In conversation with Yatharth Tyagi, Director of Yatharth Hospitals
We are in the process of ordering equipment for robotic surgeries, by utilising proceeds raised during IPO, which is expected to arrive in the coming quarter, affirms Yatharth Tyagi, Director of Yatharth Hospitals.
In Q2FY24, the company reported a 70 per cent jump in net profit on a YoY basis to Rs 27.6 crore. What were the contributing factors to the company’s stellar performance?
Yatharth Hospitals reported a stellar performance during the Q2FY24, with profits after taxes up by an impressive 70 per cent compared to the same period last year and 45 per cent compared to the immediately preceding quarter. This was driven by a remarkable 34 per cent year-over-year growth in revenue to Rs 171 crore during the quarter, with growth across our specialities and improvement in occupancy levels across all our hospitals. Our Inpatient revenue has grown by 37 per cent year-over-year during the quarter.
We have seen a remarkable improvement in our utilization, with Noida and Greater Noida hospitals reporting the highest occupancy levels of 96 per cent and 73 per cent, respectively during the quarter; Noida Extension hospital has received an occupancy level of 45 per cent during the quarter compared to 28 per cent in Q2FY23, while our Jhansi Orchha Hospital is now at 20 per cent compared to 5 per cent in Q2FY23. Our profitability benefitted from the operating leverage and enhanced efficiencies. The company has repaid debt of Rs 243 crore during the quarter, which helped us become net debt-free, reducing our finance cost by 42 per cent year-over-year and by 50 per cent quarter-over-quarter. We expect the full impact of debt reduction on finance costs to be further visible during Q3, further aiding our profitability in the coming quarters.
How is the company diversifying their range of specialities?
Yatharth has been steadfast in its commitment to expanding its portfolio of high-value specialities and introducing new ones across all its hospitals. Q2 witnessed double-digit growth across most of its specialities: our Nephrology & urology, and Neuroscience departments have grown by 40-45 per cent YoY, orthopedics and Cardiology have grown by 20-25 per cent YoY, while our Gastroenterology, Pulmonology and Oncology department revenue has more than doubled compared to the last year.
Our focus on diversifying and enhancing our range of specialities can also be witnessed from the change in our speciality mix since 2021 – Internal medicine which comprised 56 per cent of our overall revenue in FY2021, came down to 31 per cent in FY2023, while the mix across all other super specialities improved, resulting in enhanced ARPOB. Going ahead, our commitment continues to remain towards enhancing our suite of Oncology services and creating a comprehensive one-stop destination for all cancer-related treatments. The Radiation Oncology machines have arrived at our Noida Extension hospital, and we expect them to be commissioned by February 2024, seamlessly integrating the Radiation Oncology line within our Oncology Center
How is the company expanding their organ transplant and medical tourism business segments?
Our organ transplant program is gaining traction. As we are progressing, we have concluded 100+ kidney transplants to date and we are constantly expanding our organ transplant and medical tourism business which is poised to drive substantial growth and contribute to ARPOB improvement. Further, the upcoming Asia’s largest airport at Jewar should be a headwind for our organ transplant and medical tourism business as our Greater Noida hospital is near the airport location.
We are already seeing a good number of patients coming from Bangladesh, Fiji, Cambodia and other SAARC countries. We are also in the process of signing an agreement with a few CIS country's hospitals, our doctors will go over there, and we'll work on their capability and capacity increase and certain surgeries can be performed over there. And the complicated surgeries, which cannot be done over there, can be done at our hospitals. So, I think that strategies are in place and we can see good numbers coming very soon.
Shed some light on robotic surgeries?
We are in the process of ordering equipment for robotic surgeries, by utilising proceeds raised during IPO, which is expected to arrive in the coming quarter. Thus, we are well on track to offer robotic service by the coming quarter. Usually, robotic surgeries have been able to command a premium of Rs 50,000 – Rs 1 lakh, depending upon the surgery and the robot, thus, adding to our ARPOB. Also, we will be paying upfront for the robots rather than going with a pay-per-use model, so that we can negotiate better on the price of consumables per surgery.
What are your top 3 strategic priorities?
- Expansion of existing hospitals - We are continuously evaluating opportunities, both organic and inorganic, and strategic partnerships, and remain committed to expanding our bed capacity in the coming years. In line with our Noida and Great Noida Hospital, we expect our Noida Extension hospital to reach optimum utilization levels by FY2025. Thus, we have already acquired a land parcel adjacent to our Great Noida hospital and declared an L1 bidder for a land adjacent to our Noida Extension hospital, which should support our organic expansion plans. The number of beds at our Greater Noida and Noida Extension hospitals is expected to increase from 400 beds to 600 beds and from 450 beds to 700 beds respectively.
- Growth through inorganic acquisitions - In addition to organic expansion, we are continuously evaluating inorganic opportunities, and strategic partnerships and remain committed to expanding our bed capacity in the coming years. We aim to double our bed capacity over the next 3-4 years via a mix of both greenfield and brownfield expansion. We understand that inorganic growth is not merely about expansion but also about identifying synergistic opportunities that amplify our strengths, extend our reach and ultimately enable us to serve more patients with exceptional care.
- Diversifying our speciality mix - Enhancing our suite of Oncology services, organ transplant surgeries, robotic surgeries, and medical tourism business is a key focus area for the coming quarters.