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India's listed hospitals are likely to maintain double-digit revenue growth even as EBITDA margins stay rangebound due to a hectic bed-addition cycle, brokerage firm Kotak Securities said in a research report.
With ARPOB growth of 6-14 per cent YoY for most players, strong Inpatient Department volumes and diagnostics B2C traction picking up, the brokerage sees top-line momentum holding. The March quarter was overall a "fine quarter", said Kotak. Hospitals delivered 18 per cent YoY sales growth and 16 per cent YoY EBITDA growth. ARPOB growth was healthy at 6-14 per cent YoY for most hospitals, led by a reduction in ALOS and a better speciality mix. KIMS posted 14 per cent YoY ARPOB growth on contributions from high-ARPOB markets like Thane and Bengaluru. Accoridng to Kotak Securities research report, Medanta's ARPOB rose 6 per cent YoY despite the new Noida hospital, aided by lower ALOS and a higher complex case mix. Apollo Hospitals saw 9 per cent YoY ARPP growth from better pricing/case mix plus 7 per cent YoY IP volume growth. IPD footfalls grew 7-30 per cent YoY for most players, except Narayana Hrudayalaya and Max. Max Healthcare was the outlier with just 1 per cent YoY ARPOB growth, hit by discontinuation of high-value chemo drugs for CGHS patients and GST rate cuts. Oncology's share of sales dropped to 21 per cent from 26 per cent a year ago. Excluding oncology, Max's gross revenues still grew 15 per cent YoY. Profitability took a hit from new bed additions. Except for APHS and Narayana Hrudayalaya, all hospitals raised operational bed count by 5-21 per cent YoY. For APHS, operational beds rose only 1 per cent QoQ, but capacity beds jumped 6 per cent QoQ. Losses from four new hospitals -- Defence Colony, Kolkata, Hyderabad and Pune -- were Rs 414 million in 4QFY26 versus Rs 150 million in 3QFY26. Mature unit EBITDA margin was 25.5 per cent, up from 24.4 per cent YoY. KIMS and Medanta margins were also pressured by Thane/Bengaluru and Noida units, with KIMS facing delays in insurance empanelment. Diagnostics within coverage fared well. DLPL and Metropolis reported 15-17 per cent YoY organic sales growth on 9-13 per cent YoY sample volume growth and a higher wellness mix. B2C traction improved as online players cut discounts. Metropolis' 23 per cent YoY sales growth was boosted by Core, DAPIC, Scientific and Ambika acquisitions. Cumulative EBITDA for diagnostics grew 27 per cent YoY with 175 bps margin expansion. (ANI)
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