Revenue from operations grew by 11.4% year on year to Rs 1,657.41 crore in the quarter ended 30 June 2023.

The company's revenue from the Hospitals business increased by 13.6% YoY to Rs 1,354.1 crore while net Diagnostics revenue rose 2.6% YoY to Rs 303.3 crore during the period under review.

Profit before exceptional items and tax stood at Rs 169.25 crore in Q1 FY24, down 4.02% from Rs 176.33 crore posted in Q1 FY23. Exceptional gains stood at Rs 1.48 crore during the quarter, representing reversal of impairment in an associate company and allowance for loan given to Fortis C-Doc Healthcare.

EBITDA for the quarter was at Rs 280.6 crore, registering a growth of 3.24% YoY. EBITDA margin reduced to 16.9% in Q1 FY24 as compared to 18.3% reported in the corresponding quarter previous year.

In Hospitals business, occupancy declined to 64% in Q1 FY24 as compared to 65% in Q1 FY23. Average revenue per occupied bed (ARPOB) was Rs 60,076 (up 12.11% YoY) and Average length of stay (ALOS) was unchanged at 3.58 days in the quarter ended June 2023.

Net debt to EBITDA was at 0.35x vs 0.54x (basis annualized EBITDA of Q1 FY24 and Q1 FY23, respectively). Net debt was at Rs 393 crore as of 30 June 2023 versus Rs 340 crore as of 31 March 2023.

In Diagnostics business, Non covid revenues (excluding Covid and Covid allied tests) grew 9% versus Q1FY23 and 6% versus Q4FY23.

Ravi Rajagopal, chairman, board of directors, Fortis Healthcare stated, “For Q1FY24, our consolidated revenues grew 11.4% to Rs 1657.4 crore while our operating margins stood at 16.5% similar to trailing quarter and marginally lower than Q1 FY23. More importantly and signifying our intent to move forward, the quarter witnessed key strategic corporate actions related to both our hospitals and diagnostic business.

On the hospital side our portfolio rationalization strategy gained momentum with the divestment of our loss making Arcot Road facility in Chennai in July 2023. With an impetus on inorganic growth, we acquired a 350 bedded hospital in Manesar, Gurugram, enabling us to further augment our presence in Delhi-NCR. This we expect to close shortly. Our plans for brownfield bed expansion of close to 1400 beds in the next 2-3 years, increasing our focus on key medical specialties such as oncology and attracting the right clinical talent remain on track.

We have initiated the name change of the diagnostics business which is now known as Agilus Diagnostics. I'm also pleased to share that the Board of Fortis and Agilus, today, have granted approval for Agilus to initiate an initial public offer process, by way of an offer for sale of its equity shares, subject to receipt of requisite approvals, market conditions and other considerations”

Dr Ashutosh Raghuvanshi, MD and CEO, Fortis Healthcare said, “We have witnessed a steady start in Q1 FY24 for both the hospitals and diagnostics business. Our hospital business revenues grew 13.6% to INR 1,354 crore while operating EBITDA was at Rs 206.4 crore reflecting a margin of 15.2% versus 16.2% in Q1 FY23. This was in part due to a lower occupancy and a comparatively less favorable payor mix, both of which we expect should improve going forward. Our investments in bed expansion and medical equipment are on track with the latter seeing the commissioning of a Da Vinci Xi Robotic system at Fortis Noida. International patient revenues grew 29% YoY at INR 115 Crs and similar to the trailing quarter.”

Meanwhile, Fortis Healthcare board has approved its diagnostic arm Agilus to initiate an initial public offer process, by way of an offer of sale by the latter's existing and eligible shareholders in the IPO.

"The actual timing and implementation of the IPO will be subject to the determination of the company's and Agilus's respective boards, after considering the prevailing market conditions and other relevant factors," said the company.

The IPO will also be subject to the approval of the members of the company, and other regulatory approvals.

Fortis Healthcare is a leading integrated healthcare delivery service provider in India. The healthcare verticals of the company primarily comprise hospitals, diagnostics and day care specialty facilities. Currently, the company operates 28 healthcare facilities (including JVs and O&M facilities). The company's network comprises approximately 4,500 operational beds (including O&M) and around 410 diagnostics centres.

Shares of Fortis Healthcare gained 1.61% to close at Rs 338.45 on Firday, 4 August 2023.