Jupiter Life Line Hospitals (NSE:JLHL) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Jupiter Life Line Hospitals Limited Q1 FY 'twenty seven Earnings Conference Call. As a reminder, all participants will be in the listen only mode. There will be an opportunity for you to ask questions after the presentation concludes. I now hand the conference over to Doctor. Ankit Chakkar, Managing Director and CEO. Thank you, and over to you, sir. Good morning, everyone. Thank you for joining us this Monday morning for our earnings call for Q1 FY 'twenty seven. I hope you all had a chance to view our financial results and investor presentation, which were posted on company's website and the stock exchanges.

0:48 I'm joined today by Mr. Anand Apte, our Chief of Business and Strategy Mr. Arithya Gupta, our Senior VP of Corporate Affairs Mr. Nitin Patodi, our Head of Finance and our Investor Relations Advisers. The key update from this quarter is that Dombi Valley Hospital has completed its first full quarter of operations. The reception from both the patient and the medical community has been warm and encouraging. This quarter has contributed to a 9.5 crore drag on the EBITDA, pretty much in line with anticipation. The other three operating hospitals and the three upcoming projects are all on track and progressing on similar lines as discussed earlier.

1:35 So let me directly give you the financial update and then open up the floor for questions. Total income for the quarter stood at INR $4.11 crores in Q1 of FY 'twenty seven. The EBITDA stood at INR 79.3 crores and with a margin of 19.3%. The pad was INR 37.5 crores. The RPUB for the quarter is INR 73,500 crores and the halos is at INR 3.76 days. The average occupancy rate stood at 59.6% this quarter, considering the dilution on account of the expanded base of Gloomvivili beds. With this, I open the floor for questions. Thank you. Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session.

2:30 The The first question is from the line of Swanisha from DSP. I had a couple of questions. Firstly, on the indoor unit, how I'm looking at it is the stand alone numbers and the number is the differential. Just wanted to understand why the revenue growth is 10%, we understand on a higher base last year, the EBITDA margins have come in at a lower 12%. How are we thinking about this? And is there anything specific you want to call out for this quarter?

3:15 Yes. Dhoni. So Indore, as I said, we are getting ready for the next phase of expansion. We have had some new team build up, new doctor hires, etcetera. So the higher cost this quarter is on account of anticipated growth in the rest of the year and higher the HR related costs. Would you be able to quantify this number? I don't have the exact quantified number, but a couple of crores of new hires coming to us. Okay. And just on a like for like basis, excluding the INR 5 crore revenue on last year in Domivri and INR 9.5 crore loss that we took on, can we expect a 13% to 14% growth in the existing units EBITDA this year as well?

4:13 So as I've said earlier, I don't model it on a unit to unit basis. But qualitatively, I could help you understand the existing units better. Danae unit is around mid-seventy percent occupancy, 75 odd percent, which means that it will only improve in line with inflationary pricing, not leaving too much more growth opportunity besides that. The Pune unit has low 60% or mid-sixty percent occupancy. And therefore, besides the pricing, it will grow a little faster than Kane because of occupancy opportunities.

4:59 And Indore, as I just outlined, we are gearing up to improve our occupancy over the next remaining part of the financial year. So that should grow faster than the other two. Okay. And just one last accounting question. See last year in the Q2 numbers, we had seen a change in accounting policy mainly due to the unbilled revenues. How do we think about this affecting the next two, three quarters growth? Or should we not achieve anything? So unbilled revenue, honestly, is not a huge factor because it was a onetime factor because of change in policy last quarter. But otherwise, like for like, it essentially negates each other out because at the beginning of the quarter, lose out on part of the revenue. And in the end of the quarter, you gain a part of the unbilled revenue For a steady state operations like a hospital, there isn't too much of day to day revenue volatility or occupancy volatility, it should not really matter too much. So except for that one time change where you saw a little higher bump in revenue because it was the first time we recognized unbilled.

6:13 After that, if you see, it will be largely canceling each other out. Fair. And just one last thing on Dumbivilly. Just want to understand what kind of fixed cost are we operating on per quarter basis? And are we done with all the doctor hiring in Dumbivilly? Doctor hiring is an ongoing process. So, yes, we have first round of first round of specialists in pretty much all branches in place. But doctor hiring is likely to continue for a couple of years because as we keep adding subspecialties, adding more doctors in each specialty, etcetera. So when you start, you start with a few and you keep adding for the first couple of years.

7:04 So that is on the doctor hiring question. Fixed cost, think, should be INR $6.07 crores for a month currently. The next question is from the line of Palkesh Jain from Transparent Value. Mister Jen Hello? Please ask your question. Yeah. We are not able to hear you. Yes. Sorry, sir. Sorry. Sorry. Thanks for the opportunity. So I just have a couple of questions. So first is, like, you have direct for the operation. I would then also for the for the for for the... For the... The... For the Slightly better, not great.

8:00 Sorry. So, like, you previously guided for operation EBITDA loss of $2.50 per month. Yes. So was the guidance based on currently operational 200 beds, or did it factor the commissioning of 200 baht? It is based on the currently operating rates. Okay. Okay. And one more question. Also, like the as you view additional that become operational, So to be extent the EBITDA loss increase temporarily before improving? So I'll just repeat the thought process, which I've outlined in some of the earlier calls, and this holds true for this project and future project. The way we think about ramp up is that in Phase one, when we start with, let's say, around 200 odd beds, there is an initial EBITDA drag for the first two years.

8:53 After that, once we reach operational occupancy of about 60% of the installed base, we will add CapEx and add capacity to the tune that the occupancy falls down to, let us say, around 40%. When we do this, there may be a little drop in margins, but it will not result in an EBITDA loss. Once this expanded capacity then starts growing and again reaches the 40%, we'll carry out the next round of CapEx and occupancy expansion. So that again, the occupancy drops to 40%, which may again result in a compression of margin, but it will not result in loss. So operational EBITDA drag or losses are only anticipated in the initial one or two years of operations. After that, you will see fluctuating percentage of occupancy and margin, but you will not see losses in EBITDA.

9:56 That is the way we plan to ramp up this and the future hospitals. Understood. Thank you, sir. Thank you. Thank you. Thank you. Our next question is from the line of Sukrit Patil from iSight Fintreat. Please go ahead. Good morning to the team. My first question to Mr. Anikit is beyond the regular outlook, I just want to understand what are the top two to three execution priorities you are focusing on in the next few quarters? And alongside that, what do you see as the biggest risk in borrower demand shifts, interest rate movements, or competitive pressure? How are you preparing Yeah. Continue.

10:47 Also the line for the current participant was disconnected. We'll move on to the next question. The next question is from the line of Dikshan Gupta from GeoJET PMS. Please go ahead. Yes. Hi. Good morning, sir. So I just wanted to know, like, this quarter is still 10%. Can you just explain the reason why it's like, is it because of pricing or is it because of ramp up? So two main factors of ARPU growth are case mix improvement and contract renegotiations with insurance companies or pricing, which happen on an ongoing basis. So all our increases have a combination of these two factors.

11:37 Okay. So on an ongoing basis, what is the expectation that we can have? So broadly inflation linked growth for the mature units and for the new units, inflation with higher than inflation because case mix keeps improving for a few years. You start a hospital with more of secondary kind of work. And over the quarters or years, you start doing more and more of tertiary and quaternary. So first few years, higher than inflationary growth in ARPOV. Eventually once it matures, then only inflationary growth in ARPOB. And margin coming to margin profiles for FY 2020 and if so, can we expect like down 20%, 21% for the full year?

12:30 So the margin for the last year, pretty much accounts for the three mature hospitals. So you can factor in out of all the contributory factors that I said, you can project how the other three hospitals will grow. And we really have given a guidance of INR 2 crores to 3 crores of EBITDA loss every month. So you'll probably have to model it with those two inputs. Yes, understood. And just last one from my side. So for Indore, what is the current occupancy? Around 50%. 50%. Okay. Thank you so much. Okay. Thank you. The next question is from the line of Sakshi Pratap from Pratap Securities. Please go ahead.

13:28 Sir, just one question. So at the current pace of patient addition, when do we realistically expect the Rovivale Hospital to achieve EBITDA breakeven? And your earlier guidance of one point five to two years, does that still hold? Also, are you seeing the possibility of reaching breakeven sooner than that? No, the guidance still holds. Understood. Thank you, sir. Thank you. Thank you. The next question is from the line of Amit Chalkha from JMP Financial. Please go ahead. Yeah. Thank you so much for taking my question, and congrats on good numbers. I have joined the call late. So if I have repeated the question, then please for you... Please pardon me. So our first question is on Dongvivli Hospital. Is it possible to give occupancy level at Dongvivli at present? And do you expect any increase in fixed costs in the remaining of the quarters?

14:32 So occupancy should be around 25%, 30%, I think. And fixed cost, as I said earlier, in terms of doctor cost, the team built up is likely to continue for the next couple of years. So on that account, the fixed cost can increase a little bit over the next year or two. Sure. At present, how many doctors would be there in the unit? On a full time basis, maybe some, I don't know, 30, 40 doctors on a visiting basis may be more. So maybe it can go up to like 70, 80 doctors at the full capacity?

15:20 Eventually, it will mimic all others like what Sana has or Puna has that and maybe more because the scale of the hospital is bigger than these two. So at full capacity, of course, much higher than what we have now. Sure. The second question I have is on we have recently acquired a company to setting up IV unit. If you can explain the strategy of stock for CR. And, also, we have seen hospitals having diagnostic pharmacy companies, but we have never seen a com... Hospital company acquiring a manufacturing plant. So your thought process would be helpful to understand what we are thinking here. And also, it will help us to get some clarity on the capital allocation as well because going ahead, we have so many hospitals lined up. So that is also one more question I have, like how that will evolve going there?

16:15 Sure. So this is more of a backward integration for our pharmacy unit. With the growing footprint of the hospital, we have a line of sight to around 3,000 beds now. And with that, we are exploring this as a little bit of a cost management or margin improvement strategy. On the capital allocation front, as we disclosed and you might have noticed that one line of IV fluids cost 35 wattage growth with the infra. So not a very, very significant number considering the CapEx outlay of the hospitals that is already planned.

17:00 So what I want to tell you and everybody else is that this is not our entry into becoming a pharma company. We've continued to remain a hospital company, but this is to be seen as a backward integration of our pharmacy subsidiary. Sure. So last question I have on base business profitability, it has improved sharply over last two quarters particularly. 4Q also it was well above 25%, 26%. So what are the key drivers here and which hospitals between Thane and Pune are driving this at present? So I think Thane and Pune both have similar operating profile.

17:49 In terms of this quarter, we have Q1 generally has been the weaker quarters, Q1 and Q3, as I said earlier, these two quarters are relatively weaker and Q2 and Q4 are relatively stronger quarters. So besides that, Dombeyuli continuing to drag in this quarter as well. So these are two key reasons of the current quarter performance compared to the previous ones. If we compare and contrast Thane and Pune, you won't really see too much difference to choose from in terms of margin profile. Sure. So Puni has reached the macro profile in terms of margins, you need to say, where Thani is. Pretty much. Pretty much.

18:43 Sure. Sure. Thank you so much. I will join then. Thank you. Thank you. Next question is from the line of Abdul Gadar Puranwal from ICICI Securities. Please go ahead. Yes. Thank you for the opportunity. So if I look at your quarterly growth figures and compare this to FY '26, so we delivered close to a 14% growth from the four hospitals. And this quarter, we are at close to 16.4% with probably kind of ramping up further. So just wanted to understand, well, Tani, you mentioned that it will grow in line with the inflationary price hike what you will take.

19:29 At Pune, are we seeing some kind of a revenue growth slowdown in the quarter? Overnight revenue growth can be very sharp now because as I said, you are at the mid-sixty percent occupancy now. It can go to 75%. But in terms of the base, it means the last 15 odd percent of growth opportunity. So the growth will not stagnate, but it will plateau from here onwards or slowdown from here onwards in terms of percentage hike, unlike in the earlier phases where you see a more sharper growth. I don't know if that answers your question or you had something else in mind. No.

20:14 That's pretty well understood. Secondly, on Dongvivli, so in the first quarter, it's when we reached at 25% to 30% kind of an occupancy. And typically, I would believe that at 50% to 60%, this facility would kind of break even. So any reason why we are still holding on our guidance, especially after, you know, such a blockbuster start to that hospital? So guidance is kind of based on some assumptions of insurances and some past experiences. Currently, I don't think we want to be very adventurous and aggressive in guidance. Let us see how the next one or two quarters perform. And then if we think that there is need to revise, I'll be happy to do that. But just with one quarter behind us, I don't want to give you a very aggressive rate.

21:13 Sure. And last one, if I may. So FY 2026, you had a gross debt of, say, almost INR $50.09 crores. So sir, ahead with the CapEx lined up, how should we look at your debt levels? So the specific CapEx outlay, have included in the presentation. And the thought process is that our internal approvals, the cash in hand should pretty much see us through for the next few years and towards the end of that cycle. We may need some debt to finish the current round of CapEx. And at that time, we'll be able to explore that debt.

22:01 Currently, the Board imposed ceiling is debt of three times of EBITDA, but we think that we should be able to complete the current round well within that range. Understood, sir. Thank you. Thank you. Thank you. The next question is from the line of Janardar Sharma. Please go ahead. Hello. Good morning, everyone. Thanks for the opportunity. We have observed that the shares pledged in favor of Catalyst Trusteeship have increased materially over the past few disclosures. So could you help us understand whether this is due to additional debenture issuance, refinancing or existing borrowings or some other reasons? And also, could you quantify the outstanding debt secured by this pledged shares?

23:00 And let us know whether investors should expect any further increase in pledged shares going forward? And one more question, what is the total debt and cash as on books as of today? Thank you. Thank you. So we did get some offline call about this because of which I am ready to answer your question now. First, the pledge is not a promoter or a promoter group pledge, It is pledged by somebody else. Two, from what I understood, the pledge has remained same. What has changed is the number of shares, which have increased five times after the split, and someone erroneously reported it as a 5x multiplication of pledge.

23:49 So that, to my understanding, the filing has also been corrected. So this is a nonpromoter pledge by somebody else, which was erroneously reported as being magnified due to the split, but it is what it was earlier. I think your last question was about debt and cash. Currently, are at pretty much zero net debt. I don't have the exact number, but roughly INR 500 crores of debt with INR 500 crores of cash broadly that is the position. All right. And one more question. If we look at Jupiter Life Line Hospitals fifty years, twenty years down the line, where do you expect yourself and what are the challenges that you could see?

24:40 I'm not talking about the long term trajectory here about almost fifteen, twenty years. So I just want to understand your view and where do you see our company going forward? Thank you. So on a more granular level, currently, I only have a five year visibility, which is we would like to see that all three projects that we have announced should be delivered in these five years. On an ongoing basis, along the way, we continue to see a very, very strong demand supply gap for organized healthcare in India, specifically in Western India, where we are planning to focus. So I think qualitatively, what I can say is that we'll continue building more hospitals in of the shape and style that you have come to see and expect from Jupiter over the years.

25:37 And the focus area for now remains West India. But on a granular and objective level currently, I can just talk about these five years. Thank you. Thank you so much and really appreciate your time. All the best. Thank you. Thank you. Thank you. The next question is from the line of Raj Mehta from Wisdom Advisors. Please go ahead. Yeah. Hi, sir. Good morning, and thanks for the opportunity. So sir, could you share the current payer mix for the Dongle Valley Hospital? And additionally, once the insurance enrollment process is completed, what kind of improvement in occupancy do you expect towards the next few quarters?

26:25 So currently, when the initial phases is pretty much all self paid patients with a little bit of the insurance comes in with two ways, a little bit of reimbursement based insurance and a little bit of preauthorized case to case based insurance. But you never see a large insurance based payer mix till the formal empanelment processes are over. So that is where Dobivoli is even now. I can't really visualize the specific occupancy bump after the empanelment. But definitely, it reduces the friction.

27:12 The reimbursement is seen as a compulsome process for the patients. And as soon as the friction point of reimbursement goes away and cashless entitlement comes in, it should definitely result in some kind of occupancy. Understood, sir. That was helpful. Thank you and all the best. Thank you. Thank you. The next question is from the line of Anubhav Sangel from Anandrati. Please go ahead. Thank you for taking my question, sir. So my question be, I just wanted a clarification. As you mentioned that there is roughly around INR 500 crores of debt, INR 500 crores of cash. You have mentioned in the Q3 that there was a higher finance cost owing to an increase in debt for ongoing CapEx.

27:59 So the INR 500 crore debt includes the increase in debt that you mentioned? Your voice is a little unclear. What was the last line, the 500 crore debt? So the 500 crore debt that you have mentioned, the higher finance cost owing to an increase in debt for ongoing CapEx that you have mentioned in the PPT. Yeah. Yeah. Yeah. Right. So the 500 crore debt includes the increase in debt that you have mentioned? Yes. So it is 500 odd, the exact number. It will be there in the uploaded financials. But, yeah, this includes the final number. Okay, sir. Thank you. Thank you. The next question is from the line of Dikshan Gupta from GeoJIT PMS. Please go ahead.

28:54 Thank you for the call. Confirm, like Sorry to interrupt, sir. We are not able to hear you very clearly. Yeah. Hello? Yes. Yes. Better. Go ahead. Yes. Yes. So I just wanted to get your view, like, currently, do you have any plans for getting or? I know you have said that we are not comfortable with the right one, but still given especially for the option. What was that? Do you have plans for what? No, I'm not able to hear you. I'm sorry. Hello? Hello? Sorry, sir. We are not able to hear you.

29:43 Could you return to the question queue? Hello? Am I still here? Little bit. Yeah. So just wanted to get your view like do you have any plans for CGHS for Dombey Bank right now? Not immediately. Though again, as I said earlier, with the revised price, it we could consider it at some point in time, but not right away. Okay. Okay. And which specialty are pending in Tongwabli right now? Oncology is yet to be fully launched, the radiation and LENAC, etcetera, should come in by end of the year. And just a final question from my side.

30:31 So what so I just wanted to get your view more on the rationale behind choosing DKC as a location. So given that it's a very premium area, it's not a residential area. So why was the hospital chosen in such an expensive location? So your question has a little bit of answer embedded in it. It is a premium area, and that is why it was chosen. While BKC itself does not have too much of residence, but it is very accessible by a lot of residential locations within Mumbai. So and also being 100 meters away from the bullet train, so the entire drainage of the bullet train.

31:17 So if you draw a 45 driving circle from the VKC location, you will be able to fit in more than half of all the residents of Mumbai. So essentially, it becomes one of the most accessible locations of Mumbai City. And thank you so much. You. Thank you. The next question is from the line of Amit Aruja from Vijay Capital. Please go ahead. Hello. Am I audible? Yes. Yes. So thank you for giving me this opportunity. So like my question is on the Hospitals. So could you provide an understanding of the month on month trend in patients' footfall?

32:06 Like, are patients' volume ramping up in line with your expectations? And how do you see this trajectory like evolving over the coming quarters? Yes. So there is a gradual increase month on month for Dongbhuli Hospital. It is yes, it is ramping up pretty well on both interest from doctors and the patients. As I said in couple of different answers earlier that we believe, a, the second year should be the breakeven year, which means that it will have to ramp up from now until then consistently. And second is insurance embellishment being a friction point for the patients. So once that is behind us, that should also result in some improvement in footfall.

33:07 Thank you for the option. Thank you. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for closing comments. So thank you, everyone. I hope the answers were satisfactorily understood. However, if there is any further clarification needed or if you have further questions, please feel free to contact the SG and team and they'll be able to put us in touch. Thank you and have a good day. Thank you, sir. On behalf of Jupiter Life Line Hospitals Limited, that concludes this conference. Thank you for joining and you may now disconnect your lines. Thank you.