Healthcare sector revenues to grow by 20% in FY’22: ICRA

February 6, 2021 0 By FM

The Indian healthcare sector will bounce back on its growth trajectory in FY2022, according to a report by ICRA.

While the sector’s performance has recently been affected due to COVID-19, the long-term outlook remains stable on the back of a swift rebound in occupancy as well as structural factors.

The credit rating agency expects occupancy of companies in the sector to come back on track to 60% in FY2022 from the estimated occupancy of 52% in FY2021, and the revenue growth to be at 20% in FY2022, against an estimated contraction of 19% in FY2021, aided by a lower base as well.

There has already been a significant sequential improvement in occupancy every month after the sharp fall in April and pent-up demand is also likely to support the performance as elective procedures cannot be delayed indefinitely.

Due to high operating leverage, the EBITDA margin is likely to rise to 13% in FY2022 against an estimated EBITDA margin of 9% in FY2021. Capital expansion was already slowing down, even pre-COVID, and is likely to remain modest in FY2022 as players have adequate capacity to grow over the medium term, and the near-term focus is on better utilisation of existing facilities rather than on the expansion of the network, says the report.