Q2 results preview: Hospital companies to be driven by higher occupancy, rising per bed revenues

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Apollo Hospitals Enterprises Ltd, Fortis Healthcare, Narayana Hrudayalaya, Global Health Ltd (Medanta) , Max Healthcare and others is focus. Better occupancy rates, improving average revenues per operating bed (APROB) are the key reasons which keep analysts positive on better performance by hospitals during Q2.

Growth outlook remains strong for hospital chains as per analysts at ICICI Securities Ltd as higher in-patient and surgery count is generating cash flow, which companies are persistently investing in expanding their network through M&A and organically. They said that “The Hospital players under our coverage may report a strong performance in Q2FY24 on a sequential basis." Better occupancy and ARPOB is likely to drive this sequential growth of 9%, 18% and 40% in revenue, Ebitda, net profits in Q2FY24 , respectively, as per them.

Also Read- LTIMindtree share price jumps 5% post Q2 results; brokerages express mixed views; here's what they say Analysts at Motilal Oswal Financial Services Ltd also expect profitability to improve due to favorable seasonality and improved operating leverage for Hospitals .They expect Apollo Hospitals to deliver sales and net profit growth of 8% and 9% year-on-year in 2QFY24. However, Earnings before interest Tax depreciation and amortisation (Ebitda) is likely to decline 2% YoY due to higher operating expenses for Apollo 24/7.

Medanta on the other hand should sustain growth momentum, with 18%, 23%, 31% YoY growth in sales, EBITDA, net profit as per MOFSL. Max Healthcare is expected to deliver a robust performance with 12%, 11%, 14% YoY growth in sales, Ebitda and net profit as per MOFSL estimates.