We expect pharmaceuticals companies under our coverage to report healthy Ebitda growth of 19% YoY (down 8% QoQ), mainly aided by steady domestic growth and new launches like gRevlimid in U.S.
Benefits of Indian rupee depreciation versus U.S. dollar (up 10% YoY) will also aid profitability. Though cost pressures are gradually easing, likely to remain at elevated levels. Base business in U.S. likely to remain steady while National List of Essential Medicines impact will be seen in few domestic focused companies.
In Q4, hospital companies under our coverage are expected to post 25% YoY growth (7% QoQ) in post Indian accounting standard Ebitda (31% YoY Ebitda growth excluding of Rs 2.1 billion loss in Apollo 24×7).
As Q4 being a seasonally strong quarter, we expect occupancy across our coverage universe to improve QoQ. Further we see 700-1000 basis points improvement in occupancy across our coverage universe on YoY basis as elective surgeries were impacted due to third wave of Covid in Q4 FY22.
We anticipate average revenue per occupied bed to continue to remain healthy, aided by improving case and payor mix. On account of lower base due to third wave of Covid in Q4 FY22 (impacting occupancy), we see strong YoY Ebitda growth across our coverage universe.
We remain structurally positive in the hospitals space and expect momentum to continue in FY24 with improvement in occupancy, better case mix and sustainability of current ARPOB.