Artemis Hospital Q2 EBITDA margin rises to 23.8% on volumes

Artemis Hospital lifted its Q2 FY 27 EBITDA margin to 23.8%, from 22.4% a year earlier, as revenue from operations rose 14.5% to Rs 298.44 crore. The hospital reported 12.0% growth in in-patient volume, a 398-basis-point occupancy improvement and a shorter average stay, alongside higher realisations.

Why did Artemis's Q2 EBITDA margin rise?

Artemis's margin rose alongside higher in-patient volumes, occupancy and average revenue per occupied bed. Earnings before interest, tax, depreciation and amortisation, or EBITDA, increased 21.8% year on year to Rs 70.96 crore in Q2 FY 27, compared with revenue growth of 14.5% to Rs 298.44 crore. The resulting EBITDA margin expanded 141 basis points, or bps, to 23.8% from 22.4% in Q2 FY 26.

The quarterly result also improved from Q1 FY 27. Revenue from operations increased from Rs 278.49 crore in Q1 FY 27 to Rs 298.44 crore in Q2 FY 27, while EBITDA rose from Rs 61.63 crore to Rs 70.96 crore. Margin consequently moved from 22.1% to 23.8% over the sequential period. Profit after tax, or PAT, was Rs 40.43 crore, up 25.9% from Rs 32.10 crore a year earlier, and its margin reached 13.5% from 12.3%.

How much did Artemis's patient activity increase?

Artemis treated 9,787 in-patients in Q2 FY 27, up 12.0% from 8,740 in Q2 FY 26 and above the 9,181 recorded in Q1 FY 27. Occupied beds increased to 374 from 349 a year earlier and 357 in the preceding quarter. This activity occurred while operational beds increased to 550, from 544 in both comparison periods, while stated total bed capacity remained 700.

Occupancy reached 68.1% in Q2 FY 27, compared with 64.1% in Q2 FY 26 and 65.7% in Q1 FY 27. Average length of stay, or ALOS, declined to 3.52 days from 3.67 days year on year and 3.54 days sequentially. Artemis therefore recorded higher admissions and occupancy while the average patient stay was shorter than in both comparison periods.

What happened to Artemis's realisations in Q2 FY 27?

Artemis's average revenue per occupied bed, or ARPOB, was Rs 86,631 in Q2 FY 27, 6.6% above Rs 81,248 in Q2 FY 26 and higher than Rs 85,690 in Q1 FY 27. Management attributed the increase to a differentiated high-acuity clinical mix. The measure rose by Rs 5,383 year on year and by Rs 941 sequentially.

The specialty revenue mix showed oncology remained the largest named specialty at 16% in Q2 FY 27, followed by neuro and orthopaedics at 15% each. Compared with Q2 FY 26, oncology declined from 19% while orthopaedics rose from 14%; neuro was unchanged at 15%. Gastroenterology increased to 4% from 2%, while cardiology declined to 8% from 9%.

Artemis's payor mix also changed between quarters. International patients represented 30% of Q2 FY 27 revenue, up from 27% in Q1 FY 27 but below 32% in Q2 FY 26. Insured patients accounted for 32%, compared with 33% sequentially and 30% a year earlier; domestic cash patients were 22%, versus 23% and 20%, respectively. Government schemes represented 16%, down from 17% in Q1 FY 27 and 18% in Q2 FY 26.

How did Artemis perform in the first half of FY 27?

Artemis reported Rs 576.94 crore of revenue from operations in H1 FY 27, up from Rs 501.84 crore in H1 FY 26. EBITDA increased to Rs 132.59 crore from Rs 107.81 crore, lifting the first-half margin to 23.0% from 21.5%. PAT rose to Rs 73.49 crore from Rs 57.01 crore, and the PAT margin increased to 12.7% from 11.4%.

The first-half operating metrics tracked the quarterly improvement. In-patient volume was 18,968 in H1 FY 27 against 16,982 in H1 FY 26, while occupancy rose to 67.3% from 62.7%. ARPOB increased to Rs 86,174 from Rs 80,907, and ALOS fell to 3.53 days from 3.65 days. Operational beds were 544 in both half-year periods.

The consolidated figures differed from the Artemis hospital result. Consolidated Q2 FY 27 EBITDA was Rs 62.89 crore and its reported margin was 20.2%, versus 21.2% in Q2 FY 26. The presentation states that adjusted EBITDA excludes revenue and EBITDA losses of the Raipur unit; on that basis, adjusted EBITDA was Rs 71.50 crore and the adjusted margin was 23.3%, up from 21.2% a year earlier.

Conclusion

Artemis's Q2 FY 27 result combined a 141-bps EBITDA-margin increase with 12.0% in-patient-volume growth, occupancy of 68.1% and an ALOS reduction to 3.52 days. Revenue growth to Rs 298.44 crore coincided with ARPOB rising 6.6% to Rs 86,631, while first-half EBITDA margin reached 23.0% on Rs 576.94 crore of revenue from operations.

The next disclosure will need to show whether the Q2 operational measures, including 550 operational beds, 68.1% occupancy and Rs 86,631 ARPOB, continue. It will also be important to distinguish reported consolidated EBITDA margin of 20.2% from adjusted consolidated margin of 23.3%, because the latter excludes revenue and EBITDA losses of the Raipur unit.