Private hospitals see revenue surge in Q1, driven by high-end specialties

Oncology, neurosciences help revenue rise in June quarter

Major private hospital chains witnessed a significant rise in their revenues from operations for the June quarter of financial year 2024-25 (Q1 FY25). This was driven by revenue growth in specialties such as oncology, neurosciences and robotic surgeries. 

While Max Healthcare reported a 20 per cent year-on-year (Y-o-Y) increase in revenue to Rs 1,543 crore in the June quarter, Fortis Healthcare witnessed a 12.2 per cent rise to Rs 1,859 crore.  Apollo Hospitals saw 15 per cent increase in revenue at Rs 5,086 crore.

This comes after specialties such as oncology, gastroenterology, neurosciences, renal sciences, orthopaedics, and cardiac sciences reported a notable rise across all hospital networks in Q1, contributing to the overall increase in their revenues.

According to figures released by hospitals in their investor presentations, cardiac sciences and oncology (with radiotherapy) led the revenue growth, with Fortis reporting 22 per cent and 12 per cent increase in these areas, respectively. Max reported 7 per cent and 21 per cent revenue rise in these specialties. 

These two specialities also formed around 36 per cent of Apollo Hospitals revenue mix for the June quarter.   

Highlighting the importance of growth in high-end specialties, Ashutosh Raghuvanshi, managing director (MD) and chief executive officer (CEO), Fortis Healthcare, said the shift towards high-growth specialties has been instrumental in driving the overall revenue growth. 

Apollo Hospitals and Max Healthcare’s top six specialities contributed 70 per cent and 73.1 per cent to their inpatient revenues in the June quarter, respectively, according to data released in their investor presentations.  

The robust growth in key medical specialties has also led to a rise in the average revenue per occupied bed (ARPOB) per day and increased occupancy rates for these hospital networks.

Speaking during an investor call for the June quarter, Abhay Soi, chairman and managing director, Max Healthcare, said ARPOB per day for the quarter improved to Rs 80,100.

It grew by 7 per cent Y-o-Y, with the improvement largely due to growth in oncology, orthopaedics and renal sciences, as well as increased number of robotic procedures. “This was coupled with tariff revisions for self-pay, insurance and institutional segments,” he added.

Raghuvashi said Fortis’s 9.7 per cent rise in ARPOB can be attributed to providing a high proportion of complex procedures, particularly in high-end specialities and introduction of new medical technologies.

“Fortis has also seen a rise in patient inflow for advanced treatments, particularly in specialties like oncology and neurosciences, which are high-revenue segments,” he said. 

Hospitals are also planning to pursue growth in specialties, which ultimately will lead to higher ARPOB and earnings before interest, tax, depreciation and amortisation (Ebitda) per bed margins.

Speaking about Max Healthcare’s plan in an investor call, Yogesh Sareen, senior director and chief financial officer (CFO) said, “Our focus is to go up the value chain. So, we will be pursuing liver transplants, oncology, neuro, cardiology and cardiac surgeries.” 

Commenting on Fortis’s plans for ramping up such procedures, leading to higher ARPOB, Ashutosh Raghuvanshi, said that given the rising demand for high-value and complex procedures, we expect ARPOB to maintain an upward trajectory. 

“We are optimistic that these drivers will enable Fortis to achieve strong growth in ARPOB by the end of FY25,” he added.