Covid to reduce profits of hospitals by 35-40% this fiscal: Crisil

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Postponement of elective surgeries, revenue loss from the highly profitable medical tourism segment, and increasing safety and sanitisation costs amid Covid-19 will lead to a 35-40 per cent reduction in the operating profits of private hospitals this fiscal, domestic rating agency Crisil said on Tuesday.

The findings are based on an analysis of 40 hospital-companies, including 36 rated by Crisil, which account for over Rs 36,000 crore of the sector’s revenue.

Footfalls at private hospitals fell significantly in the first quarter of fiscal 2021, with the onset of the pandemic, as elective surgeries and preventive healthcare, which account for approximately 60 per cent of revenue, were largely postponed.

Trauma and emergency treatments – approximately 28-30 per cent of revenue — continued, but at a lower level, given fewer accidents during the lockdown.

Added to this, medical tourism, which accounts for 10-12 per cent of revenue, especially for large hospital chains, came to a complete standstill, due to travel restrictions imposed as part of the lockdowns, said the report.

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