Rainbow Childrens Medicare (NSE:RAINBOW) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Rainbow Childrens Medicare Limited Q1 FY 'twenty seven Earnings Conference Call hosted by IIFL Capital. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Jivani from IFL Capital. Thank you, and over to you, Mr. Jivani. Hi. Good morning, everyone. This is Rahul from IFL Capital. I welcome you all to the first quarter earnings conference call of Rainbow Hospitals being hosted by IFL.

0:49 From Rainbow, we have with us today doctor Ramesh Panchala, chairman and managing director Mr. Abrar Ali Dalal, Group CEO Mr. Vikas Maheshwari, Group CFO and Mr. Saurabh Bandari, Head of Investor Relations. Over to you, for your opening comments. Thank you, Rahul. Good morning, everyone, and thank you for joining us for Rainbow Childrens Medicare Limited earnings call for the quarter ended 06/30/2026. FY 'twenty seven has begun well for Rainbow. We delivered another quarter of healthy growth, driven by sustained demand across all our core specialties and balanced contributions from both our mature and newly commissioned hospitals.

1:42 More importantly, this performance reflects that the investments we have made in expanding the network, strengthening our clinical capabilities and building leadership across the organizations are translating into consistent growth. Revenue grew by approximately 33% year on year, driven by balanced contributions from our mature hospitals and the new facilities. Our key operating metrics, including inpatient admissions, outpatient consultations and deliveries, continues to witness healthy growth. We also maintained a healthy EBITDA growth of 29.9% year on year, supported by operating discipline, improving and improving efficiencies.

2:33 Our expansion journey also gathering further momentum with the signing of definitive agreement for 100 bed brownfield hospital in Malad, Mumbai. We expect the hospital to commence operations in Q1 FY 'twenty eight. This marks our entry into Western India, an important strategic market where we see significant long term opportunities. We are also strengthening our presence in Andhra Pradesh through the acquisition of 70 bed RAINBOW Childrens Hospital in Nellore, along with an additional 30 bed maternal care block expected to commence operations in six months' time. We have also signed a long term lease for a 50 bed brand new hospital ready to operate in Kuntur, and this facility will commence operations in a couple of months' time.

3:28 With these additions, the bed capacity in Anaswadish will reach to 500 beds. On the clinical milestones made on the clinical milestones that that made us particularly proud during this quarter was the successful rescue of an eight year old child from Guwahati, who was critically ill with a severe influenza pneumonia and an acute respiratory distress syndrome. With the ECMO being the only option for survival, our ECMO retrieval team flew over 1,800 kilometers to Guwahati, initiated ECMO and stabilized the child. Our team meticulously planned and executed air lifting of the child over three hours of flying to the Hyderabad Rainbow.

4:24 The chief remained on ECMO for thirty six days before making a full remarkable recovery and returned back to Guwahati. This mission stands among the longest periodic ECMO air retrieval undertaken in the country, and it states a powerful example how the timely intervention and advance of critical care and seamless multidisciplinary teamwork can transform what once seemed impossible into a life saving reality. We were humbled to receive an appreciation from the Honorable Chief Minister of Assam for recognizing the efforts of Rainbow in saving the child. In another case, defying all the odds, a 30 year old boy with an accidental fall from 5th Floor of his initial building arrived in our emergency with a short notice.

5:23 On rapid sequence assessment, the change found to be in shock and in coma. He was resuscitated and commenced on ventilation while addressing the shock. Very soon, he was further discovered to have a sustained thoracic aorta tear, lung injuries, pancreatic bruises, multiple fractures. Our pediatric cardiologists made an extraordinary decision to address the bleeding aorta by placing a stent graft through angiogram. The bleeding stopped with the graft stent placement. The rest of the organs will be addressed by the different teams subsequently.

6:14 The change went about five weeks in the hospital to make a full recovery. Though it was a devastating emergency, our multidisciplinary team worked like perfectly choreographed stage show. This is how it appears once the sales and the recovery when people presented in the clinical meeting. The boy came back with a smile to present a handmade artwork made by himself to the team of doctors. An extensive coverage received for this big sale and also our team received a huge appreciation for the public. These challenges made us robust and ready to deal with the most complex emergencies over the decades.

7:07 Rainbow is now entering an exciting phase of its growth journey. Over the next five years, we plan to add 2,500 beds to expand our network capacity to 5,000 beds through an estimated CapEx of investment around 2,200 crores. We already have visibility of 1,200 beds under various stages of development, giving us confidence in our expansion road map. Regarding our projects and progress, we are on track to commence operations in indoor hospital in Q3 FY 'twenty seven. Our regional hub hospital in Paimuratur and the spoke hospital in Gurgaon, Sector 56, are expected to commence operations in Q3 FY 'twenty eight, followed by our hub hospital in Gurgaon in Sector 44 in Q1 FY 'twenty nine.

8:09 Development is in progress with the Pune hospital of 150 beds and the Spok hospital in Bengaluru, Sigali, both are expected to commence operations in FY 'twenty nine. We will continue to strengthen our established network across Southern India while selectively expanding into high potential markets across Western, Central And Northeast Of India. Our entry into Mumbai marks an important milestone in this journey. We see a significant opportunity to further strengthen our presence in the city over coming years. Alongside our expansions, we'll continue to strengthen our clinical systems, attract and mentor the best clinical talent and build a strong medical leadership across the network so that every new hospital delivers the same standard of care across the group.

9:14 With a strong balance sheet and a differentiated care model and a proven execution capabilities, we remain confident of our delivering sustainable growth and creating long term value for all our shareholders. With that, I now hand over the mic to Mr. Abdalla Alai Dahal, our CEO, before passing the mic to Mr. Vikash Maheshwari for financial update. Thank you. Thank you, Doctor. Ramesh. Good morning, everyone. We have started FY 2027 with strong momentum, delivering broad based growth across our hospitals while maintaining healthy operating margins. This performance reflects the strength of our differentiated care model and our continued focus on disciplined education, operational excellence and sustainable profitable growth.

10:05 We have entered '27 with a significantly expanded operating footprint. Over the past year, our total bed capacity has grown by 26% to 2,435 beds, while our operational bed capacities increased by 22% to eighteen sixty two beds. This expanded platform coupled with disciplined execution across our hospitals has enabled us to deliver growth while maintaining healthy operating margins. This reflects in our operating performance. Occupancy improved to over 41%, inpatient discharges by 28%, outpatient consultations by 25% and deliveries by 23%. We also delivered a 6% improvement in RCOB while maintaining an efficient average length of stay.

10:54 Together, these metrics demonstrate our ability to scale the business while improving productivity and operating leverage. Over the last quarter, we have worked closely with our hospital leadership teams to strengthen our operating rhythm through structured business reviews, sharper performance monitoring and greater accountability. These initiatives are helping us identify opportunities earlier, close operational gaps faster and drive greater consistency across our hospitals, resulting in quicker decision making and improved execution. I'm particularly encouraged by the continued performance of our newer hospitals, which are ramping up well and contributing meaningfully to the overall growth of the business. At the same time, we remain focused on seamlessly integrating our recently acquired hospitals into the Rainbow ecosystem by embedding our clinical protocols, operating systems and culture while steadily progressing them towards our profitability benchmarks.

11:54 Technology continues to be an important enabler of this journey. During the quarter, we further strengthened our digital ecosystem through enhancements of our CRM platform, patient conversion capabilities and digital engagement initiatives. These investments are helping us create a more connected patient journey, improve operational visibility and enable faster data driven decision making across the organization. Another key point has been strengthening collaboration across our clinical operations, nursing, marketing and corporate teams. As our network expands, sustained performance depends on every function working towards common goals with clear accountability and shared ownership. We have made good progress in building this operating discipline, and I believe it will become an increasingly important competitive advantage as we scale.

12:48 Looking ahead, our priorities remain unchanged. We will continue to drive profitable growth, accelerate the majority of our newer hospitals, successfully integrate acquired facilities, strengthen our digital capabilities and execute our expansion pipeline with the same discipline that has defined Rainbow's growth over the years. Supported by a strong balance sheet and an experienced leadership team and a differentiated operating model, we remain confident of delivering sustained long term growth and creating value for all our shareholders. With that, I now hand over to Vikas for the financial update. Thank you so much. Thank you, Abrah. A very good morning to everyone, and thanks for joining us today for the earnings conference call for the first quarter ended 06/30/2026.

13:42 Our operating revenue for the quarter stood at INR $4.70 crores, reflecting a robust thirty three year on year growth, driven by healthy contribution from both our mature, acquired and newly commissioned hospitals. Our EBITDA for the quarter amounted to INR 134.6 crores, registering a 30% year on year growth Despite the initial operating losses at the newly commissioned hospitals, we maintained a healthy EBITDA margin of 28.6%. This demonstrates the resilience of our operating model, disciplined cost management and ability to manage growth without significant stress on balance sheet or return ratios. Our profit after tax for the quarter stood at INR 62.5 crores, reflecting a 16% year on year growth.

14:29 Operational performance remained strong during the quarter. In patient discharges, outpatient consultations and deliveries grew by 28%, 2523%, respectively. This broad based growth reflects sustained patient demand across our network, including acquired units and continued ramp up of our newly commissioned hospitals. Our payer mix continue to remain balanced and resilient. Cash and insurance contribute approximately 4842%, respectively, and remained consistent as in the past quarters. Company continues to maintain a strong balance sheet and healthy liquidity with cash, cash equivalents and the investments stands at INR $6.13 crores as of 06/30/2026.

15:16 This provides us the strong financial stability and the flexibility to fund our ongoing capital expenditure program, support our expansion pipelines and pursue strategic inorganic opportunities, while continuing to execute all planned investments through internal accruals. During the quarter, we invested approximately INR 56 crores towards capital expenditure, primarily focused on expanding and strengthening capabilities across our existing hospitals and upcoming projects, in line with our long term growth strategy. With these remarks, I conclude my financial update. We will now be happy to take your questions. Thank you. Thank you. We will now begin the question and answer session. The The first question comes from the line of Sunny Dia with Unicorn Asset. Please go ahead.

16:24 Hi, team. Good set. Couple of questions. Firstly, now that we are on 1,862 watt beds operational and given the pipeline that we have... We are looking for after the acquisitions, is it right to understand that by the end of this financial year, our operational batch should be around two two thousand and fifty plus versus that. And second is, if you can share the strategy we are looking for this year or next year for the requisitions. And given our presence that we are trying to build in Northern India as well. So are we also looking for something, say, in Noida or something, say, in the best near NCR regions, say Jaipur, that kind of strategy, yes.

17:24 Yes. I think we've as a kind of given the overall road map, I think we have a visibility of 1,200 beds. Those are the ones which have already been in execution phase. And we are also exploring the opportunities that geography is what you clearly mentioned about Noira and the central parts of the India. And having signed in Mumbai, I think this is the first opportunity for us to get into Mumbai. I think this is a great strategic move for us. I think the Mumbai, we believe it's a great opportunity for us to kind of expand ourselves to a larger network in the years to come. So this is how we look at it. And also, there is a lot of growth markets like in Bhubaneswar, Raipur, we are exploring opportunities where there is a need of children's health care, where Rainbow and Priya are significant gain. Like we went in Gowhati, I think it's doing very well. And we are trying to kind of strengthen our footprint further in the Northeast area.

18:32 Once we get into the geography, we try to play a kind of a larger game. This is how we do it because that is where we can actually have a better operating model and also kind of a clinical as well as operating model can actually be strengthened. Yes. So just a follow-up on the same thing. I was looking from the churn perspective. So I think the strategy and the kind of work that we do in child health care is... It's tremendous. And I think the churn would be more from the perspective of how can we explore into a high, say, ARPPUB or I don't wanna quote in the terms of ARBOW, say, high in the terms of revenue models that we can do. Because if we see logically something like Gurugram when comes in or Mumbai when comes in or say something we do in or some other territory like that, that eventually will lead to higher revenues per patient kind of thing for us other than what we can organically do. I was looking from that perspective. And also that should we see going forward, like, the operational efficiency improves, we can reach the higher EBITDA margins from here as well? Yes. Thank you.

19:51 Yes, certainly that we have we when we go into the markets like Gurram and definitely your the price points will be better. Anurag, do you want Yes. So hi. So see, specifically talking about Guruga Ram and Mumbai, okay, Guruga Ram already is a very high upper market because there are large players in multi specialty there, you know who they are. And when we enter Gurugram, our large strategy is going to be around quarterly care. Our hospital there is going to be is equipped with high end tertiary quarterly care like liver transplant, kidney transplant, we're going to do oncology. These itself are high RCOB, high ARPP procedures. Also, Gurgaon is a large international market, international medical tourism market. And almost 10% to 15% of that market is pediatrics, which currently does not like captured because there is no real expertise specialized pediatrics there.

20:53 So that's coming in, think that is something that will happen. And we will see a lot of these pediatric international or medical rules of patients coming to us. So it is going to be a very high up market. If you look at Mumbai again, our hospital being in Malad and it drains almost Kandivalli, Dhaithar, Bodhiwali and there are only there's not much there's lot of need for specialized pediatric care in Mumbai. Rainbow comes with a very differentiated kind of approach. We are outreach driven. We go and we look at transporting babies. So our NICU and our PIC will be very, very highly intensely operational in Mumbai. Again, are high ticket, high ARPOP kind of procedures. So that makes us believe that Mumbai and Gurugaam automatically will be higher for growth markets.

21:44 Great. That really helps. Just trying my luck on the last one. So now from next quarter, we'll have like a higher base for the revenues part. Should we expect similar kind of at least mid-20s growth? Or should we look for lower number? See, I think we are as I said in my earlier speech that we are really leveraging our operational capabilities, digitizing, doing a lot of lead driven convergence. I think the first quarter growth was very good, but we'll surely be in the range of 20s for sure in quarter two, not less than that. Great. That is very helpful. Thank you. Have a good one. Thank you. You. Next question comes from the line of Prithvi Raj with Unifi Capital. Please go ahead.

22:36 Hi. I just have a couple of questions. The first one, in the years back, we used to be predominantly in Chennai, Bangalore and Hyderabad. But now regarding to Northridge, we have plans for the NCR and then Mumbai. So how should we look at RAINBOW, say, in the next five years, given that you have another 1,200 beds to be announced for the next two quarters? Is the company going to enter new metros in Northwest or it will add more of both hospitals in South? So how should we look at the business model from geography standpoint? Yeah, the size of the country is one, India. So and the opportunities actually when you look at it overall and there is a the South is demand premium, North is an opportunity. That's how we look at it. When you see overall about the northern four states, which is Uttar Pradesh, Bihar, Rajasthan and Haryana, put together produces about 62% of India's birth, which is about almost of 28,000,000 babies who are being born. So obviously, that is a market where there is a need of children's health care. There is a need of acute care.

23:55 So obviously, we need to explore much more significant. And also the cities which we have been looking at is like Indore, Raipur and Boneshwar, all these cities are actually they are actually growing significantly. There is a significant improvement in the economic stages on those things. If you look at our multi sector players, people have entered into these markets, they've done very well. Obviously, we're being the leader in self care. For us, Boundaries is within the country for the moment. So wherever there's opportunity, we went to Guwahati. And I think what we were able to do is actually on an existing platform, we were able to build more capability. Now we are looking at a kind of a make it much more larger multi specialty hospital.

24:44 And in future, in years to come, we'll try to do some spoke hospitals also. So it is an opportunity, which I think, geographically, there may be difficulties in operating models that, of course, we do understand, cognizant with that difficulties and try to play our do our playbook. Okay. That's great. And just a follow-up on this. So does this mean the payer mix will eventually change as you get into new geographies? Because right now, it's predominantly cash and insurance. But to get some footfall in new geographies, will you consider looking at government scheme patients at some point of time? I think this is we are working on it. I think when there is a capacity, there is excess excess beds are available, and we are exploring to have some portion of the government business, which we will which again, it depends on the price points and those things because we are not surgical specialties, are more of medical specialties.

25:51 We will be careful on that front, while improving occupancies and doing a service for the larger number of people, we need to be conscious about price points, service delivery and the outcomes as well. One final question from my side. Could you give some sense on the profitability of the new hospitals, say the Assam, Rajumentary and the new Bangalore one, how it is growing with respect to EBITDA? Yes. See, these are new hospitals. Though Goharti's acquisition is well established, I don't think there's any margin issue there, it's doing well. If you look at some of our new hospitals like you mentioned in Bangalore and Raja Mundri, we are still building capacity there. Having said that, our top lines are doing good, occupants are increasing. And of course, there will be some margin pressure given that these are new hospitals.

26:39 But we don't look at a very long time line to actually neutralize this and get back into or drive profitability positively. Is it possible to give some number for Rajumentri, the new Bangalore one on the margins? Rajumentri is breakeven right now? Yes. Rajumentri is sort of breakeven right now. And EC will be a couple of months or three months before we breakeven there. But so we're not far from breakeven. That's all from me. You. Thank you. Next question comes from the line of Palam Uddli Krishna with Omar Investment Advisors. Please go ahead. Hi. Good morning, Manav. On the radiation front, given a guidance... Sir, your price is little unclear.

27:33 Yes, if you can just speak a little louder. Yes, you can talk now. Better, better, yes. Yes. Yes. On the bed addition front, we have given a guidance of 2% beds over the next five years, so it's coming around 15% CAGR. So how do you think this will translate to top line perspective, 20%, 25%? The revenue projection, if we were to add 2,500 beds in next five years, what is the revenue growth that you are looking at five years hence? That's the question. Yes. Think the way we are, I think we will probably kind of go past way beyond the 2,000 crores by end of the year.

28:29 And I think from four years, from that point of view, it will double. This is how we look at it. Looking at the trajectory of our growth of the past and also the pace of our next phase of fed additions and the geographies based on all those things. And that's how ballpark, I think, we'll have to come back to you later on, on the business plan more clearly. Okay. So on the ARPU front, so normally in this other specialty hospitals, so when they do very critical specialization related treatments, ARPU will increase. But how it will improve in our case in segmental and JLK.

29:15 So how ARPU will be driven as we grow? Yes. As I said in the earlier question that the gentleman asked, as we are adding larger cities like Gurgaon or Bombay, and we are looking at continuously driving into quarterly tertiary care, larger procedures for pediatric, as I earlier mentioned, pediatric liver transplant, pediatric kidney transplant, pediatric cardiac surgeries, automatically the RCOB will be driven because of case mix. So it's a question of getting into newer geographies, driving more of these procedures. Usually when we start the new hospital, so how big are our core levels and when it becomes mature, maybe five years down the line, so how it will look like? Any numbers ballpark number?

30:06 I think let's put it this way. We are the pilot project in the country from the pediatrics. Every number whatever we have driven and delivered so far is a fresh number. Can you compare with adult apple to apple? You cannot. So that's what so we are discovering ourselves. For example, at this point of the time, if you look at the RCOPS rainbow compared to any other other player groups and we are not far behind and we are in the top four or five with the organization. So what drives our cost for us is that what is the kind of the quality of the hospital, whichever whatever is being done, whether it is what proportion of intensive care bed, what are the traction of those patients, how much of the up six comes in with that. And the later stages, in the building stage of the super specialties, then the ARPUs further will be driven because of the high ticket items.

31:00 So this is how we look at it. And as I said clearly, as we kind of put it clearly, the next five years, we are going to make reach 5,000 beds with the five hub hospitals, is along with Hyderabad, Bangalore, Chennai, Gurgaon and Lavati. These are the hub hospitals. They will drive the complexity and the higher ARPU businesses. At the same time, and our spoke hospitals, wherever we have done it, they were kind of a fairly kind of do very high ARPU business because of the rapid churn, high outpatient footfalls and the short tailors and high up sticks and deliveries, units in terms of care, those drive the ARPUs.

31:46 So this is how the our mix so far, our understanding of our business and the numbers and ARPUs tear out. So we have been, in the last five years CAGR, if you look at it, our ARPUs have grown about percent, 65%, 6%. Yes, CAGR is 5%. Yes. That's how we'll get it. And also, if I can add here, if you look at our presentation, we have given the breakup of our ARPU of new units and old units. New units or matured units, if you look at definition is five years. If you look at the ARPU difference is roughly 18%, right, for the quarter first. For the new hospitality utilization, it is INR 59,000. As a matured, which is more than INR five years is INR 70,000. So the answer which we are looking for is that whether the new hospital, when they mature, whether the ARCOB will grow disproportionately, the answer is yes. As the hospitals continues to mature sure the complexity of the businesses which they handle, the ARPU is expected to go up, which we have demonstrated over a period of time.

32:51 Okay. A lot for my questions. Yeah. Thank you. Next question comes from the line of Tamyanti Kairai with HSBC. My question is on your Mumbai market entry. So you spoke about your focus segment, etcetera. Just want to understand a bit on your thought on the potential challenges in this market, which you can see. And then you can also elaborate a bit on the doctor engagement model, which you intend to do for this market. And after, say, a few years down the line, should we assume Mumbai market will be as profitable as your home market of Hyderabad? So how should we look in terms of profitability profile for this part? Thank you.

33:42 Currently, we have a fairly good understanding of the Mumbai market. I know it's a little the high priced market in the HR class or high doctor class or high and at the same time, this you can also the pricing also will be different in Mumbai. So the important thing is that for us to be in Mumbai and to see that, obviously, we can add a huge value to value can bring a huge value into Mumbai. That's definitely the job, number one. Number two is that the clinical play, what we can we'll be able to do is pay different from any other people that are currently in Mumbai. That's number two.

34:27 When you're able to kind of play your strength in Mumbai, obviously, that you will become a kind of a premium. Premium. In terms of driving the profitabilities, margins, I think we'll have to study our multi specialty aspect of those things because it is a high priced, high cost models on those things. I think I'm not very sure the moment will come, put a number on to it. I'm sure it will be an up to 20%, but I don't know exactly where it will stand. I think that requires some time for us to understand. So this is how I see it now. But we are very excited about our Mumbai opportunity, and that opens the doors for us to kind of build on much stronger in Mumbai.

35:14 Sure, sir. And the doctor engagement model, will that be similar, like doctors will be on Rainbow's payroll? Or it will be something different than your usual model? We always try wherever it is to say that the doctors who have to be a kind of on the full time model will be full time. But to run efficient children's hospital hospital, you require the large set of doctors to be full time. There could be some hybridization can happen in a different level of top six, some of the specialty doctors, but core team has always to be a kind of full time. Sure. That's helpful. And then wanted to check on one of the markets where you had entered two years back, Chennai.

36:10 How has been the experience there? I just wanted to understand is that turning out to be the way you expected when you entered Chennai market? Yes. Chennai has done well initially and then there is some different two years ago. INE is building on well now. Okay. And my last question is your plan for spend towards digital ecosystem. So you in the initial comment, we heard about your initiative there. So bit more there, what kind of spend you foresee to build this part of the business? And how soon we can see the system which you are working to achieve?

37:01 See most of our infrastructure already in place as we speak. So what we've done in the first three months we have actually gone and as I said earlier we have gone and closed the CRM. So we have a CRM, we have a lead management software into place. We have increased our spend into digital acquisition that is getting more and more patient facing digital applications. We have a conversion system in place. The architecture will be largely be differentiated into the HIS and the SAP model and the patient interface will be connected to a middleware. That's what we're working on. We're looking at a BI and a data lake, which will kind of streamline our data and improve our reporting efficiency. Again, as I said, we already embarked on this mission. I think in the next three or four months, we will perfect it.

37:47 Sure. So in terms of the EBITDA margin profile, how should we look at, say, FY twenty seven, twenty twenty eight number given the kind of spend which are currently ongoing? So presently, we have added a lot of bets, almost 40% of the bets we added in the last two years' time, which is why you see some margin pressure, which I already indicated to the markets in my last earnings call. But overall, your EBITDA pool has increased, but there'll be there'll obviously be some margin pressure. But total to the end of the year, we will still come back between 2425% in That's what we always guided. I think that's...

38:35 Thank you. Thank you for your response and all the best. Next question comes from the line of Rahul Jeevani with IFL Capital. Sir, we are now expanding aggressively into markets outside South India. So now let's say we have Guati, Indore, Pune, Mumbai and then the Delhi NCR commissioning as well. So given that we are now aggressively going outside core markets, what kind a management bandwidth we have put in place or we are targeting to put in place to manage expansion across, let's say, these diverse markets? Okay. See, I think we have our managerial bandwidth is significantly improved. And so this is a company which is driven by the CEO and also kind of with the vision of promoters.

39:34 And also, you've got a very strong functional heads and including the project teams. So I think our corporate team is pretty solid and strong. They have been here with us for the last three, four years' time. We strengthened further And with the addition of some the service excellence head and new projects head, I think we are pretty robust. We have a sales and marketing head. I think we have very robust. And also regional structures also, we strengthened significantly, like in the Bangalore, Chennai, Andhra Pradesh and Hyderabad in place that all of us here is its own ground. And we will actually be looking at kind of creating some the regional structure as we move forward in Mumbai in Delhi as well. So we are very kind of comfortable with the aligned team and also high end execution, and we look forward to see that lot more strength coming in.

40:37 Sure, sir. And in terms of these regional clusters, can you define in terms of what kind of clusters would these be? So maybe one Delhi NCR and one Maharashtra to manage hospitals across these markets? So Rahul, we have a very strong frontline of hospital heads who are driving the business, supported by a strong corporate back end with functional heads like Doctor. Ramesh mentioned. Going forward, we will be dividing cities into clusters and hospital heads will be looking at two, three, four hospitals depending on their maturity. That's how it's going to be. So it's going be a large city, which for example has say six or seven hospitals, there might be two clusters headed by two cluster heads, who will also be handling hospitals directly and looking at two, three other hospitals. It's a typical zonal structure, that's what we're to look at.

41:26 Sure, sir. And let's say, out of these 2,500 incremental beds, sir, which we are planning to add over the next five year period, we have visibility for 1,200 beds. But for remaining, let's say, 100, 1,400 beds, would we go into to other cities or would look to add the hospitals within the cities which we have already identified? So would we go deeper, let's say, in Mumbai, Pune, or Central India, or look to further spread across the country? Yes. Right, Rahul. I think anyway, 30% of the bets go into the Southern markets to strengthen our hub and scope model and the new areas and micro markets.

42:11 The rest of the 35%, 40% of the beds will 70% of the beds will be in the new market. New market in the sense, it will be at Delhi NCR, both focus, And some other northern cities and Central India plus Mumbai, this is where it's going to be roughly. Our bank strength is going to be built on in the next five years' time. Sir, roughly then the new expansion would happen in all these new markets which have already been identified and laid out to the market? Rahul, one more thing is we have always been always we are the organization we want to go in and try and address the larger and wider address the large cities, large markets more comprehensively and try and build an open spoke model and do the wider coverage of the city.

43:09 That is how I think children's hospitals, I believe in that be efficient in both in terms of delivering outcomes to the city and also even manage the areas, cost optimization, manage bandwidth, all these things could be built much more strongly because of the medical hospital and the emergency driven hospitals. So in a market where you are, for example, in Hyderabad, we have about close to 1,000 beds. I mean is one beds going to be stopped there? We'll continue to have beds in Hyderabad. We'll continue to have beds in Bangalore. That's the power of our bespoke model. And because your reputation is at the highest level and people would look forward to have you in multiple places presence.

43:56 Sure, sir. And sir, last question from my end. I think you referred to the fact that obviously near term revenue growth will be 20%, but did you indicate that target is to double top line over the next four year period? Yes. I mean, if we are looking at the growth of 20%, obviously, you would reach the doubling your revenue in four years' time, right? Sure, sir. So essentially, percent is the target for the medium term in terms of revenue growth? Absolutely. That's it from my side. Thank you. Next question comes from the line of Sukriti Patil with Icyte Fincrete Private Limited.

44:43 Please go ahead. Good morning to the team. I have two questions. The first question to Mr. Talal is beyond the regular outlook, just want to understand what are the top two to three execution priorities you're focusing on in the immediate process? And alongside that, what do you see as the biggest risk in patient demand shifts or competitive pressures? And how are you preparing to manage them while strengthening RAINBOW's position in the pediatric and maternity space? That's the first question. I'll ask Mr. Kunlisin after this. Thank you. Yes. So I think one is two of the main levers that we're looking at currently are strengthening while we're working on all the levers, tech being a big part of it, increased investment in social media and we've already borne good results in the first quarter.

45:29 That's one. Second is we are looking at largely increasing our market. Our doctors referring more and more to our hospitals. I think that's one very important asset we are working on. We are making our doctors visible to the markets, to the corporates and actually communicating what we do. So these are the top two levers at this point of time that we are working on in terms of driving in volumes. What was the second part, sorry, on the competitive landscape? Yes. On the competitive landscape, number one, I really think that we are a niche hospital. I don't think that there's real, real competition in our category, okay? If you look at our business, we are largely pediatric, super specialty, pediatric driven. We, of course, do participate in mother and child.

46:19 So actually from that point of view, there's no real competition I would perceive. But and if you look at the patient demand shift, I think people want to come to specialized hospitals for deliveries and for pediatric care for their children. I think where deliveries are concerned, we are a comprehensive solution and we also have fertility. So if someone wants to come for a complete comprehensive solution, I think we are the place to go to right from IVF to burning to pediatrics, neonatology, pediatric intensive care, pediatric super specialty, it's a complete circle. So I think this is where it is. So I think as patients get more educated about our comprehensiveness, which we talk about, I'm sure the shift will be more in our direction. I think it's about educating the patients more digitally and through ATL activities.

47:08 Thank you. My second question is to Mr. Upakashi. Again, from another similar line, from a financial point of view, what key risks or challenges you anticipate in the immediate quarters? And what specific measures are being taken to manage the margins and ensure consistent cash flow and strengthen the balance sheet, especially in areas that are cost pressure incentives and the receivables part and any regulatory compliance issues? Thanks, Chris. It's a very exhaustive question which you have asked. Say as far as the cost is concerned, have seen we have added 70 bps in the last two years' time. We plan to add any other further bets as we are acquiring Nendur and so. So as the acquisition comes, the first priority becomes a seamless integration, streamlines our system, processes and the cost structure of the new units which we are acquiring. If it is a greenfield, obviously, how to optimize the cost and make sure that the growth which we have planned, it's accordingly that. And if it is better than that, how to streamline the cost accordingly. And if it is less than that, how to manage that cost. I think the cost management remains very, very good part. As far as another challenge is concerned is because the company is cash surplus, we have some sizable treasury investments.

48:31 There has been lot of prevalence period in the debt market or the credit market, how to manage your treasury yield, etcetera, and make sure that the liquidity plus the safety is not compromised with the reasonable returns as per the industry standard is being maintained. I think these are the two product challenges in terms of acquisitions, greenfield and the treasury management. Obviously, the fixed company is investing a lot of money. The cost management in terms of the project, project track record plus the cost of the project management, that means the top four or five priorities on this. Thank you and best wishes. Thank you, Shiv. Next question comes from the line of Panshi Desai with JPMorgan. Please go ahead.

49:20 Hi, thanks for the opportunity. So my first question is on our expansion into newer markets. Very keen to understand from you when we have expanded in the past outside our core markets and when we enter these newer markets. In your opinion, in your experience, what has been that single hardest element to replicate in the newer markets? Is it setting up the doctor referral systems? Or is it creating that brand trust in that market? If you can share some thoughts on that? I think it's creating the clinical ecosystem, which is doctors and making a kind of a team, which has the high potency teams.

50:09 Number two is our ability to communicate to the city and include the end parents of the city into your what your capabilities are, those things. And that is where it is your main thing. Of course, your doctors who are referring to you and connecting with them through the educational programs, CMEs, workshops and various other things. Being a medical hospital, that is a major thing. And other than actually referrals because a children's hospital is always be a kind of an emergency care hospital. And also, there is nothing like a predictable number of knee replacements, number of cardiac operations, number of those things.

50:55 Those metrics don't work for children's hospitals. It is quality, deliverables and outcomes are going to determine your success. So the obviously, when you go to geography, which is completely kind of a community not aware of you, you'll have to put an extra force to ensure that you deliver and you communicate. Understood. And when we think about setting up these referral hubs outside of South India in say Guwahati, in Delhi, what will make you double down in those markets? So what are those things that you look for? Is it just the initial ramp up and success that you receive in your three projects? Or is it also a function of availability of, say, acquisition opportunities?

51:54 I think it's more of a Q2 for children's hospital to develop what we call as hospital is kind of a multispecialty children's hospital is a journey. It takes its own time to kind of build it. But places like Gaurati, which already the platform is well set and also only if we can there is a demand, there is a need, there is opportunity, all those things are there. But there is a paucity of the doctors in the Northeast. So that's where we are trying to see. If we are able to get the teams right and there is a patients are readily available in Bombardier. In places like Delhi and CR, yes, you will be able to have better teams. And also, you can recruit better teams from them, not only from India, outside India. So that is a leverage you can take it. And also, there's a market opportunity. Then how you actually play your clinical model is more important.

52:55 But I don't think it will take such a long time in those markets compared to the kind of Southern markets because in Southern markets where there is a fragmented with a matured, much special, mature markets and also there are many other apples like common trust households also there in competing with you. But we will crack in Southern markets being a pure play private children's hospital and high end deliveries. So that's where we are able to do it. So the markets which we are going to enter in is that there's an opportunities are much bigger, but very different. Understood. And my second question is also what is your initial read on seasonality this year given monsoon is in deficit. So we are entering very strong quarters from a seasonality standpoint. So if you could comment on that. And in the past, we've mentioned that we've also taken some steps to reduce our mature hospitals' dependency on seasonality.

53:56 So will some of those also play out? This is exactly if you look at our last two quarters, we have definitely overcome to an extent of the seasonality. Season one will play will obviously play in children's hospital because of the disease patterns and those things. But what's important for us now is to kind of become independent of seasons, continue to kind of deliver, but seasonality will become icing on the cake. Understood. So we've seen very good we've seen increase in occupancies in our mature hospital in Q1 on a year over year basis. So should we expect that to continue in Q2, irrespective of how season plays out?

54:47 I think that Zabar was explaining in detail about how we are connecting to our the communities and parents and greater degree of inclusivity, digital play, all those things are definitely going to kind of strengthen ourselves to be a kind of a little more independent of seasons. Albert, do you want to? Yes. I think as we said that we are working on all our levers very strongly. Really, are not taking any seasonal into account. It's not a part of our plans. Obviously, as he said, it's icing on the cake. In the last six months, we've driven a lot of levers which have actually borne fruition to the volumes that we've been able to actually garner in this quarter.

55:34 And I'm hoping that as we continue pressing on those fadges, we'll continue delivering those results in the next two, three quarters. And if seasonality were to kick in, it would be great. I think that's the way you look at it. Thank you. Mr. Desai, please rejoin the queue for more questions. Next question comes from the line of Anshul Agarwal with MK. Please go ahead. Hi, thank you for the opportunity. Sir, would it be possible to step out the inorganic growth in the current quarter numbers to be answered with the organic growth in the current quarter? When you say inorganic, do you mean acquisitions? Yes, that's correct, sir. It wouldn't be present in the base quarter basically. So Guwahati and Varangal.

56:20 Think Varangal are EBITDA positive, both of them. We think of even obviously, was EBITDA positive company. It is almost close to kind of our company EBITDA, Varangal. And Varangal is ramping up. I think it will come probably here down the line to the company level EBITDA. I was asking from the top line perspective, in terms of contribution organically how much have we grown in the current quarter? I understand 33% is the overall reported growth. I think there's about 20% growth in Kavathi as well as in Vorna, right? Yes. Anshul, if you're looking for a contribution, roughly INR 38 crore of the revenue, which came from these acquisitions.

57:08 Around 10% EBITDA contribution, that's what you're asking, came from acquisitions. So on the revenue growth, Anshul, if you remove this, 24% growth on a like to like basis. Yes. Great. And the particular reason why ARPUs in the mature cluster have increased by about 10%, has there been any insurance price hike, cash hike or anything to add? Yes. I think it's a combination of pricing as well as the case mix. These are two reasons. Got it, sir. Second question, if you could just highlight, quantify the losses that you would have incurred in the Bangalore units in the current quarter. The reason why I ask is that I think Abraha mentioned that we're close to breakeven in Electronics City after, say, probably a quarter. Whether that original guidance in electronic city was roughly 15 breakeven.

58:04 And again, annual losses, considering that competitive intensity in that particular cluster, I presume would be up because of the consolidation in the industry? Obviously, the losses are there in the new launches like HRBR, Electronic City. And this will take general guidance is about we breakeven in Bangalore about twelve to fifteen months' time. That's the time we'll be given. Some of them come a little early, some of them may come a little later. But within eighteen months' time, we set up a breakeven to those hospitals. That's how it is. I think with we have a very good doctors in HRBR and and HR the electricity, I think we still need some more doctors.

58:59 And we're very optimistic about Bangalore. I think the Bangalore is now is going to kind of play going to do very well for the years to come. Got it. And the acquisitions that we have sort of delayed yesterday, those would be positively contributing to EBITDA? And do we expect any losses from these units as well going ahead whenever they get commissioned? Yes. So I think among the acquisitions that we declared yesterday, I think those are running businesses and we do not really see those businesses pulling our EBITDA down.

59:47 Having said that, it may take us some time to ramp up further, but surely these are not units where we will have any EBITDA drain. Yes. So for example, Nelo is an existing business and also the doctors are well known to us And we will we can add significant strength to those doctors and to build business on. Adding up six in six months' time will definitely kind of make it more a lot more comprehensive of 100 plus beds in Nelur. So the I'm going say in Nelur and Gundur, Andhra Pradesh, we are a household name. So that is a Rainbow brand function is going to be significant. So in Gundur as well, it's a a 50 bed hospital. At the same time, in 40 kilometers, we have Vijayawada about 135 bed hospital. So that's more of a multi specialty hospital.

1:00:37 So this will complement to the Vijayawada. And also, we will be able to get lot more deliveries to and also the neonatal care in Gunter. All the emergency care will be sorted out. The 55 is very good enough, good acquisition, great facility, complement to the Vijayawada. This is how we look at it. There will not be huge, huge losses or anything. It will just take about six months' time to settle down and then start filing. So overall, our Andhra Pradesh, whatever is about five hospitals, whatever we have, I mean, they will do very well in next by end of the year. Thank you. Mr. Agarwal, please rejoin the queue for more questions. Next question comes from the line of Ankit Shah with White Equity Investment Advisors. I have a question on the strategy side.

1:01:36 So you called out five hub hospitals that we have identified. Wanted to understand your strategy for Mumbai. So do we also plan to have a hub in Mumbai, let's say, the next five years or so? Like in case of Gurgaon, we have a proper strategy with a proper hub hospital coming up, greenfield hospital and then we can play that market well. So can you shed some light on the Mumbai piece? Certainly would love to have in Mumbai because such a massive city. But Mumbai, as you all of us know, the challenges and opportunities. If there's an opportunity, I would definitely do a large hub hospital in Mumbai. And we will work on that. We are working on it.

1:02:23 Yes. But having said that, obviously, first priority will be to strengthen and launch Pallad. That will be the first priority. Got it. That's it from my side. Thank you. Thank you. Next question comes from the line of Sankita Savi Kuhale with PL Capital. Please go ahead. My question was on the seasonality actually. For us, Q2, Q3, normally are strong quarters. How has been the start for this quarter? I mean could you please highlight two, three indicators that we can watch out from? I'm sure this is too early to kind of comment on that considering that your monsoon has got delayed, everyone knows about it.

1:03:16 But we'll have to wait and see how things work because July is too early to kind of comment on that. Right, right. Okay. And the second question was on recent acquisition. You have already answered, but then I would like to know about the Malar unit. What will be the growth levers for this unit? And is there any lock in, non compete or buyout arrangement with the three doctor promoters? And is there any path to 100% ownership in the next level? Yes, obviously, there'll be any joint venture or any subsidiary, we will have the options. But we would like to have them because they've been friends to us for long time, good doctors.

1:04:06 So they have been they will be part of the journey for at least a decade. Okay. And what will be the growth levers from the Mallard Hospital? I think most important thing is that based on our expertise and also our proactive nature actually addressing the sick kids and the strong medical model, stronger intensive care, both PIPR intensive care, newborn intensive care, we will we believe it's a large opportunity of at least if we look at ten twelve kilometers radius from Malart, there's almost a kind of 80 lakh population.

1:04:54 So you're addressing 80 lakh population in when you look at really that how many pediatric beds are there, high quality beds, there's serious shortage. So that's why we see it's kind of there is a huge need and demand for such a high quality care, so for children. So obviously, we need to go on through ourselves that we are the best, right, in business to do the job what these babies and children are requiring. So that's where our strength lies to do a higher acuity care, to transports more aggressively, our capabilities in doing driving intensive care services and also there's some specialty like ECMO services, all those specialty things we can do it.

1:05:49 So that's why we are pretty confident about what are our I'm sure there is a huge need in Mumbai. Right. That's it for me. Thank you. Thank you. Next question comes from the line of Sanitya with Unicorn Asset. So just wanted to understand, when we see Cloud9 as a competitor in the NCR market, they follow a very different approach to what we are building. Understand that we are planning a hub unit in Sector 44, and then maybe we are... We will try to widen our approach in the city. I just want to understand how management see what they are doing as a strategy versus what we are trying to do.

1:06:46 The cloud name. So, see, again, as I said that it's a very different category of hospitals, okay? We are a tertiary, quaternary, pediatric, super specialty hospital who drives a lot of deliveries. Having said that, we are almost I think number two for sure in number of deliveries. Cloud9 is a different structure altogether. If you look at what Cloud9 does, it's largely a digitized model and they drive in deliveries and conversions. We are a much wider spectrum. So while we obviously do drive deliveries in and we have also multi fold increased our investment in digitization, which we've been talking about since morning. So that's where there's a semblance of maybe some competition or similarity, but otherwise largely 65%, 70% of our model is completely different.

1:07:32 So it wouldn't be a correct platform in my mind to compare. No, that is absolutely correct. I understand that. But my question is coming from a different approach. Yeah. You were saying something. No. No. Go ahead. Yeah. So my question was coming from different approach. How I was looking at it is, say, a parent. So they go to a hospital. They try and having a kid. Then they actually have a kid with the hospital. They form a relationship there with multiple doctors, and the... They have a memory there. They they try to be, like, going there more even as the child grows. Right? So that's... That kind that kind of forms a pattern of going, and you get out of... I'll say more out of same patient, you could say, or whatever. So it becomes a family approach in that sense. So that was my approach to look at this. Right? That's that's very...

1:08:30 I tell you what... That's... I mean, I have an answer for this. Yes. Rainbow is a kind of when it comes to delivery, we have a lot more built a lot more safety networks and we try to sell ourselves to kind of do normal deliveries. We have lot more conferences on normal deliveries to address high risk pregnancies and because of the backdrop of a strong neonatal PFS systems, which you don't need to kind of look out for anything to come in and do it. So it is naturally there in the system, embedded in the system. So the people who deliver with us, they absolutely stick to us. I mean, because it is a seamless transition. People who deliver outside, which are the multi specialties or the working centers or things.

1:09:17 In the present today, people knows about the capabilities of what anybody can do it. There are large number of people automatically shift. They might go for one or two, three months time vaccinations. After that, it's kind of a there's a disconnect comes when people will try to go because, for example, a child in the middle of the night would choose there, choose a place where there is an acute care, where the 24 will have an emergency, where the consultant service that cannot be provided by neither medical centers nor medical specialties. That can only be done by the children's hospitals. Yes, children's hospitals because our focus on acute care and emergency is a lot more stronger and also depth.

1:10:04 So this is what makes us different from these multi models versus multi specialty athletes. No, think you're talking of stickiness, right? So I think that answers your question between what I said and what Suh said. Even if there is a family which has initially delivered with a competitive single specialized chain, okay, post delivery, any pediatric issue can only be or largely be addressed by Rainbow. For example, there's a pediatric emergency, we have a ER at night, anything pediatric and that is the point where the shift will happen, if that answers your question. Yes. So that does. So more I don't want to push it further, just getting my approach right. Don't we think that if we have a wider network of, say, birds, right, in that sense that we can... So because it's, like, 10 to 15 visits yeah.

1:10:59 Yeah. We already do have... So birthright is available in all our 24, 25 hospitals. Okay? It's already there. And in in a month, capacities in most of the things, is already there. Yeah. Same on... Extending on that, was asking that, okay. Do we want to actually expand it horizontally, the birthright part of the of the... Of ours versus the actual specialty of the pediatric specialty part? Well, this hospital has been promoted by a highly skilled super specialty doctor. So, I mean, we always worry about what we deliver to the patients because anything what we do, we should always be strengthen our medical systems. In the smaller places, building a strength, medical strength is not that going to be that easy. While it may look appearance was better, but something runs into an emergency is a disaster. So therefore, I wouldn't build a hospital, 20, 30 beds. I would only build a hospital.

1:12:03 Basically, even 50 beds nowadays painful for me to even acquire it. I always feel comfortable to have 80 beds and above because I need to build up strength in the systems to support whether it's expected mother or during the delivery or a newborn or a child because this is how we envisage the healthcare to be built much more on the stronger platforms. Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question and answer session. I now hand the conference over to the management for closing comments. Thank you for joining today's conference call. Your continued support and thoughtful questions is instrumental to our strategic journey.

1:12:51 If there are any questions, do write to us or connect with us at investorsrelationship at rainbowhospitals. In. Thank you very much. Thank you. On behalf of Rainbow Childrens Medicare Limited and IIFL Capital, that concludes this conference. Thank you for joining us. You may now disconnect your lines.