| Experienced management and long track record of operations
Incorporated in 2000, PN Memorial Neuro Center and Research Institute Limited (PNM) has a long operational track record of more than two decades. The long-standing experience of the promoters and long track record of operations has helped them to establish a strong brand image and secure corporate tie ups with more than 150 entities. The tie up is spread across various sectors in the private and government. The company has tie ups with the Government of West Bengal, Jharkhand, Mizoram and Bihar. The clientele of the entity from the private segment includes Air India, Hindustan Unilever, Ahluwalia Contracts, L&T, Hindalco, WIPRO, Microsoft only to name a few.
Acuité believes that the promoters’ extensive experience and expertise in the health care industry will support the company’s growth plans going forward.
Stable operating performance
The revenue of the company stood at Rs. 194.86 Crore in FY2023(prov.) as against Rs.151.55 Crore in FY2022. The occupancy level of the hospital remained stable in the range of 80 to 90% for the Kolkata Unit and for the Siliguri Unit, the occupancy level increased upto the range of 60% to 70% in FY2023 from 50 to 60% in FY2022. The operating profit margin of the company stood 24.46% for FY2023 (prov.) as against 20.10% for FY2022.
The company is in its final stage of completion of phase-II extension project in Kolkata wherein, the Out Patient Department (OPD) has been operational since April, 2023 , further 100 beds are expected to be operational by the month of September 2023 and the project is expected to be completed by the end of FY2024, imparting revenue visibility in near to medium term.
Acuité derives comfort from the company’s growth plans and believes that the timely completion of the project is a key rating sensitivity monitorable.
Healthy Financial Risk Profile
The financial risk profile of the company is healthy marked by moderate net worth, coverage indicators and low gearing. The tangible net worth of the company stood at Rs. 285.24 Cr as on March 31, 2023 (prov.) as against Rs. 267.23 Cr as on March 31, 2022. The company follows moderate leverage as reflected in its peak gearing of 0.64 times as on March 31, 2023 (prov.) as against 0.48 times as on March 31, 2022. The total debt of the company of Rs.181.70 Cr. as on March 31, 2023(prov.) includes long term borrowings of Rs. 159 Cr and working capital borrowing of Rs. 22.70 Cr. The total outside liability to tangible net worth (TOL/TNW) stood at 0.98 times as on March 31, 2023 (prov.) as against 0.76 times as on March 31, 2022. The debt coverage ratios are moderate with interest coverage ratio (ICR) of 3.67 times as on March 31,2023(prov.) as against 4.07 times as on March 31,2022. The debt service coverage ratio (DCSR) stood at 1.56 times as on March 31, 2023(prov.) as against 1.15 times as on March 31, 2022.
The company has undertaken implementation of the 2nd phase in Kolkata unit comprising of 300 beds super speciality cardiac division and 100 beds cancer ward for a total cost of Rs.197.27 cr. to be funded from term loan of Rs.140 Cr. and balance though internal accruals. For this unit, the OPD has started since April 2023, and 100 beds are expected to be operational from September 2023 and rest of the expansion is expected to be completed by end of FY2024.
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