HealthCare Global Enterprises Limited (HCG.BO) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to HealthCare Global Enterprises Limited's Virtual Investor and Analyst Meet. [Operator Instructions] Please also note that this session is being recorded. Before we begin, we would like to highlight that certain statements made during today's discussion may be forward-looking in nature. A disclaimer to this effect may be included -- has been included in the presentation. We will begin the meeting with a short video, followed by opening remarks from Dr. Manish Mattoo. [Presentation]

Welcome back, everyone. I now hand over the proceedings to Dr. Manish Mattoo.

Good evening, everyone, and thank you for joining in. I am Dr. Manish Mattoo, CEO of HCG. I welcome you all to HCG's Virtual Investor and Analyst Meet. Today, I would like to take the opportunity to walk you through HCG's journey as leaders in cancer care, how we are thinking about our value proposition, our clinical differentiation, our patient care and outcomes. And more importantly, what's our vision for the future? How are we thinking ahead to advance our mission backed by a clear strategy to compound our EBITDA with a disciplined approach to capital allocation. Today, HCG is India's largest cancer-focused oncology platform with deep presence across India in metros as well as non-metros. Backed by 20 years of experience, HCG has built one of the most extensive and talented pool of clinicians in the country. Our patient-centric approach backed by a focused Tumor Board approach and well-defined treatment protocols enable industry-leading gross mortality rate of 0.9%, which is 1/2 to 1/3 of other multi-specialty peers. The thesis is simple. Specialist focus leads to better outcomes, stronger doctor performance and strong economics. Today, HCG operates 25 hospitals across 10 states and 19 cities. And out of these 19 markets that we operate in, we are leaders in 16 of them. Not just that, we have a comprehensive infrastructure spread across 2,500 beds, and we have the largest LINAC installation base of 38 LINACs in the country. Besides this, we have 100 fully operating theaters and also 400-plus experienced oncologists in our network. This depth allows us consistently delivering great clinical outcomes, a good operating leverage and access to some very interesting markets, which are going quite well of late. If I look back 15 years, HCG's journey can be broken up into 3 phases. In the first phase, which was from 2010 to '15, we really consolidated our base in Karnataka and also expanded to a few markets outside the state through our doctor partner model. This phase saw a revenue CAGR of 27% and an EBITDA CAGR of 30%. The next phase was from 2015 to '20, which saw us expanding rapidly into 8 new cities, 8 new markets. And we saw a shift from a doctor-operated model to a fully owned model. And this phase gave us a revenue CAGR of 16% and an EBITDA CAGR of 14%. The last 5 years from FY '20 to '25 have really been about consolidation, capital preservation and operational efficiency. But this phase also saw a revenue CAGR of 15% and an EBITDA CAGR of 18%. But throughout these phases, what's been important is the expansion of the capacity. Our platforms, our hospitals, almost doubled in size from 14 hospitals, we went up to 25. Our LINAC installation base increased threefold. Our bed capacity increased fivefold. And today, we are at 2,500-plus beds. Our revenue increased 15-fold in this same time frame and grew at a revenue CAGR of 19% and -- while our EBITDA grew at 16-fold at a CAGR of 20%. But while we were expanding across these years, one thing was very clear that we continue to dominate the markets that we were in, and we continue to build a large talent pool and delivering great outcomes. Based on this historical context, we now stand at a unique position of rising demand and constrained supply for high-quality cancer care in India, and HCG is exceptionally well positioned to capture this opportunity. We are truly excited to have KKR as a majority shareholder and promoter. KKR brings with it a wealth of experience in building and scaling some of the world's leading health care platforms and something that's going to augment HCG's journey ahead. This partnership gives us access to global expertise, long-term capital and proven operating frameworks, strengthening our focus on performance, governance and disciplined value creation. With KKR's support, we are now well positioned to scale and advance our mission of transforming cancer care in India. A little bit about myself. I am a trained anesthesiologist with an MD from BJ Medical College, Ahmedabad. I also have an MBA in Finance from Indian School of Business. I've had the privilege of working across health care majors like Apollo Hospitals and Fortis Healthcare across geographies and functions. In my last role at Apollo, hospitals, I was overseeing a network of 2,000 beds and an annual revenue of INR 2,400 crores. And in the time spent in Apollo, I've been able to double the business and increase EBITDA 2.5x, essentially by deepening our clinical expertise, expanding our clinical programs and reach, onboarding several clinical teams who shared our mission and clinical vision. But these experiences have taught me some important things, that a strong focus on patients and clinicians can drive transformation growth. And I'm truly delighted to be part of HCG and in some form or shape, contribute in shaping the next wave of cancer care in India. Before we get talking about HCG, it's important to understand the broader context of cancer care in India. Despite advancements, several advancements, cancer remains an underpenetrated and underserved disease. If you see on the left-hand side of the slide, our cancer coverage by the National Cancer Registry is only 10%, whereas in China, it's about 40% and U.S. is about 90%. Now what that means is a large portion of population is beyond the formal cancer care ecosystem, and that leads to underreporting, right? The fact that in 2020, only 56% of cancer cases were actually reported. A total 1.7 million cases were reported, whereas the real incidence was about 3 million. By 2030, the number is going to swell up further. We are going to have a reported incidence of 4 million cases likely, but the real incidents will be around 6 million, which is a huge number. Another challenge that we are facing is lack of early detection. As you can see on the slide, even in breast cancer cases, for example, which is a large part of cancer incidents in this country, only 29% cases come in at the right stage. The big -- other big cancer incidences in lung and head and neck cancer cases, the reported incidence is even lower. Now what that leads is a high mortality to incidence ratio, which is quite serious for a country like us. This underscores the urgent need for immediate intervention, broader access and consistent quality of care. And this is leading to oncology becoming the fastest-growing specialty driven by rising incidents, narrowing diagnosis gap and improving access. And as I was saying, it's not just an underpenetrated disease, it's also an underserved disease in this country. As you can see on the left-hand side of the slide, we have only 0.3 PET scans and 0.3 LINACs per million population in this country. And the similar corresponding number in U.S. is 6 to 12, respectively. Now what that does is increase the burden of volume on our equipment. Today, in India, for example, each LINAC takes care of 3,000 patients. In U.S., the number is about 400. On the right-hand side, you see a similar issue when it comes to capacity and talent. Out of the overall 500-plus districts that we have, only about 175 have comprehensive cancer centers, right? It's a big demand-supply gap. When it comes to oncologists, out of the need of 12,000 oncologists in the country, we only have 8,000 oncologists. Now this is translating into tangible growth headroom for players with scale like HCG. And we can see cancer is a fast-growing specialty in this country, probably the fastest, growing at a 13% to 14% growth per annum, out of which 9% to 10% is driven by volume alone because of factors like aging, demographic change, rise in risk factors and so on and so forth as well as affordability. So on the supply side, rapid improvements in technology and infrastructure are making advanced cancer care accessible, while on the demand side, because of these factors, the demand is increasing by the day. And in this environment, HCG is at a vantage point because of our oncology-only focus, our clinical depth and pan-India presence, we are in a strong position not just to participate in this growth, but to lead this growth cycle. It's important to understand the disease as well, the disease that we are tackling, the disease that we are focused on. Now cancer is a complex, chronic, recurring heterogeneous disease and the disease landscape is changing every day. Now it demands a super specialized focused approach to deliver clinical outcomes, to deliver superior clinical outcomes, which is very, very important because the margin for error in this specialty is very narrow for the patient. And HCG's model of a comprehensive cancer center is especially suited for oncology because we integrate advanced diagnostics, genomics, proteomics, organ-based histopathology, theranostics and a multi-specialty, multi-modality treatment and even post-care therapies like nutrition, rehabilitation and so on and so forth. And the result is a gross mortality rate of just 0.9%, which is industry-leading. As I had mentioned earlier, it's 1/2 to 1/3 of multi-specialty peers, and it's something very difficult to replicate. So in summary, on this slide, cancer requires a coordinated multi-modality care, only a focus single specialty platform can deliver this seamlessly, and that is the foundation of HCG's clinical strength and market leadership. Globally, too, if you look around and see which are the leading the best cancer centers globally who are the gold standard of care, you can think of a few, whether it's Memorial Sloan Kettering, it's MD Anderson and closer home, whether it's Tata Memorial, Rajiv Gandhi and of course, HCG on the private side, they all have one thing in common, all follow the single specialty model that delivers great outcomes for patients and have a superior brand recall. And HCG has demonstrated this effectively at scale over the last 20, 25 years, holding leadership positions in 16 out of the 19 markets that we operate in. In fact, as you can see on this slide, there was a study conducted in the U.S. comparing outcomes in dedicated cancer hospitals versus multi-specialty hospitals. And it was clearly evident that the first year mortality rate and a 5-year survival rate were significantly better in dedicated cancer hospitals vis-a-vis multi-specialty hospitals. And this data, whether it's global or from the Indian context, reinforces our belief that when care is focused, concentrated and specialized, patient outcomes improve. And that's the currency going forward that hospitals will have to build. It's not just the scale and footprint. It's going to be on clinical outcomes and quality of care. And that's the approach guiding HCG's model and continuous focus on improving cancer care quality and consistency. In fact, feedback from the medical community echoes the same thing that their preference for single specialty model for referring their cases because of the factors that we mentioned about comprehensiveness, clinical outcomes, focus, latest treatment options and so on and so forth. Now HCG has been driven by a strong clinical philosophy of delivering great clinical care, great outcomes, especially in high-need areas. While growth has been important to us, we've stood true to our values of ethical practice, integrity and high quality. And because of a combination of strong clinical vision, mission and our values, today, HCG is India's most trusted oncology platform based on the volumes and our reach and outcomes. Not only are we India's most trusted oncology platform, we are also the destination of cancer care in this country, as I mentioned, because of the sheer volumes and outcomes, because we provide end-to-end cancer care, organ-specific, personalized care through a fully integrated system. We have to understand that when a patient walks into HCG hospitals, every step in the patient's journey, whether it's diagnostics, whether it's genomics, molecular diagnostics, high-end theranostics, preventive oncology or the whole spectrum of multi-modality care through medical oncology, radiation oncology, surgical oncology or the post-care treatment options in rehabilitation and nutrition and so on and so forth or even targeted follow-up, everything is delivered under one roof. Even our histopathology today is organ-specific, and that's something very, very difficult to replicate. Hence, it is this comprehensiveness and completeness along with superior clinical outcomes that we have delivered consistently that makes us the destination for cancer care in this country. We've also been ahead of the curve when it comes to investing in technology. When India was delivering cancer care through cobalt machines, HCG was one of the first institutions to start LINAC installations. When LINAC became common, that's when HCG moved ahead and started installing TomoTherapy and CyberKnife units. And today, as we speak, we are going to install the first MRI LINAC in our upcoming hospital in North Bangalore. So suffice to say that we've always invested in cutting-edge technology like AI and diagnostic, robotic surgery, genomics, adaptive radiation therapy that we have in our centers of excellence, all this while contributing to building the most technologically advanced oncology platform in the country. And this early and continuous investment in technology has not just delivered superior outcomes for our patients, they have also helped us attract and retain some of the best clinical talent as well. One of HCG's strongest clinical differentiators has been the Tumor Board platform, the Tumor Board program, which we have been running consistently for the last 17 years, which ensures that every patient, every complex case, every challenging, rare, difficult case gets -- undergoes a multi-specialist review. And what that does is this collaborative approach has delivered very superior and consistent clinical outcomes for us and setting us apart from our multi-specialty peers. Over the years, we have built a rich repository of insights through this Tumor Board platform with over 40,000 cases that we have discussed and about 300 oncologists and other specialists who have participated in this platform in these discussions, come out with deep insights. And over a period of time, we have systematically embedded these insights into our treatment protocols. And every year, hundreds and thousands of patients across our network benefit from these insights and hence, again, points out to the fact of delivering superior clinical outcomes. Hence, in that sense, our Tumor Board isn't just a discussion forum. It's really a powerful clinical engine where oncologists and other specialists come together to tackle rare and challenging cases. And it's also very important to note that our platform doesn't just employ oncologists. We have other specialists to taking care of patients and improving outcomes like radiologists, intensivists, physicians, surgeons. We have the whole gamut of specialists across modalities coming together to take care of our patients and ensuring that they get the best under one roof. And these insights, like I was mentioning about the Tumor Board, have directly contributed to a low mortality rate, low relapse rate and a high survival rate, a reflection of how well our clinical ecosystem is working for our patients. And you can see this whole clinical engine driving statistics, too, like I had mentioned, a comprehensive baselining, a deep baselining that we do for our patients on the diagnostic side. And when it comes to multidisciplinary decision-making through the Tumor Board, a multi-modality treatment and a targeted follow-up coming together, delivering great outcomes. As you can see on the right hand of the slide, in spite of a fourfold increase in our volumes over the last 10 years, our gross mortality rate has decreased by 70% -- 74% to come down to less than 1% at 0.9%, which is really, really remarkable. In fact, our outcomes are perhaps at par with some of the best cancer institutes in the world in a comparative study of 5-year survival rates in a cohort of breast cancer patients. We found out that our survival rates were actually a couple of percentage points higher than the leading global cancer institute that I'm talking about. Just goes on to show that not just in our country in India, but globally also our outcomes are something to reckon with. And just before we move forward, a quick recap and overview of our Board and management team. Our Board brings together deep expertise, deep functional expertise across finance, health care, investment, consumer and governance -- consumer sectors and governance and combining clinical leadership, investment acumen and strong audit and governance experience. And this diverse and highly experienced Board provides strategic oversight to us and is helping us strengthen HCG's performance and governance framework. HCG has built a strong team culture over the years, and it's always been known for cohesive teamwork and integrity, and that's something we are going to build on and evolve as it goes forward because it's very critical to have a high-performing team, which is delivering on key metrics. Now over the past 5 months, we have hired 5 senior leaders in critical functions, including a Head of Clinical Strategy, who will drive identification of high potential clinicians and onboarding them onto the network; a Chief Marketing Officer, whom we are hiring for the first time in HCG's history, who will drive brand amplification and patient engagement; a CIO who is going to drive the mandate of digital transformation; Head of Investor Relations, who is going to deepen stakeholder communication; and also Heads for International Business and Domestic Sales who are going to sharpen our commercial execution. Now these additions who come from reputed organizations in the health care sector and come with diverse -- deep experience, combined with our existing leadership at HCG will bring together strong operational, clinical and strategic expertise, positioning us well for the next wave of growth and transformation. This slide reflects what HCG has really built over the last 20, 25 years, which is a clear leadership position in cancer care by virtue of the large coverage we have or by virtue of the operational capacity, by virtue of the volumes. Clearly, HCG is the leader in this space. As an example, if I have to tell you, on the left-hand side of the slide, if you can see, as compared to our closest competitor in this space, HCG is 3x the installed LINAC base. We have 3x that competitor. Our revenue is 2.5x that competitor and our clinical density measured by the number of clinicians, oncologists we have on board is actually 2x. Just goes on to show that we are miles ahead of our closest competitors in oncology. And not just that, we are ahead of other large multi-specialty players as well, underscoring the strength and scale of our focused model. This slide captures our journey in figures largely. And if you can see, we've had a proven track record of profitable growth over cycles as well. But particularly in the last 5 years, we have delivered consistent growth. In FY '25, we achieved a revenue of over INR 2,200 crores at a CAGR of 15%. That growth happened, contributed by a good delivery of performance by our mature centers and also a ramp-up of our relatively newer centers. Our EBITDA in the same time frame of '20 to '25 actually doubled to INR 398 crores and grew at a CAGR of 18%, really through a sharper focus on operational efficiency, on cost discipline and also the improving maturity of our network. And going forward as well, we expect to maintain a similar trajectory in the coming quarters. I want to take a step back now and walk you through how we are thinking about tracking our business and structurally how we are thinking about the business. In the past, we classified our business as established and emerging. But as most of our centers have now matured or near maturity, I think this metric or this classification no longer is relevant. And hence, we are moving to a new region-based, cluster-based framework, essentially making -- grouping our markets into 3 main clusters: the South, the West and the East, and we have one international cluster, which combines Milann as well, and I'll talk about that separately. And this cluster-based framework essentially will help us leverage regional synergies, is also in line with our organizational structure, and it will also help us understand the local dynamics better and help them address it so that we can improve accountability and performance. Now on the metric side that you can see on the right hand of the slide, we have simplified our performance tracking a little bit. Instead of the traditional multi-specialty metrics like occupancy and ARPOB, which don't fully represent our business because a large chunk of our business is on the outpatient side like radiation and chemo modalities, we propose to focus on 2 new metrics. One is patient volumes and the other is average realization per patient or ARPP. Now together, we are confident that these 2 metrics will give you a comprehensive view of all revenue streams and all modalities and help us track scale and realization both. On an overall basis, we will show you EBITDA margins for profitability and ROCE for capital efficiency, and I will be discussing these metrics with you every quarter. I will now quickly introduce you to the clusters that we just spoke about. The first cluster is the South cluster, which is a major cluster for us. It represents 10 hospitals across 4 states, Karnataka, Tamil Nadu, Telangana and Andhra Pradesh, covering key cities like Bangalore, Hubli, Vijayawada, Vizag and Ongole. And this cluster has, as I said, 10 hospitals, 870 operating beds and 16 LINAC installations, and major markets being Bangalore and Vizag, and I'll talk about that a little later. And in FY '25, the cluster delivered a revenue of INR 875 crores, growing at a 13% revenue CAGR since FY '20, driven by 11% volume growth in the same time period and an ARPP improvement of 2%. Now going forward, how are we thinking about this cluster? This cluster has a center of excellence in Bangalore, where we will deepen our presence by adding 2 more hospitals. and dominate the landscape of the city as far as cancer is concerned. And the other major market of Vizag, where we already have a 50% market share, we want to deepen our presence in the surrounding areas. We want to increase the market share further. And we want by doing more complex, more specialized work by increasing our clinical depth, we want to become a center of excellence in that city as well. The second cluster is the West cluster, which represents 11 hospitals that we have across 4 states, again, of Maharashtra, MP, Gujarat and Rajasthan, covering major markets like Mumbai, Ahmedabad, Nashik, Nagpur, Jaipur and Baroda. So that's the West cluster. And this cluster has an operating bed base of 990 beds and an overall revenue contribution of about 45%. And the fact is that this West cluster has been a good engine of growth for us in the past and will continue to be. As you can see on the statistics, the overall revenue in FY '25 was INR 990 crores from this cluster, and the revenue grew at 17% CAGR, driven by a 10% increase growth in volumes and a 6% growth in ARPP. And going forward, how we're thinking about this cluster is that it will continue to be a growth engine for us. The major market of Ahmedabad, where we have a center of excellence, we will continue to maintain our leadership there. And also, the other markets like Mumbai, where we are forced to reckon with now with one of the top market shares of that city, Mumbai will scale up and so will Nashik and Nagpur. So that's how we're thinking about the West cluster. The third cluster is our East cluster, which has 3 centers across Ranchi, Cuttack and Kolkata with an installed operating bed capacity of 280 and 5 LINAC installations. This also cluster has had a robust growth of 26% revenue since -- CAGR since FY '20, driven by a 15% growth in patient volumes and 9% growth in ARPP. This cluster delivered a revenue of INR 255 crores in FY '25. Going ahead, we have a major presence in Cuttack and Ranchi. We are the dominant player because of the trust that patients have on us or the clinical expertise that we have. So we will continue to dominate that market by expanding our capacity, work on that has already started. At the same time, we want to strengthen our positioning in Kolkata, which we foresee being the hub of growth for our East cluster in the days ahead. On the international front, we have one center in Kenya, which has a 1 LINAC installed. This center has done really well for us in the last couple of years. We recorded a revenue of INR 43 crores in FY '20. And this center continues to do well this year as well, and I think the momentum is going to continue. Besides growing organically, that center also continues to feed high complex work into our centers of excellence in India like Bangalore and Ahmedabad. Lastly, as you're aware, Milann is our fertility business, which we acquired in 2019. And our focus in the last few quarters has really been about stabilizing operations, revenue and profitability, which we have done now. But going forward, our focus will be on cancer care. And hence, we are evaluating several strategic options on the way ahead for Milann. As far as our balance sheet is concerned, we have constantly been focused on deleveraging our balance sheet. In the last 5 years, our cumulative EBITDA was INR 1,050 crores with a healthy cash flow to -- with a healthy EBITDA to cash flow from operations profile of 72%, we've been able to generate INR 753 crores of cumulative operating cash flow in the same time period. And our CapEx spend has been about INR 659 crores, out of which INR 353 crores has been spent on maintenance CapEx alone. Now despite undertaking 2 acquisitions in Vizag and Indore, overall, our net debt-to-EBITDA ratio, which was 6.2x in FY '20 has come down to 2.3x in FY '25. Now how are we thinking about the future? I think it's a very, very important conversation. We are very focused on several parameters going forward, and we have a clear strategy in our mind. We have 4 pillars of strategy that we have identified. The aim is really to improve clinical outcomes from where we are because that's at the core of what we do. The focus is also on improving our growth and profitability, but all of it is underpinned by prudent capital allocation. So I'll give you a summary of our strategy going forward, and I'll touch upon some of these pillars in detail in the subsequent slide. Now our first pillar, our first strategic pillar is to optimize our existing network. Today, we have a large headroom for growth in our existing hospitals. And we are going to deploy several measures to really unlock that growth. We are going to deepen our clinical depth -- we are going to deepen our clinical presence, sorry. We are going to improve our quality of clinical talent. We are going to expand our clinical domains. We are going to unlock potential of sales and marketing engine. We are going to amplify our brand and marketing efforts, and we are also going to scale our international business. Now all these put together are definitely going to optimize our network going forward. The second pillar is growth. While a big chunk of our growth is going to come from our existing network, we are anticipating a good chunk of growth coming from 2 other levers, 2 other channels. One is the brownfield expansion, which will happen in our key markets, high potential markets like Ahmedabad, Cuttack, Baroda, Vizag. So that's, I think, a big channel for our growth. And the other channel is greenfield expansion. We've identified 10 to 12 markets, 10 to 12 cities, which we feel are attractive, which fit into our structural -- sorry, which fit into our strategic and financial framework, where we feel HCG has a right to win, where we feel we can ramp up quite well and deliver on unit economics in a reasonable time frame. And out of these 10 to 12 cities, we are confident that in at least 2 to 3 cities, we should be able to start something in the next 2, 3 years. And that will be the other engine of growth that we're looking forward to. The third engine -- the third strategic pillar is going to be our network efficiency, where we feel we have the potential to improve that as well. We've undertaken cost measures in the past, and we are continuing that journey in the future as well. We feel there are several levers that we can unlock to give us this efficiency. And also, we want to focus on operating leverage to improve our margins. We're also consciously moving in asset-light adjacencies, investing in them like day care and diagnostics, which we feel are -- have high potential and are complementary to our business, and they can also help us grow in the days ahead. And last but not the least, that's a big lever for us, a big strategic pillar for us is about enhancing patient experience. We are going to invest in upgrading our infrastructure. We are investing in digitizing patient experience inside the hospital and outside as well. We've invested in the past on our digital infrastructure like a patient app, our CRM, our doctor portal, and we want to increase adoption so that we can get the benefits of that to improve overall patient satisfaction. But the underpinning philosophy is going to be prudent capital allocation. I will now talk you -- walk you through some of the pillars in detail. This slide on growth potential of our existing hospitals is essentially talking about the revenue potential of these hospitals at current pricing levels, assuming optimal occupancy and utilization. This metric, while may be new, is taking into account all the revenue streams of a particular hospital across OP, IP, along with the capacity limitations. And please remember, this is -- it's a point-in-time metric, and it will scale up as our price realizations improve. And you'll notice across all the clusters, our average, we are operating at about 50% to 60% of our overall revenue protection. So that's the key message I want to leave you with. These are hospitals where majority of the investments have happened, both in infrastructure and medical technology. And as we expand our capacity at very incremental CapEx by unlocking the revenue and growth drivers that I spoke about in the previous slide, this metric is going to improve quite a bit in the future. This is another lever that we're going to focus on, optimizing our payer mix. Currently, our cash insurance and corporate business is about 63% of our overall business and our institutional business is about 34%. And that's happened over a period of time. The reliance on institutional business in some of our non-metro markets has been there historically because the idea was to ramp up those hospitals. Now that we've reached a maturity stage in most of our markets, we are going to consciously move away from this segment of the business by focusing on infrastructure upgrade, by getting onboard expert clinical talent, really focusing on sales, marketing, brand amplification, improving patient experience. And with those measures, we are confident of improving our cash and insurance business quite favorably in future. The other lever that we're going to focus on is international. It's been in the past, a good contributor to our overall sales, but is now at only 3% of our overall sales, which we feel is well below potential given HCG's clinical quality and brand equity. Over the next couple of quarters, we're going to focus on building our relationships in key markets, international markets like Africa, Middle East, Southeast Asia. We're going to work directly with the Ministries of Health in these markets. We already have existing relationships. We want to activate them further. We want to build on the digital platform to attract international patients. Also, the insurance piece is going to come and handy and get activated. We've, as I said, onboarded an international sales leader who comes with extensive experience in this field, and we are confident that with all this collective effort, we should be able to increase international sales channels contribution in the future. I spoke about this in brief in my previous slide on strategic pillars. But as I had mentioned, a big chunk of our growth will come from our existing network, existing footprint, but we are looking at brownfield expansion and greenfield expansion. Greenfield expansion could come through 2 routes. One is that we set up our own hospitals or if we have good value-accretive acquisitions in the pipeline. So between brownfield and greenfield expansions, we are anticipating that we will add about 1,000 beds to our current capacity and add 10 additional LINACs in the future. This slide actually displays how we are thinking about improving profitability and ROCE and how the drivers are already in place and how we see the shift happening in the next 4 to 5 years. If you can see the correlation in this slide, the relationship between scale and profitability is quite evident. In the top bucket, if you see, there are hospitals with a monthly revenue of INR 10 crores plus. In the top left-hand corner, if you see. Now these mature hospitals post-corporate cost are delivering an EBITDA margin of over 25% and a ROCE of about 24%, which is a strong benchmark for mature facilities in our network. Now the other important thing is we have seen the progress in this bucket in the last couple of years. In FY '20, we had just 1 center in this bucket. Today, there are 3. The second bucket, if you see below that top bucket is a group of 11 hospitals today, which are in the range of INR 5 crores to INR 10 crores monthly revenue. Now this bucket is also delivering an EBITDA margin of 20% and a ROCE of 12% pre-corporate cost, which is quite in a reasonable state as well. But the good thing about this bucket is that it's growing at a very healthy CAGR of 18%. Now in all these hospitals, most of the investments have been made. So the growth that we are talking about is going to come at an incremental CapEx spend. And as these hospitals show growth, as we -- at a network level, push and drive these levers for revenue and volume growth in the range of high teens, they will migrate to the first bucket. So the hospitals in the second bucket will migrate into the first bucket over a period of time because of this push on growth and volume and eventually improving the overall profitability and ROCE of the company. Even our smaller centers, which are doing less than INR 5 crores per month, revenue per month, as you can see in the bottommost bucket, will -- are improving and will show a steady improvement over a period of time as we put all these levers together to improve volumes and revenue. As we look ahead, our vision is very clear to ensure that HCG remains at the forefront of cancer care in the country, combining scale, compassion and scalability. We aim not just to be the largest cancer player in this country, but to be the most trusted with patient experience and superior clinical outcomes at the heart of what we do. Our focus will continue to be on profitable growth, underpinned by disciplined capital allocation. We are confident of delivering revenue growth ahead of industry supported by an operating leverage that will drive EBITDA growth faster than historical CAGR that we have seen. And at the same time, our ROCE is expected to improve as the profile of our higher-yielding centers improves in the company, and that reflects the strength of our model and our capital efficiency. In essence, we are building a platform that's not only delivering outstanding clinical outcomes for patients but is also creating sustained long-term value for all our stakeholders. Thank you so much for your patience and listening in. With that, I end my presentation, and I'll be happy to take any questions that you may have. Thank you so much.

[Operator Instructions] We take the first question from Gaurav D. of AMBIT. There is no response from this connection. We'll check the connection with Mr. Gaurav.

Can you hear me?

Yes, we can hear you now, sir.

Sure. Sorry for that. First question would be, you've laid out the strategy, but if you can speak more about the future outlook for the business, what kind of revenue growth do you expect over the medium to long term? If you can speak more about that, please?

Yes. Sure, Gaurav. Thank you for the question. See, over the last 5 years, we have consistently delivered revenue growth of over 15% per annum, and that's outpaced the broader industry trajectory. Looking ahead, we aim to sustain, if not exceed this momentum and continue to grow faster than the overall market. That's a key direction that we are going in. And this will be driven by a couple of factors. First, we want to realize the full potential of our existing network. There is the brownfield expansion in play, in our existing markets and high potential markets. And we aim to improve our case mix. We aim to improve our payer mix going forward, and that will lead to higher realization. And this will be underpinned by the fact that we are building and focusing on centers of excellence in most of our markets. So all of this should lead to the number that I just alluded to.

Understood. Okay. Another question would be how do you see your EBITDA margin trajectory going forward? How do you see your EBITDA margin improving going forward, please?

Right, right. Yes. I think that's, I think, an important question. And I would again allude to our historical growth of EBITDA. In the last 5 years, particularly, our EBITDA CAGR has been 18% per annum. And we expect our EBITDA to grow at a faster pace than this historical CAGR and which will be driven by a couple of measures, again, we will be sweating out our existing infrastructure. We will be bringing in operational efficiencies. There will be operating leverage that will come into play by improvement in our payer mix, by improvement in our case mix. And as I said, the investment, whether on the OpEx side has already been made to a large extent in these centers, and that should improve our EBITDA CAGR going forward. And as I had mentioned in my presentation also, our mature centers doing more than INR 10 crores of revenue are already delivering an EBITDA of 25% pre-corporate cost. So as more and more centers come into this bucket, our EBITDA margins would grow at a healthy CAGR more than the historical number that I just discussed.

Understood. So with higher growth and EBITDA growing faster and operating leverage also kicking in, how do you expect ROCE or return on capital employed to look like in the next 3 to 5 years? What's the sustainable ROCE that you see in the business over the medium to long-term close?

Yes. Thanks, Gaurav, for that question. And see, I'd like to talk about the centers today, the mature centers who are delivering more than INR 10 crores per month. Our pre-corporate ROCE for those centers is around -- corporate ROCE for those centers is around 27%. And it's a strong benchmark for mature facilities. And we progress -- we've seen progress that these centers are increasing in number, and there will be more centers getting added to this. So overall, I feel we expect a trend of at least a 20% plus ROCE over the next 5 years.

We take the next question from Param Desai of PL Capital.

Am I audible?

Yes, sir.

Yes. Manish, if you can just highlight that if you see a lot of multi-specialty hospitals are also stepping up the investments in the oncology. So how are we positioned against them? And what will be our value proposition?

Thanks, Param. I think, again, a very relevant question. See, I think as I alluded to in my presentation as well, it's a -- cancer is a very complex disease to handle, and it requires a super specialty focus, which we have delivered and shown that clinical outcomes that we deliver are far superior to multi-specialty hospitals. Now it's incumbent on us to actually deliver this message to patients over and over again and reinforce on this, which we see happening today. We get a lot of patients for second opinions, third opinions that come to our centers because they believe that what we deliver is definitely superior. Now as this message percolates further because the incidence is rising, awareness is rising, we feel a lot of volume shift happening to our single specialty centers more than multi-specialty. So our value proposition is really the integrated care that we deliver through our diagnostics, precision medicine, multi-modality care, great technology, which delivers superior outcomes. And I was -- I had mentioned this too, globally, if you see, it's been proven time and again by dedicated cancer centers being regarded as the gold standard. So while there is -- the cancer burden is increasing at a very brisk pace, I think we don't have enough quality care beds in the foreseeable future as well despite our own plan to expand. There is, I think, growth -- room for growth for everybody, but we definitely hold an edge as far as outcomes are concerned, as far as quality of life is concerned for patients and as far as survival rate is concerned for patients. And that's something incumbent in us to communicate more aggressively to the market.

Got it. Got it. And we did allude that we'll be doing 1,000 bed addition largely brownfield. But what will be our approach to the greenfield-led or say, inorganic route? Because historically, some of the new centers we have started in the last few years have not performed to our expectations. So what will you do differently on that part?

Yes. So I think it's important to identify the right markets, the right specs, so that we can tie in the right clinical talent coming in because that's important in the initial phase. And from the learnings of the past and the due diligence that we have done, as I said, we have identified a couple of markets where we feel confident of them being attractive, whether it's high cancer incidence, low penetration of cancer care beds or availability of clinical talent. So we have a pipeline of these markets where we will at least be looking actively in to expand. And based on our past experience, I think we will be getting the specifications right, the size of the hospital right, the talent pipeline right. So that we can ramp up fast and deliver on the unit economics that I mentioned in my presentation. Because we definitely have to have those metrics in mind as we go into any market.

Got it. And what is the kind of capital outlay we envisage in the next 3 to 5 years to achieve the growth targets we have mentioned?

So Param, over the last 5 years, HCG has incurred a total CapEx of INR 660 crores, out of which INR 350 crores was towards maintenance CapEx. Now as the size of the network has grown, we expect maintenance CapEx to be in the range of INR 90 crores to INR 10 crores -- INR 90 crores to INR 100 crores annually, right? In addition, we would like to spend additional INR 500 crores to INR 600 crores over the next 2, 3 years to fund new centers. Every center -- each center with our specifications will cost us about INR 100 crores or in that range. We want to spend CapEx on increasing our existing capacity. And also most importantly is to upgrade facilities and infrastructure so that we are -- they are in line with patient expectations, post which we expect a total CapEx to be around 30% to 35% of our EBITDA.

Our next question is from Sumit Gupta from Centrum Broking.

Sir, a few questions. First is on the payer mix. Like over the next 3 to 4 years, how do you plan to optimize the payer mix currently, like in FY '25, your institutional mix was 34%. So can we expect that to reduce? And within this, how much is CGHS?

Gaurav (sic) [ Sumit ], thanks for that question. In that institutional business, CGHS is in the range of 12% to 13% from the institutional business. And as far as optimizing the payer mix is concerned, as I had mentioned, it will be driven by a couple of factors. One is the kind of infrastructure that we are upgrading it to. Second, how are you focusing on optimizing and enhancing patient experience significantly. Cancer patients have special needs, how we understand those needs and deliver on improving their experience through multiple cycles that they come to the hospital for. Third is how do we activate our sales and marketing engine aggressively, especially the marketing part because as we speak and amplify our message around our clinical outcomes, around our superior clinical sets, around our technology, I think we can see that shift happening. So I think these are the couple of measures. And fourth is obviously the corporate awareness part. I think we have to spend a lot of time and effort on building awareness in the right pockets for us. And fifth, I would say, is the day care centers that I referred to. These are adjacencies that will help us enter micro markets of affluence, increase the feeder into our major centers, and they come at a marginal CapEx investment. So I think these 4, 5 measures, I would say -- and dominantly, the execution rigor has to be much, much better. And I'm very confident that we should be able to optimize the payer mix with these measures in place.

Understood. And sir, going forward, how are you building a team below you to drive the growth? And second is, are you looking to raise equity to fund future endeavors?

So as far as the team is concerned, Gaurav (sic) [ Sumit ], we've added some new roles in the team, and we've added -- we've onboarded some senior leaders from a reputed organization in the sector into the team, as I said, and I want to just reiterate that, roles like Head of Clinical Strategy to drive focus on identifying good clinical talent, good oncologists across our network and onboard them because it's a constant process. It's a long process. Every good clinical hire takes anywhere between 6 to 8 months from the start. So I think to drive focus on that, we've got this experienced person on board who happens to be a very senior clinician himself. Second is our -- the Chief Marketing Officer, who's going to drive a lot of work around patient communication and brand amplification. And other hires like CIO, Head of Investor Relations and 2 Heads for International and Domestic Sales. These are the kind of roles that we have got good people to join us for. And that's -- with the existing team, combined with the existing team members who had already been here, I think this team coming together should be able to drive the next wave of transformation. And sorry, could you repeat your next question? I missed that.

Yes, sir. So basically, are you looking to raise equity to fund future expansion or any -- for growth basically?

Sorry, I missed that. Yes, I lost you for a bit. So we are evaluating our equity and debt ratio. And at an appropriate time, we'll take an appropriate call on that.

We'll take our next question from Ritika Khandelwal from Perpetuity Ventures.

Am I audible?

Yes.

Yes. So how well equipped is HCG to deal with the comorbidities and other complication that comes with cancer? And also, what would be our radiation, surgical and medical oncology split?

Okay. So Ritika, as I had mentioned in my presentation, we are -- while we are oncology focused, but we don't do just oncology. We have other specialists too in our centers who take care of our patients. Like intensivists, gastroenterologists, physicians, surgeon, orthopedicians, we have the whole gamut because oncology today is a multi-modality treatment and oncologists alone cannot handle that. So we are well equipped from that perspective. And you can see that in our outcomes as well. I spoke about the mortality rate that cannot happen -- that wouldn't have happened if we didn't have the whole gamut of services to address patient needs. So that's point number one. As far as your question on the split is concerned between radiation, radiation is today 20% of our overall revenue. Medical is about 42% and the balance is driven by diagnostics and surgeries, surgical. So diagnostics will be about 20%.

Okay. And also one more question. Are you planning on closing any centers which you have identified, which is not doing that well?

So Ritika, we want to refrain from giving center-wise guidance today. We are looking at a cluster-based approach to our business and all the clusters have done well in the past. However, if there are -- to answer this question specifically, there are -- there have been concerns in the past about some of our centers. And we are looking at ways and means to improve profitability and improve the growth there, like expansion of our clinical team members, improving our clinical programs, activating our sales and marketing, as I said, overall. So that work is happening at a network level and at a center level as well. And hopefully, that should give us the necessary desired outcomes. But as I said, the centers that you perhaps were alluding to form a very small fraction of our overall enterprise revenue and volume. And as I said, going forward, I mean we will be talking about the cluster level structure that I spoke about in the presentation.

Sir, we've also received some questions via text. So I'm going to read out to them. There are like 3 questions from Mr. Varun Bang from Bandhan Life Insurance. His first question is, what does gross mortality rate mean in our industry? Is there a standard practice of calculating this number across industry?

So the mortality rate is actually calculated as the number of deaths inside the hospital over the total number of discharges that we have in that hospital in that specific time frame. So that's how it is calculated, and it's a standard metric that's calculated across all hospitals.

Yes, 2 more questions. Can you help us understand the broader pricing strategy? How are we thinking about pricing at present? And is there an opportunity to improve or recalibrate service pricing in certain regions based on market response and value delivered?

So from time to time, we undertake an exercise to understand where we are in terms of pricing vis-a-vis our competitors. And currently also, we are -- we have undertaken that exercise, which should get over in the next couple of weeks, which will give us market-wise our positioning in each market and then the opportunities that lie in front of us. But it's a very scientific exercise, and we want to rely on data coming from proper due diligence. So we will take an appropriate call on that once we have that research. And we want to do that exercise annually and not just every 2, 3 years.

And sir, his last question is, how is the current incentive structure for doctors designed? And are there plans to revisit or modify it going forward?

I think many of our doctors are on a retainer fixed model. And I think that's the preferred model that we have in our system. People who are full time is with us. But of course, different markets have different nuances like the Western cluster, many of the doctors prefer to be on a fee-for-service mode, which is a reality and constraint of that market, and we have to align to that. But in many of our centers, the model is a fixed retainer model. And unless there is a necessity and need, we don't intend to change that going forward. And a multi-modality suits a full-time model since we have a multi-modality model of clinical care, we want to stick to that model so that doctors remain focused on patient outcomes and patient care. And sometimes the incentive model can be an undesirable distraction.

We'll take the next question that's from Kunal Randeria from Axis Capital.

Sir, just what explains the fact that some of the multi-specialty hospitals have seen their revenue growth to be slightly faster than your growth? Is it to do with the case mix or maybe some higher-end surgeries, they kind of -- a lot of hospitals, a lot of patients in metros prefer to go there and maybe follow-up chemo or they prefer to come to HCG. Is it something like that? Or what can you attribute it to?

I think the 15% revenue growth that we have delivered at a network level, I would say, is marginally higher than industry. There may be one or [ there ] who's probably delivered a higher revenue growth because of the certain markets that they are present in. That could be one of the factors responsible.

Sure. And sir, you in the presentation mentioned the number of centers that you have, right? But can you share -- because I'm sure not all centers would be having all the services on offer because it would be very expensive to have doctors across all modalities in one center. So perhaps that could also explain the reason. But going forward -- so I mean what should we think for example, the South, Bangalore and Chennai would have a lot more service offerings from your end vis-a-vis, let's say, Ongole or Hubli or Gulbarga. Would my understanding be correct?

So the way we approach these is that in our all mature centers and all, we have comprehensive services and doctors are on full-time basis. But in some of our centers, like you said, Ongole and all, they will be on visiting models. But see, the comprehensiveness is not compromised. In some of the smaller centers and all, it may not be possible to get a full-time endocrinologist, for example, but we will have a visiting endocrinologist because at no point is clinical care compromised. And I've said it again at the cost of sounding repetitive, if you look at our mortality rates, they are far superior to multi-specialty hospitals without doubt. So in none of our centers is comprehensiveness compromised, and we have comprehensive availability -- I mean clinician availability. And the full-time or the part-time mode may just -- a model may just vary. But otherwise, all our centers have these service offerings.

Sure, sir. And just one more, if you don't mind. Can you explain how the mature centers, that is -- centers, let's say, which are 2 to 3 years old, how do they grow? And what are the growth drivers after, let's say, 3 years?

Center -- 1x asset turnover in 4 to 5 years. And that's the typical growth trajectory we take. Also a 15% to 20% EBITDA margin in the same time period, and 15% to 20% ROCE in the same time period.

Sorry, I meant to ask not from a financial perspective, but after 3 years, what are the drivers? Do you kind of, let's say, add more specialties there? Or it's just a normal price hike driven? What exactly -- because I'm assuming volumes will kind of taper off after 3 years, the volume growth.

Yes, you're right. You're right. See, I think it's driven by a couple of levers. One is capacity expansion, right? Second is addition of clinical teams, right? In many of our centers, like we had to start with 2 medical oncologists in a center of, say, 100 beds. Today, we have 4. Third is, specialty mix changing, right? In one of our centers, for example, we did not have a bone marrow transplant unit some time back in the initial phases. But after 2, 3 years, we added the bone marrow transplant, which really contributed significantly to the revenue ramp-up. Fourth is technology, addition of technology from a LINAC, we moved to a CyberKnife, we moved to a TomoTherapy. From a surgical -- regular surgeries, we move to a surgical robot. And from chemotherapy, we move along that curve to immunotherapy and so on and so forth. So -- and fourth, for example, infrastructure upgrade, payer mix change. So I would say all of these factors keep on getting added every 2, 3 years and changing the revenue profile of the center. But I think essentially, it's about deepening our clinical teams and deepening our complexity of the programs that we run. So these are the 2 drivers that really improve the revenue profile of the centers in 3, 4 years -- every 3, 4 years.

We take the next question from Rahul Agrawal from EverFlow Partners.

Manish, you alluded to the growth outlook for the company. Can you also detail like what sort of growth do you expect from organic same centers that you have today versus the expansion in newer centers that you are planning? And second, over the next 3-odd years, what sort of EBITDA margin do you aspire to get to at a corporate level?

Thank you for that question. See, as far as we're looking at the growth 4, 5 years out, our big part of our incremental revenue, about 70%, 75% of our incremental revenue is going to come from existing centers, right? 10% to 15% is going to come from brownfield expansion and about 8% to 10% is going to come from the greenfield expansions that we have planned for. So that's the split of our incremental revenue coming in. As far as EBITDA margins are concerned, we are at 19% in Q2. We have delivered an EBITDA margin of 19% in Q2. And as I had said, based on our higher-than-market revenue growth and operating leverage, we expect the margins to grow faster than the historical trend. Obviously, it's upwards of 20%, 21%, 22%. We expect to be in that range at a corporate level.

Got it. And also on the CapEx, I don't think I got the numbers right. Can you just clarify that again? Over the next 3-odd years, what sort of CapEx plans did you highlight? Did I get the number of INR 600 crores right? And how much of that would be maintenance CapEx on existing centers versus what you expect as greenfield CapEx?

So in the next 2 to 3 years, it's about INR 600 crores. About INR 600 crores to INR 700 crores, out of which about INR 300 crores will be maintenance CapEx. And the rest will be for upgrading our infrastructure, increasing our existing capacity and so on and so forth. So that's the number we are looking at.

Got it. INR 600 crores over 2 to 3 years and INR 300 crores being maintenance and the rest being incremental facilities and brownfield?

That's right. That's right. That's right.

Our next question is from Rajas Joshi from ChrysCapital.

Am I audible?

Yes.

So I mean firstly, on some centers, as someone had alluded to earlier, some centers, especially, for example, the South Mumbai center, have been a drag on the profitability metrics. So I mean given how some cities like Mumbai, the treatment protocol is different, what would be your strategy going ahead for these specific cities and these specific centers to be precise?

Thank you for your question. See, as I had mentioned earlier in one of the -- as a response to one of the questions earlier also, we will refrain from giving center level guidance going forward. But however, to quickly answer your question, South Mumbai has historically faced some challenges in ramping up as compared to our other centers. But if you look at the overall Mumbai cluster today, HCG is now among the top oncology players in that market. But at a network level, we are working through several initiatives to improve the performance of our centers. As I had mentioned, by augmenting the clinical talent, by introducing new programs, by improving our efficiencies in that center, upgrading the infrastructure or technology or international business, for example, which is very relevant for South Mumbai. All these put together should be -- should help us turn these centers around. But as I said, we are looking at a regional level performance of the clusters and not necessarily at the center level.

Understood. Secondly, on Milann, you earlier alluded that looking at all the strategic options. So I mean what would be your sense on the options available there?

I think one of the options, while we are still evaluating, just to be very clear, we are still evaluating what those options could be. But one of the options could be divestment of this vertical. But again, not a definitive answer at this point in time because we are evaluating some other forms of -- some other options.

Understood. Understood. And lastly, on margins, right, so you've given a lot of qualitative color on margins, and you also answered, I think the previous participant asked a bit on the number side. So I mean, breaking down the margin expansion into probably cost and realizations, how -- I mean is there room for price hikes per se in some of our existing regions? When we benchmark ourselves to our peers?

That's right. There is -- in our mature markets, there is definitely an opportunity, and we will keep evaluating these opportunities every year. And that similar exercise actually is already underway right now as we speak across the network.

Okay. Okay. And if I look at some of your peers, right, their margin profile is somewhere in the, let's say, 25% to 35-odd percent range. And you earlier, you just mentioned that you're looking at somewhere close to around 21%, 22%. So I mean what would really be driving that delta from 22% to, let's say, 25%, 30-odd percent? I mean any specific reasons that you would like to call out for that and how we can further move up the ladder there?

So in near term, as I've given the margin guidance, that's the near-term guidance of 22%, 23%. But as you see, some of our mature centers are delivering 27%, 28% margin as well. And that's the long-term vision for the company overall. And that -- in my presentation, I had alluded to the path towards that as well. So with more focus on these levers, I'm sure we're hopeful of driving that number in the long term -- towards that number in the long term.

Understood. Got it. Got it. All right. And so this margin profile guidance that you had earlier alluded to that is for the next 3-odd years, you reckon?

I would say this journey is around 4 to 5 years, that's the time line we have in mind for delivering these margins.

Okay. And in terms of cost-related margin measures, so be it in terms of procurement or otherwise, any levers there on that side as well? I mean -- that you would like to exploit and something coming from there as well probably?

That's right. That's right. Procurement is going to be also one of the levers that we are going to work on to improve margins.

We take the next question from [ Ankush Mahajan ] from Sanctum Wealth.

Am I audible?

Yes, you are, sir.

Sir, most of the questions are answered. Just trying to understand, sir, what kind of realization growth exactly we can expect in upcoming years? And what kind of the inpatient volume growth that we can look for the existing centers in the upcoming years?

Yes, can you hear me?

Yes. Yes, sir.

Overall, we are looking at 4% to 5% realization improvement every year, and the volume growth will be in the region of 9% to 10%. And that's what we are anticipating in the near to midterm.

And sir, this INR 600 crores CapEx plan, what kind of -- how could we see the funding about this INR 600 crores CapEx and debt position in the next 3 to 4 years?

Our net debt-to-EBITDA ratio is 2.5x today, and we are comfortable with that right now. And a lot of this CapEx funding is going to come from internal accruals because very -- we are mindful of this leverage ratio. Sorry, was I audible?

Yes, you're audible now, sir.

Yes. So as I said, we are able to fund our growth CapEx through a combination of free cash flow and available borrowing headroom because we want to prudently maintain our net debt-to-EBITDA threshold at 2 to 2.5x on a pre-Ind AS basis in the near term.

We take the next question from Dheeresh Pathak from WhiteOak.

I'm referring to the slide that you had shared, Slide #38, which gives a cut of the facilities in terms of revenue per month, right? So you show about 10 centers which are less than INR 5 crores a month and 11 centers, which are between INR 5 crores to INR 10 crores a month. So like what is the vintage of these 2 buckets? And are there particular reasons that you identified that despite long vintage, they are in this bucket? Is there a particular reason? Or is it just that these are not mature? Because my impression was that not many new assets have been added in the portfolio. So the vintage alone can't be the reason. There must be other reasons. So what are the other reasons?

So the bucket which has centers doing more than INR 10 crores per month are about 10 years plus vintage and the middle bucket that I mentioned are about 6 to 7 years.

What about the last bucket?

It's less than 5 years that mostly, but it's not just a function of vintage alone. It's also a function of size. So some of the centers may be old, but maybe smaller in size and hence, delivering less than INR 5 crores per month revenue. Ongole, for example, is an example, which is an old center, but delivering less than it because of the size of the hospital.

Okay. And there was one slide. There's one slide, Slide 35, which talks about the revenue potential. So at an aggregate portfolio level, the bar -- yellow bar on the right-hand side, if I understand this correctly, you're saying that we are doing INR 2,200 crores revenue in FY '25, and that is only 56% of our potential revenue...

Right, at current pricing levels.

That you mean at a theoretical level or at a revenue, which is at -- something which is practically doable?

No, it's practical and doable because we've taken optimal occupancy and utilization. We have not taken 100% occupancy and 100% utilization. These are practically doable revenue numbers at existing price points.

So given -- what is the time frame that you have in mind to achieve that potential then?

4 to 5 years.

4 to 5 years. Why is that? Because I know it sounds -- maybe I don't understand the nuance of the business that much. But given that a lot of our assets, most of the assets would be at least 5 years old vintage. So a lot of the hospitals that we are seeing, they start going towards mature economics towards 5 years. So -- and you're saying there's demand supply gap, there is higher incidence of cancer. So why is it going to take longer? Because these are not new assets you're talking about. These are most assets which are more than 5 years old, and correct me if I'm wrong. So why does it take 5 years out then if there's so much demand supply gap, good brand equity, good clinical outcomes?

So I think the time line I gave is on the outer side. Of course, in some of the centers where the investments in some of the markets where -- which are expanding rapidly in some of the centers where the investment has already been made. This center-wise realization can happen sooner than that. But at a network level, because some of the centers will require some upgradation, some of the centers will require some payer mix optimization, which may take some time. But that time frame that I gave you was at an outer level, but we could achieve this potential -- a higher potential in some of the centers in the near term as well in next 2 to 3 years. Like for example, Ahmedabad, it's -- we've added to -- we've transitioned to a new hospital there with 100 new beds and all. So I think that will also take some time. But largely at a network level, that's the time line I had in mind, but some centers will mature faster.

Sir, we've received a text question from Mr. Rishit Parikh from Nippon MF. I'll just -- he's got 2 questions. I'll just read it out. The first question is capital has been a constraint in the past. How do you plan to address that? Split of 1,000 beds between green and brownfield, which hospitals have scope?

Sorry, can you repeat the question, please?

Sure, sir. The question is, capital has been a constraint in the past. How do you plan to address that? And then in the same question, the next sentence is, split of 1,000 beds between green and brownfield, which hospitals have scope?

Yes. So as far as capital is concerned, we have actually conserved capital in the last 5 years. Our net debt-to-EBITDA ratio, if you see, has come down quite significantly in the last 5 years. And to answer your next question, the split between brownfield and greenfield on that 1,000 beds, I think brownfield, we'll add about 700 beds through that route. And in markets like Ahmedabad, Vizag, Baroda, Cuttack. So that's our brownfield expansion plan. And as far as greenfield expansion is concerned in newer cities like Pune, Surat, Varanasi, Kanpur, as to name a few, while just indicative, we have identified 10 to 12 cities in that bucket. That will be about 200 to 400 beds.

The second question of Rishit is, a split of bed expansion of 100 -- sorry, capital availability for greenfield or acquisitions? And is there a CapEx number for those investments? Is there a time line to reach 21%, 22% margins?

Yes. I think for investment for our greenfield expansion will largely happen through our internal accruals. So we're very clear about it. And as far as margin forecast is concerned, as I had mentioned earlier, that's the time line of 4 to 5 years that we have in mind to reach that number.

Sir, we have a question from Shyam Srinivasan of Goldman Sachs. His question is, you have served previously as Head of Apollo, Karnataka. What are the key differences as an operations clinical-focused culture that you noticed when you took over this leadership role at HCG? What are key learnings that you plan to bring from your previous experience?

Well, I think, culturally, both organizations are very similar, if you ask me because the focus is on hiring of good clinical talent, developing clinical programs, high on ethics and integrity and really focusing on clinical outcomes. And also, I think, expansion at a pan-India scale. These are similarities. I think differences on account of the fact that Apollo is a multi-specialty chain vis-a-vis HCG being a single specialty oncology-focused chain. There are some differences in terms of the variables at play in both these organizations in terms of scale and size. But other than that, if you ask me, not much of a difference as far as the core DNA is concerned. Both organizations are focused on driving outcomes. Both organizations are compassionate and focus on compassion, scale and clinical excellence. So that's been my learning in the last 5 months that I've been here. And in terms of -- sorry, I missed the other question, second question. How...

What are the key learnings that you plan to bring from your previous experience?

Yes. I think the big learning in my stint at Apollo was that how to deepen clinical programs and how to make organizations attractive for clinicians to come onboard. What kind of support do the clinicians need really when they transition from a different organization to yours? How do you help promote them? How do you help them with technology, the right infrastructure in place? And how do you really scale up medical programs? That really was my learning. And that was the reason we were able to deliver what we were able to deliver in that 3-, 4-year time frame that I was at Apollo. And how do you leverage the brand, how do you really create brand resilience around clinical outcomes, clinical excellence outreach. So I think many learnings really to speak, which I'm hoping I'll be able to implement effectively at HCG.

Thank you. Ladies and gentlemen, that brings us to the end of question-and-answer session. I now request Dr. Mattoo to add a few closing comments. Over to you, sir.

Thank you so much, everyone. I think it was a wonderful interaction and a very interesting and insightful set of questions. I really enjoyed presenting HCG's vision to you, and I look forward to interacting with you in the future and really deliver on the numbers that we've spoken about. Really excited about the path that HCG is taking now in partnership with KKR and look forward to more such fruitful and engaging interactions. Thank you so much. Have a good evening.