.

Speaker #1: Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, you may press star and one now.

Speaker #1: Your first question comes from the line of Binay with Morgan Stanley. Please go ahead.

[Analyst] (Morgan Stanley): Hi, team. Thanks for the opportunity. In the last earnings call, we talked about around mid-teens growth in the hospital business. We had a pretty strong start to the year, and ramp-up is yet to play out. Do you see that this year you could actually hit closer to 20% revenue growth in hospitals?

Speaker #2: Hi, team. Thanks for the opportunity. In the last earnings call, we talked about around mid-teens growth in the hospital business. We had a pretty strong start to the year, and the ramp-up is yet to play out.

Speaker #2: So do you see that this year you could actually hit closer to 20% revenue growth in hospitals?

Speaker #3: Yes, for this, yes, I believe we're on track to deliver 20%.

Suneeta Reddy: Yes, I believe we are on track to deliver 20%.

Speaker #2: And within that, if you look at the next big hospital that we are ramping up, Gurgaon, how is the progress on that playing out?

[Analyst] (Morgan Stanley): Within that, if you look at the next big hospital that we are ramping up, Gurgaon, how is the progress on that playing out?

Speaker #3: So, in September, we'll have a soft launch. In October, it will be opened up.

Suneeta Reddy: September we will have a soft launch. In October, it will be opened up.

Speaker #2: So, the revenue contribution will be more from Q3 onwards.

Krishnan Akhileshwaran: The revenue contribution will be more from Q3 onwards.

Speaker #4: For Q4, because we will launch it, and after that, the IP will take another couple of months to ramp up fully.

Krishnan Akhileshwaran: Or Q4. We will launch it, and after that, the IP will take another couple of months to ramp up fully.

Speaker #2: Right, right. And just lastly, on the new hospital losses, is it fair to assume that the quarterly run rate may actually inch up into the opening of Gurgaon, or how should we think about that?

[Analyst] (Morgan Stanley): Right. Lastly on the new hospital losses, is it fair to assume that the quarterly run rate may actually inch up into the opening of Gurgaon? How to think about that?

Speaker #4: So there are two things. Yes, one is that it will inch up a bit, and that's something that we should expect—it should go up by at least ₹20 crore a quarter, and then it should come down.

Krishnan Akhileshwaran: There are two things here. One is it will inch up a bit, and that is something that we should expect that it should go up by at least INR 20 crore a quarter, and then it should come down. We are doing very well on financial district in Hyderabad, and that ramp-up has been good, and we are quite hopeful that that hospital should break even in the coming quarter.

Speaker #4: But we are doing very well on the Financial District in Hyderabad, and that ramp-up has been good. We are quite hopeful that that hospital should break even in the coming quarter.

Speaker #3: Absolutely.

[Analyst] (Morgan Stanley): It's good. Thanks, team. I'll come back in the queue.

Speaker #2: Thanks, team. I'll come back in the queue.

Speaker #1: Thank you. Our next question comes from the line of Neha Manpuriya with Bank of America Securities. Please go ahead.

Operator: Thank you. Our next question comes from the line of Neha Manpuria with BofA Securities. Please go ahead.

Speaker #2: Thanks for taking my question. Just extending on the hospital margin, we've seen hospital margins obviously improve meaningfully in the last few quarters, and I think ma'am in her opening remarks also mentioned scope for more structural cost saving.

Neha Manpuria: Thanks for taking my question. Just extending the hospital margin. We've seen hospital margins obviously improve meaningfully in the last few quarters. I think ma'am, in her opening remarks, also mentioned scope for more structural cost saving. Given we are already touching close to about 26% margins in existing hospitals, could you give us color in terms of how much more room there is to improve margins in these hospitals, and what would be the areas of those that would drive that improvement?

Speaker #2: Given that we are already touching close to about 26% margins in existing hospitals, could you give us some color in terms of how much more room there is to improve margins in these hospitals, and what would be the areas that would drive that improvement?

Speaker #4: The current numbers are a good set of numbers, as you have seen. We have got the benefit of both operating leverage as well as some cost benefits.

Sanjiv Gupta: The current numbers are a good set of numbers, as you have seen. We have got the benefit of both operating leverage as well as some of the cost control measures that has already been taken. The other important point is we're getting back the IP volumes as well, as you have seen in this quarter. So it is a good margin. We would like to first sustain these margins. There are some more cost takeouts which are possible, but the margins are something that we are happy with.

Speaker #4: Some of the cost control measures have already been taken, and the other important point is that we're getting back the IPS volumes as well, as you have seen in this quarter.

Speaker #4: So it is a good margin. We would like to we would like to first sustain this margins, there are some costs, some more cost takeouts which are possible, but we would the margins are something that we are happy with.

Speaker #2: Understood. So, 26 is a good, sustainable number to assume for existing operations at the moment.

Neha Manpuria: Understood. So 2026 is a good, sustainable number to assume for existing operations at the moment.

Speaker #4: Yes.

Sanjiv Gupta: It is.

Speaker #2: Okay. And we're still maintaining our new loss number of ₹150 crores, right?

Neha Manpuria: Okay. We are still maintaining our new loss number of INR 150 crores, right?

Speaker #4: So for the full year, that's what, but as I said, we will have to see—some uplift is happening. But as I said, the financial district in Hyderabad has started and has done very well in this quarter.

Sanjiv Gupta: For the full year, that is what. As I said, by Q3, Q4, we will see some uplift, which is happening. As I said, financial district in Hyderabad has started and done very well in this quarter, and we would break even on that front next quarter. Belenus, which we have acquired, will start operations in the coming quarter. We are continuing to keep that, maintain that 150, but it will rise up a bit on a quarterly basis.

Speaker #4: And we would break even on that front next quarter. Bellinis, which we've acquired, will start operations in the coming quarter. So we are continuing to keep that maintained at 150, but it will rise a bit on a quarterly basis.

Speaker #2: Understood. My second question is on the digital business. I do see that the pre-OPEX margin has improved pretty meaningfully here. So if you could give us some color as to what's driven this—is it the insurance business, etc.? And I also see the costs increasing.

Neha Manpuria: Understood. My second question is on the digital business. I do see our pre-Opex margin has improved pretty meaningfully here. If you could give us some color as to what is driven this. Is it the insurance business, et cetera? I also see the cost increasing. Is it fair to assume that now the break-even would be essentially driven by revenue momentum and therefore the pre-Opex margin expanding?

Speaker #2: So, is it fair to assume that now the break-even would be essentially driven by revenue momentum, and therefore the pre-OPEX margin expanding?

Speaker #3: So Madhi and Sanjeev?

Suneeta Reddy: Madi and Sanjeev.

Speaker #4: Yes, ma'am. So, no, your observation is right. While our primary three core businesses of pharmacy, diagnostics, and consults are in a good, reasonable run-rate state, insurance is still in a build-up mode.

Madhivanan Balakrishnan: Yes, ma'am. Your observation is right. While our primary three core businesses of pharmacy, diagnostics, and consults are in a good, reasonable run rate state, insurance is still in a build-up mode. We have now four centers across. That is one of the reasons why both our tech cost and cost of building up of these operations is going up. We were genuinely hoping that we should be able to get insurance under control, but there have been one or two setbacks which is pushing it up. There are one or two other costs which were one-time costs as we are rationalizing our organization. Those are the only two reasons. Otherwise, the momentum when it comes to our core businesses, at around 25% to 30% growth rate on the pharmacy side, around 27% on the diagnostic side continues to grow.

Speaker #4: We now have four centers across, so that's one of the reasons why both our tech cost and the cost of building up these operations is going up.

Speaker #4: We were genuinely hoping that we should be able to get insurance under control, but there have been one or two setbacks, which is pushing it up.

Speaker #4: And there are one or two other costs, which were one-time costs, as we are rationalizing our organization. So those are the only two reasons.

Speaker #4: But otherwise, the momentum, when it comes to our core businesses, at around 25% to 30% growth rate on the pharmacy side, and around 27% on the diagnostic side, continues to grow.

Speaker #4: Insurance actually grew at around 80%, but that's on a very small base. And like I said, it's still in the investment mode. So the momentum will be maintained, and as we rationalize some of our costs, we should get into a consistent mode.

Madhivanan Balakrishnan: Insurance actually grew at around 80%, but that is on a very small base, and like I said, it is still on the investment mode. The momentum will be maintained, and as we rationalize some of our costs, we should get into a consistent mode. Sanjeev, do you want to speak about specific numbers on these lines, please?

Speaker #4: Sanjeev, do you want to speak about specific numbers on these lines, please?

Speaker #3: No, no, I think you said it right, Madhi. Slight increase in the expenses—I think, ma'am, you must be referring to Q4 versus Q1. And I think there are one-off costs also in Q1.

Sanjiv Gupta: No, I think you said it right, Madi. Slight increase in the expenses. I think Manpuria must be looking Q4 versus Q1. I think there are one-off costs also in Q1. But we believe that on a sustainable basis, we should be in the range of about INR 80 crores quarter as spend. As far as the margin line is concerned, we continue to see good traction on insurance and other circle subscription-led programs are also doing pretty good, which would also mean that slight increase in the margin. With controlling operating cost, I think we are well within the course of seeing the business turning around. Thank you.

Speaker #3: But we believe that on a sustainable basis, we should be in the range of about ₹80 crore a quarter as expense. And as far as the margin line is concerned, we continue to see good traction on insurance, and other circle subscription-led programs are also doing pretty good.

Speaker #3: We should also note that slight increase in the margin, and with controlling operating costs, I think we are well within the course of seeing the business turning around.

Speaker #3: Thank you.

Speaker #2: Got it. This is very helpful. Thank you so much.

Neha Manpuria: Got it. This is very helpful. Thank you so much.

Speaker #1: Thank you. Your next question comes from the line of Damyanthi Kirai with HSBC. Please go ahead.

Operator: Thank you. Your next question comes from the line of Damayanti Kerane with HSBC. Please go ahead.

Speaker #2: Hi. Thank you for the opportunity continuing the discussion on your efforts towards scaling up insurance business. So in terms of certain milestones or certain scale in mind, where do you think or how long it will take you to reach there when we will see significant scale up in that part of the business and then the losses declining significantly?

Damayanti Kerane: Hi. Thank you for the opportunity. Continuing the discussion on your efforts towards scaling up insurance business. In terms of certain milestones or a certain scale in mind, where do you think or how long it will take you to reach there, when we will see significant scale-up in that part of the business and then the losses declining significantly. If you can explain the insurance part a bit better or a bit elaborate on that.

Speaker #2: So, if you could explain the insurance part a bit better and maybe bring it down a little.

Speaker #4: Let me take that, ma'am. So, first and foremost, insurance business—we are a corporate agent. So effectively, we are not into manufacturing, but we are in the business of setting up a comprehensive sales engine that will enable us to sell a product to our existing customers.

Madhivanan Balakrishnan: Let me take that, ma'am. First and foremost, in the insurance business, we are a corporate agent. Effectively, we are not into manufacturing, but we are into the business of setting up a comprehensive sales engine that will enable us to sell a product to our existing customers. Our operating model is very simple. We do not advertise or we did not spend money to get customers. Our insurance business is primarily driven through cross-pollination to our existing base of pharmacy, consult, and our overall Apollo ecosystem customers. Our aspiration is to actually run. As a corporate agent, we are entitled to sell all three kinds of insurance, health, life, and non-life. But given our natural alliance with the healthcare, we being part of the healthcare, our health insurance is what has taken off. We have been seeing some very good traction.

Speaker #4: So our operating model is very simple. We do not advertise, or we do not spend money to get customers. Our insurance business is primarily driven through cross-pollination to our existing base of pharmacy, consult, and our overall Apollo ecosystem customers.

Speaker #4: Our aspiration is to actually run as a corporate agent. We are entitled to sell all three kinds of insurance: health, life, and non-life. But given our natural alliance with healthcare—since we've been part of healthcare—our health insurance is what has taken off.

Speaker #4: We've been seeing some very good traction. We are almost in double digits in terms of the gross premium that we are earning. And as you know, while the margins are very good at a gross level, the costs which are typically incurred by an entity in the early stages of this operation are reasonably high.

Madhivanan Balakrishnan: We are almost in double digits in terms of the gross premium that we are earning. As you know, while the margins are very good at a gross level, the cost which typically an entity incurs in the early stages of this operation is reasonably high. Just to give you a flavor, now we have four call centers across four big cities, Gurgaon, two in Hyderabad, and one in Bangalore. Out of these four centers, two centers are completely breakeven on an incremental CM2 level. Only the overheads needs to be covered for, and this is covering all the technology investment that we have made. A total workforce of around 250 odd people. It includes business which was set up for the first time. As we progress quarter on quarter basis, we also start getting annuity income from the businesses that we have booked beforehand.

Speaker #4: Just to give you a flavor, now we have four call centers across four big cities: Gurgaon, two in Hyderabad, and one in Bangalore. Out of these four centers, two centers are completely breaking even on an incremental CM2 level.

Speaker #4: So, only the overhead needs to be covered for, and this is covering all the technology investment that we have made, a total workforce of around 250-odd people, and it includes business which is set up for the first time.

Speaker #4: As we progress quarter on quarter, we also start getting annuity income from the businesses that we have booked beforehand. So, that particular revenue engine has not yet started kicking off.

Madhivanan Balakrishnan: That particular revenue engine has not yet started kicking off, so it is primarily the first time business that we are building it. If you were to track us on milestones, it would be typically all the four centers becoming viable. Our digital business, which is pure digital products. We have two big products, one with Niva Bupa and the other with Care Health Insurance, which do not incur other than the technical costs that have incurred, I don't need to do anything. It is a pure digital business targeted through my app and my web. So that is the second engine which will grow. One area which from a disclosure perspective is we had actually made an attempt to build a feet on street very similar to some of the other brokers like InsuranceDekho and RenewBuy. That is one engine which has not sort of worked out for us.

Speaker #4: So it's primarily the first-time business that we are building in. So, if you were to track us on milestones, it would be typically all the four centers becoming viable.

Speaker #4: Our digital business, which is pure digital products, we have two big products—one with Niva Bhupa and the other with Care Insurance—which do not incur, other than the technical costs that have incurred, I don't need to do anything.

Speaker #4: It's a pure digital business targeted through my app and my web. So that's the second engine which will grow. One area which I would, from a disclosure perspective, mention is we had actually made an attempt to build a platform very similar to some of the other brokers, like InsuranceDekho and RenewBuy.

Speaker #4: That's one engine which has not, sort of, worked out for us. We are reworking that engine, and that's a bit of a setback. We hope to sort that over the next two quarters.

Madhivanan Balakrishnan: We are reworking that engine and that is a bit of a setback. We hope to sort that over the next two quarters. We hope to break even on the insurance business by Q3 end. While all the other three businesses are already at a CM2 positive level. Once this business comes in, our ability to show even a clean digital level should be much better. Sorry for the long-winded answer, but that is really-

Speaker #4: And we hope to break even on the insurance business by Q3-end, while all the other three businesses are already at a CM2-positive level.

Speaker #4: Once this business comes in, our ability to show even a clean digital level should be much better. Sorry for the long-winded answer, but that's the reason.

Speaker #2: Sure. That's helpful. So, break even by the third quarter of this fiscal, right? That's the...

Damayanti Kerane: Sure. That's helpful. So a break even by Q3 of this fiscal, right?

Speaker #4: All insurance Q3? Yeah, because that's what is pulling us down. So, if you were to notice, if we didn't have insurance, we are already on the positive side.

Madhivanan Balakrishnan: For insurance Q3.

Damayanti Kerane: Yeah.

Madhivanan Balakrishnan: Because that's what is pulling us down. If you had to notice, if we didn't have insurance, we're already on a positive side. That's one business which is pulling in. Just to be on the safe side from a guidance perspective, I would say by Q3 end.

Speaker #4: So that's one business which is pulling in. So, just to be on the safe side from a guidance perspective, I would say by Q3 end.

Speaker #2: Okay, that's very helpful. My second question is, you have announced a new Proton center in Delhi, which will come up, say, a few years down the line.

Damayanti Kerane: Okay, that's very helpful. My second question is, you have announced a new Proton Centre in Delhi, which will come say a few years down the line. Just want to get some update or some insights on your Chennai Proton Centre, how that has picked up and what kind of utilization level that unit is operating at. That will be helpful.

Speaker #2: But I just want to get some updates or some insights on your Chennai Proton Center—how that has picked up, and what kind of utilization level that unit is operating at.

Speaker #2: So that will be helpful.

Speaker #3: Yeah. Madhu will answer that.

Suneeta Reddy: Yeah. Madhu will answer that.

Speaker #4: No, thank you for that question. So, our Chennai is a three-gantry unit, meaning that it can, at the same time, accommodate three patients.

Madhu Sasidhar: Thank you for that question. Our Chennai is a three gantry unit, meaning that it can at the same time accommodate three patients. Two of those are mobile gantries and one is a fixed gantry. A fixed gantry is limited in the kind of cancers it can treat. The two mobile gantries are more or less fully occupied. Sometimes very frequently we are encountering a wait list. We do have some capacity on the fixed gantry. We are working extended hours to accommodate the additional patients. In terms of capacity, I think the Delhi unit coming online will be perfectly timed.

Speaker #4: Two of those are mobile gantries, and one is a fixed gantry. The fixed gantry is limited in the kinds of cancers it can treat.

Speaker #4: The two mobile gantries are more or less fully occupied. Sometimes, very frequently, we are encountering a waitlist. But we do have some capacity on the fixed gantry.

Speaker #4: We are working extended hours to accommodate the additional patients. So, in terms of capacity, I think the Delhi unit coming online will be perfectly timely.

Speaker #3: And that the Delhi unit would be a single gantry?

Suneeta Reddy: The Delhi unit will be a single gantry.

Speaker #2: Sure. And one of your competitors also announced that they plan to come up with proton centers. So I was just looking to understand, from the demand perspective, in that particular market.

Damayanti Kerane: Sure. One of your competitor also announced to come up with Proton Centre. I was just looking to understand from the demand perspective in that particular market.

Speaker #4: Yeah, so I think it's useful to look at what's happening in the scientific literature. Increasingly, we are finding that particle beam therapy is superior to conventional radiation and other forms of treatment.

Madhu Sasidhar: Yeah. I think it's useful to look at what's happening in the scientific literature. Increasingly, we are finding that particle beam therapy is superior to conventional radiation and other forms of treatment. The literature is moving in the direction, especially for conditions like head and neck cancer, that proton beam therapy has superior results, both in terms of outcome as well as side effects. So we believe that especially with India's high burden of head and neck cancer, the demand is even with these units coming online, I think the demand is going to be there and is going to exceed what today we see as supply that is coming online.

Speaker #4: The literature is moving in the direction, especially for conditions like head and neck cancer, that proton beam therapy has superior results both in terms of outcome as well as side effects.

Speaker #4: So we believe that, especially with India's high burden of head and neck cancer, the demand—even with these units coming online—I think the demand is going to be there and is going to exceed what we see today as the supply that is coming online.

Speaker #3: Yeah, and just to add, we have to have a comprehensive oncology offering. So, without having the right equipment, I think we would have left the radiation space, because when we do this, we attract the best clinical talent.

Suneeta Reddy: Yeah. Just to add, we have to have a comprehensive oncology offering. Without having the right equipment, I think we would've left the radiation space. Because we do this, we attract the best clinical talent and we're able to collaborate with institutions overseas. As you can see, 30% of the volumes come from overseas patients. This is a critical asset for our Delhi unit.

Speaker #3: And we're able to collaborate with institutions overseas. As you can see, 30% of the volumes come from overseas patients. So this is a critical asset for our Delhi unit.

Speaker #2: Sure, that's very helpful. I'll get back in the queue. Thank you.

Damayanti Kerane: Sure. That's very helpful. I'll get back in the queue. Thank you.

Speaker #1: Thank you. Before we take the next question, a reminder to all participants: if you wish to register for a question, please press star and then one.

Operator: Thank you. Before we take the next question, a reminder to all the participants, if you wish to register for a question, please press star and then 1. Your next question comes from the line of Shyam Srinivasan with Goldman Sachs. Please go ahead.

Speaker #1: Your next question comes from the line of Shyam Srinivasan with Goldman Sachs. Please go ahead.

Speaker #5: Good afternoon, and thank you for taking my question. Regarding the Tamil Nadu region, we've seen an occupancy rate that has been quite encouraging, correct?

Shyam Srinivasan: Yeah. Good afternoon. Thank you for taking my question. Just on the Tamil Nadu region, we have seen like an occupancy rate, which has been quite encouraging, right? Now it is 70%. We have not seen this kind of prints for a long time. So from an overall operational standpoint, has something changed? Was it just a seasonal quarter that uptick? I know we have been rationalizing our beds there overall over the last 12 months. But just want to understand what is happening in that core region for us and are we seeing market share gains?

Speaker #5: Seventy percent. We have not seen this kind of print for a long time. So, from an overall operational standpoint, has something changed? Or was it just a seasonal quarter that drove the uptick?

Speaker #5: I know we've been rationalizing our beds there overall over the last 12 or so months, but just want to understand what's happening in the core region for us, and are we seeing market share gains?

Speaker #4: Yes, so this is demand-driven. I don't think it is one-time. We did not see a large number of either acute febrile fevers or gastrointestinal disease.

Madhu Sasidhar: Yes. This is demand-driven. I do not think it is one time. We did not see a large number of either acute fevers or gastrointestinal disease. There was some uptick in medical admissions, but this is much more distributed between surgical and medical. We have been working very hard on our operational efficiencies to be able to sustain a higher throughput.

Speaker #4: There was some uptake in medical admissions, but this is much more distributed between surgical and medical. We have been working very hard on our operational efficiencies to be able to sustain a higher throughput.

Speaker #4: So I think 70% is a healthy number, but with a lot more capacity to grow further. Also, I think to note is that there has been a significant normalization of the Bangladesh IPS volume—about a 50% growth in this quarter compared to last quarter.

Krishnan Akhileshwaran: I think 70% is a healthy number, but with a lot more capacity to grow further. Also I think to note is that there has been a significant normalization of the Bangladesh IP volume, about a 50% growth in this quarter compared to last quarter. So that has also contributed more than the volume. The type of patients that we are seeing have higher acuity of illness.

Speaker #4: So that has also contributed. More than the volume, the type of patients that we are seeing have a higher acuity of illness.

Speaker #5: Helpful, thank you. My second question is on the digital business. When I look at GMV growth and revenue growth, there is a discrepancy, so maybe the revenue-to-GMV ratio has come off by a bit.

Shyam Srinivasan: Helpful. Thank you. My second question is on the digital business. When I look at GMV growth and revenue growth, there is a discrepancy. So maybe the revenue per to GMV ratio has come off year-over-year. So just want to understand, how we should look at this business. I thought we talked about GMV growth of 20% plus, but revenue growth seems to be lagging.

Speaker #5: So, I just want to understand—is there a way we should look at this business? I thought we talked about GMV growth of 20% plus, but revenue growth seems to be lagging.

Speaker #4: If you remember, around three quarters back in a similar forum, we had spoken about how the business is getting restructured. We said the way to read our business is in two ways.

Madhivanan Balakrishnan: So if you remember, around 3 quarters back in this similar forum, we had spoken about how the business is getting restructured. We said the way to read our business is in 2 ways. The pharmacy business and the diagnostic business are driven by GMV. What I mean is the revenue usually works in sync with the growth on these 2 lines of businesses. When it comes to the consult business, which is wherein we are facilitating digital consults of doctors across the Apollo Group, the revenue model changed. That is, we get a flat fee, and the focus is more on ensuring that we have an optimum structure to take care of being the digital gateway as well as any of the other supporting services.

Speaker #4: The pharmacy business and the diagnostic business are driven by GMV. What I mean is, the revenue usually works in sync with the growth in these two lines of business.

Speaker #4: When it comes to the consult business, wherein we are facilitating digital consults with doctors across the Apollo group, the revenue model changed.

Speaker #4: That is, we get a flat fee, and the focus is more on ensuring that we have an optimum structure to take care of being the digital gateway, as well as any of the other supporting services.

Speaker #4: So I would say the ratio that you should look for is the overall GMV growth on these two lines of business, which is consult and diagnostics.

Madhivanan Balakrishnan: I would say the ratio that you should look for is the overall GMV growth on these 2 lines of businesses, which is consult and diagnostics. Sorry, pharmacy and diagnostics. Pharmacy growing in the range of 25% to 30%. Diagnostics again in the similar range. And the revenue has been on par. Our CM1 and CM2 margins on the pharmacy is already positive. There is enough work which is happening to increase our order density and to reduce the cost of our deliveries. It has been on a downward trajectory. Again, like I said, over maybe the next 2 quarters that should be up. So I would say look at the revenue in conjunction with these 2 lines of businesses and the consult revenue, while it will remain, not show such a direct correlation. However, we do show the GMVs on those lines.

Speaker #4: Sorry, pharmacy and diagnostics. Pharmacy is growing in the range of 25 to 30 percent, diagnostics again in a similar range. And the revenue has been on par.

Speaker #4: Our CM1 and CM2 margins on the pharmacy are already positive. There is enough work happening to increase our order density and to reduce the cost of our deliveries.

Speaker #4: It's been on a downward trajectory. Again, like I said, over maybe the next two quarters, that should play out. So I would say look at the revenue in conjunction with these two lines of businesses, and the consult revenue, while it will remain, will not show such direct growth.

Speaker #4: But, however, we should show the GMVs on those lines.

Speaker #5: Got it. Go ahead. Just quickly, my last question, Suneeta ma'am, on your opening remarks on the whole parliamentary panel—whatever recommendations, right? We had ARPA grow 8%.

Shyam Srinivasan: Got it. Just quickly, my last question. Suneeta, ma'am, on your opening remarks on the whole parliamentary panel, whatever recommendations. We had ARPP growing 8%. Does it put a little bit of a question mark around how we look at pricing now, given that there is a lot of scrutiny, we have taken a price increase benefit of 4%? Just want to understand from a competitive dynamic or even from a stakeholder perspective, are you relooking at how you price your services?

Speaker #5: Does it put a little bit of a question mark around how we look at pricing now, given that there is a lot of scrutiny?

Speaker #5: We have taken a price increase benefit of 4%. So, I just want to understand, from a competitive dynamic or even from a stakeholder perspective, are you relooking at how you price your services?

Speaker #3: No, I think we’ve been very fair and transparent in the way that we price our services. In fact, we’ve been in maybe 100 hours of dialogue with the insurance companies.

Suneeta Reddy: No, I think we have been very fair and transparent in the way that we price our services. In fact, we have been in maybe 100 hours of dialogue with the insurance companies, and all of them were appreciative of the fact that they could deal with this level of price increases. So going forward, I think, once you have insurance companies on board, it should not be difficult for the rest of our customers to understand the tariff increase, which is based on inflation as well as inflation in the cost of services, which I must say is not as high as core inflation. So I think we are just mirroring the trend of inflation and pricing.

Speaker #3: And all of them were appreciative of the fact that they could deal with this level of price increases. So, going forward, I think once you have insurance companies on board, it should not be difficult for the rest of our customers to understand the tariff increase, which is based on inflation as well as inflation in the cost of services, which I must say is not as high as core inflation.

Speaker #3: So, I think we're just mirroring the trend of inflation in pricing.

Speaker #4: And the other point that I want to— we have spoken on the earlier calls as well. I think it's important that we appreciate that we are a high-end tertiary care network, with Congo contributing 62% to 63% of our overall revenues.

Krishnan Akhileshwaran: The other point that we have spoken on the earlier calls as well, I think it is important that we appreciate that we are a high-end tertiary care network with CONQT contributing 62% to 63% of our overall revenues. Even with the CONQT at 62%, 63%, with us being high-end, 90% of our overall patients we have said that. In fact, 70% of our overall patients, even today, pay less than INR 200,000 in our system in admissions, and 90% pay less than INR 500,000. Even if you go to a metro, that 70 comes down to 68. So clearly it is not a high number at all.

Speaker #4: And even with the Congo at 62, 63, with us being high-end, 90% of our overall patients—we have said that. In fact, 70% of our overall patients, even today, pay less than ₹2 lakh in our system on admissions.

Speaker #4: And 90% pay less than 5 lakh rupees. Even if you go to a metro, that's 70 comes down to 68. So clearly, there is a very high it's not a high number at all.

Speaker #3: Yeah. And also, this is,

Madhu Sasidhar: Yeah. Also this is Dr. Madhu Sasidhar. I also do not want you to make the error of assuming that ARPP increase is always a price or a tariff increase. We have been working very hard on a substantial case complexity shift. As an example, robotic surgeries increased 85%. Our number of transplants, which are life-saving procedures, liver transplant, and heart and lung have increased. All of these will drive the comparative ARPP increase, and this reflects case complexity rather than a tariff increase.

Speaker #2: Dr. Madhush, I should add, I also don't want you to make the error of assuming that an ARPP increase is always a price or a tariff increase.

Speaker #2: We've been working very, very hard on a substantial case complexity shift. As an example, robotic surgeries increased by 85%. Our number of transplants—which are lifesaving procedures, including liver, heart, and lung transplants—have also increased.

Speaker #2: All of these will drive the comparative ARPP increase, and this reflects case complexity rather than a tariff increase.

Speaker #5: Thank you.

Shyam Srinivasan: Thank you.

Operator: Thank you. Your next question comes from the line of Kunal Dhamesha with Macquarie. Please go ahead.

Speaker #1: Thank you. Your next question comes from the line of Kunal Damesha with Macquarie. Please go ahead.

Speaker #5: Hi. Thank you for taking my question. Can you please share the revenue contribution of the 380 bids that we have published today in this quarter?

Kunal Dhamesha: Hi. Thank you for taking my question. Can you please share the revenue contribution of the 380 beds that we have operationalized in this quarter?

Speaker #4: So, we are close to 100 crores. Ninety-two crores is the number for this quarter.

Madhivanan Balakrishnan: We are close to INR 100 crores. INR 92 crores is the number for this quarter.

Speaker #5: 92 crores. Okay. So is it basically fair to say that the indirect cost of operating this bed was close to a similar number, around 90 crores for this quarter?

Kunal Dhamesha: INR 92 crore. Okay. Is it fair to say that the indirect cost of operating these beds were close to the similar number, around INR 90 crore for this quarter?

Speaker #4: Higher, right? Because we have said that there is a loss of ₹38 crores.

Madhivanan Balakrishnan: Higher, right? Because we have said that is a-

Suneeta Reddy: INR 38 crore. Yeah.

Speaker #3: Yeah.

Speaker #5: But there will be direct; I'm just talking about the indirect cost.

Kunal Dhamesha: But there will be direct cost. I am just talking about the indirect cost.

Speaker #4: Only the indirect. Yeah, indirect would be, yeah, close to that number.

Madhivanan Balakrishnan: Only the indirect. Yeah, indirect would be close to that number.

Speaker #5: Close to that number. So then, shall we say that when we are adding another 620 beds, or operationalizing them, will those costs, indirect costs, move in the same proportion?

Kunal Dhamesha: Close to that number. Then let's say when we are saying that we will be adding another 620 beds or operationalizing, shall those indirect costs move in the same proportion?

Speaker #4: No, it won't.

Krishnan Akhileshwaran: No, it won't.

Speaker #3: See, when we open our hospital, you already incur the admin cost. And you've already got certain employees on board who are critical to the running of the unit.

Suneeta Reddy: See, when we open a hospital, you already incur the admin cost.

Suneeta Reddy: And you've already got certain employees on roll which are critical to the running of the unit. So as we operationalize additional beds, we actually benefit from operating leverage. So I don't think there's a direct correlation between the current cost that you see and the number of new beds that we will open.

Speaker #3: So, as we operationalize additional beds, we actually benefit from operating leverage. So I don't think there's a direct correlation between the current costs that you see and the number of new beds that we will open.

Speaker #4: Because, as you said, the indirect cost will actually be leveraged, right? And that's the point that we are making, because some of the indirect costs, as you correctly questioned, are incurred upfront for us to be able to leverage them as we move up the revenue curve.

Krishnan Akhileshwaran: Because as you said, the indirect cost will actually be leveraged, right? And that's the point that we are saying, because some of the indirect costs, as you correctly questioned, are incurred upfront for us to be able to leverage out of it as we move up the revenue curve. And some of that predominantly with these numbers would have doctors' fees, which would be significant here, as well as the opening up of some of these beds. We also have a lot of people on the ground who are nursing and paramedics, et cetera.

Speaker #4: And some of that, predominantly, these numbers would have doctors' fees, which would be significant here, as well as the reopening of some of these beds.

Speaker #4: We also have a lot of people on the ground for nursing and paramedics, etc.

Speaker #5: So, sir, let's say within this indirect also, there will be fixed and semi-variable or semi-fixed costs, right? So let's say ₹10 million is the current indirect cost of operating one new bed.

Kunal Dhamesha: Sir, let's say within this indirect also there will be fixed and semi-variable or semi-fixed cost. So let's say INR 10 million is the current indirect cost of operating one new bed per year. How should we think whether it is like going forward, the 620 bed would be like 60% of that, 70%? I mean broad ranges.

Speaker #5: So, per year—so how should we think about whether, going forward, the 620-bed would be like 60% of that, 70%? I mean, a broad range is fine.

Speaker #4: Can we take this offline? I can explain it to you, because I can tell you that the beds we have currently commissioned—the indirect cost that we have already incurred—is capable of handling 750 beds as of now itself.

Krishnan Akhileshwaran: Can we take this offline? I can explain it to you because I can tell you that

Kunal Dhamesha: Sure

Krishnan Akhileshwaran: the beds that we have currently commissioned, the indirect costs that we have already incurred are capable of handling 750 beds as of now itself. We will take some of this offline.

Speaker #4: So we will take some of this offline.

Speaker #5: Sure, sure. And second question for ma'am. We have said the 4% pricing growth in our healthcare services business. Ma'am, if you could throw some light, how has this pricing growth moved, let's say, over the last four or five years?

Kunal Dhamesha: Sure. Second question for ma'am. We have said the 4% pricing growth in our healthcare services business. Ma'am, if you could throw some light, how has this pricing growth has moved, let's say over the next four, five years, because I think this is the first time we are getting this really important number. But how would have that moved and you have said that it is in line with the healthcare cost inflation. But historically, how has that moved? Is it in line with history, higher, lower?

Speaker #5: Because I think this is the first time we are getting this really important number. But how would that have moved? And you have said that it's in line with the healthcare cost inflation.

Speaker #5: But historically, how has that moved? Is it in line with history—higher or lower?

Speaker #3: No, I think that what is impactful is probably the fact that we've closed with a lot of insurance companies, and therefore, this is sustainable.

Suneeta Reddy: No, I think that what is impactful is probably the fact that we have closed with a lot of insurance companies. This is sustainable. What you are seeing is sustainable, and we will continue to have these price increases because this is medical inflation, and like was said earlier, case complexity will continue to drive higher ARPP. With all that, we are still very affordable, like AK said. 80% of our patients pay less than INR 2 lakhs per patient. So I think we have to consider this very holistically and to maintain that we actually mark in a 5% increase in pricing every year.

Speaker #3: What you're seeing is sustainable, and we'll continue to have these price increases because this is medical inflation. And like we said earlier, case complexity will continue to drive higher ARPP.

Speaker #3: With all that, we are still very affordable, like AK said. Eighty percent of our patients pay less than ₹20 lakhs per patient. So, I think we have to consider it very holistically, and to maintain that, we actually mark in a 5% increase in pricing every year.

Speaker #5: Okay. And ma'am, this is just the last one from me. If you could—the way my understanding is, initially, the price increases happen for cash-paying patients, and then insurance companies basically do the catch-up on the rates.

Kunal Dhamesha: Okay. And ma'am, just last one from me, if you could. The way my understanding is, initially the price increases happen for cash-paying patients, and then insurance companies basically do the catch up on the rates. Is that how it works?

Speaker #5: Is that how it works?

Speaker #4: Insurance contracts are today two-year contracts. So what happens is that every two years, there is a reset which comes our way. So to that extent, if there's an inflation of 5% every year, every two years, ideally, they should increase it by at least 10%.

Krishnan Akhileshwaran: Insurance contracts are today two-yearly contracts. So what happens is that, every two years there is a reset which comes our way. So to that extent, if there is inflation of 5% every year, every two years, ideally they should increase it by at least 10%.

Speaker #5: Okay, sure. I'll join back later. Thank you, and all the best.

Kunal Dhamesha: Okay, sure. I will join back later. Thank you and all the best.

Speaker #1: Thank you. Your next question comes from the line of Vivek Agarwal with Citi Group. Please go ahead.

Operator: Thank you. The next question comes from the line of Vivek Agarwal with Citigroup. Please go ahead.

Speaker #5: Hi, thanks. Thanks for the opportunity. Sir, this year you are indicating 20% kind of revenue growth in the hospitals. Just if you can help us understand how to look at the hospital growth over the next couple of years.

Vivek Agarwal: Hi, thanks for the opportunity. Sir, this year you are indicating 20% kind of revenue growth in the hospitals. Just if you can help us understand how to look at the hospital growth over the next couple of years, maybe 2028, 2029, and also on profitability. So how the EBITDA margin trajectory can be, given that you are seeing some of the new hospitals coming in, some of the existing, the recent commissioned hospitals maturing in. Thank you.

Speaker #5: Maybe '28, '29. And also on profitability, how the EBITDA margin trajectory can be, given that you are seeing some of the new hospitals coming in, and some of the recently commissioned hospitals maturing.

Speaker #5: Thank you.

Speaker #3: So the established hospitals will continue to grow at 13–14%. The new hospitals will bring an additional 7% of revenue. As we look at the next 24 months, this is a very sustainable target for us.

Suneeta Reddy: The established hospitals will continue to grow at 13% to 14%. The new will bring an additional 7% of revenue. As we look at the next 24 months, this is a very sustainable target for us. Going forward, we expect that the units that we start now will also mature in the sense that they will start contributing to both EBITDA and profitability. AK want to handle that.

Speaker #3: Going forward, we expect that the units that we start now will also mature, in the sense that they will start contributing to both EBITDA and profitability.

Speaker #3: So if you want to handle that.

Speaker #4: Yeah, so that's the rate that we would look at it, I think. And the margins, as we said, should sustain at the current levels or even inch up a bit as well within the next 24 months.

Krishnan Akhileshwaran: Yeah, so that's the way that we would look at it. I think, and the margins, as we said, should sustain at the current levels of the established, inch up a bit as well in the next 24 months.

Speaker #5: Understood. And the hospitals that you're going to commission, let's say last quarter as well as this year, how should we look at the losses as well as the profits, maybe over the next two years, FY28 and FY29?

Vivek Agarwal: Understood. The hospitals that you are going to commission, let us say last quarter as well as this year. How we should look at the losses as well as the profits, maybe over the next two years, FY28 and FY29?

Speaker #4: So, let us come back to you by the next quarter. We are hoping that by next year, we should break even overall as a cluster of new hospitals by the end of Q3 or Q4 of next year.

Krishnan Akhileshwaran: We will come back to you by the next quarter. We are hoping that by next year we should break even overall as a cluster of new hospitals by Q3, Q4 of next year. That is what we are hoping. We will come back to you by next quarter.

Speaker #4: That's what we are hoping. Let us come back to you by next quarter.

Speaker #5: Perfect, sir. This is from my side. Thank you.

Vivek Agarwal: Perfect, sir. This is all my side. Thank you.

Speaker #1: Thank you.

Operator: Thank you. The next question comes from the line of Kunal Randeria with Axis Capital. Please go ahead.

Speaker #5: Your next question comes from the line of Kunal Randheria with Axis Capital. Please go ahead.

Speaker #1: Yeah. Good afternoon. First question, ma'am, is on the payer mix. The cash plus insurance is around 85% for you, but with all the expansion that is going into greenfields, should we expect more institutional beds in the near future, or should you be able to maintain this 85% kind of range?

Kunal Randeria: Yeah, good afternoon. First question, ma'am, is on the payer mix. The cash plus insurance is around 85% for you. But with all the expansion that is going on, especially with the new greenfields, should we expect more institutional beds in the near future, or you should be able to maintain this 85% kind of a range?

Speaker #3: I think 85% is very maintainable.

Suneeta Reddy: I think 85% is very maintainable.

Speaker #1: Right, right. So even outside of the southern states, you'll be able to maintain that.

Kunal Randeria: Right. Even in outside of seven states, you will be able to maintain that with all the-

Speaker #3: Yes, sir. If we look at it, yes.

Suneeta Reddy: Yes, if we look at Yes.

Speaker #4: Yes. Next question.

Krishnan Akhileshwaran: Yes. Next question.

Speaker #1: Yeah. And one more, if I can. So for the AHL business, the revenue traction seems to be getting better. Now, what would be the margin targets for you in the next couple of years?

Kunal Randeria: Yeah. One more if I can. For the AHLL business, the revenue traction seems to be getting better. What would be the margin targets for you in the next couple of years, and if you can just explain how you can achieve this.

Speaker #1: And if you can, just explain how you can achieve this.

Speaker #3: Sriram?

Suneeta Reddy: Sriram.

Speaker #5: Yeah, hi. Good afternoon. As you can see, we have three different lines of business. Our focus right now is to really double down and grow the diagnostics and the primary care business.

Sriram Iyer: Yeah. Hi, good afternoon. As you can see, we have three different lines of businesses. Our focus right now is to really double down and grow the diagnostic and the primary care business. This quarter, diagnostic has hit the 14% margin. The focus on diagnostics would be to continue growing at a 20% plus kind of a growth, and over a period of next six to eight quarters, look at a 20% mark on margins. Primary care is another area where we have grown by about 12%. We want to stay put at that kind of a growth levels, and we are also going to be adding few clinics in the next two to three quarters. These are the two big lines of business that AHLL is going to be focusing on.

Speaker #5: So this quarter, Diagnostics has hit the 14% margin. The focus of Diagnostics would be to continue growing at a 20% plus kind of growth.

Speaker #5: And over the next six to eight quarters, look at a 20% mark on margins. Primary care is another area where we have grown by about 12%.

Speaker #5: We want to stay put at that kind of growth levels. And we are also going to be adding a few clinics in the next two to three quarters.

Speaker #5: These are the two big lines of business that AHL is going to be focusing on. And as all of you are aware, we have concluded our transaction on the mother and child business.

Sriram Iyer: As all of you are aware, we have concluded our transaction on the mother and child business, and we are merging into a larger platform. We are finally awaiting the regulatory clearance from the government. Once that happens, our focus will even more double down on the diagnostics and primary care business. Hope I have answered your questions.

Speaker #5: And we are merging into a larger platform. We are finally awaiting regulatory clearance from the government, and once that happens, our focus will double down even more on the diagnostics and primary care business.

Speaker #5: Hope I've answered your questions.

Speaker #1: Sure, sure. So, I mean, to conclude, it's diagnostics which will drive the margins up for this business, right?

Kunal Randeria: Sure. So, to conclude, it's diagnostic which will drive the margins up for this business, right?

Speaker #5: That's right. Yeah.

Sriram Iyer: That's right, yeah.

Speaker #1: Perfect, thank you. Your next question comes from the line of Prashant Shirsagar with Univade Corporate Research Private Limited. Please go ahead.

Kunal Randeria: Perfect. Thank you.

Operator: Thank you. Your next question comes from the line of Prashant Kshirsagar with Unifi Corporate Research Private Limited. Please go ahead.

Speaker #5: Yeah, thanks for the opportunity. My question is related to the Delhi Cancer Center and the Proton Subsidy Facility that you are going to create.

Prashant Kshirsagar: Yeah. Thanks for the opportunity. My question is relating to Delhi Cancer Center and proton facility which you are going to create. Can you share the location for the same, or is it yet to be identified as the location?

Speaker #5: Can you share the location for the same, or is it yet to be identified as the location?

Speaker #3: So, we have two options. We'll share them with you shortly.

Suneeta Reddy: We have two options. We will share it with you shortly.

Speaker #5: Okay. And second question relating to that only, are the total beds and the census beds in that case the same, at 100 beds?

Prashant Kshirsagar: Okay. Second question relating to that only, is the total beds and the census beds in that case is the same at 100 beds. Normally census beds are less than the total beds. Can you clarify on that?

Speaker #5: So normally, census beds are fewer than the total beds. Can you clarify that?

Speaker #4: So in this case, it was assumed that it would be part of one of the centers also, which is why it's seeming to be the same.

Krishnan Akhileshwaran: In this case, it was assumed that it would be part of one of the centers also, which is why it is seeming to be the same. But if it goes as a separate center, then it can come out to be a bit different. It can become 125 and 100. As of now, it was assumed to be part of one of the centers.

Speaker #4: But if it goes as a separate center, then it can come out to be a bit different. It can become 125 and 100. As of now, it was assumed to be part of one of the centers.

Speaker #5: Okay, thanks a lot, sir. That answers my questions.

Prashant Kshirsagar: Okay, sir. Thanks a lot, sir. That answers my questions.

Speaker #1: Thank you. Before we take the next question, a reminder to all the participants: you may press star and then one to ask a question.

Operator: Thank you. Before we take the next question, a reminder to all the participants, you may press star and then one to ask a question. Your next question comes from Tauseef Sheikh with BNP. Please go ahead.

Speaker #1: Your next question comes from Tawsif Sheikh with BNP. Please go ahead.

Speaker #5: Good afternoon, and thanks for the opportunity. My first question is on the International Patient Business, which has grown by 26%. I just wanted to understand: are the patient volumes from Bangladesh completely back to 100% of what they were two years back, or have we still not reached that level?

Tauseef Sheikh: Good afternoon, and thanks for the opportunity. My first question on the international patient business, which has grown by 26%. Just wanted to understand, are the patient volume from Bangladesh completely back to 100%, which was there two years back, or still we have not reached that level?

Speaker #4: So the volume has not reached that level. It's about 60 to 70 percent of what it used to be. But I would say that we are seeing patients with higher complexity, but for value, it's a little bit higher.

Krishnan Akhileshwaran: The volume has not reached that level. It is about 60% to 70% of what it used to be. But I would say that we are seeing patients with higher complexity. But on value, it is a little bit higher, but volume-wise it is about 60% to 70% of what it used to be at its peak.

Speaker #4: But volume-wise, it's about 60 to 70 percent of what it used to be at its peak.

Speaker #5: Oh, that's helpful. My second question is on the bed addition plan. I think I see a few of the brownfield beds, which were expected to come in FY27, have been moved to FY28 and FY29.

Tauseef Sheikh: That is helpful. My second question on the bed addition plan. I think I see few of the brownfield bed which is expected to come in FY27 has been moved to FY28 and FY29. Any specific reasons for the same?

Speaker #5: Are there any specific reasons for the same?

Speaker #4: No, so we just are, because FY27, we just have six more months. So, Jubilee Hills expansion—there is some change in the configuration that we are planning, etc.

Krishnan Akhileshwaran: No. We just have because FY27 we just have six more months. Jubilee Hills expansion, there is some change in the configuration that we are planning, et cetera, which is why it is moved to the next year. Secunderabad also there was some delay because the landlord has taken some time to come back yet on the lease deed. That is why there has been a delay.

Speaker #4: So, which is why it's moved to the next year. Secunderabad also—there was some delay because the landlord has taken some time to come back yet on the lease deal.

Speaker #4: So that is why there has been a delay.

Speaker #5: Thanks. That is helpful.

Tauseef Sheikh: Thanks. That is helpful.

Speaker #1: Thank you. Your next question comes from the line of Rahul Jeevani with IIFL. Please go ahead.

Operator: Thank you. Your next question comes from the line of Rahul Jeewani with IIFL. Please go ahead.

Speaker #5: Yeah, thanks, sir, for taking my question. Sir, the IP volume growth for us has been pretty strong this quarter. So, on the established units, we saw almost 11% volume growth.

Rahul Jeewani: Yeah. Thanks for taking my question. Sir, the IP volume growth for us has been pretty strong this quarter. On the established units, we saw almost an 11% volume growth. While there is some component of Bangladesh patient normalization which is helping us, apart from that, was there any seasonal factor which led to, let's say, this strong volume growth on the established unit side? How do you see this trajectory going forward?

Speaker #5: Now, while there is some component of Bangladesh patient normalization, which is helping us, but apart from that, was there any seasonal factor which led to, let's say, this strong volume growth on the established units' side?

Speaker #5: And how do you see this trajectory going forward?

Speaker #4: So there wasn't really—I think two things to point out. One is, there was not a seasonal pattern. When we look at it from a regional standpoint, it was broad-based across all regions.

Krishnan Akhileshwaran: There wasn't really, I think, two things to point out. One is there was not a seasonal pattern. When we look at it from a regional standpoint, it was broad-based across all regions. This was not a typical sort of dengue or acute febrile illness pattern. I think it speaks for a little bit of a shift to more elective and semi-elective cases. That is a good sign for the future because it means that we can move our volumes with more intentionality and less seasonal change.

Speaker #4: This was not a typical sort of dengue or acute febrile illness pattern. So, I think it speaks for a little bit of a shift to more elective and semi-elective cases.

Speaker #4: And that is a good sign for the future because it means that we can move our volumes with more intentionality and less seasonal change.

Speaker #5: Sure. So, let's say our guidance is for 13% to 14% top-line growth for the established units over the next 24 months. What would be the contribution of volume growth for the established units in this period?

Rahul Jeewani: Sure, sir. Let's say our guidance of this 13% to 14% top-line growth for the established units over the next 24 months, what would be the contribution of volume growth for the established units in this period?

Speaker #4: So, roughly around 7%—7 to 8%.

Madhu Sasidhar: Roughly around 7%, 7% to 8%.

Speaker #5: 7 to 8%. And do you think that with this normalization in Bangladesh footfalls, the IP volume growth for established units would be higher than this 7 to 8% in FY27?

Rahul Jeewani: 7% to 8%. Do you think that with this normalization in Bangladesh footfalls, the IP volume growth for established units would be higher than the 7%, 8% in FY27?

Speaker #4: Sorry, I didn't quite catch that question. Sorry.

Madhu Sasidhar: Sorry, I didn't quite catch that question. Sorry.

Speaker #5: So, I was saying that last year, our Bangladesh footfalls were impacted. In the first quarter, we saw normalization in that. I think you pointed to 60% growth in the Bangladesh IP volumes.

Rahul Jeewani: Sir, I was saying that last year our Bangladesh footfalls were impacted. Q1, we saw normalization in that. I think you pointed to 60% growth in the Bangladesh IP volumes. With that happening, for established units this year, the volume growth could be higher than 7% to 8%, which you are guiding.

Speaker #5: So with that happening, for established units, this year the volume growth could be higher than the 7 to 8 percent which you are guiding.

Speaker #4: That's why we said, for the full year, we should still be at that 18 to 20 percent revenue number.

Madhu Sasidhar: That's why we said in the full year, we should still be at the 18% to 20% revenue numbers.

Speaker #5: Okay, sure, sir. Yes, that's it from my side.

Rahul Jeewani: Okay, sure sir. That's it from my side.

Speaker #1: Thank you. Your next question comes from the line of Suraj Bhandari with East Lane. Please go ahead.

Operator: Thank you. The next question comes from the line of Suraj Bhandari with Eastspring. Please go ahead.

Speaker #5: Hello. Good afternoon. Good afternoon. Thank you for taking my question. I just wanted to know, what is Apollo's medium-term view on how the NPS Swasthya tie-up will drive patient volume, case mix, ARPU, and margins across hospitals and pharmacies?

Suraj Bhandari: Hello, good afternoon. Thank you for taking my question. I just wanted to know, what is Apollo's medium-term view on how the NPS Swasthya tier pool drives patient volume, case mix, ARPU, and margins across hospitals and pharmacies.

Speaker #3: So Apollo Swasthya?

Suneeta Reddy: Apollo Swasthya.

Speaker #4: Sorry, let me take

Madhivanan Balakrishnan: Sorry. Let me take that question. NPS Swasthya is a very early-stage product. Only two PoCs have happened. One wherein Apollo was involved, which was to drive the OPD agenda, and the second is something which MedAssist, MedPlus, and some of the other banks were involved. As we speak, the PFRDA is putting through the regulatory requirements, and this product will come. My understanding is even the first one year will be focused on getting more and more customers into the fund, and the product itself will shape out as we are talking about layering it with the top-up, et cetera. I would say at least we are one year to 18 months away before seeing any impact of NPS Swasthya. But the vision for the product is how can people continue to keep investing in their pension?

Speaker #5: That question. NPS Swasthya is a very early-stage product. Only two POCs have happened, one that Apollo was involved in, which was to drive the OPD agenda.

Speaker #5: And the second is something which MedAssist, MedPlus, and some of the other banks were involved in. So, as we speak, the PFRDA is putting through the regulatory requirements.

Speaker #5: And this product will come. My understanding is, even in the first one year, it is primarily going to be focused on getting more and more customers into the fund.

Speaker #5: And the product itself will shape out as they are talking about layering it at a top-up, etc. So, I would say at least we are one year to 18 months away before seeing any impact of NPS Swasthya.

Speaker #5: But the vision for the product is, how can people continue to keep investing in their pension? However, 25% of their contribution is then allowed for any kind of OPD or IP-related businesses.

Madhivanan Balakrishnan: However, that 25% of their contribution is then allowed for any kind of OPD or IP-related businesses. But as far as the business is concerned, it will be treated as money which is sent from the customers. But it is very early, so I would say around 18 more months before it starts playing out.

Speaker #5: But as far as the business is concerned, it would be treated as money which is spent from the customers. But it's very early.

Speaker #5: So, I would say around 18 more months before it starts playing out. Understood. Thank you.

Suraj Bhandari: Understood. Thank you.

Speaker #1: Thank you. Your next question comes from the line of Shobh Kalra with Aseet C. Mehta Investment Intermediates Limited. Please go ahead.

Operator: Thank you. Your next question comes from the line of Shubh Kalra with Asit C. Mehta Investment Intermediates Limited. Please go ahead.

Speaker #5: Yeah. Hi, excuse me. First of all, congratulations on a very strong quarter. It's been noticed that Apollo has closed three hospitals during the quarter: Lavasa, then one facility in Chennai, and one in Bangladesh.

Shubh Kalra: Yeah. Hi. First of all, congratulations on a very strong quarter. We noticed that Apollo has closed three hospitals during the quarter, Lavasa, then one facility in Chennai, and one in Bangladesh. Could you please help us understand the rationale behind these closures, and particularly whether they were driven by some strategic considerations or some probably operating performance or other factors A, and B, should we expect any material financial impact from these closures, either in terms of one-off cost or ongoing savings?

Speaker #5: So, could you please help us understand the rationale behind these closures? I mean, particularly whether they were driven by some strategic considerations, or perhaps operating performance or other factors?

Speaker #5: If A and B, would we should expect any material financial impact from these closures? Either in terms of one-off costs or ongoing savings?

Speaker #3: I think no material impact. The one in Chennai is closed for renovation—an upgradation. So that is Sundaeya Peth, which is now closed for renovation.

Suneeta Reddy: No material impact. The one in Chennai is closed for renovation and upgradation. That is only our bet, which is now closed for renovation. The one in Lavasa is where we've not really established a high-end hospital there. We have the land. It's just to make sure that we keep possession of that land. It's not an operational hospital in the true sense of the word. Your third one was

Speaker #3: The one in Lawasa is where we're not—we're doing—we've not really established a high-end hospital there. We have the land; it's just to make sure that we keep possession of that land.

Speaker #3: So, it's not an operational hospital in the true sense of the word. Your third one was?

Speaker #2: Bangladesh.

Speaker #3: Bangladesh. Bangladesh has never had a hospital in Bangladesh. We had an OMA-owned.

Suraj Bhandari: Bangladesh.

Suraj Bhandari: Bangladesh.

Suraj Bhandari: Oh, managed hospital in Bangladesh.

Suneeta Reddy: Never had a hospital in Bangladesh. We had an O&M agreement, wasn't it?

Speaker #4: It was OMA, actually; we got out of the OMA in Bangladesh.

Madhivanan Balakrishnan: It was O&M. Actually, we got out of O&M in Bangladesh.

Speaker #5: Okay, got it. Sorry. Thank you.

Shubh Kalra: Okay, got it. Thank you.

Speaker #1: Thank you. A reminder to all the participants to ask a question: you may press star and one now. Our next follow-up question comes from the line of Kunal Damesha with Macquarie.

Operator: Thank you. A reminder to all the participants, to ask a question, you may press star and one now. Our next follow-up question comes from the line of Kunal Dhamesha with Macquarie. Please go ahead.

Speaker #1: Please go ahead.

Speaker #6: Hi. Thank you for the follow-up. Just one question: Do we have any EWS obligation in any of our hospitals? And if yes, how many beds do we have for the EWS obligation?

Kunal Dhamesha: Hi. Thank you for the follow-up. Just one question. Do we have EWS obligation in any of our hospitals? If yes, how many beds we have for the EWS obligation?

Speaker #4: There are EWS obligations in some of our hospitals, which we are adhering to. One is in Delhi, where we are adhering to them.

Madhu Sasidhar: There are EWS obligations in some of our hospitals, which we are adhering to. One is Delhi, which we are adhering to. Another, we have some in Hyderabad and some in Kolkata. Because we don't have much of the other structures that some of the other operators work on. Most of it is freehold. Otherwise, even our Gurugram hospital that is coming is on freehold land, et cetera. We have minimum obligations across our system, which we are adhering to. I'll come back to you on the numbers exactly offline.

Speaker #4: We have some in Hyderabad and some in Calcutta, because we don't have much of the other structures that some of the other operators work on.

Speaker #4: Most of it is freehold. Otherwise, even the Gurugram hospital that is coming up is on freehold land, etc. We have minimum obligations across our system, which we are adhering to.

Speaker #4: I'll come back to you on the numbers exactly, offline.

Speaker #6: Okay. Sure. Thank you.

Rahul Jeewani: Okay, sure. Thank you.

Speaker #1: Thank you. Ladies and gentlemen, as there are no further questions, I would now like to hand the conference back to the management for closing remarks.

Operator: Thank you. Ladies and gentlemen, as there are no further questions, I would now like to hand the conference back to the management for closing remarks.

Speaker #3: So thank you all for attending this call. I hope that we answered all of your questions. Apollo has become a SPY 27 from a position of strength.

Suneeta Reddy: Thank you all for attending this call. I hope that we answered all of your questions. Apollo has begun FY27 from a position of strength. Our strategy is firmly centered around building India's most integrated healthcare platform. Primary care diagnostics, digital engagement, insurance, and hospitals can no longer be looked at as independent businesses, but interconnected patient journeys that improve acquisition, retention, clinical outcomes, and lifetime value. This focus on an integrated healthcare ecosystem, delivering superior clinical outcomes, expanding access to high-quality care and disciplined capital allocation position as well, will sustain our momentum and create enduring value for all of our stakeholders. Please feel free to reach out to our team for any further questions and discussion. I look forward to connecting with you again next quarter. Thank you, and good evening.

Speaker #3: Our strategy is firmly centered around building India's most integrated healthcare platform. Primary care, diagnostics, digital engagement, insurance, and hospitals can no longer be looked at as independent businesses, given the interconnected patient journeys that improve acquisition, retention, clinical outcomes, and lifetime value.

Speaker #3: This focus on an integrated healthcare ecosystem, delivering superior clinical outcomes, expanding access to high-quality care, and disciplined capital allocation positions us well to sustain our momentum and create enduring value for all of our stakeholders. Please feel free to reach out to our team for any further questions and discussions.

Speaker #3: I look forward to connecting with you again next quarter. Thank you, and good evening.

Speaker #1: Thank you, ladies and gentlemen. On behalf of Apollo Hospitals, Limited, that concludes this conference call. Thank you, everyone, for joining us, and you may now disconnect your lines.

Operator: Thank you, ladies and gentlemen. On behalf of Apollo Hospitals Limited, that concludes this conference call. Thank you everyone for joining us, and you may now disconnect your lines. Thank you.

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