ICRA Assigns Long-Term Rating of ICRA BB+ (Stable) to Metro Hospital and Cancer Research Centre

Strategic Insights -

Metro Hospital and Cancer Research Centre, a multispecialty hospital in Jabalpur, Madhya Pradesh, has been assigned a long-term rating of ICRA BB+ (Stable) by ICRA. The rating factors in the hospital's long track record in the healthcare industry, tie-ups with governmental and non-governmental organizations, and high occupancies in OPD and IPD divisions. However, the rating is constrained by stagnation in top-line growth, limited scale of current operations, and stiff competition from other hospitals in the area.

Key Takeaways:

  • ICRA has assigned a long-term rating of ICRA BB+ (Stable) to Metro Hospital and Cancer Research Centre's Rs. 3.00 Crore fund-based bank facilities.
  • The hospital has a long track record in the healthcare industry, with tie-ups with various governmental and non-governmental organizations, ensuring high occupancies in OPD and IPD divisions.
  • Revenue per occupied bed (RevPob) in the IPD division stood at around Rs. 5000/- per day in FY2014-15, which is on the lower side due to the hospital's charitable nature.
  • The hospital has a healthy capital structure, with gearing of 0.66 times as on March 31, 2015, and comfortable profitability, resulting in healthy coverage indicators.
  • The hospital faces stiff competition from other hospitals in the area, which may result in moderation of RevPob in the near to medium term.
  • Attracting and retaining reputed doctors who are willing to render services for a charitable cause remains a challenge for the hospital.
  • The hospital's ability to maintain a healthy RevPob, coupled with high occupancy, sustained profit margins, and efficient working capital management, will be the key rating sensitivities.

Statistics:

  • The hospital's Operating Income (OI) for FY15 stood at Rs 26.96 crore, with a net profit of Rs. 1.62 crore.
  • The hospital has a bed capacity of 130, with over 90% occupancies in the past couple of years.
  • The hospital has tie-ups with insurance companies such as Bajaj Allianz, Aviva Life Insurance, Apollo Munich Health Insurance, ICICI Lombard, etc.

Sources:

  • "Rating Information" by ICRA Limited.
  • "Company Profile" by Metro Hospital & Cancer Research Centre.
  • "ICRA Ratings" by ICRA Limited.
  • "Terms and Conditions" by ICRA Limited.
  • "Contact Us" by ICRA Limited.