Refused to commit on lucknow nagpur unit performance.

There has been some senior doctor departure from your team in NCR hospitals. Have you rehired the required doctors? And what kind of impact was there, if any? What is the attrition rate?

Yes, that level of iteration is normal. You have certain teams always sort of move out, and new teams come in almost immediately. And that is what has happened. So, we do not expect any impact. Less than 1% of the doctors. Yes, so you could say, between 1% to 1.5% at best. I mean anecdotally, if two or three doctors' leave or certain doctors leave, it does not have any major impact. We have got close to 6,000 doctors, right?

On your settlement with issues on the insurance company. So has like all the matters now been put to rest and do you have any further contracts which are coming up for negotiations?

So Damayanti, first of all, whatever issues we had in terms of these three insurance companies, that we have already sorted out. And not only sorted out for now, but we are also sorted out for future. In the sense that when we concluded this arrangement, we also agreed the next revision with them. There are other companies, which are also up for renewal this time, including GIPSA. Those negotiations are underway, I would say. Abhay Soi added: But this sort of impasse happens once every few years, and we do not expect a repeat of this.

On the international patient side where the growth has been quite robust this quarter, almost 25%. Could you break down into volume and realization growth? And elaborate on geographies.

Most of it was volume growth. I do not think there is any increase in the ARPOB in that segment. So, you can assume that 25% is entirely volume growth. Abhay Soi: Broadly, the geographies remain the same. Like we mentioned in the past, it is Middle East, Eastern Europe, African cluster, etc. We do not want to give any specific countries because it is privileged information.

On the MSSH Saket 400 bed hospital - timeline for the commissioning? And how do you see the scale up post commissioning in terms of ramp-up of occupancy or EBITDA breakeven?

Currently, there is deep cleaning happening at Nanavati-Max, and we are expecting it to be commissioned within this week. Max Smart will be commissioned within the next 30 days. EBITDA breakeven is almost immediate. We have also stated that in the past, for brownfields, we do not have any EBITDA drags necessarily.

Your profit growth after correcting is 16% year-on-year which lags a little behind EBITDA and revenue growth. Is there any insight you can provide on this?

You would have seen that the finance costs have gone up, and depreciation has gone up as well because we have added new hospitals in Q3 last year. And their EBITDA margins are lower. We have also taken borrowings to fund these acquisitions. As their EBITDA growth comes in level with the other hospitals, you will find that the PAT growth number will also start to follow the same pattern. Abhay Soi: Yes. Last year, Jaypee was not there, right? So that is about INR 2,000 crore of acquisition that we have done.

On ARPOB - the rate of growth of ARPOB is becoming slower, at least optically. Do you share this assessment? Is there any discussion on what to do about ARPOB going forward?

ARPOB growth is 3% y-o-y. But it also includes the impact of the new hospitals that we acquired and started last year. If we take that out and consider all the existing hospitals - existing hospitals mean the one that were operating before Q4 FY24 - then the ARPOB growth is around 7% y-o-y. It is basically the impact of the mix that is bringing this number down since the share of the new hospitals (Lucknow, Nagpur and Dwarka) has gone up in this quarter compared to Q2 last year.

Our cash flows were weak because of institutional business. Do we expect further deterioration with Nanavati and Saket coming up?

No, no. Institutional payments have historically been lumpy. They do not necessarily come on time. There are certain months when there is a build-up because various PSUs, whether it is ECHS or CGHS, run out of budgets. Then they write to the ministries, get their budget replenished and pay. They have been lumpy in the past as well. So, there is nothing to be concerned about. No, not at all. I mean, even this is not a deterioration. It as a one-time thing. In the next quarter, you will probably see a large amount of cash flows coming through.

On Mohali - we added 160 beds, but presentation shows operational increase of 53 beds only. So in Q3, how much will get operational?

As we speak, 90 beds are operational. Out of the 160 beds, 53 were made operational from August 1st. That means the impact in the quarter is around 35 beds because you will have to consider the weighted average. And that is the reason why the operational capacity will be lower. We are obviously not short of beds there. As we see the occupancy ramp up, we will open more beds. But in quarter 3, we will have all the beds ready. We will open them as we see the demand there. Abhay Soi: For Mohali, it is a revenue share arrangement. So, let us say, 5% of our revenues are given to the government.

In Lucknow and Noida, we are seeing a lot of interest from peers coming out with big capacities. Any comments on competitive intensity?

Not really. The new Noida capacity, I mean, it will not come overnight. It has been under construction for the last 4 years. Any competitor coming up with any capacity has been constructing for the last 4 to 5 years. In fact, we purchased Jaypee later. That was like it fell from the sky and we purchased it, right? So, I mean that was a cold start.

On ARPOB growth - we are trending at about 6% now this quarter for our existing units?

We are around 7% ARPOB increase if I take the existing units. When I say existing units, I mean units which were operating in Dec'24 or before. Not December quarter, I am talking September quarter. In the September quarter, the ARPOB increase was 3.3%. If I take out the impact of the new hospitals that we added in Q4 FY'24, then the ARPOB increase in the existing units is 6.8%. Abhay Soi: We have not given any guidance for Q3.

For H1 FY'26, can you quantify what percentage of total hospital revenue came from international patients? And what is the yield profile?

It is about 9% of the revenues. And I think typical ARPOB is about 30% higher for international patients compared to our average. Yogesh Sareen: ALOS is 1.2x. Abhay Soi: 1.2x, because people who come for international visiting are coming from more acute diseases, right?

Your asset light divisions like Max Lab and Max@Home - what is the consolidated EBITDA margin? And what is the long-term margin target as it scales?

That is already there in the investor release, right? So Max Lab reports an EBITDA margin of around 16%, right? And for the Max@Home business, the arm's length EBITDA would be around 20%. But if I take the global EBITDA, that will be probably more than the hospital EBITDA. Abhay Soi: These are also subdued right now because, as you mentioned, we are growing at a fast pace. It is because we are investing for the growth.

What is the occupancy in Noida currently?

So it is around 64%.

On Dwarka - what is the occupancy and what margins are Dwarka at currently?

Dwarka is 81% plus occupancy in the quarter. We have 285 beds operational now. It is a 300-beded hospital, once we get the oncology block, then we will be able to vacate some onco day-care beds and move them to the onco block and have this hospital's capacity restored to 300 beds. EBITDA (Unit) margin will be around 15%, currently. Abhay Soi: The typical trajectory for a greenfield would be that you sort of ramp up the occupancy first, and then after that, you see expansion of margins.

What was the ARPOB growth of segments - cash, insurance, institutional?

The walk-in business, both insurance and the self-pay, grew by around 8% to 10%, on a like-to-like basis. It is basically the impact of the new hospitals that got added into the existing hospitals, which has brought down the overall growth to 3%. No, ARPOB growth is flattish in the institutional. And because the rate got revised only in October, so in Q2, there is no growth in the institutional ARPOB. But in the self-pay and insurance, the growth is in the range of 8% to 10%.

On Noida hospital facility - you had mentioned land parcels in Greater Noida (400 beds) and Sector 128 Noida (700 beds). Is the land adjacent to the existing hospital or different location?

The present one (Sector 128) we have in Noida is 18 acres of land. You can imagine we can keep building over there. It is a contiguous land parcel. Similarly, in Lucknow, it is 27 acres of land. So we can go for another 2,000 - 2,500 beds there. We also have another land parcel in Lucknow. At Noida, in addition to that, we have land in Greater Noida. Keshav Gupta: Greater Noida and Noida are separate locations.

Can you share the international patient bed share for this quarter? And for self-pay and TPA channels?

Self-pay is around 26-27%, insurance is around 34-35%. And international, as we mentioned, is 5.5%. The rest is institutional. Abhay Soi earlier: Yes, so similar to what it used to be earlier -- yes, it would be around 5-5.5%.

On 7% ARPOB growth like-to-like - shouldn't specialty mix help given medical patients are down? Should we maintain ~7% +/- 1% going forward?

Yes, it takes into account that, right? But that has been historical as well, right? I do not see any changes there. Yogesh Sareen: So, if you think that internal medicine is basically the impact that you generally used to have in quarter 2. But for the new hospitals, the share of internal medicine is low. So, while there is some impact, and you can see that in the earnings update, but it is not that big of an impact.

What was the network capex intensity in the first half? And second half?

We spent around INR 900 crore. A bit higher probably. Hopefully around INR 1,100 crore.

When we say ARPOB this quarter was subdued, that was largely due to insurance issues and impact of new hospitals?

Not so much the insurance, I would say. Like I said, any reduction in insurance perhaps was made up because we had that many people shifting to self-pay. But I think, it was perhaps because of the new hospitals.

On the INR 200 crore CGHS positive impact, what is the estimated timeline expected to reflect in numbers?

I think some of it has already started from 13th October. But I think there is a super speciality rate that will also kick in, I think, by the end of this month. I mean, we do not know how much time it will take, but I think the expectation is that by the end of November, that rate should also be up and working.

On CGHS - is the INR 200 crore impact largely for CGHS or includes possible similar rate revisions for all other central government agencies?

All central government agencies are linked to CGHS. So, this number we mentioned is for CGHS and CGHS-like accounts. So, new rates, including super speciality rates, etc. are also expected on ECHS & others accounts because they are normally in-line with CGHS. However, they have to go through the paperwork. That is right. So, this is CGHS and CGHS-linked accounts.

Is it fair to assume that the CGHS pricing benefits start tinkering in from FY27? And what kind of flow-through to operating profit EBITDA?

Yes (FY27 is the year for total benefit). Pretty much 85% (flow-through). We are looking at INR 200 crore and hopefully good numbers should flow through.

On Smart and Nanavati Brownfields - is large part of fixed cost already in P&L reflecting in 2Q or can we expect more increase in 3Q? And can we see margin expansion despite adding brownfields?

No, I mean, these are Brownfields, right? So, your fixed cost is largely absorbed by the existing hospitals. So, you should have expansion of margins with brownfields because they give you higher margins than existing hospital beds. Keshav Gupta: You are right. There would be a bit of operating leverage that will kick in once those brownfields start getting full up, that may be 15 days here or there. But, yes, operating leverage should come in. That is the whole concept of brownfields.