India Ratings and Research (Ind-Ra) has maintained a stable outlook on the corporate healthcare sector for 2016-17 on expectation of revenue growth of around 15 per cent following significant capacity expansions and better utilisation of facilities.
While expansion plans will continue to impact profit margins, the ability of companies to turn around and achieve break-even at the new facilities will be key to improve profitability, the rating agency said in a report here. The debt-funded capex will result in deterioration in credit metrics. However, the rating outlook has been maintained at ‘Stable’ as the expected deterioration is already built-in to the rating levels of companies, it added. The corporate healthcare sector will continue to report high revenue growth rates of about 15 per cent during 2016-17 as facilities are completed and patient inflow increases at the new as well as existing facilities.