The hospital sector is seeing better days ahead after more than two years of subdued performance — which was mainly due to several regulatory measures — rating agency ICRA said on Wednesday.
The tough days were triggered primarily on account of several regulatory measures, including the cap on prices of stents and knee implants by the National Pharmaceutical Pricing Authority (NPPA), ICRA said in a release.
Adverse impact of the GST rollout on profitability, strict regulatory actions taken by multiple States — including restrictions on procedure rates — levying penalties and placing operational limitations on erring hospitals were other measures that impacted the sector, it added.
The performance was also impacted due to the start-up cost of new hospitals owing to significant capex by entities in the sector, and the long gestation period required for the new facilities to ramp up, the release said. “In line with our expectations, the performance of the players in the sector has likely bottomed out, after struggling for more than two years,” said Kapil Banga, Assistant Vice-President, ICRA Corporate Ratings.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.