Hospital valuations keep steady pulse, ensuring growth never skips a beat

Administering the right dose for asset-light expansion and steady margins

- RAM PRASAD SAHU

Even as pharmaceutical (pharma) firms grapple with tariff uncertainties and diagnostic majors brace for slower growth in the fourth quarter (Q4) of 2024-25, hospitals are likely to emerge as stronger performers in the January-March period. While the average growth for pharma and diagnostic firms is estimated at 11-12 per cent year-on-year (Y-o-Y), hospitals could clock 16-19 per cent growth during the quarter.

Explaining the drivers behind this outperformance, analysts at IIFL Research, led by Rahul Jeewani, point to recent bed additions, higher occupancies, improved average revenue per operating bed (Arpob), and inorganic initiatives, which are expected to lift hospital revenue by 19 per cent and operating profit by 21 per cent.

Krishna Institute of Medical Sciences (KIMS) and Global Health (Medanta) are likely to lead the pack, delivering operating profit growth of 25 per cent Y-o-Y, supported by a low base from the previous year.