Healthcare Global Enterprises Ltd
NSE:HCG
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Healthcare Global Enterprises Ltd
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Ladies and gentlemen, good day, and welcome to the Q4 and FY '22 Earnings Conference Call of HealthCare Global Enterprises Limited. [Operator Instructions]. I now hand the conference over to Mr. [ Ravi Udeshi ] from EY. Thank you, and over to you, sir.
Thank you, [ Faizan ]. Good evening to all the participants of HealthCare Global Enterprises Q4 and FY '22 Earnings Conference Call. Today, we have with us Dr. B.S. Ajai Kumar, Executive Chairman; Mr. Raj Gore, CEO; and Mr. Srinivasa Raghavan, Chief Financial Officer of HealthCare Global Enterprises Limited, along with the top management members, to share the highlights of the business and the financials.
Please note that we have uploaded the earnings presentation to the stock exchanges and have also shared the same through our mailers. In case any one of you has not received it, please do reach out to us, and we will be happy to send over the presentation to you. As usual, the standard safe harbor clause applies. And without delay, I now hand over the floor to Dr. Ajai Kumar for his opening remarks.
Thank you very much, Ravi, and welcome to this investors call and good evening to everyone. HCG has carved a niche as cancer care destination of choice across all key areas of clinical, research and academic excellence. Our phenomenal growth over the years bares testimony to the fact that cancer can be considered just like any other chronic disease. However, it is the only chronic disease which is curable.
This year, we have added over 40 oncologists to our growing team, which takes our doctors' strength to over 450, which is largest in the country in the field of oncology. We continue to employ the latest and most advanced techniques of cancer diagnosis and treatment, enabling us to serve a greater number of patients with the objective of quality outcome.
In a landmark development, we introduced Microsoft HoloLens, the next-gen holographic headset, heralding a new era of virtual reality at our enterprise. Through a pioneering industry initiative, we have brought health care training and medical education to Metaverse by publishing over 200 hours of virtual reality content across multiple subspecialties.
Patients are our most important stakeholders. To serve them more effectively, we have invested in a robust digital platform, employing cutting-edge technologies for end-to-end patient engagement. The crux of our high quality of care across the length and breadth of the country is to ensure the right treatment the very first time for our cancer patients.
Going forward, we believe our robust cancer care ecosystem will continue to deliver impressive returns. Cancer therapies are undergoing a defining change over 75 days through innovation and research. Thanks to our enhancement of knowledge and innovations, we are able to relentlessly manage cancer care in a progressive way. Backed by our research labs and clinical trials, we are uniquely positioned to enhance our diagnostic capabilities and offerings, as also redefined precision medicine with the end-to-end expertise spanning bioinformatics, genomics and research. This will enable us to deliver tangible patient outcome with greater precision over a long term.
Academics and research go hand-in-hand with patient care, and our capabilities in this regard makes us a benchmark in cancer care treatment. We are happy to share that our Center of Excellence in Bangalore has been ranked #1 in the country by Outlook.
I now turn the floor over to Mr. Raj Gore, our CEO, for his remarks.
Thank you, Dr. Ajai, for your continued guidance and support to everyone at HCG. I extend warm welcome to all the attendees. And it's great to have this dialogue with you again. We are happy to share that we ended the last financial year, FY '22, as a great resilient organization on the back of our strong financial and operational performance.
We've also strengthened our senior leadership team during that last financial year by hiring the requisite expertise, which makes us future-ready to effectively implement our strategy going forward. We have embarked this current financial year with a greater ambition, and we firmly believe that the collective effort of our team will enable us to achieve our stated purpose of solidifying our leadership position in oncology.
Furthermore, we are happy to share that we have delivered another quarter of sustained performance. This is our fifth consecutive quarter with all-time record revenue and third consecutive quarter with all-time record EBITDA. Our new centers also recorded the third consecutive quarter of positive EBITDA.
HCG team's execution focus and hard work were instrumental in achieving these accomplishments, and we remain committed to continue driving growth with the execution rigor in future. As stated in our last quarterly call, we are continuing with our journey on digital transformation and operational transformation project, with the objective to enhance patient engagement and experience. We are happy to share that the company has started realizing its initial benefit, and we expect that we will realize the full potential in near future.
With that, I would like now our CFO, Srini, to go over the important financial highlights for the quarter and year gone by.
Thank you very much, Raj. Good evening to all of you. The highlights for the quarter ended 31st March '22. Consolidated revenue was INR 3,646 million, up 22.3% from INR 2,981 million in the previous year's equivalent quarter. International business revenue is steadily growing on a quarter-on-quarter basis and is returning to pre-COVID levels. Hence, it has a substantial potential going forward.
Consolidated EBITDA was INR 661 million, up from INR 438 million in the same quarter of the previous year, a Y-o-Y increase of 51.2%. Consolidated operational EBITDA was [indiscernible] million, up from INR 394 million in the same quarter of last year, a Y-o-Y increase of 60.4%. The existing center's operating EBITDA was INR 610 million, up from INR 440 million in Q4 FY '21. That is 39% increase Y-o-Y, resulting in 22% operating EBITDA margin. This has been achieved by [ vigilant ] control in operating expenses, resulting in consolidated operating margin being at 17.3%, an expansion of 410 basis points from 13.2% of the year earlier.
The operating profit for new centers was INR 21 million compared to a loss of INR 46 million in the corresponding quarter of the previous year. Reported PAT was a profit of INR 60 million compared to a loss of INR 1,022 million in Q4 FY '21. Pro forma operating EBITDA was INR 676 million compared to INR 394 million in the corresponding quarter of the previous year. Pro forma PAT was INR 67 million as compared to a loss of INR 155 million in the corresponding quarter of the previous year.
I'd now like to give a context to the set pro forma PAT in Q4 FY '22. There was an impact of a onetime project fee of INR 25 million plus support on value-creation plans, ESOP scheme expense of INR 19 million, and DTA recognized on tax expenses through the year, on account of discontinuation of Kochi project, INR 25 million.
I now request your attention to Slide 32. FY '22 revenue grew by 37.9% Y-o-Y. HCG centers grew by 37.8% and Milann centers by 39.8%. FY '22 operating EBITDA of existing centers was INR 2,308 million, 21.5% margin versus 17.4% margin in FY '21. New centers witnessed an EBITDA INR 72 million versus a loss of INR 157 million in FY '21.
I now refer to your attention to Slide 33. The revenue mix for our business is 96% contribution by HCG centers and 4% by Milann centers. Within HCG centers, Karnataka's contribution to the revenue is 36%, followed by Western India, comprising of Gujarat at 26% and Maharashtra at 17%.
I would now like to draw your attention to Slide 34 of the presentation. Strong growth in revenue continues across centers in fourth quarter of FY '22. Jaipur delivered 220.7% Y-o-Y growth; South Mumbai delivered 89.2% Y-o-Y growth; Nagpur delivered 49.3% Y-o-Y growth; Ranchi, 41.4% Y-o-Y; and HMS, 38% Y-o-Y.
Revenues from new centers was INR 826 million in quarter 4 of year '22 versus INR 535 million in quarter 4 in FY '21, which is a growth of 54.3% Y-o-Y. The existing centers recorded a healthy revenue growth of 15.6% in quarter 4 of FY '22 on a Y-o-Y basis.
Moving on to Slide 35. Increase in average occupancy rate in quarter 4 FY '22, Y-o-Y basis of 59.9% versus 54.1% at a consolidated level. For existing centers, occupancy rate was 59.1% versus 55.5% corresponding quarter of last year. Increase in existing centers ARPOB in quarter 4 FY '22 was INR 39,725 versus INR 35,545, which is a 11.8% Y-o-Y growth.
Looking at [indiscernible] on Slide 36. In Karnataka region, our Center of Excellence performance in Q4 is revenue growth of 39.6% Y-o-Y. Center of Excellence ARPOB was INR 56,800 versus INR 48,800 in the corresponding quarter last year and 25.8% operating EBITDA margin.
With respect to Gujarat region, we had a strong revenue growth in Q4 FY '22 on a Y-o-Y basis, with oncology revenue growing by 33.2% and the multi-specialty revenue increased by 28%. As stated in previous calls, multi-specialty has resumed its growth trajectory.
With respect to Maharashtra region, new centers grew by 79.3% Y-o-Y. South Mumbai BAU revenue continues to grow. For East India, existing centers' revenue grew by 34.1% Y-o-Y.
In Andhra Pradesh, we have witnessed a strong revenue growth across the region. Vizag and Vijayawada delivered a growth of 45.2% and 26.9% Y-o-Y, respectively.
Coming to Slide 37, covering key highlights of Milann facility business. Milann demonstrated good recovery in Q4 FY '22 across all metrics. New centers revenue grew by 45.3% Y-o-Y. There was a big improvement in digital traction as a result of continued efforts on our digital campaign and the focus on strengthening clinical talent across Milann. Milann is looking to consolidate and focus on market leadership in Bangalore and scaling up North Indian business in near term for Milann going forward.
Coming to Slide 38. With respect to the CapEx table, we have implemented judicial control measures with respect to both routine and growth CapEx, with most of our expansion completed. Total CapEx for FY '22 was INR 704 million. With respect to the net debt, as of March 31, total debt was INR 1,901 million, which is a reduction compared to the previous quarter of INR 2,025 million.
I would now like to hand over the call back to Ravi, please.
Thank you. We'll now start the Q&A session.
[Operator Instructions]. The first question is from the line of Kaustubh Pawaskar from Sharekhan by BNP Paribas.
Congrats for good set of numbers. So my question is on our operating EBITDA margin. So this year, we have crossed almost 17%. I think it was in line with what we were aspiring for...
Sorry to interrupt you. The audio is breaking from your line, sir. Please check.
Now [indiscernible]. Hello?
Yes. Please go ahead. Please go ahead, sir.
Yes. So I have a question on the EBITDA margin. So we have reached operating EBITDA margin of more than 17% in FY '22. And I guess that was in line with what we were aspiring for. So in coming -- considering the fact that now even the new centers are approaching consistent EBITDA for past [ 2, 3 ] quarters and our occupancies and [ ARPOB ] were also increased. So going ahead, how do you see this EBITDA margin inching up [indiscernible]?
EBITDA margin?
EBITDA margin, going forward. Yes. Yes. Yes, we have recorded a good EBITDA margin of about 17.5% in the current year. And we expect to kind of maintain this kind of a margin and likely to improve in the coming quarters as well. It will be driven by various factors. One is, of course, the growth in revenue, the mix of revenue. And of course, the trajectory of the new centers, growing in the right direction, that will help us to improve the overall EBITDA margin.
Right, sir. Second question is on Milann. So this call -- this year, the registration grew by around 29%. Now the scare of COVID has almost receded. So that means...
Sorry to interrupt you Mr. Pawaskar, the audio is now breaking from your line, please check.
Yes, just a second.
Maybe he can re-login, and then we can ask the next participant.
He is asking about COVID.
Is it better now?
Yes.
It's better now, yes.
So my question is on Milann. Second question is on Milann. So this year, we have clocked around 28% growth in registration. Now scare of COVID is almost receding. So correct me if I'm wrong. So considering that, should we expect this registration number to go up in FY '23 and FY '24?
Yes. Certainly, we expect the numbers to go. And after the downturn in COVID, we've recovered. We really look at a very healthy growth going forward.
Okay. And on capacity expansion -- sorry, on CapEx, beyond our expansion in Milann, anything specific you would like to highlight for FY '23, '24?
No, we are -- as we said, we are in a consolidation phase this year. We are not going to look at any other expansion, particularly any greenfield or anything. So at this point, our Board has taken a decision to primarily look at consolidation. But strategically, we may do something, and as and when we do, certainly, we will report it.
Right, sir. So our depreciation should remain at current level, whatever the quarterly, we are achieving at around INR 41 crores kind of a depreciation. So it should remain into that range, right?
It should be in similar levels in the current year.
The next question is from the line of [ Vikas Mistry ] from Moonshot Ventures.
Congratulations, sir, on the good set of numbers. I have a couple of questions, specifically on registrations. As we are trying to expand into Tier 2, Tier 3 towns, so what will be the strategy to drive registrations and making affordable cancer care to every patient?
Yes. We are actually now HCG is possibly the one of the groups, only 1 maybe, which has penetrated through Tier 2, Tier 3 cities, not just putting a linear accelerator or all, that's a comprehensive cancer centers. And we are -- certainly, once the consolidation phase is over because with 22 -- 21 oncology centers, we have taken a decision to consolidate. We will be certainly looking in future at more centers in Tier 2, Tier 3 cities. It could be either in form -- mostly in the form of maybe acquisitions or so as the time comes. But at this point, I want to reiterate that we are looking at more consolidation, bringing them to maximum capacity utilization.
And at that point, because we are now going through, as we explained through digital and through transformation and sales, we are looking at increasing the capacity of each center. And that is where we are focused on. That is where -- with Raj Gore focusing on existing. So we will certainly look at where we should go in terms of Tier 2, Tier 3 cities once the consolidation phase is over.
Okay. So my next question is on the digital initiatives that you described in opening remarks. So as we try to expand into Tier 2, Tier 3 cities, then how will operating [indiscernible] will play out by using the different initiatives and intensity of CapEx for the new centers or maybe small expansion? How the payback period will reduce and how it really perform, what's your opinion on that?
So look, the digital initiative is aimed at 2, 3 things. One is create HCG's brand awareness online digitally, create leads and therefore, drive footfalls. As that happens, the revenue will keep growing. We feel we'll get a bump in our revenue growth. And as that happens, all financial ratios will automatically improve.
The next question is from the line of Anurag Jain from Green Lantern Capital.
Am I audible?
Yes. Please go ahead.
I had a couple of questions. One was just a follow-up on the previous question itself. So by when do you think these digital initiatives should start delivering results for us?
Yes. So it has already started. Last few months, we are seeing increase in our traffic on our website, leads that we are getting, the conversion that is happening. I think the journey has started. I think with each month, we'll keep improving it. And we look forward to reporting you specific numbers in the coming future.
Great. Great. The other thing was on international patients. You did mention that they've normalized to pre-COVID levels. Can you share what percentage are they now? How -- at what rate are they growing? And how much more do they contribute to profitability versus normal patients?
Yes. So the -- it's a good question. International, we feel, is a very good opportunity for HCG because we have a clearly differentiated product for that market. Unfortunately, through the year, as soon as we started showing progress, the COVID wave 2 came, then it dipped again for obvious reasons. Then again, we picked up then in January. I think December -- November, December, we reached to pre-COVID level on a monthly basis. Then again, January, February, we had an impact. March, we ended up at a higher level than pre-COVID level at about 4% of our top line. And we are very encouraged with it, and we're hoping that we'll continue to grow that percentage in the coming year.
Understood. Because I think full-fledged flights were started only sometime in March. So...
Yes. First week of April.
So these numbers [indiscernible] improve, right?
You made a very important point. I think the sky opened all out in first week of April. And in spite of that, the March was, for us, the highest-ever month above the pre-COVID levels. So we are really encouraged with how resilient our capability is to pulling patients from all corners due to our differentiated product and outcomes. And this is something that we're really looking forward to in the coming year.
Got that. And in terms of profitability, they would be adding a couple of percentage points more than that, right?
Yes. So it will be. It is -- logically, it's a higher-margin business. And as that share of revenue goes up, it will reflect in higher margins.
Got that. Got that. Just last question from my side, and this is on the occupancy of onco hospitals, in general. So I mean, compared to a multi-specialty, there is a gap as to how much onco hospital can get occupancy at the peak levels. In your sense, how much, for example, Bangalore Center of Excellence, what's the peak of occupancy that we can reach? And at that level, what is the kind of margin which is possible?
Yes. So as you know, our verticals of oncology, diagnostics, medical, radiation and surgical, only the surgical vertical requires overnight occupancy in most cases. And that also -- the length of stay is coming down as we are using more and more minimally invasive and robotic techniques. In spite of that, you've seen a very big jump in the current year in our occupancy because our volumes are growing. And I think going forward, we'll -- I don't see it as a constraint in our growth in near future in next couple of years. And I think that's probably the upside that we don't need to worry about capital spend on expansion or addition of capacity.
Got that. Got that. So essentially, occupancy may not be like a very high number, 70% or so, but will still reach a margin which would be comparable to the multi-specialty...
Absolutely. Absolutely.
The next question is from the line of Ankit Agrawal from Yellowstone Equity.
My first question is on the Ahmedabad center. Are we doing any kind of renovation or expansion there?
Yes. In Ahmedabad center as it has been there for last -- almost over 10, 11 years. And we have reached the capacity there. And because of the type of subsidy, we know their strong surgical group as well as medical oncologists and radiation. We are now -- we actually announced this a few quarters ago also that we are now building a Phase 2. A new dedicated cancer center work has started. And some of the -- with that work, we expect major part of our oncology will be done there. And as we know, the Ahmedabad center is very surgical oncology-focused with [ Astha ] Group with 16 surgeons there. So with this, we expect this new center to take place around 2024. And work is done. And yes, we are doing that at this point.
Okay. Just a follow-up to that. What is the kind of CapEx involved? And are we doing in the same partnership like the one we have, like, with [ Astha ].
Yes. Certainly, we are doing with the same partnership. And some of the CapEx, obviously, what we have will be used there. And there is an additional CapEx, which is involved.
The next question is from the line of Praful from BPS Group.
The first question is on Slide 36 I'm referring to. So for East India, I see that the overall regional growth is around 33.9% compared to 34.1%, [indiscernible] existing center? So I'm interpreting it by saying that maybe the new centers in Kolkata had de-grown this year. Is that a fair statement? And yes, then what are -- are there any challenges we are facing on the new center?
Yes. Can you please repeat your question? We're not able to hear it clearly.
I think on Kolkata we didn't hear.
Okay. So the question is on East India. I'm looking at the Slide 36. For East India region, I'm looking at the growth for the region compared to the growth for the existing centers. So the existing centers have grown slightly more than the region itself. So 34.1% compared to 33.9% for the region.
Yes. Look, Kolkata center has also grown in a similar line. It's slightly lower than our existing centers, but Kolkata center has also grown over 33%.
Yes. Correct. So my question is like in terms of margins, so because the new center, I'm assuming that's the reason the margin for East India is pretty less compared to other regions. So is it that going forward, the margins for East India also improved more in line like Maharashtra region?
Yes. So Praful, as you know, Kolkata is our newest center. We just opened it prior to COVID pandemic. So it's still -- we're still working on turning it around in terms of breakeven. As that happens, this region will also start showing higher EBITDA margin going forward.
Other question is just to understand the -- again, I'm looking at the same Slide, by region. So the average revenue per operating price, like -- so like for Gujarat, Karnataka, it's very high. I suppose it's more matured compared to like Maharashtra and other regions. But once these existing centers also mature, then by region also, do we see that the ARPOB are pretty much similar? Or are there still a [indiscernible] where maybe Karnataka will always have a higher ARPOB compared to East India center?
Yes. So it's a factor of a couple of things. One is Bangalore and Ahmedabad are our mature centers and Centers of Excellences. So they are -- they have a higher cash business. They do more complex, high-end, high realization treatment. Bangalore gets more international patients. So because of that mix, their ARPOB is higher. Now going forward, we feel that Mumbai and Kolkata both fit that profile, and we expect them to move in on a similar lines as Bangalore as well as Ahmedabad. They both are bigger cities. Affordability is better. Our payer mix can be better. Their ability to attract international patients due to their connectivity across the world is better. Therefore, we expect those 2 cities and therefore those 2 regions also to move in a similar direction.
That makes sense. Just last question on the cash on the balance sheet. So we are around INR 200 crores cash. So in terms of the -- from this year, like is the plan to use -- utilize the cash to just retire some of these things? Or are you looking at some of the inorganic growth or some other capital allocation for this time?
No. The debt would get retired by our free cash flow generation in the business. And after that, they will get returned. Cash would be used for activities, various growth activities in terms of asset requirement or for any inorganic growth supporter.
Okay, sir. And sir, lastly on CapEx. So the [ INR 70 crores ] CapEx in FY '22. So for FY '23, is there any like guidance, like will the CapEx be a similar amount? And I think even more of like a maintenance CapEx and growth CapEx.
Yes. As you can see, the CapEx in '21 was very low CapEx than [ '22 ]. And as we move forward, we have taken a position of consolidation only. So -- but this year also, the CapEx will be mostly replacement CapEx. And in the Center of Excellence, bringing in new technology, those will be the new CapEx since we have not planned for any other greenfield project for us. So except for Gujarat, which I already stated, there will be some CapEx allocation this year. And as we go to next year and the year after, there will be CapEx for the new center, which is coming up in Gujarat. Apart from that, we don't see any other new CapEx coming.
No. The only thing I would like to add to what Dr. Ajai said is our focus -- since we are in a consolidation phase, our CapEx focus will also be to drive the growth of our existing hospitals.
The next question is from the line of Bharat Celly from Equirus Securities.
So sir, just wanted to understand on our Center of Excellence. So what sort of [ ROIC ] return [indiscernible] we have for this center? If you could provide any color on that?
On the Center of Excellence. Yes, so our Bangalore Center of Excellence will be about 25%, 26% [ ROCE ].
Sorry, I didn't get it.
Our Bangalore Center of Excellence will be around 25%, 26% [ ROCE ].
Okay. And sir, so -- and will it be similar for something like Ahmedabad as well, and you will be trying to build similar for Mumbai as well as Kolkata?
Ahmedabad is actually higher than our Bangalore close to 30% [ ROCE ]. It's higher than the Bangalore center.
Okay. So sir, just wanted to understand on that note only. So we have been focusing a lot on Tier 2, Tier 3 cities lately. So when we go for group setting, do we work around considering that the CapEx involvement is relatively lower than what we require in these Tier 1 cities? And on the top of it, even the ARPOB will be relatively lower. So how do we look at these ROICs when we move through Tier 2, Tier 3 cities?
So look, I think the uniqueness of what HCG has done is the business model is viable, scalable in big cities as well as smaller cities. Some of our Tier 2, Tier 3 center, existing centers delivered EBITDA margin in mid-20s. They have ROCE about 20% because the model is evolved like that. We still invest, the contemporary modern medical equipment in those cities. But our focus is a little different there. Our cost structure is really different. So we end up having EBITDA margins and ROCE in a similar level even in Tier 2, Tier 3 cities.
I just want to add. So the important thing to remember here is ROCE for mature centers, even in Tier 2, Tier 3 cities will be in the high teens, or more even more than 20, which is there at the unit level. So we are able to achieve that even with the ARPOB, as you said. The reason ARPOB is maybe lower, like we explained before, is because we don't -- we have technology, but not the highest technology. Center of Excellence, we'll have more. Naturally, the ARPOB will be more. But the differential some points is there, but still, even with this is one of the achievements of HCG in Tier 2, Tier 3 cities, unlike some beliefs that in Tier 2, Tier 3, we cannot achieve, we have been able to successfully achieve. As Raj Gore said, good EBITDA, good EBITDA margins and ROCE for mature centers. It's a function of 2 things. One is lower cost structure because we are in Tier 2, Tier 3 cities, and higher asset turnover.
Right. Sir, just on higher asset turnover, sir. So I just wanted to understand, obviously, COVID was a time when we were seeing a lot of disruption, a little travel, and many people would have been going to the nearby hospitals for their radiation process. But since the lockdowns, things have been started getting normal, so how do you see the patient flow? Do you expect some cannibalization happening? Or even are there people moving from Tier 2 to -- going for treatment in Center of Excellence? So that sort of trend can emerge again? Or so how do you look at it? And what will be the key area why patients will come to Tier 2 hospitals rather than going to our Center of Excellence?
Yes. You are absolutely right, doing the COVID time, we saw reorganization of the patients. When our footfall fell in our major centers at that time, we saw the footfall actually increase in Tier 2, Tier 3 cities, as you said, going to nearby centers. But one of the positive things which has happened for HCG is our centers, main centers and cities have got back to pre-COVID level are even higher now. And also our Tier 2, Tier 3 cities have continued to grow. And possible reason could be patients now have better awareness about health care. The COVID could have created that awareness. So people are looking to come to centers, which are dedicated, like oncology centers, for focused care and all. This could be the reason we are still collecting the data because we thought at one time, it could be the previously held patients who are coming forward. It is not so. Actual footfall month-on-month, it is increasing. So we feel that the reorganization happening where people are seeking better health care and coming across to centers like HCG.
Raj, do you want to add anything?
No. And also in addition, right, being a Center of Excellence, our main centers in big cities offer certain differentiated products, like CyberKnife, like robotic surgery, like BMT, complex surgery. And that will continue to draw patients from all parts of India, irrespective of this demographic flow pattern changes because those are differentiated projects -- products. Forget Tier 2 and Tier 3 cities, even big cities may not have been available easily.
With your permission, if I could squeeze last one. Sir, I just wanted to...
In fact, our market share in big cities have actually grown post-COVID.
That's wonderful to hear, sir. So sir, just wanted to understand on one part. So what is exactly the things we are doing to actually increase awareness in these Tier 2, Tier 3 cities, especially when there is a case that the overall insurance penetration is on the lower end. The second part that I want to understand is how easy it is to find a surgeon or a doctor or an oncologist in a Tier 2, Tier 3 cities where we have seen over the past that the skewness is towards metro or Tier 1 city.
No. As I said, we have recruited 50-plus oncology physicians in the recent. And one of the things we have, we have our own training program, residency program, approved program, DNB programs. And because we train them in several centers, some of them may be coming from Ranchi, Cuttack and areas, so we push them. The other thing is when you just look at oncology practice in the past, doctors would like to have technology. Doctors would like the ability to be empowered and runs in the infrastructure. Because these infrastructures are lacking people like Ranchi, Cuttack or Angol, people were moving to big cities.
So one of the things we are seeing is, if I am from Cuttack or Ranchi, I would like to go back and realizing that the infrastructure is there, oncologists are moving back. So this kind of reorganization is also happening. Because of that, we are very happy to say that we are -- most of our centers have fully staffed with radiation, medical and surgical oncologists. Sometimes even like Cuttack center has several surgical oncologists, several medical oncologists. And when we -- and radiation. When we first started, we didn't have a single medical oncologist years ago, in 2018. So there is certainly change happening, and people are looking at technology, infrastructure, of course, HCG brand name and all to be part of it. And that is what driving people to come and be there in these cities.
You want to add something, Raj?
Yes. And coming back to the awareness issue. Look, we all know urban, rural disparity in health infrastructure in India. The demand-supply gap is even higher in Tier 2, Tier 3 cities. Historically, these patients would have had to go, travel several hundred kilometers and stay for a few weeks in big cities. We've had a first-mover advantage. We've invested in a comprehensive cancer center in these locations. So I think just by having that demand-supply gap, and we're providing that comprehensive treatment there, it's never been a challenge to create awareness and have patients coming to us.
And the other thing is we have a multidisciplinary clinic using the -- for example, information technology, video conferences and all, we have been able to link telemedicine, teleradiology. We are the pioneers in the digital pathology, telephysics planning. All of this has helped us to give the same level of care to patients in Tier 2, Tier 3 cities, even though they may not come to Tier 1 city. That word also has gone so that patients are feeling comfortable staying in those cities themselves.
The next question is from the line of Nitin Agarwal from DAM Capital.
Sir, just a couple of questions around the Nashik Hospital. Can you help me understand how has the Nashik -- I mean what is the structure of a partnership in Nashik? And how has the business done over the last couple of years?
Yes. Our Nashik -- the structure of the partnership on our...
The structure of the partnership, it is partnered with Raj -- Dr. Raj Nagarkar, where he -- we are 51%, he's 49%. And as you know, Nashik started as a small center in 2008, '09, '10, when we became partners in non-surgery. And a few years ago, we decided to become partners with a new center, 220-bed center. And we are doing very good with the top line growing. And I think even with the new centers, they have really come up to March, and we have put in new technology. We have almost 3 linear accelerators, PET scan. The center is certainly growing, and there is a lot of clinical trials happening. And we are definitely going to see a good growth there.
Okay. That's helpful. Sir, in this context, how should you read about this announcement about Dr. Raj Nagarkar tying up with KIMS Hospital?
Yes, I will explain this. See, Raj Nagarkar is the ambitious surgical oncologist. And he had a necessary area he wanted to come up with a multi-specialty hospital. And he approached us to see whether we could partner. But as you know, we are very focused in oncology. And we made it very clear, in Nashik area, we would like to remain focused in oncology. So we gave him the liberty to see what he would like to do in a multi-specialty. So he really chose a partner with KIMS, where, from our understanding, he is also a partner like what we have done in our HCG Group. So at this point, that is what the announcement. And he also called to say that he is doing it, which was okay with us.
So you don't see any challenge to...
There is a -- I just want to add, there is a noncompete [indiscernible] in oncology only with us. So they cannot do any oncology, and Raj Nagarkar is fully dedicated to us as surgical oncologist. So he said he's going to be only a passive investor and a partner there in terms of multi-specialty. The entire management, from what he said, will be run by KIMS. But oncology is completely excluded from that, and we are comfortable with that.
Okay. Okay. That's helpful. And sir, on the Borivali Hospital, how is it ramped up? Is it now that the Mumbai Hospital, [ South Bombay ] and Borivali, are they both in -- their territory now?
Yes. So Mumbai has been a good improvement this year. Our domestic business has grown. Our international business is significantly growing over the last few months, both for Colaba as well as Borivali. We are -- we have done several corporate PPA insurance, PSU empanelment. And you will see that we will continue to ramp up our Mumbai business in this year.
The next question is from the line of Shyam Srinivasan from Goldman Sachs.
Just the first one, Raj, Dr. Ajai 40% -- 38% growth this year. If I do a 2-year CAGR, it's about 12%. So just help us understand what is the revenue growth outlook for fiscal '23, if there is some, directionally if you can help us. And if you can also help us break it down into what do you think about ARPOB, we have seen over 11%, 12% growth this year and also existing plus new. So how should we look at fiscal '23 for revenue growth outlook?
So Shyam, as you know, this growth is year-on-year. And the prior year, we had a severe lockdown. And I think that's -- the higher growth of 38% is also a function of the suppressed numbers due to COVID lockdowns during the prior year. However, I think if you look at our recent quarters, we feel that we'll continue our growth momentum. We -- I mean, both existing centers, new centers, we've shown growth on both sides. And we're pretty confident that we will continue to grow. It's just that 38% is a function of separate growth in the prior year. That's why it has a 2-year CAGR of 12%. We think that's the number, like a lower teens to mid-teens. We think that's the growth we should look at for the past 12 months. I'm not looking at just fiscal '22 or '21.
CAGR 12%. We are confident continuing that momentum probably with -- our aspiration is to beat that number.
Got it. And if you -- how would you split that into like ARPOB, [ ASP ] versus, say, volume? How should we understand that? Is it going to be -- can we still do this 12% [ ASP ] increase that you are seeing year-over-year even in an existing center? Do you think the environment, either competitive or regulatory, does it allow us for the price increase? How much more mix change can you drive in the ARPOB?
So if I have to -- I think ARPOB will continue to drive growth about 3%, 4% and rest will come from volume.
And other thing is regulatories now are not really, in the last 2 years, have not come in the way of any interfering with our price. And at this point, we don't see any because all the drug issues are now are behind us. So hopefully, we are hoping there won't be any more of these issues going forward because most of it has been beaten down significantly at this point.
And then the 3%, 4% is a price hike? Or is it a mix change?
It's both. It's both. In our mature existing centers, we are optimizing our mix, not just payer mix, but also the modality mix going towards more higher-end treatments in radiation, et cetera, in chemotherapy. So that -- it's a combination of both price, price in terms of realization, in terms of payer mix as well as moving towards more higher-end modalities in treatment.
Okay. Very helpful. My second question is on similarly on margin. Again, we have done margins [indiscernible] of 17%, so higher than revenue growth. And to help us benchmark it now, you have existing centers, which are north of 20%. You have new centers which are below this number. You have Center of Excellence at 25%. So do we think like a 50 or 100 basis points, at least in the oncology side keeps going higher and higher based on what our operating leverage? Or you think there is a chance for us to do higher than 100 basis points? And what would be some of the levers on margins?
I mean we would like to go for a higher margin going forward. As I mentioned, as we've covered in previous calls as well as this call, look, our payer mix is improved -- improving. Our international business is improving. Our new centers in Mumbai and Kolkata are improving. As the new center bucket grows, as our share of revenue from big cities grows, it will all be EBITDA margin accretive going forward. So we're pretty optimistic that we'll continue to grow in our EBITDA margin percentage going forward.
Got it. Last question is on competition. You have reported very sound numbers. Margins are improving. We're also picking up some -- this is like a renewed refresh thing that key other hospital chains are going to look at oncology again. Are you seeing any increased activity on the ground in terms of multi-specialty starting to increase focus back on oncology? Or do you think large-enough market, you have penetration in rural, which they may not necessarily pursue. So how should you look at competitive dynamics? And how your footprint is versus others?
Shyam, I think as far as competition, as you know, this question, that comes up quite frequently. And we are -- we see nearly now 120,000 new patients a year. So there is no other similar organization in India, so many comprehensive cancer centers, particularly the footfall in Tier 2, Tier 3 cities, we really don't have any other people. So we are really feeling as far as the competitors, you also are right, there is enough work for all of us to do. But at the same time, if you look at our market share in a city like Bangalore or in Ahmedabad is only increasing from where we started even a year ago, 2 years ago.
So with all this, we are very confident we are taking market share. We are growing. And that there is -- I don't think there is an issue for us. We want to remain a focused factory approach, focus on providing the right scale to the patient, focus on first-time right treatment, outcome, research, academics. All of this, when a cancer patient comes what do they look at? Really outcome, how am I going to do, word-of-mouth and the digital initiatives, which we have taken, all of that will only add to our growth. So I don't think that will be an issue.
Raj, you have any...
I think the best way to test this hypothesis is look at our Center of Excellence or our key market in Bangalore. This is a hypercompetitive market with most big players having multiple hospitals with oncology focus. And overall -- over the last 2 years, we've grown our market share by 2%. And that's the strength of the differentiated product we have, the outcomes we have and the strength of the brand. So I know that everyone is focusing on oncology, but we are confident that we will continue to solidify our leadership position in the specialty.
The next question is from the line of Bhagwan Chaudhary from Sunidhi Securities.
Sir, can you please share what was the average occupancy rate in the quarter? And what was the ARPOB in the quarter?
Occupancies -- average occupancy and ARPOB in the quarter.
56,800 -- Center of Excellence had ARPOB of 56,800.
He's asking for Q4.
I'm asking for Q4 for the consolidated number.
Give us a few seconds. Just 2 minutes.
56,800.
Across interest.
Yes. Are you asking for only Center of Excellence?
No, I'm asking for the overall.
Overall ARPOB, 36,697. So 36,700 in Q4 ARPOB. And occupancy? Overall occupancy?
Q4 is about 37,000...
No, occupancy. Q4 occupancy.
60%. No, again, I will...
Occupancy is 60%, and ARPOB a little less than 37,000.
Okay. Sir, I asked this because this number, 36,697 you had mentioned in that presentation, that is for the year.
Yes. Yes.
So it is for the year or it is for the quarter?
For the quarter, it is 38,805. For the quarter, it is 38,805.
So sir, my next question comes that for the impact, all the fourth quarters when I'm looking at the ARPOB it's 37,000 plus, while for the year, this 36,700 number is for the year, so lower than even average of all the quarters.
No, the first quarter was lower. First quarter was around 36,000.
Okay. I'll recheck that. And sir, secondly, just one more question. This is on the margin side. In the last 3, 4 quarters, our margins are almost stable, around 17-point something. I'm looking by putting the other income out. So how do you look at going forward. Means for the FY '23 and FY '24, do you have some number in the mind that we'll head towards this?
Yes. So we covered it in our initial thing. We are -- look, we are investing in our future growth. Part of that is our value-creation plan, which is our digital transformation journey. So that's the investment we are doing today for the future growth, future margin accretion. It's a function of that.
So that investment will continue in the coming year?
No. I think we'll complete the -- our transformation project this year. Yes.
Okay. So will there be some improvement in the margins or by some...
Yes. I think we answered this earlier. Yes, you should kind of start seeing improvement in margin, driven by the new centers growth, some of the value creation activities we are taking place, and of course, the increase in the international business as well. All this will kind of help in driving the target in an upward trend.
Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.
Okay. Thank you very much. Thanks for all the investors who have been on the call. And once again, thank you. I wish you all the best. Thanks again for the HCG team today. Thank you.
Thank you. Thank you very much.
Thank you. Ladies and gentlemen, on behalf of HealthCare Global Enterprises, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.