Top hospitals expected to add 3,400 beds in FY25

Chennai: Top hospital groups are expected to add 3,400 beds in FY25, which would be more than double that of beds that would be added this fiscal.

Some of the top hospitals have announced sizeable expansion and upgradation or refurbishment plans over the next four to five years, according to ICRA. These include hospitals like Apollo Hospitals, Aster DM Healthcare, Fortis Healthcare, Healthcare Global, Krishna Institute of Medical Sciences, Max Healthcare Institute, Narayana Hrudayalaya, Rainbow Children’s Medicare, and Shalby.

They are expected to add over 1,500 beds in FY24 and during FY24 they are likely to add 3,400 beds. This cumulatively translates to 15 per cent of the existing capacity. Most of the expansion is expected to be in the form of brownfield expansion.

Many hospital chains are also scouting for inorganic opportunities to expand their network, resulting in consolidation. Further, private equity investments have also increased in the recent past. In recent times, Manipal Hospitals backed by Temasek announced the acquisition of an 84 per cent stake in AMRI Hospitals. Kauvery Hospitals acquired a hospital of Fortis Healthcare in Chennai and Aster DM Healthcare acquired a majority stake in Ramesh Hospitals.

Strong occupancy coupled with healthy ARPOB (average revenue per operating bed) to drive revenues by 12-14 per cent in FY2024 despite the high base of FY2023. Further, continued benefits from cost optimization measures are expected to support a healthy operating profit margin of 22-23 per cent in FY2024.