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00:00We have Sandhya J who is the Group CFO at Narayan Health to talk to us about the numbers
00:06for Q1 FY25. Welcome on board ma'am. First off, I want to try and understand how Q1 has
00:13played out for you and what we can expect from the rest of the year. Margins have gotten slightly
00:18better. Do we expect you to operate around this margin range or can you probably inch higher as
00:25the year progresses and as you scale up? Good morning. Thank you for having me here.
00:32So from a performance point of view, I think our revenue performance has come in in terms of
00:38a steady state performance if one can say. We are coming off the highs of COVID. I think this is
00:46more like a good steady state performance. But what we've also done is consciously taken a
00:51balanced approach between cash flow profitability and growth in terms of the kind of business that
00:56we're picking up and that's really reflected in our margin journey. The other aspect is that we
01:02are not very aggressive on pricing and therefore our build will always be a little bit of a slow
01:06and steady build. So in terms of outlook, I don't want to make any forward looking statement,
01:12but this is a good steady state performance that one can look at on the revenue front and in the
01:19margin front I think it also varies between quarters. For us Q1 and Q3 are typically a
01:24little bit of a lower quarters and Q2 and Q4 are higher performing quarters. So a little bit of
01:29that upswing will come in Q2 and Q4 because of the seasonality of the business and also a lot of the
01:35effort that we are putting in in terms of our quality of revenue, our throughput, our cost
01:41optimization initiatives. Some of the benefits of that will also flow in our overall performance.
01:47Hi Sandhya, Varsha here. So if you see a RPOP growth, so we have seen almost 10% of growth in
01:55last few quarters, but this time RPOP growth was around 6%. Now is this because of weak
02:01quarter in healthcare and where you're seeing this RPOP growth going forward?
02:06So like we've always said, we believe that average revenue for patients is a better measure
02:13than RPOP. Having said that, our average revenue for a patient for this quarter year on year has
02:20grown about 6% and our RPOP year on year if you look at last year same quarter to this quarter
02:26is about 10%. But the ARPP is a more real reflection of the underlying business traction.
02:35Q1 is a little bit of a weaker quarter for the industry itself and therefore you will see a
02:41slight moderation between Q4 to Q1. Also our price increase which comes through comes through
02:47in January. For many healthcare institutions it comes in April. So therefore some of the benefit
02:53of the price increase is already baked into the ARPP or RPOP that you've seen as of Q4.
03:00And Q1 being a slightly moderated quarter, so therefore you are seeing that little bit of
03:04adjustment in the numbers. In terms of outlook, I think we continue to try to improve the quality
03:11of the revenue and improve the growth but ours will be slow and steady like I explained earlier.
03:18Sure Sandhya. So where does revenue go from here especially for FY25? And if we can get
03:25a more wider lens at this, maybe over the next two to three years, what are the growth plans and
03:31where does revenue therefore go for you? So I think this may be the right time to segue
03:37into our CapEx journey and we have invested almost close to 1000 crores over the past
03:45two years and we are looking at another, this year we've divided between 1600 to 1700 crores of CapEx
03:52and we are expecting to keep this high CapEx momentum over the next two to three years.
03:59However, most of the CapEx investments which we are looking are greenfield and nature, therefore
04:04we are building new hospitals. So therefore the next big inflection in revenue that will come
04:10will only come when these facilities come out. Until then we will try to grow with maximizing
04:16our throughput through our existing facilities and therefore we will continue to show organic
04:21reasonable growth. Over a longer time frame, because we are doing a very heavy CapEx over the
04:28next three to four years, therefore when we complete that CapEx cycle, I think the next
04:34big inflection will come. How much of bed capacity we are adding through this CapEx?
04:41So it is still work in progress. We have at the moment announced two to three projects,
04:47all adding up to about 1000 beds but all greenfield, but that's just the starting of the
04:54CapEx cycle. We are going to create more capacity and as and when we announce these projects,
04:58we'll be able to share more details. All right, thank you so much Sandhya. We're going to have
05:04to cut this short. Market's in a tizzy, but thank you so much for coming in and speaking with us.