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Hospitals in India report a strong 1QFY2022

Driven by business recovery across hospitals and diagnostics, continued focus on cost optimization, and incremental upside from COVID-19 tests, the hospital industry in India, accounting for 80 percent of the total healthcare market has shown a major improvement in performance in 1QFY2022.

The first wave of COVID-19 had hit the hospitals hard, with almost all hospitals reporting losses in 1QFY2021. Occupancies had plunged significantly, medical tourism came to a standstill, OPD visits were curtailed, and electives were postponed. Nonetheless, with the easing of lockdown restrictions and decline in COVID cases, the occupancies recovered subsequently, and almost reached pre-COVID levels by 4QFY2021.

The sector is witnessing a huge investor demand from both global as well as domestic investors. It is expected to reach ₹11.14 lakh crore by 2023 from ₹6.15 lakh crore in 2019; growing at a CAGR of 16–17 percent.

COVID 19– Unprecedented challenges of working in a changing world

Suresh Sharma
Chairman cum Managing Director,
Allengers Group of Companies

The COVID-19 pandemic has confronted the world with an unprecedented situation. This had a profound effect on millions all across. It has resulted in transforming how we think about our economies and our societies, and how our healthcare providers require facilities to combat this pandemic.

COVID-19 has provided dramatic and unprecedented changes to daily life, occurring in the context of economic and health uncertainty. So, during such unprecedented times, everyone has the power to help in some way, and medical equipment manufacturers across the country are doing just that.

The medical equipment manufacturers like us are sharing the same passion more than ever today. Innovation is more important now than ever before and it motivates us to use the power of technology to create meaningful solutions for the global healthcare industry. They are playing a crucial role in the fight against this deadly virus through their various services as well as through their medical devices.

The outbreak of COVID-19, a major worldwide public health emergency, created an unprecedented demand for medical devices as the likes of mobile/portable radiography systems, CT for chest imaging, etc. Such an imaging technology, which was employed for early detection and screening of pneumonia, has played a vital role.

The declaration of results of COVID-19 tests takes hours, or maybe days, so the use of technology has fastened the processing cycle.

For instance, the algorithm like AI in X-ray imaging for chest, COVID-19, pneumonia, and TB detection, though does not confirm whether someone has the virus or not but it helps the doctor to identify the region of interest related to the particular disease. This surely fastens the treatment protocols and goes a long way in fast diagnosis.

OPDs and IPDs all across are hard-pressed by adopting better technologies in order to render safe practices to all concerned. Though many opine that the healthcare infrastructure is very stable and all required safety protocols are being met, but when it comes to the safety of healthcare workers, opinion is not good enough as health systems are being tested, and often found wanting.

As Charles Darwin said, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”

Apollo Hospitals Enterprises reported a strong 31-percent quarter-on-quarter (QoQ) growth in consolidated revenue at ₹3760 crore for the quarter ended June 2021. On a year-on-year (YoY) basis, consolidated revenues rose 73 percent from ₹2172 crore. The healthy revenue growth was mainly driven by hospital segment, which grew 26.2 percent QoQ to ₹1941 crore, while revenue from the pharmacy distribution segment grew 35 percent QoQ to ₹1512 crore.

Besides, in 1QFY2022, occupancy across the group was at 5108 beds (67 percent occupancy) as compared to 2742 beds (38 percent occupancy) in 1QFY2021. The 1QFY2022 occupancy in mature hospitals was at 3500 beds (64 percent occupancy). New hospitals had an occupancy of 1607 beds (73 percent occupancy) in 1QFY2022, Apollo Hospitals said. The company further said average revenue per occupied bed or ARPOB (excluding vaccination) was at ₹41,102 compared with ₹38,065, registering a growth of 8 percent in 1QFY2022 as compared to the previous year.

For 1QFY2022, Max Healthcare reported the highest ever operating profit and margin. Its network operating Ebitda (earnings before interest, taxes, depreciation, and amortization) at ₹360 crore, a 37-percent increase QoQ. This is the third consecutive quarter of the highest Ebitda both in absolute and margin terms. Operating Ebitda margin improved 309 basis points (bps) to 27.2 percent in 1QFY2022, sequentially. Margin expansion was driven by high overall occupancy, improvement in direct-costs ratios and significant uptake in COVID-19 vaccination in initial six weeks post launch on May 1, 2021, which touched a high of around 48,600 vaccinations per day. The significant improvement in operating Ebitda is also attributed to the gains from augmentation of clinical programs and structural cost savings undertaken in the last two fiscal years.

The company’s network gross revenues rose to ₹1385 crore during the first quarter reflecting a growth of 124 percent YoY and 19 percent QoQ. This includes ₹136 crore from vaccinations and related antibody tests post inoculation during the quarter. The company reported profit after tax (PAT) of ₹205 crore in 1QFY2022 against ₹109 crore in 4QFY2021. It had posted loss of ₹375 crore in 1QFY2021. The company is entering a high-growth phase, owing to the significant expansion it has planned at strategic locations. It seems poised for a strong Ebitda CAGR of 48 percent/25 percent over the next two/five years, led by expansion and operating leverage.

COVID-19 – We will come through this together

Steven Minn
Bionet Co., Ltd.

Since the World Health Organization (WHO) officially named the COVID-19, this new coronavirus disease has caused a global pandemic with critical impacts on many aspects of human life.

Even until now, the virus has constantly mutated into new versions or variants to be more contagious or dangerous, and the number of cases continues to rise. Medical workers had to carry a new burden – in addition to their usual tasks, they had to start undertaking totally new and difficult responsibilities.

We at Bionet have a deep respect for the healthcare providers, who bravely tackle this global crisis on the frontline, and feel proud and responsible for our role in supporting COVID-19 patients as a healthcare product/solution provider that can assist frontline healthcare services and workers who fight against the COVID-19 pandemic.

COVID-19 is a lower-respiratory infection, and this disease may damage the cardiovascular system and lead to abnormal vital signs or electrocardiographic findings, which bring more patients to ER or ICU, where real-time, fast, and accurate monitoring is required. In these cases, our ECG and patient monitors will support the monitoring and the treatment of COVID-19 patients.

In addition, imaging plays an essential role in the diagnostic pathway and especially lung ultrasound might play an important role as a non-invasive, rapid, repeatable, and sensitive bedside method to detect a range of pulmonary pathologies.

As we, Bionet, have plans to launch wireless mobile ultrasound scanners, SonoMe in the future (now registered in South Korea only), this will be our critical opportunity to provide more real-time and bedside diagnostic solutions.

All Bionet staff is doing its best to support and respond our customers’ demands during this tough time, and we are continuing to monitor this situation on hourly basis to assure the safety of our employees including the protective process trainings as well as maintaining the highest level of health and safety.

We appreciate support and care from our customers and partners as always. Please do not hesitate to contact us for any further needs, and let us work together to get over COVID-19 together.

In the same quarter, Fortis Healthcare posted a profit after tax (PAT) of ₹430.6 crore in 1QFY2022 as against a loss of ₹187.9 crore in the corresponding quarter last fiscal, riding on a 132-percent rise in revenues to ₹1410.31 crore. The PAT includes an exceptional gain of ₹306 crore on remeasurement of the previously held equity interest of SRL in the SRL-DDRC JV at its fair value post acquisition of the balance 50-percent stake in the said JV in April 2021.

The hospital business revenue soared from ₹488.4 crore in 1QFY2021; a lockdown-hit quarter, to ₹1006.5 crore in 1QFY2022. Margins too improved – from a loss of ₹85 crore last fiscal, the Ebitda in the hospital business improved to ₹149.6 crore with resulting Ebitda margin of 14.9 percent. The average revenue per occupied bed (ARPOB) for the quarter stood at ₹1.62 crore versus ₹1.51 crore in the corresponding previous quarter and ₹1.70 crore in 4QFY2021. Non-COVID ARPOB was at ₹1.97 crore and grew 8.5 percent versus 4QFY2021. Overall occupancy for the quarter stood at 65 percent as compared to 37 percent in 1QFY2021 and 64 percent in 4QFY2021. COVID contribution to overall hospital revenues stood at 27 percent in the quarter.

The diagnostics business was also impacted in terms of the non-COVID revenues which were partially offset by a sizeable contribution from COVID revenues “comprising COVID and COVID-allied tests,” it said. In the first quarter of the ongoing fiscal, the diagnostics business grew by over three-fold to ₹441.4 crore as compared to ₹140.4 crore in 1QFY2021. “COVID revenue contribution to overall diagnostics revenues stood at 26 percent in the quarter. On a like-to-like basis, SRL undertook 1.24 million COVID tests in 1QFY2022 as compared to 0.65 million in 4QFY2021,” the healthcare chain said.

Ravi Rajagopal
Fortis Healthcare.
“The second wave of the pandemic in 1QFY2022 witnessed the company reserving approximately 50 percent of its operational bed capacity and making all efforts to provide the best possible care for its patients,”

Narayana Hrudayalaya’s consolidated net sales soared 118.5 percent to ₹859.80 crore in 1QFY2022 from ₹393.50 crore in 1QFY2021. Pre-tax profit was at ₹77.11 crore in 1QFY2022 as against a pre-tax loss of ₹153.45 crore in 1QFY2021. Consolidated Ebitda stood at ₹140.40 crore during the quarter, reflecting a margin of 16.3 percent as against loss of ₹86.30 crore in 1QFY2021. As on June 30, 2021, the total borrowings less cash and bank balance, was ₹428 crore representing a net debt-to-equity ratio of 0.36 (out of which, debt worth USD 37.3 million is foreign-currency denominated). Its consolidated net profit stood at ₹76.24 crore in 1QJune 2021 (1QFY2022) as compared to a net loss of ₹119.76 crore in 1QJune2020 (1QFY2021).

Dr Emmanuel Rupert
Managing Director and Group Chief Executive Officer
Narayana Hrudayalaya.
“With the impact of the devastating second wave of the pandemic playing out for much of the period in the quarter gone by, our Indian operations were affected on expected lines. Our flagship heart hospital at Health City, Bengaluru, bore the brunt of the effect given its pre-eminence in the cardiac sciences-based elective domain as well as higher reliance on out-of-station domestic and international patients. However, we are encouraged by the traction being demonstrated by our other units building upon the momentum over the previous few quarters. Looking ahead, we remain vigilant over recent developments taking place across some nations with respect to a fresh wave,”

Krishna Institute of Medical Sciences (KIMS), recently listed, and one of the largest corporate healthcare groups in Andhra Pradesh and Telangana in terms of the number of patients treated and treatments offered, reported a strong 57-percent growth in consolidated profit after tax (PAT) at ₹92.0 crore for the quarter ended June 2021 (1QFY2022) on a sequential basis. Ebitda was up 41 percent QoQ at ₹147.9 crore, while margins improved 200 basis points (bps) to 31.0 percent in 1QFY2022 from 29.0 percent in 4QFY2021. Consolidated revenue grew 31.6 percent QoQ at ₹477.50 crore from ₹362.70 crore in the previous quarter.

Aster DM Healthcare has posted a consolidated net profit of ₹59.60 crore for the quarter ended June 30, 2021. It incurred a net loss of ₹88.59 crore in the year-ago period. Revenue from operations also rose to ₹2372 crore in the quarter. It was ₹1747 crore in the same period a year ago. Its operational revenue increased by 36 percent YoY to ₹2372 crore compared to ₹1747 crore, Ebitda (increased by 97 percent YoY to ₹281 crore compared to ₹143 crore).

Dr Azad Moopen
Founder Aster DM Healthcare.
Chairman and Managing Director,
“We start 2022 with a more positive sentiment and hope. The pandemic gradually seems to be coming under control. The focus going forward as a strategy is to expand capacity in India. To the existing capacity beds of 3757 beds in India, an addition of 411 beds is being planned in the next 18 months. We continue to actively expand Aster Labs and our pharmacy distribution network in India,”

HealthCare Global Enterprises Ltd.’s revenue was ₹3,231 mn as compared to ₹1935 mn in the corresponding quarter of the previous year, reflecting a YoY growth of 67 percent. Its consolidated profit before was ₹547 mn, as compared to ₹221 mn in the corresponding quarter of the previous year, a growth of 148 percent YoY and 25 percent QoQ.

Raj Gore
HealthCare Global Enterprises Ltd.
“We are satisfied with the performance in 1QFY2022, which was also during one of the most testing times we may have seen in our lives. The fact that we have not only emerged successfully, but also created new performance benchmarks as an organization, is a testament to the clinical expertise and overall value proposition that we offer. We are excited about the next few years as being truly transformative for HCG, to continue our dominant leadership in oncology, while delivering strong return on capital and meeting our responsibilities toward all stakeholders,”

Long-term outlook for the industry continues to remain stable, given the increasing life expectancy, rising share of elderly people, rising incidence of non-communicable lifestyle diseases, higher healthcare awareness, growing per capita spend, increasing penetration of health insurance, and robust medical tourism volumes.

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