New delhi: Private healthcare provider IHH Healthcare is set to expand its operational hospital beds in India to approximately 10,000 by 2031 from the current 6,100, with an estimated investment of about US$250,000 per bed. Dr. Ashutosh Raghuvanshi, managing director and CEO of Fortis Healthcare, IHH's Indian arm, shared that the expansion will largely be funded through internal accruals, with debt utilized for acquisitions and equity raised if needed.
According to BERNAMA News Agency, Fortis Healthcare has robust backing from its parent company IHH, which sees significant growth potential in India's healthcare sector. "We have strong support from IHH, which has already stated its intention to double down on the India opportunity," Dr. Raghuvanshi remarked during a media briefing. IHH Healthcare has established a substantial private healthcare network in India through its subsidiaries, Fortis Healthcare and Gleneagles Healthcare India.
The network currently operates 36 hospitals with about 6,100 beds across 12 states, including major markets like Delhi, Mumbai, Bengaluru, and Hyderabad. Fortis plans to add around 400 beds this year with a capital expenditure of approximately 700 crore rupees. Fortis boasts a healthy balance sheet, with a debt-to-EBITDA ratio of 1.08, allowing flexibility to raise debt for expansion, while equity could support larger acquisitions.
Dr. Raghuvanshi projected an improvement in Fortis's EBITDA margin by 1.5 percentage points annually, aiming for a margin of around 25% over the next few years. However, he noted that the margin might stabilize at 25-26% as new hospitals mature, with revenue growth expected to surpass 15% annually.
The oncology center at Fortis in Gurugram draws about 30% of its patients from international markets, primarily the Middle East, Africa, and Central Asia. However, conflicts in West Asia have impacted patient demand from Iraq and African nations. Bangladesh remains a significant source of medical tourists, and Fortis is focusing on the African market, seeing growth opportunities due to limited healthcare options.
IHH Healthcare's group chief corporate officer, Ashok Pandit, stated that Turkiye and Europe were the largest contributors to the group's first-quarter revenue, followed by Singapore, Malaysia, and India. India's contribution is expected to increase gradually as IHH holds full ownership of its operations in Singapore and Malaysia and a 90% stake in Turkiye.
IHH Healthcare, which holds a 31.1% stake in Fortis, acquired the controlling stake in 2018. Pandit noted that the Malaysian operations are projected to achieve double-digit growth, while Turkiye is anticipated to grow rapidly following a strong start to the year. IHH is also focusing on expanding ambulatory care centers in Malaysia to enhance access to healthcare services and reduce costs.
In Malaysia, IHH operates 18 hospitals with about 3,600 beds, serving numerous patients annually through brands such as Gleneagles and Pantai. IHH Healthcare is publicly traded with Mitsui and Co as the largest controlling shareholder, followed by Khazanah Nasional Bhd, Malaysia's sovereign wealth fund.