Dr. Agarwal's Health Care Limited — Q4 FY25 earnings call

Call held 29 May 2025

Management summary

Dr. Agarwal's Health Care Limited reported strong financial performance for FY25 and Q4 FY25, driven by robust revenue growth and strategic facility expansion. While EBITDA margins were impacted by higher operating costs and one-time expenses, the company is optimistic about future growth, targeting 20%+ revenue and 35%+ PAT growth for FY26, supported by significant capex plans for new facilities and technology upgrades.

Highlights

  • FY25 Total income recorded a growth of 27.6% year-on-year to INR1,757 crores.

  • FY25 Revenue from operations grew by 28.4% year-on-year to INR1,711 crores.

  • FY25 EBITDA increased by 23.6% to INR502 crores, translating into an EBITDA margin of 28.6%.

  • Q4 FY25 Total income grew by 28.9% to INR476 crores and revenue from operations grew by 31.9% to INR460 crores.

  • Company added 59 facilities in FY25, comprising 32 primary, 25 secondary, and 2 large tertiary facilities.

  • Targeting 20% plus revenue growth and 35% plus profit after tax growth in FY26.

Concerns

  • FY25 EBITDA margin was slightly impacted by increase in other expenses, predominantly marketing costs and one-time expenses.

  • Q4 FY25 EBITDA margin was primarily driven by increase in certain expenses such as IPO expenses, marketing expenses, and a decline in other income to the tune of INR8.4 crores.

  • Manpower costs for FY25 totaled INR574 crores, up by 28.4% compared to last year, driven by strategic hiring and workforce expansion.

  • CFO to EBITDA declined from 85% in FY24 to 72% in FY25, primarily due to increased inventory, receivables, and vendor payments.

Key financials

2 periods

Q4 FY25

  • Revenue from operations
    ₹460 Cr
    YoY +31.9%
  • EBITDA
    ₹145 Cr
    YoY +13.9%
  • EBITDA Margin
    30.8%
  • PAT
    ₹43 Cr
    YoY +3%
  • PAT Margin
    8.9%
  • Surgeries performed
    68,724 units
    YoY +17.4%

FY25

  • Revenue from operations
    ₹1,711 Cr
    YoY +28.4%
  • EBITDA
    ₹502 Cr
    YoY +23.6%
  • EBITDA Margin
    28.6%
  • PAT
    ₹110 Cr
    YoY +16%
  • PAT Margin
    6.3%
  • Surgeries performed
    2,82,326 units
    YoY +28%

What they filed

Q1 FY27: revenue up 26.8%, net profit up 70.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue255 268 281 302 309 +21%335 +25%348 +24%383 +27%
EBITDA58 65 73 67 69 +19%80 +23%92 +26%96 +43%
Net profit-4 8 27 10 5 +225%14 +75%11 −59%17 +70%
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.

Capital allocation

high confidence
  • Capex ₹310 Cr
    • New greenfield capex ₹180 Cr
    • Renovation and relocation ₹50 Cr
    • New technology and growth capex for existing facilities ₹40 Cr
    • Maintenance capex for existing facilities ₹16 Cr
    The plan is to spend approximately INR310 crores, and most of this will be around setting up new centers across the country. The capex number mentioned by Dr. Adil, I'll just give you a slightly detailed breakup about INR180 crores to INR200 crores will be towards new greenfield capex. Renovation and relocation will be about close to INR50 crores. Then we are also investing in new technology and growth capex for the existing that will to the tune of about INR40 crores to INR45 crores. Then maintenance capex for existing facilities, which were close to about INR11 crores last year, that number will move to close to about INR16 crores this year. So, a broad breakup of about INR310 crores.
  • M&A Eydox Eye Hospital Acquisition · Closed · Consideration ₹[object Object] (cash)

    Acquired a premium practice led by a star retina doctor, enhancing retina practice at the main facility.

    In the subsidiary, actually, we acquired a premium practice in Chennai by name, the Eydox Eye Hospital. We had paid INR18 crores to the tune for completing that acquisition. That practice is actually led by a very star retina doctor who is currently heading our retina practice at the main facility as well.

Guidance & targets

Revenue

  • Revenue growth Revenue · FY26 · High confidence 20%+
    We expect to clock 20% plus revenue growth in FY '26, driven by strengthening presence in existing micro-markets, foray into new micro-markets, and increased adoption of high-end surgeries.

    — Adil Agarwal

  • Delhi greenfield facility revenue growth Revenue · once fully constructed and running · High confidence 30% YoY
    We're talking about that particular facility when it's up and running. We should expect that center to do approximately 30% year-on-year once the center is up and running.

    — Adil Agarwal

Profitability

  • PAT growth Profitability · FY26 · High confidence 35%+
    We also expect the profit after tax numbers to rise by 35% plus.

    — Adil Agarwal

Facilities

  • New facilities launch Facilities · FY26 · High confidence 55-60
    Looking ahead, in FY '26, we are targeting a launch of 55 to 60 facilities, with 25 to 30 of them being surgical facilities, and the balance will be clinics.

    — Adil Agarwal

Expansion Geography

  • Expansion focus Expansion Geography · FY26 · High confidence 70% in core geographies
    70% of this expansion will be in our core geographies of Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, and Maharashtra.

    — Adil Agarwal

Margin

  • EBITDA margin Margin · FY26 · High confidence stable
    We expect our EBITDA margin to remain stable as ongoing greenfield investments continue to impact profitability.

    — Adil Agarwal

What to watch in Q1 FY26

FY26 Revenue Growth

FY26
Current FY25 Revenue growth 28.4%
Target 20%+ revenue growth

Why it matters

Verifies the company's ability to sustain top-line growth amidst expansion and market dynamics.

We expect to clock 20% plus revenue growth in FY '26, driven by strengthening presence in existing micro-markets, foray into new micro-markets, and increased adoption of high-end surgeries.

Risks & concerns

  • EBITDA Margin Impact from Operating Costs

    medium

    FY25 EBITDA margin slightly impacted by increased marketing costs and one-time expenses. Q4 FY25 EBITDA margin impacted by IPO expenses, marketing, and decline in other income.

    Management acknowledged

  • Increased Manpower Costs

    medium

    Manpower costs for FY25 increased by 28.4% YoY due to strategic hiring and workforce expansion for new facilities.

    Management acknowledged

  • Decline in CFO to EBITDA Ratio

    medium

    CFO to EBITDA declined from 85% in FY24 to 72% in FY25, primarily due to increases in inventory, receivables, and vendor payments.

    Management acknowledged

  • Delayed Payments from Government Schemes

    low

    Company remains cautious on government business due to potential delays in payments.

    Management acknowledged

  • Headwinds in African Operations

    low

    Mature facilities in Africa experienced flat to negative growth and currency impacts, affecting overall average revenue per mature facility.

    Management acknowledged

Q&A highlights

7 direct
Payer mix shift and cash component increase Direct
No, not really. I think the way to look at this is, in some cases, our products don't get insurance. So the product business, when that goes, that is not under insurance. Consultancy fees is not under insurance. Some of these aspects, when they go, you will not see insurances. Some part of the investigation also does not come under insurance. It's actually the surgical business. Also, yes, refractive allowance is not under insurance.

Clarifies the drivers behind the increased cash component in the payer mix, indicating growth in non-insured, higher-value procedures and new technologies.

Asked by Tushar Manudhane

FY26 Capex breakdown and investment for new facilities Direct
The capex number mentioned by Dr. Adil, I'll just give you a slightly detailed breakup about INR180 crores to INR200 crores will be towards new greenfield capex. Renovation and relocation will be about close to INR50 crores. Then we are also investing in new technology and growth capex for the existing that will to the tune of about INR40 crores to INR45 crores. Then maintenance capex for existing facilities, which were close to about INR11 crores last year, that number will move to close to about INR16 crores this year. So, a broad breakup of about INR310 crores.

Provides a detailed financial plan for capital expenditure in FY26, outlining allocations for greenfield expansion, renovations, technology upgrades, and maintenance.

Asked by Tushar Manudhane

Brand ambassador and production costs for Q4 FY25 and future recurrence Direct
One is for the brand ambassador. Second is for the production cost for the two ads. The brand ambassador cost is close to about INR8 crores, plus GST, plus the production cost will be to the tune of about INR5.5 crores. This brand ambassador cost is for a period of close to about 2 years. A portion of that has been taken in FY '25, about 50% has already been taken in FY '25. We will not have any recurring production cost. So you can consider this production cost as a one-time hit to the P&L, Tushar. ... Fourth quarter towards the brand ambassador, it was close to about INR1.2 crores.

Clarifies the nature and timing of significant marketing expenses, distinguishing one-time costs from recurring ones and providing specific Q4 figures.

Asked by Tushar Manudhane

Subsidiary capex vs total capex, including flagship facility Direct
So basically, this capex, whatever we have mentioned, Binay, just includes the newer facilities which will be taking it up for the subsidiary. This excludes the capex requirements for the new flagship facility. Out of this INR310 crores, nearly about close to INR60 crores will be towards the subsidiary AEHL. On top of this, for the new flagship facility, we'll be spending around close to about INR70 crores to INR80 crores.

Details the capital allocation between the main entity and its subsidiary, and reveals an additional significant investment for a new flagship facility beyond the stated FY26 capex plan.

Asked by Binay Singh

Minority interest breakdown and Thind financials Partial
So from a PAT perspective, approximately 76% of the earnings is attributable to the owners, and the remaining 24% is towards the minorities. That's predominantly because the Thind facility that we acquired last year, it's a 51:49 JV, and 49% of that contributes to about INR10.96 crores of PAT. So that is significantly driven the minority earnings. So that's why you're seeing a bit of that skew, which is 76 24. ... So Thind had a INR10.9 crore of PAT this quarter, March quarter. ... Two points, Binay. One is on Thind, whatever INR10.9 crore number, which you mentioned, it is a 49% number. The overall PAT generated from Thind is close to about INR21.5 crores to INR22 crores, one.

Explains the significant contribution of the Thind acquisition to minority interest and provides its full-year and Q4 PAT figures, clarifying the impact on attributable earnings.

Asked by Binay Singh

Reasons for slowdown in revenue per mature facility growth Direct
Point to note here is a few of the facilities which we started in FY '21-'22 were primary care facilities. And those facilities also, as you know, the primary care facilities ramp up cannot be compared to the surgical facilities. So those facilities have also been added to the mature facility bucket. So that is also one more reason for the slight dip in the average revenue per mature facility. ... So, if we have to break down the average revenue per mature facility, at India level, it is close to about 15%. But in Africa, it was flattish. And in fact, a few of the facilities had slight de-growth as well due to currency impact. So that is why the average revenue per mature facility is looking at close to about 8%.

Addresses a key performance metric, explaining that the slowdown is due to the inclusion of primary care facilities in the mature bucket and headwinds in African operations, while India's mature facilities continue to grow robustly.

Asked by Binay Singh

Decline in CFO to EBITDA ratio and impact of working capital Direct
This year, with us opening more primary care facilities and also opening facilities in Tier 2 and Tier 3 markets, the inventory levels also have gone up slightly. So, if you discount for that, this 77% would have been actually at close to about 80%. So 3% impact we had because of increase in inventory levels, one. Second is, in terms of receivables, again receivables also had an impact of close to about 2%. And then in terms of payables, especially the last two quarters, we had continuously increased in paying out our key vendors. So there was an impact of close to about 1%. So if you adjust for all these three points, the number would have stood at close to about 83%, Alankar.

Provides a detailed breakdown of the factors contributing to the decline in cash conversion, attributing it to increases in inventory, receivables, and vendor payments, offering clarity on working capital management.

Asked by Alankar Garude

Details on the INR18.5 crores business acquisition in the subsidiary Direct
In the subsidiary, actually, we acquired a premium practice in Chennai by name, the Eydox Eye Hospital. We had paid INR18 crores to the tune for completing that acquisition. That practice is actually led by a very star retina doctor who is currently heading our retina practice at the main facility as well.

Clarifies the strategic acquisition made by the subsidiary, highlighting the talent acquisition aspect and its potential to strengthen the company's retina practice.

Asked by Dishant Jain

2 min read 7 chapters

Detailed narrative

Strong FY25 Financial Performance

Dr. Agarwal's Health Care Limited delivered a robust financial performance in FY25, with total income growing 27.6% year-on-year to INR1,757 crores. Revenue from operations increased by 28.4% to INR1,711 crores. EBITDA for the year stood at INR502 crores, reflecting a 23.6% growth and a margin of 28.6%. Profit after tax (PAT) grew 16% to INR110 crores, with a PAT margin of 6.3%.

Robust Q4 FY25 Growth and Margin Dynamics

The company reported strong Q4 FY25 results, with total income up 28.9% to INR476 crores and revenue from operations growing 31.9% to INR460 crores. EBITDA for the quarter was INR145 crores, a 13.9% growth, translating to a 30.8% margin. However, EBITDA margins were impacted by increased IPO expenses, marketing costs, and a decline in other income of INR8.4 crores. PAT grew 3% to INR43 crores, yielding an 8.9% margin.

Strategic Expansion and Footprint Growth

In FY25, Dr. Agarwal's expanded its network by adding 59 facilities, comprising 32 primary, 25 secondary, and 2 large tertiary centers, bringing the total to over 236 facilities across India and Africa. For FY26, the company targets launching 55-60 new facilities, with 25-30 being surgical and the remainder clinics. Approximately 70% of this expansion will be in core geographies like Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, and Maharashtra.

Focus on High-End Surgeries and Technology Upgrades

Revenue growth was significantly driven by the premiumization of surgeries, increased surgical volumes, and improved surgical conversions. The company has invested in advanced technology, installing femto-cataract machines in key cities and planning to add SMILE technology. In FY25, cataract surgeries constituted about 73% of total surgeries, while refractive surgeries accounted for approximately 6%.

Capital Allocation for Future Growth

The company plans a capex of approximately INR310 crores for FY26. This includes INR180-200 crores for new greenfield projects, INR50 crores for renovation and relocation, and INR40-45 crores for new technology and growth capex for existing facilities. Additionally, INR70-80 crores will be spent on a new flagship facility, demonstrating a strong commitment to capacity and capability expansion.

Working Capital Management and Payer Mix

The CFO to EBITDA ratio declined from 85% in FY24 to 72% in FY25, primarily due to increased inventory (3% impact), receivables (2% impact), and higher vendor payments (1% impact). The FY25 payer mix was 64% cash, 26% insurance/TPA, and 10% government. The increase in cash component was attributed to growth in non-insured procedures like femto cataracts and refractive surgeries, and a cautious approach to government business due to payment delays.

Performance of Mature Facilities and Regional Dynamics

While mature facilities in India showed a healthy growth of approximately 15%, the overall average revenue per mature facility growth was impacted by headwinds in Africa. African facilities experienced flat to negative growth and currency impacts. The company also noted that the inclusion of primary care facilities, which have a slower revenue ramp-up, into the mature bucket contributed to the observed dip in average growth.

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