Yatharth Hospital & Trauma Care Services Limited (YATHARTH) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Yatharthharth Hospital and Trauma Care Services Limited Q1 FY '27 Earnings Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Mantha. Thank you, and over to you, sir.

Thank you. On behalf of Systematix Institutional Equities, we welcome you all to the Q1 FY '27 Earnings Call of Yatharthharth Hospital and Trauma Care Services Limited. We have with us the senior management of the company represented by Mr. Yatharthharth Tyagi, Whole-Time Director; Mr. Amit Kumar Singh, Group Chief Executive Officer; Mr. Nitin Gupta, President, Finance and Group Chief Operating Officer; Mr. Pankaj Prabhakar, Group Chief Financial Officer; Mr. Ashutosh Kumar Jha, Group Chief Strategy, M&A and Investor Relations; Mr. Anu Goel, Group Chief Financial Controller. I now hand over the call to the Yatharth management for opening remarks. Over to you, sir.

Good morning, and welcome to Yatharth Hospital and Trauma Care Services Limited's Earnings Conference Call for the quarter ended June 30, 2026. Joining me today are Mr. Amit Singh, our Group CEO; Mr. Pankaj, Group CFO; Mr. Nitin, Group COO and President, Finance; and Mr. Ashutosh, Group Chief Strategy, M&A and IR; as well as Mr. Sonu Goyal, Group Financial Controller. Our earnings presentation has been uploaded on the stock exchanges and on our website, and we hope you have had the opportunity to review it. I'm pleased to report a strong start of FY '27. We delivered our highest ever quarterly revenue and profits this quarter. More encouragingly, we achieved a record revenue growth of 51% year-on-year and an EBITDA growth of 59% year-on-year. This performance is a testament to the growth strategy we have been pursuing over the past several quarters. Our newer hospitals at Greater Faridabad, New Delhi Faridabad Sector 20 and Ara collectively contributed 27% to the mix this quarter, especially our acquisition playbook has delivered signs of early success. A key highlight was our Faridabad Sector 20 hospital turning EBITDA breakeven within a record period of 9 months. The hospital is now contributing to a monthly revenue rate of INR 12 crores to INR 13 crores with an ARPOB closer to INR 40,000 and the potential to reach INR 45,000 to INR 50,000 as we move ahead. Our New Delhi hospital has already approached the INR 50,000 ARPOB mark, positioning us among the premium hospitals in NCR. The hospital is currently operating at a monthly revenue run rate of INR 8 crores. Importantly, the revenue mix at both these hospitals is 90% plus cash and private insurance patients. Our Agra Hospital, which was integrated last quarter, achieved a revenue run rate of INR 9 crores to INR 10 crores and delivered a strong 20% plus EBITDA within its first full quarter of integration. The Gurugram construction is progressing as per expectations, and we expect the hospital to go live by quarter 1 of the next fiscal with a potential to achieve an ARPOB of INR 50,000 plus. Our performance across these hospitals demonstrates the group's ability not only to identify and acquire good assets, but also to integrate and turn around their operations within a very short span of time. Over the past couple of quarters, our profitability has also improved meaningfully with operating leverage kicking in as reflected in our adjusted EBITDA margin, excluding the impact of New Delhi FY'20 stood at 28.1% this quarter. In recognition to the above performance, the Board today approved a maiden interim dividend of 5% of face value for all our shareholders, ensuring that shareholders benefit from the growth and investments being done by the group. Behind this execution is a significant effort by the entire organization. In reward to this effort by our people, we have also approved our first ESOP grant and launched a new ESOP scheme 2026 to attract, retain and align quality talent. These are meaningful steps for us, reflecting our confidence in the business that we are building and a commitment to sharing the value created with both our shareholders and our people. We are also in the process of identifying ESG priorities across our network of hospitals with the objective of building a more sustainable and future-ready organization. Our focus on strengthening our international collaborations continued this quarter. Expanding our global outreach, we opened the Isar Information Center in Uzbekistan and have also leveraged our partnerships with health care institutions as well as undertook many open initiatives across key markets across Asia, Africa and Middle East. With the infrastructure built over the last 12 months, we have expanded our network to 2,555 beds setting the foundation for record growth this year. Looking ahead, we remain committed to our road map of doubling our bed capacity to 5,000 beds target over the next few years. The upcoming 250-bed Gurugram facility expected to commence operations by Q1 of next fiscal will further strengthen our positioning in the premium NCR market and add another high potential platform to the network. The opportunity now is to fill these beds, improve utilization and allow earnings to catch up with the capacity we have created. Overall, we believe Yatharth is entering an exciting phase. We are continuously expanding capacity. Our specialty and payer mix is continuously improving, and we have substantial installed capacity to utilize drive a stronger cash generation in the years ahead. With that, I shall hand over the call to our CFO, Pankaj, for further updates.

Good morning, everyone. I will take you through the financial performance for quarter 1 FY '27 and the key drivers behind the quarter. The group reported its highest ever quarterly revenue of INR 3,207 million, up 51% year-over-year and 15% quarter-over-quarter. Our existing 3 hospitals in Noida and Shashi Orsa collectively contributed INR 2,862 million, growing 22% year-over-year. Our existing hospital occupancy reached approximately 75% as inpatient volume improved 15% year-over-year. As far as hospital-wise occupancy is concerned, Noida and Jhansi Osha Hospital achieved 90% plus occupancy. Greater Noida Hospital is currently operating at 74%, while Noida Extension stood at 56%. We expect occupancy level at Greater Noida and Noida Extension to improve further in coming quarters. The newer hospital at Greater Faridabad, New Delhi, Faridabad Sector 20 and Agra collectively contributed INR 1,067 million in revenue, accounting for 27% to the group's revenue. This shift in revenue mix reflects the rapid scaling of our newer capacity alongside continued growth for our established base. The group's ARPOB reached an all-time high of INR 34,758 in quarter 1, up 7% year-on-year. Importantly, our premium NCR hospitals at Noida Extension and New Delhi crossed INR 50,000 ARPOB mark for the first time in quarter 1, which is a strong indication of the improving case mix. This was followed by Greater Noida, which achieved an ARPOB of INR 43,000, Faridabad Sector 20 approaching INR 40,000, Greater Faridabad and Noida at INR 35,000 and Agra closer to INR 30,000. This performance is largely driven by the benefits of a stronger specialty mix across our network. We are continuing to invest in advanced clinical capabilities and infrastructure as we believe deeper specialty capabilities are essential to building a differentiated hospital network and improving the quality of our revenue over time. Oncology has already started contributing close to 10% to the group's revenue with only Lac machine currently at Noida Extension Hospital. We are in the process of adding another Linac at our Faridabad Sector 20 hospital soon, followed by the new Delhi facility, which will meaningfully strengthen the oncology sales at the group level in the coming years. With newer hospitals demonstrating higher ARPOB level, we expect a meaningful uplift in overall group's realization as these facilities continue to scale up. EBITDA for the quarter was highest ever at INR 917 million with PAT stood at INR 454 million, while the consolidated EBITDA stood at 23.3%, the adjusted EBITDA margin, excluding the impact of New Delhi and Faridabad Sector 20 stood at 28.1%. With newer hospitals progressively moving up, the profitability curve at Agra delivers a 20% plus EBITDA margin, while Faridabad Sector 20 achieves EBITDA breakeven in Q1. We expect our blended EBITDA margin to improve from the current level. The increase in depreciation and finance costs have been following the significant capacity addition made over the past 12 months, despite which our cash profit, which is PAT plus depreciation increased significantly by 32% year-on-year, largely reflecting a noncash impact on the PAT growth. With the upcoming Gurugram facility and brownfield expansion plan at Noida Extension and Greater Noida, our total bed capacity will reach over 3,200 beds. We remain confident of achieving our target of 5,000 beds over the next 5 years. FY '27 has started on a strong note and the early success of our newer facilities gives us a confidence in sustaining this momentum. Thank you for your attention. I would now like to hand over the call to the moderator for question-and-answer session. Thank you.

[Operator Instructions] We have the first question from the line of Gupta from T Asset Managers.

So my first question is that in the PPT you mentioned 5,000 beds target by 3 years. And you just mentioned is it 3 or 5? Also just second part of that question, we have like one big cluster, which is Haryana and Delhi and second would be UP and MP. So are we targeting any more cluster, another cluster to add? Or are we going to add beds in this...

So I think, yes, definitely, the road map ahead is to double our capacity. In fact, our announced capacity, which includes the Gurugram and the brownfield expansions at Gara and North extension is already upwards of 3,200 beds. So from there, if you look at the 5,000 bed capacity, we feel that we would be even reaching it much earlier than the 3 years announced target. This would be primarily within the North, the cluster that you mentioned, yes, but we are also evaluating different clusters. One thing that we have done in the past, we have usually formed the cluster. So it's not stand-alone independent assets we have gone -- we have also leveraged the benefits by adding assets within that surrounding similar to what we have done here. So I think even we feel Gurugram is still a huge cluster for us to further explore. And a new cluster, obviously, within the North, we identify. I think UP has certain cities where a good cluster can be formed. So I think we would still stick to the areas we very well understand, which is the North, the Delhi NCR and the metro cities in the states that we operate in.

And these will all be higher average bed pay, right?

Yes. So ARPOB would be much higher than the group average. In fact, the newest hospitals which we are doing is already clocking close to INR 50,000 ARPOB. So that's clearly the strategy even going forward.

No, will it be more than 50,000 or mostly 50,000?

Around 50,000.

Okay. Just my second question quickly. Sir, we are focusing on improving payer mix. So I think we are focusing on international mix as well. So if you could just talk about a bit on that? And what kind of benefit are we expecting to get from that? Like if you could just quantify on this?

Yes so yes definitely we are working on how to improve the fair mix and that's the reason if you see in fact there's a dip of you know few percentage in order extension occupancy this is a totally as per expectation because we wanted to restrict the you know government's business and that's our thought process. Yes international is concerned that's the various activities we are planning in fact this quarter I think five OBD centers, I mean the information centers we are planning in the various countries like CIAs or African countries. We have posted our very senior marketing person also in African regions. So I think they started showing the trends and believe that I think this will help in a better payer mix as well as you know the.

Even the new hospitals, both the New Delhi Faridabad 20 already are displaying this playbook. These hospitals are close to 90% cash and private insurance business. So we are able to demonstrate it. Faridabad, we are glad that it has break even much before our target, but the way breakeven is also with less than 10% government business. So I think that the playbook is clearly evident and it's been reflected in all the new hospitals. And as the volumes of these 2 hospitals continue to grow, significant changes will also be visible at the group level payer mix.

The next question comes from the line of Akshat Mehta from Seven Rivers Holding.

So my first question was on the new hospital Delhidabad.at we've been seeing the last 2, 3 quarters, the occupancy has kind of stagnated around similar I mean when can we kind of see that occupancy go up in the hospitals? And what is the status of government and insurance for the hospitals?

So I think occupancy is not significantly increased. The reason why you see the numbers is because the occupancy is counted on different bed capacity. Earlier, all the beds were operational. So now quarter-on-quarter, we are increasing the capacity, and that's where the occupancy is being counted upon. So the IPD volumes occupancy is definitely increasing. That's the reason why the revenue is quarter-on- there concern, I think a lot of are already completed in these hospitals. So it's not that we are waiting for government panels and that's why the government business is low. Even though we have a majority of the government impanel already, we are sticking to our playbook of not increasing the government pay in these hospitals. And specific numbers, if you can tell them about the occupancy and the beds counted in different to what we were counting last quarter.

So if you see about it in the Delhi, the sensors bed is 150 on which the occupancy has been counted in this quarter as compared to the 100 beds in the last quarter. So that's I think the overall percentage is impacting in that manner. However, the sensors bed at the new hospital has increased from 100 bed that census to 200 bed in this occupancy. So that's the overall thing that we have added 160 bed new census bed in this occupancy counting in this quarter.

My second question was on the Delhi hospital overall. So we started this hospital around three, four months before we did the Faridabad hospital. And if you see after almost a year, so that hospital in terms of scale up, in terms of occupancy, you know, has been kind of slower than the Faridabad hospital. So what is the strategy there to kind of achieve BQ1 and then kind of, you know, grow from there?

I think Delhi hospital Model town is as per our guidance. We are quite happy with the way it is progressing. In fact, it's not that the numbers are slow there. It's just that Faridabad 20 has overperformed than our expectations. We were thinking of Faridabad Sector 20 be breaking around 12 to 14 months, but it has broken even earlier than we expected around 9 months, right? As far as Delhi is concerned, we are sticking to our guidance. We expected that hospital to break even around 15 to 17 months. And it will 100% it's on track for that is concerned. So we are quite happy with the way Delhi is progressing. I think we're quite happy with the ARPOB and the monthly revenue run rate that it has reached -- and the same strategy is that similar to what we are following in the we are following in New Delhi, which is having one of the most reputed doctors in that area, having star doctors, having a strong brand recall and community connect in those areas with strong visibility within the communities. So I think both hospitals are progressing on the right track.

Okay. So if I can ask one more question, sir. On the hospital now since you've reached 90% occupancy, are we planning to operationalize the other census as well on the 250 beds?

Yes. As of now, on 250-bed capacity, we are running on the census of 110 beds. And we are planning to the stage of increasing the census bed capacity to take the full leverage of the occupancy in the coming quarters.

I think the census beds in Agra will definitely increase and I think there is definitely much room headway for Agra hospital to grow in terms of the numbers of concern.

The next question comes from the line of Nishita from Sapphire Capital.

I just wanted to understand this 3,200 beds that we are targeting by when is this going to be operational?

3,200 beds is announced capacity. So what we mean by that is it's already under our possession. Only a bit of construction is left. So it includes the 250 beds in Gurugram, which will be live in the quarter 1 of the new financial year. And it includes around 450 beds of Brownfield addition in the two Noida cluster hospitals, which will be live in somewhere around next 15 months.

Okay so then all that cluster will be operational in next 15 months?

Yes if you start getting operational maybe you know out of 450 200 beds would be earlier and 250 beds will be probably in 18 to 19 months.

Okay. So what is our current capacity? I think 2800 right?

So 2800 capacity includes the new acquisition of the Gurgaon. As I said, that has to be happened in quarter one is an exponential year.

Okay. Understood And my next question is on, so we've had quite a human revenue growth, inclusions for 27% or 51%. Do we expect the growth to continue? What sort of growth can we see for the full year FY27?

I think for the full year, FY27, we are on track for the guidance that we've already done as far as not just revenue, I think even the revenue, EBITDA and the PAC numbers, what we're guiding for 2027, we will be on track for that. And I think certain parameters, we will also -- if things continue on the ramp-up is expected, I think we should be surpassing certain of our guided targets. So I think the company is on track to meet that guidance.

Can you reiterate the guidance. I'm actually attending the conference for the first time?

I think we have said that last year, we grew 27% Y-o-Y. As you can clearly see this year, we will easily surpass that growth even the EBITDA is concerned. I think the company is on track close to upwards of 24% EBITDA margin for the full FY '27 is concerned. And I think similar is the ARPOB growth and the PAT...

Right. So ARPOB growth, we can expect around 10%, 15%...

I think 9% to 10% is the right estimation to be taken.

The next question comes from the line of Prenita from Rock Capital Limited.

So could you please walk me through how the quarterly revenues arrived from the ARPOB occupancy and bed count? When I back calculate using these 3 metrics for the last few quarters, I'm getting a number higher than the reported revenue. I just wanted to understand if there's a component that I'm missing in this calculation.

So if you see about this quarter with the ARPOB of nearly INR 25,000 on the census bed of 820 with the occupancy of 68%, you'll be able to arrive to these numbers. When we calculate the ARPOB, it includes the total revenue, ID as well as the OPD revenues.

Would you not recommend doing it for every single hospital separately or just one for the complete chain of hospital...

I can give you the occupancy percentage of each of the hospitals. If you see about it out, the Greater Noida Hospital having occupancy of 74%, Noida Sector 110 health sector have occupancy of 91%, Noida extension having occupancy of 56%, Faridabad sector 88 that is the Greater Faridabad having occupancy of 63%, Faridabad new hospital having occupancy of 49%, [indiscernible] nearly having occupancy other having occupancy of 89% and Dhansi have occupancy of 91% but to emphasize here the sensor bed capacity has been 1820 which in the previous quarter was 655 so it has increased by 175 beds however we as we said that there is a enough headroom to increase the sensor bed capacity to build up the case to 2555 of the existing hospitals.

Could you also highlight the RPOB of each of these hospitals please?

Yeah surely so uh Greater NOIDA Hospital having the RPOB of nearly 43,000 NOIDA extension hospitals have a RPOB of more than 50,000 NOIDA Hospital having a RPOB of 35,000 Greater Faridabad Hospital having a occupancy ARPA of 35,000. New Faridabad Hospital having the ARPA of nearly 40,000. Model Town having ARPA of nearly around 50,000. Agra having the ARPA of 27,000 and Jhansi Hospital having a ARPA of 13,000 nearly.

All right, so just to clarify, it would be better to look at all the hospitals together when we are calculating the RPOB occupancy and bed count when we are calculating the revenue instead of each one of these hospitals. Is that correct?

Yeah, when we calculate the hospital occupancy as well as the percentage overall, the drivers comes through the overall occupancy percentage and with the blended arc of we calculate the kind of the performance of the at the blended level.

The next question comes from the line of Ashish T from UTI. Please go ahead.

Yeah, thanks for the opportunity. So excluding this model town in Faridabad, EBITA margins are pretty high at 28%, probably including the losses, they are lower. When do you expect the new assets to fall in line and possibly when shall we start clocking 26%, 27% EBITA margin again?

So, I think if we talk about these two specific hospitals, as we said, for 2020 is already broken even, but EBITDA drag is there, right, because I think the EBITDA margins there would be around 4% to 5%, so it will take some time to catch up to the, let's say, 20% EBITDA margin. Model town, we are expecting it to break even, somewhere around, between Q3, Q4 this year, so that will also, reduce the drag on dividend. Both these two hospitals, from here, we are targeting, let's say, in around 15 months, once they get break even is the EBITDA, there could be somewhere around 15 to 20%. However, at the group level, even though that will significantly reduce the drag, we might have new hospitals continuing to start. So in 15 months, Gurgaon will also be live. So I think the EBITDA drag from these two hospitals will shift to Gurgaon as well as certain other acquisitions that we do going on. But however, as we said, these two specific hospitals will be in line within 15 to 18 months after the breakeven and at a group level, even with the new additions of the continuing EBITDA drag of all the upcoming new hospitals, we would still be closer to 24% of the EBITDA margins.

Yeah. If you see the kind of performance we had delivered and demonstrated at the Agra, when we bought and started the operation at the Agra having a beta percentage of 11% yearly. Now we are already reaching much near to around 24%, 25%. So that demonstrates the kind of performance and the turnover of the kind of performance of our group.

And obviously we are adding new assets, we are planning to double the bed counts to 5,000. So in the... overall scheme of things as we go ahead over the next three to five years, I specifically had a question on this panel recommending limiting the hospital room charges to three-star hotel. Would you be worried about such recommendations and if not, so what's your view on this? Some color would be very helpful.

Yes, sir, recently got this news, so I think there's a recommendation about the stealing of the room rent. So, as of now, there's no comment, but see, price increase. There are various regions and various factors on this side increase there. So how this entire ecosystem gets managed, that's very, very important. As of now, we don't want to comment on it. As industry moves on, when we receive some frameworks, then probably it will be prepared for us to come in and see that.

Also see, it's something not for the first time a certain recommendation has been discussed. There have been multiple incidences in the past where center or certain petitions have said to, you know, look at the room rents and the rates of the private hospitals. So far, you know, we have always seen that government, in fact, has always supported, you know, the growth of private hospitals. In fact, for the first time after a lot of years, EGS' rates were also revised. So we feel in the past, government has always backed the private sector as well. You know, I remember times when even the spend rates were capped for certain cardiac procedures, certain implants were capped for, you know, orthopedic procedures and as well as certain medicines. So I mean this is not and also in the possibly in the future as wouldn't cause a significant impact or something to worry about. In fact, you know, if certain optimization of the cost can be done, I think hospitals will do it. They have continued to do it and always done in the past. But yes, you know, going forward, we'll get more clarity on this. And again, it's just a proposal and think long way than, you know, even close to a certain part of it being implemented as a project.

The next question comes from the line of Satyam Kumar from triple-A Holdings. Please go ahead.

Hi, thanks for the opportunity. I have a couple of questions first like sir can you help me to understand like as I see average length of stay of patient has been fallen below four days I think this has been the first time when it's below four days so can you help me to understand like whether this is going to be new consistent below four days or how we should look at it is it one of so if you can help to understand on this part.

I think it is reflecting in the overall strategy of FIRST when the new hospitals are ramping up. The A loss in those new hospitals is lower than the group A loss we used to have earlier. But the pure fact that there is very less percentage of government patients in these new hospitals. Government patients typically traditionally tend to have had higher losses because they come for critically for medical management procedures. So I think as a new hospital is ramping up and also being reflected in the higher arc of growth in the new hospital. So I think it's a reflection of that. And I think going forward also, I think it should be closer to the numbers of the ALOS that we've had this quarter.

And to add on, the way we are moving towards the surgical mix in the new hospitals is actually demonstrated on lowering of the ALOS overall. from lesser than four days.

Understood, understood. Sir, apart from this, how do you see competitive intensity with regards to your Delhi Model Town Hospital? As I understand, I think 50 new Samsung beds have been added in Model Town Hospital. But overall, how do you see this competitive intensity and how you are seeing that you can increase your rates for procedures or any new procedures you are adding to that hospital since it is in the full situation.

So Delhi, the area where we operate, there are 2-3 big cells are there within the range of 10 kilometers. But I'll tell you, the Delhi population moves within 2-3 kilometers of range. And the area where we are is very densely populated and very affluent supplies are there. So it's a huge opportunity for us to have a complete tertiary care facility. In fact, Very soon, we're going to have an entire spectrum of oncology treatment, also the transplant program, and of course, team is working on still onboarding the. few Indian doctors on the various facilities. So I believe we were confident the way Delhi is coming up. And as you said it, within 15 to 16 months, Delhi will be an operational break given. And then that's what process in Delhi is that absolutely different level and setting up a complete quaternary care center in that region.

And so just a couple of bookkeeping questions. So can you share three of mix for this quarter?

The payer mix is, government payer mix is close to 40% for the overall company for this quarter, obviously, as I said, in newer hospitals, it is close to not more than 10% of the government business there.

Sir, has the government mix increased because last quarter what I remember the insurance and cash were thirty-two, thirty-two, and that means government was thirty-six, and now you said 40, so has government mix increased?

So the volume has not increased. I think the impact is 1-2% of the price revision of the CZS rate that the government did recently. So because of that, I think there would be an increase of around 2% or in terms of the overall revenue of the government business, but the volumes are constantly decreasing quarter on quarter for us.

So that's why ALOS has decreased.