Medanta to add 2,700 beds as CEO says quality care drives returns across Tier-2 markets
New Delhi, May 18
Medanta Group's Chief Executive Officer, Pankaj Sahni said the broader healthcare industry was seeing that high-quality patient care could deliver both clinical impact and strong financial returns, a model Medanta had validated across multiple cities beyond metros. He said the company's experience in Lucknow and Patna had proved that demand for premium care existed outside traditional urban hubs, with competitors now following Medanta into these markets.
Sahni said Medanta was currently operating hospitals in six cities -- Gurugram, Ranchi, Indore, Patna, Lucknow and Noida -- and all six assets had performed "exceedingly well" both financially and in elevating the standard of care locally. Building on that, the company had announced two new hospitals in Delhi and one each in Mumbai, Guwahati and Varanasi, adding nearly 2,700 beds through greenfield projects over the next five years. He said Medanta would continue to expand where its quality of care was needed, not only in major metros but also in other cities with similar demand.
Addressing concerns around margins and capex, Sahni said Medanta had committed around ₹4,500 crore in capital expenditure over the next five years but did not expect to raise additional capital. He said the company was net cash positive by nearly ₹700 crore and had maintained a healthy conversion of EBITDA to cash flow. "We feel very confident of our ability to execute all of these projects through our balance sheet, internal accruals and any project-specific debt," he said.
Sahni emphasized that Medanta had followed a conservative capital structure, typically keeping debt-to-equity at 1:1 or below on a project basis and maintaining a healthy debt-to-EBITDA ratio. He added that the company had preserved a strong cash balance while funding growth from internal accruals. The returns generated from its first Gurgaon facility 15 years ago had helped finance the subsequent six units, and those returns would now support the next phase of expansion.
He said Medanta's track record over the last 15 years had shown consistent delivery of healthy balance sheet metrics, return on capital and profitability. "We've shown healthy balance sheet, healthy returns, healthy return on capital and we see no reason why this will change in the short to medium run," Sahni said. He added that the projects announced were well within the company's capital capacity, and future opportunities would be evaluated based on the same discipline of matching quality care with sustainable financial performance.
— ANI
Reader Comments
It's great that they're expanding, but ₹4,500 crore capex is a lot of money. Hope they don't end up passing those costs to patients. Healthcare should be accessible, not just profitable. Let's see how they balance quality care with keeping things affordable for the common man.
This is exactly what India needs. Our metros are overcrowded with hospitals, but people in smaller cities suffer due to lack of quality options. If Medanta can replicate their Gurgaon success in Patna and Ranchi, it'll be a game-changer. Kudos to the team for thinking beyond the usual hotspots! 👏
I work in the healthcare sector and can confirm - the demand in Tier-2 cities is massive. People are willing to pay for quality if it's available locally. But I hope Medanta maintains ethical pricing. Some private hospitals have become money-making machines. Let's see if they walk the talk on "quality care driving returns" without exploiting patients.
My cousin works at Medanta Patna, and the difference in treatment quality compared to local government hospitals is night and day. Yes, it's expensive, but at least people now have options. More competition will eventually bring prices down too. Good move by Medanta, hope they keep their standards high in these new locations! 🌟
I appreciate they're not raising additional capital and using internal accruals. That shows fiscal responsibility. But I'm concerned about Guwahati - the Northeast has been neglected for so long. Hope Medanta's presence there inspires other chains to follow. Our region deserves world-class healthcare
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