Rainbow Children's Medicare Ltd
NSE:RAINBOW
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Ladies and gentlemen, good day, and welcome to the Rainbow Children Medicare Q2 FY '25 Earnings Conference Call hosted by IIFL Securities Limited.
[Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Jeewani from IIFL Securities Limited. Thank you. And over to you, sir.
Yes. Thanks, Angel. Hi, good morning, everyone. I welcome you all to the second quarter earnings conference call of Rainbow Hospitals hosted by IIFL Institutional Equities. From rainbow, we have with us today Dr. Ramesh Kancharla, Chairman and Managing Director; Mr. Vikas Maheshwari, Group CFO; and Mr. Saurabh Bhandari, Head Investor Relations and Group Business Analyst. Over to you, sir, for your opening comments.
Thank you, Rahul. Good morning, everyone, and a warm welcome. It's a privilege to address such a distinguished group to discuss the earnings for the second quarter and the first half of the financial year '24-'25, reflecting on our company's progress, vision and the exciting opportunities ahead.
In a rapidly evolving landscape, our commitment to innovation and excellence remains steadfast. Today, I will share insights into our recent achievements and the strategic initiatives. I believe that transparency and open dialogue are key to fostering trust and collaboration with our stakeholders.
As we reflect on the second quarter, I'm pleased to report that we have made a significant strides in several key areas. Here are the highlights of the second quarter and the first half of the year.
We have strengthened our hub-and-spoke model further with the addition of the new hospitals commissioned in the past few year. They have progressed impressively, reaching operational stabilization, standerdization and integration into the rainbow operating model.
We believe this will not only enhance our operational effectiveness as a group, but also strengthen our position as a leader in children's health care.
As expected, we have come up with a strong performance in the current quarter. The growth in all key operating metrics across the group, including newly opened hospitals in Hyderabad, Bangaluru and Chennai.
The progress in our IVF services has been notably promising gaining significant traction. We are optimistic about sustaining this momentum and achieve further growth in the IVF segment in the coming quarters.
We have maintained a strong emphasis on the cost management, ensuring that we optimize our expenses wherever possible. This discipline disciplined approach has been crucial as we manage the original cost of our newly operating hospitals, while maintaining this for group's profitability.
As a result, we achieved our highest quarterly revenue, EBITDA and PAT figures along with the positive patient feedback.
We are facing some challenges in international business particularly in some countries like Bangladesh, Oman, Kenya and Sudan. Because of geopolitical situations, these countries have significantly decreased issuance of the health of mix patients pursuing medical travel.
So in response, we are actually pursuing with the authorities of these countries and simultaneously, we are also exploring opportunities in other commercial markets. We have launched a retail brand named Butterfly Essentials, a specialized retail store designed to cater to the unique needs of the women and children.
Butterfly products aim to transform the retail experience within our hospital facilities for customers by offering a wide selection of items that realize organic and natural ingredients for mother, babies and children.
In the first phase, we plan to open Butterfly Essential stores in most of our existing facilities. I would like to something different now with most fascinating sequence of events in human life is an early childhood development, any aberration would result in a long-term consequences in development milestones.
We are witnessing a significant increase in childhood developmental and the behavioral problems. So we recognize this need for a comprehensive child development center to support this children. So we have set up a 8,000-square feet state-of-the-art comprehensive child development center adjacent to our cardiac centers in Banjara Hills, Hyderabad, is expected to launch on 14 November Children's Day aligning with our Foundation Day.
Our steadfast commitment to quality has allowed us to provide outstanding clinical and patient care in line with this dedication our Visakhapatnam has recently achieved With this 13 of our hospitals are enabled and 3 have earned JCI accreditation. Notably, we are the only pediatric hospital chain in the country with a 3 JCI accredited hospitals
Now delving into those numbers for Q2 FY -- financial year FY '25, our revenue registered a growth of 25.5% amounting to INR 417.5 crores. Simultaneously, our EBITDA increased by 25.1%, reaching INR 147.1 crores, while the PAT registered a growth of 25.1% to INR 79 crores.
I'm happy to share that all these growth numbers of 25% very aligns with our silver jubilee year. Our overall occupancy rate for the quarter was 59.9% with a mature hospitals achieving 68.6% occupancy and the new hospitals, including the recently commissioned hospital in Hyderabad, Bangalore and Chennai recording a 43.2% occupancy rate.
Coming to update on upcoming projects. The project work of our regional hub hospital in Rajahmundry with 100 beds is progressing quite well and is poised to commence operations by March of '25. The Hospital in Bangaluru which is a 60-bed hospital is expected to be delayed due to the conflicts between the landlord and the builder.
However, all these issues being sorted, and now the hospital looks to be commissioned by end of H1 FY '26. The project work for our regional hub hospital, Coimbatore, of 130-beds hospital has just started, and we expect it to be completed in 24 months' time.
On projects, we have submitted the drawings to for building sanction approvals for sector 44 and 56. We are waiting for the approval from to start the project works.
We signed a lease agreement for a 90-bed brownfield spoke hospital at rapidly growing population in electronic city, Bangalore city. This building is in the final stages of construction. We shall commence the interiors very soon, and we expected to commence operations by Q3 FY '26. With this, we will be -- it will be sixth hospital of Rainbow Group in Bangalore City.
Beyond our growth plans, I would like to highlight some of our significant achievements that underscore our dedication to pediatric and perinatal health care excellence.
During the last 6 months, we have treated a lot of sick children in pediatric intensive care and as well as pediatric subspecialty children. I would like to discuss a couple of such cases.
A 21-month-old child was diagnosed with spinal muscular atrophy, it's called SMA. It's a rare genetic condition and which has a significant developmental delay, delay motor milestones, especially. The treatment to this genetic condition includes administering is an expensive gene therapy drug, which costs of 14.5 crores.
So this child was very fortunate to our financial support from a large Indian public sector company and its employees to raise a full amount to support this child. Our figure hospital Secunderabad led by Dr. Ramesh Konanki, one of the top experts in the country with a large experience in treating spinal muscular atrophy. This child received the gene therapy and the special clinical substances. The follow-up of this child following therapy indicates child is gradually improving motor skills and approaching independent walking.
Now other case, there's a 2-month child who was having a breathing difficulties since birth. A 2-D echocardiogram revealed a right ventilator outflow obstruction, a mass which is adjacent to the pulmonary walls causing the obstruction.
This will be required now open heart surgery, at 2 months discovery of large mass occupying almost 90% of the right lower heart chambers obstructing the outflow of the blood flow. The cardiac team could meticulously dissect and remove the entire mass and the baby made a full recovery in a week day's time.
The histopathology of the mass demonstrated rhabdomyoma. Rhabdomyoma is in children are fairly benign, and we expect this child to have lead a normal life. These cases emphasize the importance of the multi-scenario approach by tertiary and care to achieve better outcomes.
As we celebrate silver jubilee of Rainbow in providing our world-class children care in India, I extend my heartfelt gratitude to our doctors, nurses, team and the entire Rainbow family, along with out valued stakeholders and young parents who have contributed to this incredible journey.
With that, I will now pass the mic to Group CFO, Mr. Vikas Maheshwari, to take you through the financial update. Thank you, once again, for joining us today. We look forward to your questions and insights as we move forward. Vikas?
Thank you, sir. A very good morning to all of you, and thanks -- thank you for attending this investors' conference. I'm pleased to brief you on the financial performance and the key developments of Rainbow Hospitals for the second quarter and first half of financial year FY '24-'25.
Our operating revenue for the quarter stood at INR 417.5 crores, reflecting a growth of 25.5%, when compared to the corresponding quarter of the previous financial year. For H1, our revenues stood at INR 747.6 crores, reflecting a growth of 20.6%, when compared to the H1 of the previous financial year.
Our EBITDA for the second quarter amounted to INR 147.1 crores, marking a 25.1% growth compared to the same period last year. For the H1, our EBITDA stood at INR 240.8 crores, reflecting a growth of 17.3% when compared to H1 of the previous financial year.
Our EBITDA margin for the current quarter is 35.2%, while for H1, our EBITDA margin stands at 32.2%. The profit after tax for the quarter is at INR 79 crores, marking a growth of 25.1% in comparison to the corresponding quarter of the last financial year.
For H1, our PAT stood at INR 118.7 crores, reflecting a growth of 13.5% when compared to H1 of the previous financial year. In terms of the operational performance, both outpatient and inpatient volume increased by 20% and 22%, respectively, when compared to the corresponding period of the last financial year.
Deliveries grew by 12% compared to the corresponding period of the last year. Our payer mix continued to remain robust and balanced with 52.8% of the revenue coming from the insurance and the balance, 47.2% coming from the cash patients.
For the H1, the payer mix stands at 47.7 cash patients and 52.3 as insurance patients. Furthermore, I would like to inform you that our international business now constitutes approximately 2% of our total business for the second quarter.
As highlighted earlier by our CMD, we are facing some challenges in the international business and working on this simultaneously. I am pleased to inform that our company's balance sheet remains very, very robust with a net cash position of approximately INR 580 crores as of September 30 of this year and will support our ongoing capital expenditure plan.
Given our current cash and anticipated internal accruals in the coming years, we remain very confident in our ability to complete all the planned capital expenditure through internal accruals without any debt financing. During the quarter, the company has invested approximately INR 23.4 crore in the capital expenditures.
With these insights, I conclude my financial update. I now invite questions and suggestions from the participants. Thank you.
[Operator Instructions] The first question is from the line of Damayanti from HSBC.
Sir, my first question is on your plan for child development center. So can you talk a bit more about this new initiative in terms of what kind of demand you are seeing in the market, say, out of 1,000 children, how many might require this sort of treatment? So any color on this new initiative will be very helpful.
So Damayanti kind of in a modern society and growing modern society, the -- one of the significant things which we have been seeing is that the behavioral and developmental problems. Developmental problems as a result of we have various other neurological, other problems, early childhood infections, that's one significant for the group.
Other significant group is the behavioral where there is attention deficit disorders, autism, autism spectrum, so early childhood psychological problems. So these are all the things constitutes a very large proportion.
For example, autism itself is about 1 in 80 and the recent report says it's come down almost 1 in 60. So there's a large number of children who actually requires this fairly long-term therapy. So this requires definitely a specific approach. At the moment, we do see a very large number.
For example, for your information, we have about 6 pediatric neurologists in Hyderabad City under Rainbow Group and all of them see at least about 20% of them are development problems. So this definitely requires not only Rainbow Group, the country definitely requires to address this problem very seriously because of increasing numbers year-on-year.
So what we see is that this -- they are coming now to our hospitals, but this children requires a specialized environment, specialized therapies and specialized doctors and a whole team of our kind of developmental team, including with education psychologists and physiotherapists, occupational therapists and development clinicians a whole lot of team is required.
We always have about almost 80% of the team. I think we're segregating collecting all of them together in 1 place and trying to kind of deliver excellence into this children. The behavioral problems for -- in children results serious So they're really looking out for these kind of necessities.
Okay. So you mentioned you have already say 80% of doctors and other medical people who are available in this segment, but it will be in a different unit altogether dedicated for this particular center?
Exactly.
And doctor, did you mention all the neurologists -- top neurologists in your hospitals almost 20% of patients which they or other such issue? Did I hear that correctly?
Yes. In the outpatient department, 20% of the volumes are coming in some sort of a new developmental problems or behavioral problems. So this -- obviously, this is a different segment of the neurodevelopmental from the mainstream neurology, this requires a very specific focus and special attention.
And a team of people are more important rather than 1 single individual. And also, there are a lot of therapies are coming up now for these children. And it's kind of a sessions for example, behavioral modifications for attention deficit disorder is very different and how you approach autistic child is very different. This is something which is the need of the hour for the country.
Sure. And again, I think similarly, I want to hear some more update on your new initiative butterflies. So I understand your hospitals already have pharmacies, right, which are like supplying these baby and mother-related products, so why like this new initiative, which is coming up, when you already have pharmacies? And then just wanted to check here, products will be on a private level or it will be a multi-brands of facility in the hospital?
Okay. So as a pharmacy, you can only address to the small segment. So in terms of the visibility also, the mothers and children or for the babies, they would expect pharmacy to provide so much of a range of product range, what is required for the pregnant women as well as babies and children.
So what kind of we are trying to address is that address specialized vertical because if I say that now how many people are actually trying to buy outside compared to the hospital is very less number because people's perception of the pharmacy is very different from a retail store.
So we are trying to create that niche of that -- niche area where retail specifically focused there's a lot of medically aligned retail which we could improve, which we can give it with not only a kind of a vertical revenue, it gives a lot of comfort to the patients and also accessibility to the products because we take certain degree of ownership in choosing the products and also as a hospital, and we display a lot of responsibility in terms of the product range and those things.
We try to people more towards kind of what patients require, what babies require, right from soaps to shampoos to everything else. We can it better and offer them a kind of a wider range of the products within the hospital. So they don't have to step out and go other shop.
Sure. That's clear. And my last question is on the IVF services, which you initiated a quarter back or so. So you mentioned you have seen good momentum. So can you put some number like how things are picking up on that vertical?
So as I mentioned in the previous call also. So we are looking at our IVF growth in very organic growth in the B2C and very unlikely that our B2B growth will come because we're being a mainstream of service delivery. So I think within our group, word of mouth on the B2C is going to be dominant play for us to build our IVF.
So I think so far whatever we have seen is now, we were doing the IVF centers earlier from H1 comparison to the last year and we see about 50% growth. So that's significant. And also the revenue also, we have seen about 40% growth, right?
Yes, 73% growth.
73% growth. So I think it's 73%. We are actually quite happy and also the results are very encouraging. Even the doctors also within the hospitals are very, very optimistic about our -- number one, our service delivery for these patients; number 2 is that overall happiness quotient of doctors and patients.
[Operator Instructions] The next question is from the line of [ Bino ] from Elara Capital.
Just wanted to understand the ramp-up in the newly opened centers over the last few months. Last year, we have opened a couple of centers. What is the occupancy level there? And are we profitable there already or what is the path to profitability?
I think we opened about end of the last quarter of the financial year. And they're actually tracking fairly well in Hyderabad center is doing very well because our other centers are actually have a good traction, both and
I think we are very close to kind of a breakeven. Of course, in the business season now, then But as we look at the overall trajectory, very encouraging. It's a pretty good going.
Okay. So we are almost profitability during the next couple of quarters, improve. Is that the right assessment?
Yes.
The next question is from the line of Sumit Gupta from Centrum Broking.
So just -- sorry, I joined the call a bit late, so sorry for the repeat question if it may. So sir, for the matured hospital, the revenue growth is stupendous, I understand because of the occupancy, but what is driving that majorly?
I understand in 2Q is relatively strong, but still, I just want to understand more on the fundamental aspect of...
Vikas.
Yes, Sumit. So the matured hospital, obviously, as the busy season comes which is quarter second for most of the hospitals, including adults and pediatrics, it becomes busy. And as the mature hospitals they have already existing patients who have already experienced with us. They have a history of more than 5 years in the locality, so any issues comes with the pediatrics mother they keep coming to our hospitals. So that is driving our growth.
So you have seen both IP and OP volume growth in case of our mature hospitals. So it is a regular organic growth, which I will say, which all our mature hospitals are shrink.
Understood. And so what kind of margins are there for matured and new?
So we don't disclose the margin based on the maturity Overall, at the company, we show as a margin. But obviously, matured hospitals will have a better EBITDA margins than the new ones because every year, we are adding the capacity and mature capital will have always some impact of the new hospital, which is getting opened. So obviously, the mature hospital will always have a better output, which is the industry phenomena, right?
Right. So like this is superb, 35% kind of margins. And in 2Q, obviously, do this kind of margin So in the second half also, we can expect around 32%, 33% kind of margin?
So what we have guided, Sumit, is that over the longer period, we will be able to sustain this margin whatever we have shown in H1. So because of a little bit seasonality, right? In the quarter 1, the margins will be always metical impacted because in the hospital, there is a operating leverage which in. But the business is generally the quarter 1 is the weakest quarter for us and the quarter second is the strongest quarter.
So if you look at the H1 figures, whatever the EBITDA margins we are showing which is, again, post Ind AS numbers, we should be able to suspend those numbers, plus/minus 1%, depending upon what type of capacity we are adding based on that, we should be able to maintain that EBITDA margin.
Okay. And just sir, lastly, on the EBITDA per bed. So what kind of EBITDA per bed do you target? So as of now, so this quarter, it was a decline of nearly 9% to 10% on Y-o-Y basis. So just on an annualized basis or for let's say, for the next 2 to 3 years, what kind of EBITDA per bed we can target?
See, if we are keeping the EBITDA margin same, Sumit, I think for per bed EBITDA will also not change. What we have to factor in is that whatever the H1 number has come, we have to take it as a realistic basis and then project that accordingly.
[Operator Instructions] The next question is from the line of [ Karan Gupta ] from [ Invest Portfolio ] Management.
Sir, my first question on the ARPU side is, continuously from the last quarter [Technical Difficulty].
[ Karan ], there is a lot of disturbance from the voice, if you can just be very closer to your handset, please?
Yes. Sir, my first question ARPU side is this quarter is on the decline side? And the second question on the side, retail stores, what kind of are [Technical Difficulty].
Mr. [ Karan ], I would request you to please use your handset.
Yes. So my first one is on the ARPOB side, this quarter. And the second one on the Butterfly side, what's your [Technical Difficulty].
Ladies and gentlemen, we have lost the connection of the current participant. We will move on to the next participant. The next question is from the line of Rahul Jeewani from IIFL Securities Limited.
Yes. Sir, in Bangalore now with, let's say, the Heinola Electronic city expansions coming up next year, we will have almost close to 600 beds in Bangalore and Hyderabad capacity right now is around 950 beds. So what kind of potential do you see in the Bangalore market over the next 5- to 6-year period?
So can we get to, let's say, the kind of capacities which we have in area and maybe potentially overtake in terms of the capacities, which Bangalore could have versus, let's say, Hyderabad 4 to 5 years down the line?
I think with the -- see, the Hyderabad story is about 25 years. The Bangalore is only about 8, 9 years, Rahul. So what we are trying to do in Bangalore, in Hyderabad, we've come to the stage, we only do when there's a demand.
So we do it only for demand in Hyderabad. In Bangalore, we are looking at opportunistically because the bandwidth will lot more micromarket-driven. So we are, at the moment, we've got 4 hospitals in the 4 key areas. And what we are trying to do is to another in Electronic City. With that, I think we kind of have a fairly good kind of spread in the Bangalore City.
However, I think we'll have to see that how these hospitals are going to go next 2, 3, 4 years' time. And we'll get into the kind of doing the more centers as the demand arises anywhere. For example, the central cities, something area, there some areas are there. But I think we don't want to go rush in and do something as a kind of expansion, scale up expansion.
And right now, once these 2 are done, I think my focus is going to be strongly kind of a build these profitability of the centers and also to build a hub more strongly and then see look at the demand, whatever the demand then becomes easier for me doing better demand is less stressful, right? So this is how our approach is going to be for Bangalore.
Sure, sir. So wherever you see demand, let's say, in Hyderabad and Bangalore, you would be keen to add incremental capacities in these markets?
Exactly, yes.
Sure, sir. And sir, in the Hyderabad market, 1 of your peers is entering into the Hyderabad market with the a 300-bed women's and child hospital. So how do you see the competitive intensity in your core Hyderabad market?
No. I mean I think you won't -- see, we welcome anybody who wants to do a good quality of work in the pediatric domain anywhere in the country, whichever is a city. That's not a problem. But I don't think that we would have any problems because we always have a competition competition there is always better and also perform better and also realize things better.
So that's how, I always have looked at it. I always welcome the competition. But 1 thing everyone has to -- multi-specialty trying to focus on single specialty is not going to a easy because all my focus 24/7 is only 1 agenda, how much they can actually drive that focus a multi-specialty and single-speciality is a big question to answer. I mean -- but someone who is as disciplined as us, I'm sure they'll be able to do it.
Sure, sir. So while we appreciate, sir, then maybe some of these multi-specialty hospitals haven't been as successful in scaling up children-dedicated hospitals. But with increasing competitive intensity in Hyderabad, would we see some sort of an impact in terms of our doctor talent that maybe these other competitors become more aggressive in poaching doctor talent from us?
See, what happens is, we've got a kind of -- we've built a kind of a -- see, unlike other hospitals, pediatric hospitals, doctors cannot take the business away very easily because it's a very it's a brand, it's a overall service system is more important than kind of doctor alone, right?
So that is what is -- is a medical branch. It's not something like a surgical branch where the surgeon moves away, he can take 70% of the surgical patients. So somebody needs to kind of understand that.
So second important thing is we are kind of -- we produce a lot of doctors for internally for our purposes. I think as long as kind of we have a balance, we are packed with the doctors in Hyderabad. We won't have problems.
Efficiencies in terms of things, I mean I wouldn't expect people to take because patients don't move with the doctors in pediatrics domain. That's an important thing. And we -- it happened to us in the past also quite early of '09, '10 -- I mean at least 30% of the doctors gone away and start their own but they couldn't take even 5% to patients.
So that is what the strength of the brand is, the strength of the model actually, operating model and in top, top in the brand and model.
Sure, sir. And sir, last question from my end. We were looking at M&A opportunities in, let's say, Northeast and West India market. So any progress in terms of inorganic as such?
So it's early phase to discuss about it. I think they -- I mean, when company really consolidating when it's happening, definitely, I would come forward and let you all know.
But sir, anything which you can call out in terms of, let's say, the potential sizes of these assets in terms of which you are evaluating either on a bad number or what kind of, let's say, hurdle ratios would you be using for evaluating these assets?
Well, we are in a very early I think let's give some more time to discuss some of those things.
The next question is from the line of [ Ritesh Shah ] from [ Lucky ] Investments.
I have a few questions. One, can you tell me on the slide, I couldn't see the margins that we would make in a new hospital and margin that you would make in a matured hospital? Other details are there. But if you can just share at this stage of occupancy ratio that you have put in a new hospital, what are the margins?
New hospitals is a mix of a very newly started to the up to 4-, 5-year-old hospitals, right? But see, it gets really complex to give a kind of a unit-wise 1-year-olds, 2-year-olds, which is very 2 buckets.
So I'll put it differently, sir...
[indiscernible] for the consistency and also visibility, I think better in 2 buckets, matured hospitals and new hospitals and the...
No, so the new hospital bucket, whatever bucket you have today, irrespective of the vintage of that bucket, what will be the margin there?
So [ Ritesh ], let me take this question. So as a company, we don't would like to share the margins on the matured hospitals and the new hospitals [indiscernible] business hub-and-spoke model and then...
No problem, sir. Can I ask you differently then? At what utilization level does a hospital start becoming profitable?
So it depends on geography, again. If I do an hospital in Hyderabad, very likely at the end of the year, it will be either breakeven or profitable. In Bangalore, it will take about 12 to 15 months' time. Chennai, maybe takes 18 to 24 months' time.
So depending on your brand recognition and also your -- and also depends on micro market where you are in and kind of the doctors you are able to curate for that particular center. So these are all things kind of go hand in hand together. So broadly, that's how I can say. If I do it in Hyderabad, first year, at breakeven. And...
And what utilization will it be, sir? That utilization will be 20%, 25%?
I think 30%, 32% we are -- that's not generally ballpark is.
Okay. The other question is in your focused markets of Hyderabad, Bangalore and Chennai, if you could tell us the ratio of pediatric hospital to a normal specialty hospital, what would be the ratio of beds ratio? Is it 1 is to...
See, so more or less in all our hospitals, pediatric beds and the mother care beds, the ratios will not change actually. These will be more or less same.
No. My question is, if let's say, 100 is the total pool of beds in, let's say, Hyderabad across all hospitals, across all types, in that, how many beds obviously -- or how many beds will be a pediatric bed? One bed 200, 2 beds 200, 10 beds 200?
Okay. See, it works that way. So we have a different hospital. Usually, 30% of the beds are dedicated to the Some of the spokes, we do up to 40%, 50% also. So it depends on the macro market, what is the requirement and these thing that way, bespoke level.
So hub is always like a kind of a 70%, 75% of the pediatrics, 25% is about obstetrics that's in terms of separation of beds. business is the same, numbers are the same. When you look at the and everything, it's kind of our business is 30%, and our numbers are 30% OBG gynecology compared to pediatrics.
Sir, I was actually asking for the market. I know for your company, but for the market, if there were 100 beds treating all types of patients, our case pediatric bed will be what, 1%, 2% of that? See, because in U.S. for every 10 or for every 20 hospitals, we have 1 dedicated pediatric hospital. So I was just figuring out that what is the ratio that we've reached in India.
We have not kind of -- we don't have a knowledge about other hospitals -- people like you should do this diligence actually [indiscernible] we won't be able to tell [indiscernible].
Maybe you can have a paid [indiscernible] do it. And last question is, sir, in the Hyderabad market, Bangalore and Chennai in your opinion what can be a pediatric bed potential in terms of number of beds?
There is a good market [indiscernible] Bangalore and Hyderabad, these are all the growing markets, especially younger populations. If you look at the report, consumption of the retail space, IT space and the number of flats, which are coming up in these 2 cities and Pune.
And you could see that the growth of population is definitely is kind of 15%. This most of the population. So that's how we can say it. I don't think it's the right estimate, it's a rough estimate.
Sorry, I didn't get it, sir.
So when we look at the growth of the real estate, office space consumption, IT consumption and also the housing, the flats and villas and those things, the consumption, the year-on-year growth in the markets of Hyderabad, Pune and Bangalore, they're definitely 15%.
The number of the buyers of the new houses and those things. So [indiscernible] I can't say it numbers. But there is definitely -- there's a 12% to 15% increase in the population in each of the cities year-on-year, that's most of these populations are coming into city are and that is notable, which is why I think our growth is not a problem in these young cities and like Hyderabad, Bangalore, Pune, and these are all the cities are most vibrant, right?
Okay. And after these 3 markets, if there can be another focus market, which can eventually be a target market for what it should be?
I think right now, we are -- our next focus is in NCR. NCR itself is huge And that I think of your focus NCR start our for hospitals, then obviously, we're going to look around more micro markets in the NCR.
Okay. And lastly, in the next 24 months, what is the beds which will come on stream for us, the number of beds?
24 months, I think we have about...
380 beds. So roughly 380 beds will come, which will be 100 beds, which we are starting by March '25 and then 2 hospitals, which is coming at Bangalore, which is and Electronic City, roughly 150 beds there. And Coimbatore, which will be the fag end of FY '26, 130 beds, so total 380 beds are expected in next 24 months' time.
Okay. So when I look at your OR at about 69% in the quarter for mature hospital? It looks like that the annual OR is about 50% there. I remember last fall's historical call is to always say that penetrate on an annual basis, is about 60% OR occupancy business because we have a seasonality element in it -- so is it fair to assume that the mature hospitals for you, which is like this 1,200, 1,300 beds is peaking out in terms of or in terms of OR you may have an ARPOB-led increase But on OR, is this comment correct or you want to modify this?
In the peak season, we have multiple levers, [ Karan ], current to accommodate the patients, which we have done, all of the units have done to accommodate the patients with a faster turnaround, adding a few additional beds on a temporary basis, et cetera, we try to manage.
I think we will continue to do this and what you are saying is that 60% on the mature is speaking it, which I partially agree, it has another 5% delta, it can come.
So which means that the matured hospital for once on a volume basis can have this 5%, 10% delta? And then whatever is the case mix or price-led increasing, which will flow in your matured hospitals?
And also, [ Karan ], what happens is the medical hospital, right? So any matured hospital to grow, what the company of the hospital should do is that keep adding the other super specialties and...
Yes. That's why I said fixed and price-led, sir.
So that will continue. Some price corrections will continue. And obviously, if the demand is high, we will not be shying away from adding the beds, which we have done in one of our hospital at Haider Nagar at Hyderabad, we have added capacity.
If you see the robust demand, obviously, we'll be adding the beds there. We did [indiscernible] added. So we will keep on adding the beds on the existing hospital if the demand is sustainable and we continue to grow.
So you add the structure -- you need a you can added, there's a limit to what you can add, right?
We can -- see, we do will take multiple ways away. Sometimes we move out of some of these services, add more beds building for some of the diagnostics and those things. And increase beds sometimes we build up small block land parcel available, our land is available, so we've done that. We've added 150 beds addition to the Haider Nagar recently adjacent to it, right, next to it.
And we added 12 beds in LB Nagar for the demand. So creating some space from the existing fleet. And we are talking about some space for patients and IVF center in the adjacent building.
So we keep doing these things [indiscernible]on discovery, is there, we discover yourself how to take the opportunity.
Okay. And lastly, sir, can you give us the revenue mix for H1 in terms of at least the revenue mix between mature and new? What is the revenue mix?
Again, [ Karan ], we don't share this figure it out by ARPOB and occupancy we've given you...
The next question is from the line of Alankar Garude from Kotak Institutional Equities.
Sir, we had mentioned once that if there is demand, we might look to add another hub in Hyderabad at the appropriate time. Now given incremental supply coming up from competition, do you think there is enough demand to add another hub in Hyderabad over the medium term?
I don't know for them, but definitely, when I feel that there's another hub required, I will definitely do it. I think that maybe I don't know whether it's a 2 years' horizon or 3 years' horizon or 5 years' horizon, we will definitely do another hub at some point in 5 years down the line in Hyderabad, that's thought process.
It's not been consolidated, we would do it because this is a place where people trust us, people believe in us. It's just not the Hyderabad, it's the entire 2 states of people support us and And also the neighborhood like Northern Karnataka and also parts of Maharashtra comes to us. This is a large domain and we have the choice of hospital for these areas.
Obviously, if there is -- and also, we need to see the betterment as you will future, build more strength and more specialties and do a lot more work based on what -- how is it going to pan out now in the next 3 to 5 years' time, we will definitely look at -- see, for example, we are in the financial district about 100 beds, we have opened up 100 beds and it's doing very well.
I don't think the I'll probably need another -- some more bets in Financial District in Hyderabad, so therefore, I may do another I might decide to do the large hub hospitals. So building is another problem. I can do a brownfield over there the inabilities constructed and been vacant. So I mean, that's a call which kind of who we take at some point based on math what we think about it.
Understood, sir. Sir, and if you look at the last decade, we have entered into several new markets. So Bangalore, Chennai, then the 2 hospitals in Delhi now. I mean, maybe we can also include the upcoming Gurgaon there is Vizag as well. So if you look at the next 5, 10 years, you mentioned about the LCR and the plans over there. But apart from that, apart from these existing markets, which other markets can we potentially look to target?
I think see, we have always been very disciplined. Wherever we go, we want to position of strength of much larger. And Bangalore will pan out like Hyderabad as we move forward in 5 to 7 years' time.
Chennai also will have a significant number of beds. And also, there will be significant beds in Andhra also. That's a South story. Now we are looking at the kind of Once we kind of start we start operating the hospitals then I will obviously look at kind of of is going to go in the NCR.
Whether how you look at how do how do you look at Hyderabad, how do you look at so many like micro markets are there. So obviously, we're understanding which much better once we start hospital we will definitely take NCR as a kind of an extra larger space for us to expand. And if we do take other geographies at a investor somewhere else, we will take a similar there -- if it is best or Northeast, we will take a very similar view of what we have done in this 4 geographies.
I think that that's what we look at it. Very unlikely, we do sporadic small, small hospital of 100 beds city, that's something which kind of we are not really keen to do it.
Pfair enough, sir. And 1 final question, possible to qualitatively comment on the performance of Bangalore, Chennai and Madhukar, particularly Chennai and Madhukar, if you can comment?
I think that the Bangalore is going quite well and that Chennai there's a lot of new beds at there. Chennai we have 5 years of operation, sixth year running. And there are 2 new hospitals one is about less than 2-year old just to open up Chennai as a market is a very good market, how I see it is.
But Chennai takes its own a little bit of time to kind of progress and build. It's got a good doctors. It's a good name. And I think we have been well in Chennai. I mean the here was a little bit of slowness. We addressed all the issues going fairly well.
I think that we have done quite well in the last quarter. And even Madhukar also, I think that things have moved well good in Madhukar also overall. But Madhukar will not any kind of EBITDA swap like the other Rainbow Hospitals because it is just not our model.
It is just kind of we manage the beds and the structure is very different. So -- if I can do a Madhukar about at 12% EBITDA, it's good, it's good. I think for me, the Madhukar is something is kind of hard to establish our brand to establish our service model to understand the those things, so it will be helpful to us as long as I do about 12% to 15% -- as we move forward, 12% to 15% EBITDA comes in the next 1 to 2 years' time that itself to the kind of -- we're not expecting any more than that because I cannot do anything more.
For example, I do about rent every month. So otherwise, that would have come to EBITDA, right? So -- and also, it's a only managed beds -- and it is again of a lot of money flows back in the front of rental or other forms to the owners. So it is -- our CapEx for betas low. So when you look at combine all the factors together, it is not highly asset. We have seen another half to other groups, which turns a similar model like Hospital in East Delhi, they also same because -- the hospital will do well, but you can't generate EBITDA.
Sir, just 1 follow-up there on Delhi NCR. If you look at the 2 sectors wherein we are opening our hospitals in a Clearly, there are a lot many more multi-specialty hospitals coming up for expansion over the next 3 to 5 years in that same micro market, if I take a certain radius I understand that our model is different. But just can you share your thoughts on whether incremental multispecialty capacity coming up, significant capacity coming up in that same micro market -- is it something which worries us? Is it something which is something which we are actively considering? And also, I mean, when I look at our future plans, do we also consider upcoming capacity of multi-specialty beds coming up in any of the newer markets for us?
What happens is Gurgaon I think our people see you can talk to other promoter also. I don't think people are looking at Gurgaon as a micro market. People are looking at Gurgaon kind of health city overall. And it is for NCR are for the not everyone's view point these, it's not just for Gurgaon.
It is for the NCR, it's for the North and it's for the international. Every hospital's thought process is in the same lines. So sitting in the Gurgaon, you want to opportunities. In a way, what happens is the network effect of Gurgaon the longer term might my personal view, I'm not sure about other promoters. They may have more knowledge about because they've all been done in the hospitals. So it will create a large ecosystem for the medical care in the country.
Maybe you'll see that this is one of the kind of the health care hub in the world. So that is how the ban is going to shape up. If you see the people putting the CapExes and the quality of the hospital, are actually a condition to be proud of what the promoter is doing in Gurgaon.
So that is how the network effect or for everybody. I don't think we are competing with each other. There is a competition between each of this. But our opportunity also will be larger. And also people will come from the reader part for the country towards -- flock towards to the Gurgaon. That's what I'm saying, even international.
That's how everyone see, even for me also, when I looking at and I'm doing a 300-plus bed, 400 beds in Gurgaon, now 300 beds I'm looking at for -- not for the Gurgaon, that is for NCR, that's for the North, that's for the international.
And I'm -- that's what is the positioning of me of that hospital. So this is, I think, the way forward. I understand from other ones promoters, what they're doing other hospital groups. People are looking at Gurgaon to be a kind of a major health care hub.
[indiscernible] also, we have gone through with your report, right? I think that also gives you the comfort. If you look at Bangalore, Chennai, Hyderabad, even Mumbai, these are the more beds per than NCR with the projected whatever you are giving, right? It is going to be roughly 2,700 beds per whereas Bangalore was 4,300 beds per million, Hyderabad 3,600, Chennai 4,000 beds.
So I think there is a lot of scope as doctor is also saying that NCR we should not project as only the NCR population, the road connectivity and the near states, which hardly have or have a less health care infrastructure. So Gurgaon is going to be emerge as a health care center for the whole north Indian, basically, and plus international.
Maybe you should tell me talking to because you interact with all the promoters, so you can give you a better view about it, next time, when we meet together.
[Operator Instructions] As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Thank you. We appreciate your participation in today's conference questions where support integral to our strategic progress, and we value the time and listed by our in understanding our business level in future times. For further information please we talk to Mr. Saurabh Bhandari, IR Head, Investor Relations, or at investorrelations@rainbowhospital.com.
Thank you.
Thank you everybody.
On behalf of IIFL Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.