GPT Healthcare Limited (GPTHEALTH) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and a very warm welcome to the Q1 FY 2025 Results Conference Call of GPT Healthcare Limited. Before we begin, I would like to state that this call may contain some of the forward-looking statements that are completely based upon the company's belief, opinion and expectation as of today. These statements are not a guarantee of company's future performance and involve unforeseen risks and uncertainties. The company also undertakes no obligation to update any forward-looking statement to reflect development that occurs after a statement is made. Documents relating to the company's financial performance including the investor presentation have already been uploaded on the Stock Exchange and company's website. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Raghav Vedanarayanan from JM Financial. Thank you, and over to you, sir.

Thank you, Siddhant. Good morning, everyone, and welcome to the Q1 FY '25 Results Conference Call of GPT Healthcare Limited. Joining us today on the call are Mr. Atul Tantia, Group CFO; Mr. Anurag Tantia, COO and Executive Director, GPT Healthcare; Mr. Kriti Tantia, CFO, GPT Healthcare. I would now like to hand over the call to the management for your opening remarks. Thank you, and over to you.

Thank you, Raghav. Good morning, everyone, and welcome to the GPT Healthcare Limited Earnings Conference Call for the first quarter ended June 30, 2024. We extend our appreciation to JM Financial for hosting this call. We also have with us on call our Investor Relations advisers, Stellar IR. I'm thrilled to connect with you -- with our esteemed shareholders today and reflect on our journey over the past year. GPT Healthcare Limited is the health care arm of GPT Group. We are driven by the ethos to provide quality health care, particularly in the underserved regions like Eastern part of the country through our neighborhood tertiary care hospitals. During this quarter, despite this quarter being a seasonally weak quarter, which was further heightened due to the overhang of the general elections in the eastern part of the country, our financial performance reflects our commitment to continued operational excellence. Revenues for Q1 FY '25 witnessed a 1.7% year-on-year growth, totaling to INR 97.8 crores with total income of INR 100.1 crores up by 2.5% year-on-year. EBITDA for the year amounted to INR 20.2 crores with an EBITDA margin of 20.2%. Profit after tax for the quarter stood at INR 10 crores with a 10% PAT margin. Finance costs have come down by 57% on account of reduction in debt, reflecting our efficient financial management. The existing 4 hospitals in Salt Lake, Agartala, Dum Dum and Howrah continue to perform well and are improving on all financial and operational metrics and increasing occupancy. Notably, our ARPOB stands at 36,500, aligning with our commitment to serving the aspiring population of the society with higher disposable income in the middle to high income segment. Moreover, due to our neighborhood model, approximately 95% of the patient business is from cash and insurance. The company-level bed occupancy currently stands at around 53% with the ALOS of 3.62 days compared to 4.0 on a Y-o-Y basis. Coming to the hospital wise performance. The 85-bed surgical excellence hospital, ILS Hospital Salt Lake has revamped its gastroenterology department infrastructure to attract more patients and thereby diversify the specialty mix. The ARPOB for this hospital has risen from 33,000 to approximately 40,000 while the ALOS has fallen sharply to 2.78 days compared to 3.32 days of the previous quarter 1. The Agartala hospital has the presence of 66 critical care beds across all bed categories and have commenced the installation of the radiology oncology equipment as well. Dum Dum Hospital has recorded an ARPOB of approximately INR 40,000 for the quarter. In line with our intent to reduce the average length of stay of this hospital, the ALOS has reduced to 4.74 days compared to 5.19 days of the previous year. This has correspondingly led to a slight dip in the occupancy as well. The company intends to commence a state-of-the-art diabetic clinic in this hospital to further strengthen its medical offerings. The Howrah Hospital has seen a sharp revival with the hospital revenue and patient volume rising. The ARPOB of this hospital has increased from around 26,000 mark in Q1 FY '24 to approximately 33,000 in Q1 FY '25. In addition to our ongoing expansion efforts in Ranchi and Raipur, I'm excited to share our ambitious goal of becoming a 1,000-bed hospital chain within the next 2 to 3 years. This target underscores our commitment to scaling our operations and reaching more communities in need for quality health care services. By expanding our footprint and enhancing our capabilities, we aim to make a meaningful impact on health care accessibility and patient outcomes across the Eastern Indian region. This vision drives us forward guiding our strategic decisions and ensuring that we continue to lead the way in delivering excellence in health care. Thank you for your attention, and I look forward to addressing any questions you may have. With this, I conclude my opening remarks and look forward to addressing any questions that you might have regarding our financial performance and our future prospects. I will request the moderator to kindly open the floor to questions and answers.

[Operator Instructions] The first question is from the line of [ Aman Vishwakarma ] from PhillipCapital PCG.

I broadly had a question on your expansion plans. I'm not sure if you have highlighted them earlier in your call. So I was wondering if you could give us a broad idea of how we are planning to expand this, because I believe the Northeast region itself is fairly underserved. So I mean, what are your plans there?

Sure. Thank you for the question, Aman. So as highlighted earlier as well, we are coming up with our fifth hospital in Raipur. This should be commissioned by February of 2025. With this, we'll be adding another 155-odd beds to our portfolio. We are also -- we've also signed a lease agreement for a hospital in Ranchi. That is under the construction phase and should be added in the next 3 years. Apart from that, we are on the lookout for acquisition opportunities in the larger Eastern India including Northeast India, as highlighted by you. Northeast India is deficient, and we are obviously looking for good opportunities in that part of the country.

And just as a follow-up on the Northeast. So I mean do you see a fair amount of your traffic today that you have, for traffic coming from Northeast or do you see them coming from Central India or I mean if you could just give a breakdown of that? I mean, where do you see your patients coming in from mostly?

See, one of our largest hospitals of Agartala is in the Northeast. Obviously, that hospital has a fair bit of its patients from Tripura, which is about the Northeast market. The Calcutta hospitals tend to cater to patients from all geographies of Eastern India, so Northeast and the rest of the Calcutta City as well.

And just quickly on the ARPOB. So I think we are fairly in the mid-range of ARPOBs when we compare it to the industry levels. I mean, where are we -- how do we see the growth coming in there?

ARPOB is -- there is too much background noise, if they can be, if you can just repeat the question also, please.

Sure, so my question -- I'll join back in queue.

The next question is from the line of Sunil Jain from Nirmal Bang Securities.

Sir, my question relates to the excellent improvement in ARPOB. So are these ARPOB sustainable even at normal capacity utilization?

Yes, definitely, the ARPOB is sustainable. These are ARPOBs, which have increased due to an effect of the case mix as well as increase in prices of both TPAs and our cash prices. Apart from that, the starting of specialty cases like robotic or replacements even to an extent, the oncology services, which we started. So all this is happening and giving an impact on the ARPOB increase. So yes, it is sustainable, and we are going to see that improving also down the line.

See, we saw ARPOB increasing in all the hospitals. So is there any price action also or just a mix of the patient and all?

There was a slight price correction in the beginning of the financial year for cash patients, but that was a very small component. Apart from that, insurance companies as and when their term or their term of contract expires and renews, there is a price correction there as well, which is generally set for 2 or 3 years. So that is a process which is continuously happening. More importantly, the ARPOB has increased due to the change in case mix across all hospitals. You can see that in our operating numbers as well. The length of stay going down, patient volume increasing. So all that is having an impact on the ARPOB as well.

Yes. Great. Sir, last time you had guided for around 14%, 15% revenue growth. So is that on track and you are likely to achieve because if we exclude first quarter, the rest of the 9 months, you have to grow by almost around 18%.

So in terms of the guidance, we're still, I would say, on track to do a 12% to 14% kind of growth number. We did guide for -- we did not guide for 15%, we guided for 12% to 14%. We're still on track. So just to give a total number. I mean the Q2 is better like we said earlier that April and May due to elections was slightly subdued, we are right now on a monthly run rate of almost INR 36 crores, INR 37 crores in terms of revenues, so -- in Q2. So we should be -- Q2 would be slightly -- it will be better than the Q1, obviously, and then taking it forward from there.

Yes. So this Q2, you had last year achieved almost around INR 108 crores of revenue. So with this, we will start seeing whatever the growth we are targeting 12%, 15% in the Q2 itself?

Q2, we should see about -- we should see a growth. I cannot comment a number because we are still in the middle of the quarter, so I cannot comment on a specific number, but Q2, we should see a growth to achieve the overall number for the year.

Okay. And the occupancies, what we are seeing a dip was mainly on account of election period, but what we see from the other hospitals the occupancy impact is not so large what we had seen in our case?

See, every region differs in its functioning or reaction to election. The Eastern India has a more pronounced effect of elections maybe compared to other regions which you're talking about. Apart from that, the occupancy dip which you see on an overall basis, it's also on account of reduction of length of stay. We are committed to reducing the length of stay of our Howrah -- of our Dum Dum and our Salt Lake Hospitals, our mature hospitals, and we have managed to do that. Our length of stay has come down to 2.78 in Salt Lake and almost 4.6 in Dum Dum from 5.3. So the occupancy dip is an effect of that also, which is allowing us to take more patients now.

The next question is from the line of [ Harsh ] from Bandhan AMC.

Just 1, 2 quick questions. One, in terms of the Howrah occupancy. Now again, there is some possibly seasonal impact as well as the election impact. But the guidance for the occupancy to ramp up to more than 50% would still hold true because the first quarter has seen 37% occupancy. So how should we think about the annual run rate, annualized run rate for this hospital in particular?

So yes, the hospital is ramping up well. The quarter 1 average was at 37%, which was primarily an effect of the elections, a pronounced effect of the elections. At this point also in quarter 2, we are tracking a figure of more than 50%. So we are fairly confident that on overall year-ending basis, we'll be tracking our guidance over on this.

And sir, just in terms of clarifying one, two metrics over here, let's say, for Dum Dum Hospital as well as Howrah Hospital, I understand it would be inaccurate, but your occupancy coming down and your ARPOB moving up for both these hospitals is a function of your of ALOS also coming down? Or is there something else that is happening?

No, it's a function of the length of stay coming down. As the length of stay comes down from almost 5.3 to 4.7, the beds do open up and the occupancy will come down. It is purely a function of the length of stay coming down.

And this length of stay coming down continues to be again a function of our efficiency as well as the case mix.

Yes. It is, as we have been -- we have made it amply clear in all our previous calls also that our intention is to reduce the length of stay of the Dum Dum Hospital and the Salt Lake Hospital to free up more beds so that we can take more patients. It is an intentional strategy, which is now playing out. We are focusing on short-stay treatments and surgeries, which is now starting to give us results.

And lastly, in terms of the guidance, I think if I refer to the previous transcript, is at 14% to 15% guidance for the core assets, the existing assets. So is there a chance, like is there a downgrade to that 14%, 15% because you mentioned 12% to 14% for FY '25? Or should we still consider 14% to 15%?

See 12% to 14% is a good guidance, and we stand by that guidance.

Next question is from the line of Dishant Jain from Quasar Capital.

I had a question on Howrah occupancy which you have answered. The other question was on the cost structure. So if you look at the cost on the yearly basis, it has increased. So is there any kind of upfront cost that we are taking or it is just a normal in line with the business?

I'm sorry, Dishant, it was not very clear. Can you please repeat the question?

Yes. Sir, I had a question on the cost structure. So the cost, capital cost, employee and other costs have increased. Like is there any upfront costs that we're taking or it is in the line of the business? Can you help us with that?

Yes. So the employee cost has gone up due to the annual increase in the salaries for the employees, which happens every April. If you see in terms of the cost structure due to the change in case mix, the medicine cost or the cost of material consumed has come down, whereas other expenses has slightly gone up because the doctor expenses has gone up. And also, what do you call, due to increased use of the robot, the payment to the robot agency has also gone up. So that all comes as part of the other expenses. So this case, the cost structure depends on the case mix, which is in line with the industry as well.

Okay. And sir, how much of that are we carrying as on June '24?

Close to INR 8 crores.

[Operator Instructions] The next question is from the line of [ Nihar Dave], who is an individual investor.

I just had 1 to 2 questions. So the Raipur and the Ranchi hospital, how much of the CapEx is already reflecting in our gross block of, let's say, about INR 270 crores plus totaling up to INR 312 crores, including intangible and other assets. How much of it is already reflected?

So it is not a part of the gross block as of now. It is a part of the CWIP expenses are still going on in those projects. Ranchi, we did not spent anything apart from the initial security deposit because the approvals and the initial work is going on by the developers. In Raipur, we have spent almost INR 5 crores to INR 7 crores. In capital work in progress and the equipment ordering process, the major chunk of our expenses already started.

Okay, okay. And, sir, we are expecting about INR 55-odd crores per hospital. And what will be your working capital in requirements for the new hospitals?

It would be around INR 5 crores to INR 10 crores in the initial period. For the initial period where we will be likely to sustain cash flows, that will be the INR 5 crores to INR 7 crore mark. Beyond that, business is a negative working cycle business, we don't require a lot of working capital for daily functioning.

Okay. Okay. And so what location specifically in Ranchi and Raipur are we planning?

So Raipur, the project has already started and it is, I would say, finishing stage. We are looking at starting in February 2025 -- commissioning in February 2025. It is in Pachpedi Naka. It's in the heart of the city. Similarly, Ranchi in Line Tank Road, again, right in the heart of the city. There we are going through the approval process and the builder is going to start construction there.

Next, there's a follow-up question from the line of [ Aman Vishwakarma ] from PhillipCapital PCG.

So I have a rough question. So broad -- could you give me a broad idea of what does your CapEx per bed look like in the Northeastern region as opposed to the central region?

So CapEx per bed in the Northeast or Central region really doesn't change that much other than the cost of land per se. Our last hospital in Howrah, we spent about INR 70 lakhs per bed, which is in Calcutta City. In our Raipur Hospital, the CapEx per bed looks optically lower because the asset, which is the land and the building is on a long-term lease from the developer. So that is why the CapEx per bed is low also. CapEx per bed is a function of the model that we do choose. Industry generally tracks at almost INR 1 crore per bed without the cost of land, whereas Howrah it was INR 70 lakhs per bed including the cost of land.

I mean -- but if I understand it correctly, all of our hospitals are greenfield, right?

Existing 4 are greenfield. The fifth one is also greenfield, but the land and building is on an asset-light model.

Okay. Got it. And just sir, lastly, so I mean, how are we placing ourselves? Are we doing any high-value surgeries or -- so essentially, what I'm trying to get to is how do we establish ourselves as a branded player because these areas are fairly underserved, right? So I mean, if we could get the first mover sort of advantage with the brand recognition. So I mean, how would you go about that?

So in terms of our Calcutta hospitals, it's a brand which is there in Calcutta since almost last 24-odd years. It's a well-recognized brand in the city. We -- our model is more of a neighborhood tertiary care model. So we believe in marketing that 4 to 5 km radius of that hospital. These hospitals have the most advanced surgeries like robotic surgeries, bariatric surgeries, kidney transplants, neurological surgeries, congenital heart disease and other kinds of surgeries, which are the requirements in each and every region. The hospital in Agartala is the only corporate hospital in Agartala. We are very famous for the critical care patients that we do treat and other high-value surgeries that we do operate there.

Okay. Okay. And sir, just a suggestion, I don't think you give out the case mix data. So I mean it would be great if you could just provide that?

So we do give case mix data on an annual basis. We don't give on a quarterly basis. Annually -- we will give it out on annual presentations.

And sir, just last one, I think if you look at doctors in Mumbai, they are majorly consultants, right? So I mean, how does it work in the other regions -- in the regions that you operate? I mean, how many would be on your payroll and how many would be consulting broadly?

So the doctor engagement is again a structure of the region where we are operating in. In Calcutta, the trend is more like Bombay where most of the doctors are on a visiting basis. While in Agartala and even to a large extent on Raipur, they work more as full-timers. At this point, we have over 90 full-time consultants and almost the association of 500-odd visiting consultants.

Okay. Got it. And this 90 is spread across all the hospitals, right?

Correct.

Next question is from the line of [ Anuj Kashyap ], who is an individual investor.

Congratulations for the good set of numbers. I wanted to ask on last financial year, we had a campaign in Bangladesh for international patients. Just wanted to know what is the revenue mix or what percentage of revenue comes from international patients? And how much Bangladesh issues have affected us? Is first set of custom?

Sure. So as highlighted earlier also, we are more of a neighborhood hospital, tertiary care center. We focus more on patients in our immediate neighborhood areas. Bangladesh for us is not a target market in Calcutta Hospital. We do get a small percentage roughly around 5% to 7% of our patients from Bangladesh in our Agartala Hospital only. That is something which might get impacted for a few months because of the ongoing crisis, but hopefully should be results for.

Okay. And sir, second question is, in your DRHP you mentioned that you'll be looking for the Kanpur city or cities in Bihar or Guwahati and all. So whether that will be organic expansion or inorganic?

We are open to both organic and inorganic opportunities. We are scouting for inorganic opportunities in these major cities which you've mentioned. At the same time, we are looking for land parcels also for organic expansion opportunities.

The next question is a follow-up question from the line of Dishant Jain from Quasar Capital.

My question, sir, as you said that doctors' fee increased, is it related to the intense competition or something other than that?

So it is a mix of some amount of fixed increment to the payments to RMOs and some of the fixed consultants. Apart from that, it is also a function of the case mix changing as we are doing more complicated cases, the doctor fee component in these cases tends to increase. So it's a mixture of both of these factors.

Next question is from the line of [ Bina Shah ] from [ BS Investments ].

Congratulations on the quarter results. I actually joined a little late. So my question is regarding the occupancy. So we see that the occupancy levels for this quarter for most of the hospitals had declined on a Y-o-Y basis. So could you help me understand the reasons behind this? Firstly and second is how we can expect to ramp up the coming on quarters or the year?

So the occupancy has declined primarily due to 2 reasons: A, is that we've managed to reduce our length of stay in our Salt Lake and our Dum Dum hospital, which was an intentional strategy from our part. So that has opened up more beds to be available for newer admissions. Secondly, quarter 1 is a seasonally weak quarter, which was further heightened by the general elections, general elections tend to have a higher impact in Eastern India. The disruptions cost. So because of which there was limited movement and that impacted the occupancy as well. We are already ramping up. July has already ramped up, and we are expecting Q2 to give us a fair amount of growth which you're looking at.

Understood. And 1 more question. So can you comment on the cost of the surgeries performed by robots. And how was that really accepted by the patients? Like were they are comfortable? Or could you just help me with that.

Sure. So the surgical robot charges are fixed around INR 60,000 to INR 70,000 mark. And generally, these are either paid for the patient by themselves or in some cases, the insurance companies tend to cover it also. Insurance coverage is limited at this point. We are engaging with all insurance companies to make it a standard offering.

Okay. And if I am not wrong, the Dum Dum Hospital has the highest ARPOB among the 4 hospitals. So how does this number look going ahead or any -- will it stay on the top or any other changes expected?

So yes, Dum Dum hospital has a higher ARPOB because of the high amount of tertiary care level work which we do in that hospital, including renal transplants. We expect that number to continue with the standard growth path. Other hospitals are also maturing in the service offerings. For example, in Agartala, we are starting oncology services as well. So as newer service offerings start other hospitals, they would also guide up or match up to the Dum Dum number.

Okay. And 1 last final question. So why has there been a sudden increase in the other expenses, if you could help me?

We already covered that in 1 of the previous questions. So the other expenses has primarily increased due to increase in doctor expenses, which is product of the annual increment as well as the change in specialty. Apart from that, payout to vendors like robotics -- with the increase in robotic surgeries, payout to vendors or robotic cases also. All these are added as factors to the increase in other expenses.

[Operator Instructions] The next question is from the line of [ Cinderella ] from SR Investments.

So I just wanted to know that how are the roles distributed among the family members involved in the business?

So the roles between the family members are clearly defined. There is minimal overlap between the different family verticals. There are family members involved in the infrastructure piece and in the health care piece. I look -- I, Anurag Tantia look after the entire health care operations. And I'm assisted by Mrs. Kriti Tantia, who is our CFO; and Dr. Vishal Goyal, who's our Group COO of the Healthcare division.

Okay. Okay. Also, can you please provide the insight to the demographic of a patient base, like multiple times and patient age or gender or health conditions? Like are you observing any of those?

Those data points are there but they are not available with me at this point. We can provide them later if it's so desired.

Okay. Okay. Okay. And I just wanted to understand that what are the investments we made in technology innovation to improve the operational efficiency of the patient care?

So we do end up making quite a lot of investment in this regard. For example, as highlighted earlier also, we've invested in the surgical robot in our Salt Lake Hospital. We've invested in 3D cath facilities in our Dum Dum Hospital. We've digitalized our entire functioning from an HMIS perspective. We are launching a patient app very soon. So there are constant endeavors, both from a medical and a nonmedical perspective to improve the overall patient experience.

Okay. And how are you measuring the ROI on these investments, like?

So there are some investments, for example, the digitalization of patient records linking everything to sales force. These are measurable on account of the higher conversions, which we are able to do from leads. Apart from that being measuring the satisfaction of patients because they are being able to get the reports on time, on the phone, et cetera. These are -- some of it is immeasurable. Some of it is measurable. Directly measurable are the returns on the robotic surgeries and the returns from specialty specific investments, which are done. So those are directly measurable. Some are not measurable as well.

Okay. And also 1 more thing. How can you differentiate between the asset-light model and the normal business model? Like if someone is paying INR 2 crores or to INR 3 crores per year. So like how can you differentiate between them?

I'm sorry. I was -- the question was not very clear.

I said that if you can explain me the difference between asset-light model and the normal business model, okay? Regarding the investment, and I needed the clarity on like who's paying INR 2 crores to INR 3 crores per year. So how can you differentiate between those?

I don't know where the number of INR 2 crores to INR 3 crores is honestly coming from. For an asset light model and a normal business model in this case is when the land and the building is on a long-term lease. So almost 40% of the CapEx per bed is towards land and building. So if you carve that out and taken on a long-term lease, then we don't need to spend on that. That is why it becomes an asset-light model. The balance 50% to 60% is what we end up spending, which is what we are doing in Raipur and also potentially in Ranchi as well. So that is a...

Where in Ranchi?

I think you've joined the call late, maybe, madam. So the Ranchi is -- in Line Tank Road, heart of Ranchi, next to MG Road of Ranchi.

Next is a follow-up question from the line of [ Aman Vishwakarma ] from PhillipCapital PCG.

I had a question on your broader occupancy numbers. So despite these hospitals being 20, 15 years old, I mean our occupancy numbers are still in the range of 60% to 50% sort of range. I mean is this optimal utilization or what is causing this stagnation of the occupancy?

So if you look at the occupancy numbers, the older hospitals of Salt Lake and Dum Dum are functioning at good levels. Dum Dum is functioning at almost a 70% occupancy, while Salt Lake is at a slightly muted 56% occupancy. The Salt Lake occupancy is on account of the length of stay coming down. So as the length of stay has come down for the hospital, we have more -- it has come down from almost 3.7 a year ago to 2.7. So that has been a constant endeavor on our part to reduce it, which is now affecting in the higher number of beds available. We are engaging with more doctors and more departments to make -- to utilize the larger number of beds available. If you see our IP numbers, they have not reduced, they've increased in fact. The same applies to the Dum Dum hospital also. Our length of stay has come down from almost 5.4 to 4.7 in the past 4 or 5 months as an intentional strategy to make more beds available, which is what we are now working on filling up. Agartala occupancy has been increasing year-on-year as we see with the addition of oncology services there that we are hopeful it should press towards the optimal 70% mark in the next 1 year or so 1, 1.5 years. Howrah is on an increasing trend. It's a fairly new hospital post COVID. It is on an increasing trend, and we are seeing good growth year-on-year.

Fair enough. But I mean, I might have gotten it wrong, but maybe -- so if there are more beds opening up for the patients despite the IP numbers going up, so should there be an increase occupancy also?

So length of stay has come down. As I said, length of stay has come down if every patient is staying lesser on that same bed compared to 3.5 days, 2.7 days, that opens up beds to be lesser occupied because of which you are seeing the occupancy to be lower on a visual basis.

Okay. And then just lastly on automotive surgery. So I mean who exactly are we partnered with in terms of our equipment? I mean do we have any major supplier that we buy from?

So at this point, we have 1 surgical robot in our Salt Lake hospital from a company, a British company called CMR. We are in talks with some more robots for other hospitals as well. That is under negotiation.

Next question is a follow-up from the line of Sunil Jain from Nirmal Bang Securities.

Sir, you said that currently, you are running at INR 36 crores revenue per month. So that will again translate to around the INR 108 crore, INR 109 crore revenue. And again, we will be in the growth range of 1% to 3%. So how we will be able to achieve growth of 12% to 14%, what link we are missing in it?

So like I said, it's INR 37 crores for July. We're tracking around INR 37 crores odd for July. Obviously, August is slightly better than September is also better. So we are looking at an improvement in the occupancy like we highlighted earlier, for the quarter, we should see a bump up in the growth, not the 1% to 2% that you're kind of pointing towards. So for the year, that 12% to 14% mark is what we are quite confident of achieving.

And second thing about you had pointed out that some impact will be there on the Agartala about the Bangladesh patient not coming. So again, there, the utilizations are not likely to improve so much because -- or get impacted because of that. So will that also have impact on the revenue?

So that can -- will have a temporary impact on the revenue because Agartala, the Bangladesh patients have contributed to almost 5% to 8% of our revenues in Agartala. Having said that, like we've highlighted in the next couple of months, we expect to start the radiation oncology and the PET CT and the LINAC as well in Agartala. That would again bump up the revenues there. So that should counter affect each other. The second part is that Bangladesh situation will also get hopefully normalized in the next couple of months. The patient inflow from there should hopefully come back to normal next couple of months. It cannot stay like this for a long time.

How is the utilization in Agartala in the July month? Is it running well or what?

July month is running well. It is almost tracking around the 50% mark for Agartala right now. We are seeing a bump up in revenues there. A lot of initiatives like this oncology and other departments we are plugging the gaps to ensure that the operations do pick up well. The first quarter -- so the first quarter, honestly, like you said, it's not a good benchmark because the elections and otherwise. I mean, I think that to say that the first quarter is what will translate for the full year. That's not a good impact. Not a good...

[Operator Instructions] The next question is from the line of Raghav Vedanarayanan from JM Financial.

Just 1 question from my side. Anurag, you had mentioned that ALOS is reducing -- sorry, ALOS increasing has led to lower occupancies, but IP volumes had still gone up. Could you quantify that for 1Q and how it has been on a year-on-year basis?

Sure. So as I have said earlier as well, the length of stay has come down, IP numbers have remained stagnant or have gone up compared to 1Q last year. So if you see the Salt Lake hospital 1Q last year, we had done around 1,380-odd admissions. This year, we've done almost 1,560-odd. Agartala, we had done 2,590 last year, and we've maintained the same 2,590 this year as well. Howrah was almost at 1,100 against which we've done 1,200 admissions this year. So the numbers have increased or remained stagnant, which also is commendable because of the overhang of the elections as mentioned earlier.

Sure. And what's the number for Dum Dum?

Dum Dum had done 2,050 admissions in the last year. This year, we've done 2,070 admissions.

Next question is a follow-up from the line of [ Nihar Dave ], who's an individual Investor.

So my question is on the inorganic acquisitions that we are planning on making. So Raipur and Ranchi, looking at, let's say, odd, INR 70 lakhs, INR 80 lakhs per bed investment, are we also for our inorganic acquisitions going to look at an asset-light model? Or if we get into an inorganic acquisition, we are open to, let's say, a higher CapEx spend per bed?

So given the nature of an inorganic acquisition, it cannot be asset light, right? That is the premise by the existing owners are selling. And -- but if it is available, we will need to take it on a going concern basis. We cannot comment on a number for an inorganic acquisition. But having said that, the hospital will be operational on day 1. We will not need initial 6, 8 months dealing issues to start the hospital. That is the advantage of an inorganic hospital because time to market is much faster.

Of course. But are we looking -- my question is, if I can rephrase. Are we looking specifically for an asset-light model? Or are we looking -- are we open to one?

We are open to both. We are open to both. We have almost INR 45 crores sitting on the balance sheet in terms of available cash and investments, which is targeted towards getting such an opportunity and hopefully we should be able to crack something in the next 12 months -- 12 to 15 months.

Got it. And just a follow-up on the Raipur and Ranchi acquisition. You mentioned in the previous con call that you have -- about INR 3 crores to INR 4 crores would be the lease rental expense for the hospitals. That's per hospital and that's fixed already?

Yes, it's part of -- so it's per hospital, it's an agreed upon amount with an increase every 3 years.

The next question is from the line of [ Harith Ahmad ] from Avendus Spark.

On the new hospitals at Raipur and Ranchi, what is the kind of ARPOB that we can anticipate for these markets and other kind of assets that we are planning for these facilities?

So obviously, for the new hospitals in the initial phase, the ARPOB might be at a 10% to 15% discount compared to our Calcutta hospitals. But as the hospital matures in the -- by the third or the fourth year, we hope the ARPOB levels to meet up to our Calcutta standards of around 36,000, 37,000 mark in today's terms.

Okay. And like you mentioned, there could be some initial losses in the first few quarters. So any sense of the breakeven time lines that you could share for these assets? And what is the time line for the Ranchi Hospital? I missed that -- [ for commissioning ].

See, generally, in our Calcutta hospitals, we've broken even on a month-on-month basis and around 10 months in Dum Dum, 8 months in Howrah but we are mindful of the fact that we are going into newer territories. So we are assuming that we would require around 15 to 18 months to break even on a month-on-month basis in these new territories. That is something we have factored in our projections as well and we are fairly confident of making that happen. The Ranchi hospital, as I said earlier, is under the approval stage from the government and we are awaiting the last few approvals to come in, post which the builders will start the construction process.

It's more towards the second half of the 2026 that we can expect?

We are potentially looking at that starting commencing in FY '27.

Next is a follow-up question from the line of [ Bina Shah ] from [ BS Investments ]. The line from [ Ms. Bina] seems to be disconnected. So next question is a follow-up from [ Anuj Kashyap ], who's an individual investor.

Sir, my follow-up question is like we are looking for diversification of our revenue stream like oncology, like robotics. So what is the management thought process behind IVF or diagnostics?

So we are not looking at setting up IVF for diagnostics as a separate business vertical. It is a part of our existing business vertical itself. We are doing diagnostics in-house across all our hospitals at an OPD level and IPD level. And IVF is something which we are starting off in Raipur also as a part of our hospital service offerings. We are not looking at branching them off as separate business verticals.

So that's a good strategy. But the margin basis of diagnostic and IVF that is a high-margin business, am I right?

It might be, but we have our focus, and we want to focus on our hospital business itself. At this point, we don't think it would be the right timing or the choice to branch off into that.

[Operator Instructions] The next question is from the line of [ Sakshay ], who's an individual investor.

Many of my questions have been answered earlier. There's 1 question. When you said scouting in the state of UP, particularly in the city of Kanpur, are you also starting any particular city in Bihar?

So we are looking at opportunities across the eastern geographies. So we are not just limited to Kanpur and UP. We are also looking at cities like Patna or Banaras, even some cities in the eastern periphery of Madhya Pradesh. So it is not just that we are limiting ourselves to Kanpur, we are looking at various cities in the Eastern part of the country.

And the second question would be...

I'm sorry, your voice is breaking off, you were not audible. Raghav, can you please look -- moderator, can you please look into the questions?

Can you please repeat your question?

My question is many of the competitors are setting up their own laboratory. So are our company looking into that sector too?

Okay. So [ Sakshay ], we just answered that question in the previous question itself. We are not looking at separating a -- setting up a separate diagnostic vertical. Diagnostics is a part of our hospital service offerings, and it is a part of our existing hospitals. We are focusing on increasing our hospital business at this point and not looking at setting up a diagnostic vertical separately.

And my last question would be, are there any acquisition on the table in this particular financial year?

So there are multiple opportunities which do come and we evaluate them based on the strength and weaknesses they give. We are discussing a couple of opportunities. It would not be right to comment on it at this point.

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

Thank you, everyone, for your questions, which I hope have been suitably addressed. In case you have any further queries, please get in touch with us or through our IR advisers, Stellar IR. Thank you for your continued support and trust in our company's vision and mission. Together, we look forward to achieving new milestones and creating lasting value. Thank you, and have a good day ahead.

On behalf of JM Financial, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.