Global Health Limited — Q3 FY25 earnings call

Call held 5 Feb 2025

Management summary

Global Health (Medanta) delivered a steady Q3 FY25, characterized by strong volume growth and significant margin outperformance in its developing hospitals. While matured hospitals grew at 10%, the Lucknow and Patna units are scaling rapidly with 64% occupancy. Management is aggressively expanding capacity with a 1,000-bed addition planned over the next two years and a long-term ₹3,000 crore capex plan for greenfield projects in Mumbai and Delhi.

Highlights

  • Total Income reached ₹959.5 crores, representing a 12% YoY growth.

  • EBITDA for the quarter stood at ₹253.8 crores, up 8% YoY with a margin of 27.5%.

  • Profit After Tax (PAT) grew 16% YoY to ₹142.9 crores, with PAT margins improving to 14.9%.

  • Inpatient volumes increased by 13% YoY to 44,856; Outpatient volumes grew by 9% YoY.

  • Average Revenue Per Occupied Bed (ARPOB) for the group was ₹61,307, a marginal 1.3% increase.

  • Developing hospitals (Lucknow and Patna) reported a strong EBITDA margin of approximately 33.8%.

  • International patient revenue grew 14% YoY to ₹54.1 crores, contributing ~6% of total revenue.

  • Board approved a new 110-bed hospital lease in Ranchi with a total investment under ₹50 crores.

Concerns

  • Legal/Regulatory delays in Indore

Key financials

  1. Total Income ₹959.5 Cr +12%YoY
  2. EBITDA ₹253.8 Cr +8%YoY
  3. EBITDA Margin 27.5%
  4. PAT ₹142.9 Cr +16%YoY
  5. ARPOB ₹61,307 +1.3%YoY
  6. Occupancy Rate 64%

What they filed

Q1 FY27: revenue up 26.5%, net profit down 1.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue957 943 931 1,031 1,099 +15%1,121 +19%1,159 +24%1,304 +26%
EBITDA228 238 225 247 231 +1%217 −9%244 +8%287 +16%
Net profit131 143 101 159 158 +21%95 −34%142 +41%157 −1%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹947 Cr Total
  • Matured Hospitals (Gurgaon, Indore, Ranchi) ₹646.6 Cr 68.3%
  • Developing Hospitals (Lucknow, Patna) ₹300.4 Cr 31.7%

Guidance & targets

Capacity

  • Noida Hospital Operational Timeline Capacity · Summer 2025 · High confidence 3-6 months
    Our Noida hospital construction shall be operational within the next 3 to 6 months.

    — Pankaj Sahni, Group CEO

  • Planned Bed Additions Capacity · next 2 years · High confidence 1,000 beds
    Overall, we have roughly 1,000 bed additions planned over the next two years, including Noida and the remaining expansion.

    — Pankaj Sahni, Group CEO

  • Greenfield Capacity Capacity · next 3 to 4 years · Medium confidence 1,600 beds
    We also have 3 major Greenfield projects underway, comprising approximately 1,600 beds... will take 3 to 4 years to commence.

    — Pankaj Sahni, Group CEO

Capex

  • Total Capex Capex · next 3 to 4 years · High confidence ₹3,000 crores
    Total CAPEX for the next 3 to 4 years is somewhere around Rs. 3,000 crores.

    — Yogesh Kumar Gupta, CFO

Other

  • Ranchi Expansion Investment Other · FY26 · High confidence < ₹50 crores
    I would say overall, the complete investment should be under Rs. 50 crores.

    — Pankaj Sahni, Group CEO

Risks & concerns

  • Legal/Regulatory delays in Indore

    high

    The Indore project is currently on hold and subjudice due to legal challenges.

    Management acknowledged

  • Geopolitical turmoil in Bangladesh

    medium

    Turmoil in Bangladesh has historically impacted international patient flow to India, though Medanta is seeing offsets from other regions.

    Both acknowledged

  • Pollution-related construction stoppages in Delhi NCR

    medium

    Construction at South Delhi has been stopped and started 6-7 times due to pollution regulations.

    Management acknowledged

  • Competitive intensity in Noida

    low

    Management believes entry of competitors like Max Healthcare in Noida will help build the medical ecosystem rather than hurt Medanta.

    Analyst downplayed

Areas of evasion (1)

  • Specific EBITDA break-even timeline for Noida (refused to 'hazard a guess').

Q&A highlights

3 direct
Sustainability of Developing Hospital Occupancy Direct
Occupancy as a percentage may be a little inappropriate to just look at as a single metric just because of the fact that the denominator keeps changing with respect to the bed additions.

Clarifies that while occupancy % might fluctuate due to rapid bed additions, absolute volume (occupied bed days) is the true growth driver.

Asked by Amey Chalke

International Patient Mix and Bangladesh Impact Direct
Bangladesh has taken a little bit of a hit over the course of the last several months... we are seeing this pick up in other countries, which is good news not only for us but for the country.

Addresses a key sector risk (Bangladesh turmoil) and highlights diversification into Africa and CIS countries.

Asked by Prithvi Raj

Indore Project Delays Direct
Indore... we have had some challenges with respect to the legal issues there. That is on hold, it is status quo because the matter is subjudice.

Transparently acknowledges a project delay due to legal hurdles, which is a key risk for the expansion pipeline.

Asked by Alankar Garude

2 min read 5 chapters

Detailed narrative

Developing Hospitals Outperform Matured Units

The developing hospitals segment, comprising Lucknow and Patna, has become a significant growth engine, reporting an EBITDA margin of ~33.8% compared to 25% for matured hospitals. This outperformance is driven by high occupancy (64%) and rapid scaling of complex procedures like robotic surgery in Lucknow. Management noted that while ARPOB in these units (₹52,502) is lower than matured units (₹67,303), it is primarily due to the payor mix and they are actively working to reduce the Average Length of Stay (ALOS) to improve realizations.

Aggressive Capacity Expansion Pipeline

Medanta is entering a high-growth phase with 1,000 beds planned for addition over the next two years. The 550-bed Noida facility is on track to be operational by Summer 2025, and a new 110-bed facility in Ranchi was recently approved to alleviate capacity constraints at the existing unit. Furthermore, the company has a long-term pipeline of 1,600 beds across Mumbai Oshiwara, Pitampura, and South Delhi, supported by a ₹3,000 crore capex plan over 3-4 years.

International Patient Dynamics and Bangladesh Headwinds

International patient revenue grew 14% YoY to ₹54.1 crores, now making up 6% of total group revenue. Management acknowledged that while the traditional flow from Bangladesh has been hampered by local turmoil, they are successfully diversifying into African and CIS markets. They expect the upcoming Noida facility to become a major hub for international patients due to its strategic location.

Operational Efficiency and Payor Mix Strategy

The group's ARPOB growth was a modest 1.3%, impacted by a higher proportion of scheme and PPP patients in Patna and Lucknow. However, management emphasized that realization per patient remains healthy and the focus is on volume-led growth. They have not taken a tariff increase in Lucknow for five years or Patna for three years, suggesting significant latent pricing power that could be exercised in the future.

Navigating Regulatory and Legal Hurdles

Expansion is not without challenges; the Indore project remains stalled due to subjudice legal matters, and the South Delhi project has faced multiple stoppages due to pollution-related construction bans in the NCR region. Management is exploring alternative options for Indore while remaining committed to the site if legal issues resolve. In South Delhi, soil testing has commenced, signaling a move toward active construction.

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