Narayana Hrudayalaya Ltd
NSE:NH
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Narayana Hrudayalaya Ltd
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Ladies and gentlemen, good day, and welcome to the Narayana Health Q2 FY '21 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Debangshu Sarkar from Narayana Health. Thank you, and over to you, sir.
Thank you, Janice. Good afternoon all. As you are aware, my name is Debangshu, and I run the Investor Relations and Mergers and Acquisition Practices at NH. On behalf of the company, I welcome you all to our Q2 FY '21 earnings call. To discuss the performance and address all your queries, today, we have with us Dr. Emmanuel Rupert, our CEO; Mr. Viren Shetty, our COO; Mr. Kesavan Venugopalan, our CFO; alongside Ashish Sukhija from the team. I'm sure you have gone through the investor collaterals which have been uploaded on the stock exchanges as well as on our website. Before we proceed with this call, I would like to remind everyone that the call is being recorded, and the transcript of the same shall be made available on our website at a subsequent date. I would also like to remind you that everything that has been said on this call that reflects any outlook for the future or which can be construed as a forward-looking statement must be viewed in conjunction with the uncertainties and the risks that they face. These uncertainties and risks are included but not limited to what we have already mentioned in our prospectus filed with SEBI during our IPO and subsequent annual reports on our website. Post the call, should you have any further queries, do feel free to get in touch with us. With that, now I would like to hand over the call to Dr. Rupert.
Good afternoon to all. Having reported operational losses of over INR 860 million in the first quarter, which bore the brunt in terms of the effects of the pandemic, we are pleased to turn in the black at the consolidated level in this quarter at the EBITDA level. While localized lockdowns affected patient footfalls, leading to a rather gradual recovery for most part of the quarter gone by, we are encouraged by the momentum generated in the month of September, with monthly consolidated revenues reaching almost 90% of pre-COVID levels. At a consolidated level, while on a year-on-year basis the operating revenues degrew by 27% revenues in the quarter gone by, it grew over 50% as compared to the previous quarter within India business, reaching 79% of our pre-COVID levels in the month of September, while Cayman operations achieved its highest ever monthly as well as quarterly revenues. India business reported steady buildup in volumes, achieving 45% occupancy in September vis-à-vis 33% in June, majorly driven by hinterland facilities and was further strengthened by hospitals at NCR Delhi. Tier 2 facilities at Raipur, Mysore and Shimoga, which were relatively less impacted due to the pandemic, along with Dharamshila and Narayana Superspecialty Hospital in Delhi, the Gurugram facility and the Narayana Superspeciality Hospital at Howrah units, on the back of a robust pickup in oncology and urology business, has recouped the pre-COVID business. Then in Delhi NCR, facilities have recovered their revenues despite the international business being practically completely shut reinforces Narayana Health's emerging brand recall in the region and gives us a lot of confidence going forward in that crucial market. The flagship units of Narayana Institute of Cardiac Sciences in Bangalore and the RN Tagore Institute of Cardiac Sciences at Kolkata continue to remain impacted given the preeminence in the Cardiac Sciences-based elective domain as well as higher reliance on outpatient -- outstation domestic as well as international patients, while Mazumdar Shaw Medical Centre, bolstered by oncology and organ transplant business, relatively outperformed with September business at 80% of February 2020 levels. Together, the 3 flagship facilities, while lagging the others, achieved 65% of the pre-COVID revenues in the month of September as against 49% in June. With travel relaxation for international patients, specifically Bangladesh in that context coming into play and with improving sentiments on the domestic front, we expect these units to stage a faster recovery. Our international venture at Cayman Islands facility reported a stellar performance yet again, with the facility reporting its highest ever quarterly revenues of USD 19.5 million in the second quarter with approximately 150% increase in monthly revenues in September as compared to February 2020 levels. This robust growth in revenues led to the facility more than double its EBITDA to USD 8.9 million on a year-on-year basis during the quarter. On the clinical front, our focus on providing highest quality of quaternary care is reflected in some of these highlights in this quarter. The RN Tagore Institute of Cardiac Sciences, Kolkata performed the Eastern India's first ever simultaneous liver and kidney transplant. The Narayana Superspeciality Hospital in Guwahati performed a rare procedure for the advanced stage of pancreatic cancer called the radical antegrade pancreaticosplenectomy with segmental colon resection. The same facility also did another rare procedure called hepaticojejunostomy for advanced cancer of the liver. And the Narayana Superspeciality Hospital in Gurugram did a very rare procedure for a tumor in the trachea, which is the main windpipe. And the facility in Ahmedabad also did a rare procedure for angioplasty for the blood vessels in the brain, the left carotid angioplasty, for a patient with recurrent ischemia. Looking ahead, despite the third quarter of the fiscal traditionally being the seasonally moderate one account of festivals, we remain optimistic about the turnaround in the business with the traction seen in the month of October. As certain geographies are planning to -- planning into -- going into lockdown due to the second wave of infection, we continue to remain cautious and shall continue to tweak our operations in line with the pandemic-related developments. Thank you.
With that, we can go open the Q&A floor.
[Operator Instructions] The first question is from the line is Sharan Pillay from Allegro Capital Advisors.
I have 2 questions specifically. The $8.9 million that you had recorded as an EBITDA at the Cayman Islands, is this adjusted for the Ind AS?
No. It is not.
Okay. Could you give me the number, by any chance, adjusted for Ind AS?
Yes. Like we had previously mentioned, you can assume a run rate of around $100,000 to $125,000 per month on account of the adjustment. So it roughly translates to around $8.5 million pre-Ind AS basis.
Okay. My second question was in terms of the increase in beds that we've had Q-on-Q. Could you give me any indication as to where these -- that increases took place?
Yes. The COVID volumes have been -- depending upon the stage of the pandemic in different regions, the COVID has been a major bed occupancy because the ALOS of the COVID patients have been on the longer -- higher side. But overall, we've also seen a very good traction in the non-COVID work because both existed simultaneously. So there, we have seen a good traction in...
Ladies and gentlemen, the line for the speakers have got disconnected. Please stay connected while we reconnect the speaker. [Technical Difficulty]Ladies and gentlemen, thank you for patiently holding. We now have the lines of speaker reconnected. Over to you, sir.
I think we lost the last question. So whosoever asked it, if you don't mind repeating that or we...
Sir, we have lost the connection for the participant asking the question. We'll move on to the next participant.
Okay.
That is from the line of Rohit Balakrishnan from VRDDHI CAPITAL.
Congratulations on a decent performance. Sir, just a few questions. So one, on Cayman, if you can just please share, it's been a quite robust performance. So can you share a bit about what led to that? Is it COVID-related? Or is it more pent-up or something else? So if you can just share that first.
Yes. I can answer that. It is COVID-related in the sense that Cayman has taken a very aggressive stance towards lockdown. And generally, what happens on the island, we do get a substantial number of international patients coming in, and that [ work ] has not been available to us. But a lot more of the wealthier clientele who normally would have gotten their treatments done in the U.S., mostly they go to places like Houston or Miami, those patients have not been able to travel. And so a lot of high-value procedures have been taken up by these patients who would otherwise have gone to the U.S. In addition, they're not even able to travel outside for low-value procedures. And so we're starting to find a lot more interest and enthusiasm for these procedures. So this is a momentum that may not sustain. Once the borders open, people will go back. But we definitely expect some amount of retention of patients who are happy with our services and have given their medical records to us. And so we will do a couple of things to make ourselves more attractive to those patients. And in this case, primarily, it is working at a clinic in a very upscale area in Cayman and opening up more primary care specialty. And so what that will do is it will just build a new habit for these patients to come and access that treatment going forward. But I don't think this is a sustainable way. It's primarily driven by the fact that patients are not leaving the island. And given a choice, we would also prefer that the borders be opened because we definitely want to build up more patients coming into the island rather than just trapping everyone there and they have no choice but to come to us.
Got it. The second question was on recoveries, so just 2-part question here. So if you can probably sort of give some highlights on recovery on 2 fronts. One is people coming in from outside of India, obviously, the [indiscernible] operational, but I think some of it has started, so any high commentary on that would be helpful, and also within the India movement of outstation payment -- patients coming to your metro hospitals. The second question on this -- on this also was that if I can look at the clusters that you've shared. So NCR and the southern peripheral have done quite well, whereas the other 2 regions haven't really done that well. So anything that happened in these 2 areas which you want to highlight or what you're seeing? And if other regions are also now sort of coming back given the recovery?
Yes. So first question you asked is on international travel. You're right, flights haven't opened up to a full schedule, but medical emergencies are allowed. So here and there, we do get the one-off patients with a very high value-added procedure, so people -- usually patients on transplant or children with hole in the heart and so on. But it's very few and far between. We're not getting too many of those. We are, fingers crossed, hoping that these localized air bubbles will kick in. The one that we're fingers crossed the most probably for is Bangladesh, and we've been told that this channel should open sometime soon. The land border is open. So those who are able to drive coming from the border towns are coming to a hospital in Kolkata slowly. But the big numbers we won't see until the flights resume as normal, but we are told it should happen any time soon. With regards to domestic travel, it's still very difficult. The -- again, flights are not full scheduled. Railways are not full scheduled. People are scared to make long distance travel. And so historically, there are these large patterns of travel that you see, people from East India coming to South India, people from Central India coming to either North India or Mumbai or even district travels within the place. So for example, a lot of patients who would come from small towns across Maharashtra would come to our hospital in Mumbai for treatment. But because Mumbai became known as such an epicenter for disease and people were just scared to come to get treatment done, so the reputation of a city is also impacted by the number of cases that people in Tier 2, Tier 3 towns hear about. Which sort of leads to the next question you asked, how come the Karnataka peripheral units performed so well compared to everyone else? And that's because the COVID impacted there also very less. Rural Karnataka is not a very densely populated area. It's very spread out, and certainly, we did not see the major sort of outbreaks. The few outbreaks that we did see was in Bellary, and that is only because we run the hospitals of the general JSW Steel plant. And the entire Bellary outbreak was localized entirely to that steel plant location. So since we are the only hospital there, that was the only hospital in rural India there that managed to see a huge number of COVID cases. But once it was over, it never really -- the COVID never became a sustaining thing, what you see in big cities. Delhi, the performance has been good for a different reason. It's just that it happened very early. The lockdown happened very early. The disease ran through very early, and the numbers dropped and then people started coming. And what happened is as Delhi numbers recovered, the numbers in UP, Haryana, all the rest, started going up. So then early on, people were avoiding Delhi because Delhi was worse. And later on, they started coming to Delhi because their place became much worse than Delhi. But I'm not seeing encouraging numbers right now in terms of the slow uptick in case count in Delhi. So that -- we'll wait and watch to see what plays out because of that. I don't think they'll go for another lockdown. But definitely, as COVID numbers go up, it's something that, again, will strangle a very quick recovery in Delhi NCR.
Got it. Very helpful. If I can squeeze one more question. So if I look at the balance sheet, our receivables are pretty much at the same level as March despite sort of lower sales in the first half. So just wanted to understand that. Is it because of patient mix? And also, is there a risk that one should sort of factor in for some provision in bad debts, et cetera?
This is Kesavan here. I think even while the billing is low, what has happened, predominantly, most of the payer establishments have resorted to work in home as a methodology. So as a result, the claims which were available online were processed as quickly as possible. But the old claims still remain what we can call as not processed. And with a lot of effort, we are able to pursue some of them. So it will take some time for these establishments to come on a full work-from-office mode and expect collections on the normal basis.
Okay. But there's no risk as such on proceeds, right?
We don't foresee any risk on the outstanding amounts at this point of time.
[Operator Instructions] The next question is from the line Shantanu Baku from SMIFS Limited.
I have a few questions. So the first question is with regard to India discharges for September 2020 with respect to your existing and new hospitals. Shall I ask my other question, sir?
Sorry. Shantanu, what's your question on that?
The India discharges figure for September 2020 for the existing and new hospitals.
You want the number?
Yes, please.
We'll have to touch base separately on that.
Okay. And can you please give me the outpatient revenue percentage with respect to your existing and new hospitals?
We, again, don't have that readily available. Rather, we do not actually maintain it in that format. But should you want those details, we can separately touch base and try to address them to the best of our ability.
All right. Then my next question is with respect to COVID revenue for Q2. So do you have the discharges figure with respect to COVID and beds allotted and occupancy and ARPOB for COVID?
Yes. We do have that for the India business. The COVID for -- revenue for the quarter was around 16% of my total India business, which is translated to roughly 20% in terms of the discharges and 30-odd percentage in terms of the occupancy, given their high length of stay.
Okay. 30 -- I'm sorry, I couldn't get that. 30%?
31% to be precise in terms of the occupied bed days of the total for the quarter.
So is it the occupied bed versus the number of beds allotted for COVID?
No. It's just occupied bed days for COVID as a percentage of the total occupied bed days in that quarter.
Okay. Okay. And any idea about the COVID ARPOB?
COVID ARPOB was much lower than what the non-COVID ARPOBs were. So on -- at a very broad level, it would be half or even lower.
The next question is from the line of [ Chirag Patel ], an investor.
Yes. I have a question on that post-coronavirus from calendar 2020 for [indiscernible] for growth strategy plan?
Yes. Even prior to coronavirus, this company was on a consolidation mode. And 2020 and 2021 are the phase we're giving the focus on getting the profitability for the new hospitals that we opened while doing a few things [indiscernible] being set up. So we had a capacity expansion going on in [ Mysore,] growth capacity expansion we had planned in Mysore and Delhi as well as in Howrah. Those got delayed a bit, but it's definitely something we will take up maybe early 2020. This is just adding 20, 30, 50 beds to these hospitals, which can really benefit from additional [ capacity ]. In addition, there is some medical equipment that we'll be upgrading, getting to the newer technologies, changing the software across the entire group. Those are the sort of things we are looking at. Here and there, there are some expansion opportunities in organic routes that we were exploring earlier. We continue to be open to those. But ultimately, the valuation needs to make sense. The synergies would have to make sense. And so if something ultimately has more concrete data, we will disclose, but nothing really at this point.
Okay. So all this valuation and all are brownfield or greenfield?
Brownfield.
Brownfield, okay. And what is the CapEx outlay for Q3?
[indiscernible].
The CapEx outlay for Q3.
So [ Chirag ], we have previously outlined all these numbers in a few of our earlier calls. So all this put together, it's not a very high CapEx, I mean, to the extent of around INR 50 crores to INR 100-odd crores number that we were looking at previously.
Okay. Okay. Got it. And on the technology integration [indiscernible]...
[ Chirag ], yes, there's a lot of disturbance at your end, [ Chirag ]. I mean, we are just not able to get through what you are trying to ask.
Technological integration, do you say that you are planning to install some items from -- in relation to that. So what exactly -- if you can provide us your take on it.
So there are 2 kinds. One is the medical technology, and that is basically upgrading the software or the hardware of the medical devices that you have across the units. The -- this is usually equipment that we have. The large equipment has a 7-year technology life cycle. After that, you have to upgrade it to the next version, and that is something we are undertaking. The other one is on the software side, the hospital management information system or HIS, what it's called. That we had built out as an in-house program and has finished up the India deployment. We will be deploying it across Cayman starting in January, and this was something we have taken up primarily because we were not getting good [ traction ] in the market. And a lot of the efficiencies that we want to drive will be driven through our ability to do a lot more precise pinpointing by looking at our medical data, by doing our analytics and predictive analytics, by driving a lot of cost efficiencies by automating certain back-end processes. And for all of that, you need a very stable platform, a software platform for the hospital operations to run on. So by in-housing that system, it has enabled us to be able to have a lot of savings as well as efficiency by speeding up transactions. So just a simple example, [ my solution ] shows the new system, our pharmacy dispensing [ brand ] was able to come down by 30%. And that's because the software is just simply much more responsive. But upon that, we would be able to do a lot more interesting things on analytics to actually predict stocking and for us to be able to more accurately predict the demand cycle. And then our inventory levels can respond to that, and that is something that can save us on the cost side. So these are the small little improvements and tweaks that we had around on the operations side, which is very possible now that we have a very good software to do that.
Okay. So all this IT-related CapEx is also a part of this earlier outlay of INR 50 crores to INR 100 crores or other than that?
No. This is separate. The INR 50 crores to INR 100 crores were specifically towards the brownfield expansion projects that Viren mentioned. These are all just separate to that.
Okay. And second, your regional performance grew across our...
Certainly, on the software development -- okay. So IT expense for us is 1.5% of revenues generally. That's the run rate of [ the thing ]. In addition to the software development, we spent anywhere from INR 18 crores to INR 22 crores every year on the application costs, manpower costs, server costs, all of that. So that is a number that is going to increase the more we start becoming technologically enabled.
[Operator Instructions] The next question is from the line of Charulata Gaidhani from Dalal & Broacha.
My question pertains to the purchase of the consumables during the quarter. Is it that we have stocked a lot of consumables in anticipation and it has not happened in particular hospital?
I think I couldn't understand your query. Could you elaborate, please?
Yes. In the sense, the purchase of consumables compared to the last quarter is fairly high.
Yes. Okay. It's related to the COVID-related consumables because you can see that the COVID-related occupied bed days have gone up. So automatically, the number of personnel who are involved with the care of the patients were also on the higher side. So the consumables is mainly related to the COVID related -- the care which was there. Also in addition, we've also started seeing reasonable traction in the acute care, in cardiology and some of the other procedures where the device consumables also are used in higher quantities. So all this put together, the consumables have shown us a higher run rate.
Okay. And ARPOB has gone up by around 3%, which are -- whereas normally, your increased rate is around 7% to 9%. So did you think ARPOB has also increased?
Charu, again, this has got to go with what Dr. Rupert previously said, which is specifically on account of the COVID business which has significantly higher length of stays as well as not that high yields, so obviously, it has a very depreciative effect on the overall ARPOB. So that -- we would like to believe while it may be a temporary transient phenomenon, obviously, to leave you a tight COVID, our base ARPOBs remain as it was till the last quarter.
Okay. Very good. Now my last question pertains to, how much is the EBITDA for Cayman?
It's $8.9 million on a post-Ind As basis for the quarter and $8.5 million on a pre-Ind AS basis.
The next question is from the line of Sameer Baisiwala from Morgan Stanley.
I got dropped for 5 minutes on the call. So maybe pardon me if it's a repetition. But just wanted to check if you have shared your updated time lines for breakeven at Gurugram and Mumbai SRCC hospitals. And second is, how should we think about the India business ramp-up to turn EBITDA positive and also to come back to pre-COVID levels?
Sure. Specific to SRCC and the Gurugram hospital, prior to COVID, we were expecting it to happen sometime this financial year towards the end. But I would guess that whole thing has been postponed by another year. But whether it happens in the early part of FY '22 or the later part of FY '22, I would prefer to be on the conservative side, pushing it to the later end. But having said that, we have seen a lot of enthusiasm in Gurugram at least for -- and there is a normal amount of growth that is happening in Gurugram. I'll be a lot more confident. SRCC, I'll definitely push to second part of FY '22. As for the remaining hospitals' performance, I would say, Q4 is when we expect to reach our normal operations, assuming, of course, that the COVID counts continue to decline and no amount of lockdown and some of the vaccine, not full vaccine, but I think some of the vaccine starts to get rolled out.
Okay. Great. And just to follow up on a couple of them. So the cardiac patients continue to be much lesser, at least on your overall pie. So I thought that it did not pull back too long. So I'm a bit surprised that they have not come back. And any update on the new onco unit that you're planning for Cayman?
I'll give the update on onco unit, and then Dr. Rupert will talk about why cardiac patients tend to not come during this pandemic. So the onco unit in Cayman, we are moving the locations to an upscale part of the town. One of the things we realized during the lockdown is that these number of patients who were historically traveling outside the country for radiation treatment would be preferring something that's a lot available closer to them. And so while our initial plan was that we build it in our campus, we decided to put it off-campus in a place that's closer to the city. It did get stalled, obviously, because of this lockdown. We are not able to bring people or building material or anything into the island. In Cayman, you have to bring everything from outside, and they are not allowing anyone to enter the country without a special permission. So it has gotten delayed from that sense, but we feel confident in the next 2 months at least to start construction. And it's a 6- to 8-month process. In this case, it will be ready by then. As for the cardiac, Dr. Rupert?
World over, the number of cardiac patients have seen a significant drop once the lockdowns were announced in almost all the countries. But with the resumption of economic activity in almost every nook and corner of the country here, we've seen a lot of acute care cardiology cases coming up, like primary angioplasties and things like that. And we've started seeing a good return of elective cardiac work in some of our flagship hospitals. Cardiac surgery was lagging beyond initially because we were also a little cautious all across the country. Because after admission, we found that at least 20% to 30% of people, once they were tested for COVID, were turning out to be positive. And once you operate on a patient with the COVID infection, the mortality is almost 80% to 100%. So we were very cautious, and we had to do multiple tests before we actually subjected them to surgery. So patients were also not really coming in unless it was absolutely essential. But we have been seeing good traction in this trend. And we've been seeing steadily, the growth is -- or in the number of cases have been going up, though we did congenital heart program in the children. We have taken -- the numbers have been on the lower side because a lot of them can be managed on medication until a suitable time. And therefore, the -- for them to be -- performed on them safely. So in this context, it's a little bit of a mix. But now that everybody has learned how to live with the COVID and also manage them and coexist with COVID and non-COVID work, we have been seeing a steady increase in the numbers, both patients coming inside and also our confidence in doing them with a lot of safety in this regard.
Okay. Great. And one final question, if I may. So when viewed from your lens, how do you see the -- nothing to do with Narayana, how do you see the COVID pandemic unfold? And how important -- or can vaccine really solve the problem?
So I'm going to give you the most uninformed answer. And that's why I never go on social media and keep my opinion because then everyone jumps in and says, "Oh, you're not an epidemiologist. If you're not a scientist, you won't know." But actually, we did go by the past history. Ebola was known in the 1960s. And it wasn't until the Western countries start getting impacted by Ebola did they rush to get a vaccine. And then even then, it took 7 years. By the time the vaccine came out, there was no Ebola. Similarly, H1NI1 and a lot of the avian flu, it was mostly an Asian phenomena. But it did have some western repercussions. By the time the vaccine came, the disease had more or less retreated. Now the -- I know there's a lot of enthusiasm. Everyone's putting billions and billions of dollars reordering vaccines and all of that. And sure, maybe 1 or 2 of them will have beneficial impact. But it's not going to solve the problem because the sheer -- the thing is no one will know which vaccine works, and the first candidate is never the right one. There's a huge amount of clinical trials, there's a huge amount of things that we need to do. So someone made a statement a while back who logically I actually might agree with. He says, "If there's enough equipment, if there's enough contact tracing and if everyone wears masks, the effect is as good as a vaccine." You look at countries which are disciplined and which have a mask-wearing culture. You take Vietnam, South Korea, Taiwan. For them, their daily case count is like 5, 10 people a day. And that is, again, mostly driven by the outsiders who are coming back to their country. And then they get isolated treatment, and then that's it. So we are not able to do that. So we've pinned all our hope on this vaccine curing anything. I have no confidence that a vaccine is going to solve our problem. I think we just have to learn to live with it and putting systems to restrict transmission. But there's no sense either going for a full knockdown, either on restricting flights. So really, our efforts should have been more on putting in good -- so in Bangalore, we saw case counts really dropped recently. You know why? Because the policemen were able to hand out spot fines to people who are not wearing masks properly on the streets. And the most common thing you see is the mask is over the chin or the mask is over the neck. So you give people at the local level that amount of power. You see the discipline come in. So anyway, long story, but I would say that it will be driven more by the society's ability to discipline rather than a vaccine.
The next question from the line of Sharan Pillay from Allegro Capital Advisors.
I just wanted to confirm something with reference to the Cayman EBITDA. If you looked at the Cayman's EBITDA, it's at $8.5 million adjusted for the Ind AS benefit, that would then suggest a roughly 40% plus EBITDA margins. Is my understanding right? Or have I gone wrong somewhere? And if I haven't, could you explain to me how this was achieved?
So it's 42%. You are right. How was it achieved? Like I said, the inability of local patients to travel outside. We rejigged a bit the doctor salaries in response to the pandemic, moved it to be more variable. And so that was a benefit because you are able to align a lot more of the doctor's behavior with the outcome. They implemented a system for billing, which was a system of coding that did -- it put a lot more discipline in the current billing practice. Honestly, our billing systems were running quite horribly in the past, and we were going on these fixed package rates. And we're just leaving -- bill that in completely. Now that we had a lot more time, we put that time to revamp the entire billing system and get more disciplined about billing properly. So that's why just for generally the same amount of volume, the reimbursements skewed quite higher. But again, not sustainable because this is primarily for the Cayman patients. In the future, the foreign patients that come in are on a much lower reimbursement package because these are international insurance companies, and they have very different billing quotes. So then again, there will be a bit of a learning curve, and you'll see this ARPOB fall. But yes, I wouldn't take this to be a sustainable trend.
The next question is from the line of Charulata Gaidhani from Dalal & Broacha.
Yes. So relating to Cayman EBITDA, how long you think -- next 2 quarters, you will continue around the same rate? And how much has been the occupancy attainment?
Yes. So again, like I said earlier, I would not assume that this will continue in any meaningful way because the country is in full lockdown. And their -- initially, while they were talking about opening up the country to cruise ships in December 10, now because there are elections next year, and the politicians don't want to do anything to bring again that coronavirus back to the island. So they've initiated that until May or June of next year, they continue to remain on lockdown. And it is a very small country. Eventually, there'll be no one left to operate. And unless we are able to get more patients coming to the island, we'll struggle. So that's to say again that Cayman, I would say, we're cautious. We'll wait and watch, but our interest there is more for the -- getting international patients on to the island and hoping on opening up the economy. But right now, we're dealing with a very small patient base, for the second part of your question.
Yes. So the occupancy at Cayman and revenue of $19.5 million can be sustainable going forward? Or it will come down?
It will come down, unless the -- this one, that the country opens up.
The occupancy, Charu, for the last quarter was around 37%. I mean, that roughly translates to around 35-odd occupied beds, given that there are 95 centers [indiscernible].
[Operator Instructions] The next question from the line of Rohit Balakrishnan from VRDDHI CAPITAL.
Just a couple of questions. One was, so the average length of stay increased to about 4.5 versus same half last year. So can you -- I mean, is it -- what is driving that? And do you expect to sort of -- just to stay at these levels or grow more than outpatient, if you can just share something on that?
Yes. Debangshu shared earlier, it is an aberration driven mostly by COVID. So the COVID business is only 15% of revenues, about 30% of our occupied bed days. So the fact that Cayman -- the COVID patients are staying much longer at a very lower reimbursement. And so that's why our ALOS has gone up. Hopefully, as the COVID numbers have come down -- and they have come down. In Bangalore unit, for example, at the peak, we were seeing 400, 500 COVID patients. It's down to about 100, and we think it will go down even lower. Similarly, other hospitals virtually have no COVID patients in -- our hospitals, not all hospitals. NH hospitals virtually have no COVID patients there. So once that happens, we can get back to a normal business. And again, back to the normal ALOS and the normal ARPOBs.
Got it. And just 2 more questions. So one, also in terms of your expansion, bed addition that is happening. So if you can just broadly outline, I think I missed that, so sorry for the repetition. The other point was, I think you alluded to the fact that you're also -- in terms of expansion and overall growth, you alluded to the fact that you are probably looking at some of your inorganic opportunities. So whatever you can share in terms of these are existing areas or new areas, in terms of geography and broad size of beds, if you also can share that.
Yes. Okay. So to repeat the first point, which is what is the inorganic -- sorry, the organic expansion, what we're doing right now. This is capacity addition in Raipur, which is finished, capacity addition in Mysore, which is yet to start, capacity addition in Dharamshila, which is yet to start. And in [ MMR ], that is Howrah hospital in Calcutta, which is yet to start. All of these were supposed to start sometime this year, but we have delayed it because of the pandemic and the occupancy has fallen. But as the occupancy starts to go back to pre-pandemic levels, the same pressures on space and inability to get patient comfort, that becomes a trend. So then we start those construction projects again. So what it means is that the effect of that gets pushed out. Whereas the effect of doing the construction now would have been realized in FY '22, now we're pushing this to end this year or early next calendar year, pushing it to end of April '22 or even the FY after that. So I wouldn't really -- the brownfield effect would not kick in, the expansion there. In addition, the inorganic opportunities, it is something that we are looking at only in the places where we want to build numbers. And that is primarily East India where we have very a strong presence in Calcutta and in the NCR Delhi area. But it is something that we've done very opportunistically and yet within the most reasonable limits of our ability to borrow its expense, to grow and make -- and buy these hospitals at a price that makes sense, which right now, nothing is meeting all that criteria. But as and when it does, then we would evaluate it.
All right. And given the -- as you alluded to, I mean, given the fact that numbers are improving in areas like Bangalore, which is a very big region for us, I mean, October -- was October a better month from that cluster point of view? And do you see that sustaining going forward, should keep this up?
Yes. Across the board, October was a better month, yes, so nearly all our hospitals, barring Jammu.
The next question is from the line of the Vivek Agrawal from Citigroup.
Sir, so just a longer-term question. So let's say, in fiscal '23, hypothetically, we are out of the pandemic, what kind of the EBITDA margin we can achieve?
Debangshu, you want to give your favorite answer?
We refrain ourselves from giving any guidance on this. I mean, you have seen what we have been able to achieve during the pre-COVID times, at least till a good part of February last year. Basing upon those and given the uncertainty currently surrounding our business, we don't know what will be the time line and the pace of recovery thereafter. But leaving those aside, obviously, you need to build upon where we were, let's say, till mid-February or end of February, till about -- I mean, that is around 8 months back from now. And with the improving traction that you see in some of our hospitals, specifically what Viren mentioned, the NCR unit and a few of our other peripheral units, obviously, you can possibly work out the numbers given that we refrain ourselves from giving any margin guidance so far.
The next question is from the line of [ Chirag Patel ], an investor.
I want to know our -- regarding our strategy with regard to overseas market other than Cayman Islands and Bangladesh.
Yes. The area that we are most concentrating on is the larger Caribbean region. We have opportunities furthering construction projects for our doctors to go and visit and those cases in different Caribbean islands. So those are the things that we would be looking at. And yes, that is something now especially given that most of those countries have gone through quite a bad pandemic and their economies are in tough shape, the single biggest line item for a lot of those businesses is the health care cost for their citizens. And so definitely, we see great opportunity across the Caribbean area, both the English-speaking category as well as the French part of the Caribbean. Bangladesh is -- because it is our largest market, overseas market, and because we have an opportunity to run a heart center there, so we will definitely be looking further in Bangladesh. But for the near term, nothing really to report.
Okay. So do we feel any opportunity or area, particularly in diagnostics space, like what is digital [indiscernible] are doing currently?
So there's 2 kinds. One is the B2B space, where we have very large central reference laboratory. The second one is the consumer-facing, which is more the attractive one in the space. On the B2B space, we had considered, given that we have such a large presence, and we thought we could have a different set. But at the time, we thought it was a very crowded space, and the hospitals themselves won't be able to cope with the demand that we have. And the other one is this business is driven a lot by kickbacks for medical -- by lab companies to the medical practitioners, and that is not something we're very comfortable with doing. So we stayed away from the B2B space. On the consumer-facing side, more than on diagnostics, we have made a significant effort in upgrading our technology for online consultations and for a consult scheduling. And that is something for NH patients, we're going to offer as a service to do the home sample collection, the pickup, the laboratory, delivery -- sorry, pharma delivery and so on, not something as a consumer-facing thing, but something that our own patients can avail rather than waiting in line in the hospital. We can do it with them as per their convenience. Building a consumer business at this point is very capital-intensive, and a lot of the economics of the market have been ruined by the [indiscernible]. And so we would not feel comfortable entering the space at those price points right now.
[Operator Instructions] As there are no further questions, I now hand the conference over to Mr. Debangshu Sarkar for his closing comments.
Thanks, everyone, for your active participation. We look forward to such further interactive sessions with you guys in future as well. As we have not possibly been able to handle all your queries that you have asked us, feel free to touch base with us offline, and we'll try to address it to the best of our ability. Thanks once again.
Thank you. Ladies and gentlemen, on behalf of Narayana Health, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.