On expansion plans for India: We have about 17% of business coming from India and we would like to invest further in India. In fact, there are four hospitals, which are in the pipeline—in Coonoor (300-bedded), Bengaluru (230-bedded). We have already started work on a 500bedded hospital in Chennai and the fourth one, which will come up in is Thiruvananthapuram. These are all tertiary to quaternary care hospitals. We have significant plans for India. We should have 5,500-6,000 beds in the next two years.

On opportunities in North India: These hospitals are in the south. We thought we should do it gradually in a fashion where we have our management. We started off with Kerala and then entered Karnataka and Telangana. We have a small presence in Maharashtra and now in Tamil Nadu. We would like to come up north as we go forward. India is a big country and we didn’t want to spread in many geographies. Now, we will definitely be looking at opportunities in the north. If there is a suitable acquisition option, where already there are management structures and we need not fully get it up and running, I think we will be interested in looking at that.

On mid to long term plans: We have larger expansion plans in GCC countries now. At least 83% of our revenue and income comes from GCC and India is only 17%. We have an ongoing expansion happening in the GCC countries, where there are about four hospitals in the pipeline. However, the expansion will be much smaller in size. The number of beds will be smaller. This year, we will invest ₹650 crore because all these hospitals, which I have mentioned, half of it has been invested and in the next financial year, it will be about ₹350 crore.

On overview of Indian healthcare sector: Ayushman Bharat is attracting a lot of investment. However, if you look at most of the hospitals, the listed companies are not having significant return on capital invested in India. The return on capital is actually low and this is because of high capital expenditure (capex). Both the investors and promoters should be looking at a long-term perspective rather than a short-term gain in the hospital field in India. We have a different experience with GCC because it is low capex or the model where we don’t own the building or the land. Actually, this is being built by others and therefore our total capex will be just 50% of what we spend in India. So, this helps in a much better return on capital. We have 25-30% return on capital in GCC whereas it will be less than 10% in India.

On Indian market: We have plans that about 25% of our total revenues come from India. We see India as a growth market and we know 10-15 years down the line, India will be the place where growth and good return on capital will happen. What we are trying to do.We are now getting developers to construct buildings for us instead of us investing in the land and buildings. That’s what we have done in Bengaluru. That will significantly reduce the capex and that will improve the return on capital.