Artemis Medicare Services Q1 FY27 earnings call

Artemis Medicare Services Limited reported a robust Q1 FY27, with consolidated revenue from operations reaching INR 287.32 crores, marking a 12.7% year-on-year growth. The standalone Gurugram facility demonstrated even stronger performance, achieving a 15.4% YoY top-line growth. The company maintained a healthy EBITDA margin of 21.5%, translating to an EBITDA of INR 61.82 crores. Profit after tax (PAT) saw a significant increase of 48.3% year-on-year, totaling INR 31.44 crores, reflecting improved profitability and operational efficiency.

The flagship Gurugram hospital continued its strong performance with an occupancy rate of 65.7% and an average revenue per occupied bed (ARPOB) of INR 85,690. This was driven by sustained patient volumes across key specialties and a higher contribution from complex procedures. The company is planning a significant expansion with Tower IV in Gurugram, which will add 200 beds. This expansion, costing approximately INR 55 lakhs per bed and a total of INR 120 crores including parking, is expected to be operational within 18 to 22 months and will primarily focus on advanced pediatric and gynecological care.

A key milestone in Q1 FY27 was the commencement of operations for the 300-bed Artemis Shanti Hospital in Raipur, Central India, under the Artemis brand. The hospital began OPD services on July 9th and surgical operations (theaters and cath labs) on July 27th. While it is very early days^💬, management is encouraged by the initial response and expects the hospital to reach 50% occupancy within the first six months. The facility is projected to break even within 15 to 18 months, with an estimated operating loss of INR 20 crores during this period.

Despite the West Asian war, the international patient business continued to perform well, contributing almost 27% of the total business in Q1 FY27. Management aims to increase this to closer to 30% in Q2, leveraging strong clinical outcomes and diversified patient sources. The company's focus remains on strengthening relationships across key regions and expanding its medical value travel platform. This segment's resilience underscores the hospital's reputation for quality tertiary and quaternary care.

Artemis has outlined a substantial capital expenditure plan of approximately INR 800 crores over the next three years. This includes INR 120 crores for Raipur, INR 350-360 crores for VIMHANS, and INR 120 crores for the Gurugram Tower IV expansion. Additionally, INR 100-120 crores is allocated for replacement capex and INR 70-80 crores for multi-level parking. The company is also pursuing a QIP of INR 700 crores, an enabling resolution, which is expected to be finalized within 6-8 months, primarily for brownfield acquisitions, with a focus on minimizing shareholder dilution.

Management indicated a strategic shift towards consolidating smaller centers like Daffodils and Artemis Lite. The rationale is to improve operational efficiencies and leverage economies of scale, as larger bed capacities generally lead to better overall EBITDAs. This strategy involves merging centers or integrating them with larger hospital wings, ensuring that the company's core focus on tertiary and quaternary care is maintained while optimizing resource utilization.