Sharma said the hospital, currently operating 180 beds, is expected to generate ₹8–10 crore per month once all multi-super-specialities are launched, with annual revenue of about ₹100 crore at 18–20% EBITDA margins, while maintaining average revenue per occupied bed (ARPOB) in the ₹32,000–₹34,000 range.
The company’s current market capitalisation is ₹6,284.59 crore. The stock has declined around 2% over the last year.
These are edited excerpts of the interview.
Q: The acquisition that you have made in Agra -just give us a sense in terms of the financials of the hospital. What is the occupancy like? What is the average revenue per patient at this point? And is it profit-making, both on the Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) level and the bottom line?
A: This property, which we have acquired, is a hospital located in a densely populated area in the heart of Agra city. This is a 360-bed hospital, but currently it is operational with only 180 beds, and largely they are practising cardiology and gastroenterology there. But we intend to start all multi-super-specialities from day one.
Currently, it is doing an ARPOB of about ₹34,000, and we hope that the same ARPOB, around ₹33,000–₹34,000, will continue. This is one of our costliest acquisitions in comparison to our previous ones from that point of view. But overall, on a consolidated basis, it does not impact our CapEx much. Our CapEx stays around ₹32–34 lakh per bed in that aspect. So that is the advantage which it creates.
Currently, it is doing about ₹4 crore per month of revenue. And we believe that once we take over and we start by February 15, we will be able to clock about ₹8-10 crore per month with all multi-super-specialties from day one. For the whole year, we feel that it will clock about ₹100 crore per annum at an EBITDA of about 18-20% and profit after tax (PAT) of about 10-11%.
Q: From February, will you see all 360 beds operational, given the revenue numbers that you’re also giving?
A: Yes, because currently all the 360 beds are available, but they are operating only 180 beds at present.
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Q: Just give us a sense in terms of the occupancy and the revenue per patient, and what are the kind of services that you are offering within this hospital in terms of the high-end services, because that would determine the kind of margins that it would possibly have on a standalone level, as well as on a blended basis.
A:
All these super-specialties – cardiology, cardiac surgery, gastroenterology, gastrointestinal surgery, neurology, neurosurgery, nephrology, urology, joint replacements, oncology, medical oncology, surgical oncology, and radiation oncology – all these services we will be providing, along with robotic surgeries.
Q: And what is the occupancy and revenue per patient, and even the percentage of high-end work that you’re doing in this hospital, and how much do you want to scale it up?
A: The ARPOB, we feel that we’ll be maintaining it. There are three pillars which we focus on. One is affordability, the second is high quality, and the third is profitability. We have been maintaining all three parameters for the past 21 years.
So here also, we’ll ensure that our ARPOB is somewhere around ₹32,000–₹34,000 per bed and does not cross the affordability limit. But we will be ramping up the occupancy. With all the super-specialities, we see more occupancy and patient flow into this hospital because the need is there. Unfortunately, not all multi-super-specialities are currently running there.
Q: You said ARPOB at ₹34,000 is what is there for this acquisition currently. So overall, maybe from FY27, how do you see your ARPOB shaping up? Because that would lead to some improvement as well? For FY25, it was around ₹26,000. How do you see that improving? Also, what would be the net debt now on the books? Is there any debt that you are taking?
A: This acquisition is ₹245 crore. Our current debt is around ₹425 crore in total, against which we have ₹305 crore of unencumbered FDs, and we also have about ₹40 crore in our current account. This ₹245 crore will be largely funded from internal accruals only. The initial public offering (IPO) proceeds were already planned to retire about ₹380 crore of debt. So that gives us higher leverage to take more debt if required.
Q: You’ve been very focused on inorganic expansion. You’ve done around eight acquisitions in the past. Just give us a sense of what the acquisition pipeline looks like going forward.
A: With this hospital, we will have 15 hospitals, and our presence will be across five states. Our growth has been in a cluster format. With this 15th hospital, our brownfield or acquisition projects will be 10, and our greenfield projects will be five.
Going forward, for FY26, we envisage adding another 300 beds, besides Agra, which will be a greenfield project. We have six projects in the pipeline over the next three years – three brownfield and three greenfield.
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In FY26, we will add a total of 660 beds, including Agra. In FY27, we will add about 750 beds – 300 from Kanpur, 200 from Delhi, and 250 from Rohtak. In FY28, we will add another 600 beds, including 400 from Gorakhpur brownfield and Ambala, and 200 from a greenfield project. The total bed strength will go to 5,260 beds by FY28.
Q: And just in terms of any more acquisitions planned in North India, and if you could give us an update on the Febris Multispeciality Hospital in Delhi, where you have submitted a resolution plan.
A: That is still in process. There is a share transfer that is expected to happen very soon, probably in a day or two from that point of view, that should also come through, and Febris should be activated by FY27.
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