Narayana Hrudayalaya, the Indian parent company of Health City Cayman Islands, reported a 32 percent increase in revenue due to the consolidation of the East End-based multi-specialty hospital and growth in other new hospitals.

In 2017, the hospital group bought out Ascension Health, its partner in the joint venture, by paying US$32 million for the U.S. healthcare provider’s 71.4 percent stake. The 106-bed hospital is now a full subsidiary of Narayana Hrudayalaya.

In 2018, Health City generated revenues of US$44.6 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of US$6.0 million, according to a stock report by Mumbai-based research firm ICICI Direct. During the year the hospital was running at a 27 percent occupancy rate.

Health City’s EBITDA margins of 13.5 percent lifted overall profit margins of Narayana Hrudayalaya.

ICICI Direct, which maintains a buy rating for Narayana Hrudayalaya, said the hospital group pursues a business model of engaging with partners who invest in land and building infrastructure, while it manages the hospitals and medical equipment on a revenue share basis, but also owns some hospitals outright.

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The group typically focuses on affordability of healthcare through strict control over costs and capital. However, the research report said, Health City with its “optically” higher acquisition costs and a stronger emphasis on quality showed that this business model was likely going “to be modified from affordable to a mix of affordable + quality at premium.”

Narayana Hrudayalaya was founded by heart surgeon Dr. Devi Prasad Shetty in 2000. The network comprises 24 hospitals, seven heart centres, 19 primary care facilities, and Health City Cayman Islands.

Last year the hospital group had 16,311 employees, which included 3,491 doctors, 12,820 nurses, paramedical staff and administrative personnel, in addition to 469 student doctors, paramedics and administrative trainees.

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