Narayana Hrudayalaya Ltd
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Narayana Hrudayalaya Ltd
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Good afternoon, everyone. My name is Nishant Singh. I head the IR function at Narayana Hrudayalaya. I welcome you all to the quarter 3 FY '23 earnings call of the company to discuss our performance and address all your queries today. We also have with us Mr. Viren Shetty, our Vice Chairman; Dr. Emmanuel Rupert, our CEO and MD; Ms. Sandhya, our CFO; Mr. Venkatesh, COO of our Eastern and Southern domestic operations; Dr. Anesh Shetty, MD of our overseas subsidiary, HCCI, better known as Cayman; and Durga Prasad, Senior Manager from the team.
We hope you have gone through the investor collaterals, which have been uploaded on the stock exchanges as well as our website. As usual, before we proceed with the call, we would like to remind everyone that the call is being recorded, and the transcript of the same shall be made available on our website as well as on the stock exchange at a later date.
I would also like to remind you that everything that is being 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. Post the call, should you have any further queries, please do not hesitate to get in touch with us. We would like to address them to the best of our ability.
With that now, I would like to hand over the call to Dr. Rupert.
Good afternoon, everyone. I warmly welcome you all to quarter 3 FY '23 earnings call conference of Narayana Hrudayalaya Limited. The third quarter of the fiscal year delivered steady performance supported by the growth in business across our flagship units, newer hospitals and improvement in payer mix.
Consolidated revenue for the quarter stood at INR 11,282 million, reflecting a year-on-year growth of 17.5% and a marginal decline of 1.2% compared to the previous quarter due to the seasonal nature of the business, which affects patient footfalls. However, contribution from international patient footfalls remain unaffected.
Narayana Hrudayalaya generated consolidated EBITDA of INR 2,660 million in Q3 FY '23 at a margin of 23.6% against 22.3% of quarter 2 FY '23 when adjusted for the onetime other income. This margin improvement is attributed to improvement in payer mix and cost efficiencies. Our Cayman unit managed to contribute to the overall performance despite holiday season and HCCI revenue marginally declined by 3.2% to USD 28.2 million.
We remain optimistic on the robust growth prospects of overseas business in Cayman and continue to explore the investments in surrounding islands an opportunistic basis. Our overall balance sheet and liquidity profile remains strong with group cash and liquid investments of over INR 5.6 billion against gross borrowings of INR 7.8 billion, a net debt of INR 2.2 billion as of 31st December 2022.
Our debt-to-equity ratios improved -- further improved to 0.11 against 0.14 in quarter 2 FY '23, giving us sufficient room to fund our expansion through a mix of borrowings and internal accruals. We have incurred capital outlay of close to INR 6.8 billion, which includes the Sparsh acquisition for 9 months ending 31st December 2022. And in the fourth quarter, we expect to spend the balance amount of guided CapEx of INR 10 billion for FY '23.
We have also provided further disclosures on Slide 12 of our investor presentations on CapEx spend for FY '22 and expected spend for FY '23 and FY '24. During the pandemic, we partnered with YouTube on digital awareness program to provide reliable health care information on a daily basis. We created more than 600 videos to provide evidence-based answers to questions of YouTube users across India in 6 different regional languages.
This initiative, which received 45 million consolidated views and more than 7,000 likes allowed people to understand their affliction in a very difficult period. We are proud to share that this was featured in Google's impact report of 2021, which was released in December 2022. We are strengthening this partnership with channels like YouTube. Our total investments in digital engagement channels grew online traffic by 97.5% to 5.43 million users in the current quarter as against quarter 2 FY '23.
We're also pleased to inform you about the soft launch of Aatma SaaS version, specifically designed for small health care facilities such as diagnostic labs, nursing homes and stand-alone hospitals. Aatma SaaS offers a streamlined integrated solution for an underserved segment of the market scattered across Tier 2 and Tier 3 cities. The team is onboarding foundational customers to gather valuable usage data and feedback to further enhance and refine the platform.
Aligned with our vision to provide integrated health care to wide sections of the society, we have piloted a subscription program in Bangalore to cover individuals and family members. We have recently crossed a landmark milestone of 1,000 subscription plans and are witnessing continuous traction. These results are encouraging us and give us confidence to roll out a comprehensive personalized seamless health care service at the doorstep to digitally integrated patient touch points. We will keep providing more information in the coming quarters.
We continue to strengthen our current position and grow our brand through several various strategic initiatives that will drive our vision to offer a gamut of integrated quality health care services to people across the geographies at an affordable cost. Thank you.
[Operator Instructions] Mr. Prithviraj.
Sir, my first question is on the new hospitals for India business. Could you give us the revenue and EBITDA number for this quarter?
Can you please speak up a little bit?
The revenue and EBITDA number for the new hospitals in India business.
So this is -- you're talking about the 3 new hospitals?
Yes.
Okay. So we have been able to continue to improve our performance on the 3 new hospitals. We have, from a revenue growth point of view -- the revenue was about INR 110 crores for this quarter, for the new hospitals, SRCC, Gurugram and Dharamshila. This was a 17% growth versus last year. And the EBITDA, which we were able to deliver was -- 9.3%. This has -- in this, the Mumbai Hospital is almost broken even and Gurugram and Dharamshila are positive. So that is the number for the new hospitals.
This 9 percentage EBITDA margin is actually quite a good improvement compared to what we have seen over the last few quarters. See how long will it take for this to reach your sustainable EBITDA margin of, say, 15, 17 percentage from now on?
I think for Gurugram and Dharamshila, we are almost there, so I think by -- as we see in the next few quarters, we should be able to reach a reasonably sustainable margin for Gurugram and Dharamshila. Mumbai, we are breaking even -- we have broken even actually in January as well. So Mumbai will take us maybe more than a year, but we are in that direction. But Gurugram and Dharamshila, we are almost there.
And my next question is on the Cayman business. I guess in interview, you mentioned that the oncology department will be commenced from Q1. So how much is the CapEx that went for this particular block? And what kind of revenue potential are you looking at?
Go ahead.
Is this Cayman or Jaipur?
This is Cayman.
Cayman. Cayman, yes.
Sure. Thank you for the question. The last slide of the Investor Relations presentation talks about the CapEx we've incurred and we project to incur. I would say about 80% to 90% of that is for the new oncology block, which includes not just the oncology block, but the new hospital as well. The new oncology block, yes, you are right, we are on track to treat our first patients from Q1 of next year, early Q1. So hoping April, hopefully, we'll be starting radiotherapy services in that. Since it is a department, essentially a service line for us, we won't be in a position to share specific revenue projections for a particular department.
Next line for the question is Dhara.
I had 2 set of questions for Cayman. So despite the declining number of discharges from last quarter, our average revenue per patient has actually increased for Cayman. So what is the driving factor for this?
Dhara, thank you for your question. So we will -- there are a few reasons for that. So the first is essentially an increase in the complexity of patients that we continue to treat as we commission more service lines which are catered towards our oncology offering and getting ready to ramp up the linear accelerate and the comprehensive oncology program. We are going to be doing more and more complex patients.
The second reason is the discharges, which is the denominator for the ratio you are referencing as well as the discharge is an absolute number. We had a migration of our core EMR system from the legacy system to Aatma, a couple of quarters ago. So Aatma is more sophisticated in that we are able to break down discharges into more granular details of daycare, emergency and regular IT discharges. So the Investor Relations team will be releasing more details on how we have to reconcile the pre Aatma and post Aatma discharge numbers for this maybe in a quarter or 2.
So if the new oncology block, you are saying, no, we'll be operational from Q1 FY '24. So should we expect that the number of discharges will also grow from here on?
So the oncology block, which will be ready from April will be only offering radiotherapy. We continue to offer medical oncology. We -- I mean we have been offering medical oncology for a while, and that will continue. Surgical oncology will build up as well. So radiotherapy, the number of discharges, these are predominantly daycare patients, so they will not be inpatient discharges. And although the realization is high, and we expect the margins to be commensurate with what we are earning. The number of patients will not be very significant to move the [indiscernible] in the early days. That will take some time.
Next in line is [indiscernible].
So my question is that -- so there was this EBITDA margin that was given in the previous investor presentations. From what I have the previous quarter, Bangalore was around 35% or East was around 40%. So could you possibly provide me the breakup for this quarter?
Actually, we are kind of aligning to industry here. And I think also our units are getting mature. So we are now stopping that, earlier we were providing that distinction because different stages of maturity was there for different geographies. Now we -- more and more, we want to align with how industry represents data. But what we will continue to do like we did at the beginning of the call, is we will provide information on our new hospitals, revenue and EBITDA, until they come to a state where they are steady state and they are able to -- they make run rate returns. Until then, we will provide that data in the investor call but we believe that it is time has come that we don't need this distinction between regions. They are more or less consistent in terms of performance.
Sure. And just one follow-up question. So the ALOS, average length of stay has been consistent over the last few quarters. So -- but there was a lot of talk about robotic surgeries and other things. So is this expected to reduce the average length of stay going forward?
Yes. The robotic surgeries are all -- I mean, when you compare to the overall number of discharges across the group, the number is very -- I mean the number is small to make a major difference. While, however, we are continuously working on operational efficiencies and trying to reduce the pre- and post-procedure length of stays. And that is what when we have given some kind of a guidance level, we said that over 6 quarters, we'll try and bring it down to around 4.1, 4.2 kind of a thing.
The next question is from Mr. Ashish.
Congrats for a good set of numbers. I had a slightly question from a medium-term perspective. Given the fact that we are spending INR 2,000 crores CapEx between this year and next year, which is basically doubling our current net block. So let's say, how long do you think it would -- the new CapEx will need? And a lot of it is brownfield. So how long do you think it will need to get to, let's say, a 20% plus ROC on the incremental CapEx? Would it be a couple of years or faster? What's your thought process around that?
Actually, it should take a couple of years. Construction itself, given that some of this is in running hospitals. It means that the work goes half the -- I mean, half as quickly as it would in a greenfield setup. So 2.5 years in construction, breakeven time should be faster because you're leveraging -- I mean there may not be breakeven time because you're using it within the existing manpower and so on. But definitely, in terms of returning positive EBITDA, that would take couple of more years after that. So it's...
FY '26 would be the real time to look at it?
It's a good ambition but could extend beyond that.
When you said the return means a 20% kind of an ROC and incremental investment.
Yes.
Okay. Would Cayman would be faster because the fact that it's an oncology block and the construction is getting over for large blocks very soon?
Emmanuel, Should I take that?
Yes, Anesh, go ahead.
So the Cayman CapEx will be, like you said, is phased. So oncology, which is a small portion relatively about 10% to 15% of the total CapEx will be incurring that will be ready for March onwards. It's the only major therapy facility in the country. So we don't expect any ramp-up phase for that. It will be active from day 0, and we expect that to be just like any other service line from the beginning. The larger hospital, which will be ready, will naturally -- it's a separate campus. It's a separate location. It's not, we're not spending this within the same campus. Having said that, it is the same island and it is a small island. We don't have a specific number to share as to how many months it will take us to breakeven. But as I mentioned, it should be quicker than going to a new location and starting from scratch.
Sure. And secondly, Anesh, in terms of Cayman, in the past, we've talked about business from new islands, what is happening to that now that we are post-COVID or do you think that's something which is -- which will still take some time.
No, definitely. So since the travel restrictions, so one was post-COVID. The other one was the island opening up completely. So as we discussed during the last few calls, as well, all those restrictions are -- we don't -- they're no longer any restrictions, and it's been that way for some time. So we are seeing a lot of the Caribbean channels that we were working on for many years opened up. We are seeing a steady growth and return to normalcy in the overseas patients by getting from the other Caribbean islands and that's going to be very, very helpful as we ramp up the radiotherapy facility as well because this is -- there aren't too many equivalent facilities in the region.
Having said that, as of now, the local patients constitute the bulk of our business, but we're very -- we're seeing very positive signs with some of the overseas markets. These are patients that come to us just through us soliciting them, whereas others are activities where we go to other islands for different levels of engagement to try and attract patients back to Cayman.
And in terms of capacity utilization, where are we currently on the current facility on the IP side?
Could you repeat that, please, Ashish?
Where are we currently in the capacity utilization?
Sure. So the facility has 107 beds. And as we've said in the investor presentation, I think this quarter, we're a little over 50, 55 beds in occupancy. We have adequate capacity to treat whoever needs to come. And there are days when we have shortages in certain critical infrastructure, but on the whole, we're very comfortable with treating incremental business. And this will line up well with the new hospital, which should be commissioned according to our previous guidance, which will significantly increase our capacity across all classes.
Sure. You are not expecting a step-up jump as things -- as the links completely become open in terms of the other islands 70%-plus kind of utilization on the existing capacity.
It will happen, but it will not happen suddenly because like we discussed a couple of calls ago, when Cayman had shut down, essentially, people in other markets they didn't -- did not go anywhere. They had to diverge and go to other markets that were willing to take them. So swinging those channels back to us is a gradual process. It definitely won't be -- and for clarity, all islands are open completely right now. Nobody has any restrictions. So that -- it's not going to be a sudden jump up. As you had guessed it, it will be a gradual movement that will take time. And that works perfectly fine for us because it helps with phasing out towards the new building.
Thank you, Ashish. Do we have any further raise of hands? Please go ahead.
So the first question is on the gross margins from Q1 to Q2 and into Q3 gross margins have consistently improved. What is the sustainable number for gross finance as we go ahead?
I think the current number is sustainable, we believe. The reason you are seeing the improvement is also because we've been able to do more with the current capacity. But yes.
Can I -- I'll answer your question. This is Venkatesh here. Yes, you've seen correctly that the gross margins have been improving in the quarter on quarter, what we believe that we can sustain these margins., primarily what we have seen last year, we had COVID on the baseline, so the consumable cost is always high. But now that COVID is not there, we've been able to work out savings in relating to that part of consumption. And plus we work very hard with the supply chain to bring out further improvements in the consumption area.
More than that, we have also worked very hard in terms of improving our throughput so that we could utilize our existing capacity to the optimal. So what you've done is we are focused more on doing daycare cardiac procedures and robotic procedures, which are better throughput with the morning admission and evening discharge. We're also working on adding operation theaters, ICUs, diagnostic and lab setups so that we can process more and add more volumes within the existing capacity.
We've also worked -- invested significantly in technologies to improve our throughput, say, faster discharges, faster lab results and so on. And it has actually shown results in terms of 17% reduction on the turnaround time for lab investigations, so far and even 36% of the top 5 investigations. If you see 25% of all our consultations are all through appointment channels and 80% of all our appointments are done through NHK app and portal.
We also worked on increasing throughput for -- through process transformations, improved on our discharge efficiencies and also working on reducing ALOS which you will see the results in next quarters to come. So what has happened is -- all these throughputs have helped us increase the revenues in the same capacity with the same cost in terms of overheads and manpower and that's where we have been able to squeeze higher margins quarter-on-quarter, unless there is any unforeseen headwind, this is reasonably sustainable.
But a couple of the headwinds, which we'll have to also keep in mind is that -- come under the price control, consumables could also come under price control, a lot of the high-end implants, there is stock that the government may reduce the price of stent even more than what it currently is and add more items to this. We're in a very competitive field, doctors and nurses are always have good job opportunities in other centers and in other countries. And so we consistently face a lot of challenges on the payouts. So we're doing what we can, and we believe where we are is sustainable, and we're working towards improving this, but that also gets tempered against the other massive challenges this industry faces.
Yes, Yes. And second question is around simply trying to understand that before all of the CapEx that you're doing reaches solution, how much headroom do your existing Indian facilities give you to grow. I'm not looking at what growth you can get. I'm looking at the limit, the theoretical limit of what can be the potential maximum outcome of whatever you have basis tweaking and creating efficiencies.
For some of the larger format hospitals that we have, as long as we're able to put in smaller investments in just realigning the rooms, doing up the interiors, adding new machines. There will be no theoretical upper limits. You can keep growing at high single-digit revenue line because there's enough space to tweak around. But that is true only for 3, maybe 4 of our large hospitals. The rest of them, which are smaller, you may not -- they're not as well built, you may not have enough room to upgrade. So they will reach a point of stagnation beyond which it will -- you just either have to invest or you have to just add and upgrade more capacity or go somewhere else. So the largest flagship units have no theoretical upper limit for how much you can keep tweaking to improve the performance. And that's true for most large hospitals across all the other groups.
The reason I ask that is, given that there is adequate demand next year and thereafter, would your capacity suffice to grow at a double-digit rate?
With the exception of our Arctic's unit in Kolkata, which is extremely capacity constrained, double-digit growth. It's -- we don't want to get into the forecasting game. We will do our best to sustain this growth momentum and there are other avenues that we would try. But until the new capacity comes, it will be very challenging.
Right. And since you mentioned the new capacity, 2 questions there. One, in terms of bed strength, what does it add for India? And second, in terms of funding year-to-date, you've managed to keep your gross debt very stable in spite of almost INR 700 crores of CapEx. How should we think of the funding part of the CapEx as you go into the second tranche of that CapEx?
The bed capacity part, I'll answer quickly and then I'll hand it over to Sandhya for the CapEx spend. See, we haven't finalized the drawings for the new expansion that's there and the bed capacity once we do it, will come modestly. But like I said, we can't keep measuring the performance and our utilization just purely on beds and occupancy. There is a lot more of investment that we'll be adding on procedure rooms on OTs, on outpatient areas, patient amenities that will be a spend, can improve realization but not necessarily count towards the total bed strength of Health City. But having said that, once we start finalizing these things, we've indicated the amount of spend over this year and next. And as and when the drawing get running, we'll indicate that, okay, at this particular time, this will get operation and how many beds will get added to the total capacity.
On the net debt situation, currently, our net debt is about INR 250 crores. Gross debt by the end of the year, we will be around INR 859 crores. Next year, another INR 1,000 crores we are planning to invest. I think INR 500 crores, we will invest from internal accruals. INR 500 crores will borrow. So we keep our liquidity profile constant between the years. So our net debt will be around INR 500 crores by next year end. So that's the aspiration with which we are working. Of course, the situation depends on what choices we make and how it progresses, but this is the broad direction.
Next in line is Mr. Sameer.
The first question is on the payer mix for India business. So the scheme has been coming down steadily now at 20%. So what's the outlook over here?
So we don't have a specific outlook per se on the scheme. We do want to keep a [indiscernible] of scheme in other payers. The larger philosophy with which we've been working is that if there is -- if there is an ability for the -- if the patient does not have an alternative place to be served, we are serving those patients, and we will not moderate schemes in those hospitals at all. From where we are right now, will be consistent with where we believe to be between 20% to 22%. That will be the range in which I think will continue to be. It also depends on how the government looks at these schemes we've been making continued representations, both in terms of the collection issues that we constantly face as well as in terms of the rates, which have not been revised for a long time, and they are not very -- economically very viable. So we've been making a lot of representations. So if there are some outcomes that come out of these representations, then we will be able to work better with these schemes.
Okay. Got it. But what you're saying is bottom line that as things stand, you would maintain it at current levels, 20%, 22%?
Broadly, yes.
Okay. Okay. So that's what gets me to my next question. What are the drivers for ARPOB for India business going forward? I can see that it's been in INR 12 million to INR 12.5 million for last 4 quarters. So where does it go? And what are the key drivers for this?
Sure. So ARPOB like you are aware that we don't -- price is not a significant lever that we exercise. We exercise cost levers to drive efficiency. So to that extent, we have -- pricing will not drive ARPOB. ARPOB will come because of mix upgrade going to higher coronary procedures as well as improvement on the payer mix. So you will only see and throughput, like what Venkatesh explained that we will be. We are continuously working on improving the throughput. So you will see a gradual improvement in over ARPOB. You will not see a significant jump in the ARPOB. But I think we will be able to manage the overall P&L even with a gradual commitment in the ARPOB. That's how we look at it.
Okay. No, that's very clear. And one final question from my side, and that's for the Cayman Island. Just thinking about it, is there a demand issue over there? As in what would take your discharges and the inpatient volumes up with the current facility? Or it is also about the mix issue that what you can do, which specialties you can do which you can't, and that will get addressed when you come up with a new block. And if you can just talk about that...
Sameer, so for now, for the foreseeable future, the reason there is scope to improve our number of discharges and procedures by adding services we don't currently offer or we offer in a very minimal capacity. So as you are aware, recently, we announced an acquisition of a very niche E&T practice, which is one of the highest volume practices in the island. So these are -- there are certain niche areas like this along with the broad specialty of oncology, which we do not offer. That will definitely help us see some improvement in the volumes of discharges that you mentioned.
Having said that, there are also certain specialties which we do offer where there are other players on Island, where we do have market share to gain. A lot of this will be driven primarily by location. So our location is, we are disadvantaged by location, although we have a massive campus, it's very far away from where most of the people live and work, whereas some of the other players have more central locations. So this will be neutralized with the new hospital in Camana Bay. So that will lead to a further -- we expect that will lead to a further volume gain in specialties we currently offer, but where we do not have a dominant market share simply because there are other players. But of course, eventually, it is not a very large market. We will reach a stage where -- which is your first guess where at a time, there will be a demand issue. And our hope and our aim is by that time for the overseas patients to start ticking in insignificant levels to move the needle to drive the next level of growth. I hope that answers the question.
Yes, sure, Anesh. That's very clear. And just on the new facility, what would be the tax rate? I know I'm jumping the gun, but just to understand that.
I'm sorry, did you say tax rates, Sameer? I didn't get that.
That's right. Because I think that for the current business, the tax rate is probably minimal, right? So would that continue for the new facility as well?
Yes, Sameer. I mean, no, not just us for anybody. The Cayman Islands is a 0 tax jurisdiction for business tax. So there is no applicable taxes -- business taxes.
Yes, I just wanted to make sure.
And just for clarity, that's not a concession that is time bound. That's for everyone operating there.
Thanks, Sameer. Any further raise of hands? Any further questions? Yes, Gagan, go ahead.
The Bangalore new orthopedics facility that you acquired last quarter, if you could update us on what's the status there? I think last quarter, you indicated that it gives you headroom to transfer the orthopedic cases from your current Bangalore facility out and therefore, creates that much space for you in terms of bed capacity. I mean, are we going to see that sort of playing out in the coming year? Or is that something that can happen later? And what's the status and evolution of that one?
So this part, which we started, we started operations in October, and it is being merged into our current operations of the Health City in Bangalore. We have been able to have a smooth transition in terms of the operations in Sparsh with least kickups. Most of the doctors working there have been taken into our roles. And they're working with the same energy and rigor, which they were doing when they were a part of the Sparsh. So to start with, we are continuing to work with these doctors and also trying to aggressively source clinicians into the system. We've already got in 3 surgeons and an anesthetic on board, including the clinical lead for orthopedics and trauma.
As of now, we've done reasonable numbers in terms of joints and other procedures in this quarter. And this quarter, in fact, has generated a very good EBITDA of around 30% in this quarter, which is much higher than what we've had forecasted. Of course, we've got -- the first objective is to maintain the same performances in this next quarter and also to make sure that we've got aggressive plans for growth of this particular unit in the subsequent year with higher top line volumes and more EBITDA.
And on the margins that you used to give up to the prior quarter segmentally or at least city-wise, I think cluster-wise margins is standard reporting for most hospitals, be it Apollo, be it KIMS everybody reports cluster-wise operating margin. So when you say you want to align your practices to how the industry does it. The industry does report it in that pace. So -- why -- I mean, have you discontinued the practice? And I mean, if you could give us some idea as previous gentleman asked in terms of understanding the margin evolution by cluster.
How we've looked at competition and what disclosures, I think most of the focus is on overall margins and the various levers that enable the judge performance better. So we are aligning to that, as we go into future quarters, we will try to publish more data points, which gives -- like this time we came, we have put a separate slide on the CapEx across different types of CapEx that we'll incur. So we can give more visibility to how our future spends are. So we will try and create more data points that helps you understand the underlying strength of the business. We will also share some of the new hospitals where the margin profiles are low. We will share that information in the investor call so that the clarity is there on the improvement plan.
But otherwise, we believe that as a group, if we are able to share overall margins that reasonable well indication of where we are headed as a group and cluster-wise, margin information has not enabling any better decision-making than the data that we are already sharing. So I think we would like to align to that model.
And between Sparsh, Mumbai and Dharamshila is there, I mean you indicated there still is room to increase efficiency with scale, which would mean as you head into FY '24, there's still room to improve operating margins -- any assessment of, first of all, the viability of this assumption into a ballpark scale of what could be possible margin improvements because of this?
Sure. So Sparsh, I think it is already around our ballpark margins like Venkatesh had shared. And so we were talking about Gurugram, Dharamshila and Mumbai, which are the new hospitals. Like I mentioned earlier, Gurugram and Dharamshila are almost there. I think they will get to reasonable margins, double digits. They will -- Dharamshila is already in double digits. So we will get to double-digit margins for Gurugram and Dharamshila in the next couple of quarters, we should be able to get there. Mumbai will take a year. We are -- we will turn EBITDA breakeven positive also in the next quarter or so. But it will take time, maybe more than a year to get to a double-digit type margin profile.
And on Cayman, how should we think in terms of growth for the coming year with the addition of the radiology department. And also, when does the new hospital become operational? Any time lines of when it becomes operational? And when do you see a reasonable sort of occupancy in that one?
Gagan, so to your first question, I think for the past few years, we've been able to demonstrate adequate double-digit revenue growth from the existing facility and the existing service lines. So even without the radiotherapy facility being taken into consideration, we don't see that stopping at least for the next year. Having said that, adding the radiotherapy facility does add a comprehensive oncology offering, which will definitely help, help a lot.
To your second question on the new hospital being commissioned. So currently, it's well under progress. Time lines are dependent on a lot of externalities. We currently estimate, and I think this was shared a while ago as well. It won't be commissioned in the coming financial year. I think the time we'd be looking to complete the facility and get all the licenses and accreditations in place will be somewhere in the range of about 14 to 16 months from today. So that's a -- we're still -- given how far away we are from that, that is subject to be change, and we'll keep you posted every quarter, but we expect that to happen in that time frame.
And adding on to even Sameer's question, we think that will be a big, a big positive win for us simply because it neutralizes the location disadvantage that currently hampers all specialties that we offer.
Just one final question. This is more to get your opinion on observations around cataract surgery is just a case in point to drive home a bigger point, which is that if I look at the CapEx surgeries done, the data that's put out for this year. And if I look at what used to be the pre-COVID trend, my assessment is that from pre-COVID, it went down very sharply less than half, maybe even worse. And then this year, it came to more than double of the pre-COVID levels, which is basically a lot of pent-up cases getting done. And from -- and if you look at the monthly data, it seems to be normalizing. If that is the case with a lot of elective procedures as you get into the next year, not necessarily only NH, but for the entire industry per se, case mix would normalize, which would put, I would think put pressure on ARPOB because this has been an year of exceptional case mix if that observation can be extrapolated to other elective surgeries. So what's your thoughts on that?
Yes. It might be very difficult to extrapolate from an [ ophthalmic ] practice because ophthalmology in general, especially the cataract surgery is well covered. And the COVID, definitely, it was considered as an elective nonemergency case. So most of them were postponed. And that is bound to jump up and then normalize over a period of time. But if you look at almost every other specialty in the country, a lot of -- we are still significantly underserved in terms of number of procedures that needs to be done vis-a-vis the population and the patient mix. So there is -- and the -- what is COVID done is it has brought significant awareness of health to the public irrespective of the -- across the entire socioeconomic zones. So we will -- we are quite positive that the awareness will keep pushing the relevant specialties to do certain numbers. And even if you look at the kind of need that is required in the population for cardiac procedures or onco procedures, we are way, way behind schedule of what needs to be done.
So looking at that, I'm sure we may not be able to drop parallels between ophthalmology and the rest of the specialties. But certain specialties may catch up at some point of time. But we are -- from whatever 12 months data we have seen, we have seen fairly good inflow of patients to most of the specialties.
I'll put it another way. People that have health problems in our country, most of them don't know they have a problem. And we'll suffer from it for years, and then eventually, it will end them. For the people who know they have a health problem, very few of them will actually get help for it. Of all the people who try to get help for a problem, very few of them will go to the right place for their [indiscernible]. And all the people who go to the right place for the help, very few of them will come to us.
So in terms of the opportunity set, you're talking about many orders of magnitude between what start-ups like to call a total addressable market versus the number of people that we are currently treating. So COVID or no COVID, the growth of patients with health problems into [indiscernible] super specialty health care facilities like ours and competitive hospitals to ours has huge opportunity. And that those only form the first 1 or 2 decks that every hospital likes to put out.
Now how we get there is through all the activities that we're doing on improving our efficiencies, improving our reach, going all over the place, increasing awareness, investing in digital branding to tell them that a heart problem should be taken seriously, get the check up and so on. So that's how you build your [indiscernible] reach out to patients who otherwise are not consumers of health care, which is not the case for Ophthalmic because we're very well served, and most people understand.
Now we have Nitin [indiscernible]. Nitin, please go ahead.
Just questions on the CapEx. So 2 things. One is, a, for the current year, how much CapEx have we done so far for the 9 months?
INR 6.8 billion.
And in terms of the pending CapEx about INR 300-odd crores, which is there for Q4, what are the areas where we're looking to spend that money on or invested money in?
So like we've indicated in the slide that we have shared, there are 4 chunks in which the CapEx is getting spent. There is a part that is -- the part on the Sparsh, et cetera, are done. There are certain -- we had a lot of pent-up demand on our replacement of the biomedical equipment, et cetera. And also, there was a lot of civil upgrade that we were working on. We have spoken about it in our previous investor call. So almost 35% of the investments that we have made and are going to make to the balance remaining part of the year is going into replacements and maintenance and upgrade.
In addition, about 13% of the investments that we are making are going into new capabilities setting up, say, new, say, new cath labs, new oncology blocks, those kind of items. So that's about 13% in the current year. And of course, you are aware of the Cayman piece, which is about 30% in the current year of our spend going into Cayman and about 20% into the Sparsh acquisition that we did. So that's how the INR 10,000 crores is split. And this data is also there in the -- I think in Slide 12 of the investor deck. So in that range only, it will get spent mostly towards the biomedical equipment and the work that we are doing on the civil side, the balance -- in the balance remaining 3 months.
And we've had some of INR 350-odd crores, which we've outlined for CapEx for the next year towards upgradation. And so are there any specific facilities where this investments are being done?
It's very spread out, across all our hospitals. The bulk of it will be going towards Kolkata and Bangalore to our large hospitals, but the rest towards all of them, Jaipur, Ahmedabad, Jamshedpur, Delhi those places.
And where on Kolkata, since you mentioned, how are we now looking at the capacity constraints there?
We have no choice but to look for land to buy something and set it up. The only other option otherwise was to demolish one of our old towers and rebuild it, but that would cause too much disruption of the operations. So we don't want to consider that right now. We found a few land [ persons ] where we're trying to acquire them. But buying land in West Bengal is always difficult. So it's taking time, but we're hopeful that it should happen sometime next year, and then we can start construction immediately.
But it is still going to be another 2 to 3 years before this new facility comes up...
Yes.
How are we looking to handle the Kolkata capacity constraints in the meantime?
The Howrah hospital construction is ongoing and that should get operational when that is complete, it will take some of the budget. It won't. I mean Arctics will still have some challenges. We do a little bit more realignment there, try to take over some buildings nearby on rent. We've taken over some of the apartments nearby to convert them into our purposes, move admin, redo the parking areas and so on. And little things that we can do, but it won't change the needle too much.
And just, Anesh, what is the total CapEx you're looking at in Cayman for this new expansion and that -- is it still -- it's still sticking to the $90 million to $100 million we had talked about earlier, is going to be lower, higher than the previous estimate?
Nitin, I wish it was low. No, we're still on track for that. The exact values have been broken up in, I think, one of the last slides of the investor presentation converted to INR, I think. So that's the detail there, but we're still on track for the earlier guidance. There may be some slight upward revision, but nothing significant.
Thanks Nitin. Next to line, we have Mr. Prithviraj. Please go ahead.
Anesh, just one question on payment. See, given the oncology department will be operational from Q1, do we expect margins to take a dip initially? Or can we sustain this 40% [indiscernible] EBITDA margin in Cayman?
No, we don't expect any margin dilution because oncology, so what we are adding incrementally is radiotherapy, which is capital intensive. But from an EBITDA margin perspective, very, very healthy and definitely accretive to what we're doing. So we don't expect any margin dilution.
For this space.
Yes, for this -- when -- I'm talking about only the radiotherapy facility, which will be ready in a few weeks, so only for that space. When the new hospital is commissioned. That's essentially commissioning a new building, we'll be duplicating a lot of our fixed costs, unfortunately, in a completely new location, et cetera. So -- and as we've guided before, they most definitely will be margin dilution at the time.
Next, we have Mr. Nitin again.
Sorry, I'm done.
Do we have any further questions? Anyone? All right. So if we have no further questions, we would like to conclude our session. Thanks, everyone, for your active participation, as always. Please do feel free to reach out to us in case of any further questions. Thank you once again from all of us.