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Most hospitals expect double-digit revenue growth in FY2022

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Growth-chart

The hospital sector witnessed a spike in Covid-19 occupancies during Q1 FY2022 in line with the active cases in India that touched an all-time high in May 2021, peaking at more than 4x the first wave peak.

The overall occupancy levels were supported by longer average length of stay for Covid patients even as localised lockdowns resulted in a sequential decline in non-Covid occupancies to a certain extent.

The blended occupancy of both Covid and non-Covid patients for ICRA sample set stood higher at 64.2 per cent in Q1 FY2022 (against 36.9 per cent in Q1 FY2021 and 58.8 per cent in Q4 FY2021), an ICRA report said.

Most multi-speciality hospitals derived 25-30 per cent of their Q1 FY2022 footfalls and revenues from Covid-19 treatments and vaccination drives. While the Y-o-Y revenue growth of 129 per cent in Q1 FY2022 for ICRA sample set was optically high aided by the low base, the Q-o-Q revenue growth was also healthy at 15 per cent.

However, higher share of revenues from Covid treatments resulted in a 4.2 per cent Q-o-Q contraction in the average revenue per occupied bed (ARPOB) in Q1 FY2022, even as complex nature of infections and higher proportion of patients requiring critical care treatment and oxygen support aided Y-o-Y growth of 8.7 per cent in ARPOB.

Operating leverage benefits in addition to incremental revenues and margins from vaccination drives and Covid tests resulted in an improvement in OPM for ICRA sample set to 19.3 per cent in Q1 FY2022 (against -9.3 per cent in Q1 FY2021 and 18.4 per cent in Q4 FY2021), the highest witnessed by the sample set in the last few years. This was despite absence of revenues from international patients.

Says Mythri Macherla, Assistant Vice President and Sector Head, ICRA, “While both in-patient (IPD) and out-patient (OPD) footfalls declined sequentially in Q1 FY2022 on account of Covid 2.0, footfalls were far higher than Q1 FY2021, wherein hospital operations were adversely impacted on account of the nationwide lockdown. Most hospitals have witnessed sequentially higher footfalls in July and August 2021 compared to Q1 FY2022 levels.”

“To assess the on-ground sentiments and understand the outlook for FY2022, ICRA conducted a survey of its rated hospital entities. Key findings suggest that with strong performance in Q1 FY2022 and expected benefits from pent-up demand for electives, respondents expect occupancies in FY2022 to be better than FY2020 levels and ARPOB to remain range-bound in FY2022 despite higher contribution from Covid. More than 2/3rd of the survey respondents expect double-digit growth in revenues in FY2022, and OPM to revive and be higher than FY2020 levels on the back of healthy improvement in occupancy levels.”

The net debt for ICRA sample set increased by Rs 350 crore as on June 30, 2021, compared to March 31, 2021 on account of advance payments for vaccine procurement and higher pharmacy stocking of Covid medicines.

In terms of capex, many companies in the sector have gone slow on greenfield expansion in the last few years as the focus was on improving returns on existing facilities.

Players are now looking at adding bed capacity within the existing infrastructure, and some of the larger players are actively scouting for inorganic growth opportunities. However, owing to the healthy cash generation and strong liquidity position, the interest coverage ratio is projected to improve.

The Government of India and the Reserve Bank of India have taken multiple measures to support the sector, including an on-tap liquidity window, dedicated ECLGS credit lines, etc. which is likely to support liquidity of industry players.

National

BJP accuses Congress of opposing voter verification to shield fake votes in Bihar

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New Delhi, June 27: Following Congress’ objection to the Election Commission of India’s special revision of the state’s voter list ahead of the upcoming Assembly elections in Bihar, the BJP has launched a sharp counterattack, accusing the grand old party of attempting to protect fake voters.

BJP state president Dilip Jaiswal defended the ECI and called Congress’ objections baseless.

“The Election Commission is an independent body which works independently. It is its responsibility to ensure that elections are conducted with complete transparency. If any political party opposes this, it is wrong. Fake voting can be prevented by the revision of the voter list. Voters who have died will be identified. This process will also make it clear whether the voter is actually in Bihar or voting somewhere else. This is a very necessary step for transparency. I congratulate the Election Commission for this,” Jaiswal said.

Bihar Congress president Rajesh Kumar on Thursday criticised the ECI for initiating the voter list revision process in a limited time frame.

He alleged that the move is part of a conspiracy to suppress the electoral rights of marginalised communities.

Reacting strongly to these allegations, BJP leader and Minister Nitin Nabin questioned Congress’ intent behind opposing the exercise.

“I say that Congress should clarify what exactly they are objecting to. If genuine voters are being verified and fake voters are being removed, is Congress sitting here to commit fraud? I want to ask the opposition members who are opposing this, are you trying to gain power through fake votes? Such fake voters will definitely be stopped, and the parties doing fraud will also be taught a lesson,” Nabin asserted.

The ECI has issued instructions for holding Special Intensive Revision (SIR) in Bihar, where polls are to be held by year-end. This means electoral rolls for the state will be prepared afresh.

The special voter list inspection has been undertaken by the ECI as a standard pre-election procedure to ensure the accuracy of electoral rolls.

Officials have stated that the process will help remove deceased or duplicate voters and correct errors, ensuring a fair and transparent election.

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Crime

Kerala HC judge files complaint of theft at his residence, police probe on

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Kochi, 27 June: The Kochi police have received a theft complaint from Kerala High Court Judge, Justice A. Badharudeen, according to officials on Friday, stating that six sovereigns of gold were missing from his residence.

The complaint, which was filed on Thursday, mentions that the gold has been stolen from the judge’s bedroom. The police have registered an FIR under Section BNS 305.

What has surprised many is that the thief has decamped with gold from a high-security guarded house located in the heart of the commercial capital of the state.

The judge registered the complaint with the Kalamassery police under which his residence falls.

After the preliminary probe, the police are now planning to prepare a list of those who need to be spoken to, as this incident occurred in the bedroom of the senior judge.

More details are awaited.

The incident has raised concerns regarding the security situation in the state. The Congress-led UDF has been accusing the state government of failing to curb the crimes.

It has been found that Kerala is a haven for organised gangs hailing from neighbouring states who specialise in robbing homes, and the cases against non-Keralaite thieves are also on the increase.

According to information prepared by the home department, which was placed before the Assembly last year, it showed 192 cases of theft involving non-Keralites were registered in 2021, and the numbers have been steadily increasing. This rose to 360 in 2022.

In 2023, the number increased further to 519, and by September 2024, a total of 307 such cases were registered. But the image of the Kerala Police got a boost when over 1,350 thieves during this period were put behind bars.

However, with regards to the case being registered in the burglary at the home of a judge, the police appear to have a tough job ahead.

Likewise, with other crimes also on the increase, the Ernakulam Police have come out with a directive to landlords who are seeking to rent out their properties. The police have urged the landlords to get a police clearance certificate from the prospective tenants from their local police station where they stayed.

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National

Thackeray brothers will jointly hold one anti-Hindi protest: Sanjay Raut

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New Delhi, June 27: Amid plans to hold two protests against imposition of Hindi in schools in Maharashtra, senior Shiv Sena (UBT) leader Sanjay Raut on Friday announced that there would be only one demonstration and the two Thackeray brothers would participate in it together.

Even though there has been no formal announcement on this till now by the Maharashtra Navnirman Sena (MNS) or the Shiv Sena (UBT), but Sanjay Raut’s post on X, in which he has also put up a picture of the two cousins together with a photograph of the late Bal Thackeray in the background, has fuelled speculation of rapprochement between Uddhav and Raj Thackeray and the possibility that they might hold the protest jointly.

Earlier, close to Raj Thackeray’s birthday Uddhav Thackeray had also hinted at a rapprochement between them but nothing concrete had come out of it.

On Thursday MNS chief Raj Thackeray announced the change in morcha date to July 5 instead of July 6 to protest the imposition of Hindi in Marathi and English-medium schools for classes 1 to 5 in Maharashtra.

This was done as the auspicious Ashadhi Ekadashi falls on July 6 when the devotees fast for the day and walk all the way to Pandharpur to pay tribute to the presiding deity Vitthal.

Significantly, Uddhav Thackeray on Thursday extended his party’s support to a morcha organised on July 7 in Mumbai by The Tribhasha Sutra (Three language formula) committee.

Raut’s post is significant because even though both the brothers and their parties had declared that they would not allow the imposition of Hindi, they had announced two different protests.

Insiders from both the parties said that efforts are on to fight as one, in order to avoid a split in the Marathi speaking people opposing the imposition of Hindi.

Now, it remains to be seen whether Sanjay Raut’s post was his own initiative or whether it had the blessings of the leaders of both the parties and the two estranged brothers have finally decided to come together for a cause close to their heart and fight for it jointly.

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