Krishna Institute of Medical Sciences Limited (KIMS) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the KIMS Hospital Q3 FY '26 Earnings Conference Call hosted by IIFL Capital. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Jeewani from IIFL Capital. Thank you, and over to you, sir.

Good morning, everyone. This is Rahul from IIFL Capital. I welcome you all to the third quarter earnings conference call of KIMS Hospitals. From KIMS, we have with us today Dr. Bhaskara Rao Bollineni, Founder and Managing Director; Dr. Abhinay Bollineni, Executive Director and CEO; Mr. Sachin Salvi, CFO; Dr. Nitish Shetty, CEO for KIMS Bangalore Cluster; and Mr. Sreenath Reddy, Director, Business Strategy and M&A. Over to you, sir, for your opening comments.

Good morning to all of you. A hearty and warm welcome to all of you. This happens to be the first meeting in the new year, and I take this opportunity to extend the greetings for a healthy and happy year ahead for all of you. Last week, the union budget was presented, which is a quiet budget, devoid of any frills or fanfare, but conveys a clear resolve for fiscal consolidation. The health sector received a 7% hike over the previous year with a major push to mental health and making cancer and rare disease treatment more affordable. Primary focus was given to creating a skilled health care workforce to cater to the growing disease burden. That way the hospitals will get more skilled people in the new coming areas. Overall, it is a good budget, though it would have been better with increased allocations to health care sector. Now let us move to financials and operational results for the quarter 3 '25/'26. I'm happy to share that this is a record-breaking quarter with the highest-ever revenue crossing the INR 1,000 crore mark. Though Q3 is traditionally a weak quarter, I would say that we have raced fast with growing results despite the usual initial pressures associated with the new units because of our new inherent strength and enhanced network. Q3 FY '26 highlights. Total revenue of INR 1,003 crores, a growth of 29.2% on year-on-year and 3.9% on quarter-on-basis. The EBITDA of INR 204 crores, a marginal decline of 0.4% on year-on-year and 2% on a quarter-on- basis. The decline in EBITDA was mainly on account of EBITDA erosion caused by the newer units that commenced operations over the last 9 to 12 months. EBITDA margin stood at 20.4% versus 25.9% in quarter 3 '25 and 21.6% in Q2 FY '26. PAT at INR 52 crores in Q3 FY '26 against INR 93 crores and INR 72 crore in Q3 FY '25 and Q2 FY '26, respectively. A consolidated EPS for Q3 FY '26 of INR 1.3, a decline of 39.9% on a year-on-year basis and 20.1% quarter-on-quarter, respectively. Cash and cash equivalents includes cash, bank balance, deposits with maturity less than 12 months and investments in mutual funds at INR 206 crores as on 31st December 2025. Q3 FY '26 financial highlights, consolidated. Consolidated revenue from operations INR 998 crores, a growth of 29.2% on year-on-year and 3.9% on a quarter-on-quarter basis. Consolidated EBITDA Pre-INDAS, INR 193 crore, a decline of 2.2% on year-on-year and up 3.7% on a quarter-on-quarter basis. Consolidated EBITDA Pre-INDAS and excluding other income of INR 188 crores, a growth of 4.6% and a decline of 4.3% on year-on-year and quarter-on-quarter basis, respectively. Operational highlights consolidated Q3 financial year '26 highlights. Average revenue per operating bed grew by 20.5% and 10.3% on year-on-year and quarter-on-quarter basis, respectively. Average revenue per patient grew by 13.9% and 9% on year-on-year and quarter-on-quarter basis, respectively. IP volume, 61,139 grew by 13.2% year-on-year and declined 4.9% quarter-on-quarter basis. OP volumes 585,499 (sic) [ 585,491 ] , an increase of 24.5% year-on-year and a decline of 1.2% quarter-on-quarter. Other developments KIMS entered into an agreement with Andhra Mahila Sabha for its land to construct and operate a hospital at Chennai for 26 years. The construction is expected to be completed within 2 years. At KIMS Mahadevapura, Bangalore, 25 transplants were performed just within 3 months, it started functioning. At Thane, 100-plus life-saving pediatric cardiac procedures were done within first 5 months. It's a great achievement for the new unit. We organized an event on occasion of World Cancer Day fourth February where a good number of cancer conquerors, their families and doctors participated, the Chief Guest to us, Padma Vibhushan awardee and famous senior actor Shri Chiranjeevi. I don't intend to burden you with endless list of our clinical achievements. The point of notice that excellent medical care and latest technology is now available at Tier 2 and Tier 3 centers wherever KIMS is there. Even organ transplants are taking place at these small towns, which was unheard of before. There have been a galore of accomplishments during the year 2025. I will give brief highlights. We now have 25 hospitals across 5 states. In 2025, we launched 7 hospitals, Bangalore, Mahadevapura and Electronic City, 2 in Guntur, Kollam in Kerala, Thane and Sangli in Maharashtra. Hundred lung transplants were done in 2025 under the leadership of Dr. Sandeep Attawar and his team. Over 430 renal transplants across the group, led by Dr. Uma Maheswara and [ Satti ] Reddy and his team. Over 120 liver transplants across the group done in this year under the leadership of Dr. Venugopal and Sachin Daga and Chandan and other group team members. Over 100 organ donations are achieved by impressing the patient attenders to donate their kith and kin for their body so that at least 800 people got benefited, out of this entire credit goes to our coordinator, Mangadevi and Dr. -- Mr. [ Adhik ]. Over 500 robotic surgeries done across and over 100 robotic Whipple surgeries done, which is a great achievement by KIMS Secunderabad. KIMS Ushalakshmi Breast Unit got 2 Guinness Book of World Records for largest breast cancer awareness program. Launch of India's first TULSA-PRO for prostate cancer care treatment without operations. Launch of India's second magnetic resonance guided focused ultrasound for tremor treatment, which is a very, very successful. Launch of South India's first Gamma Knife for brain tumors for metastasis and other things. Finally, I would like to say that the new units have started stabilizing and real growth on their path can be seen from coming financial year. We have more expansion in the offering, and I would be able to let you know in the next quarter. Thank you for your continued trust and support. I conclude now wishing you and your families best of everything in the new year. Rahul?

[Operator Instructions] The first question is from the line of Amey from JM Financial.

So first question is on the newer assets. Is it possible for the management to provide the occupancy number for Thane as well as 2 Bangalore assets and also the trajectory for the EBITDA losses for these 3 units in the coming quarters, especially for quarter 4 and FY '26?

Yes, it may be difficult to give you specific details on occupancy of each of the assets because both -- all 3 assets are growing. But I think between Thane and Mahadevapura in Bangalore, and towards the end of Q1 next financial year, we should become EBITDA positive or EBITDA neutral. Electronic City might take a little longer by -- because we commissioned it only in the month of December. So I think by end of Q3, Electronic City also should turn EBITDA neutral or positive.

Sure. And for Bangalore, particularly on the Karnataka cluster, the ARPOBs are upwards of INR 76,000 for this quarter. Should we consider some normalization in these ARPOBs because this is just the first few quarters of the hospitals getting started? Or you think these ARPOBs are maintainable going ahead?

Sreenath, do you want to take that? So I think you should probably discount it a little because we have done a significant amount of transplant work in this quarter. And since the hospital is new, the base is still low, we should probably think of it similar to what it is in the Telangana cluster, around INR 70,000, INR 75,000 crores ARPOBs.

Yes. To add to Dr. Abhinay, see, these are initial period, but we strongly believe that these trends should more or less continue. There could be some small rationalization, but the trend should continue.

Sure. And the second question I have on the Andhra and Telangana cluster, the IPO volumes growth has been for Telangana, it's in low single digit and for, I believe, Andhra, it has declined. Despite bed addition and only operating at 50% kind of occupancy, is there anything to read into this? Do you expect the performance to improve?

No, I think if you look at Telangana, growth, it has been on a year-on-year basis, it's been 20% on a quarter-on-quarter last year same quarter. On the volume growth also from last year -- first 9 months of last year to the first 9 months of this year, there has been a 5% growth in volume and revenue has grown higher. But at a mature cluster to grow at 5% is healthy enough. As far as Andhra, in quarter 3, we had a strike with the state government. So we had not taken Aarogyasri scheme for almost a month, and that's why you see a significant dip in volume. But otherwise, January, things have bounced back and the revenues are as per how it was in Q2.

Sure. So Telangana, what optimal occupancy should we assume going ahead at an annual...

Telangana, we should get to 75%, 80%. There are little constraints in Telangana because some beds, we have now shut down because of renovation. Once those beds come into operation, which will happen end of next year, that should contribute to growth. And the new Kondapur facility, like the Kondapur facility today, is probably running at 90%, 95% occupancy. It should get commissioned in the next 3, 4 months. Once that gets commissioned, there will be more volume growth in the Telangana cluster.

The next question is from the line of Damayanti from HSBC.

My question is on Maharashtra cluster unit. So first, for both Nashik and Thane unit, can you update whether -- like what is the status on NABH accreditation? The second point is the discussion which you are having with the insurance empanelment, what is the update? And since last quarter, have you signed any empanelment either in Nashik or Thane? And also, I just want to understand is NABH accreditation must before you really get empanelment with all the key insurance players?

No NABH in Nashik, entry level is completed. NABH in Thane is in pipeline, it will take some more time. But both of them -- for both units or any other unit, NABH is not a prerequisite for empanelment with insurance company. There has been some progress in both units on insurance empanelment. But the top 5 companies that we wanted to do, out of which 2 are done, 3 more are to be done. We are almost in the last leg of closure on all 3 for both Nashik and Thane. It should be done by -- before the end of this quarter, quarter 4.

Okay. And just want to understand, I believe your discussion or negotiation with insurance companies took a little longer than what we anticipated. So any point where you really had to negotiate a lot with the insurance companies? And what are the key pushback coming from them before they agree for signing the deal?

I think it is -- we always want a better price. We want something higher than what is already being offered, and they obviously want to lower the price as much as they can. So that is something that's a bilateral discussion between the hospital and insurance company.

Okay. And you said of the top 5 insurance companies, 2 are already done, like you have closed the contract. Is it that for Nashik unit or...

Nashik and Thane, for both, Nashik and Thane.

Okay. And then second question I had on the overall ARPOB and ARPP trends. You did mention there was a component of transplant in new Bangalore unit, et cetera. But when we look at the trends, it seems exceptionally strong than what we had seen in last few quarters. So is transplant only the moving factor here or something else has changed? And how should we look at the trend in the coming quarters?

Are you referring to the group ARPOB?

Yes, the consolidated ARPOB and ARPP numbers.

I think -- see Thane and Bangalore both are high ARPOB markets. And both of the -- all 3 hospitals got commissioned only in the last 6, 9 months. So definitely, the incremental revenue that's coming in from Thane and Bangalore, the ARPOB will be higher, which will pull the overall group ARPOB. And Telangana, also -- if you see Telangana was at 65,000 last quarter has now moved to 70,000 this quarter. So there is growth in 3 regions, Bombay, Hyderabad and Bangalore, all 3 of them being high ARPOB, which is pulling the overall company ARPOB.

Okay. So maybe not at, say, 20% level or so, but we can assume better trend than what we saw in 1Q, 2Q or any quantitative indication will be helpful.

Difficult to quantify because these are all different states and each state is growing differently. So I think what we are delivering today, we should get to -- we should be sustainable in growing that.

Okay. And my last question is, if I look at your Telangana cluster, I guess your growth number for revenue in last 2 quarters, they were somewhere in high single digit to low double digit. So will that be the range to look forward? Or as you mentioned, there is a headroom to grow better compared to what we saw in the last 2 quarters?

I think we've always been indicating that Telangana is a very mature market with significant bed capacity by KIMS and other hospitals. As and when we add new hospitals, we might see this high single-digit move up to a double-digit number. But otherwise, just having mature hospitals to grow at a double-digit number from that cluster will be difficult. But this year, because we are adding Kondapur, we're adding Kompally and subsequent years, we are adding a few more facilities. We might see double-digit growth for the next 3, 4 years. But again, moving forward, after that, it will be difficult to deliver double-digit growth only from Telangana.

Got it. My last question is actually a clarification. Did you mention for Telangana, you are looking to reach occupancy of 75%, 80%? And if yes, by when?

It will eventually get there, maybe another 3, 4 years on the current occupancy. But as we keep adding more beds, the occupancy will -- percentage will fall down. But absolute numbers, it consistent [indiscernible].

The next question is from the line of [ Chirag Gupta ] from Allegro Capital.

I just wanted to know the net debt position as of December 31.

Chirag, it is about [ INR 2,850 ] crores at a consolidated level as on 31st of December 2025.

[Operator Instructions] The next question is from the line of Karan Vora from Goldman Sachs.

So my first question is an extension of previous participant's question with respect to top 5 insurer empanelment. So can you highlight how many of the top 5 have been impaneled for Kerala cluster? And what's the progress on Bangalore? I know it's early days for Bangalore, but still just getting some sense. And what are the targets of reaching those top 5 insurer empanelment if they have not already been for Kerala?

So on Kerala, I think Kannur, we are done with most of the empanelment. Kollam might take another 2 quarters before the top 5 are fully done. Bangalore should take another 6 months to 9 months before the empanelment happens.

Okay. Got it. And Kollam, how many are already on board?

Top 5, none, maybe one, I think I'm not sure.

Okay. Okay. And Kannur, all top 5 are done?

Yes.

Got it. And the second question is with respect to Bangalore. So in the previous presentations, previous quarter's presentations, the kind of CapEx we have given for Bangalore, it seems like these are asset-light expansion. So any rental number which you are calling out or as a percentage of sales is also fine, which we might be paying to the owners of those land or properties?

I think the total rent that we have, the commitment is around INR 2.5 crores per month for both the assets put together. Half of the Mahadevampuram asset is owned by the company. The remaining half we pay lease. Electronic City is on a revenue share model. But I think the fixed commitment is towards INR 2.5 crores a month.

Okay. And sorry, you mentioned Electronic City is half owned, right?

Correct. Sorry, Mahadevapuram is half owned. Electronic city is on revenue share.

Okay. Got it. And the revenue share will be over and above the INR 2.5 crores per month fixed rentals?

No, no, it is part of it.

Okay. Okay. Got it. And the last question is with respect to ARPOB. So whatever ARPOBs I think for Bangalore, you've already mentioned that there could be some moderation. But for other geographies, whatever ARPOB we see in Q3, should that be considered as the new base of ARPOB?

Yes. For Karnataka and Maharashtra, we should still give it more time before it stabilizes. But other clusters, yes, you should more or less take that ARPOB.

The next question is from the line of Kunal Randeria from Axis Capital.

So it's on your payer mix. Sir, your [ ROV ] contribution has gone down. Obviously, that is because incremental revenues are largely coming out of -- outside of Telangana market. So as we expand in other states, are you also getting impaneled for those state schemes?

No, we only are impaneling state schemes in Andhra, not in other states.

Okay. It's only in Andhra. Okay. So your institutional bed contribution as well as revenue contribution should keep coming down over the years?

Correct. from state government schemes.

Sure. That's very helpful. Secondly, again, on ARPOB, I'm not sure if it's covered earlier or not. But in the last couple of quarters, Andhra cluster has seen very sharp ARPOB as well as ARPP growth. But there has been some moderation as far as the volumes are concerned, IP volume. So I just want to understand what is happening over here?

So even volume growth are growing very healthy. It's just that last quarter, we had a strike with the state government on Aarogyasri payment because of which almost for 45 days, 45, 60 days, we had -- 1 month Aarogyasri was completely banned in all hospitals. And 15 days before and 15 days later, it took time for us sort of scale down and ramp up. So that disruption caused a decline in volume. But otherwise, we don't see any issue in volume growth or revenue growth.

Got it, sir. And the reason for ARPP or ARPOB growth, I mean, is the case mix changing very heavily or just the payer mix?

So even the case mix is some hospitals, we have started onco services like in Ongole, in Vizag, we have started onco services. Transplant is picking up in a big way in Andhra. So it's a little bit of everything, case mix, pricing and the payer mix.

Sure. And just one more, if I can. Sir, I noticed in this time down in the presentation, there are -- there is no slide on expansion plans. So should I assume that what was there last time is the same thing?

Yes, you should assume the same thing. We have no new hospitals in addition to what we have already announced.

Right, sir. So Chennai is the only one that you would have announced. So other than that, there's nothing much coming.

Yes.

[Operator Instructions] The next question is from the line of Anshul Agrawal from Emkay Global.

A few clarifications in the net debt number that you have mentioned, does that include all the payments made to our partners for bringing down the minority stake to 9%.

So yes. So it is a net debt position as on 31st of December 2025. It includes all the debt which we have raised for the expansion. For minority, we do not get any -- we have not raised any debt. But of course, it is out of the internal sources. So to fund the internal sources, you have to raise working capital requirement.

So that's exactly what I wanted to understand. There are no payments due to get that minority stake to 9%, which have not already been paid?

Yes.

Perfect. Second question, sir, that I had was, is there any update on the new units that were going to be commissioned in AP? I thought in the last slide, I think we mentioned Ongole was supposed to get 50 incremental beds added in Q3, which in the AP cluster doesn't seem to have shown up. And Anantapur is expected to be commissioned in the current quarter. Could you help us with an update on these 2?

Ongole 50 beds got commissioned. That's what I just mentioned 3, 4 a week ago. Anantapur towards the end of March, we should commission the cancer center and add an incremental 75 beds of the 250 beds that we are supposed to add. Rajahmundry, we're again stated towards the end of Q4. Kondapur 2 end of Q1, we are stated to start. And Kompally also from March, we will start commission the hospital.

Got it. Very clear. Also, just wanted to check, there's a dip in occupancy and profitability in the Kerala cluster. I understand seasonal trends, et cetera. But given that we are in the ramp-up phase in these 2 hospitals, any particular reason to call out for this dip in occupancy and profitability in the Kerala cluster?

One of the hospital at Kerala -- both the hospitals are doing extremely well. In one of the hospitals, we had some onetime expenditure, which we had to write off in the last quarter. But otherwise, both hospitals are doing extremely well. Kollam is ramping up -- sorry, Kannur is ramping up quite well. In fact, December, Jan have been even more promising than the results of Q3. Kollam is just 6, 7 months old. It should break even in the next 1, 2 quarter.

Got it. Just one last question from my end. In the previous con call, you had mentioned that Thane because of the ramp-up, we are seeing at least on a monthly run rate basis, expectation is around breakeven somewhere in the month of January. Are the trends suggesting the same? Or should we wait for end of Q1 '27 for Thane to breakeven?

The trends are suggesting that towards the end of Q4, we should break even. But just to be on the safer side, we have also indicated end of Q1. But right now, things are going quite positive. There are some incremental costs that we are incurring on a month-on-month basis, but it's going better than planned.

Got it. Just one last question, if I can squeeze in. For the Bangalore cluster, is Q3 an apt indicator for the overall cost for both hospitals? Or are there certain costs that you would think would sort of crop up in Q3 with the Electronic City Hospital? Or is it a full quarter of costs that have come up in the Bangalore cluster in the current quarter?

Yes, I can answer that. See, Electronic City, the cost, what you are seeing is only for 1 month, right, because we just started in the month of December. But for the Mahadevapura unit, it's a full cost. Yes. Year-on-year, there could be some minor increase in overall cost to the extent of 7% to 8%. But having said that, most of the costs have been factored in. Electronic City per se, the cost what you see is just one month.

[Operator Instructions] The next question is from the line of Rahul Jeewani from IIFL Capital.

Dr. Abhinay, you indicated about Telangana being a mature market and a competitive market. But if we look at our occupancies, our occupancies are still, let's say, for first 9 months on an operating bed basis, hovering somewhere around 52%, 53%. So with the scope which we have in terms of driving occupancy improvement, shouldn't our IP volume growth be slightly faster within the Telangana cluster because first 9 months, the IP volume growth has been only, let's say, low to mid-single digits? So just your thoughts in terms of how you see these dynamics playing out with respect to occupancies in Telangana and the potential for IP volume growth?

See, Rahul, if you actually look at the Telangana occupancy, so occupied beds divided by the operational beds, correct is around 50%, 55% -- sorry, 52.5%. Now in this -- see, in Secunderabad, we don't -- we are renovating almost 200, 250 beds, which will only get commissioned in the next financial year. So actually, on the beds that are available, we are running at 80%, 85% occupancy. It's just that those beds, it shows in the census beds, but they are under renovation. So that is one reason why we are not able to show more volume growth in the Secunderabad facility. As far as Kondapur is concerned, it is already running at 95%, 100% occupancy, and we are losing patients because of space constraints. Once we move to the new facility, there will be significant volume growth in that hospital. Sunshine are the other 2 assets, and they have been growing consistently on a year-on-year basis. It is only -- since the bed capacity is spread over 4 facilities, Sunshine has been growing on a healthy basis on a year-on-year basis, even on volume. These 2 facilities where there is more growth potential, we are limited with bed capacity, which should get sorted by one next quarter and one maybe in the next 18 months.

Okay. Sure, Dr. Abhinay. So basically, Secunderabad and Kondapur. So when these 200 beds, which we are renovating at Secunderabad, when would they come online?

Towards the end of next year.

So by end of FY...

Second half of next financial.

You mean FY '27?

Correct.

Sure, Dr. Abhinay. And with respect to the new units, your presentation talks about the fact that the doctor onboarding at the Thane Hospital is 90% over. So can you also talk about in terms of, let's say, the doctor onboarding for the 2 Bangalore hospitals in terms of where are we in terms of -- our targets for doctor additions in these 2 hospitals?

Yes, I'll let Nitish take that.

Yes. Rahul, most of the onboarding of the doctors in all specialties has been done in both the hospitals, probably very few people might be added in the future as the volume grows. But at this moment of time, considering all quaternary care specialties, tertiary care specialties, all doctors are on board. We are close to 200 doctors between 2 hospitals already on board.

Sure, Dr. Nitish. So 200 doctors -- yes. So I was saying 200 doctors you have combined across both the hospitals as of now?

Yes, that's right. Close to 120 in Mahadevapura, and other 90 doctors in the Electronic City.

Okay. And so for the first Bangalore hospital, Mahadevapura, now the costs or, let's say, the losses should keep coming down. But for Electronic City, given that we only had 1 month of contribution, maybe for Electronic City, we might still see an increase in loss going into fourth quarter?

Not increase in the losses because the December month, January month, January has come down and as the revenue ramps up, we are confident of the losses only should come down because all the doctors, all the fixed costs are already been done. So it's all a matter of the revenue ramping up and revenue ramp-up in Electronic City has been good, and we are confident that the losses will come down and eventually lead to the breakeven, like indicated by Dr. Abhinay, we are targeting somewhere in the second quarter of the financial year 2027.

Sure, sure, sure. And Dr. Abhinay, you talked about Thane and Mahadevapura achieving breakeven in 1Q Electronic City in third quarter of fiscal '27. So just to clarify, do you mean breakeven for the quarter or, let's say, breakeven on an exit run rate basis in these quarters?

I'm saying towards the end of the quarter, we will break even for that quarter.

Okay. you will breakeven for the quarter. So Thane and Mahadevapura by 1Q FY '27 and Electronic by 3Q FY '27, breakeven for the quarter?

Correct. Correct. What we are indicating when we say doctor onboarding is completed, the doctor onboarding is a continuous process even in mature hospitals like in Telangana and Andhra. So what we have completed is for Phase 1 of growth, which is the first 24 months of growth. We will keep adding more doctors for more growth in the future because all these hospitals are large format hospitals. There are more than 300 beds in each location. So it will be an onboarding process before we onboard doctors. And that's why cost keeps going up. Sometimes in between we find good doctors, we take them then the cost goes up. Breakeven might get delayed here and there a little. But as long as the revenue is growing and the losses are diminishing, it's in the right direction.

Sure. And given that all these 3 hospitals are growing, can you also talk about in terms of the operationalization plan for incremental beds at these 3 hospitals?

I think we have now enough capacity first to break even. Our focus is to prioritize breakeven in all of these hospitals. We have enough capacity operationalized in all of these hospitals. All the CapEx for all the 3 hospitals are fully done. There is no intermittent CapEx that we'll have to incur for more beds up to each of their capacities. It's about adding more manpower, which is not going to take more than 2, 3 months. As and when we see the occupancy ramp-up happen and we feel there's pressure on the system to add more beds, we'll operationalize the remaining.

Sure. And last question before I join back. So now obviously, if we look at these 4 hospitals, Nashik, Thane and the 2 Bangalore ones, maybe in Thane and the 2 Bangalore hospitals, we have seen a very good traction in terms of revenue ramp-up. But Nashik, let's say, still continues to be slightly behind in terms of ramp-up. So do you think that maybe a better strategy is to have or add hospitals largely in Tier 1 markets where, let's say, ramp-up is relatively faster, easier as compared to, let's say, some of these Tier 2, Tier 3 markets like Nashik. And if you can also talk about where, let's say, Nashik hasn't gone according to our plans.

So Nashik, yes, there is -- it took us 13 months to achieve breakeven. And in January, we are EBITDA positive in Nashik, Rahul. We've achieved almost INR 8.5 crore revenue, and we turned EBITDA positive. We got empanelment of CGHS -- sorry, ECHS in Nashik. We should start being able to take patients from next month. The only difference in Tier 2 and metro market is the opportunity size is the same. In fact, there is more opportunity in Tier 2 because of lesser competition. The ability to consolidate work there is much easier and -- much easier. But the only challenge is because the payer profile in Tier 2 markets, you have a mix of cash, insurance and corporate. Insurance and corporate, because they take time and it's a very price-sensitive market, that is why the delayed ramp-up. But otherwise, fundamentally, we don't see any issue in Thane or Bangalore because these 2 are very high cash-paying markets. Even though there's insurance impairments are getting delayed, they are getting substituted by cash business, which may not be the case in smaller towns like Nashik. But with now last month breakeven at the 13th month of operations has given positive -- more positive feedback in the entire system. Now with the empanelment of corporates such as CGHS and ECHS in the next 2 months, we don't see any fundamental challenge in the growth story of Nashik. It was a little slow, likewise in Nagpur, but overall, things in Nagpur have turned around significantly well in 24, 36 months. So Nashik, we don't see any -- we have similar confidence levels for Nashik.

Sure, Dr. Abhinay. So with respect to the ramp-up, which we have seen on onco and transplants in these other 3 hospitals and the fact that for the Nashik market, obviously, we cannot do onco. So has that also been a reason why Nashik has seen a slightly slower ramp-up as compared to these other 3 hospitals?

No, I wouldn't say that because even in Thane, we have not done any transplant work here. It's just that given the broad specialties, we have just -- because of delayed empanelment from insurance, which is almost 30% of the business and being a price-sensitive market. And the remaining 30% of the business there is from public sector companies. And only 25%, 30% of the business is from cash. And with only one payer to scale up in Tier 2 markets is a challenge, like in the case with Andhra and most all our hospitals in Andhra. So if you actually look at just the cash-to-cash business of KIMS in Nashik today versus the other competition in Nashik, we are probably the largest in terms of cash as a payer in that market already in less than 12, 13 months.

[Operator Instructions] The next question is from the line of Alankar Garude from Kotak.

So on a like-for-like basis, how would you compare your tariffs in Mahadevapura and Electronic City with other similar hospitals in those respective micro markets?

Yes. So between Electronic City and Mahadevapura, internally, there is no change in the pricing, both offer same pricing. Vis-a-vis with respect to competition, we are slightly priced at least I would say that around 15% lower in the initial days. We may rationalize it in the coming few months. But yes, we will be slightly -- at least for some more time, we'll be slightly lower compared to competition.

Got it, sir. The second question was, can you take us through your thought process behind entering Chennai? Which are the leading factors that drove this decision? And maybe a second question there would be, are you open to looking at further expansion in Tamil Nadu?

So like we earlier mentioned, we have always felt there is a lot of micro markets within these larger cities, which are underserved. Like in Bangalore, like in Bombay, we felt there were many micro markets underserved. And very clearly, with the way things are ramping up, the thought process of these being underserved has turned out to be true. Likewise, in Chennai, we feel there are at least 2, 3 micro markets visibly underserved today. We want to focus on being able to start new hospitals there and attract talent. And again, strategically, a lot of patients from Andhra go to Tamil Nadu for treatment. A lot of the people in Tamil Nadu, at least 20% of the population there are Telugu speaking. The brand is well established. The doctor culture among the doctor community, there is a strong goodwill. And even now with Bangalore and Thane success, that goodwill is even getting stronger because even outside the core markets, we've been able to do quite well. So given the size and the opportunity for consolidating one more state, it will -- that's the reason why we looked at Chennai. Earlier, we've looked at Chennai, but we didn't get the right land parcel. Now that we got a very good land parcel, we said let's start the story in Chennai. And that's the only missing link in consolidating South India. So with Andhra, Telangana having such strong leadership position, now with Karnataka, Bangalore, both hospitals doing well and adding more facilities. Kerala doing well and adding more facilities. The only missing link in the South story would be Tamil Nadu, and that's why we thought it makes logical sense for us to enter that market.

Sir, does it mean, Dr. Abhinay, that apart from possibly looking at more expansion in Chennai, you would also be open to Tamil Nadu, the other cities in Tamil Nadu? Or would it be just Chennai for the next few years?

No, I think we are pretty open. We are not closing our mind on the other cities of Tamil Nadu. But at this point in time, we have not looked at anything. We are only focusing on Chennai as a market.

Got it. And similarly, if you can comment about Karnataka state as well. We have 2 in Bangalore with more in the works. Any plans of looking at other markets in Karnataka?

Nothing. I think at this point in time, we have enough on the table for Bangalore. We want to do a few more hospitals in Bangalore. We have a land, which is already part of the company. We want to start working on that hospital too. We feel we can add more bed capacity in Bangalore, the kind of doctor traction we've got with these 2 facilities. We're pretty confident that with more facilities and more micro markets being underserved, we should be adding more capacity here and expanding this. After that, then we could probably potentially look at other Tier 2 markets in Karnataka.

Got it. And one final question from my side. In the past, you've also spoken about adding more hospitals in Mumbai. Can you share any update on your plans for Mumbai City?

Mumbai City, we are still exploring all the opportunities that are coming our way. Nothing concrete at this point in time. But like we said, overall, we believe there's a large footprint that we can create in Bombay City. We are working towards achieving that over a period of time. But for the next 12 months, I think, our focus is to first ensure all the hospitals that we've commissioned and we are going to commission in this financial year to ensure that they all breakeven and there is no drag on the system.

Got it. So basically, any expansion plans, if at all, in Mumbai are unlikely to be finalized at least for the next 12 months?

I wouldn't say that. But yes, we're definitely exploring opportunities. As and when something good comes up, we might take it up, but our priority is on commissioning the current -- I mean, operationalizing and commissioning the current hospital.

[Operator Instructions] The next question is from the line of Rahul Jeewani from IIFL Capital.

Yes. Sir, now, let's say, a large part of our current expansion is nearing completion. So the only large one which we have is Kondapur, which should get commissioned. So how do you see your overall debt now trending from a next 1- to 2-year perspective? Has the debt number peaked out?

Yes. I think for the current expansion, the debt numbers have peaked out. If we add more new facilities, then it could potentially go up. But for now, we are almost done with most of the CapEx that we planned for 3 years ago.

Okay. Sure, Dr. Abhinay. And given that you said the focus over from, let's say, our next 1-year perspective is to scale up these existing new hospitals, that would mean that debt should moderate unless and until we don't announce anything large in any of the new markets.

Correct. Unless we don't announce anything large, I think debt should moderate.

Okay. And are we looking for something, let's say, a largest kind of an opportunity in any of the other markets apart from, let's say, a Mumbai market? And what, let's say, excites you still about Mumbai?

I think the way Thane has ramped up and the kind of confidence we're getting in Bombay, it's a pretty underserved market, and I don't see why we shouldn't consolidate and add more capacity. There is enough opportunity for 2, 3 players to coexist in Bombay as a market. So I think the opportunity is quite large, and we were waiting for us to do well in the first few hospitals. Nagpur, Thane, Nashik, we are pretty -- Nagpur anyway is doing extremely well, but Thane also is ramping up well. Nashik, we are pretty confident with the way things are moving. So I think overall, Maharashtra being able to consolidate over the long run is a good opportunity beyond South.

Sure, Dr. Abhinay. And let's say, these opportunities which you might be evaluating in Mumbai, would these be asset-heavy or asset-light expansions for you?

I think our preference has largely been to own land and building, Rahul. So I think it will take into account owning the land and building. Doing an asset-light model may be challenging in a city like Bangalore -- sorry, in Bombay, the rental cost will be significantly higher. It will be difficult for us to absorb that cost. But if we are referring to the opportunity in Ghatkopar, that's not true. We are not doing any hospital in Ghatkopar at this point in time.

Okay. And apart from, let's say, the organic expansion, any potential M&A opportunities in any of the markets which might -- where you might be interested in?

Nothing sizable. There are a couple of small acquisitions, potential acquisitions that have come our way, but nothing significant and sizable at this point in time.

The next question is from the line of Alankar from Kotak.

Just one question on Kondapur. You said you are operating at 90%, 95% occupancy. Now with this new hospital coming up, how should we assume a ramp-up of it? And I mean, what would be the plans for the existing hospital once the new building is up and running?

In 6 months, once the new building is ready, we will shut down the old hospital. And I think 20% -- 20%, 25% year-on-year growth at the new Kondapur facility is something that we are extremely confident about.

So in terms of cost, would there be duplication of cost for 6 months? And I mean, how should we look at the EBITDA for both the hospitals combined, say, over the next year or so?

There will be some duplication of costs like when we transition from the old Sunshine to the new facility. There has been some duplication that will continue to be there in Kondapur also for 3 to 4 months before we fully shut down the old facility.

Got it. And any sense on the monthly fixed cost at the new facility?

It will only be incremental. It we're moving one of our old facility into a new facility. So we will -- obviously, a lot of new doctors will come in, a lot of new incremental staff to service those patient volumes will come in. So it will probably be higher than -- higher by around 25% from the current fixed cost, 25%, 30%. It also depends on when the new doctor teams are onboarding and stuff.

Got it. But given that it's expected to be operationalized soon, I mean, we would already be in that process, right, of...

It's a very large facility. It's an 850-bed hospital. So -- and the current facility is only 250 beds. So it will -- our doctor onboarding will happen in phases. It will not happen on day 1.

Okay. Okay. So significantly higher beds, but just 25% higher cost, as you mentioned. Got it.

The next question is from the line of Vedant Nilekar from ICICI Securities.

Am I audible?

Yes.

I just had one question on the CapEx front. Now that most of our expansion is done and whatever further bed capacity that we are going to add, what is our expected CapEx figure for FY '27 and '28?

CapEx for '27 and '28. '27, the full closure and CapEx will be another incremental INR 500 crores to INR 600 crores. And for '28, we have not yet put a plan together because there's no new hospitals that we're commissioning in that year. It will just be maintenance CapEx.

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

Yes. And we have done a lot of knowledge by asking your questions. Let me clarify certain things beyond what all in addition to what Sachin, Abhinay and Sreenath and Nitish clarified. The debt portion is even though we have INR 2,800 crores, we are supposed to get nearly INR 600 crores from our creditors from mostly the state and central government, which are sent for the payment. But because of lack of money there, that will definitely will come. There is -- as I mentioned, that we have already at INR 200 crores cash as of now with us. So with these things, I think moving forward, we may not see any incremental debt will be there on the books, and it will start coming down quarter-on-quarter. If there is any new opportunities, expansions, which we are having that we will be able to look into the other means of funds, not through debt. That's one. As far as the doctors onboard is concerned, the -- initially, we started a few specialties and it is an ongoing process of expansion of the new facilities with even the old facilities like Nellore and other places. We are adding new specialties. When we add new specialties, then the doctors keep boarding. That is even incremental revenue instantaneously because these are all already existing facilities. There will not be a requirement of any CapEx. And these are all the things which we are doing for the growth so that the growth we can expect in all the hospitals. There is a potential in every hospital that needs to add a little more of new specialties. And as one of the calls, I said in about a year back that in 3 years, we will be able to double our top line, which we are on the -- better than what I promised. So the -- whatever the things that we do, it will always be for the benefit of the investors. And also, we consider the -- many of you have been worried about the debt ratios. So we are very, very keen and confident that we will do good. And in the next few years, we expect a better growth than the last 2 years. Thank you. Thank you very much.

Thank you. On behalf of IIFL Capital Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.