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Fortis Healthcare Limited Q1 FY '25 Earnings Call Summary
Meeting Overview • Date: August 7, 2024 • Key Executives: • Dr. Ashutosh Raghuvanshi (MD and CEO) • Vivek Goyal (CFO) • Anand K. (CEO of Agilus Diagnostics) • Transcript available on the company's website.
Financial Performance Highlights • Consolidated Revenue: Rs. 1,859 crores (12.2% increase YoY) • Hospital Revenue: Rs. 1,549 crores (14.4% growth) • Diagnostics Revenue: Rs. 343 crores (stable) • Operating EBITDA: Rs. 343 crores (25.5% increase) • Hospital EBITDA Margins: Improved to 18.5% • Key Growth Areas: Oncology and neuro sciences; expansion in facilities and digitization.
Agilus Diagnostics Performance • Revenue: Rs. 343.5 crores (slight increase YoY) • Testing Volume: Nearly 9.92 million tests • Operating EBITDA: Rs. 55 crores (margin drop to 16.1%) • Network Expansion: Added over 185 new centers and 3 hospital labs. • Focus Areas: Brand awareness and new tests, especially in genomics.
Q&A Session Insights • EBITDA Margin Concerns: Attributed to one-off costs and lower-margin specialty tests. • Acquisition Plans: Valuation of Rs. 1,780 crores for a 31% stake in Agilus; no immediate plans for further acquisitions. • Hospital Performance: Growth in FMRI and Mohali due to increased capacity and occupancy. • Operational Standards: All hospitals NABH accredited with robust clinical governance. • Financial Impact of IndAS-116: Minimal impact on hospital business. • Manesar Facility: Targeting 20% EBITDA margin; plans to operationalize 100 of 350 beds initially.
Marketing and Pricing Strategies • Agilus Marketing Costs: Planned Rs. 50 crores for rebranding. • Price Hikes: Small increase in B2C diagnostics segment; minimal overall impact.
Conclusion • Occupancy Levels: Improving compared to the previous quarter. • Future Outlook: Focus on enhancing growth, optimizing performance, and exploring inorganic growth opportunities.
Fortis Healthcare Limited Investor Meeting Summary (May 28, 2024)
Meeting Overview • Date: May 24, 2024 • Key Executives: • Dr. Ashutosh Raghuvanshi (MD & CEO) • Vivek Goyal (CFO) • Anand K. (CEO of Agilus Diagnostics) • Purpose: Discuss audited financial results for FY ending March 31, 2024 • Transcript available on the company website
Financial Performance Highlights • Dividend: Recommended Rs. 1 per share • Consolidated Revenues: Rs. 6,893 crores (9.5% increase from FY23) • Operating EBITDA: Rs. 1,268 crores (15.1% increase) • Profit After Tax: Rs. 645 crores (up from Rs. 633 crores in FY23)
Q4 Financial Results • Revenues: Rs. 1,786 crores (8.7% growth) • Hospital Revenues: Increased by 10.3% • Operating EBITDA: Rs. 380 crores (21.3% margin) • Debt Reduction: Reduced to Rs. 264 crores; net debt-to-EBITDA ratio of 0.17x
Operational Highlights • Conducted over 60,000 cardiac procedures • Expanded bed capacity by 246 beds • Average Revenue Per Occupied Bed (ARPOB): Grew by 10.8% • Enhanced clinical offerings and digital initiatives, including new patient feedback management system
Diagnostic Business Performance • Revenue Growth: Non-COVID revenue up by 5% for Q4 and 6% for FY24 • Challenges: Impacted by rebranding to Agilus and marketing expenses • Future Potential: Focus on wellness and specialized testing
Agilus Diagnostics Q4 Results • Revenue: Rs. 1,372 crores (2% increase) • Operating EBITDA: Rs. 209 crores (15.3% margin) • COVID Testing Contribution: Dropped to 0.3%
Strategic Plans and Future Outlook • IPO Considerations: Exploring options for reviving IPO; decision expected by August/September 2024 • Brownfield Expansions: Plans for 2,200 new beds with CAPEX of Rs. 1,200 to Rs. 1,300 crores • Government Revenue: Currently around 20%, with CGHS accounting for 4%
Management Insights • Volume Growth Projection: 7-8% driven by occupancy and expansions • Cost Management: Focus on supply chain efficiencies and manpower optimization • Legal Issues: Ongoing high court hearings; expected resolution soon
Conclusion • Fortis Healthcare is committed to enhancing patient care and market presence through operational improvements, strategic expansions, and digital transformation initiatives.
Fortis Healthcare Limited Investors/Analysts Meet Summary
Meeting Details • Date of Announcement: February 10, 2024 • Meeting Date: February 8, 2024 • Focus: Discussion of unaudited financial results for Q3 FY'24 and nine months ended December 31, 2023 • Participants: Dr. Ashutosh Raghuvanshi (MD & CEO) and key executives • Restrictions: Limited information on Agilus Diagnostics due to IPO preparations
Financial Performance Highlights • Consolidated Revenues: INR 1,680 crores (8% YoY increase) • Hospital Segment: • Revenue: INR 1,389 crores (10% growth) • Operating EBITDA: 88% of overall earnings • Margins: Slight decline to 16.9% • Profit After Tax (PAT): INR 134 crores (down from INR 142 crores YoY) • Occupancy Rates: Slightly lower at 64% • Digital Revenue Growth: 32%
Future Growth and Strategy • EBITDA Margin Goal: 20% by year-end, with gradual bed operationalization • Projected ARPOB Increase: 5% due to high-end cases • Divestment Impact: Malar facility expected to improve EBITDA margin by 0.5% to 0.6% • Occupancy Recovery: Projected to reach around 70% in the upcoming quarter
Challenges and Concerns • International Patient Volumes: Recovery noted in early 2024 • Legal Costs: Ongoing expenses related to a High Court case • Low-Margin Hospitals: Structural changes underway, but improvements will take time • Pricing Levels: Recent increases attributed to specialty mix changes, not general hikes
Expansion Plans • New Facilities: • Only new addition in Ludhiana, with 35 beds added in Mohali • Gradual opening of 350 beds from Medeor hospital acquisition • Focus on High Margin Hospitals: Expansions in facilities with EBITDA margins above 15% • Capital Investments: Significant investments in oncology and neuro areas
Underperforming Hospitals • Key Hospitals Identified: Jaipur and FEHI • Jaipur: Plans to enhance service range for improved margins • FEHI: Diversification of specialties to stabilize costs • Overall Strategy: Focus on enhancing clinical offerings to drive better performance
Conclusion • Private Equity Exit Timeline: Set for April 2024, pending SEBI clearance for IPO.
Fortis Healthcare Limited Investor Meeting Summary
Meeting Overview • Date: November 10, 2023 • Led by: Dr. Ashutosh Raghuvanshi (MD & CEO), Vivek Goyal (CFO), Investor Relations team • Purpose: Discuss unaudited financial results for Q2 FY '24 • Transcript available on the company's website
Financial Performance Highlights • Consolidated Revenues: Increased by 10.1% to INR 1,770 crores • Operating EBITDA: Rose to INR 330 crores; EBITDA margin at 18.6% • Profit After Tax (PAT): Grew by 8% year-on-year to INR 180 crores • Hospital Business Growth: • Revenues up 12% • Operating EBITDA increased by 13.1% • International patient revenue grew by 15.6% • Expansion Plans: • 250 new beds this financial year • Total of 1,400 beds planned over the next 3-4 years
Expansion and Cost Management • Brownfield Opportunities: • Expansion at Mohali and Shalimar Bagh increases bed pipeline to approximately 1,800 beds • EBITDA Margin Strategy: • Aiming for 20% margin through increased occupancy and cost management • Brownfield expansions expected to lead to quicker breakeven
Legal and Operational Challenges • Legal Costs: Current costs around INR 6-7 crores; future projections uncertain • Average Length of Stay (ALOS): • Changes in reporting methodology noted • Growth in oncology and cardiology services contributing to reduced ALOS
Occupancy and Performance Insights • Occupancy Target: Aiming for 70% occupancy for FY '24, with seasonal factors affecting levels • Cost Increases: Rising medical personnel costs acknowledged, but not seen as a significant risk • Surgical Revenue: Focus on enhancing surgical oncology to improve profitability despite seasonal variations
Future Outlook • Patient Admissions: Challenges in predicting due to seasonal variations • Underperforming Hospitals: Continuous evaluation before considering divestment • Growth Projections: Optimism about sustaining growth trends with a projected 12-13% top-line growth driven by price and volume increases
Conclusion • The call concluded with an invitation for further inquiries, emphasizing the company's commitment to growth and operational efficiency.
Fortis Healthcare Limited Q4 FY'23 Earnings Call Summary
Earnings Overview • Date of Call: May 24, 2023 • Consolidated Revenues: INR 6,298 crores (10% increase from FY'22) • Hospital Revenue: INR 5,107 crores (19.8% growth) • Diagnostic Revenue: INR 1,347 crores (16% decline) • Consolidated EBITDA: INR 1,163 crores (18.5% margin) • Dividend: Maiden dividend of INR 1 per share
Hospital Business Performance • Occupancy Rate: Increased to 67% from 63% • Average Revenue Per Occupied Bed (ARPOB): INR 2.01 crores (11.5% increase) • Key Specialties Growth: 31% in Oncology and Cardiac Sciences • International Revenue: 98% increase, contributing 8.3% to total revenue • Infrastructure Investment: INR 200 crores for new equipment; added 140 beds
Digital Transformation and Cost Optimization • Initiatives: Launched Electronic Medical Record system • Cost Savings: Focus on drug and consumables leading to improved margins • Diagnostic Segment: Non-COVID testing grew by 12%
Margin Concerns and Future Projections • SRL Business Margins: Declined to 16.5% in Q4 FY'23 from pre-COVID levels • Hospital Margins: Stable between 16.5% to 17.5% • FY'24 Projections: Double-digit revenue growth target; ARPOB expected to increase by 6-7%
Expansion Plans • Manesar Asset: Plans for a 150-bed hospital operational within 12 months, expanding to 350 beds • Brownfield Expansions: Ongoing across Mumbai and NCR, targeting 1,300-1,400 beds
Capital Expenditure (CAPEX) • Total CAPEX: Estimated at INR 600-700 crores for expansion and maintenance • Maintenance CAPEX: Projected at INR 250-300 crores
Operational Insights • ARPOB Variance: Higher at FMRI due to international patient flow; other facilities improving • EBITDA Margin Target: Confidence in achieving 20% through expansion and cost control • Acquisition Strategy: Focus on clusters of hospitals with profitability potential
Industry Outlook • Industry Growth: Expected 10% CAGR over the next three years • SRL Performance: Slightly outperforming industry growth rate
Conclusion • Clinical Talent Availability: Easing post-COVID, but nursing shortages persist • Invitation for Further Inquiries: Call concluded with an open invitation for questions.
Fortis Healthcare Limited Investor Meeting Summary
Meeting Overview • Date: February 16, 2023 • Purpose: Discuss unaudited financial results for Q3 FY2023 • Chaired by: Dr. Ashutosh Raghuvanshi, MD & CEO • Participants: Key executives including CFOs of Fortis and SRL • Format: Presentation followed by Q&A session • Transcript available on the company's website
Financial Performance Highlights • Consolidated Revenues: Rs. 1560 Crores (6% increase YoY) • EBITDA Margins: Declined to 18.5% due to reduced COVID-related diagnostics • Profit Before Tax: Rs. 175 Crores (down from Rs. 185 Crores in Q3 FY2022) • Hospital Segment: Revenues grew 13% to Rs. 1267 Crores, driven by surgical volumes and international business (73% revenue increase) • Diagnostic Business: Revenues at Rs. 331 Crores (down from Rs. 388 Crores), but non-COVID revenues grew by 7%
SRL Diagnostics Performance • Revenue: Rs. 332 Crores (97% from non-COVID testing) • EBITDA: Rs. 71 Crores (21.5% margin) • Tests Conducted: 9.4 million, serving 4 million patients • Network Expansion: Added 362 customer touch points and 7 new laboratories • NPS: Steady at 82 • R&D Focus: Emphasis on genomics with 29% revenue growth
Key Inquiries and Responses • Occupancy Trends: Slight improvement; larger hospitals nearing 70% occupancy • Clinical Talent Acquisition: Stable market with low attrition rates (<6%) • Expansion Strategy: Focus on brownfield expansions and evaluating inorganic growth opportunities • Government Business: Engaging in schemes in Jaipur and West Bengal due to local pressures; lower realizations compared to private patients
Legal and Capital Expenditure Updates • Legal Proceedings: Next hearing on February 17, 2023; no current disputes • Capital Expenditure Plans: Increase from ₹100-125 crores to around ₹150 crores for technology and expansions
International Business and Future Outlook • International Patient Contribution: Currently 9-10% of sales, with growth expected • M&A Opportunities: No constraints due to strong balance sheet • Capacity Utilization: Expected to improve but slightly below 75% target • Government Initiatives: Optimism about "Heal in India" initiative to boost international patient inflow
Conclusion • The meeting concluded with a reminder of the forward-looking nature of some statements made during the discussion.