Fortis Healthcare Limited (FORTIS) Earnings Call Transcript & Summary

Ladies and gentlemen, and welcome to the investor conference call of Fortis Healthcare Limited. [Operator Instructions] Please note, 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, Mr. Kalra.

Thank you, Margaret. A very good morning and good afternoon, ladies and gentlemen, and thank you for taking the time to be with us on this call. This call is primarily to discuss the current situation around COVID-19. And the call today is chaired by Dr. Ashutosh Raghuvanshi, our Managing Director and CEO. With him, we have Mr. Vivek Goyal, our Chief Financial Officer. And we also have from SRL, Arindam Haldar, the CEO of SRL; and Mr. Mangesh Shirodkar, the Chief Financial Officer of SRL. I think there's a lot out there already in the public domain regarding COVID-19 and what's been going on in the current situation. With that, now we would directly open the floor for questions and answers, so that all participants get a chance to put their questions forward. Margaret, please begin with the Q&A, please.

[Operator Instructions] The first question is from the line of Rahul Veera from Abakkus Asset Managers.

Just a quick question. So have you informed any of our patients in any of our facilities until now that we will have to close on the operations completely?

No. We are treating patients. As a matter of fact, at the current moment, we have 13 patients in various facilities. These are in completely isolated areas of the hospitals. Just to put on record, one of the first few patients which were identified, an Italian -- part of an Italian tourist group in Jaipur, was treated in our hospital where right at the beginning, it was suspected and the protocols we had put in place from January onwards, and hence, the patient was completely isolated. However, we had to quarantine about 38 of our staff members who have already finished the 14-day quarantine period, and all of them have tested negative. So we do not foresee a situation where kind of a lockdown of a facility will have to be undertaken because separate areas have been marked, and we have very strict protocols right from the entry point in all our hospitals so that any patient who's even a suspect is kept in proper isolation, and all precautions while dealing and treating the patients are taken until the time the reports are available. So we feel that we are in a quite prepared position to handle such patients in our hospitals.

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

So first question is on the impact of the lockdown on either outpatient visits, inpatient admissions. If you can share us on what's happening to elective procedures. Just in terms of volume numbers, what has been the impact? I know it's very short, maybe 1 week only. And do you foresee this going into April and May?

Yes, yes, Shyam. There are definitely, as you said, that there is going to be impact on all the segments of the lockdown. So IPD admissions are already down by 35% to 40%. OPD attendance in the early days are down by 60% to 80%. I might add here that in case of OPD, certain services like dialysis, radiation treatment and chemotherapy patients will continue to be served in clearly demarcated identified areas with all the precautions. So that part will probably go on as the lockdown proceeds as well. So we expect that about 15%, 20% of that business would continue to happen. Thus, care will be provided. As far as the elective work is concerned, that is likely to see a very significant impact. There will be hardly any elective surgeries happening. Only emergency services will be fully operational. We have made provisions to make sure that all the support staff as well as clinicians are available to provide 24/7 emergency services. Typically, about 30% admissions happen through emergencies in some of the hospitals. This number may vary from hospital to hospital, but at a blended basis, you can say 30% work comes through emergency. So we will continue to serve those people who require care for other procedures. As far as the elective work is concerned, we will have to see the impact as the lockdown -- we go down further in the lockdown. At the moment, we see about 40% sort of fall in those numbers.

Doctor, should we just -- so elective procedures are what? 50 -- 40%, 50% of our total procedures or higher, lower? Sorry.

It's -- no. In normal circumstances, about 70% procedures are elective. However, the 30% procedures are likely to be emergency procedures. That's the normal distribution. But even elective procedures vary in severity, so not all elective procedures will go away. The completely elective procedures which are avoidable and can be deferred are only going to be deferred. So our estimate currently is that about 50% of that work, of total procedure work will come down because of this.

Got it. And my second question, I'll get back into the queue. Doctor, there has been a criticism that the number of tests that India has done totally is low, and that's why we don't know whether there is a stage 3 kind of outbreak here. But the other way to look at it probably would be to see, on a systemwide basis, if the number of pneumonia or influenza cases are kind of inching up through the emergency part. Is there any evidence to suggest that even in your own network?

Yes. So within our network, we have not seen a surge of respiratory cases at the moment. We are seeing respiratory cases. This is a typical time of the year when you see H1N1 cases also increase. So the number of pneumonia and other respiratory complication cases is there, but it is -- we are not seeing any surge so far.

The next question is from the line of Neha Manpuria from JPMorgan.

What -- would occupancies in the hospital be in the 40%, 45% level? And at what point do we start burning cash? If occupancies go below a certain level, what level would that be?

So as far as occupancy is concerned, Neha, we are currently at about 43%, 45% of occupancy. The occupancy in the first few days was about 50%, which is gradually dropped, and it is currently hovering around 43%. And this is coming down from approximately 70% in the month of February. So there is a very, very significant drop. I would defer the second part of your question to my colleague Vivek, our CFO. Vivek, if you could answer the cash burn question, please. Okay. So -- I'm not sure Mr. Goyal is online. So I would attempt to answer that. We have not done a real estimation of that number so far. We believe that at least still about 40% or -- up to 35%, we may be quite all right, we might be neutral. Below 35%, we expect that there should be a cash burn.

Sorry, Vivek, you were mentioning something?

Yes. So I was saying around 60% occupancy level, there is a -- we are at a no cash-loss situation. So because it is coming down below 60%, so there will be some cash burn. And it is different for different hospital, of course.

So below 60%, there would be cash burn, you're seeing?

Yes, yes.

And my second question is given there will be some EBITDA impact, I know we talked about cost-saving initiatives that we had undertaken even in the last year, in the last fiscal. But do you think there is some additional cost containment efforts that we will need to take in order to offset the EBITDA impact?

Yes. If I can take this question, sir? Yes, can you hear me?

Yes. I can hear you, Vivek.

So what -- so we are already taking -- we're taking some cost-cutting initiatives, which we have discussed in the earlier call also, which include contract and the manpower rotation and reduction of the corporate expenses and things like that. But because of the COVID thing, also, we will be taking some more measures, but we have not yet finalized those measures. And of course, we will ensure that the quality and the safety of the patient will be the topmost priority. But there will be some more cost-cutting initiative, which company will have to take to come out from the situation. We'll come with a little bit more detail maybe as the situation normalizes.

The next question is from the line of Adi Desai from York Capital.

I guess just to -- want to understand which of our hospitals and testing centers, how are we kind of coordinating and working with the government to help out in this process? Is there -- do we need to kind of get some beds at subsidized rates or get testing facilities at subsidized rates? And does the government kind of recompensate for that? Like how do we -- what's sort of the social kind of help obligations that we have to do over here?

Yes, Adi. We have earmarked and prepared certain beds in all our facilities. Currently, we have earmarked about 262 beds, with half of them having ventilator facility across our network, which has been shared with the Health Ministry and UP -- the local authorities. So we are keeping these beds available. As the surge happens, we will probably have to earmark more patients. As you might be aware that not all patients require critical care. So we will be able to create additional capacity as and when required. Currently, the government has not asked any specific -- except in certain areas like in Mumbai, there is a certain ask of keeping about 25% of the beds available, so in 2 categories: the critical care beds and the normal beds where a patient just requires isolation. So we are preparing those beds, and we have the ability to create those beds. Other than that, we are closely monitoring and closely communicating with the local authorities in different jurisdictions in order to support that -- their effort. And as I said earlier, some of the hospitals are treating some patients, and these were patients who require -- who were in government facilities and wanted to move to a private facility. And hence, it was requested by the authorities to take these patients up. So currently, we are treating about 13 patients in our facilities, and about 5 patients have already been discharged as treated. We were unfortunate to lose one patient as well. So other than that, on various other forums, industry bodies, et cetera, are coordinating amongst themselves and with the authorities. So we are participating in all those things. Certain other instructions were given by government like, for example, nonessential elective surgeries to be postponed. And they are also providing support in terms of giving us some PPE, the protective equipment for our health care personnel as well. As far as testing is concerned, I would request Arindam to take that part. But as an enterprise, we are fairly well poised to help the authorities and step up to provide larger capacities across the network. And we are also exploring options of activating other non-health care kind of facility and some of the hospitals, which were in a ready situation to commission, which was not part of our network. So we are collaborating with certain other groups and companies. As and when we are able to get that done, we will be able to inform you about that. But we are closely working with the authorities to see how we can activate more beds. The idea is if we can have more COVID-specific hospitals because if you cluster the other patients with the COVID-positive patients, it becomes a significant risk to the other patients. So we are trying to propose to the government that if we can have more COVID-designated hospitals and we can support that process by providing manpower, et cetera. In some of our facilities, we are providing manpower to the government hospitals, including some equipment to -- in order to be able to support those facilities and upgrade those facilities. Like in ESI Hospital in Faridabad, Gurgaon as well as in Noida, we are providing equipment as well as manpower. Arindam, if you could add about the diagnosis, please, diagnostic test, please.

Sure, I will. So just taking a leaf out of what Dr. Raghuvanshi was saying, this moment of crisis has one positive outcome: all the major industry players as well as the government bodies have come even more closer. So we have been working very closely with each other, all the large chains as well as with ICMR and the various other government and industry bodies. Specifically, closer home, ICMR has officially approved, as you know, select private labs in India on 21st of March to conduct some tests. So 2 of our reference labs, the one in Mumbai and one in Gurgaon, are both a part of that list. So these are NABL and CAP-accredited labs, and we have initiated testing at both these locations. And we are going -- I mean our internally prepared, our teams are ready, the training is done. There are some constraints around availability of kits and protective gears. And that apart, we are completely geared how to support the government's initiatives in this manner.

Got it. And then sorry, just a follow-up question, Dr. Raghuvanshi. Sorry about the dog in the background. Is -- on the 250 beds that you mentioned that we kind of now are making available for COVID-related procedures, how do we get -- do we get a sort of compensation back from the government? Or is there a subsidy -- subsidized cost? Like how does that work in a way? I mean again, our occupancy is low. So it's not the biggest opportunity cost, but just want to understand how we kind of -- what the framework is for that.

Yes. So government is essentially asking for FICCI to come up with a costing mechanism. So FICCI has done a study along with 5 other hospitals other than Fortis. So Fortis, BM, Columbia Asia, Medica and few other hospitals together have done a study to see what kind of costing could be there. And they have submitted those documents today to the authorities, and we will wait to hear from them if they want to come up with a reimbursement mechanism. So far, the patients which are being treated are private patients who are paying for their care. So we expect that there will be 2 categories of patients, which one is the ones who are coming for private care will be paying, either it will be reimbursed from the government or they would be paying directly. At the moment, patients are paying directly. Government hasn't fixed any tariffs in Mumbai. However, there is an instruction from the Municipal Commissioner that INR 4,000 or 50% of the normal cost is what should be charged. So that kind of instruction is likely to come in other places as well. But patients will have to be paying themselves, and the ones who are not paying will be treated it in public facilities.

The next question is from the line of Vishal Biraia from Aviva Insurance.

Sir, what is the current testing capacity at Fortis as a whole?

Yes. Vishal, Arindam here. So I can take that question. So just to repeat, 2 of our reference labs are currently approved as part of the ICMR's list where this test can happen. So we have sufficient RT-PCR machines and personnel on which this test gets done. So immediately, we should be able to do about 1,000 tests a day, and that is scalable to at least 2 to 3x of that within a short period. So this is from the 2 labs. We also have a couple of other labs across the country where RT-PCR machines are there. And we are under discussion with ICMR, if possible, to include those labs as well in the list. If that happens, that can take up the capacity further.

Okay. So are you looking to expand substantially higher? Maybe are you looking to like spend more to ramp this up to, say, 10,000, 8,000? Or is that a case that is required? Because some of the peers are talking about massive testing capacity. So just any perspective on this?

Okay. So obviously, we are -- as you know, the government of India is deeply involved. All the scientists of ICMR are, and we are working with them in this manner. So currently, the test, the confirmatory test that is there is a PCR assay. It's not a blood test or antibody, this test. It's RNA virus detection. It's a confirmatory test. So on that, we have more than 100 government labs already approved. And almost every other day, more and more private labs are being added to the list. As on last night, I think 35 labs are there on that list. And just to give you a perspective of the capacity, if one sees, government until now would have done about 25,000, 26,000-odd tests until now. As of now, my rough understanding of the labs which have been approved, their existing capacity will itself be about more than 20,000, 25,000 tests a day. So that's the current level of capacity across the industry from the approved labs alone, and more and more labs are getting added. If required, we can always expand capacity. As of now, I don't really see we need to expand capacity of our RT-PCR platform. However, there are lots of discussions which are going on with the experts to see that whether they should open up for a serological test or they should open up other platforms beyond RT-PCR. So those are discussions which are currently on. We do have facilities of those as well. So in case government expands the testing protocols to other platforms, we will be -- and it will be possible for us to do tests there as well.

Okay. For the country as a whole, serological test at this stage, it would be much more beneficial, right?

So I would leave that to experts. There are enough views on both sides. It will be very difficult for one to say that serological tests are beneficial. Yes, serological test is beneficial purely from the angle as it's a blood test, and it's much easier and a lot more labs can do it. But at a very layman's perspective, to understand, a blood test can only happen when the impact of the virus is there in your bloodstream and antibodies can be detected. So typically, that will be at a slightly later stage than the early confirmatory test, which a RNA virus test can give. So there are views and counterviews on it, which the experts are debating.

Okay. Just a question on the hospital side, on the legal stuff that was going on. So any recent updates? Is there any other change on the legal side for Fortis?

No, there is no change on that, the -- as the court is not sitting on a regular basis and they are not doing as many hearings as normally done. So we expect fresh dates to be given. It has not yet -- there has been no change in the status so far.

The next question is from the line of Prashant Nair from Citigroup.

So my primary question was on whether there has been any specific ask from the government on testing our hospitals which you have answered. I just have one additional question. With respect to testing capacity, you mentioned 20,000 to 25,000 tests per day as the capacity nationwide. Is this just from the private labs that are approved or including all the government labs as well?

No. So what I said is our capacity is about -- currently about 1,000 a day, which is expandable. The industry capacity is a very rough estimate based on some of the leading chains that I personally know of and their capacity. That's not necessarily a confirmed number for all India and definitely does not include the capacity of the 100-plus government labs.

All right. And secondly, in order to raise the capacity for testing, what is the primary constraint now? Is it testing kits? Or will it be anything else like machines, et cetera?

So currently, as you know, there is 3 levels. You need to collect the samples. And while collecting the samples, you need to be conscious about the health and well-being of the health workers who are going. So there are personal protection gears, which are needed, a suit, N95 masks and goggles. So those are in terrible short supply across all hospitals and labs. So that's one level of constraint. Then of course, there are constraints on the testing kits and DNA extraction kits. So those are getting sort of figured out. Hopefully, we think it will be a little better over the weeks as we speak. But currently, there are plastic constraints are not necessarily on the machine, but more so on the kits and the protective gears.

And finally, last question from my side. The kit and protective gears, I mean, particularly the kits, are they still primarily being imported? Or do we have any Indian kits also now approved for use?

Yes. So the answer of that is yes. So initial approval from ICMR was only for U.S. FDA-approved and European CE 35 kit. After that, they have also put in a fast-track approval mechanism, and they are approving more and more other kit -- commercial kit manufacturers. One of them is a Indian manufacturer who had just started manufacturing in Pune, based on the approval.

The next question is from the line of Kunal Shah from Carnelian Capital.

I have one specific question pertaining to medical tourism. So now since there's a complete lockdown for people coming from abroad, so what proportion of our revenues would be on account of medical tourism? And if you could help further elaborate on that, sir.

Yes. So we typically had about 10% of our revenue coming from international. Currently, we see about 80% to 90% drop in the footfalls of international patients. This is expected to go down further and become 0 in short term. And I think it -- this is one segment which will take some time to recover as the situation evolves around the world. But this is definitely a segment which we can expect to go down completely.

Okay. And just one more question. I mean, the CFO did elaborate on the occupancy levels that we need to have till the time we go into the cash flow situation. So I was just wanting to understand now we are at already 30% to 40% kind of occupancy levels, if I've heard correctly. So how do we plan if this continues, say, for next 2, 3 months or whatever? I mean, how is -- what kind of strategy Fortis has in place for this kind of situation?

Yes, okay, I can answer this question. So there is a -- we're working on the cash flow situation. So there are certain group which is below the line. So we are kind of absorbing and the second need of existing additional line from the bank, which is -- which should be available in next year. We are comfortable for 1 month, first of all. So 1 month, we have sufficient liquidity, there is no problem as such. And there is a plan to meet the additional liquidity requirement for the month of May also through the -- through pulling the liquidity sitting in different group company. And we will be -- we are seeking the line from the bank, which should be in place by the next 2 to 3 weeks' time.

Sorry, I got the liquidity part. I missed the first part. And also if you could elaborate the cash debt level situation as on date and the approximate number of the fixed cost on a per month basis put across [Audio Gap] to develop an infection. So mixing patients may not be a good idea. However, if the surge of the disease is so high that the hospitals are overwhelmed, in that case, it may make sense to designate some of our private hospitals also as COVID hospitals. So we will be open to that. We will see as the situation evolves. But our continuous focus is on to be able to serve as many patients as possible, whether they have COVID disease or other disease. So all the other chronic illness patients need to be supported through this phase as well. As the private -- as the public system get overwhelmed with the disease outbreak, it will become more and more important for the private sector to be able to provide services to the patients who are undergoing chronic treatments. So our feeling is that we will be watching the situation as it evolves. And if necessary, to designate 1 complete facility, we will consider that. In the meanwhile, we are looking at alternative options of creating some facilities rapidly into a hospital where patients who just need simple isolation and not critical care, we can support certain soft services like that. This could be a public hospital, this could be a medical college hospital, et cetera. So we will collaborate with other hospitals to provide that kind of facility. But within our hospitals, at the moment, we don't think it is going to be necessary to designate a hospital completely as a COVID hospital. Arindam, if you could answer about the test price.

Sure. So yes, so as you know, we are conducting this confirmatory test at a government-defined price of INR 4,500. And at that price, as a company, we will -- covering all our costs both on doing the test as well as sample collection and won't be incurring any loss on the same.

But is it profitable at this price? Or is it just cost recovery?

So the idea, obviously, this is a cost control product. So does it make a whole lot of profit? Obviously not and that was never the intent, but it doesn't make a loss. It covers up for the cost.

The next question is from the line of Saion Mukherjee from Nomura.

This is Saion here. Arindam, just on SRL volumes, how is that impacted because of the lockdown?

Sure. So obviously, business has been on a sharp decline, maybe from 20th March onwards. And with the recent lockdown, we are seeing that further being affected and will probably continue. So -- and this is on both side, both B2C and B2B because you heard Dr. Raghuvanshi talking about the nonemergency procedures in a hospital being roughly 70%. And if that obviously goes down, that has a impact on the prescriptions coming to the lab. As well as thanks to the lockdown and logistics issues, we are not being able to move our samples for specialized tests from across the country to our reference lab and our walking and home collection has to improve and the typical corporate health checkups that happens, which are more preventive, and I think in the month of March, that has all but sort of vanished. So altogether, very early days to assess. And we do believe this is a short-term impact. In the last 6, 7 days, we have seen the overall revenue going down by anywhere between 70% to 80%. So that's the kind of dip that we have seen in the last 6, 7 days. We are still monitoring the situation on a daily basis. So the long-term story, as we all know, tax and its impact, we don't see because of the COVID. The overall structure of the industry or the growth story gets impacted. But yes, we will, I guess, need to sustain our short- to medium-term hard way in between.

My second question on the hospital side, sir. You mentioned the 10% of revenues from medical tourism, foreign patients, which will obviously fall. But I'm just also wondering what proportion of your revenues or volumes are from patients who have to move long distances within India? Because, of course, that is going to get impacted. And even after the lockdown is [ lifted ] off, the issue is that people may not be traveling that frequently. So there can be a lingering effect of this. So can you share that? What fraction of business is that for you?

So our country business for most of our units is not that high. Majority of our hospitals are serving the local communities. But as you know, that in India, in the secondary markets, the availability of care is not there for these kind of tertiary procedures. So our belief is, as Vivek was saying earlier also, as the situation starts normalizing, we would probably see a pent-up demand of these kind of cases happening. You are right that people will still have a hesitation and there would probably be a gradual curve of recovery where patients start seeking these treatments, but there would be a pent-up demand because these procedures are required. And the reason why they come to our larger facilities at the moment from far off is because of unavailability of these services in their primary -- the area of residence. So we expect that not to be the case, and people will be coming eventually for surgeries. And as a percentage, though, I do not have the exact number as to how many patients come from upmarket, but -- upcountry market. But I would say that in our case, it is a smaller percentage. Majority of our patients come from within the metropolitan areas which we serve.

Okay. And sir, if I can ask one last question on -- you mentioned about cash flow. So there was a statement mentioned, INR 200 crores cash shortfall. May I know at like what timeframe you're looking at? And also if you can throw some light on your cost structure, particularly on the hospital business. So let's say, if you have 15% margin, 85% cost, how much is fixed and how much is variable? And what can you do in terms of bringing down some of the fixed costs? Do you have an assessment in mind at this point?

Yes. So we have started working on that. So the -- we will have to do something about it as we go further. We are in active discussions internally. So I would not be able to put an exact number on it, but we are working on that. For the next 3 months, we will have to adjust some of the fixed costs as well. Variable costs automatically will get adjusted, but the fixed costs have to be adjusted as well. So we are in active discussions. But as a proactive measure, the senior executives have decided to take cuts on their salaries and which would start immediately. And then post that, we are also in active discussion with physicians as to how we can make the arrangements more sustainable for both sides. We also need to be mindful that clinicians who are on the front line of this battle, we, as an organization, need to support them as well. However, we will have to rationalize the payouts. So we are in a process of discussion. We will be able to give a little more color to this over the next 2 or 3 weeks.

And for the cash flow, if you can -- this INR 200 crores which was mentioned, what is the time frame that you're looking at, the shortfall in cash flow?

Yes. This is for up to June, we have calculated. We have assumed that average revenue fall of 50% up to June.

Up to June? Okay.

Yes.

The next question is from the line of Rushabh Sharedalal from Pravin Ratilal Share and Stock Brokers.

Yes. Fortunately, some of my questions have been answered. I just have one more question. When do you expect that the open offer shall open? And what is the status of it?

Well, this is still subsidies, as you know. We have -- we were supposed to have the hearing on 16th of this month, which did not happen. And we haven't got the fresh date. We expect that because of the backlog getting generated at the Supreme Court, this is likely to be delayed by at least couple of months. So we don't expect this to be going forward for next 2 months. But we have no idea about this, and we cannot really take a guess on this. If the court is -- the court is continuing to hear cases in a virtual mode. So in case this comes up earlier, we would have the resolution earlier.

Okay. And if I may just follow-up with that. Why is it that the company does not update the things that they are going on in the court, on the BSE or the NSE website. I mean, is it not necessary as per the SEBI LODR guidelines that the company must update as of March 16, hearing was canceled and there may be a delay or something like that?

The March 16 hearing getting delayed has been notified. But we will further send a clarification on that.

The next question is from the line of Mayank Hyanki from Axis Mutual Fund.

I have questions on the COVID testing capacity and provisions right now. So in the last few days since we have started to test, can you highlight how many test cases have been flowing to us every day? And secondly, on the pricing side. Is the pricing like, say, even if we get supply of the cheaper, domestic-made kits from players like Mylab?

So I think there are 3 parts of your question. If you can just repeat the last part, it will help.

Sir, the last part is on the pricing part, where the price is INR 4,500 right now. I'm assuming that this price was strict, keeping in mind the imported kits from Roche or other players globally. Now if domestic guys like Mylab and all they start manufacturing local kits, which are cheaper, does the price -- can this price be downward revised depending on their cost and your volume ramp-up or it remains constant? That is the last one.

Sure, sure. So capacity, I think I already spoke about what is our existing capacity and what we can step it up to. And so that's number one. So if I need to repeat, I mean, you can let me know so I can address that.

No, no, no. The question was just capacity. I understood. I wanted to know that how has been the actual inflow of patients.

Yes. So coming to that, as you know, this is a specific case where there are information, which we are not allowed to share that how many positives and how many cases have come in as of now. All the cases, end of the day, are uploaded on the ICMR website via a dedicated password and user ID each of the private labs are giving. And then that gets consolidated at ICMR-NIV level for them to publish that. So at this stage, it will not be proper for me to be able to say exactly how many cases and how many positives at each of Mylab. So that's on the second. On the third one, it is not a -- the price has been fixed by the government. It's not necessarily that I have any knowledge that they have done the price primarily based on U.S. FDA and CE-approved, whether they have done a detailed costing to go there. INR 4,500 is the price that is fixed today for swine flu. And it could well be that government took a call of having a similar price control. So I'm not very sure to say that whether INR 4,500 was only based on those kits. We have to see on ground how much, because the U.S. FDA kits are still not available in India. Only when they're there and when the -- I can compare the Mylab's price on ground, can one say that whether there is a cost saving between Mylab's and the U.S. FDA kits. So I won't be able to comment on that because while, yes, the kits are from outside and they may have import duties, but there are also manufacturers that are much more larger and mass scale and sometimes those efficiencies can also come in. But at this stage, I don't have the exact numbers on landed price of both to be able to give you that answer.

Just some clarification on the first part of capacity. So when you say that you can do 1,000 tests per day, is it just the capacity of the machines, the future machines? Or is it -- you are saying that depending on the number of test kits that you have already secured? So you already have test kits to go around the package of [indiscernible]?

No. So the 1,000 per day is based on both the machines and the amount of hours they run those machines for. So those same existing machines, if I run 24/7 and I stop doing all other tests because I'm not stopping, there are swine flu cases which keeps coming. So their artificial machine is used for few other tests as well, things like HIV, HCV and various other tests. So theoretically, if I stop all those tests and if I run these machines 24/7, the 1,000 can go up to, as I said, 2,000 to 3,000.

Okay. And the test kits currently, we have like enough in number like in 1,000-plus test kits? Or is it -- and can be directly procured? Or do we have to go through government channels or some other regulatory channel?

No, we can directly procure. What we can procure and the list is as per the guidelines of ICMR, and the kits are in terrible short supply for all of us, and we are hand-to-mouth practically at a daily level.

The next question is from the line Tushar Manudhane from Motilal Oswal.

Sir, just on this sample collection constraint for COVID as well as non-COVID in terms of transporting the sample to the required reference labs. As you see in the last 2, 3 days, there has been a lot of concern. So how is this taken care of? Is there any mechanism which is putting in place wherein government allow these kind of transport to happen?

Can you restate what exactly is the question, sorry, for me to answer.

As you referred to the earlier question that sample -- collecting samples is one of the constraint, may be COVID as well as for the non-COVID samples as well. And in addition, even if you collect the sample, transporting it to the required lab is another burden as of now over the last 2, 3 days. So how are we going about to resolve this issue in a way where there is some -- is there any clarity from the government side or no?

Yes. So actually, we are constantly engaged with various bodies as well as reaching out to the authorities, whether it's NITI, whether it's through FICCI, whether it's through industry bodies like NATHEALTH and through various industry leaders, both on the hospital as well as on the lab side. So we are putting up a, sort of a, coordinated and joint face to the authorities to ask for help in this regard. So there's a constant discussion that is going on. So we are even talking about -- through some of the senior leaders on our group, we are also reaching out to civil aviation coordination person as well. So through all of that effort -- so currently, the effort is on to see how soon can medical supplies and all be smoothened so that -- one is the availability of the kit is a issue, but at least once the availability is made proper, we are then not constrained by availability of flights or inter-state transport. So that's the part that we are in parallel sort of trying to address at a local level. So say, for example, in Mumbai, Mr. Pardeshi's office, the Mumbai Commissioner's office had been very, very proactive been in giving us support and similarly, we are connected at a local and national level to ensure that we try to sort this out to the best extent possible.

Effectively another maybe like 3, 4 days, 5 days to smoothen this process?

I would hope so. I mean it will be difficult for me to commit and confirm for a country, which is as diverse and geographically spread and complex, but yes, we are all hoping that things will become -- I mean, it will not be normal, but it will become easier as we sort of get used to the whole lockdown phase.

And one -- no, maybe two basic, but now the testing at least for the COVID patient is based on the prescription if the patient has a prescription in place. But now this -- with the lockdown, can patient-doctor disconnect is to that extent. So how does the patient get the prescription? And how do we allow that test to be done?

Sure. So the testing protocol remains exactly the same, whether it's a government or private. So patient can just call for a test himself or herself, has to go through a qualified physician. The physician has to prescribe a test, has to also give a declaration in something called Form 44, which specifies those criteria, things like whether you have traveled abroad last 14 days, whether you have symptoms, so there are a few other criteria like that. So this is the prescription in the Form 44 is the 2 things that we collect, apart from government-issued ID card. So those are the 3 sort of mandatory documents for us to be able to conduct the test. And as I told earlier, once the test results are done, the same is uploaded on to the ICMR website, and all positive samples are further sent to NIV Pune.

We'll take one last question from the line of [ Charu Mehta ] from Dalal & Broacha.

Yes. My question pertains to the test. Is the RNA test the most proficient in giving the result? Or whether the MAT test is more effective?

Look, current understanding from the experts and the scientists at ICMR, the most proficient and confirmatory test at this stage is genealogical, and it's based on the RNA test. So that's most confirmed way of getting to know the virus. That's the current understanding. But as I said, the experts are also evaluating alternate platforms as we speak.

Okay. And what is the cost per kit?

So the cost is defined at overall, INR 4,500 is the government-defined price. That about covers the cost of kits and sample collection.

Okay. That is the cost per patient. So 1 kit can process for 1 patient?

Depends on what kit, ma'am, you are asking for. There are different kinds of kits which is there. There are some kits which are used to conduct the test. There are some kits which are protective gears, which are called PPE kits, and there are DNA extraction kits. Each one is different in nature. The testing kit has different sizes depending on the scheme. There are kits where each kit can do hundred tests. There are kits where 1 kit can do 384 tests. As far as the protective gears are concerned, those are 1 per patient. So if someone is coming to home to collect a sample, the entire protective gear, including the whole Hazmat suit and N95 mask and glove, everything is biomedical waste immediately after 1 collection. So that gets discarded. In fact, the cost of collection is technically higher than cost of doing the test.

Thank you. Ladies and gentlemen, due to time constraint, that was the last question. I now hand the conference over to the management for closing comments.

Ladies and gentlemen, thank you very much for being with us for today. Gaurav and colleagues and I are available to take any further questions or clarifications you may have. We hope you and your families are safe, are at home, and we will be in touch again with you as the situation evolves. Thank you very much, and have a good day.

Thank you. On behalf of Fortis Healthcare, that concludes the conference call. Thank you for joining us, and you may now disconnect your lines.