Prime Highlights
- IHH Healthcare plans to increase its operational hospital beds in India to about 10,000 by 2031.
- Fortis will mainly use internal funds for hospital expansion and debt for acquisitions.
Key Facts
- IHH Healthcare operates 36 hospitals with around 6,100 beds across 12 Indian states through Fortis and Gleneagles Healthcare India.
- Fortis expects annual revenue growth of more than 15% and aims to lift its Ebitda margin to around 25%.
Background
IHH Healthcare plans to nearly double its operational hospital beds in India to about 10,000 by 2031 from around 6,100 currently, as it expands its healthcare network in the country. The company expects to invest about US$250,000 per bed as part of the expansion.
Dr Ashutosh Raghuvanshi, managing director and CEO of Fortis Healthcare, said the expansion of existing hospitals would mainly use internal funds. The company could use debt for acquisitions and raise equity if needed.
Fortis plans to add about 400 beds this year, with capital expenditure of around ₹700 crore. Its strong balance sheet, with a debt-to-Ebitda ratio of 1.08 times, gives it room to borrow for expansion.
IHH has built one of India’s largest private healthcare platforms through Fortis Healthcare and Gleneagles Healthcare India. The network has 36 hospitals across 12 states, including Delhi, Mumbai, Bengaluru, Chennai, Hyderabad and Kolkata.
Fortis expects revenue to grow by more than 15% annually and aims to raise its EBITDA margin from 21%-22% currently to around 25% over the next few years. The margin could later settle at 25%-26% as newer hospitals mature.
The company is also targeting international patients, particularly from Africa, the Middle East and Central Asia. Its oncology centre in Gurugram gets about 30% of its patients from overseas.
IHH also plans to increase its focus on ambulatory care centres, especially in Malaysia, to bring treatment closer to patients and reduce healthcare costs.
