Asarfi Hospital — Q2 FY26 earnings call

Call held 19 Nov 2025

Management summary

Asarfi Hospital reported strong H1 FY26 results with significant revenue and profit growth, driven by increased patient volumes and improved ARPOB across both Superspeciality and Cancer hospitals. Strategic initiatives like the multi-organ transplant MoU and planned bed expansions are underway. However, high trade receivables due to government dependency and initial trust issues at the new cancer hospital remain areas of concern, alongside a notable nursing attrition rate.

Highlights

  • Revenue from operations grew 50% year-on-year to ₹80.6 crores compared to ₹53 crores in the first half of the last year.

  • EBITDA stood at ₹15.86 crores reflecting 38% year-on-year growth with a stable EBITDA margin of 20%.

  • PAT rose by 70% on year-on-year basis to ₹7.32 crores with PAT margin improving to 9%.

  • In-patient volume has more than doubled to 12,361 in the first half and out-patient volume grew to 72,317, up from ₹54,000 in the last period.

  • Signed a strategic MoU with Gleneagles Hospital, Chennai to establish Jharkhand's multi-organ transplant unit.

Concerns

  • Trade receivables grew 67% year-on-year, primarily due to government agencies and new cancer hospital's reliance on cashless business.

  • Cancer hospital still faces trust issues, leading to low cash proportion and high dependency on government business.

  • Attrition rate in nursing is 20-30%.

Key financials

  1. Revenue from Operations ₹80.6 Cr +50%YoY
  2. EBITDA ₹15.86 Cr +38%YoY
  3. EBITDA Margin 20%
  4. EBIT ₹12.13 Cr +75%YoY
  5. PAT ₹7.32 Cr +70%YoY
  6. PAT Margin 9%
  7. In-patient Volume 12,361 patients
  8. Out-patient Volume 72,317 patients

What they filed

Q1 FY27: revenue up 32.8%, net profit up 33.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue31 33 35 36 45 +45%46 +40%45 +28%47 +33%
EBITDA7 7 6 7 9 +31%10 +45%8 +22%9 +34%
Net profit3 3 4 3 4 +48%5 +101%4 +7%4 +33%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of ARPOB
₹61,240 Total
  • Cancer Hospital ₹41,401 67.6%
  • Superspeciality Hospital ₹19,839 32.4%

Capital allocation

high confidence
  • Capex ₹3 Cr internal accruals for future 200-bed expansion
    • Hostel construction (already spent) ₹4 Cr
    • Additional 65 beds and cancer hospital equipment ₹3 Cr
    • Future 200-bed expansion ₹10 Cr
    In the last earning call, we had explained this also. Again, we are not going to invest huge sum of money. The construction of major portion of that additional 65-beds in the existing unit is already done. Hopefully, it should be operational before March. And in the cancer hospital also, because civil infrastructure is already in place, we need to put some equipment. So, there will not be major investment more than Rs.3 crores in the entire process. ... Approximately Rs.4 crores has been on hostel ... not be more than Rs.10 crores is needed, which will be funded through internal accruals.
  • M&A Gleneagles Hospital, Chennai (for multi-organ transplant unit) Joint venture · Signed

    To establish Jharkhand's multi-organ transplant unit and bring world-class transplant services to the region.

    We are also pleased to share that in the May of this year, we have signed a strategic MoU with Gleneagles Hospital, Chennai to establish Jharkhand's multi-organ transplant unit.
  • M&A Promoter entity hospital Merger · Announced

    To increase bed capacity and leverage existing infrastructure.

    Yes, sir. We are planning to merge that. We are discussing with the consultants to process that merger. ... No, sir. It will be on cashless basis. ... Earlier, there was a question about a merger of a hospital of a promoter entity. So, could you please share the bed capacity of that hospital? 70-beds.

Guidance & targets

Revenue

  • Revenue Revenue · FY26 · High confidence ₹160 crores
    we are looking for a revenue of Rs.160 crores

    — Harendra Singh

  • Revenue Revenue · FY27 · High confidence ₹200 crores
    It is also given, sir, Rs.200 crores revenue we are looking.

    — Harendra Singh

Profitability

  • PAT Margin Profitability · FY26 · High confidence 13% to 15%
    PAT will be somewhere around 13% to 15%.

    — Harendra Singh

  • EBITDA Margin Profitability · by 2027 · High confidence 25% to 27%
    maintaining a healthy EBITDA margin of 25% to 27%

    — Harendra Singh

  • PAT Margin Profitability · by 2027 · High confidence 13% to 15%
    PAT margin of 13% to 15%.

    — Harendra Singh

Capacity

  • Total Bed Capacity Capacity · by 2027 · High confidence 500 beds
    expanding total bed capacity to 500

    — Harendra Singh

  • Cancer Hospital Bed Capacity Capacity · High confidence 150 beds
    Our expansion roadmap includes a scaling of the cancer hospital to 150-beds

    — Harendra Singh

  • Additional 65 beds operational Capacity · before March · High confidence Operational
    Hopefully, it should be operational before March.

    — Harendra Singh

  • Total Bed Capacity Capacity · before 2030 · Medium confidence 1000 beds
    Definitely, we would like to aim for a 1,000 bed company. ... It is not exact, but definitely before 2030.

    — Harendra Singh

New Initiatives

  • Bone Marrow Transplant Unit Launch New Initiatives · next year · High confidence Operational
    We would like to launch a Bone Marrow Transplant Unit next year

    — Harendra Singh

  • Education Vertical Operationalization New Initiatives · next year · High confidence Operational
    operationalizing our education vertical with 600-plus capacity hospital and healthcare management institute in Ranchi.

    — Harendra Singh

What to watch in Q3 FY26

Additional 65 beds operationalization

before March (FY26)
Current Construction of major portion done
Target Operational

Why it matters

Successful operationalization will contribute to increased bed capacity and revenue growth.

The construction of major portion of that additional 65-beds in the existing unit is already done. Hopefully, it should be operational before March.

Risks & concerns

  • High Trade Receivables

    medium

    Trade receivables grew 67% YoY, primarily due to government agencies with 90-180 day payment cycles and the new cancer hospital's reliance on cashless business due to initial trust issues.

    Management acknowledged

  • Cancer Hospital Trust Issues

    medium

    The new cancer hospital faces initial trust issues, leading to a low cash proportion and high dependency on government business, impacting cash flow.

    Management acknowledged

  • Organ Transplant Policy Clarity

    medium

    Lack of clear organ donation policies in Jharkhand makes it difficult to procure organs, potentially delaying the full operationalization and revenue generation from the multi-organ transplant unit.

    Management acknowledged

  • Nursing Attrition Rate

    medium

    The attrition rate in nursing staff is 20-30%, mainly due to young age, marriage, and government job opportunities, requiring continuous HR policy review.

    Management acknowledged

Q&A highlights

6 direct
Trade receivables growth vs. revenue growth Direct
We have identified that trade receivables are a cause of concern not only for our investors but also for us. ... this trade receivable is slightly on the higher side. And second main reason is because this cancer hospital in this area is new. Initially, people have trust issues. So, cash proportion in the cancer hospital remains very low and we are dependent mainly on government business and that is why it little bit appears as skewed.

Addresses the discrepancy between revenue growth and trade receivables growth, highlighting challenges with government payments and new hospital's cash flow.

Asked by Murtaza

CAPEX for education business Direct
First of all, basically, we are trying to maximize the investment already made. We already have building infrastructure. Hostel, we were not having, which we have already constructed. ... Approximately Rs.4 crores has been on hostel

Clarifies the minimal CAPEX strategy for the education vertical, leveraging existing assets and focusing on manpower development.

Asked by Murtaza

CAPEX for bed expansion (Superspeciality and Cancer Hospital) Direct
The construction of major portion of that additional 65-beds in the existing unit is already done. Hopefully, it should be operational before March. And in the cancer hospital also, because civil infrastructure is already in place, we need to put some equipment. So, there will not be major investment more than Rs.3 crores in the entire process. ... not be more than Rs.10 crores is needed, which will be funded through internal accruals.

Provides specific CAPEX figures and funding sources for planned bed expansions, indicating a capital-efficient growth strategy.

Asked by Murtaza

Update on new 100-bed hospital acquisition Partial
Yes, sir, we are trying, there were certain technical glitch, there are some shareholders of the identified unit had died and the share transfer was not taken shape and that is why it got delayed. But we are still trying and we would like to close it quickly as soon as we hear update from them.

Explains the delay in a previously discussed acquisition, indicating ongoing efforts despite unforeseen challenges.

Asked by Runit Kapoor

Payer mix and debtor days Direct
Insurance is 8%, government is 30%-plus, cash is 50%. In cancer hospital, government scheme contributes 90%, 2% insurance and 7%-8% cash. ... Yes, because of government mix, it is quite high. This is an identified area. We are working day-in and day-out to manage this in the best possible manner.

Details the company's payer mix, especially the high government component in the cancer hospital, and acknowledges the resulting challenge of high debtor days.

Asked by Rithika

Steps to increase PAT margins Direct
We are working hard to bring down the cost. We are trying to modify the contract with the doctors without disturbing our relationship... We are trying to seriously look into and control the overall cost in every area. ... we are using the same brand of medicine, whereas we receive letters from ECHS, PGHS, ESI that you have to use generic medicine, where we feel that there will be some increase in margin. So, all these steps will help us to improve our PAT.

Outlines specific operational strategies to achieve targeted PAT margin expansion, focusing on cost control and procurement efficiency.

Asked by Ashish Soni

Attrition rate and doctor retention Direct
Attrition is somewhere 20% to 30%, which is manageable, but we aim to bring it down by modifying our HR policies. ... Attrition is mainly in the nursing field, because they are most volatile.

Highlights a key human capital challenge (nursing attrition) and management's approach to address it through HR policy revisions.

Asked by Ashish Soni

2 min read 6 chapters

Detailed narrative

Strong H1 FY26 Financial Performance

Asarfi Hospital delivered robust financial results for H1 FY26, with revenue from operations surging 50% year-on-year to ₹80.6 crores. EBITDA grew 38% YoY to ₹15.86 crores, maintaining a healthy 20% margin. Net profit (PAT) saw an even more significant increase of 70% YoY, reaching ₹7.32 crores, and the PAT margin improved to 9%.

Operational Growth and Capacity Expansion

The company's Superspeciality Hospital achieved a 64% occupancy rate and an ARPOB of ₹19,839. The newly operational cancer hospital, the first of its kind in Dhanbad, saw its occupancy improve from 26% to 44% in H1 FY26, with its ARPOB more than doubling to ₹41,401. Overall, in-patient volume more than doubled to 12,361, and out-patient volume increased to 72,317 from 54,000 in the prior period. An additional 65 beds are expected to be operational before March 2026 with a CAPEX of less than ₹3 crores.

Strategic Initiatives and Partnerships

Asarfi Hospital has entered into a strategic MoU with Gleneagles Hospital, Chennai, to establish Jharkhand's multi-organ transplant unit, aiming to provide world-class services locally. The company also plans to launch a Bone Marrow Transplant Unit next year and operationalize an education vertical with a 600-plus capacity hospital and healthcare management institute in Ranchi. Furthermore, discussions are ongoing for a cashless merger with a 70-bed promoter entity hospital to further expand capacity.

Addressing Trade Receivables and Profitability

A key challenge highlighted was the 67% YoY growth in trade receivables, primarily due to delayed payments from government agencies (90-180 days) and the new cancer hospital's initial reliance on cashless business. Management is actively working to reduce debtor days and improve cash flow. To enhance PAT margins to a target of 13-15%, the company is focusing on cost reduction, optimizing doctor contracts, and increasing the use of generic medicines for corporate and cashless patients.

Future Outlook and Long-Term Vision

Looking ahead, Asarfi Hospital targets ₹160 crores in revenue with a 13-15% PAT margin for FY26, and ₹200 crores in revenue for FY27. By 2027, the company aims for a total bed capacity of 500, an EBITDA margin of 25-27%, and a PAT margin of 13-15%. The long-term vision includes scaling the cancer hospital to 150 beds and aspiring to become a 1,000-bed company before 2030, primarily through brownfield projects funded by internal accruals.

Human Capital Management

The company acknowledged a 20-30% attrition rate, particularly in nursing, attributing it to factors such as young age, marriage, and government job opportunities. Management is reviewing HR policies and focusing on creating a conducive work environment to reduce attrition and ensure retention of skilled healthcare professionals.

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