Medanta Q3: Noida Drag Hits PAT Despite 19% Revenue Surge; JCI Boosts Lucknow

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AuthorVihaan Mehta|Published at:
Medanta Q3: Noida Drag Hits PAT Despite 19% Revenue Surge; JCI Boosts Lucknow
Overview

Global Health Limited (Medanta) reported a robust 19% year-on-year revenue growth to ₹11,428 million in Q3 FY26. However, consolidated PAT declined significantly due to an ₹366 million one-time charge from new labor codes and early-stage operating losses at the new Noida hospital. EBITDA, excluding Noida, grew 11%, but consolidated EBITDA margin narrowed to 21.8%. Medanta, Lucknow achieved JCI accreditation, a key strategic win. Management expects normalized ARPOB growth of 5-7% and targets EBITDA margins of 22-25%. The company maintains a net cash position of ₹600 crores.

Medanta Navigates Expansion Headwinds with Strong Revenue Growth Amidst PAT Pressure

### 📉 The Financial Deep Dive

Global Health Limited, operating under the Medanta brand, posted strong top-line growth in Q3 FY26, with total income climbing 19% year-on-year to ₹11,428 million. This performance was driven by a healthy 14% increase in inpatient volumes and a substantial 20% rise in outpatient footfalls. The Average Revenue Per Operated Bed (ARPOB) also saw a significant 10% YoY jump to ₹67,361.

However, consolidated Profit After Tax (PAT) took a considerable hit, falling to ₹950 million. This decline was primarily attributed to two factors: higher depreciation and finance costs related to the new Noida hospital, and a significant one-time exceptional item of ₹366 million arising from new labor codes. Excluding this one-off, PAT would have been higher at approximately ₹1,224 million.

EBITDA margins also experienced pressure due to the inclusion of the newly commissioned Noida hospital. Consolidated EBITDA stood at ₹2,494 million with a margin of 21.8%. Excluding Noida's early-stage operating losses of ₹320 million, EBITDA grew 11% YoY to ₹2,814 million, maintaining a healthier margin of 25.4%.

### 🟢 The Grill: Noida's Drag and Margin Stability

The performance of the new Noida hospital is a key point of discussion. While management indicated that the ramp-up is progressing as per expectations and the reported EBITDA loss is close to its peak, the facility incurred ₹343 million in revenue and a ₹320 million EBITDA loss in its first full quarter. Analysts will be scrutinizing the pace of patient acquisition and the timeline for this facility to reach profitability.

Management guidance aims for normalized ARPOB growth in the 5-7% range annually and targets stabilizing overall EBITDA margins within 22-25%. This suggests a focus on improving efficiencies and managing cost pressures in mature hospitals, particularly employee and maintenance expenses, while driving the Noida unit towards breakeven.

### 🚩 Risks & Outlook

The primary risks revolve around the execution of the Noida hospital's ramp-up and achieving margin stability amidst rising operational costs and the industry-wide 'war for talent'. Proactive management of relationships with insurance providers is also crucial.

The outlook remains positive, centered on strengthening clinical programs, expanding tertiary and quaternary care services, and driving the Noida hospital's operational and financial recovery. The company continues its expansion with greenfield projects in Guwahati, Mumbai, South Delhi, and Pitampura. Capital expenditure for FY27 is projected to be under ₹500 crores, with significant new project investments deferred to later years, indicating a phased expansion strategy.

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