- Fortis Healthcare reported a 10% growth in revenue in the second quarter, with hospital revenue benefiting from improved average revenue per operating bed.
- Margins remained flat on a year-on-year basis.
- The company expects occupancy to be slightly higher than the first half, with an 8-10% increase in average revenue per occupied bed in the second half.
- Surgical revenue is mainly driven by complex cases, particularly in neurosurgery and orthopedics.
- International patient revenue has grown but is slightly below expectations.
- The company expects international revenue to increase marginally in the current half and to see better growth in subsequent years.
- The diagnostics business is improving, with competition becoming less price-based.
- Fortis Healthcare's subsidiary, Agilis Diagnostics, has filed for an IPO, but details cannot be disclosed at this time.
- The company is evaluating the divestment of non-core assets and may consider divesting one or two more areas.
- Legal matters regarding the open offer from IHH are pending in the Delhi High Court.
- The company has a cluster strategy focusing on Punjab, NCR, Western India, Kolkata, and Bangalore, and is considering divesting the Chennai asset.

#2QWithCNBCTV18 | Have seen a steady growth in avg realisation per bed for the past 6-7 quarters says Ashutosh Raghuvanshi of Fortis Healthcare. He tells Prashant Nair, Nigel D'Souza and Mangalam Maloo that he expects 8-10% rise in average revenue per occupied bed.

#fortishealthcare #Q2FY24results #Q2FY24earnings #cnbctv18 #businessnews #businessnewstoday #businessnewsinenglish #sharemarkettoday 

Read More: https://www.cnbctv18.com/earnings/fortis-healthcare-rise-in-revenue-per-bed-complex-medical-treatments-international-patients-18314861.htm

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All right from 1 pharmaceutical company, let's go on to another health care diagnostics company Fortis Healthcare reported a steady set of numbers in the second quarter Revenue saw growth of about 10% hospital revenue aided by improvement in the average revenue per operating bed But margins came in flat on a year-on-year basis We do have Ashutosh Raghuvanshi who is the Managing Director and the CEO at Fortis Healthcare joining in.

Ashutosh, thank you for joining in and season's greetings to you and your team.

Just wanted to know about a couple of details for your second half.

What kind of occupancies and average revenue per occupied bed are you factoring in for the second half of this year?

See, we have seen a very steady growth in the average realization per occupied bed over the last about 6 to 7 quarters.

And that is primarily coming because of the complexity of cases is increasing and the kind of patient mix and case mix we are having, that is resulting into that.

As far as occupancy is concerned, we expect it to be somewhere upwards of 70%, which would be slightly higher than the H1.

And average revenue per occupied bed, where would it be in the second half?

See the growth rate of ARPOP has been pretty high and I don't think it will remain at the same magnitude.

But we expect at least 8 to 10% increase in that.

Always good to see you in, wishing you and your team a very, very happy Diwali.

Well, you know, in terms of your numbers, Let's slice it a little bit more.

The surgical revenue, I think that's at around 61% of sales.

High-end surgeries, how much do they contribute and where is that number headed?

If you could give us a bit of a guidance out there.

And international patient revenue as well has moved up.

And where do you see this number move to?

So the complexity of cases has been increasing.

As I said that, you know, our portfolio is such that we do tertiary quaternary kind of care.

So that kind of cases, majority of the surgical revenue comes from complex work itself.

And neurosurgery is a big part of our portfolio.

Other than that, we have a lot of orthopedic, joint replacement, robotic surgeries, et cetera.

And as far as international business is concerned, that has grown significantly, but it has been slightly below our expectation.

We expect to see a better growth because we are going for several measures like direct sale into different international markets, et cetera.

So we expect that to increase marginally during this half, but I think in the subsequent years we should see a much better growth on the international as well.

How much will it contribute as a percentage of your mix?

A person as a percentage, you know we have still come back only to the pre-COVID levels, which is approximately 10% of our revenue from the international.

And we expect that to remain more or less in percentage terms at the same level.

The reason for that is because our base of domestic patients is continuously increasing at a fast pace.

A lot of hospital chains are focused on their international patient segments, so we'll sort of keep coming back to you for more information.

Raghuvanshi, good morning, Prashant here.

If you can talk to us a little bit about the diagnostics business.

I think here growth perhaps is lagging you know players like Dr.

Could you explain what was the operating environment like in terms of competition etc discounting?

Lal by the way was with us I think the week before last and they were telling us that, you know, competition is still there, but it is not price-based anymore, that verse of discounting, etc.

And for Fortis' diagnostic business, what were margins this quarter And what's the guidance?

Prashant, as you must be aware that our subsidiary Agilis Diagnostics has filed for an IPO.

So I am sorry, but I will not be able to answer any specific forward-looking questions.

The general environment of diagnostic is concerned.

It definitely is settling down and is becoming much better than the challenges of past.

Okay so can you tell us the the the IPO I mean can you talk to us a little bit about the IPO?

Yeah, no, sorry, I don't think I would be able to speak about that.

But, you know, just your thoughts on, I'm not specific, when do you think the streets should look at the listing or the offer?

We are fine in the month of September and depending on all the clearances we will keep you posted as it develops.

Will it be a fresh issue or just an offer for sale?

Just wanted to understand that or a mix of both.

Let's focus on the business then because you're not giving us too much with regard to that IPO and we'll wait by for further details on that front.

But tell us, are you looking at divesting any of the non-core assets or a couple of parts of your business that you're looking to divest or are you done with that?

No, see, as you must be aware that we have already divested 1 of our facilities in Chennai.

We continue to sort of review our portfolio and see the focus geographies where we have good presence.

And some of the facilities we are in the process of evaluating whether they are enough, they are important enough for us in the larger scheme of things and we would possibly be looking at 1 or 2 more areas.

So we can hear about them in the coming quarter, second half of the year?

Okay, and final question from I and then, what's the status on the open offer from IHH?

We have not heard about an update out there, if you could tell us where is it at now and when do things get resolved?

So the legal hearings are still, legal matters are pending in the Delhi High Court.

So we expect some clarity to come from there and that would determine the approach.

As far as MTO is concerned, that is an IHH matter.

But what I'm aware of is that as and when at the earliest we can get the necessary clearances, we will go ahead with it.

You said you are looking at rationalizing 1 or 2 more areas or looking at unlocking value out there or divesting those businesses.

Could you give us a sense of what geographies and what hospitals you're talking about?

So the clusters we are focusing on are is Punjab, NCR, Western, around Mumbai, Kolkata, and Bangalore.

We are looking at Chennai asset as a potential asset for divestment.

Alright, so after having divested the Arcote Road facility you are looking at another asset for divestment out there as well.

Raghavanji for joining in and giving us a detailed outlook on your business as much as you could have given us.


Speaker 0: All right from 1 pharmaceutical company, let's go on to another health care diagnostics company Fortis Healthcare reported a steady set of numbers in the second quarter Revenue saw growth of about 10% hospital revenue aided by improvement in the average revenue per operating bed But margins came in flat on a year-on-year basis We do have Ashutosh Raghuvanshi who is the Managing Director and the CEO at Fortis Healthcare joining in. Ashutosh, thank you for joining in and season's greetings to you and your team. Just wanted to know about a couple of details for your second half. What kind of occupancies and average revenue per occupied bed are you factoring in for the second half of this year? 70% plus for both these factors?

Speaker 1: See, we have seen a very steady growth in the average realization per occupied bed over the last about 6 to 7 quarters. And I think that trend should continue. And that is primarily coming because of the complexity of cases is increasing and the kind of patient mix and case mix we are having, that is resulting into that. As far as occupancy is concerned, we expect it to be somewhere upwards of 70%, which would be slightly higher than the H1.

Speaker 0: And average revenue per occupied bed, where would it be in the second half? How much higher would it be?

Speaker 1: See the growth rate of ARPOP has been pretty high and I don't think it will remain at the same magnitude. But we expect at least 8 to 10% increase in that.

Speaker 2: All right. Hi, good morning, Mr. Agarwal and Shane. Always good to see you in, wishing you and your team a very, very happy Diwali. Well, you know, in terms of your numbers, Let's slice it a little bit more.

The surgical revenue, I think that's at around 61% of sales. So give us a few more details. High-end surgeries, how much do they contribute and where is that number headed? If you could give us a bit of a guidance out there. And international patient revenue as well has moved up.

What's the guidance out here? And where do you see this number move to?

Speaker 1: So the complexity of cases has been increasing. As I said that, you know, our portfolio is such that we do tertiary quaternary kind of care. So that kind of cases, majority of the surgical revenue comes from complex work itself. And neurosurgery is a big part of our portfolio. Other than that, we have a lot of orthopedic, joint replacement, robotic surgeries, et cetera.

So that trend would remain as such. And as far as international business is concerned, that has grown significantly, but it has been slightly below our expectation. We expect to see a better growth because we are going for several measures like direct sale into different international markets, et cetera. So we expect that to increase marginally during this half, but I think in the subsequent years we should see a much better growth on the international as well.

Speaker 2: How much will it contribute as a percentage of your mix?

Speaker 1: A person as a percentage, you know we have still come back only to the pre-COVID levels, which is approximately 10% of our revenue from the international. And we expect that to remain more or less in percentage terms at the same level. But in absolute terms, it would grow. The reason for that is because our base of domestic patients is continuously increasing at a fast pace.

Speaker 3: Okay, all right, fair enough. A lot of hospital chains are focused on their international patient segments, so we'll sort of keep coming back to you for more information. Mr. Raghuvanshi, good morning, Prashant here. If you can talk to us a little bit about the diagnostics business.

I think here growth perhaps is lagging you know players like Dr. Lal's etc by by some bid. Could you explain what was the operating environment like in terms of competition etc discounting? Dr. Lal by the way was with us I think the week before last and they were telling us that, you know, competition is still there, but it is not price-based anymore, that verse of discounting, etc.

Is behind. Do you sense that as well? And for Fortis' diagnostic business, what were margins this quarter And what's the guidance?

Speaker 1: Prashant, as you must be aware that our subsidiary Agilis Diagnostics has filed for an IPO. So I am sorry, but I will not be able to answer any specific forward-looking questions. The general environment of diagnostic is concerned. It definitely is settling down and is becoming much better than the challenges of past.

Speaker 3: Okay so can you tell us the the the IPO I mean can you talk to us a little bit about the IPO? No, that's off-balance, for now.

Speaker 1: Yeah, no, sorry, I don't think I would be able to speak about that.

Speaker 0: Okay. Alright, that'll be interesting. But, you know, just your thoughts on, I'm not specific, when do you think the streets should look at the listing or the offer?

Speaker 1: We are fine in the month of September and depending on all the clearances we will keep you posted as it develops.

Speaker 0: Will it be a fresh issue or just an offer for sale? Just wanted to understand that or a mix of both.

Speaker 1: It is primarily an offer for sale.

Speaker 2: Let's focus on the business then because you're not giving us too much with regard to that IPO and we'll wait by for further details on that front. But tell us, are you looking at divesting any of the non-core assets or a couple of parts of your business that you're looking to divest or are you done with that?

Speaker 1: No, see, as you must be aware that we have already divested 1 of our facilities in Chennai. We continue to sort of review our portfolio and see the focus geographies where we have good presence. And some of the facilities we are in the process of evaluating whether they are enough, they are important enough for us in the larger scheme of things and we would possibly be looking at 1 or 2 more areas.

Speaker 2: So we can hear about them in the coming quarter, second half of the year? Absolutely. Okay, and final question from I and then, what's the status on the open offer from IHH? We have not heard about an update out there, if you could tell us where is it at now and when do things get resolved?

Speaker 1: So the legal hearings are still, legal matters are pending in the Delhi High Court. So we expect some clarity to come from there and that would determine the approach. As far as MTO is concerned, that is an IHH matter. But what I'm aware of is that as and when at the earliest we can get the necessary clearances, we will go ahead with it.

Speaker 0: You said you are looking at rationalizing 1 or 2 more areas or looking at unlocking value out there or divesting those businesses. Could you give us a sense of what geographies and what hospitals you're talking about?

Speaker 1: So we have a cluster strategy. So the clusters we are focusing on are is Punjab, NCR, Western, around Mumbai, Kolkata, and Bangalore. We are looking at Chennai asset as a potential asset for divestment.

Speaker 0: Alright, so after having divested the Arcote Road facility you are looking at another asset for divestment out there as well. Take that point. Thanks a lot Mr. Raghavanji for joining in and giving us a detailed outlook on your business as much as you could have given us.

what is outlook on average realisation per bed

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Have Seen A Steady Growth In Avg Realisation Per Bed For The Past 6-7 Quarters: Fortis Healthcare