Healthcare Q1 Results Preview - Hospital Business Steady; Non-Covid Diagnostic Ops Surging: ICICI Securities

ICICI Securities Report

Surge in occupancy and average revenue per occupied bed is likely to help hospitals under our coverage to report a revenue/Ebitda/profit after tax growth of 3%/7%/19% QoQ in Q1 FY24E, respectively.

The outlook remains steady for hospital chains as higher in-patient and surgery count is generating cashflow and the companies are diligently investing in expanding their network through merger and acquisition or brownfield capex.

Base impact from Covid-led test is largely behind for diagnostic companies and the coverage companies are likely to post a strong 9%/13%/20% rise in revenue/Ebitda/profit after tax in Q1 FY24E, respectively.

Non-Covid volumes continue to witness steady 12-15% growth despite steep competitive pressure. Companies are now taking price increases in selective test portfolios as against their earlier focus on maintaining volume share.

Our top picks in the space: Krishna Institute of Medical Sciences Ltd., Fortis Healthcare Ltd. and Dr. Lal Pathlabs Ltd.

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