Recovery in regular treatments to boost SME hospitals in FY22: CRISIL

CRISIL Research estimates the revenue of hospitals and nursing homes to grow a sharp 18-22 per cent year-on-year this fiscal year on the back of a low base, Covid-19 treatments in the first quarter amid the second wave of the pandemic, and pent-up demand and recovery in regular treatments.

Small and medium enterprises (SMEs), which account for 60-65 per cent of the health care delivery market, stand to benefit. As things stand, SME units in the hospitals and nursing homes segment are into primary and secondary care, though some also provide tertiary care.

Last fiscal year, the pandemic-induced lockdown had impacted the regular channels — out patient department or OPD consultations and elective surgeries — drastically in the first half. Very small establishments and hospitals deriving revenues mainly from elective procedures were hit particularly hard. The second half, though, saw a recovery in demand as the first wave abated and travel restrictions were lifted.

This fiscal year, again, the first quarter saw the peak of the second wave and related mobility restrictions. However, compared with last fiscal year, non-Covid-19, regular treatments were hit less severely. As a result, smaller hospitals mandated by the government to reserve a portion of their beds for Covid-19 patients witnessed a boost in occupancy and most have benefited from pent-up demand as the second wave abated and recovery in regular treatments kicked in. Business Standard