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The report highlighted that the sector’s long-term demand outlook remains robust due to multiple factors. These include low hospital bed density, a steady rise in lifestyle and chronic diseases, an ageing population, and higher health insurance coverage.
It stated, “The low cost of treatment and high-quality care make India a preferred destination for medical tourism, with more than 7 lakh medical tourists in 2024, and it is a key revenue driver.”
With constraints on public capital expenditure, the private sector is expected to remain the key beneficiary of incremental healthcare demand in the country.
Medical tourism continues to be a significant growth driver for India’s hospital industry. Treatment costs in India are estimated to be 60 to 90 per cent lower than the average costs in many other countries, making it a preferred destination for patients seeking affordable care.
India ranks among the top 10 medical tourism destinations globally and is the most preferred among Asian countries.
Nearly 85-90 per cent of medical tourists coming to India are from Africa, West Asia, and other South Asian nations.The report also shared that the performance of corporate hospital-listed players has also remained strong over the years. Revenues have grown steadily, except in FY21 when the COVID-19 pandemic led to a temporary decline due to lower occupancy levels and reduced average revenue per occupied bed (ARPOB).
In the post-COVID period, a combination of favourable factors has supported recovery in occupancy and pricing. As a result, hospital revenues recorded a healthy CAGR of 15-16 per cent over the past five years.
The report expects this momentum to continue, with revenue growth projected at 10-12 per cent over the next two to three years, aided by ongoing additions to bed capacity.
The report also pointed to healthy pricing and utilisation dynamics. ARPOB has grown at an 8-9 per cent CAGR over the past five years and is expected to increase by 5-6 per cent annually in the near term, supported by a favourable case mix and payor mix.
Occupancy levels have stabilised at around 62-64 per cent despite capacity additions, which is supporting strong cash flows.
On the financial front, the sector’s profile has strengthened significantly. EBITDA margins have stabilised at 21-22 per cent, while net leverage has improved sharply from about 5.0 times in FY19 to nearly 1.4 times in FY25.
Despite continued capital expenditure, credit metrics are expected to remain comfortable, backed by resilient cash flows and operational stability, the report said.
