Detailed Rationale

Crisil Ratings has upgraded its rating on the long-term bank facilities of Global Health Ltd (GHL) to ‘Crisil AA/Stable’ from ‘Crisil AA-/Positive’ and reaffirmed the short-term rating at ‘Crisil A1+’.

 

The rating action follows the sustained improvement in the company’s business risk profile, driven by steady performance of its flagship hospital, Medanta Medicity, in Gurugram; and faster ramp up of operations in its greenfield hospitals in Lucknow and Patna. Supported by bed additions and optimal occupancy, GHL is expected to maintain its strong double-digit growth momentum over the medium term, while maintaining operating profitability at 22-24% despite the bed expansions. Financial risk profile is expected to remain healthy, backed by strong capital structure, moderate debt addition despite sizeable capital expenditure (capex) due to healthy accrual and cash surplus of over Rs 1,000 crore. Debt protection metrics are also expected to remain comfortable due to prudent funding of capex; for instance, the ratio of gross debt (including lease liabilities) to earnings before interest, tax, depreciation and amortisation (debt/Ebitda) will remain below 1.5 times.

 

The revenue grew 17% year on-year in the first half of fiscal 2026, driven by increase in inpatient volumes owing to bed expansion, improvement in average revenue per occupied bed (ARPOB) and better occupancy levels. GHL group level occupancy increased to 63.4% in the first half of fiscal 2026 from 61.6% in the corresponding period last fiscal. GHL added 57 beds in its Patna hospital, 110 beds in Ranchi through operations and maintenance (O&M) agreement and commissioned its new greenfield hospital at Noida in September 2025. ARPOB grew 4.8% on-year to Rs 66,055 (Rs 63,024 in the first half of last fiscal). Operating profitability moderated 150 basis points (bps) to 21.5% in the first half of fiscal 2026 due to preoperative expenses associated with the Noida hospital.

 

At a consolidated level, GHL’s revenue may witness a double-digit growth in fiscal 2026 and over the medium term, supported by bed additions, sustenance of occupancy levels at overall level and improvement in ARPOB. Incremental revenue contribution from Noida and Ranchi hospitals, along with healthy revenue growth in Lucknow and Patna hospitals, will drive revenue growth over the medium term. While there will be stabilisation losses in Ranchi and Noida hospitals, the hospitals are expected to breakeven in 15-18 months of its operations thereby limiting the drag on operating profitability. Therefore, Crisil Ratings expects that the operating profitability will remain healthy at over 22% over the medium term.

 

The financial risk profile is supported by strong capital structure, healthy debt protection metrics and liquidity. Consolidated adjusted networth stood at Rs 3,376 crore and debt (including lease liabilities) was Rs 718 crore as on March 31, 2025, with gearing at 0.21 time. Furthermore, debt/Ebitda improved to 0.83 time in fiscal 2025 from 0.98 time in fiscal 2024. GHL has planned capex of more than Rs ~4,000 crore over the next 3-5 fiscals for bed addition and expansion of specialties at existing hospitals in Patna and Lucknow, additional beds at Noida, new hospitals at Mumbai, South Delhi, Pitampura and Guwahati. GHL will also be building a residential complex at its flagship hospital to help outstation patients stay at the premises for a consideration of ~Rs 250 crore. Furthermore, GHL has set up a wholly owned subsidiary, which will be building and operating a medical college in Gurugram. The above projects, except Noida and bed expansions in Lucknow and Patna, are planned to be implemented over the next 3-5 years. The capex will be funded through a prudent mix of cash accrual and debt. Even though the company may avail of external debt, debt/Ebitda is expected to be around 1.5 times over the medium term.

 

The ratings reflect the experienced management of GHL in therapeutic segments and healthy financial risk profile. These strengths are partially offset by exposure to risks related to implementation and timely stabilisation of upcoming hospitals, geographic and therapeutic segmental concentration in revenue, regulatory risks, and exposure to intense competition.

Analytical Approach

Crisil Ratings has combined the business and financial risk profiles of GHL and its wholly owned subsidiaries – Global Health Patliputra Pvt Ltd (GHPPL, 'Crisil AA-/Stable') and GHL Pharma and Diagnostics Pvt Ltd; these entities are collectively referred to as GHL.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers - Strengths 

Established market position

Through its network of seven hospitals under the Medanta Hospital brand, GHL has established presence in the National Capital Region (NCR), East and Central India. It also has a long operational track record of over 15 years in the tertiary and the quaternary healthcare segments and benefits from the strong brand reputation and the extensive experience of the promoter, Dr Naresh Trehan, in the healthcare industry. The group, with a combined bed capacity of more than 3,400 beds as of September 2025, is one of the leading players in the tertiary care segment in NCR and East India. GHL plans to increase the number of beds to around 5,000 in the adjacent geographies of existing hospitals over the medium term, as well as in the newer markets in Western India, which will further enhance its market position.

 

The flagship hospital in Gurugram is one of the largest single-location hospitals with 1,440 beds and offering multi-specialties. The revenue profile is well-diversified across specialties with no specialty contributing more than 25% of the revenue. Cardio treatments account for the highest share of revenue at ~22%, followed by oncology at 14% and neurosciences and gastric sciences at ~11% each. The balance is spread across urology, orthopaedics, liver transplant and others.

 

Dependence on the flagship Gurugram hospital (Medanta Medicity) is decreasing, with ramp-up of operations at the Lucknow and Patna hospitals. The Lucknow hospital achieved operational break-even in fiscal 2021 while Patna hospital achieved operational breakeven in fiscal 2023, its first full year of operations. Revenue of both hospitals put together saw a 10% rise in fiscal 2025, reaching Rs 1,094 crore (~30% of consolidated revenue). Furthermore, ramp up in Noida hospital, which is also present in the Delhi NCR region, will reduce the dependence on the flagship hospital in Gurugram.

 

Experienced management and healthy operating efficiency

GHL benefits from the stewardship of Dr Naresh Trehan, one of the leading cardiac surgeons in India. Dr Trehan was instrumental in the establishment and management of Escorts Heart Institute & Research Centre (Escorts). His two decades at the helm of Escorts were spent in pioneering initiatives for the development of healthcare delivery in India and research in cardiac sciences. Also, the hospital has prominent doctors heading other therapeutic departments, such as orthopaedics, gastroenterology, neurology ,oncology and transplant units in liver, kidney and heart, resulting in an established patient base. Revenue grew at a compound annual rate of over 12% between fiscals 2014 and 2025, supported by industry-leading revenue/bed rate, good occupancy and strong reputation. 

 

Despite the bed additions and commencement of operations in new hospitals, GHL has sustained its operating profitability above 20% over the past four fiscals. Despite the bed additions planned, operating profitability will sustain at over 22% over the medium term, supported by sustenance of occupancy and growth in ARPOB. Healthy profitability and increasing occupancy levels have enabled steady improvement in the group’s return on capital employed (RoCE), which stood at around 19.2% in fiscal 2025, compared with 13-16% earlier. The RoCE will moderate over the medium term due to aggressive capex and initial losses in new hospitals, but will remain above 15%.

 

Healthy financial risk profile

Financial risk profile is supported by a well-managed balance sheet, aided by IPO proceeds in fiscal 2022, resulting in comfortable debt metrics. The management philosophy is also to maintain gearing within 1 time, notwithstanding capex, which is happening across private hospitals, given the shortage of quality healthcare.

 

Net cash accrual to total debt ratio stood at 0.95 time and interest coverage ratio at 12.64 times in fiscal 2025, against 0.82 time and 10.49 times, respectively, in fiscal 2024. Debt/Ebitda improved to 0.83 time from 0.98 time in fiscal 2024.

 

GHL’s capex of over Rs 4,000 crore will be implemented during the next 3-5 fiscals and will be funded by a mix of debt, cash accrual and cash surpluses (Rs 1,173 crore on September 30, 2025), as it seeks to take bed capacity to ~5,000 beds. Besides, the company is setting up a medical college in Gurugram. With debt addition, debt/Ebitda ratio will moderate but remain healthy at below 1.5 times. Cash surpluses too will moderate but still remain sizeable at Rs 800-1,000 crore over the medium term. That said, any further sizeable organic or inorganic growth opportunities that may involve sizeable debt addition will remain monitorable.

Key Rating Drivers - Weaknesses 

Revenue concentration risk and exposure to intense competition

Geographic and segment concentration in revenue persists. Increase in beds in new hospitals has helped to reduce concentration risk. Even though GHL has expanded operations to Lucknow and Patna, its flagship hospital in Gurugram will continue to be the key revenue and profitability driver over the medium term. This is because while the Lucknow hospital commenced operations in November 2019, the other hospitals in Ranchi and Indore are smaller and have modest occupancy. Noida has commenced operations in September 2025 and meaningful contribution from the hospital will take 2-3 fiscals. The contribution from the Patna hospital is <10% of consolidated revenue at present, while the Lucknow hospital contributed ~20% to the revenue. While the company is also diversifying into Mumbai and Guwahati, contribution from the same is expected after 4-5 years.

 

Although upcoming hospitals in New Delhi, the NCR and Uttar Pradesh will intensify competition in the healthcare space over the medium term, established hospitals, such as Medanta Medicity, are better placed to take on the competition compared with mid-sized hospitals.

 

Exposure to risks related to implementation and timely stabilisation of operations

The company has sizeable capex planned for the medium term for setting up greenfield hospitals in Noida and Mumbai, while expanding bed capacity to over 5,000 beds over the medium term. Besides, GHL is also setting up a medical college at Gurugram. Some of these markets already have well-established players. Timely ramp-up and stabilisation of operations in the new hospitals will remain monitorable. Financial closure for projects is not expected to be an issue due to strong balance sheet, cash surpluses, and comfort of lenders with the company’s management, given their demonstrated track record.

 

Both the Lucknow and Patna hospitals achieved breakeven in the first full year of operations. Ability of GHL to set up and stabilise Greenfield projects provides comfort in lieu of the new hospital in Noida. However, timely implementation without significant time and cost overruns will be monitorable.

 

Exposure to regulatory risk

The government policy on capping prices for medical procedures such as treatment of Covid-19 and medical devices such as coronary and knee implants, has impacted players in the healthcare sector. Such price-control mechanisms have a direct bearing on the operating margin of players through reduction in revenue and affect inflow of premium patients (including medical tourism), who would prefer getting such procedures done abroad. Any policy change that may negatively impact the company’s credit risk profile will be closely monitored.

Liquidity Strong

Cash accrual, expected at Rs 700-900 crore per annum over the medium term, will adequately cover yearly debt obligation of Rs 100-150 crore and part-fund the sizeable capex. Liquidity is supported by healthy cash surplus of over Rs 1,173 crore as on September 30, 2025. As surpluses will be partly used to fund the sizeable capex, they will moderate but remain sizeable at Rs 800-1,000 crore.

Outlook Stable

GHL will continue to benefit from higher bed count, stable occupancy and increased realisations over the medium term. The business risk profile will benefit from adequate revenue diversification from different multi-specialty treatments, high ARPOBs and healthy operating efficiency. The financial risk profile will also be supported by increase in operating cash flow and prudent expansion, which is being undertaken in a modular manner.

Rating sensitivity factors

Upward factors

• Successful implementation and ramp up of operations at new hospitals ensuring healthy revenue growth, while maintaining operating margin at over 20%
• Continued prudent funding of organic and inorganic expansion plans, and sustenance of comfortable debt metrics

 

Downward factors

• Slower-than-expected ramp up of new hospitals with operating margins falling below 15% impacting overall cash accrual
• Additional large debt-funded capex or any inorganic expansions leading to significant moderation in debt protection metrics
• Substantial reduction in liquidity

About the Company

GHL was established in 2004 by Dr Naresh Trehan. A world-class, super-specialty, tertiary-care hospital in Gurugram, Medanta Medicity, commenced operations in November 2009, and has capacity of ~1,400 beds and ~40 operation theatres, besides state-of-the-art diagnostic and laboratory facilities.

 

In fiscal 2015, GHL entered an arrangement to manage a ~150-bed hospital each in Indore and Ranchi on a lease basis. Company further operates two hospitals in Lucknow, Patna and also commenced operations in its new greenfield hospital at Noida in September 2025. Lucknow hospital was earlier under 100% owned subsidiary, Medanta Holding Pvt Ltd(MHPL) which was merged with GHL in March 2025. Patna hospital is under 100% subsidiary, GHPPL.GHL also incorporated a wholly owned subsidiary, GHPDPL, on June 29, 2022, and has moved its outpatient pharmacy business to this entity and started diagnostic services in it.

 

Consolidated Total bed capacity count stood at 3,435 as on September 30,2025.

Key Financial Indicators

As on/for the period ended March 31	Unit	2025	2024
Revenue	Rs crore	3694	3278
Profit after tax (PAT)	Rs crore	481*	478
PAT margin	%	13.0	14.6
Adjusted debt/adjusted networth*	Times	0.21	0.14
Interest coverage	Times	12.64	10.49

*adjusted debt factors in lease liabilities

PAT lower due to provision for stamp duty payable on account of scheme of amalgamation between MHPL and GHL

Any other information: Not applicable