Narayana Hrudayalaya Ltd
NSE:NH
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Narayana Hrudayalaya Ltd
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Good afternoon, everyone. My name is Nishant Singh. I head the Investor Relations function at Narayana Hrudayalaya. I welcome you all to the quarter 4 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; Mr. Venkatesh, COO of our Eastern and Southern Domestic Operations; Dr. Anesh Shetty, MD of our overseas subsidiary, HCCI, Cayman; and Durgaprasad, senior manager from the team. Our group CFO, Mrs. Sandhya, is not available for this call due to some unavoidable reasons.
We hope you have gone through the collaterals, which have been upgraded on the stock exchanges as well as on our website. As usual, before we proceed with this 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 with the best of our ability.
With that now, I would like to hand over the call to Dr. Rupert, our CEO.
Good afternoon, everyone. I warmly welcome you to the quarter 4 FY '23 earnings call conference of Narayana Hrudayalaya Limited. The fourth quarter of the fiscal year delivered robust performance supported by the growth in business across our flagship units, our hospitals and newer hospitals.
Consolidated revenues for the current quarter stood at INR 12,216 million, reflecting a year-on-year growth of 29.9%, resulting in a consolidated fiscal revenue of INR 45,248 million at a year-on-year growth of 22.2%. NHL generated consolidated EBITDA of INR 2,904 million in quarter 4 FY '23 at a margin of 23.8% against 23.6% of quarter 3 FY '23.
Our Cayman unit continues to contribute significantly to the overall performance. HCCI quarter 4 FY '23 revenue increased to USD 29.3 million against quarter 3 FY '23 revenue of USD 28.2 million. There are one-time income and expense included in this. And adjusted for the same, the quarter 4 underlying margin is 22.5% for the group and 18.5% for India. Our industry-leading average ROCE of over 28% and our targeted CapEx strategy focusing on judicious allocation of capital continues to deliver sharp returns.
I'm delighted to share with you that we recently operationalized our New Bone Marrow Transplant Wing in Health City campus in quarter 4 FY '23, adding to our existing capacity, making it one of the largest such facilities in India and also the Asia-Pacific region. This unit completed 63 bone marrow transplant in quarter 4, taking the total bone marrow transplants performed in the unit over the last 1.5 decades to more than 2,000 across -- in India.
This, coupled with the advanced CAR-T clinical trials, that is the chimeric antigen receptor T cell therapy trials, which is an advanced immunotherapy and precision medicine, in partnership with Immuneel with their GMP facility located within our campus, makes us one of the very few centers in Asia with end-to-end treatment for advanced oncology under one roof. The clinical trials which we participated in, we performed more than 20 CAR-T cell therapy out of the 24. And they were successful. And 40 of them are nearing their 1-year follow-up after their CAR-T cell therapy.
Our leadership in cardiac [ thread ] grew from strength-to-strength with cardiac hospital in Bangalore performing more than 2,250 cardiac surgeries and 5,500 cath lab procedures and more than 150 minimal access cardiac surgery this quarter. Minimal access cardiac surgery is growing in numbers. And they are able to perform very complex valve repair surgeries and coronary artery bypass surgeries using very small incisions of around 1 inch to 1.5 inches. This continues to be one of the largest cardiac centers in the world.
Our Mazumdar Shaw Cancer Centre performed 75 robotic onco surgeries in quarter 4. And we have been able to extend this sphere of complex work that we do across our all centers. We successfully performed Gujarat's first ever MitraClip procedure for a very end-stage heart failure, repairing the mitral valve in very severe heart failure leading to severe mitral regurgitation.
The NH Ahmedabad unit also discharged total knee replacement patients within 24 hours of the surgery. And this robust perioperative care is what we are trying to drive across our entire network, converting many of the procedures into short-stay procedures. The NSH Howrah completed more than 200 robotic onco surgeries in a little over a year.
Our newly acquired Department of Orthopaedics, Spine & Trauma in Health City campus has successfully performed a complex hand reimplantation surgery in the quarter. This [ end ] person had his forearm severed in an industrial accident. And a team of plastic and reconstruction surgeons, along with [ orthopedics ], painstakingly implanted the severed forearm. The unit has been progressing well with a clinical spectrum and does more than 200 procedures a month.
After implementing Athma, our LIS, lab information system, across our labs, we have experienced a noteworthy enhancement of 20% in the turnaround time and up to 36% in the top 5 tests. This improvement in efficiencies is across a substantial volume of 24,000 samples per day. We can now provide our patients and doctors with precise results in significantly shorter period.
Athma successfully achieved the prestigious NABH-QCI certification. This recognition granted by the National Accreditation Board of Hospitals in collaboration with the Quality Council of India and the National Health Authority recognizes Athma as a trusted partner that affords with the higher standards of interoperability, quality and safety. It reinforces our commitment to providing our patients and doctors with a reliable and secured platform.
We are transforming our business to offer comprehensive health care services by becoming more patient-oriented, digitally native and operationally efficient to offer high-quality health care at an affordable cost. While continuing to consolidate our operations, we would simultaneously pursue growth opportunities both in India and overseas that derive synergies from our existing operations and maximize value for all our stakeholders.
I would like to hand over to Viren Shetty to share updates on some of our new ventures. Over to you, Viren.
Thanks, Dr. Rupert. When we started Narayana Hrudayalaya in 2000, we sought to transform health care by making high-quality care accessible to all. Nobody said it was possible at that time. But looking back, we are proud to have played a part in putting India on the path to dissociate health care access from affluence.
At the same time, the medical research field is spending billion of dollars developing cutting-edge treatments for diseases that were once considered inoperable. We shouldn't deny our people access to the latest and most expensive treatments. But this is only possible when everyone is covered with comprehensive health insurance. The IRDAI has been encouraging new entrants to develop innovative models of health insurance that cover the missing middle. And NH would like to play a role in this new landscape.
Our existing health insurance system operates on a fee-for-service model. It will pay you when you get sick. There's nothing for you when you're healthy and runs in the other direction if you have a preexisting disease. Large developing countries with low tax collection like ours cannot afford free universal health care on a fee-for-service model.
So as NH, we would like to experiment with managed care, where the interest of patients, payers and providers are fully aligned in an integrated manner. So in this model, care and coverage is seamlessly integrated and health care is delivered in a narrow network. And the focus is on providing optimal levels of care and keeping your customers healthy. This is the logical next step in our journey to create an affordable, globally benchmarked, quality-driven health care services model.
At NH, we always believe in getting closer to patients and bringing the promise of quality affordable healthcare to the doorstep of the country's millions. So to this effect, we've incorporated a new company, Narayana Health Integrated Care, and have undertaken a slump sale to transfer our existing clinic assets.
The value may not be that significant, about INR 10 crores. But we will slowly build scale, competency and domain expertise in order to be a market leader in this space. NHIC has a strong leader in Ravi Vishwanath, who joins us with 25 years of experience across HDFC ERGO, Apollo Munich, Tata AIA Life and Reliance General.
These are the early days of our journey, but our initial results have been very promising. We strongly believe that an integrated care model based on whole person care, providing comprehensive coverage for all market segments is the need of the hour. We will share updates on the progress over the coming quarters.
We now open up the floor to your questions.
Thank you, Viren. [Operator Instructions] Yes, Nirali?
Yes. Firstly, congratulations on a good set of numbers. My first question is could you provide an update on the EBITDA margins for Mumbai in Q4? Like in Q3, to be precise in January, Mumbai had come to a breakeven. So I would like to know EBITDA margins for Mumbai in Q4.
Additionally, I'm also interested in understanding the current EBITDA margins for our relatively new hospitals in Gurugram and Dharamshila. And have we achieved a double-digit margin in these two locations? I understand that Mumbai being a new one and a breakeven has just -- we have just come across breakeven. So double digit is not possible for Mumbai. But the other two, have we reached there? Have we achieved it?
Yes. I'll take this call. I'm Venkatesh. So your question on Mumbai, the consolidated -- yes, the consolidated Q4 EBITDA for Mumbai is around INR 6 million, which is around 2.3% in terms of EBITDA. This is the first time it has shown a positive EBITDA for the year at INR 6 million. If you look at the previous quarters, it was on a negative. But gradually what has happened is the negativity has come down gradually. And this is the fourth quarter where we've shown a positive EBITDA, which shows positive direction we've been moving. And we hope to maintain this momentum for FY '24 as well.
Now in terms of Gurugram, the Q4 EBITDA margin is approximately at 2% on a base revenue of INR 35 crores. On the whole year, we just generated a revenue of around INR 133 crores with INR 3.7 crores EBITDA at around 3% margin. When it comes to Dharamshila, the performances have been robust over the year. Q4 EBITDA margin is at around 16% with INR 8.5 crores on a revenue base of INR 54 crores. And for the full year, the EBITDA margin is approximately 14% on INR 29 crores at a revenue base of INR 209 crores. This is the status of all our new hospitals at this stage.
Okay. So ideally, currently, we are at double-digit only in Dharamshila, right?
That's right. All the new hospitals are in positive. Now the most positive thing is you can see in this quarter is all the new hospitals are in positive at [indiscernible]. Dharamshila has 15% to 17% margin over the last 5 years. So we are confident that the other two will also reach the following figures in the next 3 to 5 years. But of course, the stage is already set. And we have started showing positive for all these new hospitals including Mumbai.
So we can expect a healthy margin of 15% to 17% in the nearer-term perspective of, say, 5 years. And this will be sustainable, right?
Yes.
Okay. And my next question is about the Cayman Islands. Is the new oncology block in the Cayman Islands on track to -- that was to commence operations as planned in the first quarter of FY '24?
Yes. Nirali, Anesh here. Thank you for your question. So yes, the initial guidance we had given was Q1. We expected it to happen towards the end of April. However, we had some last-minute issues with the construction. We've actually started the operations about 8 days ago. And we've been treating the first batch of patients as we speak. In fact, just before the call started, we were just playing a short video of the radiotherapy center for everyone's benefit.
Thank you, Nirali. Next, we have [ Tara ].
So I had two set of questions. One was for the ARPOB growth. So this quarter, we have seen ARPOB growth of 10% year-over-year and 5.5% sequentially. So could you provide the breakup in terms of price hike and parent-specialty mix?
Nishant, do you want to take this?
Yes. See, our ARPOB numbers have gone up to INR 1.35 crores per bed. This number, in greater time set, will continue to grow. But we do not expect this to grow very fast. Because our focus is not to have this revenue per bed at a very high level at a very fast speed because we want to retain that affordable-for-all policy. And hence, we will see this growth but will not be the best in the industry. We'll go steadily up, but we don't have a guidance for this number.
Okay. So this 10% Y-o-Y growth, like what we have achieved in FY in this quarter, so how much was the price hike we have taken in the quarter? Because I understand CGHS also increased their price. And since we have 20% mix from the scheme patients, so I guess, there could be some element of price hike in the quarter.
This is not -- this is Viren here. This won't be due to price hike because price hike is only taken once a year. This will be mostly due to change in the patient profile, the case mix, improving the throughput, reducing the occupancy. Those are things that drive. So it's essentially the performance improvement that drive it rather than the increasing prices.
Furthermore, on the price, it's not that everyone pays the price what we put as [indiscernible] a significant amount of discounts that are offered to the patients. Similarly, institutional payers like government do not renegotiate their contracts and even private insurance companies negotiate only in a 3-year cycle.
Next, we have Yash.
Congratulations, team, on a good set of numbers. Can you highlight a little bit more on the new subsidiary that you opened and you mentioned in the initial remarks? What is this about? And how will this grow for us?
So as highlighted, we want to get into creating a model for integrated care. So essentially, this will be housing all our clinics right now. We will be offering primary care services in these clinics. We will be closer to where the patients are staying. And so in the periphery of our hospitals and close to the apartment societies, we will build up all these clinics.
In the clinics, we will offer a combination of services, both the services within the clinic as well as remote services, such as home care, online care and long-term care plans. Eventually, we will combine this with a comprehensive health insurance plan, which would be able to cover not just the hospitalization in a narrow network but also the outpatient expenses within the clinic network that we have created.
All right. Got it. So the revenue-generating model will be more on a subscription basis or something like that? Or it will be...
It will be a combination of both things. It will be a combination of subscriptions that we sell as well as the medicines, lab test, consulting fees, any diagnostics that happen in the clinic.
All right. Got it. And what is -- how different will the unit economics pay for this sort of a business versus setting up a hospital? Is it more ROCE-accretive? Or any calculations that we have done on that?
So CapEx-wise, these things are very light. They break even pretty fast. They may not be as high in EBITDA as the hospital business because the realizations are quite low. And they can be spun up and spun down relatively quickly. So it won't have too much of an impact on the overall consolidated ROCEs, given that the quantum of investment at this stage as we are envisioning is not more than INR 50 crores. So it won't have that much of an impact.
And we're doing it in a measured way. So we won't plan on losing much money in running this clinic network. But we want to test it up. We're trying it out in Bangalore. We'll eventually roll it out to Kolkata and see if people are more appreciative of this model of health care. So where we have a thesis that a lot of health care should be delivered outside of hospital, we're yet to prove out that patients prefer this over coming to the hospital, similarly where the patient, in anticipation of us offering these subscription plans, whether they're fully compliant and whether there's something that has a lot of market acceptance.
So we're trying it out. We're very confident. The initial results are very good. And we'll start showing what we've been able to do from Q1 of this financial year onwards. But at this point, let's just say that it's not something you need to bake into your model. It's something we're also experimenting with and constantly are changing it.
This is very interesting. Just a question on the margins, India business. So as is said in the presentation, it's gone up from, what, 14% to 19% year-on-year. So now since our new hospitals are turning profitable and we are saying that we maintain the momentum, what sort of peak margin potential does the India business have going forward?
We won't be able to comment on this. But Venkatesh, if you can just give some color on generally how things stand in the short term.
Yes. Currently, when it comes to Q4 for India, also we've done around 18.5%. That's the underlying margin at [ 2.5% ]. Having said that, we believe there are headwinds against these numbers. And therefore, it will taper a bit. One is that this year, there has been windfall in revenue, whereas in the coming years, we can see more of an organic growth.
Secondly, there are also significant cost headwinds, which only partially we've been able to pass on to the patients. We'll not be able to pass on the entire thing. Of course, we will try and maintain the same margins in growth through earning throughputs, which we've always spoken about, efficiency improvement and cost rationalization, which we have been doing in the last few years. And we'll continue to do that and make sure that we maintain the margin.
Can we have the next question from Dheeresh?
For the India hospital assets, I want to understand the capacity that is available. So I think the metric that you prefer is the IP discharges of the occupancy. So from that KPI point of view, if you can just help me understand how much capacity is there [indiscernible]
I'll start. And then I'll ask Dr. Rupert to join in. The thing is it's not something where you are constrained in terms -- so there is a space constraint for a lot of our hospitals. But the throughput can be increased relative to how much more investment you're willing to put into these buildings.
So the discharges, by moving to things like day care, for example, been able to improve. By changing the bed configuration, we've been able to increase the realization. By investing in certain things that -- like certain processes where discharge patients faster than the day, we can fill up beds much better. But in terms of what we ultimately will be able to stop at, this is more of a moving target.
That's fine. But because it's -- I mean, is there a quantification to it? Because as you see in FY '20, you had about 286,000 discharges. This full year, you had 229,000, still below what you did several years back. And obviously, compared to the beds and all, the number looks very low. I know that's not the right metric.
So help me sort of get some sense in terms of where we are at least in the flagship assets in terms of the Bangalore and Kolkata one. Because if you see a lot of your revenue growth and a lot of the EBITDA, [indiscernible] India hospital as several clusters. So at least on those cluster point of view, if you can just help me understand how much capacity is available.
See, just off the top of my head, there is adequate capacity within all the hospitals we have. We just need to reconfigure to meet the requirements. As for us not reaching the pre-COVID numbers, there was a calculation error. Because back before when we were on the old system, we were not making a distinction between the day care discharges, which don't end up as occupancy, and the ones that do. And the emergency visits also would not get counted. Whereas since we've reclassified all of that, the absolute number of patients we're discharging has gone up. And this is the highest it's ever been but can go higher.
If you'd ask me exactly how much we can do, it depends on how much more of internal reconfiguration we are able to do for a lot of the hospitals that we have. We may not be able to double in the existing network that we have because that will require significant investment and a little bit of brownfield expansion, which we are doing also. But these two things will go in parallel.
Okay. This -- on this Slide 14, which talks about CapEx, this INR 150 crores greenfield inorganic for FY '24, apart from the clinics part, is there something specific to the hospital business that you've identified, any new land parcel in new city, this INR 150 crores represents what?
Venkatesh can take this up.
So when we are speaking about CapEx, of course, we're looking at replacements, capacity building, capability building. So INR 150 crores, of course, is on plans to require a land parcel in Kolkata for our plan in terms of greenfield expansions. Kolkata, we've already spoken about expansions planned for Kolkata and Bangalore. So this is the first initiative on a step forward towards the greenfield expansion through getting the land parcel in Kolkata [indiscernible] of around INR 150 crores, which we should realize within the first half of the year.
Can we please have the next question from [ Prithvi ]?
This question is on your CapEx. So obviously, this year, the cash flow generation has been very strong. Given this context, for next year, INR 1,100 crore CapEx, can we assume that most of that can be funded by internal accruals and the debt number would be much lower than what we were guiding earlier?
Yes, so this is Nishant. I'll take this question. We've added around INR 330 crores cash, net cash in this year, which is very positive. And our plans for the next year with a CapEx of around INR 1,100 crores, which you have highlighted, around INR 700 crores would be through the bank funding. And the rest will be through our own internal accruals, which will take our debt to around -- net debt to around 0.62 of the overall EBITDA, which is still very comfortable.
In terms of why we are not using the entire cash, it's because we have a lot of cash also at Cayman, where we're still currently exploring opportunities in the other islands. And for India, the cash balance is at around INR 200 crores-plus. So we'll have a judicial mix of both bank borrowing and the accruals in India to fund expansion in India. While the Cayman cash flow stay there, while we'll also add, but we'll also continue to look for the opportunities at other islands around Cayman.
So FY '24 will be the peak debt and then the debt will keep coming down from FY '25?
Provided we don't do any more expansion and acquisition and greenfield things. So this is what we're giving the guidance for the next year. And there is a lot. There's a huge opportunity that is presented to us in all the hospitals that we run. So it's something that we want to keep in mind. So as it looks right now, there's a lot of work that can be done that we believe will really improve our realizations going forward. And we'd like to continue that.
And this question on the Cayman new oncology department, so has there been any markets that's something of that sort you have done to just get a sense on number of people traveling to U.S.? And what can be the potential from this block?
[ Prithvi ], sorry, could you repeat that question? This is Anesh here.
On the new oncology block of the radiation, has there been any markets at way that you people have done to get a sense on number of people traveling from Cayman to U.S. currently for this? And then who can now visit your block in Cayman?
Sure. Thank you for the question. So because the service we are primarily offering is radiotherapy, which is, in general, about a 6- to 8-week treatment regimen, what was earlier happening before our facility was up and running was that patients had to fly 95% mostly to Miami to some of the centers over there. And they would relocate there for a month to 2 months or more with their family. They would not be working, not be earning, significant logistics and inconvenience costs as well as the high prices in that market that the insurers had to bear.
So what is happening is because we are offering similar, comparable treatment modality with the same machine treatment protocols, more or less in line with what they would experience in Miami but with the convenience of having it down the road in a very convenient location at home for them, we do not have much of a -- we don't foresee much resistance to converting people who need the service to use us because: a, we are at home; and b, we are the only linear accelerator on the island.
To your second question about the market size in terms of number of patients, et cetera, we have gathered some of this information through some payers who share this publicly, but others is collating various other sources of information. So it's still an uncertain number that we continue to work with. But there is a significant margin of error -- sorry, a margin of safety built in when we planned this facility. So we are -- we continue to remain very comfortable with the investment and its potential returns.
And also we have a fair idea of been treating patients on medical oncology and surgical oncology. And if you can extrapolate the clinical numbers from them, we have some fair idea as to the number of patients will be requiring radiation from that.
And can you give the Cayman EBITDA number for this quarter, absolute EBITDA in million dollars?
So we don't -- it can be derived from the statements, the difference between the consolidated and the stand-alone, more or less. But we generally don't disclose the specific numbers for that business unit.
Okay. So just final question, so if [ the slate ] is even after the radiation oncology department, can we maintain 40 percentage-plus EBITDA margin in Cayman?
So the radiation oncology will -- we can confidently say will not be margin-dilutive. So this is a facility in any hospital. Radiation, if you look from an EBITDA perspective, is actually a very, very high EBITDA percentage business simply because the investment is significant in CapEx but not in operating expenses. So definitely, there will not be any margin dilution on account of radiotherapy at this stage.
Having said that, as we've discussed several times before as well, in Q1 of next financial year, when we commission the larger hospital, which is the Camana Bay Hospital, which will also have cancer treatment among other specialties, at that time, there will be a margin dilution simply because we will be bringing online a large chunk of fixed costs. But for now, with the radiotherapy center, there will be no margin dilution.
And can we have the next question from Mr. Dheeresh?
Sorry, my question got answered.
So anyone else we can...
Yes, Mr. Gagan. Mr. Gagan, please go ahead with the question.
I hope I'm audible.
Yes.
Sir, at the start of the call, you mentioned there was a one-time contribution to the EBITDA for the quarter. If you could enumerate this contribution and also explain to what it pertains.
Yes. So we've also spelled it out in the deck. There's a INR 20 crores EBITDA contribution from St. Lucia, which is a part of India unit. But there's also a lot of one-time expenses. Because of this EBITDA one-off, we have also had -- we also took this opportunity to write down some of the one-off expenses because of this brownfield expansion in India. So we're doing a lot of transformation projects within all the flagships in India. So if you net off this one-time gain from St. Lucia and the one-time expenses, which we have already incurred in this quarter, the net effect is minimal, more or less [indiscernible].
Okay. And the oncology center at Cayman, if you could enumerate the fixed cost associated in terms of OpEx, the cost associated with that facility. I understand that in an aggregate over the year or thereafter, it might reflect its optimal margins. But as it scales up, the margin profile would be different, therefore, just to understand what could be the incremental fixed cost associated with this one.
Gagan, we run that radiotherapy center similar to how any hospital would -- how we do it in India as well. In terms of fixed costs, aside from the manpower cost to run the facility, which is not much because there are a few people, expensive but few people and the infrastructure cost, which is the facility costs in terms of the utilities and fit-out, et cetera, the ongoing cost for those things, there isn't much of a fixed cost compared to the traditional -- your regular medicine, surgery, cardiology, orthopedic service lines. While we are not in a position to disclose specific numbers in terms of absolute value, but it is -- it's not much as long as we stick to radiotherapy.
And in terms of utilization, obviously this is not going to be like on a bed count basis. But any idea you could give us as to what sort of average utilization you could see for the first year of operations? And when could it reach a mature optimal sort of utilization?
Yes, Gagan. So I'll start and Dr. Rupert can continue. When we look at mature optimal utilization for the linear accelerator of kind that we have, this is a TrueBeam facility. Some of our other centers in India are treating in the range of about 70, 80 patients, 70 to 80 patients a day in this kind of a machine. Now when we planned this center, we obviously knew that those kind of volumes will never happen.
But unfortunately, we can't buy half a linear accelerator. So we understand that the volumes will be significantly less. However, given the exponentially higher realization compared to what we see in our home market in India, as mentioned before, we're very comfortable with our returns from this investment, accounting for a very healthy margin of safety.
And this could be achieved by when? I mean, I understand these are estimates. But just to understand, given your assessment of the market, and the fact that you are the only one on the island, at least so far, do you see this sort of hitting that mature utilization fairly soon, maybe a year or 18 months? Or is it too optimistic?
No. So there will be two phases to the utilization, Gagan. So the first phase is the local business. So local business, like we elaborated in the previous question, simply because of the value proposition of convenience and logistics costs and the overall benefits of being treated at home, the local on-island business will ramp up. We don't expect to have much of a delay beyond a couple of quarters to get all the local business that needs radiotherapy unless there are some patients who, for a very, very specific reason will still travel to the U.S., and they'll do so no matter what. So that's Phase 1, which will happen fairly soon.
But what we're really counting on in the longer term, which is a little -- much more uncertain is the demand for radiotherapy services from the broader Caribbean region, which is in line with our overall medical tourism play for all our services. So if you look at the region as well, although there are a few -- a handful of LINACs all over in a few markets, they're not really run well. They're not commissioned. In many cases, they have maintenance problems. They don't have manpower shortages.
So in terms of having a modern TrueBeam linear accelerator, which is 24/7 available online with comprehensive medical, surgical, oncology and an entire hospital setting similar to what you get in Miami, this is definitely a one-of-a-kind facility in the region. But selling this to other markets, to payers, there will take some time. It's -- we obviously won't be in a position to answer. Even we ourselves don't know how many quarters it will take. But I think that will be the second phase of volume expansion, where after the local business is done, the overseas medical tourism will start kicking in.
Is there a cost proposition for that? Because as you said, people from Cayman go to Miami. So probably from the other islands, they, as of today, go to Miami. Is the travel cost or inconvenience and the treatment cost differential substantial enough for people from the other islands to shift to this?
Yes, that's actually a good question. So when we thought about this and did some research into this, what we realized is since most patients who will be going to the U.S. are coming -- potentially coming to us in Cayman from other islands, there are basically two categories. They would be the insured patients and they would be the self-pay patients. So if they're self-pay, there is definitely a cost advantage to coming to us.
It does get slightly dampened by the -- although for the clinical service, you would spend a lot less than you would spend in the U.S. But staying in Cayman, which is one of the most expensive jurisdictions in the world actually to live in, it does dampen some of that compared to some of the East Coast -- U.S. East Coast markets. But there still is a value proposition.
However, the larger market, which is the insured patients, the patients are insulated from the treatment costs largely. They feel that they've paid their premiums, so they're entitled to whatever the maximum benefits are offered. And they feel like, "Why wouldn't I go to a world-class center in the U.S.? Why would I go to a new place in Cayman?"
So there is that selling to the payer, selling to the one who's paying, in some many cases, the governments as well that we'll have to work through. But we've been doing this for other specialties for some time now. So it's no different just because it's radiotherapy. So there is a value proposition. There is a cost saving. But it's a question of communicating it to the person who is able to influence the direction the patient moves. And that can take some time.
And in terms of realization, you indicated that while volumes would be lower as compared to what you've seen in India, where realizations are substantially higher, any numbers we could work with in terms of realization per patient or ARPOB, if one could boil it down to that?
No. Yes, sorry, please go on, yes.
No. So that was a question on this one. If there's no data possible on that, I have two more questions. One, the second unit that came in, whenever it comes on stream, you indicate that it will come with substantial fixed cost and therefore initially have some sort of an impact on your margins. Point well taken, but I presume that one of the reasons for doing that facility was that day care patients, I think you indicated in some of the previous calls, don't want to come to the current facility because it's, from a travel perspective, not the most optimal location. And therefore, you want to capture that bit.
You want to do something in the heart of the city. If that is the reason or the focus for that facility, then ideally the fixed cost there should be lower than a full-fledged inpatient sort of a facility. So just trying to understand how does the fixed cost on that facility compare with your existing facility and also the proposed bed count there.
Yes. So the first question on the fixed cost and should it be lesser, so you are right that the distance is a significant barrier to many patients, even though it's just a 40-minute drive from the city center to where we are. But in that market, that's perceived to be a lot. So this -- the primary reason for this hospital was a location advantage. And like we mentioned before, when we decided to solve it, we decided to solve it with the best possible land. So the land parcel we own, the location we have is the most premier land in the country. And it's just at the roundabout by which half the country passes by every day. So we've definitely neutralized that location disadvantage.
Having said that, because we've neutralized that, we obviously would be for better -- more attractive to patients who require day care surgeries but also just outpatient visits, diagnostics, even some light inpatient work as well, whatever the reason may be. So the way we are thinking of this is to make maximum utilization of our facility and of our investment. We will not be restricting any services. So essentially, whatever we perform in East End and the main campus in East End will also be performed in Camana Bay. Because it doesn't make sense to not offer it when patients have a need for it, especially since we have the most expensive fixed cost, which is the human resources, the doctor is already in the same island.
So to your question, the difference in fixed cost, yes, it will be lower than what we currently have. But that's only because we will not be hiring the second or third cardiac surgeon or the second or third neurosurgeon, et cetera. A very large chunk of our costs are our clinical manpower. And at the clinician level, at the doctor level, they all have a good amount of redundancy or excess capacity to still be unlocked. So we will be using that. So because of that, the fixed cost of the facility will be lower. Added to that, the main campus is about 110,000 square foot facility, whereas what we're building is about 64,000 square feet facility. So to that extent, the facilities costs will be proportionately lesser than that.
And I think your last question was on the bed count of that building. I think we've mentioned it before. We'll have inpatient beds. We'll have emergency. We'll have chemotherapy. We'll have a large obstetrics unit presence as well. I think -- I don't want to give a number that's materially different from what we've earlier disclosed. But I'll -- Nishant, if we could follow up with that, I think what we said was in the 50 -- 54 beds, I think. So it's about 50 to 54 beds.
Right. And just a follow-up on that, would -- when this facility come in, would it mean that some of the revenue that you're currently generating in your existing facility would get sort of, in a way, cannibalized and shifted to the new one possibly to start with and then as the cases ramp up here, that effect might go away? And also, final one, you mentioned at the start of the call that you see -- you foresee some headwinds on the margins and there were some windfall gains, if you could elaborate there as well.
Yes, absolutely. So to your first question -- and I'll hand it back to Nishant for your second question because I think that was a comment on NH India, the margin. But to the first question, yes, so there will absolutely be a sort of transfer. Cannibalization is a harsh word. But yes, a transfer of patients and revenue from one facility to another.
But at the same time, there will also be a transfer or sharing of costs. Like I mentioned, we won't be hiring -- let me -- we won't be hiring any incremental patient-facing clinicians to do this, which is a very significant fixed cost. Because they all have spare capacity and the same goes for other senior resources as well.
So yes, you are absolutely right that in the initial ramp-up phase, there will be a large amount of transfer of business, revenue and cost until things settle in. And then we will see a true incremental gain of revenue, hopefully without any incremental gain in costs. And that's what we're really hoping for. So back to -- Gagan, if that answers your question, can we move -- pass it along to Nishant temporarily?
Yes, sure.
Thanks. This was a question, Nishant, on the one-time -- the headwinds on the margin.
Yes, I think it was already answered in terms of the...
No. Sorry to interrupt, this is not for the one-time. I think there was a comment made that for FY '24, you see some margin headwinds.
Oh, sure. Venkatesh, yes.
Yes.
I'll summarize that. So the margin headwinds, mostly around the fact we're entering an election year. And so generally, what happens is if you're exposed to a lot of government business, you'd be a little cautious because of the growing receivables. The other is the usual global macro scenarios, what we expect with the war and so on and a deteriorating currency situation in a lot of the ASEAN, [indiscernible] Nepal, a lot of places that traditionally send patients around.
Other than that, there was a massive base effect that led to a huge gain between last year and this year. Whereas now off a high base, it may not be easy to replicate the same sort of revenue growth in this year. And lastly, a lot of the work, we are still doing. A lot of the room reconfiguration, doing up the cath labs, adding bone marrow transplant units, robots, doing up the cath lab, OT, all of that is still very much under progress and will be for the next 3 to 4 years.
So as and when these units are being built, it does lead to a lot of loss in productivity because of the areas you are shutting down. And so those are the headwinds that we expect over this year, which is why we'd be a little muted in our optimism for being able to continue growing at a very high pace.
Yes, one of your peers indicated that CGHS rates partially have been revised and expected to revise for the packages as well and by, I think, a reasonably substantial amount since it's happening after a gap. Would that not in some way help you? I mean, I'm trying to understand your CGHS exposure here? And secondly, how has been the international patient flow for you? And is the momentum there growing for you? Or you believe that in the coming year, it might temper down?
I'll address the CGHS and Venkatesh will address the Bangladesh. CGHS, they had announced a revision in the rates for a lot of outpatient consultations. So INR 100, they were paying a doctor. Now they're going to pay INR 150. This is a doctor who charges INR 700 to INR 3,000 for a consultation. So the enthusiasm that he would have would be adjusted accordingly for this patient.
Similarly, the daily room rate went from INR 1,000 to INR 3,000 on rooms that cost INR 15,000 for patients paying cash. So similarly, everyone's enthusiasm on the increase in the prices would be tempered. But now they have said that some pricing rate increase would happen over the CGHS rate. We're to expect it in July. We don't know what that's going to be.
We can speculate. And obviously, our fingers are crossed that it will be substantial. But then again, one never knows with this thing, whether you're talking about a 5%, 10%, 50%, 70% price increase. This is a rate that hasn't been revised since 2014. And if I'm a payer, while let a good thing -- why not let's let it continue going on and on? Venkatesh, for the Bangladesh?
So yes, also on this, after the migration to [ NVISL ], claims have not been processed, [indiscernible] are also there. So I mean, there has been a violation in terms of the contract. So that's also one of the reasons why we have kept this on hold, along with the analysis as to what benefit the [indiscernible] policy. We have a good demand even otherwise.
Sorry, you were not very audible. I don't know if that's the case for everyone. But I did not -- I was not able to hear you very clearly. My apologies if you could just...
What I was trying to say is that post the migration into -- from NHA to [ NVISL ], the CGHS-related claims have also not been processed. So there are significant outstandings. So there has also been violation in these contracts with the other payers. So we also need to keep a watch on how effectively repayments also happen, along with trying to see what values the regulations will give us. So that's what I wanted to say as an add-on to the CGHS.
Now when we come into international patients, international patient volumes have been improving gradually from 6.2% to 7.6% and now it's gone into around 8.5% in Q4. We are focusing on core market of Bangladesh but with more of a direct outreach. But still, what we feel is that we may not -- we don't believe that we'll still reach our pre-COVID numbers in near term. Because one is we have got all the [indiscernible] we're getting directly into the market. We are also restricting our activities for key markets in direct engagement model.
And our strategy also would be a shift in the marketing expense into digital and domestic activities, which actually will be less impacted by travel disruption if anything happens in the future. So it's a backup or a standby arrangement so that the flow of patients have -- it continues to be a seamless flow of patients, irrespective whether we have an international sector open or not. But the focus is Bangladesh patients keep coming, international patients keep flowing in. But we would, of course, as I say, restrict only to key markets and focus more on digital and domestic areas.
Sir, just one final comment. I mean, the three hospitals that you earlier talked about, Gurugram, Bombay and Dharamshila, they are on their way to relatively better margins as their utilizations improve, your international patient flow maintains momentum, these are positive for you. And yet you're talking about net-net, there being headwinds on margins. I am unable to reconcile, if you could elaborate a little more.
Headwinds is something which is a little different in terms of the cost aspect we've been talking about. And also, these are key -- headwinds we were talking about is on the major units, which we had already spoken about in terms of transformation activities, in terms of the elections and also certain cost increase, which is there.
If we talk about the newer hospitals, which is Gurugram, Dharamshila, Bombay, of course, there is -- when we are looking at the international marketing and getting into this on a direct engagement model, there is a good scope for these units also. But at the same time, we alternate in terms of digital and domestic and [indiscernible] activities.
It's just as an add-on in terms of trying to see how we can add more volumes into the system and also as a standby just in case of any unforeseen circumstances come up in future that's like what we've experienced in the earlier couple of years. And this is just an alternate. While we keep focused on international market, we also need to make sure that we have alternate sources of patient for generation like this.
Right. And what would be the cost of debt for you, the INR 700 crores that you intend to raise?
Sorry, Nishant, please, cost of debt?
See, it varies. Now it's actually high for every month. So it should be in the range of 8% to 8.5%. And we also have to include this [indiscernible]. So effectively, it should be around 6.5%. We can move on to Nitin.
One is on the India business. With all the CapEx that you've outlined, can you give us a rough sense of the number of incremental beds you're looking to add across various locations over the, say, next 2 to 3 years?
The next 1 year, no incremental beds. Over the next 2 to 3 years, we'll start disclosing it when we put up the CapEx list for FY '25. But right now, a lot of the things that we're doing now is more on OPD plazas and parking areas, internal refurbishment.
And in fact, some of our bed count may actually come down because a lot of that is going to existing hospitals. Some will be operational like Howrah, for example, we're adding more beds. But the net effect is not significant. FY '25 onwards, there may be bed addition. But we'll start putting that out from the Q1 slides onwards.
And your Kolkata hospital was running to capacity, [indiscernible] hospital. How have you sort of managed to work around that for now?
Venkatesh?
As we have been always saying about throughput, occupancy or capacity, you can't view it in isolation, especially in high-throughput centers. And Kolkata also one of the high-throughput centers. We focus on very high throughputs perform cardiac surgeries or robotic procedures, which has a [indiscernible]. We're also working on efficiencies by improving discharge time, especially on insurance and scheme discharges happening [indiscernible] trying to make sure that we get it done before 12 so that there is more admissions happening during the day.
We're also trying to improve the [indiscernible] in the ICUs, trying to change the bed mix. We're also developing efficient communication tools between the doctors and nurses through subordinate care and discharge admissions faster. And we are certainly significantly investing in technology to improve our throughput, faster discharges, lab results, seamless appointments and also increasing throughput through process transformation. And also working on the [ LOS ]. We have been constantly seeing the [ LOS ] coming down versus the targets. And we're confident of achieving it in the next 8 quarters.
In the space we save with all these measures, we try to focus on infrastructure enhancement, like where there's these patient bottlenecks, like OTs, adding OTs or adding ICUs, diagnostics, lab, billing, which will enable us to increase revenues at the same cost and same capacity with the incumbent greenfield expansions.
Dr. Rupert here. We've been working with the clinical teams across the network. And part of the thing is to change clinical pathways so that we are able to do the same procedure in a much more shorter period of time and get the same predictable outcomes as well. And this is what we've been doing, apart from all the things Venkatesh has mentioned. So this has yielded very good results.
If you see the cardiac hospital with less capacity in terms of actual beds and other things, we have been able to do more work. So somewhere around the pre pandemic, we used to do around 500 cardiac surgical procedures. We are able to do around 770. That was the number in the month of March. So we have been able to do much more with the same number of beds. And all because of many things, which all work in sync to enable us to do these things.
And this is being replicated across the entire network as far as the clinical workers, whether we have beds or not, we are just working heavily on the process transformations as well as the clinical pathways to enable the procedures to become -- for them, the patients, to use as less time as possible in the hospital.
And secondly, on the Sparsh hospital, it will be about 6 months since you integrated that, merged that and closed that transaction. So any updates on our experience with that?
Yes. It's been going on track as per our expectations. We are continuously doing more than 200 procedures per month. And we have a subspecialty work in orthopedics and spine in that hospital. So we have specialists who do only joint replacement, some who do only sports medicine, some who do only spine, some do the pediatric orthopedics and things like that. But it's been doing very well.
And because of our -- the neuroscience department, which is very well established here, our work on the traumatic brain injuries has also been excellent. Results and things have been moving in the right direction. And we are also investing in the new age technologies as far as the robotic programs for both the joints as well as for the spine. Our equipments are expected to land in sometime in the next quarter. And we should be in a position to take this in a much -- in the right direction is what we want to do.
And Viren, just to sort of sum it up across the various measures you guys are taking up to not really -- with the focus not being on adding specific amount of beds but across increasing the clinical complexity and the overall patient experience, from an output perspective, I mean, where is it reflected, it reflects in higher EBITDA margins for us, higher ARPOBs? Or what are the outcomes that one [indiscernible] you'll be working to work out here?
All of the above, on the higher utilization, higher ROCE, higher ARPOB. See, the thing is we can run around the country blindly chasing beds, making expensive acquisitions, provided we run out of pennies that are found under the couch. And that's the easiest sort of gains that you can make because it's sitting right there. You don't need to look too far. You don't need to run around the whole countryside to find it.
And there is so much about our business that can be improved, which is patients simply sitting around, waiting hours and hours for a lab test. We implemented the Athma lab system. We were able to get the lab results in the time it took for them to walk from the lab to get there, this one, the bills collected, the results had already come. So this kind of throughput is phenomenal. No other hospital in the country is able to achieve that.
And that -- it's now -- it sounds easy to do. It's not just a question of putting money and put one software. Everyone had to work together. We had to put on very expensive auto track system. We had to work with all the lab people to do auto certification. We had to work with the companies to integrate their software into our Athma. We had to iron out all the kinks. We had to get the doctors all lined up to say that these are the tests that will be done with a very low [ time ]. So it's a lot of hard work.
But when it's done, it makes you so much more efficient. It improves the patient experience so much, reduces your cost and allows us to be more competitive in a field, which, as you know, there's -- it's not always that you can keep on raising your prices year-after-year. There's significant challenges coming in the future, where you have a lot of people, and maybe rightly so, saying that there are things that the health care cost should not keep rising up so much. They should be -- there may be things coming to cap the price a lot of services, which we're worried about.
And so a lot of things we're doing to address is the fixed cost that we don't want to take for granted. Now I'm not saying we're going to give up on adding beds. Of course, we want to add beds. Why wouldn't we? We want to go all over the country. But going all over the country with the way in which we operate makes us extremely inefficient, has a very low return on capital and it's not the best way to deploy our capital. So a lot of money, the way which we operate, become the most efficient, then we can run around the whole countryside buying up hospitals.
And the last one on the St. Lucia income that we booked for the year, how -- what is the nature of this contract? And how should we sort of look at this -- the share of income on a going-forward basis?
Yes, Nitin, Anesh here. I'll take that. So essentially, when we continue to explore opportunities in the Caribbean region outside Cayman, what we are very clear on is that we will not put our money or our boots firmly on the ground as a first step unless there's a very, very compelling reason to do so. So we will explore these markets in various ways.
Now given our almost decade of brand equity in the region and the fact that we've been able to demonstrate a very robust track record, governments, private players and everybody in between are actively keen and very actively pursue us to try and see if we can replicate what we've done in Cayman in those markets. We'd love to do that.
The challenge is we need to understand the economics of the health care business on these islands, the certainty of rule of law, repatriation of profits, the general business environment, et cetera, and of course, the local medical conditions and the doctor's lobby, which can always be a problem.
So St. Lucia was one of the early market -- the earliest markets outside Cayman which we explored. And the way we explored it was essentially through a consultancy contract for the government of St. Lucia to help them commission their national hospital. And the intention was to help them do this and have an option to be the operator if we so desired.
We did that. The contract is over. We've completed our work. And we've taken a call that the market is not favorable for us to make an investment. So we no longer participate in that market. But the contract is terminated and the revenue has been booked. And it was a one-time consultancy contract.
Okay. So there is no more incremental cash flows from St. Lucia business?
Yes, not from St. Lucia.
And are there any other such contracts, which could be meaningful -- I mean, not meaningful, but where you're pursuing, which can start accruing to our earnings on a going-forward basis?
Yes, there are a few that we are in discussions with. We will keep you updated as and when we are close to finalizing them.
Can we move to Dheeresh?
Yes. So just to understand this better, so the IP utilization per patient in India in the last 2 years, it's up only 9% of [indiscernible]. And my understanding is that you are trying to premiumize some of your assets by exchanging the ward beds and put single room and other things. So I will expect a slightly better -- although the ARPOB is better, but that is also largely driven by outpatient gets calculated in the ARPOB math as well. But if I just look at the inpatient realization, that has not increased that much despite the premiumization effort that we have undertaken. So please help me understand that.
The short answer is it takes time. The long answer, Dr. Rupert can talk about the challenges in increasing the per patient realization.
Again, it depends upon the kind of procedures that we do and the complexities of the procedure. So we do need to keep a work on the margins. Because some of these extremely high quarternary work do have a little bit of the higher side on the medicine consumables pattern. But that is something, which when I mentioned about the clinical pathways, these are some of the things that we look to standardize across the network to keep this under a very tight control.
And this is not something that, from an administrative point of view, we drive. But we have key clinicians, KOLs and the mentors who drive the pathways to keep these things under complete control. And the tech enables us to keep and seeing which are the outliers from a clinical standpoint and see whether these things are justifiable or not so that we are able to keep this under close track.
But price-wise, we always aim to be the most competitive price in the marketplace. So our realization per patient, what they end up paying in our place, will not grow in line with what everyone else is able to do because we just want to maintain our mass market appeal.
But is that a fair impression that I have that you wanted to premiumize by changing the bed configurations and all those things? So that mix effect, that should show, right, despite you not taking price increase for like-to-like basis, let's say, for the general ward patient?
That takes time. And it's not that we converted all the hospitals into only private rooms. And even in the hospitals, it's just a couple of wards that were reconfigured to meet the existing patient demand, where we had not much demand for the general wards and more demand for the semi-private and private. So we're not going too far ahead of what the market is telling us they want to be treated.
India is still very much a place where people struggle to meet their care expenses, where they sell assets to pay for health care. And so yes, we can pad up our numbers by going all private and refusing care to everyone else. And you can get away with that for a short time. But if you want to build something that lasts for a century, you have to give the customers what they're willing to pay for and make them very happy for it.
So because the numbers that I have, have not been restated for the change in the methodology that you would have done for the IP and discharges, so can you just help us understand that over the kind of pre-COVID period, let's say, FY '19, what kind of CAGR or how much higher are we in terms of IP discharges? Because the number that I'm seeing there is still lower. But you're saying that, earlier to my question, you said that there's a change in methodology in the way you calculate the [indiscernible].
Yes. It's hard for us to reconcile the sets of numbers because we were on an older system. We haven't moved all the billing systems to our Athma yet. So it's tough for us to do a pre-analysis to what it was post COVID. Once we get Athma online...
When did you change this methodology of measuring this...
Over 2019 to 2020. Now I mean, Athma itself has been ongoing since 2018. But there are certain modules that were put in. But that's not the issue. I would say that the larger issue is that every year, there's a moderate increase in the per patient realization. But the larger increase is due to volumes, throughput, discharges and looking at the case mix. So it's not just the plain price increase that leads to the year-on-year revenue or margin increase for us.
Understood. But I'm saying the throughput increase, I'm not able to see it because the numbers tell me that it...
Yes, that's the problem. Yes, because they're on different -- the numbers are different in that the previous one was counting everything, so the baseline is there. So what will give you clean numbers is from 2021 onwards. But of course, 2021 would have been a COVID year.
But how much are the understated current IP discharges number, just to...
It's not been understated or anything. It's just that it's in a very different methodology of calculation.
Yes, okay. So that we don't have, okay. So next question is this greenfield CapEx, which you're saying land in Kolkata. This could be, I think, if I understand correctly, after many years that you are buying land for a hospital. So probably the last one would have been good now, I think, if I understand correctly. So what have you -- like internally, at what IRR, whatever payback, whatever measures that you've used, how have you underwritten this CapEx greenfield?
Sorry, can you just say the last part of your question again?
So as per my understanding, this will be after many years of you buying land for a greenfield hospital. So internally, in your -- when you're underwriting this CapEx, what measures have you -- what is the hurdle rate that you've taken?
All our investments go between a 16% to 18% hurdle rate. And of course, this is -- a lot of this is Excel fiction. But this was after exhausting all options. So going for greenfield, either acquisition or doing construction wasn't our first port of call. We looked at adding something to the existing structure. But that meant demolishing an existing building. We looked at finding something nearby. That was not available to us. So this is after exhausting all the other things.
So definitely, the returns do come on the lower end, given that on a 10-year horizon, the returns won't manifest themselves as well. It will be more back-ended from there. But we feel more confident about making this investment in Kolkata. Because it houses our flagship asset, we can leverage a lot of the existing clinical manpower and not have to double-invest in a lot of that. And we have a tremendous brand and patient flow that we can leverage for it.
So we feel confident about making this investment. But it definitely will be, just like in Cayman, margin-dilutive. It will cause a huge amount of upfront investments in the manpower and running expenses over there, which will dilute our numbers for a bit. But it will still take time. This construction is a 2.5-, 3-year project. So we have time for that to just...
One last question. This is -- is the FSI available in Bangalore or in Kolkata? I understand it's not. But is there FSI available? Apart from reconfiguration, is there actual FSI available for you on existing assets?
Yes. In the Health City in Bangalore, there is. I mean, we can add as much as we want. We're on the absolute outskirts of the city. There's a lot of land available that we won't have a problem. In Bangalore, we're adding an expansion to our cardiac building. We're adding an OPD plaza. We're adding a parking -- and we'll eventually add an inpatient area as well. And that will come up in phases over the next 5 years.
Okay. So in Bangalore, if you expand, you don't have to invest in land. It's only in Kolkata that you have to invest in land.
We may need to invest in a little bit of land, but it doesn't come at as significant a cost as it would be in Kolkata. Any other questions?
You have [ Madhu Gupta ] on the line.
I have a question regarding the Jammu facility, which has turned around and has reported very good margins in FY '23. So what is the kind of -- I mean, what is the growth trajectory going ahead? Do you foresee any growth potential over there or it's going to remain at the same level?
Yes, the Jammu hospital is more of a management contract that we run on behalf of the Shri Mata Vaishno Devi Shrine Board. Just for purposes of the way in which it is structured, it comes on our balance sheet. But we don't take any money. We don't make any money off it. It's something that's part of our favor to the government over there. So it will do well. Those numbers show up on our balance sheet, but it doesn't come at any margin.
And going forward, we would also like to move away from the current system, which is as a limited company, and move towards putting this into a trust. Because the Shrine Board has its own ambition, they want to create a medical college. They want to take this to another level. And we're just there as management support to help them achieve that vision. [ Girish ], do you still have any questions?
No, sorry, I don't have.
Yes. So if you don't have any further questions, we would like to conclude the session. Any further questions? No. So thank you, everyone, for your active participation as always. Please do feel free to reach out to us in case of any follow-on queries that you might have. And thank you all once again.