By Nuvama Research
We recently met Pankaj Sahni, CEO of Global Health (Medanta). Key takeaways emerged: He expressed confidence in the increasing demand for healthcare services in the Delhi NCR. He noted that there is no immediate supply risk, but cautioned that not all healthcare chains may thrive in the market.
Medanta remains on track to add approximately 800 beds between FY23 and FY25. Additionally, the company is considering the option of expanding its presence in Lucknow and Patna in the future, aiming to preserve potential growth opportunities in these locations. The company’s growth strategy primarily revolves around volume-driven expansion. While tariff hikes are unlikely in Patna, Medanta is contemplating the possibility of studying tariff adjustments in Lucknow. It aims to enhance its occupancy rates, targeting an increase from the current 60% to the late 60s. Also they plan to implement price hikes in the insurance segment in Q2FY24. Additionally, optimising Average Length of Stay (ALOS) is being considered to contribute to margin improvement.
Medanta perceives significant growth opportunities in Delhi-NCR due to low bed density and the absence of credible competition. Similarly, in Lucknow and Central India, they see potential due to limited established competitors.
Management is not too worried about competitors and their expansion plans in Delhi-NCR. Given lower bed density (1.9x beds per 1,000 people versus 3x in other key geographies), growing population, uptick in international patients and lack of credible players, there is enough headroom to grow. Moreover, its strong brand puts it ahead in the league. Medanta plans to add 800 beds over FY23–25 in north India, taking its total bed capacity to 3,500. Of this, 800 beds would come up at existing hospitals: Lucknow (150–200), Patna (250) and Gurugram (100). The Noida hospital is likely to commence with 300 beds in FY25.