Hospital firms will be led by increasing occupancy and growing per-bed revenues in the Q2 results preview

 Hospital firms will be led by increasing occupancy and growing per-bed revenues in the Q2 results preview

With a focus on Apollo Hospitals Industries Ltd, Fortis Healthcare, Narayana Hrudayalaya, Global Health Ltd (Medanta), Max Healthcare, and other hospital companies, hospital companies are expected to report great results for the quarter ending in September.

Improved average operating revenue per operating bed (APROB) and higher occupancy rates are the main factors supporting analysts' optimism about hospitals' improved Q2 performance.

According to analysts at ICICI Securities Ltd, hospital chains' growth prospects are still favorable since increased in-patient and surgical counts are producing cash flow, which businesses are recurrently spending in network expansion via M&A and organic growth.

The statement was something like this: "The Hospital players under our coverage might submit a strong performance in Q2FY24 on a month-to-month basis." According to them, higher occupancy and ARPOB are projected to be the factors that propel this sequential rise of 9%, 18%, and 40% in revenue, Ebitda, and net profits in Q2FY24, respectively.

Due to good seasonality and increased operational leverage for hospitals, analysts at Motilal Oswal Financial Services Ltd also anticipate an increase in profitability.In 2QFY24, they anticipate Apollo Hospitals to increase revenue and net profit by 8% and 9%, respectively. However, owing to greater operational costs for Apollo 24/7, Earnings before interest, taxes, depreciation, and amortization (Ebitda) is anticipated to decrease 2% YoY. Contrarily, Medanta should keep up its growth trend with YoY increases in sales, EBITDA, and net profit of 18%, 23%, and 31%, respectively, according to MOFSL. According to MOFSL forecasts, Max Healthcare is predicted to achieve a strong performance with 12%, 11%, and 14% YoY increase in revenue, Ebitda, and net profit.

With the scale-up of emerging hospitals generating operational leverage, one of Motilal Oswal Financial Services' top recommendations is Medanta. Analysts Given the potential for industry-beating growth and competitive prices, Elara Securities India has reaffirmed its buy recommendation for Shalby Hospitals while giving Fortis Healthcare add ratings.

However, Apollo Hospitals, Fortis, and Rainbow Childrens Medicare were among JP Morgan's top recommendations. According to their study report, seasonality is the reason why occupancy is tracking at a higher level in Q2 compared to Q1. According to JP Morgan analysts, growth ambitions are supported by healthy demand visibility.