Rainbow Children's Medicare Limited ($RAINBOW)

Ladies and gentlemen, good day, and welcome to Rainbow Children's Medicare Limited's Q4 FY '26 Earnings Conference Call hosted by IIFL Capital Services Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the call over to Mr. Rahul Jeewani from IIFL Capital Services. Thank you, and over to you, Mr. Jeewani.

Good morning, everyone. This is Rahul from IIFL Capital. I welcome you all to the fourth quarter earnings conference call of Rainbow Hospitals being hosted by IIFL. From Rainbow, we have with us today Dr. Dr. Ramesh Kancharla, Chairman and Managing Director; Mr. Abrar Ali Dalal, Group CEO; Mr. Vikas Maheshwari, Group CFO; and Mr. Saurabh Bhandari, Head of Investor Relations. Over to you, sir, for your opening comments.

Well, thank you, Rahul. Good morning, everyone, and thank you for joining us for Rainbow Children's Medicare Limited earnings call for Q4 under financial year ending March 31, 2026. As we reflect on year gone by, I would like to start with a few key strategic and operational updates for the quarter as well as the year. FY 2026 has been the landmark year for Rainbow with the company adding nearly 500 beds, the highest annual capacity addition in its history, significantly strengthens our platform for long-term growth across key markets. The investments made over the last 2 years are now beginning to reflect on our performance with Rainbow delivering its highest ever quarterly revenue and achieving 20% year-on-year growth. Our key operating metrics include outpatient, inpatient discharges and deliveries, continued to witness healthy growth across both mature as well as the new hospitals. Importantly, the occupancies remain stable despite substantial bed addition. The acquired hospital at Bengaluru and Guwahati are integrated seamlessly into the Rainbow network and continue to scale up well operationally. In addition, the newly commissioned hospital, HRBR layout in Bangalore -- Electronic City in Bangalore, Mahadevapura IVF center in Bangalore are witnessing good patient traction. We are pleased with the response in Bengaluru, where we managed to onboard highly reputed consultants across pediatrics, obstetrics, neonatal and fertility specialties. Today, Rainbow is the largest pediatric and perinatal care provider in Bangalore City. As we enter the next phase of growth, our focus is firmly centered on improving occupancies, clinical excellence and patient experience. Mr. Abrar Ali Dalal has transitioned seamlessly into role of CEO, Chief Executive Officer, position and is actively driving day-to-day and strategic operations across the organization. I'm also extremely proud to share that Rainbow has once again been recognized as a Great Place to Work, making sixth recognition in the last 7 years with the outstanding employee satisfaction score of 90. Coming to financials. For Q4 FY '26, the company reported a revenue of INR 459.9 crores, a growth of 24%, EBITDA of INR 144.7 crores with a growth of 26% and a PAT of INR 78.2 crores, a growth of 38% compared to the Q4 of the last financial year. Occupancy for the quarter stood at 45.3%. Coming to projects. We have further strengthened our projects scheme with onboarding a Director of Projects for a timely execution of projects. The regional hospital in Mahadevapura [indiscernible] construction phase now and we expect to commence operations in H2 FY '28. We continue to make significant good progress in our Gurgaon projects, where we are trying to fast track the Sector 56 of 125 beds to commence operations in H2 FY '28, and the large super specialty hub in Sector 44 is expected to commence operations in Q1 FY '29. We have received all statutory approvals for regional greenfield hospital in Pune of 150 beds. The exploration work is in progress now. So we have also signed a lease agreement for a greenfield bespoke hospital of 80 beds in Bangalore City. Micro market is called Seegehalli, which is very close to IPPL and Hoskote. This is a rapidly growing micro market. This will be our seventh hospital in the city. We have entered an agreement for build-to-suit 100-bed hospital in Central Indore, and it's in the permission stage. We have also entered into MoU to run pediatrics and obstetrics services in 200-bed multi-facility hospital which is owned by the same owner. This multi-specialty belongs to the same owner, and he would be building up for us a 100-bed hospital in the neighboring site. So therefore, it would allow us to kind of transfer of parties seamlessly in 2 years' time in the municipalities. So because current expansions, what we have nearly 900-plus beds in the execution phase, which are all likely to kind of complete in about 2.5 years' time. As I conclude, I want to reiterate the strategic priorities as we enter into the next phase of growth. So my role will be the working very closely with the CEO and the senior management personnels to drive growth in certain segments and consultant engagement, strengthening Rainbow's clinical offerings significantly as possible to focus -- and also focus on clinical outcomes. With the success of two acquisitions which have been done the last 2 years' time, we are very excited about looking at the acquisitions which are aligned on philosophy and also where we're going to add scale. And also, we are looking at some new spoke hospitals in existing cities and we are forming our plans for the new geographies as well. With that, I now hand over the mic to Mr. Abrar Ali Dalal before Mr. Vikas' financial update. Thank you.

So thank you, Ramesh. Good morning, everyone, and thank you for joining us today. It has been a little over 4 months since I joined Rainbow, and I'm extremely pleased with the depth of clinical excellence, quality culture and strong organizational foundation that the company has built over the years. Rainbow today is a highly differentiated and scalable platform in women and children health care, supported by a strong brand, full-time consultant-led model and an outstanding clinical team across the network. Over the last few months, I've spent good time engaging closely with our unit leadership teams, clinicians and functional heads across the organization. One of the key opportunities ahead of us is to further improve occupancies, consultant engagement, service mix, patient experience and operating leverage across the network, particularly as the recent capacity additions mature over the coming years. I'm now deeply involved in our operating review cadence and transformation initiatives and are building a more data-driven and execution-focused organization. This includes strengthening dashboarding and performance tracking systems, institutionalizing structured delivery mechanisms and improving accountability across units for sharper execution at a hospital level. In parallel, we are making meaningful investments in sales and marketing, doctor engagement and patient conversion initiatives to accelerate growth momentum and improve asset utilization across the network. I'm looking forward to working closely with the leadership team to drive aspirational yet achievable growth of 20% in the current year, while maintaining margins. Further, I remain highly optimistic about Rainbow's long-term growth opportunity and our ability to create a sustainable value for all stakeholders. Thank you so much, and I'd like to hand over the call to Vikas.

Thanks. Thank you, Mr. Abrar. A very good morning to all of you, and thank you for attending this investor conference. I'm pleased to brief on the financial performance and the key developments of Rainbow Hospital for the fourth quarter and the financial year ended March 31, 2026. Our operating revenue for the quarter stood at INR 460 crores, reflecting a growth of 24% compared to the corresponding quarter of the previous financial year. For the full year FY '26, our revenues stood at INR 1,703 crores, reflecting a growth of 12% compared to FY '25. Our EBITDA for the quarter amounted to INR 145 crores, marking a growth of 26% compared to the same period last year. For FY '26, our EBITDA stood at INR 544 crores, reflecting a growth of 11% compared to the previous financial year. Our EBITDA margin for the current quarter stood at 31.5%, while for FY '26, our EBITDA margin stood at 32%. Profit after tax for the quarter stood at INR 78.2 crores, reflecting the growth of 28%. Ex of deferred tax adjustment, PAT growth is at around 17% over the corresponding quarter of the previous financial year. For the FY '26, our PAT stood at INR 282 crores, registering a growth of 15.3% compared to FY '25. In terms of operational performance, inpatient discharges, outpatient volumes and the deliveries witnessed a very healthy growth of 18%, 19% and 22%, respectively, during the quarter, reflecting a strong demand momentum across both mature and newly commissioned hospitals. Our payer mix continues to remain very robust and balanced with insurance and cash contributions remaining broadly stable during the quarter and for the full year. We had 47.5% cash business for the quarter, while the insurance business was at around 52%. I am pleased to inform that the company continued to maintain a strong balance sheet and healthy liquidity position of INR 594 crores, which provides adequate flexibility to support our ongoing capital expenditure plans, growth initiatives and the potential inorganic opportunities. With our current cash position and anticipated internal accruals, we remain well positioned to fund all planned expansions through the internal resources. Our operating cash flow to pre-Ind AS EBITDA is at around 32.8%, reflecting a strong cash conversion post tax payment. During the quarter, we invested INR 61 crores on the ongoing CapEx plan. And for the full year, we have invested close to INR 217 crores CapEx towards expanding and strengthening capabilities across existing and upcoming hospitals in line with our long-term growth strategy. With these insights, I conclude my financial update. I now invite questions and suggestions from the participants. Thank you.

[Operator Instructions] The first question is from the line of [ Sukrit ] from iSight FinTrade Private Limited.

I have two questions. My first question to Mr. Dalal. Looking ahead, how do you see Rainbow's operational model evolving to balance scale with efficiency? What measures are being taken to strengthen hospital networks, peripherals, automation and patient delivery standards across the diverse geography? That's my first question. I'll ask my second question after.

Yes. So I think to answer your first question, operationally, we're getting a lot of tech into place. We are getting a new CRM sort we're working on. I think at this point, Rainbow has a lot of leads which come in because of the various activities we do well. And we are centering our operational capabilities to convert these leads. So one is tech. That is going to be largely play a large role in strengthening option capabilities.

My second question to Mr. Vikas is from a technical standpoint, how is the company optimizing its capital structure to balance growth investments in new hospitals and technologies with keeping the debt under control, especially given the capital-intensive nature of the business? Can you elaborate in detail on the framework we use for cash flow forecasting, interest rate risk management and working capital efficiency to ensure liquidity while still maintaining the profits above the green?

It's a great question. Actually, if you look at our balance sheet, we have been a cash-rich company. So we don't have any debt in our book right now. Our balance sheet has close to INR 700 crore cash right now while we speak. And whatever the CapEx we have done so far has been funded through internal accruals. Whatever the pipelines we have of close to 900 beds, which we have just announced in our presentation, all will be funded through our internal accruals and, we are not forcing any borrowings from that.

[Operator Instructions] We'll take the next question from the line of Damayanti Kerai from HSBC.

Two questions. First, can you just elaborate on your M&A strategy? You are looking to expand meaningfully with assets which are aligned to your [indiscernible]. So which will be the market where you are mainly looking to acquire beds? And what kind of hospital in terms of size or the ticket size which you intend to look for?

Yes. Damayanti, yes, right now, what we have based is about 900 beds. They're all kind of at various stage of building, coming into operations. So it is now moving forward with our great experience of two acquisitions, which would have turned extremely well. And once we are again looking at some of the acquisitions, definitely, we would look at the size of the operations and also the scope of what we can build on top of it. Now I would optimistically look at anything -- nothing less than about 50 beds to scale up to 100 beds. The smaller ones is going to be a difficult, and this is how we look at it. Wherever there is scalability and alignment and also where the micro market is good, we will definitely be looking at it. And also, of course, in the larger players, multi kind of unit players, we're definitely welcome about it. We will look at it proactively and see how we can actually kind of look at them as an acquisition. That's one strategy. Another one is kind of in new geography, which are the geographies which are probably are going to be kind of cities which are evolving cities which have got a growth potential. I think we have work in progress. Probably about 3 months' time, we will come out with our growth plan.

So if I understand correctly, you intend to look after pan-India. As you mentioned, wherever opportunities are good, very attractive micro market, you will look to add at this place?

Absolutely.

Okay. That's. And then sir, the Indore arrangement. So you mentioned 200 beds which is an existing hospital. It is an operational and management contract for you? Is that right?

No. This 200 bed is a multi-specialty hospital, which is being built by a doctor owner. And he is building for us is the next -- the neighborhood side, 100 bed of specialty children's hospital with women services. So meanwhile, since it's a new hospital of 200 beds, he invited us to kind of do a pediatric and obstetrics business in the hospital exclusively. We felt it's kind of a good opportunity so that our entry becomes much faster and we can build our business from this other system and transferring to them the new premises in 2 years' time whenever the new unit is ready. That is a very clear arrangement which we have made.

And under this arrangement, you will be booking revenue of -- what are the financial arrangement very broadly, if you can highlight?

Damayanti, thanks for this question. So the arrangement will be that we will be given space in the existing operational hospital, where we will have the admission being done at our name. We will discharge the patient. We will deploy our doctors and nurses to that area to handle the pediatrics and the mother care and the prenatal care and IC and ICU. We will deploy our team. So it will be a subset until time the new facility at the adjacent gets operational.

So the revenue will accrue...

Revenue will be in our name.

Yes. It is not an O&M contract.

Okay. And the 200 bed is the total capacity. Out of that, how many will be for the pediatric care part, which you will manage?

I think we have about designated beds about -- for the new one, we are to [indiscernible] share. When it comes to kind of the rooms and all, it's very open.and it could be about 50 or 60 or 70. It doesn't really matter really as much as we can do it. That's how we are positioned. There are about 25 beds intensive care.

25 beds in intensive care. Okay.

Yes.

We'll take the next question from the line of Alankar Garude from Kotak Institutional Equities.

Sir, out of this 18% growth in IT discharges in the fourth quarter, how much was organic?

Yes, Alankar. So around 9% has come from our acquired units and the balance of -- acquired and new units and the rest is organic.

Okay. And if I step off the acquired units only, how much would the growth be, the mature unit?

It is contributing between 7% to 8% depending upon the month, which we are calculating, so that around 80% of the revenue is coming from acquired unit which is Guwahati and the Warangal.

This is revenue, Alankar, not volumes.

Okay. And will the mix and volumes be any significantly different?

Almost it should be in the same line, Alankar.

Okay. So then the question is, I mean, we have seen an improvement in the organic growth after a few quarters. So just wanted to understand the sustainability of it, how much of this improvement can be attributed to the digital initiatives as well as the marketing initiatives you talked about in the previous call? And if you can elaborate on where are we now in the journey of financing -- I mean, you mentioned about technology in the opening remarks. But on digital, marketing, where are we in the journey right now?

See, as I said, we will be doing a lot of tech initiatives. The tech initiatives will be targeted towards operations, as I said in the earlier remarks, and towards a lot of promotional sales and marketing activities. I think we're looking at two new things. One, I said, is the CRM software and second is a new hospital information software. I think what we need to do is as we digitally and promotionally increase our bandwidth in terms of investments, talk more about our doctors, create more visibility about our doctors, I think as and when the patient funnel starts inquiring about Rainbow, we will use the tech to convert. I think we have started this journey somewhere a couple of months back and, of course, a long way to go. But we are seeing some improvements. Some of the improvement that you've seen in the volume could be attributed to this, but I will not really bet all my money on that. But going forward in the next 2 or 3 months, I think you'll see a big difference and which maybe we'll talk about in the end of the first quarter.

Got it. Fair. The second question is if you look at ALOS for us, it's somewhere around 2.7, 2.75 days. Is there any scope to reduce ALOS further?

I think, Alankar, we are industry best, right? It is at 2.7. And consistently, for the last 3 years, if you look at more or less we are in the same range, plus minus 0.1, right? So I think this is where we stand right now.

Okay. So difficult to go significantly beyond this number.

I'll give my perspective, Alankar, both the areas, in children's hospital and women's. This is absolutely [indiscernible]. The recoveries are always the fastest in the women and children and it's really not in your hands. And whether you want to increase the ALOS, it's not in your hands. You want to decrease ALOS, it's not in your hands. So it's very natural. I think the case change will probably influence to an extent. As we move forward, there are chronic cases which are going to stay, the long-term ICU stays on both things. And if the [indiscernible] going up, definitely, ALOS will come down further. I think that is where the balance is. It's very natural in building a business. We will know over a period of time in the next couple of years and how things are going to be. We are very comfortable with the ALOS of 2.7, 2.8.

Got it, sir. That's helpful. The other question was can you qualitatively talk about your performance across the key clusters specifically Hyderabad, Bangalore, Chennai? And even if you can talk about Madhukar, how has been the performance, say, in FY '26, the fourth quarter? And what are your expectations over the coming years?

I think whatever the we've been already talking about the seasonal backdrops and those things. And actually, if you look at the year, it is at a very tight line of performance, perhaps peaking towards Q4. That's all because of the quality of -- quality mix as improving the quality mix of the patients and also that we have substantially increased the complexities and case mix and also there is certainly increase in the fertility business. Obstetrics have come from -- earlier it used to be 28% to 30%. Now it's 32%. So there is dynamics of changing. And I don't think we are going to be -- but some of the important thing is we'll move probably kind of away from the medical seasonal dependency to a kind of [indiscernible] to drive the business of 360 degrees. Of course, seasons will play out for every organization, but I think it's become a less seasonal dependent and also try to improve. That's why our other points have said is that improving our clinical mix and also strengthening our clinical model at all the hospitals as well as the regional, kind of onboarding the specialty doctors, trying to do more complexities.

Sir, if you can help break your response across the three main clusters: Hyderabad, Bangalore, Chennai and even Madhukar. Any quality to comment on the performance, where are we in the journey of taking Bangalore closer to Hyderabad levels or even Chennai closer to Bangalore? And any color on that will be really helpful, sir.

Yes, definitely. When it comes to kind of -- I see services got a lot more strengthened in both Bangalore and Chennai, that's number one. And also specialty services have actually strengthened further especially in Bangalore, of our [indiscernible] hub. Number of doctors also the overall service mix has improved under the number of the [indiscernible] in Chennai. So these are all things which kind of we are try to get Bangalore and Chennai move closer to it. Of course, it will take time. So for example, Chennai is kind of we have first year itself with a [indiscernible] transplants. So with that, we can actually have a kind of a government tie-up and do more transplants in Chennai. And that will improve the [indiscernible] as well. So similarly, in Bangalore that we have got a complete start of all the specialty doctors. So driving kind of a next advanced care is more important in Bangalore. So maybe the pediatric specialty hospital takes its own time. And I think how we nurture Hyderabad, I'm very happy that things are panning out very well in Bangalore as well as in Chennai.

Got it, sir. And one final question with your permission. We have seen actually consolidation of the top 2 players, at least on the maternity side, last week in the mother and child segment. From a competition standpoint, can it change anything at all for Rainbow?

I think we are -- well, let's put the answer in two ways. We are largest children's health care player both in terms of size as well as what we can deal with them. There's no one in the country which have come very, very close to us in terms of deliverables and specialty advancements, what we do. So that's absolutely kind of -- we are undistributed leader. Number two of the merger player, which is obstetrics, what we call it the perinatal services, which is more scientific and the deliveries. So we do about 20,000 deliveries. And we don't really overstate all the time because, at the same time, probably we are the second or third largest in the maternity chain. And also now with the last 2 years, we have started fertility. It is fairly fast growing. And I do not want to compare ourselves, match ourselves with the any of the boutique chains, which are more mom-and-pops stores because their sizes are less than 50 beds, 25 to 30, 40 beds. And we don't do any hospital which is less than -- the lowest is 50 beds. We aimed at 50 beds or 10% hospitals. We are more and more pushing towards a larger spaces and also stronger offering, stronger growth wider offerings and how to kind of a stronger clinical strength within the organization. So that is how we want to push ourselves to be better. This has been kind of driven by the medical entrepreneur. So we always look for the clinical excellence and also building the health care for the country in the space of children's and women.

The next question is from the line of Rahul Jeewani from IIFL Capital.

Yes, sir. Just a few clarifications again on the Indore hospitals. So sir, this incremental, let's say, 100 bed, the new pediatric unit which is being built, I'm assuming that the CapEx for that unit will be done by the partner. So what would be Rainbow's investment, if we have to do anything there. And if you can also talk about what kind of revenue sharing arrangement we have with the partner?

First of all, the project which he is going to build is basically, we would do the base building with a semi-warm shell and give it to us on the lease. It is like any other hospitals which we lease it in the long-term, 20, 30 years lease. It's the same model. All the CapEx, which is going to be for the interiors and the medical CapEx will be done. There is no...

It is lease rental payment only.

I think it's a lease rental payment to be done with a bond.

Okay. So as of now, the arrangement is for the 200 bed existing multi-specialty hospital, you are just managing the pediatric unit for them. And once you move to this new 100 unit, this would function as a normal leased hospital for you?

Exactly, exactly. We're trying [indiscernible] Indore.

Sure, sir. And then what kind of -- because obviously, this is not part of the expansion plan which you have put out in the PPT. So what kind of spend do you envisage for this 100-bed Indore hospital?

I think it will be about -- it's early days, but probably like any other region spoke hospital, about INR 70 lakhs, INR 65 lakh to INR 70 lakh per bed we'll incur.

Okay. Sure, sir. Sure, sir. And commissioning, you said over the next 2 years period.

Yes, I think likely 2 years.

Sure, sir. And sir, my second question is with respect to performance across the mature and new hospitals. Now while on the new hospital side, we saw a very significant increase in capacity to the tune of 80%, despite that, we were able to hold on to occupancy in the new hospitals. But if we look at the mature hospitals for the full year, we have seen a decline in occupancy, while on the ALOS as well on the mature hospitals, there has been some decline. But can you qualify in terms of what led to the decline in occupancies for the mature hospitals apart from, let's say, a weaker seasonal business which we might have seen last year?

Okay. So I think we have discussed in the last 2 quarters in the earnings calls as well. I think one of the main reasons in seasonal hospitals, when there is a seasonal comes, the mature hospitals are the ones which actually the occupancy drops because of the seasonal [indiscernible] was not there. That was probably the reason after Q2 and the Q3 ones. Under Q4, we actually turned positive, and I think we are kind of locked up about...

About 52% occupancy there.

In the end of Q4, yes. So I think we -- I mean, some of the things which we have already addressed. As I said earlier, I think it's not the seasonal dependency. It's something which we are looking at it. We have to come out of the seasonal dependency and also build a wider spectrum on the larger stack of things and also definitely there, the obstetrics share has also increased and [indiscernible] share has increased and also the specialty mix is going to increase. So seasonal will make a difference. There's no doubt about it. I think as we move forward in the future, I think we would actually we see significantly that independent from the season.

Sure, sir. So just on the seasonal business. In the past, the seasonal business has contributed around INR 10 crores to INR 12 crores of our overall top line. So let's say, what would have been the contribution in FY '26 for the seasonal business? And if you can also call out the contribution from the IVF segment and the international business for last year.

Okay. So if you see that we have grown 12% last year growth overall, mainly this has been there. It would have been about 18% to 20% overall. So that was not there. So that's how we say that. And Abrar was earlier saying about it, with the current quarter performance, we would expect it to kind of a drop 20% growth further the current upcoming financial year. And that is taking all this in consideration of whatever the growth initiatives we are doing. One important thing is that, as you said, international business really has taken a hit last year as well because of geopolitical situations. Dominantly, we used to get patients from Bangladesh and some of the...

Somalia...

Because a lot of reporting has happened, Somalians and Nigerians and some of these people, so therefore, the local coordinators were not really available so there is a significant dip in the international business to the expected level.

And in fact, in Q4, you have seen the war also escalate. So that has all affected the flights from Middle East. So that has also impacted the international business in the Q4.

Sure, sir. And you call out the number just for bookkeeping purposes, both international patient and the IVF revenue contribution?

So revenue from the international patients remained almost flat than the last year. It was at around INR 30 crores. To be precise, INR 28.9 crores for the financial year FY '26. And as far as the IVF is concerned, it's almost for the year, it is 3.7% of the total revenue. But it is increasing quarter-on-quarter. For the quarter 4, it was 4.1%. So for the full year, it is 3.7%.

And in absolute number terms, IVF business for full year was INR 60 crores.

INR 61 crores.

The next question is from the line of Mahesh, an individual investor.

I'm an investor and also a customer of Rainbow. I have seen the different experience between Hyderabad and Vizag branches. So as we are entering into new cities, so how are we ensuring the same quality standards to maintain that new branches or new prospects?

Yes. Mahesh, I think what you said, these are very right. That's something which we are really working on actually as a big initiative of One Rainbow culture. And where there's a lot of clinical inputs. We have a kind of a team of people working on it and trying to ensure that protocolization and also the SOPs for the medical, how we kind of operate across the group because children's hospital is a very medical hospital. So we need to have standardization, SOPs and protocolization something which we the Hyderabad, Vijayawada, Bangalore works very, very similar. So definitely, we need to expand this across the board because now we have 25 hospitals. This has been a significant initiative from my side to my senior doctor team, which we have been absolutely working on that.

Yes, because I have observed this pattern. Like most of the jobs are in urban cities, and when they come to hometowns, they refer Rainbow because same quality there so far. but they are experiencing a little bit quality gaps. That's why I'm...

Thanks for bringing that. We'll definitely kind of ensure that this is going to be adjusted.

The next question is from the line of [ Anubhav Singhal ] from Anand Rathi.

Could you provide the revenue number for pharmacy for full year FY '26 and Q4?

Sorry, Anubhav, there was a disturbance. Can you please repeat your question?

Sir, could you provide the pharmacy revenue numbers for Q4 as well as FY '26?

Pharmacy number.

Say, Anubhav, as a process, right, we don't disclose this amount. In the reverse way, if you want to calculate, if you look at our pharmacy sales, it's at around 12% and 13% is the cost, right? On that, there will be some margins. Based on that, you can calculate what is the revenue share on that. We don't disclose it separately as of now.

[Operator Instructions] The next question is from the line of [ Vidan ] from ICICI Securities.

Am I audible?

Yes.

Yes, you are.

Congratulations to the management for a great set of numbers. My first question is on the dedicated IVF center we have at Mahadevapura and Bangalore. Now that we have our full year revenues from IVF at around 3.7%, how are we envisaging the ramp-up? And what would be the drivers for it in the next 2 to 3 years?

I think the -- most of our fertility specialties are within the main hospitals so far. So we've got sort of a couple of stand-alones in Bangalore and one in Hyderabad. So how we look at our fertility business is to see that mainly on the quality of the doctors, about the framework of [indiscernible] and also how the internal support our fertility business and B2C. So far, we've been very happy with the rate fertility is actually -- the growth of the fertility and in the last 2 years' time. And I would expect that our growth would definitely be a kind of 20% year-on-year for at least next 3 years' time.

Okay. And my second question is on the CapEx. Can you please help us with the figure of CapEx for the next 2 years along with the bifurcation of maintenance and growth?

Yes. So our CapEx, as we have told correctly, is that we can bifurcate into two. The maintenance CapEx is INR 45 crores per year on overall units of 25 units which we have. As far as the CapEx is concerned, again, you can bifurcate into two parts. The major part of the CapEx is our Gurgaon facility, which is where we are building it ourselves, right? We have acquired the land and we have already spent some of the amount on that. We expect that another INR 400 crores to go on building up the whole hospital at the Gurgaon. As far as the balance going back to Pune and other facility you can take at around INR 7 lakh per bed for the CapEx.

INR 7 lakh per bed.

Yes, at around INR 65 crores to INR 70 lakhs. But then you can take a calculation.

Okay. And so is there any CapEx included regarding Indore in this?

Yes. You can add 100 beds. So right now, we have a pipeline of 900 beds inclusive of our Gurgaon project, right? Excluding that, that will be 450 beds. On that, you can take INR 70 lakh per bed. So roughly INR 300 crores, INR 350 crores will go going back to Pune and Indore, those other single facility, et cetera. The balance, around INR [ 400 ] crores, will go towards -- INR 400 crores to INR 500 crores will go for our Gurgaon project in the next times.

The next question is from the line of Vishal Manchanda from Systematix.

I have a question on the occupancy. Like in your opening remarks, you highlighted that improving occupancy and service mix is one of the areas that you are working on. So can you highlight some near-term and medium-term levers for the occupancy improvement and service mix improvement?

I think occupancy is what we look at that could drive our budgets and those things, the desirable occupancies is about -- anyway, about 56% to 58% at the group level, I think we will deliver every single number. And that's what is expected of our model. So where we have a kind of the peaks of occupancy, some [indiscernible] and also optics on the sort of the holidays with all seasons. So if we do a blended, our spend about 56% to 58%, then we'll deliver every single number. That's how we look at it. In terms of service mix, changes, yes, of course, our parts will be different and so ostensibly different. Store hospitals will definitely be a kind of more you're looking at volume-driven business growth and the growth as well as volumes as well as the better service mix in terms of specialty mix, in terms of more numbers doing it, surgical number are in more intensive care admissions, more specialty patients to be treated in development, for example, some of the [indiscernible] is liver transplant, so kind of a significant ramp up on liver transplant for the current year. So all these things are going to kind of play out for achieving the top line.

Are there segments within health care, like within the pediatric care that you currently do not have presence in and are intending to build presence in those categories?

So we have a complete stack of all specialties in Hyderabad, and we have got almost 60%, 70% in Bangalore, which we are kind of trying to build more and more in Bangalore as well as in Chennai. So children's super specialties are something which takes it over time because of -- these are the new age new specialties, which are kind of new to the country which we are building it over a period of time. And we've built it very well in Hyderabad, which we bring it fast phase in Bangalore and Chennai. That's how our intent is, to build a -- it's like we are like a [indiscernible] of a multi-specialty, where we're focused on children specialty. That's what we have been doing. We've been pretty successful on that.

Sir, would you be able to share some number as to like what -- in your kind of core hubs like Hyderabad, what would be our market share in the super specialty services? Like would we have a very dominant share, like most of the cases coming to Rainbow?

Definitely, most of the clients. It's difficult to establish the market share because we don't know how wherein happens. But obviously, that -- I mean among the players, nobody else does anything significant.

Vishal, recently, we engaged with CRISIL for the industry report on pediatrics and others on the market which we spend. So that work is in progress. So once that report is finalized, we will share that more authentically data with you. So right now, the data is very, very fragmented, right? It's not available.. So we have taken the help of CRISIL. They're building it up that step for us.

The next question is from the line of Rahul Jeewani from IIFL Capital.

Yes, sir. Sir, just on the geographic expansion, which you are targeting now with the, let's say, the Delhi hospitals, we would have a presence in North. Pune provides and entry into Maharashtra, and now we have announced this Indore hospital as well into Central India. So let's say, M&A opportunity you're looking at would largely be focused in these 3 clusters? Or you are looking at outside as well, forward about Guwahati as well you have Guwahati Northeast. So if you can talk about this geographic expansion which you are targeting in some of these newer markets.

Rather than looking at the specificity of the market, I think it's more important is that what kind of opportunity is available and in what markets? And how would we look at in those markets? I think that is how we look at it. I think we have been looking around to see what exactly opportunities we have and which would work for us. I think I don't think we are specific about geographies. And we are fine to do across the country anywhere. Sure, sir. Sir, why I was asking because, let's say, in our core clusters of Hyderabad, Bangalore and Chennai, we have adopted this hub-and-spoke model where we have a larger hub hospital and the spokes feed into the hub.

So in these -- obviously, Delhi has the hub and one hub and one spoke. But for some of these other markets, wouldn't you want to have a similar kind of a hub-and-spoke approach to expansion?

No. Eventually, once we have an opportunity, for example, Guwahati, we have acquired a hospital. And I think it's seamlessly integrated. We are building up more and more specialties over there. And also, we hadn't -- we positively look at what else to be done in the Northeast market. So we're just kind of working on it, how do we kind of address the other areas. So I mean, that is a primary -- our vision is to see that wherever we go, after the pediatric care through the spoke model based on the city and the size of the city and also accessibility of the near hospitals. Not necessarily we go hub and spoke every area. For example, places like Indore, you don't need a spoke. If we go into other cities, smaller cities like [indiscernible], we may not need one. One hospital is good enough. Place like Pune, definitely, we'd look at our spoke model. So based on the city and population and accessibility, traffic conditions various other factors, influences us to kind of take this hub and spoke.

Sure, sir. So maybe within some of these smaller cities where you might expand, we might have just 1 or 2 hospitals without necessarily having a hub.

Yes, sure.

We'll take the next question from the line of [ Uttham Purohit ] from Asset Management.

Congratulations on a good set of numbers. One question on the ARPOB. If you could give some color on the drivers of ARPOB this quarter and for the full year as well, how much of it was price driven and how much of it was mix driven.

I think the ARPOB is about 8% growth, right, ARPOB growth now. ARPOB in our case is dominantly kind of case mix . And also some is increasing ARPOB because of the fertility, also definitely adds to the ARPOB, right?

Correct.

So these are the two reasons mainly to ARPOB growth, and also pricing also plays in ARPOB year-on-year.

And how do we see this number 2, 3 years down the line?

I think we have to look at both ARPOB and as well as ARPP together and see that when we look at the growth, I would say that it's difficult to say month-on-month or quarter-to-quarter ARPOB. ARPOB, yearly, we can [indiscernible]. And ARPP are the ones, I think, that gives us better visibility, which we always say about 5%, 6% of growth of ARPP annually.

Yes. And on the growth side, if I see this quarter in terms of growth came from the maturing hospitals. So if you could give some sense like which geographies were the key drivers and where are we seeing a quick ramp up other than Hyderabad.

I think we see the growth across the group with Hyderabad, Bangalore, Chennai and Andhra Pradesh as well. Those are the dominant market for us.

And on the mature side, from a long time, we have seen the occupancy has been range-bound near the 55%, 56% number. Historically, it was around 60%, 61%. So do you think we could get back to those figures? Because I think it's been long since we have such figures in mature side.

Yes. I'm sure. I think that's what we expect it to be a 60% mature hospitals for the coming year. I think that's what is -- if we need to drive our budgets and the numbers, we have to do 60% of mature rate, and blended, about 56%, 57%

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

Yes. Thank you for joining the conference call and giving you our views and asking the thoughtful questions. Thank you very much for this.

If you have any questions, you can reach out to Investor Relations at Rainbow Hospitals or you can e-mail us directly.

Thank you very much. Thank you. Thank you.

Thank you.

Thank you, members of the management. On behalf of IIFL Capital Services, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.