Healthcare Q4 Result Review - Hospital Capex To Surge; Diagnostics Growth At An Inflection: ICICI Securities

ICICI Securities Report

Better contribution from surgical revenue, higher average revenue per operating bed and stable occupancy have helped hospitals under our coverage report 3%/13% QoQ jump in revenue/Ebitda, respectively.

ARPOB for our coverage companies grew 4-11% YoY. Hospitals under our coverage are likely to increase their bed capacities by ~23% (to add ~3,000 beds in FY25 and ~1,600 beds in FY26) which may be a margin dampener in the near term.

Diagnostic chains reported 15%/24% YoY jump in revenue/Ebitda in Q4 FY24. Strong operating leverage in the business drove a robust 192 basis points YoY (75 bps QoQ) expansion in margin to 27.1%.

Performance of diagnostic chains is likely to improve ahead as the impact of covid-led tests has faded and competitive pressure in the business is easing out.

Our top picks include: Krishna Institute, Dr. Lal, Metropolis and Thyrocare.

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