Shalby Limited (SHALBY) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the conference call to discuss Shalby Limited Q4 FY '20 Earnings hosted by Elara Securities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Param Desai. Thank you, and over to you, sir.

Yes. Thank you, Aisha. Good afternoon to all the participants in the Shalby Limited Q4 FY '20 Earnings Call hosted by Elara Securities. Today, we have with us from Shalby Management, Dr. Vikram Shah, Chairman and Managing Director; Mr. Shanay Shah, Director International Operations; Dr. Nishita Shukla, Chief Operating Officer; Mr. Prahlad Inani, CFO. I will hand over the call to Unnati for the opening remarks. Over to you Unnati?

Good afternoon, everyone, and welcome to Shalby Limited Q4 2020 and Fiscal Year '20 Earnings Call. I'm Unnati Jadhav, GM, Investor Relations and Corporate Strategy. I'm based out of Mumbai, now to announce the results and also entertain questions from the audience later on, we have with us from the management team, Dr. Vikram Shah, Chairman and MD; Mr. Shanay Shah, President; Dr. Nishita Shukla, COO; Mr. Prahlad Inani, CFO; and Mr. Babu Thomas, CHRO. In the beginning of the call, the President and CFO will make opening remarks in relation to the results, post which the call will open up for Q&A. Also note that the earnings release, along with the presentation of the call are available at our website at shalby.org. Kindly note in today's call, whatever we state, especially with respect to our outlook for the future will be forward-looking statements, which must be read in conjunction with the risks that the company faces. The detailed business risks pertaining to Shalby Limited will be available in the annual report at the earlier mentioned company website. COVID-19 pandemic is still ongoing in India. Nevertheless, it is heartening to know that things have opened up partially or fully in many parts of the country and the world. However, there is no denying that the pandemic has transformed the dynamics of the services industries, including that of the health care industry that Shalby is a part of. Also, there are no two ways about the fact that health care has a long way to go in India, given the stark inadequacy of health care facility that exists at the satisfactory prices for both the providers and the payers. Having said that, I would now like to hand over the call to Mr. Shanay Shah to make the opening remarks. Over to you, sir.

Yes. Good afternoon, everyone. On behalf of Shalby Hospitals, I welcome you all to the Q4 and FY 2020 Earnings Call. I hope you all had the opportunity to go through our results and investor presentation. Now let me take you through some highlights of the Q4 as well as FY 2020 and the period following that until now. I'm happy to announce to the shareholders of Shalby Limited that the company has bagged The Best Hospital of Patient Care award, West, from ET Healthcare in March 2020. This was made possible because of the hard work of 4,000-plus staff and the relentless pursuit of excellence by our highly dedicated doctors that we have who are working round the clock to ensure patients' lives. On the financial front, the top line of Q4 grew by 0.34%, INR 116.04 crore, corresponding to Q4 of last year. EBITDA quarter stood at 11.13%, which was largely because of the 10 days nationwide lockdown in the month of March. Hence, we effectively lost INR 15 crores of business, and we have paid full salaries to the staff and doctors in that month. And usually, because of this, it has resulted in a INR 7 crore to INR 8 crore EBITDA loss in the quarter in review. If we adjust this event, we would have seen a regular EBITDA number and percentage in Q4. As far as the PAT is concerned, we had an extremely high tax entry, in line with the revision in tax rate announced in the latest budget. However, this was a book entry and the company's pay -- companies pays back at 17.47%, which is inclusive of tax and surcharges. This will be further explained by our CFO in depth. For FY 2020, our total revenue grew by 6.33% to INR 501 crores. EBITDA for the same period also shot up by 8.11% to INR 99.25 crores year-on-year. Occupancy saw an improvement and went up by 8.96% to 450 beds. Total patient count also witnessed a jump of 9.66% and stood at INR 364,636 for fiscal year 2020. We experienced a 7.5% year-on-year growth in our inpatient count to 39,030 patients, while our outpatient count increased by 9.9% year-on-year to 325,596. Our day care IP has increased the most at 20.6% year-on-year to 23,728 and total surgeries were flat at 19,835 for the fiscal year 2020. Based on this performance, the Board of Directors has decided to maintain 5% dividend, which is the same as last year. To give you an insight into our experience during the lockdown, our occupancies fell by a huge percentage across our network hospitals until the beginning of the fourth lockdown on May 17. But post that, we have been experiencing remarkable increase in the footfall as things have opened up partially. Also, we rolled out tele-video consultancy services from the beginning of the lockdown, which has seen tremendous response. We also launched COVID-19 isolation home care packages by which mildly impacted patients can be treated at their respective homes. As far as our hospitals are concerned, in total, we have given about 20 beds in Indore and about 100-odd beds in Ahmedabad across 2 or 3 facilities. Other than Ahmedabad and Indore, all our hospitals are under operations as usual. Even in Indore, we are treating non-COVID patients. Even in Ahmedabad, wherever we have given these hospital beds for COVID, they are also treating non-COVID patient. On the CapEx front, we have deposit by 6 months. And as things stand, Nashik is going to be operationalized by -- in FY 2023 and the Mumbai project in year FY 2024. Now I would like to hand over the call to Dr. Vikram Shah, Chairman and Managing Director, who will highlight the new initiatives which we have taken at Shalby.

Good afternoon, everyone. During the time of COVID, we realized that there are a lot other things we can do to increase our occupancy as well as we can go out and do business using IT and using our ability more without having indoor patients. The first thing what we have started recently is Shalby Care Card, which is 1 is INR 2,500 and the other is INR 5,000. These Care Card, we have come out with because we saw that a good number of patients are not having insurance and particularly, people in the 60s, 70s and 80s, they are either not given insurance by insurance companies or if they are given, it is too expensive for them to take. So this is a kind of copayment insurance for them whereby they are given very large discounts, and that would increase our occupancy also and that will help them also. The second thing which we have started recently is having the franchisee model, as we have already invested a good amount of money in 10 facilities, henceforth and looking forward, we are not intending to invest much money in brick and motor. Instead, there are a lot of facilities available in the market and they are ready to be work or they are ready to run for us, so we are coming up with the franchisee model for orthopedics and for joint replacement so as to increase our revenue top line and revenue bottom line also. Very soon, we will be starting one in Pun, one in Nagpur, one in Varanasi and one in Kolkata. So likewise, we will be starting yearly 30 to 50 in a year's time from now so that will be helping us improving top line, bottom line without invest in a single penny. The third initiative what we have started is to lead our facility and our -- using our staff in a proper way is a Shalby Homecare plan. All our 10 facilities here from Mohali to Goa and from Jabalpur to Ahmedabad, we have floated the Homecare facility, including Homecare COVID facility, so that is giving us good amount of revenue, and it is growing nearly 20% per annum. And the fourth thing, we have come up with 100% subsidiary of Shalby Limited. And this 100% subsidiary will be called Mars Medical Devices, and the company is intending to go into backward integration and produce implants devices for our own internal consumption as well as selling it outside India and export. I'm handing over now to Shanay Shah.

Sure. Thank you. Now we have Mr. Prahlad Inani, CFO, who will give some financial highlights for the quarter and this fiscal.

Good afternoon, everyone. Let me take you through some financial highlights and operational parameters for the quarter ending Q4 2020 and the financial year ending 2020. So Q4 2020 performance. The occupancies are driven by IP count, which in turn is driven by the number of surgeries done during the quarter. So now how IP behave is that IP, excluding daycare, showed a stable growth, as such IP count was 8,711 in Q4 2020 compared to 8,672 in Q4 2019. However, day care IP fell the most by 25% year-on-year to 4,945, 4,945. As a result, overall it fell by 10.8% year-on-year to 13,656 for this quarter 2020. Yes. As there was a stable growth in the non-day care IP, with slight improvement in ALOS 4.26 in Q4 2020. Okay. As Shanay mentioned before that Q4 2020 was -- we lost 10 days of business due to COVID-19 lockdown. And also, we have incurred the usual level of fixed cost and experienced increase unusual cost during the quarter. Our EBITDA was INR 12.92 crore and EBITDA margin contracted by 3.77 bps year-on-year to 11.1% in this Q4 2020. Now I give you some financial detail about that, that revenue from other operations, which has increased 4.6% year-on-year to INR 483.89 crore, while other nonoperating income rose to 89.4% year-over-year to INR 17.74 crore in FY 2020, due to recognition of interest subvention related to Naroda unit, since some units was operated and we bought this interest subvention in our promotional scheme of Gujarat government. To the tune of INR 3.28 crore and from loan credit outstanding, which ended to the tune of INR 5.07 crore in Q4 2020. Another thing, we experienced 38.8% year-on-year rise in other expenses to the INR 43.99 crore in FY 2020. This is because we incur our CSR expenditure, INR 3 crore for this year and provided for expected credit loss around INR 4.17 crore this year. It can be noted that these are getting offset against unusual increase of our nonoperating income during the year. As operating revenue growth -- and we sustained unusual income, offset by usual expenses mentioned before Q4 2020, our EBITDA rose by 8.1% year-on-year to INR 99.25 crores, and EBITDA margin increased marginally by 33% year-on-year to INR 19.8 crore for FY 2020. Deferred taxes have increased. So I would like to say that Shalby declares a 12.9% year-on-year decline in net income to INR 27.97 crore compared to net income of INR 32.18 crore in FY 2019, largely due to a 56% year-over-year rise in tax expense. I would like to state here that deferred tax have increased to INR 33.96 crore in FY 2020, due to [ best ] financial year changed from '17 to -- '17, '18 to '18 '19 for lower qualification, based on the turnover criteria which is less than INR 400 crores for the budget announced for FY 2021. And hence, the base rate has increased from 25% to 30% for FY 2020. Now little bit, I would like to say about the maturity-wise hospital. Matured hospitals contributed 47% of revenue in FY 2020 compared to 51% in FY 2019, while their EBITDA margin was 31% in FY 2020 compared to 12.07% in FY 2019. Mature hospital ARPOB was INR 39,158, while ALOS of 4.43 in FY 2020 compared to ARPOB of INR 41%,765 (sic) [ INR 41,765 ] in FY 2019 with ALOS of 4.47. These hospitals' occupancy stood at 37% in FY 2020 versus 41% in Q4 2019. 4 to 6 years hospital contributed 21% of revenue in FY 2020 compared to 22% in FY 2019, while their EBITDA margin was 12.43% in FY 2020 compared to 33.67% in FY 2019. These hospitals ARPOB was INR 21,193 with ALOS of 4.50 in FY 2020 compared to ARPOB of [ INR 20,783 ] in FY 2019 with ALOS of 4.43. The hospital occupancy stood 41% of FY 2020 versus 38% in FY 2019. The 2 more buckets. The newer hospital, like 2 to 4 years hospital contributed 28% of the revenue in FY 2020 compared to 25% in FY 2019, while their EBITDA margin was 16.36% in FY 2020 compared to 12.32% in FY 2019. These hospitals ARPOB was INR 28,630 with ALOS of 3.78 in FY 2020 compared to ARPOB of INR 28,883 in FY 2019 with ALOS of 4.06. These hospitals occupancy stood 42% in FY 2020 versus 40% in FY 2019. The newest hospital with less than 2 years contributed 4% of the revenue in FY 2020 compared to 2% of revenue in FY 2019, while their EBITDA margin was slight negative 26% in FY 2020 compared to 7.10% in FY 2019. These hospital ARPOB was INR 35,505 and ALOS was 4.2 in FY 2020 compared to ARPOB of INR 35,263 in FY 2019 with ALOS of 4.3. These hospital occupancy stood at 25% in fiscal year 2020. We can now open for question-and-answer session.

[Operator Instructions] The first question is from the line of [ Shweta Jain ] from [ A&S Wealth ].

So I wanted to know regarding the beds that we've given for COVID. So like you mentioned, 20 beds in Indore and 100 in Ahmedabad, is all that we've given for COVID? Or there are other hospitals also which are catering to COVID patients? If you can just throw some more details and share some highlights on it.

Indore, actually, we have given the full unit, okay? And there are the private cases as well as the government cases. The full hospital was taken by the corporation, and it was totally a COVID hospital, wherein all COVID patients were admitted, okay? And so -- but then for COVID patients also, we -- that our 3 floors are functional and all other hospitals was -- other floors were closed, even over radiation and all departments are also closed. And at Ahmedabad units, we have total 4 units in Ahmedabad. So it was good for us that our 2 hospitals are given for COVID and 2 were working for non-COVID hospitals. Allocation of this were as per the government needs, as per the criteria of government and as per the policies, we have to allocate them 50% of total beds.

Having said that, in Indore now, we are treating non-COVID patients. The -- as per the government guideline, we have kept 15 beds, 20 beds aside. Otherwise, we are treating other non-COVID patients. So it's open to all now. And our other hospitals in Ahmedabad, like Naroda and Krishna, also they are having COVID beds, they are also treating non-COVID patients there.

Okay. So now there is no dedicated unit for COVID, right?

There is one which is Vijay Shalby, where we are only having 15, 20 beds in total. So as such, it's a very small part of the total number of beds that we have.

Okay, okay, okay. Understood. And sir, one more question. Can you throw some more details on the 100% subsidiary, the Mars Medical Devices as to what kind of investments we are looking at Or the CapEx? Or any details around that would be very helpful.

Yes. Well, we had all 10 hospitals consuming a lot of medical devices. And these devices are having a lot of higher margin and 80% to 90% of devices are being imported. So we thought to get into it whereby as a surgeon and as entrepreneur and as a scientific person, I had been part of designing committee of number of international companies where I had been designing the joints for those companies. So I can utilize my knowledge as well as experience to design joints as well as design devices and implants for our own people and our own company, whereby it can directly benefit in terms of top line and bottom line growth in the coming time. As government is looking for investment in manufacturing sector, where government is giving lot of priority to it, where we all are well aware that government has come up with a 15% income tax regime for the manufacturing facility, including there are a lot of benefits they are giving for manufacturing facility as far as devices are concerned. So it looks very lucrative, and we have our own consumption. So we can go on riding our consumption to get into that big market and later on export it also.

Can you just throw some light on what kind of capacities are we looking or...

Well, we will be -- yes, we will be starting with nearly INR 40 crore to INR 50 crore investment. We will be starting this in a rented place to start with. But then after, as requirement increases, we'll keep on investing more. But to start with, this year, once we get all the necessary permissions, we'll be investing about INR 40 crores.

Okay. And the plant would be based out of sir, I assumed, Ahmedabad?

Yes. Yes, ma'am. And we are working with a couple of French and one German company to do the collaboration so that we get good German or French technology to start with.

Okay. Sir. And then what kind of devices are we looking at primarily for -- from your backward integration perspective, right?

Yes. Yes. Primarily, it will be knee joint replacement, hip joint replacement, shoulder joint replacement, even trauma implants, all orthopedic implants to start with, but then we'll get in other things also.

[Operator Instructions] The next question is from the line of Raj Desai from Prospero Tree.

Hello?

Yes.

Yes. Yes, sir. So sir, my question is that why expenses are not reduced in Q4 in spite of revenue fall?

Sorry, can you come again?

Can you hear me now?

Yes.

Why expenses are not reduced in quarter 4, in spite of revenue call?

Expenses.

So basically, in the month of March, essentially there was a lockdown period for 10 days. And for this period, we have not cut any salaries, and we have not cut the salaries for doctors and employees. Yes, of course, to that extent of the revenue loss, the cost of materials consumed has not been incurred, but the balance had to be incurred in the month of March, so which is why you see a dip in EBITDA to an extent of INR 6 crores to INR 7 crores.

Yes. Okay. And what are the growth triggers for FY '21?

So the situation that we are in, essentially, basically, we are operating at an occupancy level that there is a tremendous growth potential. So in the existing hospitals, we can go to about 3 to 3.5 fold kind of top line and bottom line from the fiscal '19 numbers, right? So that is the growth potential, not within one year, but for the next 3 to 5 years. That will be one of the major triggers. Beside that, as our Chairman said, the Shalby Care Card is going to be a major revenue generator for us. It will also improve the stickiness of the customers that we are having. And besides that, as we said, the Shalby arthroplasty franchisee model as well as the medical devices, will be the future growth drivers for the company. Again, you might not see the results immediately in one year. But yes, over the next 2 to 3 years, we'll see a huge growth in terms of top line and the bottom line.

The next question is from the line of Ashish Thavkar from Motilal Oswal.

Yes. Sir, in terms of recovery, like the April and lockdown, now we are in the month of June. So if you could help us understand in terms of default or in terms of the, I think, business that we might have done, at what utilization we were working in April, May and now in June?

See, you know why I'm not able to share those exact numbers with you, but what I can tell you is that whatever we have been reading in the newspapers that there has been a 60% to 80% dip in terms of top line, especially in the months of April and May, is applicable to all the hospitals. Having said that, as I said earlier, post lockdown 4, that is the 17th of May, the ramp-up has been extremely significant, and we are so optimistic at this point of time that by the end of June or beginning July, we might be at pre-COVID levels, in terms of occupancy. However, having said that, of course, the elective surgeries are still yet to pick up, but a lot of other work has started coming in a significant number. Even elective surgeries in the month of April, we hardly had any. From those numbers, there has been a significant jump in the month of May and then now in June.

Okay. So by the time, July and August comes, we will be in a better shape on a Y-o-Y basis, right?

By July and August, we should be working normally as we were working in January or February.

Okay. Okay. Sir, and there are also various articles which are saturating saying that there's so much of pent-up demand because people -- even for elective surgeries, people just can't keep on postponing the surgeries indefinitely, right? So at some point in time, they will come out of their homes, they will try to take a risk. And to that extent, we should see a lot of volume growth and the increase in the footfall. Is that a right understanding?

Absolutely, we have started getting cases for joint replacement, for heart surgery, even for cancer surgeries, a lot of people are coming and saying that whatever happens, we want to get it sorted out. So people are tired sitting at home doing nothing. And there is no much of a risk. Actually, this whole thing is too much oversold. So let us not talk about this at this juncture, but it is quite oversell. We need to play it down.

Yes. Okay. So sir, in the meanwhile, we might have had some control on the cost to maintain our profitability. But if things are about to normalize, then we might not continue with this cost control, right?

See, honestly, fortunately for us, our employees as well as doctors have been very cooperative. And they have essentially volunteered for pay cuts and all of that. So from that perspective, we are in a very good situation as such.

Okay. Okay. Sir, and on the industry, any regulations that you anticipate or you feel government is not supportive of the industry? And as an industry body, is something getting represented to the government?

Well, as far as government is concerned, I don't think government has ever worked against any industry. They might prioritize some industry. As far as health care is concerned, I don't feel they have prioritized health care. But having said that, there are no issues in running hospitals or making hospitals or running it smoothly. We are able to do it likely. It's a fear of people who are not coming. Otherwise, there is nothing else, and now that fear is gone and more and more people are -- we are operating and they're going home and telling 3 more, saying that there is no issue.

Okay. Fair enough. Sir, just one last question from my side. On the revenue front, since first 2 months are -- they were sort of uncertain. But at least on the EBITDA margin side, are we confident that we can maintain EBITDA margins same as FY '20 levels?

Well, as far as EBITDA margin is concerned, we will not be negative. That much I can assure you. As far as this quarter is concerned, right?

Okay. And for the full year, sir, FY '21, we can be, say, at same level as FY '20 in terms of percentage margin?

See, honestly speaking, Shalby or the government is not able to plan for more than 2 weeks when it comes to something like this. So essentially, it is not right to give any kind of projections at this point of time. So we don't know what city will go into lockdown after 1 month or 2 months. So I think it's probably not right to give any kind of projections about EBITDA margins at this point of time.

Okay. Okay. That's helpful. Just one last question. Do you anticipate another day of lockdown? Is there some kind of...

We don't anticipate lockdown at all. We had enough of lockdown, and we have most effective lockdown in the world. We had the complete lockdown and now the way things are opening and the way things are going down, if you see whole thing that the Indians are quite immune to this virus. We are not as badly as affected as Europe or America. Number of data are also substantially low, I would say, in the trajectory of 5% of what U.S. or U.K. had even affected cases are also very, very low. So in general, we are quite immune, and we have done better than all those countries in rest of the world. So I don't see any lockdown in coming time. We will be opening up more and more.

The next question is from the line of Kunal Dhamesha from Systematix Group.

My first question is on this -- our investment in the medical device front. So is this -- will it have any impact on our existing CapEx that we are planning for, let's say, Mumbai hospitals, et cetera? And because there is this delay -- because there is delay, we are kind of looking at other avenues? And secondly, in terms of the same medical devices as we discussed that it could be more of a trauma related, let's say, key implant or knee implant that would be first going for. So what percentage of your cost on an average would be these implants?

Well, first of all, I would like to say that we are sitting with INR 100 crores fixed deposits at 4%, which is not right for any company. So we would like to get into something. And as we are going through the franchisee model and not going to invest further in brick-and-mortar as far as hospital industry is concerned, and we have this big avenue of medical devices where government wants to focus, so -- and it has huge margins and it has huge market world over. So we are starting there where it is -- there is a huge experience of mine in making and designing devices, where I can utilize my experience for our company. So as far as devices is concerned, we are very serious on this. We are going very fast on that. We are working with a couple of French and one German company. We'll have a good deals very soon. As far as CapEx of Bombay and other places is concerned that project is delayed, yes, but it is on. It is related to, again, certain government permissions and regulations, nothing else. It is on, but yes, it is delayed. Meanwhile, we can go and do some other work, like getting into devices. As far as the hospital industry is concerned, we are not going to come up with the large hospitals because we already have created 2,000 beds, where now we are working at 500 bed and occupancy, which we can increase up to 3, 3.5x within this facility. So we don't need to get into brick-and-mortar at this point of time. And as we have a huge brand name in orthopedics and joint replacement where number of offers coming to us to have a franchisee with us when we don't have to spend only the name and system and processes and expertise, and expert surgeons to go and work and give our skill set as well as make. And that is what we are planning and going to do in cities where we are not there. So very soon, we will be starting -- a couple of them are already signed up.

Okay. And on -- in terms of cost, how much medical insurance make up for the procedure cost?

Well, If you take INR 170 000, INR 180,000 package, the joint cost is between INR 60,000 rupees to INR 80,000 rupees.

Okay. Okay. So almost 1/3?

Yes.

Okay. Okay. And so as far as I understood, our planned -- CapEx plan for Mumbai also is on plan, but some delay, and this could be the additional venture that we are doing. Is that correct understanding?

Yes. Absolutely.

Okay. And secondly, on this co-pay program that you have started, can you provide some more light in terms of, let's say, a co-pay program. How does it help them? Or what would be the co-pay percentage? And what are some of the benefits that are included?

Sure. I'm very happy that you asked this. I tell you why. I have been observing since long that good number of middle -- upper-middle class patients who were requiring ICU and other treatments were going to small nursing homes and suffering because they were either not getting adequate treatment or not getting proper treatment because they are not fully equipped or fully developed. So when we did the study, we found out that they are always fearful of coming to large hospital or a corporate hospital whereby they feel that the deals will be too large for them to take. So we came up with this card, by giving, say, if you buy a INR 5,000 card, you get a 25% discount in Indore. So for ICU, you get a 25% discount, which is huge discount, nobody gives. And we are able to give that because we are selling lot of many cards. Actually, we are ensuring them that as we are selling thousands of cards, we are treating a few patients. So actually, we are actually getting money from other people. Are you getting me? So we are not losing anything. We are getting good amount of money, and they are getting extra as they are getting good treatment at 25% discount. So there is a lot of discount from IP, OP, there is this health checkup free, even OP pharmacy, diagnostics, a lot of discounts are offered at various places when they buy it. The gold card is INR 5,000, and silver card is INR 2,500.

The next question is from the line of [ Amit Jain ].

Yes, sir. This is regarding our debt level, sir, could you please give us the breakup of term loan in CCPs.

We have term loan in tune of about INR 50 crores. And this INR 50 crores, we have to keep because we have interest subvention of 4%. So we have interest of 7.5% and 4% interest subvention. So we have kept loan so that we are having this loan effectively at 3%, 3.5%. And we have INR 100 crores. deposits. That is separate.

And 0 working capital.

And 0 working capital.

Sir, when I see the borrowing figure of the March ending consolidated basis, I'm able to see INR 48.6 crores.

Yes, it is INR 48.6 crore, not INR 50 crores. And this is all-in-all term loan.

Yes, yes. And sir, the second question is regarding the COVID beds. Less COVID, what will be the ARPOB and ALOS?

See, typically...

Well, actually, it is -- we are doing it for 2 months only. So we have not calculated it because COVID beds are of 3, 4 types: with ventilator, without ventilator, government, non-government, private. So we have not come to average rate. By finishing of this quarter we will come up with some average that where ARPOB is on an average business.

On the [indiscernible] anywhere between INR 10,000 rupees per day to about INR 25,000 rupees to INR 28,000 per day, anywhere, where ventilator is required, oxygen is required a category of 2, whether it's government or whether it's private.

The next question is from the line of Jason Soans, please -- from Monarch Networth Capital.

I just wanted a broad outlook on the post-COVID...

We can't hear you.

Hello?

Yes. Now it's better.

Yes. Yes. Yes. So I just wanted a broad outlook on post-COVID demand for surgeries, whether it be in your main focus, which is arthroplasty or oncology, neurology, et cetera. How are you seeing the demand in terms of after post COVID, when there is a recovery and stuff for a long-term, probably for a period of 2 to 3 years? How are you seeing the demand? Just wanted some color on that.

Well, actually speaking, what -- as far as cancer and other things, which were down by 60%. Radiotherapy patients were down by percent, which is now coming to nearly normal. By the end of this month, it will be nearly normal. And actually speaking, you know what, there are a good number of patients who are sitting at home, waiting to come, actually, once their fear is gone, we will have double the work than what we used to.

Okay. So you see a strong pickup. As in you already mentioned that July, August, you expect the operations at the hospital to be normal, and you're seeing a ramp-up?

Absolutely.

We see the way the month of June, June is going on right now. We see a 100% jump from whatever numbers we're doing in May. So already, we are extremely positive because we have seen the response in the month of June, which has been very overwhelming.

Okay. Okay. And you see the fear reducing with patients. They're coming back to the hospitals, right?

Yes, because -- yes, absolutely. This is what we have seen in the last 2 weeks.

Right. Right. Right. And sir, just -- I mean you did elaborate on the card. Could you give me some more color on this card? I think you also mentioned that you expect strong sales of these cards, which you have introduced. So some more color on this, if possible?

Yes. So okay -- so this, as you know, Dr. Shah, briefed you. There are 2 types of cards. One is like INR 2,500 card and one is INR 5,000, which is Shalby Care Card or Shalby Privilege Card, okay? The inclusions of it is like we have included -- see, usually, cards are not having IP discounts. It's all usually health checkup cards or OP care cards. But this time, we have included a huge IP discount also so that we don't have to lose patients which are going to nursing home, patients going to nursing home, which are not affording hospitals, like corporate or private hospitals and not having insurance. So this is for helping patients who are having no insurance or old-age patients who are having less insurance, where we can help them with these services. So it is on all the specialities, and it is for all OP discounts, pharmacy discounts, investigation discounts and even IP surgical discounts.

Surgical discounts. And what are the discounts, what range of discounts are you offering? If possible, just a range?

It is from 10% to 15%, and for the higher category, it is for like 20%, 20% to 25%.

A lot of companies come out with these loyalty programs, but none of the loyalty programs offer an IP discount, right? So this is going to be a big step in terms of hospitals coming up and offering this. And the second aspect is that 60% of India's patients are paying out of pocket, and there are 2 reasons probably why: one is, of course, because they haven't bought insurance. And the second category, which is also a very big category, are the people who are not probably entitled or they cannot get insurance. So we are targeting these patients, which is a huge population. And essentially, that is going to be the focus area for us.

Okay. Okay, sure. So the OPD patients also get discounts as well as the inpatients also get a discount that is allocated.

They get discounts on consultations and medicines what they purchase at OPD.

Yes. And this -- when you say INR 5,000 rupees, it's an annual membership or is it the life time thing? What is it?

It's annual membership. The card is valid for 1 year. Yes.

The card is valid for 1 year. Okay. Sure.

And there is no restriction on the number of times a patient can get admitted once he has this card.

oh, okay. Okay. There's no restriction. Yes.

The next question is from the line of Ashish Thavkar from Motilal Oswal.

Yes. Sir, just -- I just need one clarification. This card, is it -- can it be subscribed only by the population who doesn't have an insurance or even an insured guy can take this card?

It is -- to start with, it is with self-paying patients who are not having insurance.

See another area is also the insurance patients are generally not covered for OP, right? For outpatient doctor visits, for OP pharmacy, for OP radiology, for OP diagnostics, they are not covered. So what happens is when they buy this card, even though they have a private insurance, they are able to avail huge discounts, and essentially, they usually should not have a problem because for this spend of INR 5,000 or INR 2,500, they are already given a health checkup free of cost within this package. So there is no additional cost for the patient. So we are expecting patients with insurance also to avail this card.

Okay. And once the amount gets exhausted, a patient can receive it any number of times within a year, right?

Yes, absolutely. Absolutely.

Okay. Great, sir. It seems to be a great initiative.

But the patients will not be able to avail, if the patient chooses to use their private insurance for inpatient, then they will not be able to avail the benefits of the card. So basically, it will be mainly for the outpatient work that the patients with insurance will go for it.

The next question is from the line of Raj Desai from Prospero Tree.

Hello?

Yes, Raj.

So sir, what is your stake reduction plan to maintain the minimum public holding as the current promoter holding is greater than 75%?

It is nearly 80% at this point of time. We have time up to 31st of December, as far as situation is concerned, SEBI has given permission up to 31st of August to extend it. They might extend it for us also, we don't know. If they extend it, we would like to get it extended.

One positive thing is that we have been interacting with a lot of investors because during this COVID period also, a lot of traction has moved towards pharma and health care stocks. So we are constantly engaging with a lot of potential investors for the company.

The next question is from the line of Rikesh Parikh from Barclays.

I just want to understand how is the day care patient movement post the relaxation, which is coming?

Sorry, we couldn't hear you, Rikesh.

I just want to understand how is the movement in the day care patient post the relaxations have been there?

Yes. Yes. There is a lot of movement for day care IP because the patients who were hold for 2 months for dialysis, chemotherapy, radiations and all, they are like really coming in and they have waited for a long for the treatment, and now they are really -- there's a good footfall for IP patients -- day care IP.

Okay. And broadly, will it be, say, [indiscernible] that we will be -- in the month of June, we are back to the levels -- pre-COVID levels on a broader basis as such?

Yes. So as I said, we are seeing 100% rise compared to what has -- compared to the numbers that we've done in April and May. It's not probably right at this point of time to compare the June numbers with pre-COVID levels.

And any flexibility on the fixed cost side we have compared to the previous quarters as such, looking at these times as such?

As I said, we have been very fortunate to have the kind of doctors and staff on board, where they have taken -- voluntarily, they've taken these pay cuts. And essentially, that fixed cost component for this period for us has gone down significantly.

Okay. So what is the broader fixed cost level as such for us, run-rate wise?

So pre-COVID levels, the fixed costs were around INR 16 crores on an average in a month. Now they have gone down. I'm not able to quantify the numbers at this point of time for the month of -- for the Q1 of FY 2021.

The next question is from the line of [ Shweta Jain ] from [ A&S Wealth ].

Sir, just a follow-up question on the Shalby Card. Sir, I wanted to understand basically, you're seeing a person without insurance, can use that card for inpatient and for OPD and OP pharmacy and diagnostics. And if a person has insurance, he either has the choice to use the insurance for inpatient or use the card, right?

Yes. So we can make it very simple. For the patients who do not have insurance, they can use it for outpatients and inpatients, right? For the patients who have private insurance, they can avail it for outpatient, regardless. And when it comes to inpatients, they need to choose whether they want to use the card or whether they want to use their insurance.

Yes. But then, the patients who are having insurance if they go for this card, they are not allowed for reimbursement. They cannot go and reimburse that amount with the insurance companies. Yes.

Right. Right. Right. Okay. And just one more thing. So if I am a patient, say, out of Ahmedabad and I buy this card from Ahmedabad. And for some purpose, I have to get my treatment done in Bombay, so can I use the card? If it is interchangeable between hospitals? Or it is dedicated to like one hospital?

No, it is for all the Shalby hospitals. So wherever the Shalby hospital is available, you can use that card. The card is at group level. We are promoting the card at group level.

Group level. Okay. And only -- so -- and I can do multiple recharge, right? I think that's what...

Yes. It's for -- the card is valid annual for 1 year, but you can opt how many procedures or surgeries or whatever you want to do. But it is like if the card is registered with your name, you are only allowed to avail the services, per person, per card.

Okay. And if say, the balances -- let say, at the end of the year, I cannot reuse that balance, right? I lose that amount then?

So there are such no balances. See, if the card is of INR 2,500, you are given a free health checkup of INR 2,500. So whatever else services you again either OPD consultation or an emergency visit or investigations or any surgery, it is the percentage of discount, which is offered to you, okay? So...

See don't think of this as a prepaid card. It is not a prepaid card.

So the card cost -- the same card, health checkup cost is balanced within the card cost. So if you purchase a card of INR 5,000, a health checkup of INR 5,000 is given free to you for that card.

This is the kind of a 1-year membership where whatever you are paying, whether it is INR 2,500 or INR 5,000, you are entitled to a health checkup worth that money. So essentially, the membership fee is as good as will. And still we are able to avail the services that Shalby is providing on the card for outpatient as well as inpatient.

Right. Okay. And sir, last question. I think in your remarks regarding franchisee model, I just wanted to confirm, you said we'll be having 30 to 50 franchisee hospitals in next 1 year? Just wanted to confirm the number. I missed that part, actually.

We have a lot of inquiries, and we are going to select amongst them and we have come up with 3 types of franchisee models in a different way to work with. And these 3 franchises model, we are going to implement each as required, and we will be the -- selecting the place. We have not come up with a former -- formal advertisement for the people across the places. Once we will get there, we know that we will get much more required, we said and then we'll be able to decide probably that [indiscernible] we are.

Okay. But right now, Pune, Nashik, Varanasi and Kolkata is kind of given, right? It's final?

As there are no further questions. I now hand the conference over to the management for closing comments.

Right. So great. Thanks for joining this call for the results of Q4 and fiscal year 2020. See you until next time. Thank you.

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