Apollo Hospitals Enterprise Limited (APOLLOHOSP) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Apollo Hospitals Limited Q3 FY '24 Earnings Conference Call. [Operator Instructions] 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.

Thank you, Yashashri. Good afternoon, everyone, and thank you for joining us on this call hosted by Apollo Hospitals Limited to discuss the financial results for the third quarter of FY 2023-'24, which were announced yesterday. We have with us on the call the senior management team, represented by Mrs. Suneeta Reddy, Managing Director; Dr. Hariprasad, President of the Hospitals Division; Mr. A. Krishnan, Group CFO; Mr. Sriram Iyer, CEO of AHLL; Mr. Obul Reddy, CFO of the Pharmacy Division; and Mr. Sanjiv Gupta, CFO of Apollo 24/7. 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 on Slide 2 of the investor presentation shared with all of you earlier. Documents relating to our financial performance have been circulated, 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.

Thank you, Mayank. Good afternoon, everyone. Thank you for taking time out for this -- to join this earnings call. I believe that all of you have received our earnings document, which we shared earlier today. We are pleased report a strong performance in the third quarter of the financial year 2023-'24. While there has undoubtedly been some impact from seasonality, holidays and the cyclone in Chennai, we have reported double-digit growth in revenues and ARPOB this quarter on a year-on-year basis. Further, there has been continued progress in strategic imperatives such as further improvement in specialty mix, an enhanced payer mix, clinical augmentation and digitization. Our Healthcare Services business witnessed a strong 12% year-on-year revenue growth in quarter 3 FY '24, sustaining the pace of growth from the start of the fiscal year. Volume growth has contributed about half of the revenue growth, while the rest has come through pricing, payer and case mix improvements. Within this, the insurance revenues grew by 16% and contributed to 43% of total hospital IP revenue. Overall occupancy across the group was at a healthy 66%. This was achieved despite a reduction in ALOS and a planned calibration of institutional volumes. ARPOB on an overall basis increased 10% year-on-year to INR 56,368. Against this backdrop, let me take you through our financial results. Consolidated revenue grew by 14% to INR 4,851 crores. Healthcare Services grew by 12% to INR 2,464 crores. Revenues from Apollo HealthCo were at INR 2,049 crores in quarter 3 FY '24, a growth of 17% year-on-year. Revenues from Apollo Health & Lifestyle registered a growth of 8% year-on-year at INR 338 crores in quarter 3 FY '24. The diagnostics vertical within AHLL recorded revenue growth of 19% year-on-year and was at INR 112 crores. Consolidated EBITDA was at INR 614 crores, an increase of 21% year-on-year. Within this, Healthcare Services EBITDA was at INR 586 crores, registering an 8% growth year-on-year. Healthcare Services margins were at 23.8%. The margin impact was due to the reduced share of elective and surgical revenue in the revenue mix due to the holiday and festive season as well as investments in clinical talent that have been made to strengthen our clinical profile, which is yet to be fully optimized. The pharmacy distribution business in Apollo HealthCo recorded an EBITDA of INR 134 crores, a year-on-year growth of 8%. In a significant milestone, Apollo HealthCo has reported a positive EBITDA of INR 2 crores, registering a break-even performance for the quarter, 1 quarter ahead of guidance. AHLL recorded an EBITDA of INR 26 crores in quarter 3 FY '24. Consolidated PAT was INR 245 crores, a growth of 56% year-on-year. Healthcare Services PAT was at INR 287 crores, up by 10%. Within the Healthcare Services business, we have delivered an ROCE of 26.5% with a balanced ROCE across all our geographies, metros, Tier 1 and Tier 2. Looking ahead, we believe a healthy mix of metro and non-metro beds will lead to further improvement in ROCE. We have also carefully studied the key markets and micro-markets in the country, the demand-supply gap, and have set in motion a plan to add 2,000 beds over the next 4 years at a cost to INR 3,000 crores. This plan is well underway, and we would operationalize our hospitals in Pune, Hyderabad and Kolkata as well as the brownfield expansion in Bangalore in FY '25. Private label and generics business contributed 16.55% of total pharmacy revenues with an improvement of 55 basis points over last year. The platform GMV of 24/7 was at INR 658 crores, a growth of 21% on a sequential quarter basis. We are committed to achieving breakeven for Apollo 24/7 digital business within AHLL in the next 6 to 8 quarters. We have begun to see the effects of our integrated network with traction on net new footfalls coming into the system as well as more people consuming our services across the formats. We had over 450,000 new registrations this quarter within hospitals and over 160,000 incremental footfalls in the AHLL vertical compared to the same quarter last year. Our digital platform 24/7 added 2 million new users this quarter. We believe that this comprehensive platform, with opportunities for improving our offering on consumer experience and lifetime value, offers us a competitive moat and headroom for accelerated growth. With each of our verticals delivering on the strategic promise, the network effect will deliver a holistic solution for the consumer and lasting relationship. I would like to highlight that Apollo Hospitals has emerged as the first private hospital group in India to have successfully completed CAR-T cell program. The group will now provide access to Made in India CAR-T cell therapy, a state-of-the-art treatment option for cancer patients. This is in keeping with the spirit of clinical pioneership that we have always stood for. Our efforts to offer outstanding clinical programs and technologies and deliver the best clinical outcomes for those who trust us has always been at the core of our DNA. On that note, I would like to hand over to our moderator and open the line for questions and answers. I have with me Dr. Hariprasad, our CFO -- Hariprasad; our CFO, Krishnan; Sriram Iyer from AHLL; Obul Reddy and Sanjiv from Apollo HealthCo with me ready to take all of your questions. Thank you.

[Operator Instructions] We'll take our first question from the line of Damayanti Kerai from HSBC.

My first question is on margin trajectory for hospital segment. So ma'am, obviously, you mentioned you are investing in clinical talent for new facility, et cetera. And we have seen margins falling off from, say, mid-20s to around 23%, 23.5% or so. So can you elaborate like how should we look at this margin profile over next few quarters? Because you have a couple of hospitals commencing operation in FY '25. So that's my question on hospital margins.

So 2 points. We are -- as we said, we are clearly wanting -- this quarter has been, as you know, a base of a seasonal low quarter. So going forward, our focus clearly is to work on 3 levers. One is -- the one lever is the inflation volume increase that we have been speaking of. And clearly, there are plans, as part of our annual operating plan discussions, et cetera, to push each of the units on increasing the inpatient volumes across their facilities, and that's what we are working on. That should help us get closer to the 70% as close to possible or even 70% next year, which is our internal target. Second is clinical programs. If you look at the clinical programs that we are now focusing on, there is significant focus on oncology, neurosciences, some high-end cardiac, et cetera. Some of them, we believe, with -- will further increase our utilization in some of our units, and that should also flow-through through the margins. So these are 2 significant levers on the revenue side. And on the cost side, as we already have spoken, one is this whole lever that we have of the doctors' fees because having invested a bit ahead of the curve, next year, we should be able to see that getting rationalized a bit, and that should also help us see our margins go up. We have -- internally, we would like to believe that there is an opportunity to increase the margins by at least 200 basis points over the next few quarters. And that's our internal way of looking at it.

So this 200 basis point margin improvement is for existing set of beds or whatever like new beds will come cumulatively, you're talking about the sort of...

New beds will come more by Q4 of the next fiscal. So I think first is to get this done by the next fiscal, and we will obviously have to then take. But the base of the EBITDA that we have is so big now that some of the new beds should not alter, and they are all the new beds that are coming if you look at it, Calcutta, Hyderabad, the way we are looking at Bangalore. Bangalore is very close to our new -- our existing hospitals. So you should look at it more as adjacent to our existing hospital, which should not impact our EBITDA significantly. So I think next year, first is -- focus is to increase it by 200 basis points. End of next fiscal, we hopefully get all these hospitals there, and we will show that separately. I wouldn't like to guide for now on what would be their EBITDA losses, but it will be very miniscule.

Okay. That's helpful. My second question is on 24/7 platform. So obviously, with improving profitability, you are now expecting breakeven for this in next 6 to 8 quarters. So what's your plan for this? Like are you still looking for fundraise? Or do you want to put out separate IPO, et cetera? So any plan for 24/7 in, say, next 2 to 3 years?

So currently, 24/7, in terms of cash, is it's self-sustaining, so does not require a cash infusion, but we are looking at maybe -- at some time, if we require some cash, we are open to the idea. Let me just leave it at that because we are looking at growth coming from 24/7 and achieving profitability between the sixth and eighth quarter of operations.

We have our next question from the line of Kunal Dhamesha from Macquarie.

So the first question on the 24/7 GMV guidance that we had for FY '24 of around INR 3,000 crores. We have roughly INR 2,000 crores plus year-to-date. So what is our expectation for full year and the next year? And while we have achieved the breakeven -- so while we have achieved the breakeven at HealthCo level a quarter earlier than guided, that is good, but has that impacted the growth prospect of this business?

Yes. So I will take this question, ma'am. So I think INR 3,000 crores was the guidance that we had given it for FY '24 as far as digital GMVs are concerned. I think we should -- we need to hit something like INR 2,750 crores to about INR 2,800 crores. So that will be the final number versus INR 3,000 crores mark. And this would mean about 75% to 80% increase in GMV for FY '24 versus FY '23. We expect to continue to show a robust growth, anything between 60% to 70% for the next year also versus this year. That's on the first question. The second question is that on 6 to 8 quarters profitability, absolutely, we've got the clear [indiscernible] with respect to increasing the GMV, increasing the margin line for each of the firing engines that we have today, which is the pharmacy, diagnostic, consultation; and as well as doing the right thing for the fixed expenses that the company has it. And whatever right things are required to be done, they would be taken care. And as we step into the annual operating plan for next year, I think maybe in the next -- when we meet next, we'll have a little more understanding about this. But as we see, we have a detailed action plan to turn digital division also well in the next 6 to 8 quarters.

But sir, for, let's say, 60% to 70% growth next year, you should have at least some sequential growth, right, versus this quarter sequential -- there is a sequential decline of around 10%, right? So I mean, is it a top task or is there something one-off in this quarter, which has...

Yes, this is something one-off. Q3 has been a transition quarter for the company. And because of the holidays and the festivals, we have seen a slight dip in the GMV. But if I look at the January numbers and Q4 numbers, we are back into the growth, and you will notice this once we publish our Q4 numbers. So nothing to worry, this is just one-off.

And the second question is on the Healthcare Services business. Again, just going back to our guidance of around 15% revenue growth for FY '24 versus we have done 13% year-to-date. Now I think seasonality would not matter on a year-to-date basis, right? So where are we seeing this growth for FY '24 now for the Healthcare Services business? And what is the outlook for the next year?

No, I think we are targeted to grow at 15%. This quarter was because of the holidays. So leaving out holidays, I think we are confident of achieving at least 14% growth for the Healthcare Services.

For the full year. And ma'am, next year, any broad idea? We would like to know.

No, I think broad idea is that this trajectory has been good. So we are looking at 15% revenue growth.

We have our next question from the line of Bino P. from Elara Capital.

A couple of questions. You commented a bit on the pharmacy business margin improvement that is excluding the 24/7 costs. I can see that the other expenses have -- overall expenses have come down Q-o-Q a bit, the margin is up compared to last few quarters. Anything changing there?

So Obul?

I think we have -- last year, we have informed you that we have invested on the infrastructure required to create online services, and the costs were a little high. And as business matures and we have planned those controls and then you can see that improvement in the margins. And when discounts -- lesser discounts also contributed to the margin.

Okay. Great. Second, on this Rourkela SAIL Hospital, which you have inaugurated, under which cluster will you add the beds and the revenue?

So Rourkela is just added very recently now. So it's part of the existing -- it's a 50-bed that has just got commissioned. It's a 250-bedded capacity hospital, but only 50 has got operationalized. So it will get operationalized over the next 3 quarters. So it's part of the overall Healthcare Services. It's a small number yet.

No, my question was the health care you divide into Tamil Nadu, North, East, West, et cetera, right? Where would that...

East.

In East, okay. And sir, in this quarter, I see there is an increase of about 42 beds, operational beds in East and about 100 beds in North. Where is that coming from?

East is what we said, right? It is coming -- Rourkela is also adding to that. And in North, it is Indore. Indore, we have added -- in a brownfield, we have done a 100-bedded expansion.

In Indore, we have done a 100-bed expansion. Okay. Understood. Okay. Great.

We have our next question from the line of Neha Manpuria from Bank of America.

My first question is on the expansion plan. If I look at the time lines for Pune, from what I remember from the previous presentation, this was mentioned in the first quarter, but we have seemed to have delayed it to the later part of the fiscal. Any specific reason, I mean, of the significant delay in commissioning of that project?

Yes. So the current hospital project, we have 220 beds, but we have the capacity to add another 200 beds. So we are doing -- building the superstructure so that we can gradually add 100 beds every year post this year.

Okay. So it's just to complete the superstructure for the additional beds.

Yes. Yes.

Understood. Okay. Got it. And my second question on 24/7 and the comment that you mentioned of achieving breakeven in 6 to 8 quarters. Would that be possible with the existing services that we have in 24/7? Or would that target require us to add more services to the platform that we have talked about in the past, subscription, insurance, et cetera? Would that be key to getting to that breakeven in 24/7? Because from the existing business, given your GMV guidance, I'm not able to get to the math of breakeven in 6 to 8 quarters.

No, I think -- see, it has to be a mix of the new set of verticals also, which are -- which provides you better margins. And we talked about the entire digital therapeutics as one of the offerings. And sometime back, we also talked about the insurance distribution. In fact, the insurance distribution is something which we started properly from January this year. And apart from these 2 verticals, obviously, the entire monetization of the app and the website is still not being done as much as we would like to do it. So I think these 3 particular offerings, which is digital therapeutic, insurance and app monetization, these are the 3 segments, we could give you a better margin line. In fact, the entire earnings that you earn out of these 3 verticals would go back or flow back down to EBITDA. So I think, coupled with the existing offerings of pharma, diagno and consult, these are the 3 things that we should be seeing as we move forward. And together, all the 6 months should help us achieve this target.

And sir, for digital therapeutics, sir, app monetization, what sort of time line should we start seeing this being, let's say, a driver? Would it take a couple of quarters for that to happen? Like for insurance, you mentioned you've started the module from this month.

Yes. So app monetization is something which we can expect to start from Q1. And as far as the digital therapeutics is concerned, I think that is also -- work is getting done on the product and the tech side of the solutions. And I think something like in Q1 and Q2, we should also be seeing certain subscription-led module for digital therapeutics to also be ruled out of 24/7.

The next question is from the line of Shyam Srinivasan from Goldman Sachs.

Just first one on AHLL. Apart from diagnostics, I think the other segments of it have been like slow growth for the 9 months, even for quarter 3. Anything that we need to keep in mind? Is there a -- would we see an outlook where it goes back to a double-digit growth for the other segments as well?

Sriram?

Yes. So on the specialty formats, we had a lot of centers that were coming up this year. And most of them have got commissioned in quarter 3, and some of them are expected to get commissioned in quarter 4. So since we are transitioning from the older center to the newer center, there was obviously a transition time and because of which you see a muted growth in the YTD this year. And we are confident that we should be -- we should go back to a double-digit growth starting the next financial year.

Yes, Sriram, but when I look at like footfalls, I still see volume growth. So what explains that discrepancy between volume growth and revenue growth being much subdued?

See, what has happened is that the volume growth is primarily to be with OP footfalls, but specifically in our Cradles and Spectras, these are the centers where we have gone, moved into different centers. We didn't have enough rooms available, so that is why the entire challenge that you see with respect to the volume growth. Also, we had a significant challenge in quarter 3. If you see, the growth has been because of Chennai as well. So we had a couple of centers in Chennai. There was an extended delay for us to recuperate back to the business. So that also caused this. So those are primarily the 2 reasons. And we -- as I said, we'll be back to a double-digit growth, and we are expected to commission some of the centers in this quarter, in the quarter 4.

Got it. Helpful. And just last point on the AHLL, on diagnostics, right? So we have done about 19%, 20% growth, but the variation, just looking at from an industry, seems to be all over the place, right? So we have low single-digit growth to companies like you're growing 20%. So anything you can speak from -- obviously, you're starting from a lower base and maybe your margin trajectory is lower. But just want to understand, what's happening there? And is it the case that hospitals are able to keep -- or hospital chains are able to keep their patients more within themselves?

Yes. I can talk about what we are really doing. So as you rightly said, the industry, all the listed players are growing anywhere between 10% to 12%. And out of that 10% to 12%, the volume growth is pretty much in single digits. So most of the growth has been driven by price. The good thing for us is that our entire growth has been led by volume. So the focus on really driving expansion, opening centers and investing in new labs over the period of years is giving this kind of results. So we are bullish that we'll be able to sustain a 20% kind of growth levels. And we will be hitting this year at INR 470 crores of top line. And as I said, our outlook for this quarter also is at a 20% kind of growth levels. And with respect to the industry, I think at some point of time, I think the industry is also getting mature in that sense. There is some price play that is coming into this one. So we've seen some bit of price rationalization happening in the market from across the industry. So I think all that is also coming into play where the volume growth is slightly becoming challenging. But as I said, we are positioned well, and we'll continue to invest on diagnostic business, and we have an outlook of 20% growth in the coming year as well.

Understood. Helpful. Just a second question on Apollo 24/7. I'll be brief. We had 2 million registered users add up, but our daily active users have kind of come off. Is there a way in which we represent this number? Is it average versus period end? If you could help us, please?

Yes, that's the average numbers. And what happens is that typically in e-commerce, when you get the registered users, it takes a little bit of time before they start transacting into your system. And this is a little cyclical in nature. But as you move forward, you would see that the impact of adding new customers into the daily active users and weekly active users will start going up.

Just a request here because if we -- when we want to compare with historical numbers, it becomes very difficult. Like last time, I think we had 8.8 lakhs or 8.5 lakhs. Now it is 6 lakhs. And now you're saying it's average. So for us to see whether traction is happening because the registered users are going up, but if the active users are not following, it's a request because if you change these parameters, then it's difficult for us to compare with historical numbers.

No, it's the same apple to apple. It's just as far as Q3 is concerned, as I said earlier also, this is the period where we saw the seasonality impact because of the holidays and festivals. But otherwise, the corresponding numbers are similar. And as I said previously, when you add new customer base, which is about 2 million for the entire quarter, the impact of that will start happening from the current quarter onwards. And maybe going forward, we'll start presenting certain key metrics also, so that you all are well informed about those numbers and then compare it versus the previous quarters.

Perfect. Last question is on the GMV split. If you could give us some broad on what are the key line items in the GMV?

So INR 658 crores of GMV for Q3 is about 50% is on the pharmacy, about 35% is the IP, OP, which is the funnel to the hospitals, and the rest about 20% is towards the diagnostic and the consultation.

And versus Q3 -- sorry, Q2, is it very dramatically different?

Not exactly. There's a slight drop in the hospital side of the business. I think that's to do with the seasonality. But otherwise, yes, I think nothing worries us from that point of view. It's just the seasonality impact of Q3.

We have our next question from the line of Nitin Agarwal from DAM Capital.

On the offline pharmacy, can you give us a 9-month growth number for the offline business and the outlook that we have for the growth and profitability for this piece for the next couple of years?

Pure offline business has grown at 19.4%, and we continue to grow around 20%, 22%. We -- this is slightly because of the lower number of pharmacies we added during the year, which we're going to ramp up going forward.

And Mr. Reddy, how do you see that playing over the next 2 years, 20% CAGR we are on?

We will be between the 20%, 22%, as we guided always. And this year, because of the lower number of stores and, as I said, we'll be going back to the regular normal increase, and we assure you that we'll be around that percentage.

And how does one look at profitability on this piece now over the next couple of years?

Profitability, we have improved a lot. This -- it will improve further. But I can't guide you the exact number. You have seen this quarter a substantial improvement. We further have headroom to improve on that with the cost rationalization and growing the matured stores where we are focusing now.

Okay. So if I would, it's fair to say that with the guidance that we have, the digital business will be breaking on its own over the next 6 to 8 quarters, will effectively -- the offline EBITDA should pretty much start -- should be equivalent to the overall HealthCo EBITDA as you go forward 6 to 8 quarters.

I agree with you, but this will have independent growth, whereas they will be achieving with their own revenues and cost rationalization.

But you're right, Nitin.

You are right, on a comparative basis, but…

It should flow through to Apollo HealthCo.

So we're looking at potentially like INR 800 crores to INR 1,000 crores EBITDA on the pharmacy -- on the overall HealthCo business over the next couple of years?

Couple of years, yes. Yes, you can take that about 20% year-on-year growth.

[Operator Instructions] The next question is from the line of Dheeresh Pathak from WhiteOak.

I'm referring to Slide 24 of the deck. So there, on right-hand side, you mentioned omnichannel pharmacy revenue, right, which is INR 2,583 crores, INR 2,583 crores. And on the left-hand side, the total health revenue in the grid is INR 2,049 crores. So the difference is INR 534 crores. So obviously, there is some 24/7 revenue also in here, but the bulk of the difference is the front-end Apollo Pharmacy, right? That is the way to understand, right? When you say omnichannel pharmacy, that is what you refer to, right? But in the omnichannel pharmacy, do you also include 24/7 revenue? Or do you exclude the 24/7 revenue?

We exclude the 24/7 revenue.

How much is that, sir?

Sanjiv, what was that revenue for YTD? Would you have that number offhand?

That would be in the range of about -- for the quarter, we are roughly INR 300 crores -- INR 325 crores.

No, revenue.

Revenue of INR 24/7?

Yes, in the front end there.

No, not front end.

No, Only 24/7, he is saying, not the...

Digital revenue.

Digital. Only digital, Sanjiv.

Yes. So digital revenue is -- in the same slide, you can refer to digital revenue of INR 225 crores. And if you are referring to...

No, sir. That is online distribution as well as 24/7. I want you to split the online distribution and 24/7 into 2.

He's asking only IP, OP and diagnostics and consults-related revenues that you have.

Yes, understood. So that would be in the range of about INR 15 crores for the quarter.

INR 15 crores for the quarter. Okay. And when you refer to on track to achieve INR 1,000 crores revenue, 6% EBITDA, this is the omnichannel pharmacy business, including the front-end Apollo Pharmacy, but excluding this 24/7 INR 15 crores a quarter and the 6% is the post AS -- pre AS 116, right, margin?

That's right.

That's correct.

That's right, where we are currently at about INR 5.85 crores.

INR 5.85 crores, okay. So this INR 15 crores on a GMV of INR 657 crores, it looks like less than 3% take rate. Is that the right way to look...

INR 657 crores includes the pharmacy also. So the INR 657 crores includes the pharmacy as well. So you have to exclude that pharmacy and then look at the take rate.

Okay. So take out INR 200 crores roughly, so INR 467 crores. So INR 15 crores on INR 457 crores, that will still be...

50% he said is pharmacy, 25% plus 25%, he said is IP, OP and diagnostics. So maybe you can get offline to understand this from Sanjiv.

The next question is from the line of [ Arkopratim Pal ] from Sanjay Agarwal Broking.

My first question is, could you please share industry report on average occupancy rate within your hospital network for the month of December 2023? And how much it is growth as compared to December 2022?

That's 66% monthly numbers...

You will have to come off-line and take it from our Investor Relations, Krishnakumar. You can reach out to him, and he can provide you some guidance around that. The occupancy rate is also to do with the average length of stay, which has come down across the system. So if you look at year-on-year, we have been growing volumes at almost around 7%, excluding institution. We brought down some of the institutional cases. So while we are showing a 5.5% or 5.6% growth on inpatient volumes, if you look at the inpatient volumes December to December, only on the institutional and retail, which constitutes around 80%, 85% of our business, that has grown by a healthy 7.5% at volume.

Okay. I understand. And my second question is based on current industry trends and your understanding of the health care landscape, what is your expectation about the demand scenario of the current and upcoming quarters compared to last quarter?

So I think the demand -- structural demand is intact. And what we're seeing is that more people now have access to private insurance, and that's why we're seeing a significant growth in this segment. So definitely more people who can afford corporate health care, and therefore, demand is increasing. And this is happening not only in the metros, but in Tier 1 and Tier 2 cities as well.

We have a next question from the line of [ Siddhant Kanodia ], an individual investor.

I have a couple of questions. My first question is regarding -- like in last couple of years, medical tourism in India has seen quite a good uptick, especially in the Delhi-NCR region. So like we are coming up with the Gurugram facility, but -- so why aren't we looking to do brownfield in our existing Delhi facility?

So as you know that existing Delhi facility is a joint venture with the Delhi government, but we are looking at an expansion there. Our international patient revenue there is 15% of total revenues. We do believe that Gurgaon, which will be 100% owned by AHEL, will definitely offer an opportunity for us to increase our international patient revenue because of its location and because of the doctors and the clinical portfolio that we will offer there.

All right. I'm just asking about the brownfield, if the ramp-up happens a lot faster in brownfield, plus if we have...

Yes, we're adding -- currently, we're adding 50 beds. We're adding a new -- a huge neuro department, neurology. So simultaneous brownfield in the old hospital at Indraprastha and new hospital coming up in Gurgaon.

Okay. Okay. So there are plans to do brownfield as well, okay. Okay. And my second question is that there was this article involving some kidney racket, which they accused Apollo. So what is -- we haven't heard anything that -- have we gotten any clean chit or what is the status so far?

So the status is there has been no negative finding. And this much I can say with confidence because we were fully compliant with Board, with all government regulation. So there has been no finding.

Okay. So there hasn't been any negative finding, okay. Okay.

We have our next question from the line of Kunal Dhamesha from Macquarie.

Just one on the broader industry side. This proposed move to the 100% cashless health insurance, what could be the impact on the hospital industry and specifically for Apollo?

For us, I don't see any impact coming out of this, any negative impact coming out of this because all our insurance businesses are all cashless. We have all empanelment across all large insurance companies at cashless. So working capital continues per se, as such. The -- of course, we are also ensuring that I think the one good thing which can come out of this is as everything becomes cashless, I think the larger industry will expect greater, faster payments from the insurance companies also. And we are hoping that some of that should hopefully come faster, and it should, ideally for people like us, should shorten the receivables period also. But otherwise, for us, nothing significant for now.

Sure. And the second question on the INR 100 crore incremental doctor expenses that we have incurred this year, can we say that it is primarily attributable to the 150 beds, which we have added in Indore and Rourkela or some Eastern region and Northern region?

Not only that, it is something that we are planning across the system because we clearly have 66% occupancy to move to 70%, and we have even opportunity to grow some of the clinical programs as we spoke, right? So clearly, it is a combination of this and some of the clinical programs that we are planning.

So there was a growth in oncology of 17%, urology of 14%. And all this growth is attributable to the new doctors that we've hired.

Sure. Sure. And the last one, if you can share the take rates for the service lines for 24/7, the consultation, pharmacy delivery and diagnostics?

Yes. So on the pharmacy side, as you know that the entire pharmacy comes back to us as a revenue -- as pharmacy distribution to get the same revenue to us. As far as the consultation fees is concerned, consultation moves anything between 5% to 7% depending upon the category of the doctor and whether it is clinic or the hospital. On the diagnostic side, it is roughly between 15% to 18%, depending upon the volumes as well as the class of diagnostics.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Over to you.

Ladies and gentlemen, thank you for participating in our conference call. We truly believe that as we look ahead, we are confident that in the upcoming quarters, there would be very strong growth. We have delivered ahead of time on EBITDA breakeven for Apollo HealthCo. And I'm sure we will continue to deliver on our strategic intent. While our -- with our network maintaining strong occupancies and ongoing expansions in key facilities, we are well prepared to seize emerging growth opportunities. I would also like to emphasize that our unwavering confidence in the investments we've made and the solutions that we're working on, these efforts will surely differentiate us because they are anchored in a strong clinical core with convenience and access as key enablers. Once again, thank you for joining the call, and we look forward to connecting with you in the future.

Thank you, ma'am. On behalf of Apollo Hospitals Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.