Despite the uncertainty, there is cause for cautious optimism

The third quarter of 2021 was a good quarter for both the large Indian hospitals and laboratories.A closer look at the results made public over the last one month is encouraging.

In Q3FY21, Apollo Hospitals recorded consolidated revenues of ₹2760 crore and a revenue growth of 6 percent, with highest ever ARPOB in their mature hospitals. Fortis Healthcare had consolidated revenues of ₹1177 crore versus ₹1169 crore in the corresponding previous quarter. While this is similar to the corresponding quarter, it is an increase of 18 percent versus quarter two of FY21. The hospital business revenues grew 22 percent versus the trailing quarter, while the diagnostic business revenues increased 9 percent. Consolidated EBITDA at ₹201 crore increased 24 percent versus the corresponding previous quarter and about 38 percent versus the trailing quarter. Margins for its diagnostics business expanded to 23.9 percent versus 16 percent in Q3FY20. Revenue grew by 23 percent to achieve the ₹300 crore-plus mark, a record revenue, highest ever in the industry and SRL. EBITDA increased 83.3 percent to ₹73 crore, again the highest ever quarterly EBITDA versus ₹40 crore in Q3FY20 and ₹70.5 crore in Q2FY21. Narayana Hrudayalaya saw a revival with its India business growing sequentially, QoQ by over 33 percent. Shalby Hospitals’ standalone total income for the quarter was ₹131.7 crore, registering a robust growth of 17.8 percent on quarter-on quarter basis, and ₹123.2 crore in the same quarter last year, a growth of 6.9 percent year-on-year. It reported the highest ever EBITDA in the history of company, ₹32.3 crore compared to ₹31.4 crore in the previous quarter and ₹24.3 crore in the same quarter last year.

Dr Lal Pathlabs’ operating revenue increased by 38 percent to ₹452.4 crore as against ₹327.9 crore in Q3FY20. Thyrocare’s consolidated quarterly revenue increased by about 31 percent YoY, and consolidated EBITDA margin grew by about 13 percent YoY. Metropolis Healthcare saw its 3QFY2021 revenue increase by 23 percent on a YoY basis with EBITDA margin, before CSR & ESOP, at a healthy 32.6 percent, up by 430bps YoY.

A distinct increase in the share of preventive health check-ups in the overall portfolio is observed, as is an increase in remote reviewing of pathological cases. Digital initiatives are playing a very important role in home testing services, that, propelled by a change in consumer mindset saw a huge increase, an amazing 110 percent in the case of Metropolis.

The industry had begun to believe that, with the vaccination drive, India could well be in the last leg of the crisis, and resume normal business with non-emergency treatments, elective surgeries and medical tourism. The fresh surge in COVID cases, since March 15, seems to have thrown the industry once again into a state of uncertainty of what lies ahead in FY22!