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00:00We have with us two very interesting managements.
00:03First off, we have Mr. Yatharth Tyagi,
00:05director at Yatharth Group of Hospitals
00:08to talk to us about everything that's
00:10playing out in the hospital space
00:12as well as Yatharth in particular.
00:14Mr. Tyagi, let me first start off with how
00:18and what kind of trends are playing out
00:20and where would you look for in terms of scaling up
00:25with regard to your top line for FY25,
00:28given that you have a hospital or two
00:30with lower utilizations.
00:31Hopefully those scale up and ramp up.
00:33So what's the kind of expectation for FY25 fully up?
00:37See, I think for next three to five years,
00:40we feel the company is on a good growth trajectory.
00:44We do expect the growth of around 30% yearly
00:48for next three to five years is concerned
00:49as far as top line is concerned.
00:51You did mention two of the hospitals are still new.
00:55So the acquisition that we did of Jhansi Orchha Hospital
00:58as well as Faridabad Hospital.
01:00So specifically if I talk about Faridabad Hospital,
01:02because that's a good art form that we have seen
01:05in the first quarter of its operation.
01:06It just operationalized last quarter.
01:08So this hospital is expected to ramp up occupancy
01:12is concerned, not just in this one year,
01:13but across the next 15 to 18 months.
01:16We do expect this hospital to become break-even
01:20and as well as the occupancy ramp up is concerned
01:22in both our hospitals of greater Nord
01:25and Nord extension is concerned.
01:26This should be giving the good growth
01:29as far as the next few years is concerned.
01:31Another key factor that we are hoping
01:33and we are quite sure about in the next few years
01:35is the growth in our average revenue per occupied bed.
01:37So RPOP is expected to grow.
01:39I think we do expect,
01:40we have seen a growth of 10% last year
01:43in terms of RPOP is concerned
01:44and we do expect a similar growth
01:46in the coming years ahead also.
01:48Right, Mr. Taggi, you know,
01:51you're also targeting an expansion of bed capacity
01:55to, you know, 2800 to 3000 by FY28 is what you've guided.
01:58You're also, you know, doing greenfield expansions
02:01as well as brownfield expansions.
02:03Now I want to understand that your cash position
02:06right now is roughly 182 crores.
02:08So how are you planning to, you know,
02:10do all of these expansions
02:11plus the kind of brownfield expansions that you have?
02:16So the expansion, the bed capacity
02:17that we are going to be doubling in next three years
02:20is going to be fueled by three, you know, ways.
02:23First is, as you mentioned,
02:24there's a strong cash position already in the books.
02:27We have around 180 crores.
02:29Plus, you know, we will be generating good internal accuracy
02:33now that the finance cost has almost, you know,
02:36become reduced significantly since the IPO.
02:39You know, at the time of listing around 30 months back,
02:41we had a bank debt of around 250 crores.
02:44Post-IPO, we became completely debt-free.
02:46And today, there's just some small debt of 80 crores
02:49that we've taken for the Faridabad hospital acquisition.
02:51So, you know, the finance cost has significantly reduced.
02:55The network is increasing.
02:56So internal accuracy will also be able
02:58to generate enough cash going forward.
03:00And third is, again, you know,
03:01there's always a room for more debt that we can still take.
03:05If you were able to service a debt of 250 crores
03:07around 13 months back, the network growing today.
03:10If required, this option can also be considered
03:14in next three to four years.
03:16So as far as doubling our capacity is concerned,
03:19we do not require any external funding
03:21for these acquisitions.
03:24Also, Mr. Tyagi Varsha here.
03:26So I was just seeing that you are actually increasing
03:30your share when it comes to super specialties.
03:33And you have also introduced
03:34your oncology and robotics segment.
03:37So I just wanted to understand.
03:38So currently, if I'm not wrong,
03:40oncology is contributing 10% to your revenue.
03:43Now, where you want to take this
03:44because that will aid your margins and your RPOP.
03:50Yes, that's definitely right.
03:51I think we do feel oncology to be a big contributor
03:55in our growth for next three to five years.
03:57See, we were doing medical and surgical oncology
03:59since, you know, a few years now.
04:00But radiation oncology is something
04:02that we've recently started.
04:04You know, we have installed LINE-X machine.
04:06Now we're doing PET scan, we're doing brachytherapy.
04:08So I think oncology, which was just 3% a year ago,
04:11is today 10%.
04:13And if I talk about specifically Nordic Extension Hospital,
04:16where the complete oncology setup is there,
04:18their oncology is contributing to around 17%.
04:21So I think overall, we do feel in this hospital,
04:24specifically, oncology can even touch 25%
04:27in 15 months to 18 months of time.
04:30And as far as the overall group is concerned,
04:31we do expect oncology contribution to double
04:35in terms of percentage in the years ahead.
04:37And this will ultimately help boost our RPOP
04:40and not just oncology, but even high-end procedures
04:43like the transplant program, the liver, kidney,
04:45as well as bone marrow transplants
04:47will also be increased in volumes,
04:49which will ultimately help us to drive a better RPOP
04:52as we move forward with them.
04:54And Mr. Tyagi, where your margins will go,
04:57because you have around 25% of margin
05:00that you're operating into,
05:01and considering the operational losses
05:04in your Faridabad unit,
05:05and you're also entering into,
05:07I mean, you're increasing your share
05:08when it comes to oncology and super speciality,
05:10where you want to take your margin, say, next three years?
05:14See, I think we already are, you know,
05:17delivering quite healthy margins of around 26% of EBITDA.
05:21We sort of expect the margins to be sustainable.
05:24We do expect this margin of 26% to be sustainable
05:27for at least three to four years.
05:29The reason being that, yes,
05:30there is new hospitals like Faridabad,
05:33and for other new acquisitions
05:34that we will be doing each year,
05:36which will be dragging down margins a bit,
05:38but because there's a lot of occupancy ramp up
05:41that is yet to happen in a greater number of hospital,
05:43which is around 67% of occupancy,
05:45and not extension hospital,
05:46which is around 61% of occupancy.
05:48So in these two specific hospitals,
05:50the EBITDA margins should increase a few basis points.
05:54So that would compensate for the drag down
05:56of the margins of the newer hospital.
05:58So overall, at the group level,
06:00we do expect our EBITDA margins to be quite sustainable
06:03of around 26%.
06:05Understood.
06:06Mr. Tyagi, wanting to understand
06:08how top line really shapes up for you,
06:11because you're suggesting margins will largely be,
06:15will not go up in a significant fashion,
06:17but your top line will,
06:18given the kind of ramp up that you're doing.
06:21Just talk to us about that,
06:22because one, oncology will obviously contribute
06:25to top line and margin accretion as well overall,
06:29but how does top line shape up currently?
06:33Maybe FY26 in the near term,
06:36or maybe by FY30.
06:36What's the plan like?
06:38See, I think in last one year,
06:40quarter on quarter,
06:41we have delivered highest growth in the top line,
06:45year on year changes,
06:46as far as the complete whole hospital industry is concerned.
06:49We have shown the leading growth in that.
06:51This quarter itself, in quarter one,
06:54we grew around 37% year on year.
06:56So I think for next three to four years,
06:59we do expect growth of around 30% yearly.
07:03I think if you're able to do it,
07:04that should be compromising largely
07:07from the change in the case mix,
07:09leading to higher RPOP and again, occupancy ramp up.
07:12You know, at a group level,
07:13we do expect occupancy to reach around 75%
07:16in two and a half years time.
07:18This will be the driver for the top line is concerned.
07:21And again, in two, three years,
07:23when we reach optimized utilization of occupancy,
07:26we will still have new beds
07:28that are coming up after these years
07:30in our Brownfield expansion is concerned.
07:32So that's why we do expect this journey
07:34to continue for next, you know, four to five years easily.
07:36Understood.
07:37And how much of that will be RPOP?
07:40And how much of that will come from fresh,
07:43you know, capacity addition?
07:45I think it will be a fair mix of both.
07:48Yes, there is a huge room for RPOP is concerned,
07:51but as I mentioned,
07:53if you're yearly able to grow around 30%
07:57or around 10% of RPOP,
07:58I think that that'd be a fair judgment.
08:00And as far as, you know, overall growth is concerned,
08:03I think 30% should be there.
08:05So I think around 10% from RPOP
08:07and around 20% from occupancy
08:09should be a fair idea for the next few years.
08:12All right, Mr. Taghi,
08:13you know, your ratio from government business is coming down.
08:16And, you know, I want to understand
08:18that what are the kind of trends you're observing here
08:20by the end of FY25, where will the share be at?
08:23And this, I believe, improves your RPOP overall.
08:26So how does this impact the overall business then?
08:29We are definitely seeing more growth
08:31in our self-pay, that is the cash segment,
08:34as well as the private insurance is concerned.
08:36So automatically, once these two segments increases,
08:40the share of government business will come down,
08:42also including international patients here,
08:45which ultimately, you know, becomes part of the self-pay,
08:48because, you know, international business is increasing
08:51and is expected to increase in a group
08:53significantly over the course of few years,
08:56reason being because the opening
08:58of Asia's largest international airport,
09:00the J-Wear Airport, that is going to happen,
09:02you know, in greater order,
09:03which is just around 20, 25 minutes away
09:05from our greater-order hospital,
09:07should be contributing to a good number
09:09of international patient volumes.
09:10We're already, you know,
09:11catering to patients across the world.
09:13We are doing, you know, a lot of patients
09:15from CISF countries, from Gulf countries,
09:17as well as African countries.
09:19So international patient share increasing
09:21and private insurance penetration,
09:23as you know, increases with time.
09:26The government business is bound to reduce,
09:29and we're already seeing it in the existing quarter.
09:31So we feel that in three years' time,
09:34government business should be somewhere around 25%
09:37in our overall revenue pie
09:39of the payer mix is concerned for the whole company.
09:42All right, so international patient revenue
09:45right now is in single digits.
09:46So where do you expect this to go
09:48from a longer-term perspective,
09:49let's say by end of FY26?
09:52I think in two to three years' time,
09:53we are targeting around, you know,
09:56close to 15%, 10 to 15% of international business
09:59to be contributed.
10:00And this is, you know, key driver also
10:03because of certain new treatments that we have started.
10:05You know, earlier the treatments we were offering,
10:07not many international patients come for those treatments.
10:09International patients come for niche services
10:11like oncology, transplant program, you know,
10:14high-end cardiac and neurosurgery.
10:16So because we have started these treatments
10:19over the course of last few years,
10:20is now we are expected to see, you know,
10:23increase in international patients from these.
10:25And again, a lot of, you know,
10:27certain key and reputed doctors from NCR,
10:30you know, are now joining us.
10:33You know, so with them,
10:34they will also drive certain volumes
10:36of international patients
10:37because these doctors are a known name
10:39in international markets.
10:40So that's why we do expect around, you know,
10:4210 to 15% contribution of international business
10:45in few years' time.
10:46Mr. Taghi, any inorganic opportunity that you're eyeing on
10:50because for FY25, if you do a rough calculation,
10:54you will be with 200 to 250 crores
10:56of cashflow from operation that you'll be generating.
11:00Yeah, so I think this year
11:02and the plan for next few years also,
11:04each year we are eyeing one inorganic acquisition.
11:07So, you know, this remaining financial year,
11:11we're quite hopeful to close one more, you know, acquisition.
11:15We are in talks with a few hospitals in advanced stages.
11:18So, you know, we are looking in territories
11:21around Delhi NCR market, you know,
11:24big cities in UP as well as, you know,
11:26nearby capital cities of nearby states.
11:29So we do expect one more inorganic acquisition to be added
11:33as far as this remaining financial year is concerned.
11:36How large will that be?
11:41So I think, you know, that should be
11:44within this financial year's concern.
11:45But how large will it be, Mr. Taghi?
11:48Yeah, so I think the hospitals that we have identified
11:51are at least, you know, 250 bed above 300 to 400 bed.
11:55There's a hospital that we are eyeing,
11:56which is around 400 bed.
11:57It's available in the Delhi NCR territory.
12:00There's a hospital of around 300 beds that we are eyeing,
12:03which is in the capital city of a nearby state.
12:06So any expansion that we are doing in terms of inorganic,
12:09it has to be at least 250 bedded above.
12:11Ideally, 300 to 400 bed is what we are looking for.
12:14Understood.
12:15And Mr. Tyagi, you know,
12:16not sure if you had a chance to check up on this.
12:19We spoke with Yashish Dhaiya of PV Fintech,
12:23and they were suggesting a new venture,
12:27which they are investing in,
12:29which is likely to do hospitals and health care.
12:32And this is to reduce costs for hospitalizations,
12:37especially for insured patients.
12:39So a couple of questions here.
12:41One, do you believe that this will be a serious competition
12:44of sorts to the current hospital chains that we have?
12:48Secondly, do you believe that it will impact
12:52your overall sector as a whole and our pub in general?
12:59See, I think overall in India,
13:01hospital sector is growing at a very fast pace.
13:05So is the private insurance penetration.
13:07You know, there's still a lot of room for expansion of,
13:11you know, not just bed capacity is concerned,
13:13but even, you know,
13:14penetration of private insurance is concerned.
13:16Organization in India, in North India, you know,
13:19across India is happening at a very fast pace.
13:23And it's not that healthcare is not affordable in India.
13:26There are, you know, options available for, you know,
13:29patients across India.
13:30If they want to choose an affordable healthcare,
13:32if they want free treatment,
13:33they can go to government hospitals.
13:34If they want, you know,
13:36treatments that are being done on, you know,
13:37let's say robotic surgeries by surgeons who are, you know,
13:41experienced with world-class equipments,
13:44those treatments are also available
13:47under private insurances at a good rates.
13:51So I don't see that much of a challenge
13:54with this being there.
13:55And yes, I think, you know,
13:57regulating prices in healthcare is not a straight
13:59and simple thing to implement.
14:01It does require an overall holistic approach
14:04where it is not just the private hospitals
14:07and insurance prices that has to be looked into.
14:09You know, it comprises of a whole ecosystem,
14:12which comprises of pharma drugs, you know,
14:14diagnostic price,
14:15as well as costing of medical equipments.
14:17So any changes in the regime to cut costs
14:21or price cutting will have to be involved
14:24all these, you know, sectors.
14:26So I think, yes,
14:28I think the healthcare is massively growing
14:31and there is still affordable healthcare available
14:34for the patients of India.
14:36Got it.
14:37Well, Mr. Taggi, thank you so much
14:38for giving those answers so comprehensively.
14:40And thank you so much for taking our time
14:42and speaking with us at NDTV Profit.