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Fortis Healthcare sees sharp dip in June COVID-19 occupancies

Fortis Healthcare stock is up almost 100 percent in the last year and 15 percent post its Q1 earnings. To understand the outlook, occupancy picture – as India recovers from COVID – and contribution from vaccines, CNBC-TV18 spoke to Ashutosh Raghuvanshi, MD & CEO of Fortis Healthcare.

On recovery, Raghuvanshi said, “Recovery from COVID cases has been significant. We were seeing numbers close to 30 percent of our occupancy coming from COVID admissions in May, which has come down to approximately just 7 percent now. So overall blended occupancy at the network level has remained more or less same as it was in the last quarter, which was 65 percent. So we are still hovering around that. However, the non-COVID work has recovered dramatically to maintain the occupancy at the same level, but it has not come back to the pre-COVID levels.”

On occupancy levels, he said, “The overall occupancy levels remain more or less same. However, that is primarily being driven by the non-COVID work. The elective surgeries form a major bulk of it for an organisation such as ours; international business as pointed out, has not yet come back to even anywhere close to normal, it is only one-fourth of what it normally used to be. So that segment in my opinion, will take the longest to recover.”

On tailwinds, Raghuvanshi said, “This particular quarter saw a lot of tailwinds for the diagnostic centre sector and diagnostic was the segment, which performed very well during this quarter. Just from the diagnostic side, the EBITDA levels were close to 30 percent and that is what pushed the numbers higher.”

“However, even hospitals did very well, and were somewhere around 15 percent levels. So we expect hospital margins to be better in the next few quarters. However, the diagnostic side may see some bit of correction as COVID volumes become less. There has been another set of COVID price regulations, which have come in a few states and that would also sort of negatively press that segment. As a result of that, on a blended level, we should be a little more moderate in the next few quarters. But I think at the current level, what we have achieved is sustainable. Going forward, we expect to remain at similar levels.”

On loss making hospitals, he said, “So overall, we have taken a lot of systemic steps to correct whatever issues are there. Some of the hospitals which have performed poorly over the last few years, we are pretty hopeful that most of them will turn around.” CNBCTV18

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