Medanta Eyes Significant Capacity and Revenue Growth

• Sales Outlook: Global Health Limited (Medanta) is poised for substantial capacity expansion with the 110-bed Ranchi hospital operational since July 2025 and the 550-bed Noida facility commencing operations soon, starting with 300 beds. The company also plans to add 100 beds in Patna and Lucknow, and has a broader pipeline to add 1,000 beds in the near term. Average Revenue Per Occupied Bed (ARPOB) growth is projected to be 3-7% annually, or "a little more than inflation." Revenue growth will also be driven by increasing patient throughput, case complexity, and stable international patient volumes.
• Margin Outlook: Initial operational costs for new facilities, such as the INR30 million expense for Noida in Q1 FY26 without corresponding revenue, are expected to affect early margins. The company noted that salary increments impacted Q1 margins sequentially but anticipates these effects to be managed throughout the year. The overall strategy emphasizes maintaining "healthy margins" through disciplined execution, clinical excellence, and a focus on higher-value complex procedures.

Global Health Limited (Medanta) begins its fiscal year 2026 with a strong operational and financial performance, setting a confident tone for future expansion. The company’s recent earnings call highlighted ambitious plans for capacity growth and strategic initiatives aimed at sustaining robust revenue and margin profiles, emphasizing patient-centric, world-class healthcare delivery.

Expanding Footprint for Sustained Growth

Medanta is significantly expanding its hospital network. The 110-bedded Ranchi hospital commenced operations in July 2025, bolstering the company's presence in Eastern India. This will be followed by the operationalization of the 550-bed Medanta Noida facility in the coming weeks, initially starting with 300 beds. This is a landmark addition designed to strengthen Medanta's National Capital Region presence and capacity.

"Furthermore, we look forward to commissioning of our 550-bed Medanta Noida facility, which is poised to commence operation in the coming weeks." - Dr. Naresh Trehan, Chairman and Managing Director.

Beyond these immediate additions, Medanta plans further capacity enhancements, including additional beds in Patna and Lucknow, as part of a broader pipeline to add 1,000 beds in the near term and 2,000 beds over the next three to four years across its network. This expansion supports Medanta’s mission of delivering high-quality healthcare to a broader community and is expected to drive long-term revenue growth. The company is actively hiring clinical teams to support these new and existing capacities, focusing on high-demand specialties.

Optimizing Revenue and Maintaining Healthy Margins

Medanta's strategy focuses on revenue growth via increased patient throughput and an improved Average Revenue Per Occupied Bed (ARPOB). The company projects annual ARPOB growth of 3-7%, "a little bit more than inflation," driven by an enhanced specialty mix and higher case complexity, such as robotic surgeries. Operational efficiencies, including Average Length of Stay (ALOS) management, are also pivotal.

"We will possibly look at some amount of tariff hike in Gurgaon as we come into the two years from our last tariff hike, especially with respect to the insurance companies..." - Mr. Pankaj Sahni, Group CEO.

Targeted tariff hikes are considered for Gurgaon, Lucknow, and Patna, aligning with renewed insurance contracts, while maintaining a conservative approach. International patient revenue is expected to stabilize and grow, with Noida poised to attract a significant international patient base due to its NCR presence. The company clarified its business is primarily domestic, with international patients contributing additional value.

On margins, initial operational costs for new facilities like Noida (INR30 million in Q1 FY26 without revenue) will affect early performance. However, Medanta aims to maintain "healthy margins" through disciplined cost management and a focus on high-realization procedures. The company also expressed openness to strategic acquisitions and asset-light models, alongside investments in advanced medical technology, to further drive growth and efficiency.

Medanta's Q1 FY26 earnings call highlights a clear path for sustained expansion and operational refinement. Through strategic capacity additions in key regions, a focus on enhancing Average Revenue Per Occupied Bed (ARPOB) via complex procedures, and disciplined capital allocation, Global Health Limited is positioned for continued growth. The company's commitment to clinical excellence and patient-centric care remains central to its long-term strategy, promising an expanding, efficient healthcare network.