# 1. Financial Performance ## A. Key Figures * Revenue: ₹279.4 Cr at Yatharth Hospitals (+28% YoY, +8% QoQ) * **Adjusted PAT:** +63% YoY * EBITDA: ₹645 Mn (+18% YoY) · Adjusted EBITDA: ₹737 Mn (+35% YoY), 26.7% margin (ex-new-hospital losses) * Net Cash Position: ₹36.92 Cr * **OCF/EBITDA Ratio:** 58% reported, **78% normalized** (post-salary timing adjustment) ## B. Revenue Growth * **Record Performance:** Highest-ever quarterly revenue and EBITDA driven by strong patient volume, service mix optimization, and new facility contributions. * **New Facility Impact:** Faridabad Sector 88 contributed meaningfully to growth, while two new launches caused near-term margin dilution. * **Growth Sustainability:** Robust YoY and QoQ momentum reflects effective scaling and market share gains across existing and expanded footprint. ## C. EBITDA Margins * **Near-Term Margin Pressure:** Adjusted EBITDA margin of 7% reflects drag from Faridabad Sector 20 and New Delhi Model Town hospitals, with expected continued losses in Q3. * **Confidence in Recovery:** Underlying margin strength evident—ex-new-expansion impact, performance would have approached **5%**—supporting future expansion outlook. * **Long-Term Margin Trajectory:** Margins in mature facilities range 26–27%, with potential to reach **29%**; near-term constraints in Noida due to elevated doctor costs. * **Expansion Discipline:** No further significant bed additions expected over next 4–5 quarters, limiting future dilution risk and supporting margin stabilization. ## D. Balance Sheet * **Strong Liquidity Position:** Maintains debt-free status across all entities with a net cash balance, providing strategic flexibility. * **Future Funding Clarity:** If debt is raised, cost is expected to be **5–8%** via PSU banks; no current plans for borrowing. * **Loan Reclassification:** INR 516 Cr reclassified this quarter, though details on subsidiary, purpose, or subsidy remain undisclosed. ## E. Cash Flow * **Working Capital Improvement:** Debtor days reduced by 8–10 days, with expectation of sustained improvement through March 2026. * **Cash Flow Normalization:** Temporary dip in OCF due to shift in salary payment timing (now end-of-month); normalized OCF/EBITDA at **78%**, indicating strong underlying cash conversion. --- # 2. Occupancy & ARPOB ## A. Key Figures * **Occupancy Rate:** **89%** Noida · **69%** Greater Noida · **64%** Noida Extension · **71%** Jhansi-Orchha * **ARPOB:** **₹32,015** consolidated (Q2 FY26) · **₹40,800** Noida Extension (record high) · **₹33,600** Model Town New Delhi (initial) * **ARPOB Growth:** **9% YoY** mature hospitals · **19% YoY** newer hospitals * **Payor Mix:** **37%** government · **63%** private (insurance/TPA/cash) ## B. Hospital-wise Occupancy * **Strong Utilization at Mature Sites:** Noida leads with near-full utilization, while Greater Noida and Noida Extension show meaningful upside potential despite being classified as mature. * **Early-Stage Ramp-Up:** New Delhi Model Town and Faridabad facilities are in initial phases, with occupancy still building; Agra expected to reach group-average ARPOB over time. * **Optimization Opportunity:** Mature hospitals have **~10% unused capacity**, and reaching **75% optimized occupancy** remains a near-term operational target to boost EBITDA. ## C. ARPOB Trends * **Divergent ARPOB Drivers:** Consolidated ARPOB declined QoQ due to higher volume at low-ARPOB Jhansi-Orchha; growth concentrated in flagship and newer sites with super specialty adoption. * **Super Speciality Premium:** Noida Extension’s record ARPOB driven by **~70% contribution from super speciality services**, signaling pricing power and clinical differentiation. * **Ramp-Up Potential:** Model Town and Faridabad expected to exceed group-average ARPOB; current Delhi ARPOB below guidance due to **temporary pricing** and lack of insurance/international patient inflow. * **Medical Tourism Upside:** International patients deliver **45–55% higher ARPOB** than domestic, highlighting strategic value of expanding global outreach. ## D. Government vs Private Mix * **Government Segment Tailwind:** CGHS rate revision to lift ARPOB in the **37% government-revenue segment**, providing a structural boost to overall revenue quality. --- # 3. Capacity & Expansion ## A. Key Figures * **New Beds Added:** **+700 beds** (Model Town Delhi, Faridabad Sector 20) * **Total Operational Beds:** **1,750 beds** network-wide * **Occupancy Rate:** **66%** group-wide in the quarter * **Capacity Target:** **>3,000 beds** expected well before FY '28, driven by acquisitions and organic expansion ## B. New Hospital Launches * **Strategic Network Expansion:** Launched two major greenfield facilities—**Model Town (Delhi, 300 beds)** and **Faridabad Sector 20 (400 beds)**—in H1 FY26, significantly broadening NCR footprint. * **Capital Discipline:** Expansion fully funded via QIP proceeds with **no debt** incurred; capex allocation strictly aligned with stated objectives. * **Future Pipeline:** **Agra (250 beds)** to launch within 12 months and contribute from day one; **brownfield expansions** in Greater Noida (15 months) and Noida Extension (17–18 months) underway. * **Inorganic Growth on Radar:** Acquisition strategy active in NCR periphery, with potential deals expected within a year to accelerate bed count beyond 3,000. ## C. Bed Capacity Growth * **Proven Scalability:** Greater Faridabad now contributes **10% of group revenue** in its first full year, validating expansion economics. * **Efficient Ramp-Up:** No incremental capex needed for Agra’s full 250-bed activation—scaling will be occupancy-driven, ensuring capital efficiency. * **Near-Term Capacity Pause:** No further capacity additions planned for remainder of FY, allowing focus on integration and optimization of recent launches. ## D. Breakeven Timeline * **Rapid Monetization Path:** New hospitals targeted to reach **EBITDA breakeven in 15–17 months**, supported by strong clinical teams and upcoming insurance tie-ups within 4–5 months. * **Capital Efficiency by Model:** Brownfield expansions require **~₹75 lakh/bed** (vs. **₹1 crore/bed** for greenfield) and achieve similar breakeven timelines, favoring brownfield where feasible. * **Day-One Profitability Expected:** Agra facility projected to be **EBITDA positive from launch**, with no margin dilution, reflecting improved execution and demand visibility. --- # 4. Service Line & Clinical Mix ## A. Key Figures * ALOS: 4.06 days (down from 4.8–4.9 days) over past six quarters ## B. Super Speciality Services * **Clinical Milestone Achieved:** Performed Delhi’s first robotic Intelli Hip Revision surgery using advanced navigation and Intelli Joint software, underscoring leadership in surgical innovation. * **Service Expansion Accelerating:** Agra facility now fully operational with cath lab, cardiac surgery, and angioplasty, driving rapid gains in occupancy, ARPOB, and specialty depth. * **Throughput Optimization:** High-end laparoscopic capabilities have reduced patient stays to as low as 2 days, boosting throughput and occupancy across upgraded facilities. * **Quaternary Care Roadmap:** Cancer and transplant programs expanding across Noida Extension and Greater Noida; Delhi, Faridabad, and Agra targeted for full quaternary care conversion with long-term oncology and transplant services. ## C. Technology Adoption * **AI-Driven Diagnostics:** Greater Noida facility deployed Rapid AI for neuroimaging, enabling faster, more accurate stroke detection and improved treatment timelines. * **Tech-Enabled Efficiency Gains:** ALOS reduction driven by robotics and minimally invasive techniques, reinforcing competitive differentiation in clinical delivery. * **Regional Leadership Position:** Technology stack places Yatharth among a select group of hospitals in North India delivering cutting-edge, high-acuity care. --- # 5. M&A & Strategic Partnerships ## A. Key Figures * **Revenue Growth:** **110% YoY** (newer hospitals) · **19% YoY** (mature hospitals) * **ARPOB Threshold:** **₹35,000** minimum for new hospital acquisitions ## B. Agra Acquisition * **Immediate Scale via Acquisition:** Integration of **250-bed Shantived Hospital**, a stand-alone super specialty facility, to begin contributing from **Q4 FY26**, with initial operations on books from **January next calendar year** at 150 beds, scalable to full capacity. * **Strategic Market Access:** Agra hospital targets high-demand catchment across **Agra and surrounding regions**, positioning the company for regional dominance and long-term patient volume growth. * **Near-Term EBITDA Impact:** Shantived expected to cause **temporary losses in Q3 and possibly Q4**, though Agra’s underlying profitability will help offset EBITDA pressure from other new projects. ## C. Airport Healthcare Tie-up * **Exclusive Airport Partnership:** Yatharth to become **sole healthcare provider at Jewar Airport**, with a clinical medical examination room enhancing brand visibility and facilitating **international patient inflows**. ## D. Global Outreach * **Expansion in Medical Value Travel:** Launched **representative offices in Baghdad, Tashkent, and Cameroon**, and opened **two international OPD/information centers**, with **5 to 6 centers planned this fiscal** targeting Africa and Central Asia. * **Structured Global Strategy:** International medical tourism now a formal pillar, executed through **strategic partnerships** (e.g., Chinor Medical Centre), enabling low-cost market entry and scalable outreach. --- # 6. Regulatory & Reimbursement Risks ## A. Key Figures * **CGHS Impact (FY '26):** **+1.5%** revenue · **+1%** EBITDA * CGHS Impact (FY '26): Up to +1.5% revenue · Up to +1% EBITDA; next year up to +2.5% revenue · +1.75% EBITDA * GST Relief: Expected to boost EBITDA by 0.3–0.5%, contributing 0.3–0.5% of revenue * **Government Revenue Mix:** **~37%** of total revenue, with partial CGHS rate applicability ## B. CGHS Rate Impact * **Major Reimbursement Upside:** Rationalized tier-based CGHS rates significantly enhance revenue realization and profitability for metro-based super speciality facilities. * **Selective Benefit:** Only a portion of government revenue is impacted—Ayushman Bharat revenue in non-metro locations like Jhansi-Orchha remains excluded. ## C. GST on Consumables * **Margin Tailwind:** Reduced GST on critical inputs delivers a substantial EBITDA uplift, representing one of the most direct cost levers in the near term. ## D. Tax Issue Resolution * **Full Operational Normalization:** Unfreezing of fixed assets, properties, and FDs restores financial flexibility and removes a key overhang on expansion. * **Credit Confidence Restored:** CRISIL’s upgrade to **A/Stable** underscores improved governance and resolution momentum, reinforcing investor credibility. --- # 7. Guidance & Outlook ## A. Revenue Forecast * **Confident Top-Line Trajectory:** Full-year revenue growth of over 30% remains achievable, supported by ramping facilities and visible contribution from new operations. * **Regulatory Tailwind:** Revenue to benefit from minimum 5% upside due to government rate revisions, despite partial scheme eligibility. ## B. ARPOB Target * **ARPOB Expansion Underway:** Delhi hospital on track to exceed ₹40,000 ARPOB within 12 months as tariffs, insurance, and patient mix normalize. * **Structural ARPOB Growth:** Group-wide ARPOB expected to rise significantly over 4–6 quarters, driven by **super-specialty ramp-up**, **advanced technology adoption**, and **higher case complexity**. * **Sustained ARPOB CAGR:** Yatharth targets **8% to 10% annual ARPOB growth** over three years via service expansion (oncology, transplants), geographic reach, and international patient inflows. ## C. Capex Plan * **Capital Allocation Clarity:** ₹1,500 Cr capex fully funded through internal accruals and debt-free balance sheet, with deployment over 4–5 years. * **M&A Execution Imminent:** Upcoming 300–400 bed acquisitions to be executed within 12–15 months using existing budget, signaling near-term inorganic acceleration. * **Strategic Growth Levers:** Focus on **North India footprint expansion**, **super-specialty scaling**, and **clinical excellence** to drive operational efficiencies and long-term value.