Fortis Healthcare Limited (FORTIS) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the Q3 FY '20 Post Results Conference Call of Fortis Healthcare Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Anurag Kalra, Senior Vice President, Investor Relations at Fortis Healthcare Limited. Thank you, and over to you, sir.

Thank you so much. Very good afternoon. Good morning, ladies and gentlemen, and thank you for taking the time to join us on our quarter 3 FY '20 earnings call. We have on the call with us Dr. Ashutosh Raghuvanshi, our Managing Director and CEO; Mr. Vivek Goyal, our Chief Financial Officer. From SRL, we have Mr. Arindam Haldar, SRL's CEO; and SRL's CFO, Mr. Mangesh Shirodkar. We will start the call with some opening comments by Dr. Raghuvanshi, followed by Arindam giving you his insights into the quarter gone by. And then we can open the floor for question and answers. Over to Dr. Raghuvanshi.

Hi. Good morning, everyone, and thank you for taking the time to join us on our Q3 financial year '20 investor call. I thought, by now, you would have had a chance. [Audio Gap] through our results and the presentation, which we released on Friday. I'm pleased to share with you that we have registered a healthy performance in the quarter, and this continues for the third consecutive quarter. Before I get into our business, many of you have spoken to us and have regularly followed up on the open offer status matter. Just to provide an update, there was a hearing on February 3 in which the honorable Court asked all parties concerned to file their replies, and the honorable Court has now scheduled the matter for hearing on the 16th of March. We would like to assure all of you that we are making all efforts and spending considerable amount of resources to ensure that we resolve this matter at the earliest. We remain confident of a favorable outcome in due course. Coming to the results for the quarter. At a consolidated level, our revenues have grown 6% to INR 1,169 crores, and our operating EBITDA stood at INR 167 crores. This, on a like-to-like basis, has grown 22% to reach a margin of 14.3% versus 12.4% in the corresponding previous quarter. Our PBT from operations stood at INR [Audio Gap] crores versus a PBT loss of INR 103 crores in Q3 financial year '19, reflecting the significant improvement in business performance, coupled with the benefit of elimination of the RHTT. Our reported tax is a loss of INR 76 crores versus a loss of INR 197 crores in the corresponding previous quarter. This is as a result of the derecognition of deferred tax assets in certain entities. This is noncash tax charge [Audio Gap] for the quarter but would be reassessed at each time period. Our Hospital business has registered a growth of 7.3% and continues to show traction on the bottom line, which is quite encouraging. It now constitutes more than 3/4 of both our consolidated revenues and operating EBITDA. For the quarter, the Hospital business EBITDA stood at INR 126.5 crores, recording a growth of 27% and representing 13.3% margin, better than 11.2% in the corresponding previous quarter. This was similar to margins in Q2 financial year '20 despite the seasonality in the business in the third quarter. It is also important to highlight that for the 9 months ended 31st December 2019, Hospital business revenues grew approximately 9%, while operating EBITDA grew 52% to reach INR 348 crores. The diagnostics business revenue for the quarter was muted with a 2.8% revenue growth. This was impacted by the seasonality aspect and also a pronounced and severe winter, which was more prominent in North India, specifically in the month of December. However, margins in the business stood at 19.6% versus 17.6% in the corresponding previous quarter. Arindam will take you through further details post my comments. Our consolidated balance sheet remains healthy, with our cost of borrowings stable at around 10% level and our net debt at INR 1,237 crores for the quarter. The net debt represents our debt-to-equity ratio of 0.17x. Specifically, on our Hospital business, this is now on a steady growth trajectory. Our occupancy rates are encouraging and stand at 68%, which is similar to what we had reported for the same period last year. Our ARPOB for the quarter is at INR 1.62 crores, an increase of 6%. Key facilities such as FMRI, Anandapur, [indiscernible] and Noida have shown a healthy uptick in revenues, recording top line growth of anywhere between 8% to 9% to 14% to 15%. We are also making efforts towards course correcting certain other key facilities, which we believe have a stronger potential going forward. We have also, in parallel, begun the initial discussions and review on our entire hospital portfolio with a view to ensure that investment resources and efforts are done in a focused manner to enable optimal returns. [Audio Gap] in our hospitals and at the corporate office. These ongoing initiatives include personnel costs comprising medical and nonmedical manpower costs, including looking to optimize our doctor engagement model. In addition to these cost efficiencies and procurement costs, and including renegotiation of business contracts to cover various aspects such as housekeeping, food and beverages, sales and marketing, general and administration and outsourced processes, are also being implemented with rigor. Power and fuel costs at unit level have also come down through renewable resources and energy-efficient improvement. All these more have begun to show results in our P&L. But as I have explained when we spoke last, the results of these cost-optimization efforts have to be seen in light of their nominal growth vis-a-vis top line growth and assets from a percentage-to-revenue basis. Most cost lines are relatively lower. This is well reflected in the margin expansion in current quarter as well as what we had seen in quarter 2. Our plans for upgradation and expansion remain on track. Required investments are being made in the business to further scale up and simultaneously optimize current operations. To elaborate, we have initiated CapEx of approximately INR 180 crores already in the system, which is for both routine and growth CapEx and primarily towards medical equipment and for the new facilities, such as BG Road and Arcot Road. In fact, the CapEx of INR 2 crores that I had mentioned previously could now be in the order of INR 250 crores, which is quite significant. Along with this, we have also formulated a clear, calibrated path for expansion, which will see 1,200 to 1,300 beds coming on stream over the next 4 to 5 years. This will include those in our facilities of FMRI, Noida, BG Road, Arcot Road and Shalimar Bagh as well as Anandapur and some smaller additions in other facilities. Those, in the near future, will include the commissioning of our Arcot Road facility and followed by our bed expansion in Shalimar Bagh and Noida. Keeping both our current operations and future expansion plans above in mind, we are also in the process of collectively chalking out a long-term [Audio Gap] of the business. This combines key elements related to our focus on select clinical specialists [Audio Gap] talent management, emphasis on expanding new medical technologies and programs and enhancing our patient safety and experience. In addition, leveraging digitalization initiatives to drive our human resources capabilities and information technology platforms across our network of hospitals in order to streamline business functions and draw a better alignment is also being looked at. Each of the aforementioned are further being drilled down in terms of detailed action plans with relevant teams and time lines, with roles and responsibilities are being earmarked. We do expect these to further strengthen our business as we have finalized and rolled out. A few parting thoughts from my side. With the current fiscal drawing to a close, I remain optimistic of the path forward and expect to end the year with the same momentum that we witnessed in the past 3 quarters. I believe as an organization, we have immense talent, a high-quality portfolio of assets and all the building blocks in place to drive sustainable returns for all our stakeholders. I look forward to engaging with all of you again in the near future. And with that, I hand over to Arindam to take you through the diagnostics business. Over to you, Arindam.

Thank you, Dr. Raghuvanshi, and a very good morning to everyone on the call. Quarter 3 has admittedly been a bit disappointing for the diagnostic business, and performance hasn't been up to our satisfaction. We did nearly 7.5 million tests last quarter, which is a growth of around 3% over the same quarter previous year, while our revenue also grew at the same rate. The dip in the quarter's performance was mainly due to a decrease in patient flow in December, barring which our patient growth was 5% widely in November, which is also in line with what we have seen this fiscal year. The operational EBITDA basis net revenue stood at 19.6% for the quarter compared to 17.6% in the same quarter last year. For the 9 months ending December 31, 2019, the operational EBITDA was at INR 160 crores, a growth of 22% over the corresponding quarter. EBITDA margin for the 9 months stood at 23.5% compared to 19.9% of net revenue in the corresponding period last year. Saying that, I must comment that the longer-term growth constructs that we drew for ourselves, primarily business rapid network expansion and getting B2C business back on growth, especially the patient-facing phlebotomy centers, have fared exceedingly well. Our B2C business quarter 3 growth over the same period last year has improved vis-à-vis decline seen over the previous 4 quarters. And we believe we have planted the seeds, which will take SRL to near double-digit growth in the next 2 to 3 quarters. Let me talk a little more detail about the same. In retail expansion, we have transformed the way we are looking at network fund management and have improved both same-store growth and significantly increased our net of points, primarily the franchise centers. As you know, we have been stagnant in network expansion in the past 2 fiscal years, and as compared to that, we added about 250 net centers in the past 9 months, 150 of which has happened in the past 3 months, and 75 of those 150 has happened in the last 40 days of the quarter. In the same period, we have culled out low-performing, inactive centers, and the numbers that I spoke about are net of those proactive pruning. As you will know, typically, a collection center takes about 6 to 9 months to stabilize. And we believe the seeds that we have sowed in the past few months and continue to do so in the current quarter will bear us fruits in 2 to 3 quarters from now. I also believe very strongly that this will be one of our primary drivers for growth in the next couple of years. We are also taking a fundamental relook at the way we go-to-market for both our B2C and B2B segments; have formulated a robust plan, which will get executed over the next quarter. As a starter, we have already put in place a channel strategy team at our head office, and they are working overtime in conjunction with our teams in field to execute flawlessly. Our B2C segment has seen significant improvement in quarter 3, and we hope it will continue to grow with the help of retail expansion in focused cities. Saying that, in our B2B business, we have seen a temporary reduction in growth, which has, in a way, negated the strides achieved in the B2C segments. The primary reasons are reduced footfall and traffic in many of our labs and hospitals in December, mainly due to the impact of severe cold in Northern and Central region of India, and closure of few client businesses. We are confident that this is a short-term phenomenon, and the same will bounce back in a couple of months. We are also enhancing our presence and engagement with our consumers digitally as some of our new initiatives of digital channel and CRM have shown very high growth, though on a very small base. We are continually improving the digital experience of our customers and still hold -- and we still hold the highest number of app downloads amongst our peers. We have managed to reduce our general expenses by INR 2 crores, beating inflationary pressures, and gained some efficiencies in workforce optimization. This holistic margin management measures have held us -- helped us in hold our EBITDA levels for the quarter despite low revenue growth and a marginal increase in personnel expenses due to annual increment. As far as our labs are concerned, in both our reference labs in Mumbai and Gurgaon, we have taken a slew of measures to improve automation via integrated platform across basic biochemistry and immunoassay. Our cytogenetics department at Mumbai Reference Lab has been automated [Audio Gap] We also have been able to reengineer some of our lab processes to see marked improvement in turnaround time, a critical service factor. We have introduced automation in NIPS in the GYN portfolio, which has helped and improved turnaround time in the same. The addition of new microarray test in the prenatal and postnatal category has helped us to expand the product basket in the GYN portfolio. We have also strengthened the transplant portfolio by adding high-resolution HLA by next-gen sequencing method. Overall, we are cognizant of industry margins. And like our stakeholders, we do believe that the business has tremendous potential, and we are moving in the right direction. I see the glass as half empty versus half full and feel more confident today of our team's ability to lead SRL in the direction to be competitive amongst our peers in a few quarters from now. Thank you for your time. I would like now to hand over to Mr. Anurag Kalra, Head of our Investor Relations.

Thank you, Arindam. Ladies and gentlemen, we will now open the floor for questions and answers, please.

[Operator Instructions] The first question is from the line of Neha Manpuria from JPMorgan.

If I were to see our hospital performance, despite a reduction in occupancy, our margins have been pretty flat quarter-on-quarter. Is it fair to assume a large part of this improvement is because of cost-optimization initiatives that we've taken earlier in the fiscal? And if you could just give some color on how much you've achieved out of the said target.

Yes, correct. So you're right. This is partly, I will say, from the cost-cutting initiative, which the company has taken and that has started yielding in the year, which we're harping in the previous calls also. But this quarter, there is a INR 12 crores income also, which is the -- whatever export lending the company is doing, so it is eligible for some strategic case, which can be freely sold, FES as we call it. So this quarter -- generally, we book this income in the fourth quarter in the previous year. But this year, auditor insisted that we should be doing on net accrual basis. So that has given us INR 12 crores for the 9 months, and this INR 12 crores is booked for the entire 9 months. So only INR 4 crores pertain to this quarter and INR 8 crores to the previous quarter. So these 2 sectors have held an improvement of the margin.

So, Neha, a couple of points. One, sorry, on the service income, this is a result of the direct foreign exchange that the company earned through its medical tourism, the international tourists that come to for medical treatment. So it is kind of operating in nature, but [Audio Gap] this we have taken about INR 12 crores in the current quarter. Secondly, Neha, to your -- answer on the cost side of things, as we had also explained on the call in the previous quarter, a lot of initiatives and cost-optimization efforts are going through all the P&L lines, whether it be housekeeping, laundry, food and beverages, contract renegotiations, looking at -- or really looking at doctor engagement models, et cetera, et cetera. So when you actually go through the P&L, the cost line items as a percentage to revenue have actually come down, which means that the expense lines are not increasing at the same pace as the top line, which is also -- which has and will also, going forward, keep on impacting our margins positively. So that is in an absolute number. We would -- like last time, we would urge that margin expansion be the focus. And that's what -- because you're adding -- you're making -- you're becoming cost-efficient on one side, but you are also adding expenses to get that top line. So net-net, it will be margin expansion, which will be a result of the cost initiatives.

And the EBITDA margin metric that we gave out, right? If I compare the first half versus the 9 month number. From what I remember, 1/3 of our hospitals were in the 20-plus percent margin range as of the first half, but that -- the number of hospitals seem to have slipped very sharply in this -- in the 9-month period. Am I missing something? Have certain hospitals' profitability come off very sharply in the third quarter?

So Neha, this is also reflected in the overall margins of the company. However, bear in mind that, this is something that has to -- this metric is something that has to be seen over a period of time. From a quarterly-quarterly basis, there will be slippages and upsides where hospitals will move from one group to the other. Our intention of starting to share this metric is just to show you that eventually, what we would ideally like is that we will have the maximum number of hospitals in the top end of the margin category. So yes, last year, less than 10% margin. Last quarter, there were about 1,000 hospitals -- sorry, 1,000 beds, I beg your pardon. Now there's about 1,300 to 1,400 beds. And those slippages will keep on happening from quarter-to-quarter. But what we believe is that over the long term, this metric should actually go towards the upside.

So looking at it quarter-on-quarter is not the right way. Hospitals do tend to move that much of -- on a quarter-on-quarter basis?

Yes. Neha, for example, what certain hospitals is doing 11% margin, certainly at 11%, whatever reason goes to about 9.9%. And from our calculation, it drops onto the -- into the next category, right? Though, that may just be temporary because of certain things that have happened. So that's why I say that this is better to look at from a longer-term perspective.

Fair enough. And my last question is on SRL. It's been 2 years since we've been trying to inch up the growth in SRL. While a lot of the long-term initiatives that we are taking are understood, realistically, given competition is increasing, players which already established in the market are gaining share, is it fair to assume that it becomes increasingly more difficult for SRL to gain back lost market share as time passes?

Neha, Arindam here. So your point on the segment in which the organized players play, the competition is increasing in that segment. That's a fair thing to say, that it has increased and, to that extent, for players like SRL and all players in the organized segment. But going forward, we'll be competitive. So there is no shying away from the same. So yes, it is taking longer than what, as a group, we hope it can take. Saying that, some of the longer-term measures that we are taking, and as I said, that our B2C growth is our longer-term objective. We have made some very positive strides over there. Unfortunately, none of that is being visible in the quarter 3's growth number, which has more or less come back at the same level as what we saw in the previous period is because of a few specific reasons that I explained, which has been more on the B2B side, which otherwise has been growing for us. We are quite confident that the B2B slowness is more of a temporary phenomenon and work that we are doing on the collection center and the B2C side. While it may take a few more quarters, those are more sustainable in the long run. So it will not be easy, but saying that, we are confident that in a few quarters' time, we should be able to improve the growth potential from where it is today.

We'll move on to the next question. That is from the line of Adi Desai from York Capital.

My first question on SRL. So I just want to understand the B2B weakness. Was it because we have lost some client contracts? Or is it just reduced foot flow at our existing hospital clients? So I guess just a couple of more questions on that. I just wanted to get a sense of B2B versus B2C revenues as a percentage of total SRL revenues. And I guess, finally, on SRL itself, just want to get a sense on, I guess, what our target is for B2C growth. At what point do we expect B2C revenues to start growing? And what are the targets over there?

Yes. Adi, I'll take that question. This is Arindam. So your first part of the question is the B2B business slowdown that we have seen. The primary reason is the decline we saw in December. Until November, it was holding pretty well. It declined by a large chunk in December. Most of it is linked to the reduced footfall that we saw in many of our hospitals and labs, one of the main reason being both the cold wave as well as few days of political disturbances and the business that we lost due to the same. So that is the primary reason. Secondary reason is smaller business loss, but the primary reason for the B2B business slowdown has been the seasonal impact. Our business of B2B-B2C is roughly 60-40. And our B2C business is what was dragging us down over the -- quite a few quarters from now. And we have turned around the quarter from being negative growth for quite a few quarters. This is the first quarter. Despite it being overall soft quarter, our B2C business has come back into the positive territory. And we feel very confident that this is the area that, in the next 2 to 3 quarters, will get into double digit. Our B2B business was always growing at a high single-digit to low double-digit. It has become flat in the current quarter. But again, we again strongly believe that this is a temporary phenomenon, and that part of the business will also go back to the same growth rate that we have been seeing earlier.

Perfect. And I guess my second question, I guess, is more on the financials. Just want to understand the context for the tax expense, which this quarter was about INR 170 crores. So this was like why it's so large? And what was the reason for it? Just at the consolidated level.

Yes. Yes. So I think, just to answer this question, this is more of a timing type of issue because one of it -- our subsidiary having accumulated losses. And on a very conservative approach because this -- as per the current projection, this company is going in profit for 4, 5 years from now, okay? So 4, 5 years, based on 4, 5 years going forward projection, creating deferred tax effect, management feel that it is not the right approach, and we have derecognized the deferred tax effect. But having said that, there may be acceleration in this -- the profitability because it is -- because of this -- as the performance of the company is going up, it -- whenever we are coming nearer to this profitability metric, we will again recognize this profitability. So it is a non-GAAP item. Just on a conservative basis, we updated this, derecognized it.

If I could see the balance sheet this quarter as well. Our deferred tax assets would have reduced this quarter?

Yes. So this is a corresponding impact of that.

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

Just first one on ARPOB. It's growing now 5%, 6% -- 6%, 6.5%. So can you help us understand how the pricing environment is? And is pricing power back? You're obviously still lower than, say, some of your peers, but are we able to do a combination of price increases, plus mix change? If you can help us understand the ARPOB dynamics, please?

Yes. So Vivek again. So the pricing in general, as we are seeing a trend, and we are able to increase the prices wherever possible. But this particular quarter, there is a normal effect, which I covered in the initial comment, where because of this -- the SEIS income, the export turning income, this year, revenue has gone up by INR 12 crores, and that has also improved the ARPOB. So the 6%, you may say, 2% maybe attributed towards that.

Sure. So you're saying the like-for-like number has moved 4%. But of the INR 12 crores, there is INR 4 crores, which is still coming for this quarter, right? So you're saying that contributes -- takes out 1%. Now I'm just trying to look rather than just the numbers, just the environment, maybe Dr. Ashutosh can just add on. I remember, we said we'll take 3% to 4% price increases in select specialties, revenue mix change. So anything on those would be also qualitatively helpful.

Yes. So there is definitely a scope for doing some correction in gas pricing. But we have to be mindful that the percentage of business which is credit where we do not have the ability to increase prices often is also increasing steadily. The impact for the growth rate of ARPOB may not be that high. But it definitely, we have timed February and July, the months where we take a kind of a regular price hike or price corrections, depending on the ability in different markets. So we will have that ability even this year, and we would be planning that. And the second part is the case mix per se, the payer mix. That is also we are actively working on because even within the credit segment, the price points are different in different payers. So we are trying to make the mix favorable towards a higher kind of receivable or a higher kind of a net billing amount for a patient.

Got it. Second question is on the hospital assets. As when you disclosed the margin metrics last quarter, do you called out some of the underperforming ones, so something like a FEHI. Any of those hospitals, are we seeing some kind of a change? I know that this could be slow, let's say -- or Jaipur, for example, right? So are we taking a call quarter-by-quarter? And if not, let's say, in 3, 4 quarters, nothing happens, then is there a potential for divestment, some of these assets?

Yes. And also as we have repeatedly said that we will be very objective about an individual asset and what kind of value it brings for our stakeholders and what it does to the network. So I would put them in 2 buckets. One is where we have -- sure that because of operational reasons, the performance has been lagging, and there are very obvious, correctable factors like such as FEHI with all possible efforts, though the process, as you said, may be slower, it may take 2, 3, 4 quarters. But we will persist with that because these are flagship hospitals, and they have a -- they hold a huge future potential, not only for the existing business, but there is a potential of phenomenal growth there and creating more infrastructure and assets there in -- for future. So that is how we would look at FEHI. We are doing some very focused effort. We are using external consultants there. [Audio Gap] And we are making a lot of modifications in that kind of contracts we have with individuals, with physicians with the staff, with the [Audio Gap] supply services vendors like housekeeping, et cetera. And we are trying to sort of collaborate with all those partners, and we are pretty confident that will become a very [Audio Gap] factor. Now the other assets which you mentioned and which I have pointed out earlier also, which being Jaipur, and the Malar facility. These hospitals have been underperforming for quite some time. There have been external and internal reasons. Do the evaluation at the right time, we will keep you informed as to what our thinking is developing. But we are critically evaluating these things.

Got it. And my last question is on the CapEx. Dr. Ashutosh, you mentioned in the start, I couldn't understand the 2 numbers. One, you said INR 180 crores is already in the works. And then you talked about INR 250 crores. So if you can just explain those 2 numbers, please?

Yes. Sure. Sure. I'll explain. So in the beginning of the year, we said that INR 200 crores is the CapEx for the year. So for the 9 months, we have already spent INR 180 crores. However, during the course of the year, we realized that we could do certain other things, which would give us rapid results in a short term. And if we could do a little more CapEx than INR 200 crores, we could see quick results happening out of that. So we decided to enhance that [Audio Gap] end up spending INR 250 crores, where -- and majority of that will come in the fourth quarter of this year. So instead of INR 200 crores, we may spend INR 250 crores. INR 180 crores has already been incurred.

Got it. And you said most of it is that medical equipment for BG Road and Arcot Road. That could be the INR 50 crores...

Most of it. Yes. Most of it is medical equipment.

The next question is from the line of Rishabh Parekh from Sunidhi Securities.

Just had a couple of questions. One was the hospital business growth this year was primarily led by ARPOB increases and not occupancy when you compare it on a year-on-year basis. So going forward, what is the sustainability of this growth? And what will be the mix of ARPOB-led growth and the occupancy-led growth? That is one. And second is a put option on SRL. So in the earlier call, you had mentioned that this will be sorted out by the current fiscal year. Now that is quite close. So I just wanted to see what the progress is?

So on the SRL put option, as you know, Fortis SRL are facilitating a process through an ibanker to try and find a third-party buyer for the 3 private equity investors already in SRL. The put option is already a part of our accounts. So the only thing is as and when the transaction goes to and you understand, you appreciate that these transactions take a certain amount of time, given how that -- how those things work. So it is where it is. We are moving ahead. We want to also expedite this, but these things take time. As and when we reach a conclusion, subject to all approvals, we will come and share that with you.

As far as the other part of your question of occupancy is concerned, we have been seeing a steady occupancy [Audio Gap] Of course, the third quarter is seasonally slightly lower and if you would recall, the second quarter occupancy levels were about 72%, which is 68% in this quarter. And we again see a ramp-up happening in that occupancy levels. So we believe that the occupancy levels consistently should be above 70% during the next couple of quarters and then steadily increase from that. But the growth will always be a combination of multiple factors, occupancy being one, and definitely [Audio Gap] will also come from ARPOB and the case mix as well. More confident about the consistent occupancy level now.

The next question is from the line of Sarvesh Gupta from Maximal Capital.

Sir, the first question was that I think you had mentioned in one of the previous calls that you will have INR 100 crores sort of a cost reduction during this financial year. So what has been the performance on that account? How much have we been able to cut? That's my first question.

Yes. So we are very much on target as far as that is concerned. And right in the beginning, as Anurag had explained, we can see that [Audio Gap] impact on our profitability. On line-wise, if you see the various costs hit, you'll realize that none of the costs have increased beyond the percentage point where they were. So [Audio Gap] it's an ongoing effort, and we expect that we might be able to maintain this momentum and rather increase the momentum as we go further. So this will be measured best by looking at the profitability metrics.

Understood. The second question was on occupancy. As a previous con caller had also mentioned that the occupancy, even on a Y-o-Y basis, has stayed flat. And one thing that I was looking at was the payee mix, thinking that we may be biased more towards the cash market, and hence, we are choosing the more profitable signs. But even that has deteriorated Y-o-Y. So that is looking a bit worrisome that occupancy is not increasing, and the payee mix is also deteriorating. So any comments on what is happening on that, sir?

Yes. So we have to look at the cash and TPA as one segment. That is one part because increasingly, a lot of people who would be cash patients are undergoing the -- coming under the cover of private insurances, which people take as individuals. So a mix of TPA and cash is to be looked at -- as together. But you are absolutely right that we have to be very mindful of where the other businesses are coming from. And as I said during my comments earlier also, we will be always consciously trying to reduce the [Audio Gap] towards the cash and TPA. So CGHS, ECHS, these segments, we are looking to reduce as we go further. But some of our units have a very high population base around those facilities, which is covered by these schemes. And as a result of that, this ratio sometimes gets slightly unfavorable for us. But we are putting in measures in place to ensure that our growth on those segments does not happen, and it happens only through a cash and TPA segment. Occupancy levels, you are right that they have been more or less flat. But you have to be [Audio Gap] before the quarter 3 of last year, the occupancy levels had fallen further. So we -- there was a gradual recovery, which happened. And now, as I said earlier, is that we are pretty confident of a consistent occupancy, and that is a starting point to start having growth.