Strong volume growth masks margin pressure; Noida ahead of plan

Inpatient +28%, OPD +34% YoY; Noida EBITDA loss fell ₹236Cr to ₹49Cr QoQ

Cluster 2 confirmed 28% revenue +40% EBITDA, 32% margins reported

Reported EBITDA margin 23.8% including Noida drag; ex-Noida 25.8% but Cluster 1 absorbs all corporate costs

PAT ₹157.3 Cr flat YoY (-1.1%) despite revenue +26.5%; prior year included ₹196 Cr one-time gain

Noida income ₹855m (vs ₹525m Q4), EBITDA loss ₹49m (vs ₹236m loss Q4); target was H2 FY27 breakeven

Prior: H2 FY27. Now: Expected earlier than H2 based on Q1 ₹49Cr EBITDA loss vs ₹236Cr in Q4.

400 beds → 650 beds; capex ₹500Cr → ₹970Cr. Building Code 2026 allowed 6.5L → 9.8L sq ft; OTs doubled 13-14 → 28-30.

Prior: 2,700 beds over 3-4 years. Now: 3,350 beds. But capex inflation evident (Guwahati ₹1.5L per incremental bed).

October 2025 hike fully in Q1, but CGHS = 10-12% of revenue; no material P&L move disclosed.

Volume growth 7-10% in 1,500-bed Gurgaon vs 20%+ in Lucknow/Patna; structural maturity risk.

Focus on clinical quality, Noida ramp-up, adding doctor capacity, technology (LINAC, robot, cath labs). No major competitive pressure cited; emphasized 'flight to quality' tailwind.

We don't give margin guidance. Already at 24% reported, 26% ex-Noida. Operating leverage as Noida matures, no structural cost headwinds foreseen.

INR4,850 Cr is future requirement. Q1 capex INR161 Cr. Already have approvals for Guwahati; policy changes welcome but not essential.

No. Actually increased 13.7% to 14.4%. Kidney/urology up 7.6% to 8.2%. Reporting methodology differs; 'pie of a hundred'—other specialties growing faster.

Occupancy 30-40% but not material metric due to ongoing bed additions. All major specialties operational except liver transplant. No significant capex planned; 14 OTs, latest equipment already in place.

Not comparable. Gurgaon: 1,500 beds, 15 years old, ~full capacity. Lucknow: ~750 beds, 5-6 years old, 100M+ population base. Lucknow growth is 'exceptional, not normal'. Gurgaon double-digit volume growth despite scale is itself a feat.

National Building Code 2026 changes allowed 2x sq ft (30-40K to 60K); floor plate 6.5L to 9.8L sq ft. Doubled OTs (13-14 to 28-30), cath labs, LINACs. Not bed-driven, procedure-driven.

Fully baked into Q1 (April-June). CGHS only 10-12% of revenue, not moving needle. Long-overdue hike (since 2017) but modest impact on overall P&L.

Not slowdown, relative growth. Cluster 1: Ranchi 100-bed facility added, Indore 80-bed acquisition coming Q2/Q3 (cancer focus). Gurgaon: activating 2 more OTs (total 44-45), adding cath labs. Brownfield mix of beds + procedural capacity.

No margin guidance. Cluster 1 absorbs all corporate costs, so Cluster 2 inflated. Newer units have lower R&M, legacy costs. No structural difference in work. Noida benefits from operating leverage as it scales.

Management silent on annual target. Q1 +26.5% YoY sets floor; Cluster 2 momentum suggests 20%+ system growth sustainable.

Management refuses to commit to margin expansion despite operating leverage expected from Noida. Defensive posture.

Q1 capex ₹161 Cr; annualized ~₹640 Cr on track. Guwahati ₹970 Cr largest project; others (South Delhi, Varanasi, Guwahati) in design/approval.

Revenue +26.5% but PAT -1.1%. EBITDA ex-Noida 25.8% suggests core margins flat. Cost inflation (manpower, materials, fuel) may be offsetting volume upside.

Guwahati capex jumped ₹500 Cr → ₹970 Cr for 650 beds (vs 400 beds originally). Building Code 2026 enabled but signals cost surprises. South Delhi, Varanasi projects still in approval stage.

Gurgaon (1,500 beds, 15 years old, near-full occupancy) growing only 7-10% volume despite Medanta network momentum. Indicates market saturation or competitive share loss.

Noida still losing ₹49 Cr EBITDA this quarter (vs ₹236 Cr Q4). While improving, profit-neutral status still quarters away. Risk of further cost overruns or demand slower than projected.

Management cites 'flight to quality' but doesn't acknowledge direct competitor threat. ARPOB growth only +5% despite volume +28%—suggests either case mix dilution or pricing pressure. Lucknow/Patna growth is 'exceptional, not normal'.