FORTIS — earnings call

The transcript as filed. Every paragraph is addressable: its link names the page and the position it sits at in the call.

Prepared remarks

LIMITED · MR. AKSHAY TIWARI – CHIEF FINANCIAL OFFICER –

MR. AKSHAY TIWARI – CHIEF FINANCIAL OFFICER –

AGILUS DIAGNOSTICS LIMITED · Management

Fortis Healthcare Limited May 21, 2025

Questions and answers

17:08:38 +05'30' · Research Analyst

“Fortis Healthcare Limited

Anurag Kalra

Thank you, sir.

Ladies and gentlemen, we will now open the floor for questions and answers.

May I request the moderator to take the lead, please.

Moderator · Conference Operator

Thank you very much.

We'll take our first question from the line of Neha Manpuria from Bank of America.

Please go ahead.

Fortis Healthcare Limited May 21, 2025

Neha Manpuria

On the hospital business, now that we have started seeing a fair bit of traction on the margin, how should we look at the margin expansion from 20.5%, 21% that we have reported in the current year?

Should the step change in margins continue to get to that mid-teens where our peers are at?

And what -- given -- I think a large part of this was driven by brownfield, but just trying to understand where Manesar is in terms of ramp-up in bed capacity and profitability?

And when do we think that gets to breakeven?

Vivek Goyal

Yes.

This is Vivek.

So, on margin expansion, we are sticking to our guidance earlier where we said that we want to achieve a margin expansion nearer to the some of the best competitors.

And we expect the margin to grow from the current level.

You can expect like 2% growth in the forthcoming years also, similar to what we have seen in the current financial year.

So similar margin expansion growth we are expecting next financial year.

Ashutosh Raghuvanshi

Regarding Manesar, we are currently operating, Neha, at about 40% occupancy, but we have commissioned only 90 beds.

Another 120 beds we will commission as the occupancy levels go up.

We expect that on the entire bed capacity, which is 120 plus 90, we will have about 50% occupancy by the end of this year.

The exit should be at least 50%-plus occupancy.

The uptake of this hospital has been very good.

So some of the programs, which we had anticipated that we will start a little later, we are preponing them and we are going to put up the oncology, radiation oncology suite, which was planned earlier for 2 years from now within this year.

Neha Manpuria

So would it be fair to assume that at 50% occupancy, we achieve breakeven on this facility?

Ashutosh Raghuvanshi

I think so.

Even before that, we should expect a breakeven.

Neha Manpuria

Understood.

And my second question is on the diagnostics business.

The revenue momentum remains in the low single-digit range, but margins have moved up.

Is there any provision write- back, et cetera, which is sitting in the margin number?

And how confident are we of growing in line with the industry or growing high single digits in the diagnostics business, given that now the Agilus brand changes nearly getting to 2 years old?

Vivek Goyal

Yes, Neha.

So in diagnostic business also, we have seen now the increase in the revenue as well as the margin, which is reflecting in the financial.

So, the brand change effect is now behind us, and we are seeing a double-digit type of growth number in the diagnostic business henceforth.

And as regard to your other question regarding the one-off type of things.

So this year, of course, there is a one-off of relating to the brand transition and some one-offs relating to the legal fees and some contingent consideration we have to pay for the past acquisition.

Apart from that, I don't see much this thing.

And this will discontinue from this year onwards, and '25-'26 there will be normal type of EBITDA margin we are expecting.

Fortis Healthcare Limited May 21, 2025

Neha Manpuria

So Vivek, just to clarify here.

So I think initially, our view was that this probably grows more high single digits.

So you believe based on the Agilus momentum currently, we're confident of double-digit revenue growth.

Is that correct?

Vivek Goyal

Yes.

This is what we are targeting.

Neha Manpuria

Got it.

And margins would be in the mid-20s as we scale up revenue?

Vivek Goyal

It should be around 23% ultimately and then moving towards 25% in a couple of years' time.

Moderator · Conference Operator

We'll take our next question from the line of Shyam Srinivasan from Goldman Sachs.

Shyam Srinivasan

Just first one on the hospital business is how should we look at the revenue guidance for fiscal '26?

And if you could break it down into volume and maybe ARPOB?

Vivek Goyal

Vivek this side.

So, revenue-wise, we expect to grow around 14%-15%, similar number.

And this time last year, the year we have completed, we have seen 9% type of ARPOB growth and balance growth is coming from the volume.

So I'm expecting it will be the reverse this time, around 5%, 6% in the ARPOB growth and the balance is from the volume side.

And volume growth is mainly coming from some of the brownfield expansion, which has been completed and we will be operationalizing, which mainly include Noida and Faridabad and also from the capacity ramp-up in the form of better occupancy than the last year.

Shyam Srinivasan

Vivek, helpful.

So we had about 5% volume growth.

So you're saying this volume growth goes to like almost double, like 10%.

So what are we basing in terms of for the occupancy?

Should I model it on like all the expanded beds or we did end at 69% so just trying to see how we should model that?

Vivek Goyal

Yes, we are aiming around 70%-71% occupancy level at the overall level because this brownfield expansion is on the existing facility and these hospitals anyway operating at 50% type of occupancy level.

So I think we will not be facing any challenge in occupancy side.

And plus the Manesar facility, as Dr. Raghuvanshi alluded, it is ramping quite well.

Shyam Srinivasan

And just from a data point, how many operating beds we ended fiscal '25 and what is the expected addition this year?

Vivek Goyal

Yes.

So, we ended fiscal 25 with a bed capacity of around 4,024 because we have taken out certain beds also in the Richmond Road.

And we will be adding around, how much, almost 1,000 beds in the current time.

Shyam Srinivasan

So bed addition is like 25%?

Vivek Goyal

Yes.

Because most of these capacities are coming.

Like Noida, we have got full OC and we are operationalizing it.

150 beds we'll be getting.

Then there will be Shalimar, sorry, Faridabad, which has completed and will be operationalized in the first quarter itself.

Fortis Healthcare Limited May 21, 2025 Then Manesar, we will be opening further beds.

We are expecting around 200 beds to be opened in Manesar.

FMRI, we will be completing it.

Maybe the benefit we'll be getting only in the last quarter, FMRI, the 220 beds capacity expansion.

And I will say BG Road is another one, which is we are expecting OC actually.

And there is another capacity, I have added also the Jalandhar facility, which will be in our fold maybe by this month end also.

Shyam Srinivasan

And what's the margin profile there currently?

Vivek Goyal

They are on the similar margin profile.

Anurag Kalra

Shyam, their occupancy currently at about 60%, 62% and the margins are about 22-odd percent.

Shyam Srinivasan

Understood.

So just, Vivek, it's a lot of bed additions, right, brownfield, greenfield or acquisition.

So we're confident of this 150, 200 bps of margin expansion for the hospital business this year?

Vivek Goyal

Yes, yes.

So we are quite confident.

And last year also, we have demonstrated 2% margin improvement and similar thing we are expecting this financial year.

So we are quite confident on that.

Shyam Srinivasan

Got it.

Last question, sorry, I've taken many questions.

Just what is the quantification for this write-off and all the changes that you have mentioned?

It's in the hospital revenues.

Sorry, I didn't understand, I don't know whether I missed the opening comments on this one.

What are the one-offs?

Vivek Goyal

Yes.

One-offs is basically there is some impairment charge we have to take and that is mainly coming because of this Ludhiana 2 facility where the performance level is not up to mark, I will say.

And as a result of that, based on the future profitability and cash flow, we have to adjust the carrying value of the assets.

So that, along with there is some write-off impairment we have to take for our investment in Sri Lanka assets where, as you know, the Sri Lanka stock price movement and the currency movement both affect the carrying value of the investment.

So these are the 2 big items.

Apart from that, there is a positive item in this number also, where we have taken a positive -- sort of write-back of impairment, which we have done earlier for our Faridabad unit because the performance of Faridabad unit has improved tremendously.

So, the total net impact is around INR 89 crores for this financial year.

And for this quarter, it is INR 54 crores.

Shyam Srinivasan

So it was in the revenue line.

And sorry, can you say where it's been accounted for?

Sorry, I didn't understand that.

Vivek Goyal

So, it is shown separately below EBITDA, INR 54 crores as an exceptional item.

Revenue and other thing is not much affected.

It is, what is impacting is as an annual cleanup exercise.

We do write off / write back certain unidentified receipt, which are more than 3 years old.

And we also assess the provisions, which we have created in the books of fund, whether it is required, it's Fortis Healthcare Limited May 21, 2025 quite old and payable similarly.

So those types of things, which are quite normal now, so which we are doing for last 3 years, and it is not having a significant impact also.

Moderator · Conference Operator

We'll take our next question from the line of Deepthi Rajulapati from Axis AMC.

Deepthi Rajulapati

My question is on the diagnostic business.

So last quarter, you have mentioned that we are done with rebranding exercises and these expenses will taper off in the end of FY '25.

So we will not see any rebranding costs in the coming quarter or is there any carryover?

And one more question is on the variance of the margins in the diagnostic business.

Revenue Q-o-Q, if we see, it's flat, but there is 2.1% variance in the margin.

So, what is driving this?

Just one more question is on the BG Road expansion on hospitals, how many beds are we expecting in FY '26?

Ashutosh Raghuvanshi

Yes.

So regarding the first part of your question about the brand-related expenses, the one-off kind of expenses, which were there in rebranding, those are done already.

So in this year, you will not find those as one-off items.

The second is about the margin expansion in spite of the revenue being flattish is that we have built in a lot of efficiencies in the lab network, the CTPs versus the lab network we have rationalized.

There are several other initiatives on the cost side have been taken and that has resulted into this.

We have also upgraded our infrastructure on the diagnostics side quite a bit.

We have opened a new lab of genomics in Gurgaon.

At the same time, we have opened a new lab for the transplant immunology in Bangalore as well.

So with all these initiatives, we believe that high-end test volume with a higher ARPOB will also drive growth in the coming year.

Regarding the number of beds in BG Road is 140 beds.

Moderator · Conference Operator

We'll take our next question from the line of Bino Pathiparampil from Elara Capital.

Bino Pathiparampil

Most of my questions got answered, just one strategic question on the kind of expansion we are doing.

If I look at most of your competitors, they are targeting Tier 1, Tier 2 cities with large 400-500 bed facilities.

Whereas if I look at your acquisitions, be it Manesar, Jalandhar, et cetera, you are more going Tier 3, 4 and slightly smaller facilities.

Is that the way forward for us?

Ashutosh Raghuvanshi

No. You see, we have already stated that our growth strategy is a cluster-based strategy.

So as I was mentioning in my opening remarks also that in Punjab we have approximately 800 beds spread over 4 facilities, 2 in Ludhiana, 1 in Amritsar and 1 in Mohali.

Now all these hospitals, along with that, this is a strategic fit in Jalandhar and that's why we have chosen.

But out of choice, we are not going into any new geographies, Tier 2 or Tier 3 kind of geographies.

But Punjab as a state is important to us.

And then with the addition of these beds and the expansion, which we have planned in Amritsar and Mohali, and Jalandhar has a potential of 450 beds, so we will go to 450 beds there.

Mohali, Fortis Healthcare Limited May 21, 2025 we are going to be adding another approximately 350 to 400 beds.

Jalandhar, sorry, Amritsar, we are going to be adding another 150 beds.

So Punjab as a cluster, we are the dominant player already, but we will become even stronger once this happens.

So that is our cluster strategy.

The Manesar facility, I mean, just I would like to correct you is almost part of the growing Gurgaon.

So this is not really a Tier 2 or Tier 3 kind of situation.

This is a kind of a very upcoming area within the Greater Gurgaon area.

And Manesar also has additional FSI, which will take this hospital size to 450 beds.

The other comment, which I made earlier is that many of our hospitals were smaller in size, but the larger hospitals, which we have, which are already doing EBITDAs of above 20%, most of them will also become 450-bed-plus after the brownfield expansion.

So this will give us a profile of a hospital.

I completely agree with you that the 450-bed hospital has completely different economics than a 200-bedded hospital.

So we believe in that.

So we are not changing our strategy within these clusters where we are present, which is Bengaluru, Kolkata, Punjab, Delhi NCR and Mumbai -- Greater Mumbai area.

In these clusters, we will be seeking more opportunities, and we would be looking at more hospitals and try to do hospitals, which are at least in the range of about 350-bed-plus.

Bino Pathiparampil

Understood.

Just a related question or digging a little deeper.

Mumbai, Bangalore, Kolkata are cities where we are already present.

And in these cities, your competitors both listed as well as private probably in the last 2 years have -- 2.5 years have announced at least 4, 5 big projects reach, most of them greenfield, which means there is potential and there is land or whatever infra available to develop.

But you haven't been so aggressive in those particular geographies in that sense.

I mean, is there any reason?

Or would you become more aggressive now?

Ashutosh Raghuvanshi

Yes.

No, we were more focused on our brownfield expansion and execution thereof.

And we had other distractions as well and brand was one of them, which we have behind us now.

So we have been actively looking at opportunities, especially in Mumbai.

But as you said correctly that most of these projects, which are announced are all greenfield.

So we have also been looking for greenfields only because there are no acquisition targets per se available in these markets.

And land costs being what they are in -- especially in Greater Mumbai area, which is of great interest to us and we believe has a lot of potential and a lot of demand supply gap, so there, that comes hard.

So we have been actively looking at it.

Unfortunately, nothing has materialized so far.

But we are pretty hopeful that at least few of those discussions we will be able to culminate into actual projects now.

And those will be purpose-built hospitals.

Moderator · Conference Operator

We'll take our next question from the line of Prashant Nair from AMBIT.

Prashant Nair

The first question is more of a clarification.

When you mentioned that you expect diagnostics margins to get to 23% and then beyond that to 25%, you are -- this is basis gross revenues or net?

Fortis Healthcare Limited May 21, 2025

Vivek Goyal

Net revenue only.

Net revenue.

Ashutosh Raghuvanshi

Net.

Prashant Nair

All right.

Understood.

Secondly, in your network, now you have around 5 hospitals, which are in the sub-10% margin bracket.

And then you have a few, which are the 10% to 15% bracket.

Do you have any other hospitals, which are not core to the way you look at the business now?

So you sold 3 assets over the last year or 2.

So are there any more assets like this, which you would look to rationalize?

Or do you think you're done with that exercise for now?

Ashutosh Raghuvanshi

So I think we do have work to do in a couple of our hospitals still in terms of improving, but we believe that those are strategically important for us and exit is not an option.

So I think, more or less, we are done as far as these rationalization is concerned.

But on the performance side, 2 hospitals, especially I will mention -- rather 3, where we are still working and we are seeing some good results.

One is Escorts hospital in Delhi where our margin profile was less, but we have already consistently been achieving EBITDA of about 10%-14% and we are going above 15% over there, we have a clear visibility on that.

So we are confident that this hospital will also come into kind of a normal profitability profile.

And the other 2 units in this category are Jaipur and Vashi.

Jaipur has had some issues, but now it is again recovering.

The revenues trends look very healthy.

We have made certain changes there, both in terms of the leadership and some of the infrastructure changes as well, and we expect very good results to come out of that.

So, we expect that in 6 months to by the end of the year, we should have a healthy margin profile in Jaipur as well.

Vashi has some specific challenges because this is part of a government hospital.

And that's why we have also got to serve certain free patients referred from the municipal corporation.

So because of that, the profitability profile of this hospital has been low.

We also had some attrition of clinician here.

Because of that, the occupancy numbers were a little low.

But this is, again, an important market, important micro market.

And we are working on strengthening the clinical talent over there to make sure that this also comes in the healthy zone.

So that is regarding the 3 projects, which we are keeping under watch.

Prashant Nair

Just one follow-up question on Escorts Delhi.

So would 15%-plus be close to what this hospital has achieved in the past when it has been part of Fortis?

Or is the ceiling higher in your view?

Ashutosh Raghuvanshi

No, this is actually better than what it has ever achieved.

Vivek Goyal

And mind you, this is after absorbing the EWS bed cost because we have to provide 25 beds free of cost.

So it is after observing that cost.

And as Dr. Raghuvanshi mentioned, it is showing upward improvement in the EBITDA margin profile and we expect it should be settling somewhere around 15%, 16%.

Moderator · Conference Operator

We'll take our next question from the line of Atul, an individual investor.

Fortis Healthcare Limited May 21, 2025

Atul

My question is on any update on the Delhi High Court case further like as per last con call, it was discussed that from last conversations are pending.

So is there any update on that side?

And I will add another question, how is the occupancy trend going in the current quarter?

Ashutosh Raghuvanshi

Yes.

So regarding the High Court, there is no fresh development.

That is still a matter of sub- judice, but that doesn't have much impact on us.

Regarding the occupancy, the trend is healthy and we are doing occupancy levels of similar to what we did in last quarter.

Moderator · Conference Operator

We'll take our next question from the line of Harsh Bhatia from Bandhan Mutual Fund.

Harsh Bhatia

Just on the hospital EBITDA part, you alluded to some one-off expenses, which are below the EBITDA line item and I'm probably referring to the hospital EBITDA.

Just to be clear in terms of when we look at the fourth quarter performance on a Y-on-Y basis, the drag at the margin level is largely to do with the Manesar performance?

Or is there any other one-offs that are there at the EBITDA line item?

That was the first one.

Vivek Goyal

Yes.

So one-off is not like one-off, one-off.

It is exceptional gain and loss, which as per accounting standard only we have to show separately.

So that is that one-off, I have explained what is those one-off exceptional gain or losses.

So there are losses for Ludhiana 2 impairment and the impairment of investment in Lanka.

And there is some impairment gain or impairment loss write-back actually for the Faridabad unit.

So that is shown like an exceptional gain or loss.

Regarding your other questions, the EBITDA margin side, there is no one-off, one-off.

But provision for doubtful debt has slightly on the higher side if we compare with the quarter 4 of the last year.

There was a positive write-back of provision in the last quarter previous year.

And this quarter, it was not there.

Last quarter, we got very healthy collection in the last quarter itself, and as a result there, was write-back of provision, which we have provided based on the aging of the debt.

So that has resulted into some improvement in the margins.

So apart from that, there is nothing abnormal and unusual.

Harsh Bhatia

Sure.

Would you be able to call out the number in terms of the recovery for the past quarter, which is not there for this quarter as well as the Manesar drag, if any?

Vivek Goyal

Yes.

So Manesar - so first, I tell you about the Manesar drag.

So Manesar, we have budgeted also the EBITDA loss of around INR20 crores for this, for the half year, it will be less.

Ashutosh Raghuvanshi

Correct.

Vivek Goyal

Yes.

So, it will be around INR 12 crores type of EBITDA loss, which we have budgeted also, and it is there in the financial.

So, INR 12 crores loss is built into this financial, which hopefully, in the next coming year, it should be some positive EBITDA number should be there.

And as regard to your quantification thing is concerned, the provision for doubtful debt for the quarter is INR 22 crores as against there was a negative provision for doubtful debt, that means the income side, INR 7.5 crores, corresponding quarter previous year.

Fortis Healthcare Limited May 21, 2025

Harsh Bhatia

Sure.

Just one clarification on Manesar.

INR 12 crores was the drag from the third quarter as well and there's an INR 12 crores drag in the fourth quarter as well or...

Vivek Goyal

Just give us a minute.

Harsh Bhatia

Sure.

Just one -- another point, when you look at the margin metrics and then we're guiding for the 200 bps margin expansion at the hospital level.

In terms of your internal assumptions, how important are these hospitals such as Vashi, Jaipur?

Basically, which hospitals are there below the 10% in your margin metrics important for you to achieve the 200 bps broader direction margin expansion?

This is something that has been -- not being considered to a large extent to provide you that, let' say, margin of safety to that extent.

So basically, how important are these less than the 10% margins hospitals turnaround important to your guidance for the 200 bps margin expansion going forward?

Ashutosh Raghuvanshi

For these hospitals to really come to the category of 20-plus is not something we have considered.

We believe that the turnround of these 3 hospitals is going to take 6 months or 1 year or maybe longer.

So we have not considered that when we say that we are expecting about 2% of increase in our profitability profile.

So these hospitals are important strategically for the long term.

But in short term, whatever guidance has been given is not considering that these hospitals have come to a 20-plus category.

Harsh Bhatia

That's very helpful, sir.

One last quick follow-up in terms of the bed addition for FY '26.

A large part of that would be brownfield in nature or new towers as such.

What should be the general break-even time line that we should work with?

Should it be somewhere around 6- to 9-month period or somewhere closer to 1-year period?

Again, these are towers at the existing site, so maybe could help us understand a bit.

Ashutosh Raghuvanshi

Yes.

So since these are brownfield, absorption is pretty fast.

Location to location, it will differ.

However, we expect that we will open beds as the occupancy levels go up.

Currently, these hospitals are operating about 75% to 80% occupancy levels.

So we expect that this should happen in 6 months' time.

Moderator · Conference Operator

We'll take the next question from the line of Amey Chalke from JM Financial.

Amey Chalke

Most of the questions are answered.

Just one follow-up on the 900-bed addition next year.

So this bed addition, should we factor in back ended in the second half of this year?

Or do you think that some of the hospital will get commissioned -- even some of the beds will get commissioned in the beginning of the year as well?

Vivek Goyal

Yes.

We can -- we should assume 50-50 because, as I mentioned, FMRI bed expansion is happening at the last quarter.

And similarly, the BG Road also will be in the second half, we are expecting.

And rest of the beds will be commissioned in the first quarter itself.

Amey Chalke

Okay.

And particularly on the BG Road, the occupancy still looks around 60%.

So is it ideal to open one more floor there?

Or do you think we need to wait for that occupancy to go up?

Fortis Healthcare Limited May 21, 2025

Ashutosh Raghuvanshi

Yes.

So we are adding more clinical talent and modalities as well.

But obviously, the beds will be ready for being commissioned.

So capacity will be available to us.

But we will keep on commissioning as and when the occupancy there will go up.

But with the addition of clinical beds and modalities, we believe that the occupancy numbers will go up.

Moderator · Conference Operator

We'll take our next question from the line of Abhishek Jain from Invest Well Agent.

Please go ahead.

Abhishek Jain

Sir, the question is we have purchased Fortis brand under the auction.

Can you tell me how much was the royalty you were paying earlier, both in absolute numbers and in percentage level?

And the margin expansion that we are expecting for the current year of 150 basis points to 200 basis points, does this include the savings from this royalty payment?

Or it is over and above the improvement that we are expecting?

Vivek Goyal

Yes.

So, the royalty, as per the old agreement we are providing in the books till last year is 0.25% plus GST, which comes to around 0.3% impact on the EBITDA margin, positive impact on the EBITDA margin post acquisition of this brand.

So that will be the impact of the brand acquisition, positive impact, 0.3% roughly on the net revenue of the hospital business.

And that has been factored in while I guided the margin expense of 2%.

Abhishek Jain

Okay.

Fine, sir.

And can you also give the same figures for this SRL brand and -- that were converted into Agilus?

Vivek Goyal

Yes.

So SRL also the same, 0.25% plus GST was the brand royalty applicable until we were using SRL brand.

And now because we have moved to our own brand, Agilus brand, so there is no brand royalty right now.

Abhishek Jain

And the figure that you are saying is 0.3%, correct?

Vivek Goyal

Yes.

0.3% including GST because GST is applicable.

Moderator · Conference Operator

We'll take our next question from the line of Abhishek Wani from Dalal Street Investment Journal.

Abhishek Wani

Yes.

Sir, I want to know about the medical tourism prospective business for Fortis.

So what has been the growth rate across the industry?

And how has been Fortis working on it?

Ashutosh Raghuvanshi

Yes.

So, we have seen about 17% growth in Quarter 4 on year-on-year However, in the current geopolitical situation, we expect that there may not be a similar growth this year.

But overall, to our context, about 8% of our revenue comes from international patients.

We expect that to remain stable However, we are not seeing very huge growth in this.

Abhishek Wani

And sir, with respect to the brownfield acquisition, so what impact it will have on our debt levels?

And do we expect the margin to recover quickly as opposed to our competitors who have been working with greenfield acquisitions?

Vivek Goyal

Yes.

So there will not be any incremental debt for brownfield expansion.

It will be funded through internal accruals.

So there will be no incremental impact.

And as I mentioned in the Fortis Healthcare Limited May 21, 2025 earlier comment, this expansion is happening in the unit, which are already operating at 75%, 80% type of occupancy level.

So we are -- we should not be facing much challenge in ramping up these beds and it should start contributing immediately.

Abhishek Wani

And sir, with respect to the legal costs, so can we expect that the legal costs will fall down in coming quarters as we already paid for the brand deal?

So what is your outlook on legal costs?

Vivek Goyal

Yes.

So the legal and other legacy cost is taking away almost 1% of our EBITDA margin.

And I will say that will continue till we're able to resolve these court cases because there is still 1 court case pending in Delhi High Court where the regular hearing is happening.

And plus, the entity structure also, the Project Crystal, we call it, where we are trying to simplify the organizational structure.

Although the Delhi NCLT has given the favorable order, we are also expecting order from the Chandigarh NCLT and then it will be simplified.

So this year, at least it will continue.

I think from next year onwards, we should see some reduction in this cost.

Moderator · Conference Operator

We'll take our next question from the line of Nirali Shah from Ashika Institutional Equities.

Nirali Shah

Yes.

I just had 2 very quick questions.

The filing that we see today, I just wanted your view on that.

IHH is increasing damages from Daiichi.

So just wanted some color, some view on that.

Ashutosh Raghuvanshi

Yes.

That's a litigation, which is happening in Japan between IHH and Daiichi.

Being a sub judice matter, we can't really comment on that.

Nirali Shah

Okay, okay.

And about Fortis winning auctions for all the Fortis trademarks.

So would that be any kind of value unlocking?

Ashutosh Raghuvanshi

Yes.

So we -- as the previous caller was asking, we are going to save some money, which we were providing for the royalty for the brand because now we own the brand and that is a positive advantage for us.

Moderator · Conference Operator

Ladies and gentlemen, we'll take that as the last question for today.

I now hand the conference over to management for closing comments.

Over to you.

Anurag Kalra

Thank you, ladies and gentlemen, for your time.

If there are any follow-up questions, we are always available either through e-mail or on phone.

Please do reach out to us.

Thank you, and have a good day.

Moderator · Conference Operator

Thank you.

On behalf of Fortis Healthcare Limited, that concludes this conference.

Thank you for joining us, and you may now disconnect your lines.