SynopsisNineteen of Medicover’s 25 hospitals are already profitable, while the remaining facilities are in various stages of ramp-up, P Hari Krishna, executive director, Medicover Hospitals India, told ET. He said newer hospitals typically take 12-18 months to fully break even.AgenciesMedicover India HospitalsHyderabad: Medicover India expects all its 25 hospitals to turn profitable over the next 18 months, with the hospital chain also expecting its EBITDA margin to rise to more than 20% from around 14% currently as newer facilities mature following KKR’s acquisition of its India business.Earlier this month, KKR agreed to acquire 100% of Medicover India from Swedish healthcare group Medicover AB and other shareholders for an enterprise value of €1.2 billion ($1.4-$1.5 billion). The transaction, subject to regulatory approvals, is among the largest private equity investments in India’s hospital sector. KKR’s investment includes funding for the business, with proceeds also going towards shareholder exit and debt repayment.Nineteen of Medicover’s 25 hospitals are already profitable, while the remaining facilities are in various stages of ramp-up, P Hari Krishna, executive director, Medicover Hospitals India, told ET. He said newer hospitals typically take 12-18 months to fully break even. Some of Medicover’s recently opened facilities have already turned profitable, while others are still weighing on the company’s consolidated margins.Also read | Piramal Alternatives invests Rs 215 crore in Kolors HealthcareMedicover India currently has an EBITDA margin of about 14% and expects this to rise to 20-25% once occupancy reaches around 3,000 beds, from the current level of roughly 2,500-2,600 occupied beds, Hari Krishna said. The improvement is expected to come as newer hospitals mature, turn profitable and the company gets greater utilisation from its existing infrastructure.The hospital chain initially planned to tap the financial markets, but Krishna says bringing in a PE player would ensure access to more capital than an IPO could generate, allowing the company to fund its expansion and infrastructure needs more adequately.The hospital chain also plans to operationalise another 1,200 beds over the next 12-24 months from its existing 6,000-bed capacity. It currently has 4,800 operational beds. Out of the 6,000 operationalised beds in the next two years, it expects to have about 5,000 chargeable ones.Also read | Grip strength, gait may soon measure biological lifespan, says Dr Prateek SharmaThe company’s immediate focus will be on scaling up its existing hospital network rather than pursuing a major new-hospital expansion, Krishna said. KKR-backed funding will be used to operationalise additional beds, add infrastructure and upgrade medical equipment at existing facilities. Medicover is also evaluating the relocation of five hospitals from high-rent locations to sites where it could potentially own the land or secure lower rentals, with the aim of improving their profitability.Krishna said the ownership change itself is not expected to materially alter day-to-day hospital operations. However, the name of the hospital will change post regulatory approvals. Read More News on...moreless