Date:21/07/2005 URL: http://www.thehindubusinessline.com/2005/07/21/stories/2005072102421500.htm

Back Noida Medical jumps on turnaround hopes

Jayanta Mallick

Kolkata , July 20

NOIDA Medical, a hospital services company, is steadily moving up on the stock market over improvement of its financial health. The stock today closed at Rs 25, up 7.99 per cent on the BSE with a volume of 1.09 lakh shares.

According to analysts, the stock has been attracting investors' interest as the company has been reducing its losses in the last few quarters on the back of financial restructuring.

Mr Rakesh K. Gupta, Company Secretary, told Business Line that the interest cost has indeed been coming down after the negotiated settlement with the financial institutions and write-back of interest came into effect in the September quarter of 2004.

"A total waiver of interest was to the tune of around Rs 9 crore," Mr Gupta added.

The company, which owns a 120-bed hospital at Noida, has strategic arrangements with Escorts Hospital.

Under the arrangement, the company provides the infrastructure and the medical and para-medical services while resource expertise is provided by Escorts, he mentioned.

The hospital is adding 10 more beds for its gynaecological department. "The new beds with matching facility would be in place within next three months," Mr Gupta informed.

In the last one year, renovation of the building has also been taken up. Confirming that the patient flow has been improving, he observed that the current average annual occupancy stood around 62 per cent.

All 19 third party administrators for health and medical insurance have tied up with the hospital for the benefit of the insured patients, the company official added.

Though, the company may report a net loss in the financial year ended June 30, 2005, it had reported a declining trend in loss-making till the quarter ended March 31, 2005. The March quarter loss was Rs 41.40 lakh in 2004-05, down from Rs 80.80 lakh in the December quarter and Rs 76.60 lakh in September quarter in the last fiscal. The interest cost came down to Rs 29.10 lakh in March quarter of 2004-05 from the Rs 52.60 lakh in the quarter ended on June 2004.

According to a fund manager, hospital stocks are improving on the bourses on improved prospects for medical tourism in the country. Additional official patronage and promotional efforts abroad have started paying off.

The recent GDRs of Apollo Hospitals have been well received by the foreign investors.

The small hospital stocks such as Noida Medical or Kovai Hospital are witnessing a surge in investor interest because of their relatively low market valuation and improvement in infrastructure, the fund manager added.