Healthcare Global Enterprises Ltd
NSE:HCG
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Healthcare Global Enterprises Ltd
Earnings Call Analysis
Summary
Q2-2024
The company saw a 10% ARPOB growth, with matured centers achieving a 21.2% ROCE. Emerging centers reported a 29% revenue uptick but a negative ROCE of 3.9%. Significant revenue spikes were seen in Nagpur (60%), Kolkata (42%), Mumbai (41%), and Ranchi (48%) on a year-on-year basis. EBITDA increased by 14% year-over-year to 86.4 crores, while PAT reached 13.6 crores. Net debt stood at 310 crores excluding leases, with an anticipated aim to reach close to 20% EBITDA margin; the company is currently slightly below this target. The lease cost was close to about 75 crores, showcasing the company's continued investment in Mumbai and Kolkata's market expansion.
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Ladies and gentlemen, welcome to the Q2 and H1 FY '24 Earnings Conference Call of HealthCare Global Enterprises Limited.
This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements do not guarantee the future performance of the company, and it may involve risks and uncertainties that are difficult to predict.
[Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Dr. B.S. Ajaikumar, Executive Chairman of HealthCare Global Enterprises Limited. Thank you.
And over to you, sir.
Thank you very much. And good morning and a warm welcome to all present on this Q2, H1 FY '14 (sic) [ FY '24 ] earnings conference for HealthCare Global enterprise limited.
Today, I'm joined by Mr. Raj Gore, our Chief Executive Officer; and Ms. Ruby Ritolia, Chief Financial Officer. Ruby has been recently appointed as CFO. And she brings with herself an unparalleled experience in the field of finance and investor relations and will join us in our journey to take HCG to its desired goals.
Along with them, we also have a few numbers of our HCG senior management team. At this time, I would also like to thank our -- Srinivasa Raghavan, our former CFO, for his valuable services for the company and wish him luck for his future endeavors.
Since our inception, we've started with a single cancer hospital with an aim of providing world-class cancer care service to people for our country. Today, we proudly reflect on our substantial growth having expanded our presence across the country to become one of the largest providers of cancer services not only in the country but globally.
HCG has challenged the practice of relying on multi-specialty hospitals for cancer care. Achieving sustainable outcomes is feasible when patients receive optimal treatment delivered with top-notch talent, knowledge, technology and infrastructure at the right time. Whilst renowned cancer care institutes are those which specialize only in cancer care, and we are one such, for HCG, focusing on single specialty helps us to concentrate our expertise and our resources, our dedicated and deployed, in understanding, diagnosing and treating only cancer. This focused factory approach enables us to stay at the forefront of advancement in oncology, attracting top talent and also fostering talent and collaborative environment dedicated to tracking the complexities of cancer.
Clinical excellence is the hallmark of successful cancer institutions or any medical center, and we are such. Our commitment to excellence in cancer care has been unwavering, and we stand proud as a beacon of hope for patients and their families. In the -- in a landscape where the prevalence of cancer is ever increasing, our mission has been to provide not just treatment but a holistic approach to healing and adding life to years. Further, we aim to expand our footprint strategically, reaching underserved areas and ensuring that quality of cancer care is accessible to all. We will continue to invest in research and development, academics and pushing boundaries of medical science to discover new treatment and, of course, improve the quality of life to all our patients.
Lastly, our journey is not just about building hospitals, and it is about building a legacy of innovation. We are confident of making HCG an epitome of excellence in fight against cancer in India.
I now hand over the call to Mr. Raj Gore, our CEO of HCG, for his comments on the strategies going forward and operational performance for the quarter gone by. Thank you.
Raj?
Thank you, Dr. Ajai. A very warm welcome to all the participants on the call. Let me take this opportunity to wish all of you happiness, good health, prosperity on the occasion of Diwali, on behalf of HCG.
HCG has been consistently -- HCG has consistently led the way in the battle against cancer in India, constantly [ adapting ] the latest advancement in technology and treatment methods through ongoing research and development in the extensive realm of cancer care. We have effectively demonstrated our expertise in efficiently operating single-specialty hospitals nationwide, achieving superior outcomes and aligning our treatments with global standards.
Speaking of the quarter gone by, we are happy to report yet another quarter of strong performance. Our revenue for quarter 2 in FY '24 grew by 16%, with EBITDA excluding ESOP costs growing by 14% and PAT growing by 84% on year-on-year basis. Our performance is the [ combination of our brand strength in ] cancer care to generate higher footfall and operational excellence which has been delivered by our excellent team.
Speaking of our recent acquisitions. We have successfully consummated transactions at NCHRI in Nagpur and SRJ-CBCC hospital in Indore. Our strategy in Indore involved entering a non-metro city with a high-quality asset and integrating it under the HCG banner. It was a strategic move given the absence of major players in the region for cancer care and a growing market for cancer treatment. We are in the process of effectively integrating systems and processes across these hospitals with HCG, envisioning significant synergies in terms of management efficiency, treatment upgradation, procurement optimization and increased patient traffic bolstered by our local marketing initiative and the strong pan-India brand presence.
Our imaging centers that are the centers which opened after 2017 have been demonstrating strong performance and are progressing towards maturity. In particular, our revenues in Mumbai and Kolkata have shown impressive growth of 42% and 41%, respectively, year-on-year, resulting in faster expansion of our oncology market share compared to our peers. We are happy to announce that we have launched an additional dedicated women's cancer wing in our center in South Mumbai. Furthermore, we have been enhancing the infrastructure of our established hospitals by introducing significant upgrades.
In the most recent quarter, we operationalized 3 new LINAC machines. We have observed a rising demand for radiation therapy. And there exists a gap between this demand and the available supply of this treatment modality throughout India. In response to this, we have formulated a plan to install additional 6 LINAC machines in various hospitals over the next 18 months, aiming to bridge the gap between demand and supply. Further, all our LINACs which were under installation [ in Q1 ] have been operationalized in Q2, except for one which has been done in the month of October.
In addition to LINAC machines, we have also operationalized 3 robotic surgery machines at our hospitals in Baroda, Mumbai and Kolkata. This expansion is in direct response to the increasing demand for high-quality cancer care, ensuring that patients have access to the best possible treatment, ultimately leading to superior outcomes.
To conclude, I want to emphasize that our substantial infrastructure improvements, our innovative hub-and-spoke model for delivering accessible cancer care nationwide and our ongoing research endeavors aimed at advancing treatment options all contribute to our confidence in elevating the HCG brand to the level of top-tier global hospitals. We anticipate that these efforts will ultimately enhance company's financial performance in the years to come.
With this, I hand over to Ms. Ruby, our CFO, for financial highlights.
Thank you, Raj. Good morning, everyone. Firstly, I would like to thank HCG and the management team to add me to the HCG family. I am honored to be part of the cause of this esteemed organization to fight cancer and create [ a global ] standard of cancer care in India.
We have uploaded our quarter 2 and H1 FY '24 financial results and updated investor presentation on the stock exchange and company website, and I hope everybody had an opportunity to go through the same.
In reviewing our performance for the quarter, I am pleased to report a remarkable 16% year-on-year growth culminating in a top line figure of INR 487 crores. Our HCG centers contributed significantly, generating revenue totaling INR 469 crores. Milann achieved INR 18 crores, reflecting a 7% year-on-year growth.
Our operational metrics, crucial indicators of our performance, are showing positive trends across the broad. Chemo sessions witnessed a robust 8% year-on-year increase, reaching a total of 36,500 in the quarter. While our radiation services experienced healthy growth, the decline in capacity utilization from 67% to 61% is attributed towards proactive expansion efforts and incorporation of 3 new linear accelerators during the quarter. We have strategic plans in place to optimize our average utilization and a targeted ramp-up by the end of the financial year.
In-patient oncology and -- occupancy stood at 56% for the quarter, as compared to 61% for quarter 2 of the previous financial year, on account of expanding bed capacity by [indiscernible] and better bed turnaround resulting into lower average length of stay. Overall average occupancy rate for the quarter stood at [ 63.6% ], as compared to 66.4% in the previous quarter same -- previous quarter of the -- same quarter of the previous financial year.
ARPOB stood at INR 42,054, as compared to INR 36,914, registering a growth of 14% on a Y-o-Y basis.
Let me speak about our performance from matured and emerging centers. Matured centers continued the steady trajectory, growing healthily at 13% driven by healthy [ volume across ] modalities. ARPOB grew by 10% to reach at INR 43,460. And despite the addition of beds, the ARPOB -- the average occupancy rate increased by 14 bps to reach 65.1% for the quarter. Our annualized ROCE from matured centers stood at 21.2%. And ROCE pre corporate allocation was 25.5% for the quarter of financial year FY '24.
Coming to emerging centers, I'm pleased to announce a substantial 29% year-on-year growth in this segment. We are observing a consistent [ uptick ] in our emerging centers marked by increased footfall across various cancer treatment [ modalities ]. The average occupancy rate for emerging centers declined to 60.1%. However, this was resultant of [ use ] optimization, particularly at our [indiscernible] centers in North India. The optimization is also reflected in a 28% year-on-year growth in average revenue per occupied bed, indicating a positive trajectory of our operations. Annualized ROCE for emerging centers stood at minus 3.9%. And ROCE pre corporate allocations stands at 0.8% for the quarter of financial year, FY, '24.
In our investor presentation, we have detailed the revenue breakdown across various geographies. I would like to emphasize on some key highlights. Nagpur experienced a remarkable 60% increase in revenues. Kolkata saw a substantial growth of 42%. Mumbai exhibited a strong growth of 41%. Ranchi grew by 48% in quarter 2 of financial year, FY, '24 compared to the same period last year. These numbers underscore our robust performance and market presence in these regions.
On the EBITDA front. Our EBITDA excluding ESOP grew by 14% Y-o-Y and stood at 86.4 crores, as compared to 76 crores in the same quarter previous year.
PAT for this quarter, post Ind AS, stood at 13.6 crores, as compared to 7.4 crores in quarter 2 of financial year, FY, '23. Our PAT pre Ind AS, adjusted for the quarter, stood at [ 17.1 crores ], as compared to 10.5 crores, registering a growth of [ 63% ] Y-o-Y.
Our net debt for H1 of financial year, FY, '24 stood at [ 64 crores ]. Net debt excluding leases stood at 310 crores as at September 2023.
We have also given bifurcation of our EBITDA across matured and emerging centers and detailed numbers on the H1 financials in our uploaded investor deck for further details.
[ And last ], I would like to open the floor for further question-and-answers.
[Operator Instructions] The first question is from the line of Karan [ Vitan Chandra ] Surana from Monarch AIF.
Am I audible?
Yes, you're audible, sir.
Sir, first -- my first question will be can you, sir, provide specific details on the numbers of new beds and facility expansions which are projected to come and become operational FY '25?
Can you repeat -- yes. [indiscernible] can you just repeat the question?
Number of facility...
Could you provide specific details on the number of new beds and facility expansions that are projected to come and become operational in FY '25?
I mean I think of -- this is around 200 to 250 beds. However, we can connect off-line to get exact details.
[indiscernible]...
Okay, okay. And sir, my second question would be on our EBITDA margin expectations, right? So given our prior discussions and earnings calls, we have been anticipating achieving approximately 20% post-Ind AS EBITDA margins, right? However, in recent quarters, we feel that we're maybe undershooting the guidance a little bit, so sir, can you discuss the feasibility; and maybe the 200 to 300 bps, that gap that we've been seeing; what the feasibility of this reaching in the second half of FY '24? Especially like we would -- I'm assuming we will be expecting a 15% kind of EBITDA growth for '24, FY '24. So sir, any color or any light on that, when we can achieve that kind of an EBITDA margin? And why exactly are we undershooting that? What cost line items are you seeing impacting that number, sir?
Yes. This is -- yes. Regarding the EBITDA margin, as we have told in the last call also, we are moving upward. As you can see, there has been a substantial growth in the margin, compared to the first quarter, to this quarter. We expect the same trend to continue. And we feel, in the -- towards the end of the fourth quarter, beginning of the first quarter of next year, we'll be close to 20% margin, okay? And you have another question, I think, on the [indiscernible]. Can you -- no. Can you -- was there another question?
Sir, just my last question [indiscernible] is that -- what would be our EBITDA pre Ind AS for first half of FY '24? And could you provide the lease cost figures from the same period?
Our annual lease cost is close to about 75 crore, so that's just right about 3% to 4%, I guess, 4%, 4.5%.
4% of revenue, sir, 3.5%, 4% of revenue...
Yes.
[indiscernible]...
[indiscernible] -- yes, about 3.5% to 4% [ or 3.5% ].
[Operator Instructions] The next question is from the line of Dhara Patwa from SMIFS Limited.
Congratulations, sir, for the good set of numbers. Sir, in the last call, you highlighted that we hired some senior onco surgeons at the Mumbai unit, so what's the progress over there in terms of revenue? And the high growth which we are seeing in Maharashtra: So is it because of Mumbai and Nagpur, or is there anything more to go? That's my first question.
Yes. So thank you for that question. You're right. We had -- we've always said that we want to invest in our clinical talent as well as our go-to-market efforts in markets like Mumbai and Kolkata. You can see the results of this quarter. Mumbai has delivered 41% year-on-year growth in revenue. Kolkata also has delivered 42%. Nagpur, in fact, has delivered 60% year-on-year growth. That was our rationale behind the acquisition that we made last quarter. I think we will, you will continue to see the upward trend. In my comment, I also mentioned that we are gaining market share in Mumbai faster than most of our peers [indiscernible] continue. We will continue to add additional capabilities. In all the hospitals, we have added one additional linear accelerator because our prior linear accelerators was fully utilized. As that ramps up, again, it not only gives us revenue but improved margins. We've also operationalized a robotic program, our first robotic program, in [indiscernible]. And in Colaba, South Mumbai center, we have launched a dedicated women's cancer care center to meet the exclusive needs of our women cancer patients. So we're very confident and very optimistic of our growth in Mumbai market.
Yes. And one question was a general question. Since oncology as a market is growing -- so I guess everybody now is investing on the equipment for robotic surgery and radiation therapy. Like whenever we see any calls, they all are investing in it. Sir, do you think that could affect HCG going forward? I understand that we are a total cancer care hospital. And there are more of immunologists, people who could understand immunotherapy. Those kind of surgeons are present and we have that, so will that be so that going ahead we'll have edge over immunotherapies and other -- but we want to have edge in the radiation or robotic surgery because everybody is investing, so the volumes might get spread across these hospitals.
Yes. I feel that, with the growing -- as we know, with the population dynamics of India, as people become aged, also number of cancer patients is increasing. We believe the number of centers which are there compared to the population growth is still not in parity. Having said that, we being a dedicated oncology center, what we have shown in the last 15 years is that our growth will be far more than a multi specialty putting up a linear accelerator or a robotic because the -- usually the patients who go to multi specialty -- let us say they go with an abdominal pain. They get -- they are diagnosed with cancer [indiscernible], but for a dedicated -- this is a globally proven fact, what I am saying, but if you have a dedicated cancer center, the -- all the -- from other hospitals, multi-specialty hospitals, referrals from doctors come to the dedicated cancer center. Normally they don't go to the multi-specialty center. So we believe, because we are in -- not only in metro cities but also in Tier 1 and Tier 2 cities, we don't have a really credible competitor for us in these areas. Regarding the linear accelerators, that is our greatest strength. As Raj Gore said, we are installing more units because we are running in majority of places capacity utilization. This kind of capacity utilization, if you look at it, are rarely seen in a multi-specialty hospital. Other thing is we are one of the pioneers now going into the Tier 1, Tier 2 cities with robotic, so that also, as we go forward, will put us in a very leadership position.
So I feel, honestly, people can follow us. We are not followers, and we are in such a leading position. Our growth, as we have indicated, we'll sustain and grow. And as our new centers also grow, we will continue to be in a dominant position in oncology. And more importantly, it is not just equipment. It is also clinical excellence which is important. We have 400 oncologists under HCG, and nobody can really talk about it like that. And in our own Bangalore center, we have 100 oncologists with -- dedicated for organs specific. We are also big in research, genomics, so it is, like somebody told me, one of the -- in one of the hospitals, "To do something like HCG, for us, it will take, minimum, several decades." So in the past, it did not happen. In the future, with our focused factory approach, I think we are very confident we'll continue to grow and provide this kind of excellence in quality care to our patients. And recently there was a major conference in Mumbai. There we, HCG, was a major contributor participating in various meetings, keynote address and research activities. So we are now certainly a dominant force in this field.
Just last book-keeping question. Sir, what will be the effective tax rate for FY '24 for us?
We've -- so in the current quarter, we have it at around 50%, but for the full year, we will be somewhere between 40% to 50%.
[Operator Instructions] The next question is from the line of [ Ravi Shah from Opal Securities ].
Sir, am I audible?
Yes, sir, you are audible.
Yes. So I have 2 questions. First would be how have our emerging centers been performing? And are the Mumbai and Kolkata centers at EBITDA break-even levels? And when can they achieve the overall company-level EBITDA margins?
And so as I mentioned earlier, we've seen very fantastic response to our efforts in driving revenue growth. Mumbai has delivered 41% year-on-year growth. Kolkata has delivered 42% year-on-year growth. We have done further seeding by adding technology, capabilities, people and talent in these 2 markets. Our international business is also ramping up in these 2 markets. Just to give an idea: Our -- this last quarter was our highest in international business, but we are actually [ merely ] doubling our pre-COVID quarterly rate in our international business. South Mumbai is an excellent facility with excellent technology, excellent clinical talent trained in U.K. and in U.S. We are seeding -- we are opening information centers in Middle East, in Bangladesh, in Africa, so we feel that those 2 cities will continue to benefit from our international business going forward. If you look at overall emerging centers, the growth has been in mid-20s -- nearly mid-20s year-on-year. The profitability has improved. And you will see, I think, we'll continue this positive trajectory going forward.
Okay, sir. My next question will be can you give some color on the acquisitions that we recently did in Indore and Nagpur? How well are they doing? And what are our strategies for those assets that we have taken?
So Indore. As we mentioned in our announcement, it's a 50-bedded comprehensive cancer care center. Purely -- this is the only private comprehensive -- or this is the first private comprehensive cancer care center in the market. I think -- we concluded the transaction in the beginning of October. Currently we are focusing on upgrading our clinical capabilities talent-wise as well as technology-wise. We are -- we have a value creation plan across improving revenue to optimizing cost through integration of plugging it in -- on our HCG capabilities, network capabilities. It's early days, but we are seeing good response from our clinicians, our employees as well as market. As we ramp up our brand marketing efforts, we will see growth in this market, in that market. What else he asked -- yes.
[indiscernible].
[Operator Instructions] Next question is from the line of Ankeet Pandya from InCred Asset Management.
Sir, we have 2 questions regarding the Indore hospital. Sir, can you give us some ballpark number on how -- or what is the margin profile of the hospital? And also you have mentioned that there's space to further increase the capacity by 100 beds, so what will be the CapEx regarding these 100 beds? And by when do you think you will be investing on the -- for the 100 beds?
Yes. So thank you for that question. As you can see from our investor presentation, Indore hospital, there's about 30 crores annual revenue. The margin profile is in mid-teens. We see a lot of opportunity to improve that margin as we integrate that with HCG's network. It is a 50-bedded hospital. We have a plan to add 50 more beds. The CapEx for those will be about 40 crores to 50 crores. And it will come in next 2.5, 3 years. It will get completed in next 2 to 3 years. And that will position us, in the future, to scale up in those markets.
The next question is from the line of [ Viraj Shah from Shah Investments ].
Sir, I have 2 questions. Are we looking out for any other inorganic opportunities? And if yes, then what would be our ideal size of the asset in terms of bed and location? And any new geographies?
Yes. We are -- as you know, [ Mr. Shah ], we have now gone into Madhya Pradesh for the first time. And [indiscernible] being there, we will now consolidate. As we have said in the past, we are definitely looking for strategic locations primarily across the country. And we believe, if we see some opportunities, certainly we'll work and make the information known. We are -- at this point, we are not doing I any greenfield, except our Bangalore, which is an extension of our Bangalore center with Whitefield. Otherwise, we want to look at any M&A activities [ and future ]. Primarily, we like to work with a maybe established oncology, like what we did with CBCC. On those models, we will try to see whether there is an opportunity for us to grow in several regions of the country. As it is now, we have merely 24 oncology centers. And obviously India is a big-enough country for future growth, but we have to consolidate. And then we'll look at -- over the situation and see where -- which is an applicable [ M&A ] activities we can do.
Okay, great, sir. And second is what are we doing to increase our footfall and patient count in our new centers? We understand that HCG has a strong brand strength in the core regions, but what about outside the core regions? How do we generate more footfalls?
So our emerging centers, we have shown 29% year-on-year growth, and we expect it to continue going forward. And I already -- in my previous questions, I explained that in Mumbai and Kolkata, which are our metro markets where there is established competition -- in spite of that, our revenue growth has been more than 40%. And we are rapidly gaining market share in those markets, which shows the strength of HCG brand even in the new markets that we have entered.
[Operator Instructions] The next question is from the line of Karan [ Vitan Chandra ] Surana from Monarch AIF.
Sir, can you also disclose the absolute EBITDA figures for the Indore and Nagpur centers' individual entities that we just acquired? And what margins are we operating at, sir? If you can just give some color [ or some percentages ].
Nagpur, actually, we consolidated [ business ]. So as I mentioned earlier, Nagpur, we'll see a full impact for a quarter for about 2 crores gain, 2.1 crores gain, out of that transaction, going forward in EBITDA. Indore, as I mentioned, it's about a 30 crores top line asset, with about -- EBITDA in mid-teens.
So anything between 14%, 15%, sir, that will be a reasonable assumption.
Sorry...
Anything between 14% to 15%, sir, that will be a reasonable assumption, EBITDA margin, sir.
The EBITDA margin will be in the range of 17% to 18% at Indore. And just to mention [indiscernible] -- sorry. 2 crore impact for the quarter 2. We had only partial impact in quarter 2, so the full impact will come from quarter 3 onwards.
Okay, sir. So basically we are expecting Q3, Q4 EBITDA consolidated much better than Q1, Q2. Is my assumption okay, sir?
So yes. Q4 is definitely better, much better.
The next question is from the line of [ Jiya Shah from Wealth Securities ].
Sir, my question is what are our views on the Milann center. Are we going to divest it, and what are the plans for it? Do we not see any substantial performance happening in that business?
For Milann center. As we have said before, post COVID, we went through a very tough time; and we are now working on it to bring some improvement. And we are -- as you can see, we are on the right path. It is coming up the ladder. And we are looking at it, in the future, for divesting, but we cannot give any firm time line for it. But certainly we want to see how it can grow. And we have worked very hard to consolidate with the doctors to improve the outcome. We are now focusing on quality outcome with the existing centers. We have also decided to close down a center to bring about efficiency in other [ Delhi ] centers, so all of this will only improve our EBITDA and our margins and also the quality of care. So we will, of course, inform when we make a firm decision about the future of Milann.
Okay, okay. I have another question. So our growth for the matured and emerging centers have been good, but the same has not reflected in our margin flow. When can we start seeing the operating leverage playing out?
[indiscernible] -- sorry. Can you repeat your question?
Yes, sure. So what I will ask you is that our growth for the matured and emerging centers have been good, but the same has not reflected in our margin flow, so when can we start seeing the operating leverage playing out?
So [indiscernible] [ let's go to the ] slide, where our emerging centers revenues has grown by 13%. And margin has -- sorry. EBITDA has grown only by 7%. We had done -- there's some operational efficiency exercise in last financial year which -- wherein we did some rejig in terms of centralization and decentralization. That has resulted into reduction of our corporate costs. While it is not visible at the unit levels, we have -- our overall corporate cost has gone down. And that's why you will see that, at overall level, our margin impacts are not much. Having said that, as we have been growing our revenues on a quarter-on-quarter basis, as Dr. Ajai mentioned, that we should be looking at close to 20% margin by quarter 4 end or at the beginning of next financial year...
I think, just to add to what [indiscernible] said, as you know, our matured centers EBITDA margins are over 20%. In fact, our center of excellence is in the high 20s. So what is happening is, the centers which are new, once they break even, automatically it will pull up the overall margin of the entire group. And beyond breakeven, we expect that to reach higher, in the maybe 11% to 15%. Once it reaches that, at the group level, we will reach over 20%. And that is what we are predicting will happen either in the last part of the last quarter or beginning of the first quarter of next year.
Okay, all right. I have one last question. So there are certain rumors about CDC exit. Can you throw some light on this? Like what are their plans? And what is happening [ over there ]?
I was wondering when somebody will ask that question. I just want to say that, as a shareholder, they have every right to come in. And if they feel they have -- got their returns, they will look at exit. Best persons to answer that will be CDC. For us, really it is a nonissue. They have been a good partner. We have worked with them very well. They came at a very difficult time, and as you can see, we have grown very well with partnering with them. And we will -- and I would not like to say any further comment in this, no.
[Operator Instructions] The next question is from the line of Karan [ Vitan Chandra ] Surana from Monarch AIF.
Sir, one more question I had was on the 2Q debt that we have right now. We have a net debt of around 310 crores as of September '23, so sir, have we -- do we have any plans of maybe deleveraging [ it ] or maybe -- [ our debt ]? Or maybe that will continue rising up when we look for inorganic kind of opportunities. So that's question number one. And sir, on the -- question number two I had was on the emerging centers. I've seen that a lot of our emerging centers have been operational for 4 to 5 years, right? So I'm just getting some sense that -- when can they be classified as mature center? Because I'm assuming that 4 to 5 years is a good time period for any centers to kind of mature and become -- get into like high-teens kind of EBITDA margins, et cetera. So if you can just call out, sir, what would be our new centers? And of -- number of new centers and the year of operational -- they've been operational. So that will give me help, sir. That's it from my side.
So Karan, to answer your first question, on leverage. Today, our net debt of 310 crores results into a negative EBITDA of sub 1x, which is less than 1x. And I think, I mean, we have a lot of headroom there. And whatever -- because we are sort of able to internally generate and fund our maintenance CapEx. Any growth CapEx or any inorganic expansion could lead to increase in the net debt, for which we feel there is a lot of headroom available with us. So this is as far as the net debt condition is concerned and how it can go pan out in the future. As far as -- [indiscernible]?
[indiscernible] emerging...
Yes, no. So you also sort of touched upon the question on the vintage of the hospitals, the way we look at for our emerging centers. What we have been doing, so far, is that we have been consistently categorizing certain sets of centers post 2017 so that the profile, EBITDA profile, of those centers can be reflected appropriately and people can compare its progress on quarter-on-quarter basis. While you are right that we should be -- these are not new centers per se. We have classified them as emerging centers. The latest additions in our portfolio have been at Kolkata and South Mumbai centers, which is right now over 3 years old.
Thank you so much. As there are no further questions, I would now like to hand the conference over to the management for closing comments.
All right, once again, thank you, everyone, for joining, having an active discussion. I want to thank you for your continued interest in HCG.
We are confident as a management that we have the right differentiated specialized cancer care product for India. We have been a leader and pioneer, and we will continue to grow our market share in all our markets. The future is definitely brighter.
Once again, thank you. And I wish you a happy Diwali. Have a good festival season.
Thank you. On behalf of HealthCare Global Enterprises Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.