MANIPALHOS Q1 FY27 earnings call

Manipal Health Enterprises reported a robust Q1 FY27, with revenue growing over 38% year-on-year to ₹3,091 crores. Network EBITDA increased by over 26% to ₹749 crores, which translates to over 30% growth excluding a one-off^📎 gain from the prior year. The operating margin, excluding Sahyadri, stood at 25%, while the network-level margin was 24.2%. This performance was primarily volume-led, with inpatient volumes up 39% and outpatient volumes up 26%, achieving an average occupancy of 65% across the network.

The integration of Sahyadri Hospitals is progressing as planned, with management targeting an 18-month period for full integration. In Q1 FY27, Sahyadri reported revenue of ₹332 crores, a 13% year-on-year growth, and EBITDA of ₹58 crores, up 19%. Its ARPOB improved by 15% to ₹45,000 per day, and the EBITDA margin reached almost 17.5%. Operational efficiencies, including an 8% reduction in ALOS to 2.8 days, and a focus on increasing the complexity of CONGO cases are key drivers for improving Sahyadri's profitability towards the corporate average.

The company is actively expanding its bed capacity. A brownfield addition of 103 beds at Nashik increased its licensed capacity to 307 beds. The 50th hospital, adding 300 beds in Electronic City, Bangalore, was commissioned in July 2026, bringing Bangalore's total licensed capacity to nearly 3,000 beds. Management expects Raipur to be commissioned by Q4 FY27, followed by Juhu (Mumbai), and Ahilya Nagar adding 80 beds in FY28. These greenfield projects, such as Kanakapura and Yelahanka, have shown early break-even, achieving EBITDA profitability in their 5th and 2nd months of operation, respectively.

Digital revenue contributed significantly, reaching ₹710 crores, or 23% of overall revenue. The company's digital platforms processed over 15,000 e-pharmacy orders and completed over 17,000 virtual telehealth consultations. Centres of Excellence, including Cardiology, Oncology, and Neurology, remain key growth drivers, contributing about 65% of Q1 FY27 revenue, with IP revenues in these specialties growing by 45%. Investments in advanced medical technology, such as linear accelerators, PET-CT, and AI-assisted cath labs, are strengthening these specialized services.

Manipal Health is strategically growing its oncology program across its network, particularly in Delhi NCR, where it already has a strong and steadily expanding presence. The CONGO-R mix, which includes oncology, is growing at 45%, and oncology's proportion at the network level has increased from 10.8% to 12.2% year-on-year. The addition of comprehensive oncology facilities in the newly commissioned Bangalore greenfields further underscores the company's commitment to addressing the rising demand for cancer care.

The company plans a capex of ₹2,000 crores for the current fiscal year, with ₹900 crores already spent in Q1, indicating a front-ended investment approach. Over the next 3-4 years, an additional ₹4,000 crores is earmarked for adding 3,000 beds. Post-IPO, the net debt to EBITDA ratio is expected to significantly reduce from 2.8x to 0.9x, providing substantial financial flexibility. Management aims to operate comfortably within a 1.5x to 2x leverage range, enabling both organic and inorganic growth opportunities.

Manipal announced the acquisition of Kinder Hospital in Whitefield, Bangalore, adding 100 beds to its network. This strategic move aims to enhance capacity in a high-growth micro-market where Manipal already has a strong presence. The hospital, currently focused on women and children's care, will be remodeled over the next 6-7 months into a multispecialty facility. While its current revenue is around ₹22 crores annually, the acquisition's primary rationale is strategic capacity addition and market leadership rather than immediate financial metrics.