Good morning. Hi, this is Tausif from BNP Paribas. First question is to Varun; can you tell us where the industry currently stands with the common insurance and empanelment with private insurers and which gives uniform pricing with private insurers? Any of the hospital Aster or QCIL has been onboarded in this policy, and do you see this is a threat for the private hospital chains in coming years?
Good morning, Tausif. So, Tausif, first of all, I think the empanelment piece has been in play for a while. It's not new. From a data standpoint, I don't think, well, I'm sure that at least in QCIL, we haven't signed up on this, and I'm assuming Aster hasn't as well. I have also not seen large -tier hospitals get onto this platform. I think fundamentally, while a lot of conversations have happened, there are two things that are bothering the industry around it. One is data privacy. Still, I don't think the insurance companies have really figured out a way to ensure data privacy across so many hospitals and the other is transparency as to how this is being done. Right, so till that gets sorted, I think this is still a framework that's been worked upon, is the way I see it. 12 Aster DM Healthcare Limited – Q4 and full year FY26 Earnings Conference Call
But Varun, do you see this as a threat for private hospitals, if it's completely adopted by the industry?
Well, it cannot be done unilaterally, Tausif. It can only be done if private hospitals want to accept it. And that, you know, there are two ways to see this. It can actually save you a lot of costs on empanelment, etc., if it is done right. So, there are benefits and merits to doing it as well. But the current avatar, is somebody going to get onto the bandwagon? My sense is no, so I would say it’s not coercive if that’s the question.
Second question to Ramesh on the Kerala piece, I think despite the month of Ramadan the MVT business has grown significantly especially in Kerala. Ramesh, can you give some colour and also what is the current status of MVT patients? Have they started flowing in last couple of weeks?
Thank you for that question. Kerala story has done well again. Overall performance has been really good. Especially MVT, has done 41% year-on- year growth has been registered. We have seen attraction from across the Middle East as well as Maldives and African countries. There is a flow of patients coming in from all these areas. Now, in the last few days , in the Middle East we have found that especially , from Oman and UAE less number of patients are flowing in, but we have tried to keep that boat steady, by more number of Maldives patients , we have started focusing on African countries and there is a steady flow which has been happening. So, we are trying to mitigate the losses through the expanded coverage what we have now. So, we are trying to ensure that the impact is not much felt and still continue to perform well. Maldives have been contributing more now.
Thanks Ramesh, just last piece of question on Kerala, where do you stand currently on the nurses’ issue? Has there been any negotiation between the private hospital and the nurses? Can you highlight the total number of nurses in Kerala for Aster DM Healthcare and how many of them are currently working with a minimum wage of INR 20,000?
When we talk about minimum wages and the strike that happened in Kerala, this started sometime in the mid of March. At that point in time, their demand was that they wanted the government to release the GO. Every five years, the Government of Kerala issues a gazette notification for the basic pay—to have it issued by the government. But here, at this point in time, we have around 4,300 nurses approximately in Kerala. All these nurses are paid the basic pay according to the government notification. The new notification is yet to come. They first started the strike asking the government to release the GO. At that point in time, the Kerala government had released an interim GO, which would take 60 days for them to go back and rectify the same. The nurses, of course (the United Nurses Association (UNA) ) didn’t want to wait for that time and they continued with the strike, demanding the private hospitals to take it (basic salary) up to INR 40,000 per nurse. But as such, we have the private hospital association, and we were also a part of it, and we requested them. On April 13th, we had a negotiation with them as well, and the government or the court had redirected us, especially the private hospitals, to mediate and get the things done. So we have spoken to them and on April 13th, we have come to a settlement with them. And yeah, the strike is called off. 13 Aster DM Healthcare Limited – Q4 and full year FY26 Earnings Conference Call
Thank you Ramesh. Can I just ask Mr. Wilson also to add to that?
Thanks Tausif. That’s a good question, actually. So even though the demand was that they were asking for a basic salary of INR 40,000, actually, we were able to conclude by giving only a small increase, and the overall impact may not be significant actually. We used to give an annual increment every April, so this time we had to give something more than that one actually. Our total impact in Keral a will be INR 5 –6 crores. so, that’s what we have given . Total increment what we have offered is ; at Calicut we have given INR 3,500 per nurse, in Kochi that became INR 4,000, and in the remaining places it is INR 3,250. That’s the increment we have given. They were asking for a significant amount, like they mentioned INR 40,000 as the basic salary. So, we were able to negotiate and conclude that one in a very nice manner. All the nurses are back.
Thanks, I’ll get back in the queue.
Thanks Tausif. The next question is from Damayanti. Damayanti, can you please unmute yourself and ask the question?
Hi, good morning all and thank you for the opportunity. My first question is on ARPOB and IP volume trends, very strong across the clusters. So just want to understand from the management first, what are the key initiatives which are currently underway and which should help Aster to continue similar momentum in coming quarters? And what kind of headroom you have in terms of growing the CONGO-T contribution for your business? So that's my first question.
Thanks Damayanti. For Aster, for the Q4 as you called out, we had a very good IP growth, almost 7%. But also, this includes a negative 8% growth in the K&M cluster also. I just want to call out in advance that the 8% negative growth is because of the de -empanelment of the low -yield schemes which even Alisha called out. If you remove that, you're going to get into the positive 3% growth. So that way, all our clusters, whether it's a Kerala cluster, K &M cluster, or A&T cluster, everyone has done really well. In terms of the growth capacity, there are multiple things which we're working on. One is that we're strengthening all our processes, whether it's doctor engagement programs, or whether it's the OP-to-OP process, or OP-to-IP conversion process or the call center management. So, we're looking into all those things and we're driving it. But the primary thing will be the doctor acquisition. The doctor acquisition is something at which we are very strong and we also called out saying that in the last six month s, we have added, more new doctors, other than the replacements. We have added 36+ new doctors in the last 6 months alone . That is something which we are expecting the ramp up to happen. And with the continued growth, whatever we have done currently with the 7%, that's a fantastic growth to continue to happen over the next medium term.
Yeah, just to add to what Sunil's saying, I think you're asking about the CONGO mix, right? So, this is where I think there's a huge room for us to improve. We are sitting at, I think, a blended level now, 55% CONGO contribution. We think we can definitely take it up to 60 % and then 65% as well. You see a lot of the groups in that direction. So that's something 14 Aster DM Healthcare Limited – Q4 and full year FY26 Earnings Conference Call which will actually give us a good headroom to further improve the numbers especially on the acuity and ARPOB and stuff.
Sure, that's helpful. Thank you for that. So, continuing the point on doctor engagement. So again, I think I want to have some more color on what is helping you to get doctors because what we understand in markets like Bangalore, the competition is really intense. So, what are the key strategies again, which is helping you to attract the best clinical talent and also the strategies for retaining the talent which you have in your network?
Ramesh, would you like to come in?
Yeah, surely. So, overall, the last few months, we have added a good number of clinicians . Rightly said , s ome of the star clinicians were onboarded. And pretty much the reason, why they were convinced to join Aster is a simple one. One, we had a bigger vision for Aster and especially when it comes to, as you rightly mentioned, about Bangalore market, it is very competitive and we are having not only three units now and we are adding another two more units in Bangalore. So, it's quite visible for them that what is the vision of Aster. So that is one attraction to all the clinicians who have joined. Secondly, we are also looking at high -end procedures and niche segments. High -end work has been happening, like the robotic transplants. So, there is a good amount of, kind of faith in Aster and Aster's work which has been happening. That has also been attracting most of the clinicians and they find that especially when it comes to CONGO mix, in certain areas we are truly leaders, especially in neurosciences, and in oncology, we are getting there. So, in some of the CONGO mix also, I think we have good clinicians on board. That is also attracting other clinicians to join us and expand each department and also attract more patients. So that's where I think ring fencing these clinicians, of course, we have our vision for each and every specialty very clear and the clinical excellence pathway, what we have been engaging then, be it technology, be it investment in whatever, and also the branding and taking it to the next level. I think that is where the clinicians are quite happy about, and they are pretty much with Aster.
Sure. And just, I think, I want to hear Mr. Khanna's thought also on the clinical talent engagement. Again, anything or similar strategy for QCIL as well which is working for you?
Thank you Damayanti. So essentially, I'll go back to why a clinician would join more than what we are succeeding with because it is a lot to do with four or five elements that a clinician looks at. I think the first and foremost is relationships, and our relationships in the market, the transparency that we operate with is probably top tier. The second part is we are developing a model. In fact, in one of the previous quarterly results, I've spoken about developing Clin iQ because our focus on clinical independence and outcome is so significant, that is also yielding a lot of gains from a volume standpoint. And that is what the clinician wants. The clinician really wants that you should allow them clinical independence. You should be focused on outcomes. You should be able to draw referral volume into the center because of the good work that you're doing. That coupled with the technology investments that we're making is another big reason why 15 Aster DM Healthcare Limited – Q4 and full year FY26 Earnings Conference Call clinicians really want to move. And I think the last part is largely commercial. And we are top tier in that too. So, I think that is the holistic mix. Now it depends on one to the other as to which one plays out more than the other, but I think our ability to connect, to forge alliances, relationships, partner, is better than anybody else today.
Yeah, that's helpful. Thank you, team. I'll get back in the queue.
Thanks, Damayanti. The next question is coming from Mr. Kunal. Kunal, can you please unmute yourself and ask the question?
Yeah, hi, good morning. So, my first question is on, you know, QCIL. So, I see that the mature units have grown 14% as of the focused units. So, just wondering what the growth drivers can be going forward because some of the things seem to be very well optimized like pay or mix or ALOS. So, would it be the case mix or will it be the expansion, you know, going forward? Just want to get your thoughts, sir.
Thank you, Kunal. So, Kunal, the growth drivers for each one of those categories is slightly different. So, let me try and give you some color on that. So, the good part is our mature has continued to grow. Our mature hospitals are currently growing 13.5 -14% on the top and 20-plus percent on the bottom line. And they are in excess of 30% EBITDA profile as well. So, what's working for us there is still enhancing complexity. Alisha spoke about it and let me just reiterate the same thing. We are currently at about 59% CONGO-T mix. And my sense is we will continue to grow that, because I told you that we are under-leveraged on oncology and that is one piece that we've still not got our investments rolling. In fact, this year onwards, on to the next two years, you'll see a sig nificant growth in oncology volume in our network. So that will play out from a mature hospital standpoint. If you look at our emerging and focused assets, we're still sub 20% EBITDA in there. We've done extremely well. But the runway is still a long way for us to grow. Various things are playing out. So, one, wherever we have under occupancy, I think we're bringing in the clinical talent that is required to fill up the gaps that we have. It's called the golden few in our parlance. If we missed out something in one of those hospitals, we try and bring that talent. What is interesting is that, you know, brands have a long legacy. And some of the work that we're doing in Hyderabad, essentially in the Care, is bringing doctors who left us back because we've always stood for ethics. We've always stood for integrity. The consumer value perception is phenomenal around the brand. And with the investments that we are making, some of these assets are doing extremely well. In fact, you know, the Hyderabad is a sticky market, we've always known that. In fact, two years back, when I came here, one of you would ask me about what will happen to Hyderabad. So, Hyderabad has started to grow so significantly, we are now seeing huge growth on the top in terms of volume and EBITDA has grown 66 odd percent. So, I think different levers for each one of those categories and currently all seem to be firing.
So, I assume you meant it's across the units, right? The emerging, the new ones and even the focused units, right?
If you see the growth percentages, it's across all units. So, our focus units have grown top 25 odd percent, our mature have grown 14 odd percent, our emerging have grown 60 odd percent. So yeah, the play out is across the network. 16 Aster DM Healthcare Limited – Q4 and full year FY26 Earnings Conference Call
The second point is on the synergies between the two companies. I was given to understand that a lot of these synergies will start flowing in once the merger consummates between the company. But I think in your presentation you mentioned almost 200 basis points, I think INR 85 crores of synergies that you're seeing in Care. Are we seeing something similar in Aster also? And if that is the case, then going forward, once the merger completes, would there be even more synergies, more than what you have booked so far?
First of all, the synergies that I've alluded to are pre-Aster QCIL merger. So, these are, you've got to understand that within QCIL also, we are in a way merging three companies. We acquired Care, Evercare in Bangladesh, and KIMS in Trivandrum and Tamil Nadu. So that's the synergy that I'm referring to. So, bringing the three entities together has also given us synergies on account of procurement, on account of insourcing of food, a lot in terms of AMC, etc. And that is the INR 85 crores that I al luded to. We've still not started the work on Aster QCIL synergies really, and they will start to flow in post-merger.
Great, sir. Just one more question if I can on Aster. Sir, on the Greenfield expansion, you have around 200 capacity beds in the next couple of years So, just wondering how will the cost profile move going forward and the margin impact, if any, that we should expect only in Aster's business in the next couple of years?
Kunal, if you look at the last year, you saw only Kasargod commencing the operations sometime in October. And if you look at the margin profile, the impact is hardly 60 basis points . Because we closed at 20.4 in FY26 , including Kasargod. If you remove the Kasargod, in which approximately we have, a bit of losses somewhere in the negative of around INR 19 to 20 crores. So, it's probably 21%. It's only 60 basis points, which is impact. And again, it's our own cluster. So, we expect to bounce back very quickly and break even in a quarter or two. Next in the FY27 you look at we have got already two Brownfield expansion which have started. One is our Aster Whitefield Block D which already commenced operations in April and also the other unit is in Ongole which is another 75 beds on the existing hospital. We commenced that also in April. That means we got almost 200 plus beds of Brownfield expansion which is usually you can see that it is a bit accretive. Just to give an example, a year back in Kannur, we were running at 300 beds. We added 100 beds, the margin expanded by 400 basis points. It went from 18.5 to 22.5, good thing is that , in this year, already , you're starting with the Brownfield expansion, which is EBITDA accretive . Secondly, this year we are expecting onl y Trivandrum to commence sometime in October, that's only the H2 beginning and you know already in Trivandrum, it's part of the Kerala cluster. Second, QCIL entity KIMS already is present the re. It's very under -penetrated. So, we expect to do really well. So even whatever the losses come in, it's hardly any dilution. Even with those losses , I expect from the current year EBITDA margin should only grow. The third point is also very important to note is that with the merger, very much hindsight, sometime in quarter one, you should see that majority of the period will be under the merged entity. Varun also called out that Synergy is going to start after the merged entity, that's something which we 're already working on, and I think we will hit the 17 Aster DM Healthcare Limited – Q4 and full year FY26 Earnings Conference Call ground from the day one and that should also bring and help us in ensuring stability on the margins and also grow in the margins. So that way, with all these levers being there, from the cluster presence to the brownfield expansion already there, and also towards the synergy coming in, we don't expect any margin dilution and year-on-year we'll grow in the margins.
Good to hear that, sir and all the best.
Thanks, Kunal. We would request you to limit your question to two, but not more than three per participant at a time. The next question is coming from Mr. Siddharth. Siddharth, can you please unmute yourself and ask the question?
Thank you for the opportunity. Congrats on a good set of numbers. Fairly strong set of numbers. I have a few questions. I'll take my top three. What were the primary challenges in the slow growth even in Karnataka IP volumes which were at 3% versus 8 -9% in the overall group? And within that, if you could give us some understanding, you mentioned that there was a degrowth because of Aster Aadhaar. Was that a negative margin scheme that you took away and how should one think of recouping t hat set of patients? So that was question number one. Question number two is, if you could give us a sense of what's the share of Chemo and dialysis within Onco and Nephro which I would assume is more daycare and therefore brings down the ALOS and question three was if you could share any specific AI or robotics implementation that you’re doing within Aster or QCIL.
Let me jump in Siddharth with the first two questions. One is on the Karnataka. You are saying that if IP volume for other thing is at least in the high single digit to a double digit, why K&M cluster is at 3%? As I have called out very clearly, what we exited is a low -yield schemes. I think we have very clearly called out, it is a government scheme, it is a low -yield scheme. The ARPOB compared to a cash market, it is less than 50%. That's how it's been and good thing is that we exited that. Al so, one of the reasons we exited also is that there's a capacity bottleneck in Aster Aadhar. It's already running at 75% occupancy. We will be looking at how to expand in Kolhapur also. At the same time, we want to see that whatever the capacity we have, we optimize for the cash and TPA patients. Second, in the K&M, we have a positive 3% growth. There are two parts, one is that competition intensity is very high, and maybe before that, let me take a step back. If you look at a FY24 and FY25, in K&M cluster, we've been growing more than 20 %. That's mainly because of our Aster Whitefield Hospital, which started two years back. And the ramp -up was really good. We achieved INR 44 crores per month in less than two years and that is a ramp -up, if you want to compare , CMI hospital took more than six years to achieve that. That's a very fast ramp-up. And we can't expect the same revenue ramp-up at 20 plus percentage when a unit has already reached a mature phase now. So, keeping that in mind, that's also one of the reasons why the revenue growth has tapered down to around 10-11% and volume has been around 3% growth. But at the same time, we also had competition intensity, especially in the north of Bangalore. We had attrition of one or two teams also. And good thing, I also called out saying that we got them back already. Second most important thing I think we didn't call out, one of the general surgery or other team which left in Q3 due to the competition, joined back in Q4. That basically shows the strength of our clinical ecosystem and the managem ent what we do 18 Aster DM Healthcare Limited – Q4 and full year FY26 Earnings Conference Call there. That's a very, very strong. So, we don't expect this to be the norm. So, we expect to go to mid to high single digit. Good thing is that all the doctors what we have gotten now, already they're in the stability. So, we expect the volumes to trickle down in next one to two quarte rs. Second also is that you see that April already we launched the Brownfield Hospital also, which is the Block D Whitefield, which is a women & children hospital. Also, we have doubled the number of doctors there. We had around 10 or 11 doctors and we have added another 11 doctors there. So that is something due to which ramp up is expected to be really good. So, whatever you see is that the 3% is just a one-off thing, it's not a structural issue. We should bounce back very easily. Second on the Onco, usually the broad contribution is that medical oncology is approximately 50-60%. 30- 35% come from surgical oncology of the whole oncology and 10-15% from radiation. Out of the medical oncology, you can see 60% will be chemo and 40% usually is in the immunotherapy and targeted therapies, what we do. I hope that answers the question. Alisha or someone who wants to take up the AI?
Let me take the AI question. So, Sid, thanks for the question. You know, this is more of an academic question than currently in terms of what's happening on the ground. So essentially, AI will, in the near term to mid - term, impact patient safety, the operating world, financials, and clin ical. As a company, we've already started working on all four tie rs. So, if you ask us what the early successes are , we've been able to bring in CDSS, which is AI-enabled, we’ve been able to bring in call center support, which is AI enabled. We're looking at solutions that can actually save time for the doctors when the patient comes into the OPD by pre -populating some of the EMR work through AI. We're looking at significant clinical augmentation happening through AI. So, there are two parts to that. One is looking at radiology, getting more efficient. As I told you last time, we are setting up Asia's first radiotherapy platform, which will be AI -enabled. This is the first EOP platform that Electa has sold in India as well as in Asia , which is AI enabled. So, a lot happening on all four of these sites. We're also mindful that some of the newer technologies on AI are currently a huge cost and they're used cases from a revenue generation standpoint, and they haven't seen the light of the day. So, I think we are being very particular in terms of technology, because technology is galore, but in terms of what we can really use to enhance our metrics is something that we're mindful of. On the sales front, we've seen significant improvement with our CRMs now getting AI enabled, our call centers getting AI enabl ed, and our conversion ratios have gone significantly better. So, all of that is playing out, and that's how the volumes have gone to a 10% kind of a growth as you see on the IP and double-digit growth on the OP as well. I don't know if there's a specific question that you wanted to ask, but it's a broad-based question that you touched upon, so I'm probably giving a little bit of a broad.
No, I think this does give, Varun, I think this is fairly helpful in terms of, what you're planning, and I concur with you, that AI is probably, fairly early stage and theoretical today. But given that there is a merger, you're going to be leading the entity. It does help to get a color from you. So, thank you so much for that. And just a follow up on what Sunil mentioned on some of the challenges in Karnataka. You'd mentioned, so I get the capacity bottleneck in Kolhapur but for the rest of the hospitals, you also called out some other sort of capacity utilization. Is there a bottleneck elsewhere? 19 Aster DM Healthcare Limited – Q4 and full year FY26 Earnings Conference Call Because that seems to be more like mid 50s occupancy. So there does seem to be capacity, right?
Yes, Siddharth. In K &M, we have capacity. For example, Aster CMI is at 60% plus occupancy, Aster RV is at 69%, in Aster Whitefield we have added 150 beds so, if you include that, it (Aster Whitefield) has got still only 55% plus occupancy. So, I think we have got a great runway in Karnataka cluster to add beds. We are also coming with Sarjapur in next one more year and we have Yeswanthpur in three more years So, I think we got a very good runway towards it.
Thanks, Siddharth. The next question is coming from Mr. Amey. Amey, can you please unmute yourself and ask the question?
Yeah. Thank you for giving an opportunity to ask a question and congrats to the management on a good set of numbers. So, first question I have for Varun ji. So, we were intended to spend close to 500 crores in Hyderabad cluster to get that cluster to its potential. Has that investment over and where it has been spent? And, along with this, if you can give us the CAPEX guidance for the QCIL for next two years.
Thank you. I don't know where the INR 500 crores number is essentially, but the work that we are doing in Hyderabad is turning every asset around. So, we've completed Banjara. Let me stick to Banjara for a minute. We are also now working this year to enhance oncology services in Banjara. So, we'll be able to bring in radiation in Banjara, which is going to be a significant bump up. We operate an OPD building there and it will also be an IPD building going forward. So those are the plans that w e've laid out for Banjara and therefore a significant transformation is going to happen there. Hitech, as I mentioned to you earlier, is doing extremely well as an asset. We've grown 65-70% of the top over quarterly averages last year to this year. So that's been a significant upside as well. Now we are working on the Nampally asset , we are sprucing it up because I think it needs a little bit of work, which will allow us to enhance our ARPOB and also be able to take significant higher footfall. This also comes along with adding clinical capability across the board. So, every asset will see clinical enhancement. And as I told you, Hyderabad is one market where we're being seen very favorably. It's not a market that has grown volumes very significantly, but the fact that we've been able to grow the market well ahead of our competitors should give you a sense that I think we're being preferred both by the consumers and doctors alike. So that's happening. In terms of the overall bed capacity expansion, I think I give you a sense about 1,700 odd beds will get added. 2,000 odd crores of expense will happen for those 1,700 beds, which is what we call the project capex. This will be revenue accretive because 1,500 of these 1,700 beds are actually brownfield. O nly 200 is Greenfield and therefore I'm desperately looking forward to these beds coming in because they're coming in assets where we need more capacity. And as I mentioned to you earlier, wherever we are in the mature setup, our strategy has been adding more beds, adding more capacity, and bring more complexity. So, we are kind of firing all cylinders onto that and so far, so good. We are hopeful that Bhubaneswar as well as Raipur, both the assets will get incremental capacity and clinical complexity from oncology standpoint as well. Outside of that, our guidance on CAPEX has always been clear. We've stuck to the same numbe r. 5% is the CAPEX spend when it comes to the 20 Aster DM Healthcare Limited – Q4 and full year FY26 Earnings Conference Call annual CAPEX spend to spruce up the existing facility or to add clinical programs. So generally, the breakup is 3-2, which is 3% is spent in terms of refreshing what we've already spent and 2% becomes incremental every year. That's the cost for running the business. So, we stick to that. We're again very prudent in terms of managing those spends. As I mentioned, as a part of the synergy between KIMS, so that I'm very clear between KIMS and Care, we've already started to find synergy in the procurement of equipment as well. And this is pretty significant. So, the 5% spend earlier and the 5% spend now is giving us significantly more than what it used to give earlier. So, I think that's how all of this is working out so far.
Sure. And this year, we have ended at around 16-17% top-line growth and around 1-1.5% margin basis points expansion. Looking at the improvement we are doing across the clusters ahead, as well as the around, I think, 900-bed addition we are doing for next two years at least. So, you expect this growth momentum and the margin expansion to continue for next two years?
Yes, I do. I mean, we've gone to a solid start, and I do see that the margin expansion as well as the top line growth will continue. I think the strategy is firing. And again, strategies are not made for a year. I think the last year has just been a testimony of the fact that what we've started is the right thing to do, and which is where we started to see the numbers roll in. As I mentioned, our team's rock solid, very committed, and we're reasonably sure that we'll continue to add to what we've done last year.
Sure, thank you so much. I just have last question on Aster. On the Whitefield unit particularly, I think Karnataka cluster has looking like it is coming out of woods quickly after these leadership changes. But if you can give some clarity, how is the occupancy now in Whitefield for FY26, how it has moved year-on-year and what profitability this unit is working on so that we can get some sense what potential it has in terms of the EBITDA addition for next two years? Thank you so much.
On the occupancy, currently it's at 60%, and that's only for the block A, B, and C, which is the existing one. Now that the block C is going to the block D and that's another 159 beds getting added, that's a separate road path what we have. In addition to that, the empty 50 beds which is there, that will be integrated to the existing multispecialty hospital and also, for the Aster CMI, where we are coming to another year or so, we'll have the 100 beds expansion on top of the existing hospital and their existing occupancy is 56% so, there is a good room. but only thing in Aster's RV because it's just a 250-bed hospital without having oncology there. There the runway is a little lesser because currently already occupancy is at 66%, b ut still, you can go up to 75 -80% occupancy, so that room is already there. And from the EBITDA margin point of view, I think only in the Whitefield you ask for, it's already in the high teens, right? High teens are the margin. With the Whitefield coming up, I think then you can look at more than mid 20s is the margin what we are expecting to reach.
Thanks Amey, we would like to highlight that we’ll be giving preference to attendees who haven’t asked their questions before, so in that line The next question is f rom Mr. Vivek. Vivek, can you please unmute yourself and ask the question? 21 Aster DM Healthcare Limited – Q4 and full year FY26 Earnings Conference Call
Thank you for the opportunity. I just have a couple of questions. One was with regards to the performance in the Andhra and Telangana unit. The growth has been outstanding in that particular cluster. So just wanted to understand what steps or have you take n any particular steps to do the course correction and going forward, what can we expect in terms of a sustainable level in terms of both revenue and margins for the cluster?
Vivek, thanks for the question. See, there are three main hospitals. One is the Ramesh Hospitals Group. Then we have two hospitals which is the Hyderabad Aster Prime which is a smaller 150 beds and Narayanadri Hospital in Tirupati which is the 150 -odd beds again. So, in this, the two hospitals specifically driving the growth is the Narayanadri Hospitals and also Aster Ramesh Hospitals. Narayanadri Hospital was opened up almost three years back. It's doing really well. Even in the current year, we've seen a 46% growth in the revenu e and almost 75% plus growth in EBITDA. Because one of the good things why the Narayanadri Hospital is growing really well is that we are able to add good clinicians there and also the market is underserved currently. So, we are able to execute things at the right time and also in major of the specialties like cardiac and ortho and other general specialties, we are able to handle at the second in line also. That is helping us in taking more volumes. And also, we will be looking at now to convert some of the general wards into single rooms. so that we can expect more ARPOB growth also. The second big change what we have seen is the Ramesh hospitals. Ramesh hospitals were little stagnant for last couple of years, and they also lost few doctors in the quarter 1 & 2. And, in addition to that , when the attrition happen ed, they added clinicians in 3 -4 specialties including the Nephrology, Pediatric Department, Ortho and Cardiology , that was their stronghold. After the end of December, we have seen a good growth momentum and it's not a one-off growth what we have seen. Last four months and even the April trends are looking very similar. With that, they have achieved more than 32% revenue growth. And why EBITDA has been growing? It's very simple: because you are sitting on a low base. We ensured that there is a good operating leverage which is working currently. We are holding on to the cost, not jumping into hiring more manpower. We can leverage on the existing fixed costs which are already there. And because it's one or two months, I would have said it's just a one-off and we've seen a good runway for the last four to five months. And I think we will expect to continue to grow maybe not in the similar manner, but the runway that we have created, I think we expect Ramesh hospitals to continue to do well.
Thank you for the detailed answer. Secondly, just wanted to understand from Varun about the QCIL expansion. So, two things here. One is, if you could provide the expansion plan by cluster for QCIL. And secondly, what you had mentioned about the QCIL expansion budget, which is around INR 2000 crores for 1700 beds of which 1500 is approximately brownfield. So just wanted to understand the per bed capex that you plan on doing approximately for the brownfield and the greenfield units that QCIL has in its pipeline.
The blended value of a per bed will vary by which hospital, what kind of expansion are we doing. But per bed generally comes about INR 1-1.1 crores. That's what the number would be for you to take back. In terms of expansion, a quick run through. if we look at Bhubaneswar and Raipur, 22 Aster DM Healthcare Limited – Q4 and full year FY26 Earnings Conference Call which comes this year. There's capability enhancement happening in Raipur, and there's capability as well as bed expansion happening in Bhubaneswar, and that's largely for this year. For FY28, we expect to add beds and capability in Banjara. I probably brought that response to the previous question as well. We will add capacity; we will add capability in a very significant way in Banjara and in Hyderabad. We were waiting to see if we are able to turn the asset around and we start to get favorability both from the patients as well as the clinical fraternity and that seems to have happened. People now are seeking more from us. So that is another investment that we're making. We've been very excited with the Nagercoil launch. We've done extremely well. The assets at ~28-29% of the EBITDA and growing month on trading month. We are now looking at expanding that pool by another 100 beds. So that's another expansion that's going to happen. We are adding 28 beds in Nampally as well and we're turning that asset around, sprucing it up. And with that, we will need more beds to come in. Some of the other projects that we are currently looking at , beyond that is going on, are Malakpet, Chattogram, Vizag. So, it's across the board. When you're looking at brownfield and greenfield as there's one greenfield that we're doing, which is in Indore. 14 assets are brownfield, which accumulate to the 1500 beds that I spoke about.
Just on the per bed capex, you said INR 1-1.1 crores, So, can you break it down for me in terms of brownfield per bed capex and greenfield per bed capex?
Greenfield will come to about INR 1.5 crores and brownfield will go down to about in the range of INR 0.8-1.0 crores, depending again on complexity but there's no one number. We'll have to give a number by specialty or by each unit, which is not something that I intend to share at this point in time. But the fact is that if you are adding a linear accelerator setup or an Onco setup in a particular hospital, then the numbers will go up. So, it is not just the bed , i t is also the complexity and capability that we are sprucing up in the asset . So, Vivek, there's no one answer , t here will always be a broad range. And the broad range for brown field will be between INR 0.8 to 1.1 crores and for greenfield could be about INR 1.5- 1.6 crores.
Got it. Thank you for the explanatio n. Just a couple of bookkeeping questions. Just wanted to understand what comprises as a minority share as a percentage of our total profits and what should we take that as a percentage going forward?
Vivek, in case of Aster, it's around 8% and that is with only two units currently, which is Aster MIMS for which we have a minority of 20% and Ramesh Hospital which is on 30%. So overall at a console ASTER level it should be at 8 -9%. I think maybe QCIL should be between 15 -20%. So blended should be between 10 -15%.
Overall, it's 10 -15%. Secondly, just wanted to understand your ROCE number, so as per what I could understand in terms of ROCE calculation, my ROCE number is coming out to be a bit different to what has been reported in presentation, so if you could help me out with this.
In case of Aster, what we exclude is only two things. One is the revaluation reserve that is related to the land revaluation reserve which we taken up 23 Aster DM Healthcare Limited – Q4 and full year FY26 Earnings Conference Call when we converged from the old IGAP to IndAS. So, it is just a book entry, there is no actual capital employed. Second is the CWIP (Capital Work-in- Progress), because that asset is still not deployed to earn your profits or revenue. So, these are only two things we exclude. In case of QCIL , we exclude the intangibles . Because QCIL has acquired the entities in Bangladesh and specifically in KIMS, they have certain intangibles like a brand and goodwill . T hat is something they're excluding and that's the only t hree differences we will have between your calculation and our calculation. But we'll be very happy to share it offline also.
Just one more thing I wanted to ask about QCIL. The QCIL EBITDA margin we report at around 20-21%. But as per the annual report that I could see of QCIL, the EBITDA margin is coming out to be around 17 -18%. If you could make me understand what I'm missing ou t in terms of understanding the EBITDA margin with what's reported in the Aster PPT versus what I can see in the QCIL financials.
Vivek, there is this one time that impacts us broadly around, the one time that we're doing on merger and also some of the work that we're doing with consultants to enhance the productivity. So, all of that is one time. We can probably provide you a breakup of that if that's desired later.
Thanks, Vivek. If anyone or other attendees would like to ask a question, please raise your hand. So, there is no more question to the management. Thank you all. This concludes the earnings call for this quarter for Aster DM Healthcare. I thank the management and all the attendees for joining us today. If you have any further queries and questions, please get in touch with us. Thank you.
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