MB Stories
India’s dynamic healthcare landscape
The Indian healthcare sector is poised for exponential growth with valuations expected to soar, for both public and private sectors.
Rising CapEx intensity is expected from the Indian hospital sector. Given the strong operating metrics and demand outlook, the players have announced sizeable CapEx plans for the next four-five years. Elective surgeries, higher preference for large hospital players aided by increasing insurance penetration, rising incidence of non- communicable lifestyle diseases, and higher medical tourism volumes are pointing to incremental continued demand.
In addition to setting up new greenfield and brownfield facilities to enhance their capacities, hospital chains are looking at inorganic opportunities, which has led to increasing consolidation in the industry in the last two years. Mergers and acquisitions aid hospital chains in diversifying their geographic reach and speciality mix, in addition to increasing their scale of operations.
In a sample set of hospitals comprising nine listed companies, Apollo Hospitals Enterprise Limited, Aster DM Healthcare Limited (India business only), Fortis Healthcare Limited, Healthcare Global Enterprises Limited, Krishna Institute of Medical Sciences Limited, Max Healthcare Institute Limited, Narayana Hrudayalaya Limited, Rainbow Children’s Medicare Limited and Shalby Limited, it is expected that the aggregate occupancy will remain healthy at 64-65 percent in FY24 (65.1% in FY23) backed by sustained healthy demand for healthcare services, continued market share gains for organised players and revival in medical tourism post the pandemic, as per an ICRA study.
The average revenue per occupied bed (ARPOB) is expected to witness a healthy growth of 8-10 percent in FY24 (following an expansion of 10% in FY23). This will be aided by improving specialty and case mix, better payor mix (with higher contribution of cash and insurance patients) and annual price revisions by companies to offset cost inflation is supporting the ARPOB growth for the sample set. Overall revenue growth is estimated at 12-14 percent in FY24.
“To overcome the impact of inflation, hospitals have employed cost optimisation measures such as consolidation of suppliers and centralised procurement to enable rationalisation of consumables cost and capex, improvement in efficiencies through use of digital tools, energy consumption from renewable energy resources, and in-house management of onsite pharmacy operations, against outsourcing to third parties. Improving operating leverage coupled with aforementioned cost optimisation and digitisation measures are expected to support a healthy OPM of ~22-23% for these companies in FY2024,” said Mythri Macherla, Assistant Vice President & Sector Head, ICRA.
Cumulatively, the sample set companies are expected to add ~4,900 beds over FY24 and FY25, translating to 15 percent of their existing bed capacity. Exhibiting similar trends, the broader industry has also announced significant bed additions. Overall, most private players (including ICRA’s sample set companies) are expected to add over 30,000 beds in the next four to five years at an investment of ~₹32,500 crore. Metros are expected to remain focal points for this capacity expansion. Cities such as Delhi NCR, Mumbai and Bangalore are expected to witness sizeable bed additions in the next few years,” Macherla added.
Despite ongoing CapEx, which would be partly debt-funded, the net debt/OPBDITA for the sample set companies is expected to remain strong, ranging between 0.3-0.4x as of March 31, 2024. However, with significant bed additions planned for FY25, net debt/OPBDITA is expected to moderate to 0.6-0.7x as on March 31, 2025. That said, debt metrics are expected to remain healthier than the long-term average, given the current low net debt levels and expected strong accruals. The long gestation period and capital-intensive nature of operations had constrained the RoCE in the past. However, improvement in the performance of mature hospitals across players and turnaround of many of the new centres led to a sharp improvement in return on capital employed (ROCE) during FY2022 and FY2023. ICRA expects the ROCE to remain between 14-17 percent in FY2024 and FY2025, supported by incremental absolute OPBDITA despite new capacities coming onboard.
Financial results -Q3 FY24
Leading hospitals
Apollo Hospitals
The third quarter of the fiscal year 2024 has been marked by a series of notable initiatives. In partnership with Steel Authority of India Limited (SAIL), Apollo Hospitals inaugurated a 290-bed multi-super-specialty hospital in Rourkela; and introduced a specialized healthcare unit for children in Trichy under the newly introduced Pediatric ProHealth Program; Apollo Cancer Centers collaborated with India Post to launch the Stamp Out Childhood Cancer campaign, the Bengaluru Cancer Center launched AI-Precision Oncology Center (POC), in Hyderabad the Homecare Recovery Program integrated with cardiac surgery, and Apollo BGS Hospital in Mysuru introduced 5G ambulance services in association with LifeSigns.
| Apollo Hospitals Enterprise Ltd. | |||
| In ₹ crore | Q3 FY24 | Q2 FY24 | Q3 FY23 |
| Total income | 4878.40 | 4869.1 | 4299.00 |
| Net profit | 254.40 | 248.8 | 162.40 |
| EPS | 17.06 | 16.2 | 10.67 |
Key highlights-Q3 FY24
- Consolidated revenues at ₹4850.6 crore in Q3 FY24 versus ₹4263.6 crore in Q3 FY23; growth of 14 percent YoY.
- EBITDA at ₹613.7 crore versus ₹505.3 crore in Q3 FY23. This is after Apollo 24×7 cost of ₹155.7 crore in the quarter (including ₹14.1 crore non-cash ESOP charge) versus ₹202.4 crore in Q3 FY23.
- PAT at ₹245.3 crore versus ₹153.5 crore in Q3 FY23.
- Diluted EPS of ₹17.06 per share in Q3 FY24 (not annualized).
By segment
- Healthcare services revenues grew 12 percent YoY to ₹2464 crore.
- Apollo HealthCo revenues grew 17 percent YoY to ₹2049 crore; GMV of Apollo 24I7 at ₹658 crore.
- Apollo Diagnostics revenues grew by 19 percent YoY.
- Apollo Health Co. achieves EBITDA break-even; EBITDA at ₹2 crore.
Dr Prathap C Reddy
Chairman,
Apollo Hospitals Group
In the pursuit of a healthier nation, Apollo remains steadfast in its belief in the importance of preventive healthcare. Our mission is to empower individuals to safeguard their well-being, preventing the onset of non-communicable diseases (NCDs). Our vision is resolute – to integrate preventive healthcare into the lives of every Indian. More than a business objective, it’s a commitment to our nation’s health. Together, let’s strive to nurture countless healthy and happy families, shielding them from the growing threat of non-communicable diseases.
Aster DM Healthcare
The GCC and India healthcare markets are distinct and have different growth dynamics, warranting different business strategies. Aster DM Healthcare has separated the India and GCC businesses into two distinct and standalone entities. The strategic decision to segregate the India and GCC operations was based on the rationale to establish fair value for both entities, creating two pure-play geographically focused entities that are able to leverage the growth opportunities in their respective markets.
| Aster DM Healthcare Limited | |||
| In ₹ crore | Q3 FY24 | Q2 FY24 | Q3 FY23 |
| Total income | 3718.56 | 3325.22 | 3200.67 |
| Net profit | 209.22 | (15.33) | 159.03 |
| EPS | 3.60 | (0.62) | 2.80 |
Both the India and GCC entities are operated by separate dedicated management teams. Post completion, Dr Azad Moopen will continue as the Founder & Chairman of Aster, overseeing both India and GCC entities. Alisha Moopen will be promoted as Managing Director and Group CEO of the GCC business to lead a long-term strategy that will unlock value as a pure-play GCC operating company. The Indian entity will continue to be led by Dr Nitish Shetty as Chief Executive Officer, who will focus on the growth of the India business, aimed at creating value for its shareholders. The company expects the transaction to close by March 2024.
Key highlights-Q3 FY24
- Operational revenue grew 16 percent YoY to ₹3711 crore versus ₹3192 crore in Q3 FY23.
- Operating EBITDA grew 28 percent YoY to ₹583 crore versus ₹456 crore in Q3 FY23.
- PAT (excluding losses from new hospital and non-recurring costs) grew 53 percent YoY to ₹213 crore versus 139 crore in Q3 FY23.
In Q3 FY24, India business showcased 23 percent YoY revenue growth, surging to ₹949 crore. This growth was catalyzed by the expansion of over 750 beds within the past year. The 3- percent YoY increase in Operating EBITDA in Q3 FY24, elevated the hospitals’ Operating EBITDA margins to 19.8 percent, contributing to more than doubling the net profit after taxes for the quarter. Plans are to increase bed capacity to 6600.
Dr Azad Moopen
Founder and Chairman,
Aster DM Healthcare
The strategic decision to segregate India and GCC operations was based on the rationale to establish fair value for both entities, creating two pure-play geographically focused entities. In India, we as promoters, remain committed to our growth plans and hence had increased our stake to 42 percent earlier this year. Major institutional shareholders continue to remain invested, reflect-ing overall confidence in the company’s India business model and go-to-market strategy span-ning all segments of the healthcare space.
Overall GCC business achieved 14-percent YoY revenue growth in Q3 FY24, reaching ₹2761 crore marked with strong revenue growth across hospital, pharmacy, and clinics business, respectively. Operating EBITDA surged by 24 percent YoY to ₹415 crore during the quarter.
Fortis Healthcare Limited
The quarter’s performance for Fortis Healthcare Limited has been led by the hospital business, which continues to show a YoY improvement in margins. Plans for incrementally adding to its existing bed capacity by almost 50 percent are progressing, and when operationalized will eventually see some of the key facilities, such as Shalimar Bagh, FMRI, Mohali, and BG Road becoming more than 450 beds each. In addition, the group continues to supplement expansion plans inorganically with the acquisition of assets, such as the 350-bed hospital in Manesar, NCR, and adjunct land parcels to its existing facilities, such as the recent one in Kolkata. It commissioned a 70-bed facility in Ludhiana and has also successfully rationalized its portfolio having divested two of the loss-making facilities in Chennai – the Arcot Road Vadapalani facility in July 2023 and the Fortis Malar facility in February 2024 – thereby improving profitability of the company.
| Fortis Healthcare Limited | |||
| In ₹ crore | Q3 FY24 | Q2 FY24 | Q3 FY23 |
| Total income | 1686.49 | 1783.45 | 1571.58 |
| Net profit | 134.23 | 183.90 | 142.13 |
| EPS | 1.78 | 2.30 | 1.72 |
Key highlights-Q3 FY24
- Consolidated revenues at ₹1680 crore.
- Operating EBITDA at ₹284 crore, 16.9 percent margin.
- A 5.6-percent YoY fall in net profit at ₹134 crore.
- Hospital business revenues increased 9.6 percent versus the corresponding previous quarter, led by a 10.6-percent increase in ARPOB to ₹2.23 crore.
- Q3 FY24 hospital business revenues were at ₹1389.5 crore versus ₹1267.4 crore in Q3 FY23 and ₹1452.6 crore in Q2 FY24.
- Q3 FY24 diagnostics business gross revenues were at ₹330.7 crore versus ₹331.5 crore in Q3 FY23.
- Net-debt-to-EBITDA was at 0.45 versus 0.41 (basis annualized EBITDA of Q3 FY24 and Q3 FY 23, respectively). Net debt was at ₹518 crore as on December 31, 2023, versus ₹471 crore as on December 31, 2022.
The healthy performance in the hospital business, which contributes approximately 88 percent to overall consolidated EBITDA, has largely offset the muted performance of the diagnostics business. The revenue contribution from the company’s key medical specialties, viz., oncology, orthopedics, renal sciences, cardiac sciences, neurosciences, and gastroenterology to overall hospital revenues increased to 61.4 percent in Q3 FY24 from 60.9 percent in Q3 FY23.
Dr Ashutosh Raghuvanshi
MD and CEO,
Fortis Healthcare Limited
The healthy performance in the hospital business, which contributes 88 percent to overall consolidated EBITDA, has largely offset the muted performance of the diagnostics business. Focus on retaining and attracting high-quality clinical talent remains a priority with the quarter wit-nessing clinicians from key specialties, such as cardiology, oncology, and neurology joining the Fortis network. Our efforts on digital transformation are progressing well with the EMR program implementation underway and revenues from digital channels witnessing a robust growth more than 30 percent.
Max Healthcare Institute Limited
Max Healthcare reported yet another quarter of stellar performance. Despite Q3 being a seasonally weak quarter, the company exhibited healthy mid-teens (15 percent) growth in both revenue and Ebitda.
| Max Healthcare Institute Limited | |||
| In ₹ crore | Q3 FY24 | Q2 FY24 | Q3 FY23 |
| Total income | 1380.99 | 1408.64 | 1186.39 |
| Net profit | 289.34 | 276.68 | 222.41 |
| EPS | 2.98 | 2.85 | 2.29 |
The group executed a share purchase agreement to acquire healthcare undertaking consisting of 550-bedded Sahara Hospital located at Gomti Nagar, Lucknow, UP, on a slump sale basis. This inorganic expansion will further strengthen Max Healthcare’s presence in the most populous and fast-growing state of Uttar Pradesh. The group expects to consummate the transaction in Q4 FY24.
Key highlights-Q3 FY24
- Gross revenue stood at ₹1779 crore for Q3 FY24, +14 percent growth YoY.
- Network Operating EBITDA was ₹471 crore, growth of +12 percent YoY.
- Operating margin stood at 27.9 percent versus 28.3 percent in Q3 FY23 and 28.7 percent in Q2 FY24.
- EBITDA per bed improved to ₹75.6 lakh in Q3 FY24, from ₹66.9 lakh in Q3 FY23 and ₹75 lakh in Q2 FY24.
- PAT grew by 26 percent YoY to ₹338 crore in Q3 FY24 versus ₹269 crore in Q3 FY23 and ₹338 crore in Q2 FY24.
- Cash from operations was ₹226 crore in Q3 FY24, of this ₹137 crore was spent toward ongoing capacity expansion projects and ₹97 crore was paid as dividend; net cash as on December 31, 2023 stood at ₹1295 crore; bed occupancy in Q3 FY24 stood at 73 percent and OBD’s were lower by ~1 percent YoY.
Abhay Soi
Chairman and Managing Director,
Max Healthcare Institute Ltd.
We continue to witness positive trends on all parameters like ARPOB, EBITDA per bed, etc., even during this quarter, translating into revenue and profitability growth, despite expected softness in occupancies due to festive season. Further, our entry into central UP through acquisition of Sahara Hospital will strengthen our presence in Northern India and will act as a stepping stone in growing Max Healthcare’s presence in the region.
The financial performance of the network hospitals, Max subsidiaries, managed healthcare facilities, and PHFs is included in the declared results.
Narayana Hrudayalaya Limited
Consolidated revenue for the current quarter stood at ₹1203.6 crore reflecting a growth of +6.7 percent year-on-year and – 7.8 percent quarter-on-quarter. NHL generated consolidated EBITDA of ₹396.8 crore in Q3 FY24 at a margin of 24.7 percent against 25 percent in Q2 FY24. This quarter-on-quarter growth was impacted on account of seasonal factors related to festivities in the current quarter.
| Narayana Hrudayalaya Ltd | |||
| In ₹ crore | Q3 FY24 | Q2 FY24 | Q3 FY23 |
| Total income | 1221.52 | 1323.65 | 1139.72 |
| Net profit | 188.11 | 226.69 | 153.86 |
| EPS | 9.26 | 11.16 | 7.57 |
The Cayman units, the HCCI as well as the EICL continue to deliver strong business performance with quarterly revenue at USD 30.6 million, a year-on-year growth of 8.5 percent.
Viren Shetty
Vice Chairman,
Narayana Hrudayalaya Limited
Our key priorities are winning greater market share in Bangalore and Kolkata. For the next decade at least the bulk of our investment will focus on these two geographies. The remaining will just be strengthening the existing hospital set that we currently have. That means adding more beds or adding adjacent capacity to the existing network. Most of this will be in some combination of brownfield and greenfield investment in hospitals, clinics, pharmacies in the network of cities that we’re currently operating on and this will be the case for the next easily 10 years.
The balance sheet and liquidity profile at the group level remain strong with group cash and liquid investments of over ₹1039 crore against gross borrowings of ₹1014 crore resulting in a net cash position of ₹25 crore as of December 2023. The net debt-to-equity ratio now stands at -0.01, giving sufficient room to fund expansion through a mix of borrowing and internal accruals. Capital outlay of close to ₹500 crore has been incurred till the December quarter.
Medanta (Global Health Limited)
Global Health, operating hospitals under the Medanta brand, reported a 53-percent increase in consolidated net profit at ₹123.54 crore for Q3 FY24, compared to ₹81 crore in the same period last year. Revenue from operations grew by 19.91 percent to ₹832.6 crore in Q3 FY24 from ₹694 crore in Q3 FY23. Ebitda was at ₹212 crore in Q3 FY24, compared to ₹160 crore in in Q3 FY23. The Ebitda margin was 25.5 percent in Q3 FY24, as against 23 percent in Q3 FY23.
| Medanta (Global Health Limited) | |||
| In ₹ crore | Q3 FY24 | Q2 FY24 | Q3 FY23 |
| Total income | 854.53 | 864.69 | 706.23 |
| Net profit | 123.54 | 125.16 | 80.61 |
| EPS | 4.61 | 4.66 | 3.08 |
Pankaj Sahni
Group CEO & Director,
Global Health Ltd (Medanta)
Medanta has delivered strong year-on-year performance during the quarter ended December 2023. In Q3 FY2024, both our matured and developing units delivered robust revenue growth of 17 percent and 33 percent y-o-y respectively. This growth was primarily driven by increased in-patient volume and improved realization. Our commitment remains unwavering in building a sustainable long-term business model and providing the highest quality care across our key markets.
KIMS Hospitals
Key highlights-Q3 FY24
- Consolidated revenue grew by 7.1 percent YoY and declined by 7.1 percent on a QoQ basis to ₹609 crore.
- Consolidated EBITDA declined by 4.6 percent YoY and 16.5 percent on a QoQ basis to ₹150 crore.
- Consolidated EBITDA (excluding Other Income) margin stands at 24.3 percent, showing a decline of 2.9 percent from previous quarter.
- Consolidated PAT declined by 6.3 percent YoY and 24.3 percent on a QoQ basis to ₹77 crore. Consolidated EPS declined by 5.4 percent YoY and 21.9 percent on a QoQ basis.
| KIMS Hospitals | |||
| In ₹ crore | Q3 FY24 | Q2 FY24 | Q3 FY23 |
| Total income | 609.09 | 655.36 | 568.61 |
| Net profit | 76.55 | 101.29 | 81.83 |
| EPS | 8.98 | 11.50 | 9.49 |
Dr B Bhaskar Rao
Chairman and Managing Director,
KIMS Hospitals
We have seen a dip in patient footfalls this quarter. Traditionally, this happens to be the slack season on account of festivals. Besides, the cyclone in Andhra Pradesh and Assembly elections in Telangana have shown some impact. But I am particularly pleased to see that all our units have continued to produce excellent clinical outcomes. We should be opening our Nashik unit in Q1 FY25. I am optimistic that we are on track to achieve our targets for FY24.
HealthCare Global Enterprises Limited
Healthcare Global Enterprises Limited (HCG)’s performance for the quarter serves as evidence of its progress in advancing toward focused cancer care, where research and collaboration are the key drivers for improving patient outcomes.
| HealthCare Global Enterprises Ltd. | |||
| In ₹ crore | Q3 FY24 | Q2 FY24 | Q3 FY23 |
| Total income | 475.94 | 490.34 | 428.33 |
| Net profit | 3.43 | 10.78 | 4.2 |
| EPS | 0.41 | 0.97 | 0.54 |
Revenue was ₹469.9 crore in Q3 FY24, an increase of 11 percent from Q3 FY23.
PAT was ₹5.7 crore in Q3 FY24, a decrease of 24 percent from Q3 FY23.
EBITDA was ₹82.6 crore in Q3 FY24, an increase of 7 percent from Q3 FY23.
The quarter performance showcased a standout 15-percent growth in ARPOB, a significant turnaround in Kolkata with over 50 percent growth, a commendable 17-percent growth in Mumbai, and revenue mix improvement due to the radiation business growth.
Dr BS Ajaikumar
Executive Chairman,
Health Care Global Enterprises Ltd.
We have always embraced technology and innovation to be at the forefront of advancement in cancer care. And have consistently adopted cutting-edge solutions to ensure that we provide the highest-quality healthcare. Our ability to deeply connect with patients is built on a foundation of compassion and trust, which is what truly sets HCG apart from others in our field. We remain committed to continue making a meaningful difference in the lives of those we serve in making cancer a chronic disease.
The EBITDA in the quarter was driven by improved contribution margins, albeit partially offset by reduced operating leverage due to the festival impact in Q3. Recent acquisitions in Nagpur and Indore have progressed in line with the company’s plan and rightly placed to consolidate its position.
Shalby Limited
Key highlights-Q3 FY24
- Consolidated revenue at ₹220.6 crore in Q3 FY24 grew by 6.8 percent YoY.
- Consolidated EBITDA at ₹46.8 crore in Q3 FY24 grew by 23.3 percent YoY.
- Consolidated PAT at ₹19.1 crore in Q3 FY24 grew by 24.8 percent YoY.
- Basic EPS of ₹1.78 during the quarter, growth of 25.0 percent YoY.
- Occupied beds during the quarter were 590, growth of 8.4 percent YoY.
- In patient count (including day care) of 20,737, growth of 15.2 percent YoY.
- ARPOB during the quarter was 37,342, growth of 2.9 percent YoY.
Other than hospital business, SOCE franchise business and implant business delivered 10.7-percent growth in Q3 FY24 from Q3 FY23.
| Shalby Limited | |||
| In ₹ crore | Q3 FY24 | Q2 FY24 | Q3 FY23 |
| Total income | 220.57 | 243.37 | 206.50 |
| Net profit | 19.06 | 27.58 | 15.27 |
| EPS | 1.78 | 2.57 | 1.42 |
Shalby is well poised to deliver double-digit growth in the hospital business with sustainable profitability and deepen and increase footprints by adding orthopedic units under SOCE.
Shanay Shah
President,
Shalby Limited
The hospital business continued to deliver consistent performance in all key operational and financial parameters with occupancy and in-patient count growing by 8.4 percent and 15.2 per-cent YoY respectively in Q3 FY24. Hospital revenue and EBITDA also grew by 11.5 percent and 25.6 percent YoY with robust EBITDA margin of 24.2 percent. We have made a strategic entry into Northern India, with acquisition of 87.26 percent stake in Sanar International Hospital. Shalby continues to add many milestones, backed by clinical excellence and patient satisfaction.
Leading diagnostic centers
India diagnostics sector is undergoing a rapid transformation, increasing the burden of non-communicable diseases as well as new emerging and existing communicable levels, increased adoption of evidence-based treatment and a growing emphasis on preventive healthcare diagnostics are expected to sustain the growth momentum.
At the industry level, revenue from Covid is history now. And the labs are looking for expansion in Tier-III and Tier-IV towns through organic means of growth.
The industry experienced bundling of routine tests as a new consumer trend. In response, for instance, Dr. Lal PathLabs successfully built the brand Swasthfit. The revenue contribution from Swasthfit has now stabilized ranging between 19 percent and 21 percent of its total revenue.
The next wave of bundling is expected to be in the specialized test as that could be medically more efficient for clinicians.
Dr Lal PathLabs Limited
Dr. Lal PathLabs has delivered double-digit top-line growth rates on a YoY basis in the current quarter. The company has significantly improved its operating and net margins profile driven by efficiencies of scale and productivity-driven initiatives.
| Dr Lal PathLabs Limited | |||
| In ₹ crore | Q3 FY24 | Q2 FY24 | Q3 FY23 |
| Total income | 557.20 | 619.40 | 499.90 |
| Net profit | 82.20 | 110.70 | 53.60 |
| EPS | 9.77 | 13.16 | 6.37 |
Consolidated performance highlights
- Revenue increased to ₹539 crore in Q3 FY24 from ₹489 crore in Q3 FY23, an increase of 10.1 percent.
- EBITDA increased by 24.6 percent with a margin of 26.1 percent to ₹141 crore in Q3 FY24 from ₹113 crore in Q3 FY23.
- PAT increased by 53.3 percent to ₹82 crore in Q3 FY24 from ₹54 crore in Q3 FY23, with a margin of 15.3 percent.
Dr. Lal PathLabs reported an increase in its network of Patient Service Centers (PSCs) and Pick-Up Centers (PUPs) across the country. The company also reported a 2-percent rise in revenue from Tier-III cities.
Brig Dr Arvind Lal
Executive Chairman,
Dr Lal PathLabs Limited
While the competition in this space has increased, the established pan-India chains like ours are strategically positioned to exceed industry growth, progressively expanding market share, compared to both organized and unorganized players. This is possible due to the continuous improvement in scale achieved through our deep penetration in Tier-II and Tier-III towns and offering the largest portfolio of tests and services at competitive prices. To maintain affordability, we have predominantly retained our pricing mix, barring minor adjustments in prices to account for cost inflation in specialty and super-specialty tests.
The rise in revenue in Tier-III cities is being attributed to an increase in diagnostic infrastructure, with a 61-percent increase in the number of collection centers and a 53-percent rise in the number of PUPs in suburban settings.
Metropolis Healthcare Ltd.
Q3 historically remains a weak quarter due to the festive and holiday season. Compared to last year, the margin is impacted due to more intensity in lab expansion, loss of PPP contracts, and a one-time impact on account of provision for doubtful debts taken. These three elements impacted the margin by around 2.6 percent.
| Metropolis Healthcare Limited | |||
| In ₹ crore | Q3 FY24 | Q2 FY24 | Q3 FY23 |
| Total income | 293.42 | 309.72 | 292.08 |
| Net profit | 27.29 | 35.66 | 35.86 |
| EPS | 5.30 | 5.62 | 6.97 |
The company is concentrating on expanding into new geographical areas where they face minimal competition. It is expected to take 3–4 years to recover the margins in these new markets. The company is growing faster in Tier-III and Tier-IV cities, which is visible in the revenue mix of other cities growing at 16 percent YoY.
Financial highlights
- Revenue from operations increased to ₹291 crore in Q3 FY24 from ₹285 crore in Q3 FY23.
- Core Business Revenue increased to ₹286 crore in Q3 FY24 from ₹254 crore in Q3 FY23.
- EBITDA was ₹69 crore in Q3 FY24, from ₹77 crore in Q3 FY23.
- PAT declined to ₹27 crore in Q3 FY24 from ₹36 crore in Q3 FY23, with a margin of 9.4 percent – a 25-percent YoY drop.
The diagnostic industry is expected to grow at 8–10 percent CAGR till FY27, while the company is confident of growing at 10–11 percent CAGR. The outperformance will be driven by extending presence geographically, both within the established retail markets and across new markets; securing a large market share in the wellness segment; enhancing the specialized testing segment by establishing greater credibility among specialized doctors; and focus on execution in areas, such as distribution, service quality, testing report excellence, and the robustness of the test mix.
Ameera Shah
Promoter and Managing Director,
Metropolis Healthcare Ltd.
In Q3 FY24, the core business revenues grew by 12 percent YoY, reflecting a consistent trend of double-digit growth over the past seven quarters for our core revenues. The performance in Q3 was marginally impacted on account of heavy rainfall and floods in Chennai and adjacent areas in December 2023, leading to loss of revenues for approximately 7-8 days from Chennai region, which is one of the focus cities for Metropolis. We are optimistic of scaling up revenues and margins in the coming quarters.
During the quarter, the company implemented a price hike in the B2C segment, effective January 1, 2024. The resulting effects will become apparent in Q4 FY24 and throughout FY25, leading to enhanced revenue and margins. The company also intends to implement a price increase in the B2B segment, specifically for specialized and super-specialized tests, during Q1 FY25. This strategic move is expected to contribute to the continued growth of revenue and margins.
Vijaya Diagnostic Centre
In December 2023, Vijaya Diagnostic Centre acquired 100-percent stake in Pune-based PH Diagnostic Centre Private Limited (PH) for a cash consideration of ₹147.5 crore (including ₹12.8 crore for debt repayment). The business dynamics of PH Diagnostic are identical to Vijaya and can be swiftly integrated. Besides, PH’s ability of high-end testing, pertaining to allergy and genomic, may also add new capabilities to the combined portfolio. The acquisition also addresses concerns on replicating Vijaya’s business model beyond Andhra/Telangana region as the share of these regions may come down to 89 percent in FY25E versus ~97 percent currently.
| Vijaya Diagnostic Centre Ltd | |||
| In ₹ crore | Q3 FY24 | Q2 FY24 | Q3 FY23 |
| Total income | 137.80 | 145.61 | 116.68 |
| Net profit | 26.00 | 33.57 | 16.46 |
| EPS | 2.53 | 3.26 | 1.60 |
PH Diagnostic had sales of ₹41.6 crore in FY23 (down ~15 percent YoY due to covid test and scans last year) with EBITDA margin identical to Vijaya at 40 percent.
Vijaya Diagnostics has dominant presence in South India and the company is trying to penetrate in the Eastern and the Western India to diversify its presence.
Vijaya Diagnostics reported a 58-percent YoY rise in consolidated net profit at ₹25.8 crore for Q3 FY24. The company reported a net profit of ₹16.4 crore in Q3 FY24. The revenue of the company stood at ₹132.7 crore, up 17.3 percent from last year’s ₹113.1 crore. EBITDA was at ₹52.31 crore, EBITDA margin for the quarter at 39.4 percent in Q4 FY24, against 39.1 percent in Q4 FY23. PAT stood at ₹25.85 crore, translating into a PAT margin of 19.5 percent.
Suprita Reddy
Managing Director & CEO,
Vijaya Diagnostic Centre Pvt Ltd.
Marking entry into the state of Karnataka, we inaugurated a futuristic hub at Gulbarga in No-vember 2023. Market response and business performance has been encouraging. We believe that we will be able to break even within the anticipated timelines and are confident about sufficiently addressing market need and effective expansion in the region (Karnataka).
The medical landscape in India for 2024 reflects a dynamic and evolving healthcare industry. As technology advances, patient preferences evolve, and regulatory frameworks strengthen, the industry is poised for sustained growth. With a focus on patient-centric care, specialized procedures, and digital health integration, India is solidifying its position as a key player in the global market.
Thyrocare Technologies Limited
Thyrocare Technologies has revamped its equipment platform. The equipment was quite old with an average age of 12 years. Now 24 new machines from the vendors have been added, bringing the average age down to 6 years. These new additions have dramatically improved reporting accuracy and turnaround time.
| Thyrocare Technologies Limited | |||
| In ₹ crore | Q3 FY24 | Q2 FY24 | Q3 FY23 |
| Total income | 137.47 | 150.17 | 130.13 |
| Net profit | 14.74 | 20.33 | 14.70 |
| EPS | 2.78 | 3.84 | 2.78 |
Revenue stood at ₹134.7 crore, up 5.2 percent from ₹123 crore in Q2 FY24.
The consolidated net profit remained flat at ₹14.74 crore in Q3 FY24. The company had reported a profit of ₹14.7 crore in Q2 FY24.
Rahul Guha
Managing Director & Chief Executive Officer,
Thyrocare Technologies Limited
We have 3 key pillars of growth. Our franchise business, where the focus is to take it deeper into India with a focused test menu. In the public space TB and infectious disease, by far one of the strongest players, we will continue to expand our partnerships. The third area is new for us. We have a strong and robust B2B model with a core of execution and are ready to take this model forward with our first entry into Tanzania. That in brief is our mandate as management.
EBITDA stood at ₹34.3 crore in Q3 FY24, up from ₹32.3 crore in Q3 FY23. The normalized EBITDA margin is 26 percent in Q3 FY24, against 27 percent in Q3 FY23. The decline was mainly on account of an increase in marketing spends.
Some highlights:
- Partnerships (excluding API and B2G) revenue growth of 33 percent YoY.
- Franchise revenue growth of 11 percent YoY.
- Pathology (excluding materials and others) revenue grew by 8 percent YoY.
- Radiology revenue grew by 9 percent YoY.
- Execution of share purchase agreement for acquisition of 100-percent stake in Think Health Diagnostic Private Limited to foray into ECG at home services.
- Entered into partnership with TestEasy to introduce genome sequencing.
