Durdans Hospital to capitalise on health care boom

Durdans Hospital is in the process of undertaking its second phase expansion programme worth Rs.1 billion this year, in a bid to exploit the boom in the healthcare sector in the country.

Stockmarket analysts said that Rs.500 million will be from long term funding from a financial institution and the balance Rs.500 million funded by the company’s working capital.

They said that the expected debt infusion of the hospital will increase the gearing of the company to above 20 percent, from the current gearing ratio of nine percent. The Durdans Heart Centre is utilising its 100 percent capacity and reported a growth of 7.2 percent during the year 2006/2007 in the top-line which rose to Rs.463 million from Rs.432 million reported a year earlier.
The post-tax contribution of Durdans Heart Centre was Rs.87 million during the financial year 2006/2007, which was equivalent to 45 percent of the total post tax profit of the hospital group.

Industry analysts said that a reduction in state spending on public healthcare has increased the growth of private sector healthcare. “There is more than 90 percent capacity utilisation in private hospitals and in some hospitals patients are on the waiting list. This has created a large demand for healthcare,” an industry analyst said.

S. Umasudhan, Senior Research Analyst, S. C. Securities said huge investment projects are being undertaken by private hospitals and the capacity constraints in public hospitals and deterioration in service quality have led to more demand for private channelling.