Fortis Healthcare posted a weak set of fourth quarter numbers, with losses widening five-fold. However, revenues grew 8 per cent in FY16.

Elaborating on the pain points to  Bloomberg TV India, Fortis Healthcare CEO Bhavdeep Singh says the hospital business faces multiple challenges and heavy capital investment is needed to sustain growth. With a strong brand, Fortis is looking to forge partnerships in foreign shores. The entire business for Fortis is moving close to PAT positive, he said. Excerpts:

What has led to the widening of losses in Q4?

 Fortis Healthcare is into both hospital and pathology businesses. We have shown a revenue growth of 5-6 per cent in Q4 and both the businesses have grown 8 per cent in FY16.

For the full year, Ebitda has gone up slightly over last year and, from a growth perspective, it has continued to move in the right direction.

There are multiple challenges in the business. At Fortis, we continue to invest in patient care and when it comes to hospitals, we continue to invest in medical equipment technologies.

In our pathology business, we continue to add laboratories and collection centres. But I think the most important thing happening in Fortis is our focus on patient-care and clinical-led development. And I think that’s really starting to pay off really well.

Talking specifically about your profits, by when do you expect to break even and possibly become PAT positive?

I think the entire business for Fortis, hospital and pathology together, is moving close to PAT positive.

Overall, in an investment- and capital-driven business, I think while I could establish targets and talk about what one might achieve, we don’t give forecast of that nature.

What I can tell you with a great deal of confidence is that we are moving in that direction and every one of our hospitals and every one of our pathology centres continues to do well.

The FMRI hospital in Gurgaon had a record quarter. International revenues continue to grow. The premier cardiac hospital Escorts is doing well and rebounding from the tough years.

So I think that on all indicators, whether you look at hospitals, pathology or medical specialties, the arrows point up.

Your overseas business has seen some de-growth. What have been the pressure points there?

We’re out of foreign investments. The only investment we have left is the pathology lab in Dubai.

We’re looking for options there as well. We made a decision sometime back that from an investment perspective we would not be investing anything outside India. We are finding tremendous opportunities in Mauritius, Kenya and other parts of Africa. We’re looking for hospitals in the Middle East too. So there’s a lot of opportunity.

There are a lot of people interested in working with Fortis who think our brand represents great clinical care and, hopefully, we are going to have some great partnerships. And the best part is that its capital light and minimal investment, if at all, for Fortis.

 

Talking about your hospital business in particular, what’s your outlook for FY17?

Whenever I think about growth, typically people say, “Okay let’s build a hospital here and one there.” But we have 50-plus hospitals in India. We operate about 4,000 beds. We have a fantastic business plan and the best part is that within the four walls of Fortis we can take our bed count to 8,000-9,000 beds.

FMRI is planning to become a 700-800 bed hospital. Similarly, our Noida hospital can also become a 400-500 bed hospital.

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