fortis corp ppt

June 2011

Disclaimer

This presentation may not be copied, published, distributed or transmitted. The presentation has been prepared solely by the company.Any reference in this presentation to “Fortis Healthcare (India) Limited” shall mean, collectively, the Company and its subsidiaries. Thispresentation has been prepared for informational purposes only. This presentation does not constitute a prospectus, offering circular oroffering memorandum and is not an offer or invitation to buy or sell any securities, nor shall part, or all, of this presentation form the basis of,or be relied on in connection with, any contract or investment decision in relation to any securities. Furthermore, this presentation is not andshould not be construed as an offer or a solicitation of an offer to buy securities of the company for sale in the United States, India or anyother jurisdiction.Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering in theUnited States may be made only by means of an offering document that may be obtained from the Company and that will contain detailedinformation about the Company and its management, as well as financial statements. Any offer or sale of securities in a given jurisdiction issubject to the applicable laws of that jurisdiction.This presentation contains forward-looking statements based on the currently held beliefs and assumptions of the management of theCompany, which are expressed in good faith and, in their opinion, reasonable. Forward-looking statements involve known and unknown risks,Company, which are expressed in good faith and, in their opinion, reasonable. Forward-looking statements involve known and unknown risks,uncertainties and other factors, which may cause the actual results, financial condition, performance, or achievements of the Company orindustry results, to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements. Given these risks, uncertainties and other factors, recipients of this presentation are cautioned not to place unduereliance on these forward-looking statements.The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequentdevelopment, information or events, or otherwise. Unless otherwise stated in this presentation, the information contained herein is based onmanagement information and estimates. The information contained herein is subject to change without notice and past performance is notindicative of future results. The Company may alter, modify or otherwise change in any manner the content of this presentation, withoutobligation to notify any person of such revision or changes.By attending this presentation you acknowledge that you will be solely responsible for your own assessment of the market and the marketposition of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potentialfuture performance of the business of the Company.Neither the delivery of this presentation nor any further discussions of the Company with any of the recipients shall, under any circumstances,create any implication that there has been no change in the affairs of the Company since that date.

2

A. Healthcare Industry in India

B. Company Overview

C. Recent Developments

Agenda


D. Financials

Healthcare Sector: Favorable industry dynamics

Favorable Underlying Increasing Private

Increasing Public Outsourcing

Strong Cash Generation

Characteristics

Scalable Business Models

Healthcare Services remains attractive to both public and private market investors

4

Underlying Demographics

Rise of Independent Providers

Increasing Private Payers

Scarcity of Quality Assets

Healthcare without Binary Risk

Considerable Consolidation Opportunities

Defensive Growth Characteristics

Healthcare Sector

• The Healthcare delivery market in India pegged at around US$ 45 billion in 2010

• While globally healthcare is typically provided through a largely government-funded public system, the

Indian healthcare industry is dominated by the private sector

• India has ~17% of the world's population, but one of the poorest healthcare infrastructures among growing

economies and the lowest spend on healthcare (~4.5% of GDP)

• Demographic changes, improving income levels, changing lifestyles, and rising insurance penetration etc

Hospitals: Proxy for India’s Healthcare Boom

5

will result in a rise in discretionary spending on healthcare

CAGR: 12%

• Accessible, reliable and affordable healthcare

continues to be a challenge

• Opportunity in healthcare being significantly

leveraged by private healthcare providers

• Expected to generate employment opportunities for

9 million people by 2012

Indian Healthcare Market (US$bn)

Source: Analyst Research

Indian Healthcare Delivery

80%

20%

Others7%

Govt. Sector70%

Pvt. Sector30%

Out of Pocket 70%

Govt.22%

7%

Insurance1%

Hospitals in the Country

Population

Healthcare Expenditure

6

20%

6%

8% 8%9%

1%

Disease burden

Beds Doctors Nurses Community & health workers

Lab technicians

Very Low Healthcare Spend as % of GDP High Disease Burden & Insufficient Facilities

Evolution of Healthcare in India

Significantly Low Hospital Beds Per 10,000 Population Changing Age Profile of Indian Population

139

72

39 34 32 31 30 24 229

Japan France UK CanadaSingapore US China Brazil Thailand India

burden health workers technicians

7

Source: WHO, FICCI, Ernst & Young, Analyst Research

Current Status Of Global Healthcare

� There is a wide discrepancy in the world with regards to the amount of health expenditures both relative to GDP and in absolute terms

Health Expenditure (% of GDP)

Developed Countries Developing Countries

Health Expenditure Per Capita (US$)

Source: The World Pharmaceutical Markets Fact Book 2009 from Espicom Business Intelligence; CIA World Factbook

Developed Countries Developing Countries

Num

ber

of

people

(in

mill

ion)

Lifestyle

Diseases

Acute

Changing Disease Profile Expected No. of Cardiac Patients in India

Lifestyle Changes Driving Diseases Which Require Hospitalisation

45.0

72.1

2008 2018E

Estimated No. of Diabetes Patients

9

Num

ber

of

people

(in

mill

ion)

Acute

Diseases

Cancer and Cardiac –Grows widely in the lifestyle segment

• Lifestyle diseases are set to assume a greater share of the healthcare market

• Lifestyle diseases such as cardiac diseases require hospitalization and are more expensive to treat hence increasing the in-patient revenues

2008 2018E

39.0

49.4

2008 2018E

Source: CII-McKinsey, CRISIL Research

• Medical value travel is one of the most lucrative segments of

the healthcare sector and is expected to grow into a US$ 1.5

billion industry by 2012

• Potential to contribute US$ 1.2 – 2.4 billion additional

revenue for up-market tertiary care hospitals by 2012, and

will account for 3 – 5% of total healthcare market

US UK Thailand Singapore India

100,000

1,60,000

250,000

300,000

41,726

30,000

292,470

200,000

14,250

10,500

62,500

75,000

15,312

13,000

150,000

140,000

6,000

6,000

30,000

45,000

Heart Surgery

Heart Valve Replacement

Bone Marrow Transplant

Liver Transplant

Overview Cost of Important Procedures (US $)

India: Potential to Become the Global Healthcare Destination

10

will account for 3 – 5% of total healthcare market

Key Drivers For The Growth

• Quality healthcare at fraction of the cost

• Availability of skilled doctors & hospitals

• Good reputation of Indian doctors

• Upsurge of lifestyle diseases

Issues

• Inadequate healthcare infrastructure

• Unstructured medico legal jurisdiction

• Indians hospitals’ standards below par against the global

benchmarks of care

• Lack of accredited hospitals and follow up care

300,000

48,000

38,000

200,000

50,109

18,000

75,000

8,000

10,000

140,000

25,000

12,000

45,000

6,000

6,000

Liver Transplant

Knee Replacement

Hip Replacement

494 7131,127

1,472

6,207

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Growing Share Of Urban Middle Class Households Health Insurance Market Size (US$ mn)

52.5%42.3%

34.5%

44.2%52.5%

58.6%

3.3% 5.2% 7.0%

0%

20%

40%

60%

80%

100%

CAGR: 32%

Health Insurance

0

2006 2007 2008 2009 2015E

11

• One of the fastest growing free economy

• Ranked 4th largest economy in the world in terms of

purchasing power parity

• Higher service mix, increasing urbanization

• Overall penetration at 2%.

• Growth driven by:

a) increasing awareness,

b) soaring healthcare costs and

c) demographic profile of the people

0%

2001-02 2006-07E 2010-11E

<US$ 2,100 US$ 2,100 - 12,800 >US$ 12,800Health insurance market in India is expected to grow at a CAGR of 32% to reach a market size of US$ 6.21bn by FY15

Source: CRISIL Research


B. Company Overview


Agenda


D. Financials

“Vision”

Globally respected

healthcare organization known forClinical excellence and Distinctive Patient care

“To create a world-class integrated healthcare delivery system in India, entailing the finest medical skills combined with compassionate patient care”

The Fortis Edifice…..

“Achieved by”

“Foundation” of

13

Efficient systems

Responsibility towards

stakeholders

Trust

Talented people

Strong value system

• Incorporated in 1996, Fortis is second largest healthcare chain in India built on a focused organic and inorganic strategy

• 56* healthcare delivery facilities

• 31 operating hospitals,

• 17 satellite and heart command centers and

• 8 hospitals under development

• Listed on Indian stock exchanges with a market capitalization of c.USD1.5bn (May 2011)

• International and Nationally accredited facilities by JCI, NABH, NABL along with quality certifications by ISO Standards 9001 / 14001

• Acquired 10 hospitals from Wockhardt Hospitals in 2009 and gained pan India presence and had recently acquired a ~25.3% stake inParkway Holdings (Southeast Asia’s leading healthcare service provider with a network of 20** hospitals with more than 3,400 beds throughout Asia) and has chosen to exit considering higher valuations

Took a significant step in establishing Fortis as a Global Healthcare Brand by its attempt

Fortis Healthcare: The first decade of growth

Acquired Strategic stake in Started first hospital at Mohali

Revenues grow 4x with strong

presence in NCR

Company achieves profitability on

consolidated basis

Acquired Escorts chain of hospitals Acquired Malar Hospitals, Chennai

as a Global Healthcare Brand by its attempt to acquire Parkway Holdings Ltd – Asia’s finest healthcare provider, but exited considering high valuations of the asset

Enters DelhiCommences operations at Noida

Listed on BSE and NSE with a market cap of USD543mnStarts hospital at Jaipur

Rights Issue Acquired 10 hospitals from Wockhardt

* Includes projects under development

14

Have signed 5 O&M contracts till date and progressing towards ongoing projects in tier II cities

Commenced two Greenfield facilities at Shalimar Bagh, Delhi and Anandpur, Kolkata; Launched an Oncology block at Mulund, Mumbai

Acquired Strategic stake in Super Religare Laboratories (SRL)

14

Strong IT systemDifferentiated Model –

Doctor engagement, Deep penetration Strategy, Pan

India presenceBrand

Key Differentiators – Success Drivers

15

Key Differentiators People focus

Operational Synergies –FOS, TRM, PSM

Stress on Quality, Patient Centricity

Execution capabilities –M&A deals, Integration and

turnaround

Organisational Chart

Managing Director

Chief Executive OfficerChief Financial

Officer

President – Strategy, Organisational Development &

Projects

Vice President – Corporate Affairs

16

Chief SalesChief Financial

Controller

Head-Information Technology

Chief People Officer

Director-Marketing & Corporate

Communications

Director-Medical Operations

Group

Regional / Zonal Directors*

Head – Internal Audit

* The business is bifurcated into three regions headed by Regional Directors (RDs) for respective regions.

Head – Growth & Business Planning

Branding & Marketing

• Conveying Value Proposition

Capital Efficiency

• Optimize Capex• Cheap Finance

Operating Efficiency

• ARPOB, ALOS, Occupancy• Gross Margins, EBIDTA• Bed to Nurse ratio

Driving Efficiencies

• Cheap Finance• Model of Growth• Outsourcing• Off Balance Sheet• Turn key/ PPP/ Leased Premises• Technology Management : COE

People

• Motivated, Trained and Engaged Staff: Service Excellence, Academics & Research, HR Processes

• Bed to Nurse ratio• Supply Chain Management• Best practice benchmarking• DSO/ Inventory Days • Surgical : Non Surgical• Shared Service Centres• FOS, MOS, Patient Satisfaction Index

Processes

• IT system, Protocols, SOP’s, Governance,• Trust and Transparency , Integration

Capability, Project Execution

Maximizing Return on Invested

Capital

17

Deep Pan India PresenceTotal Capacity Operational Beds No. of Hospitals

Category wise

Owned 4,716 2,941 22

Managed 1,576 800 26

Projects 1,945 - 8

Grand Total 8,237 3,741 56

Region wise

North 4,538 1,977 29

South 1,469 663 10

Presence across - 15 States- 30 Cities

18

Not included in above map are international hospitals, and projects* Expansion of beds at Mulund hospital is a project, but does not add a new hospital to the total number of hospitals. Although, the beds considered as part of capacity in Project stage

Owned Facility

Managed Facility

West 1,270 685 6

East 840 306 8

International 120 110 3

Grand Total 8,237 3,741 56

Maturity wise

More than 5 years 766 542 45

3 to 5 years 2,806 1,908 27

1 to 3 years 851 616 8

Less than 1 year 1,919 675 9

Projects 1,945 - 8

Grand Total 8,237 3,741 56

Heart Command Centers (HCCs)

Projects

Focus Areas

Growth strategy

Focused and Aggressive Growth Strategy

Improving Operational

Performance

Leveraging People and Technology

Reinforce presence Maximize efficiency � Reinforce presence in already present

regions

� Flexible approach to expansion through

Green Field, Brown Field, O&M

agreements, Asset Light model and Public

Private Partnerships (PPP)

� Replicate its North India model to

establish a network of super-specialty

“Centers of Excellence” and multi-

specialty hospitals delivering quality

healthcare, to all regions

� Maximize efficiency through strategies

such as common procurement unit for

medical equipments and supplies

� Improve occupancy rates by

expanding its reach and increasing

community outreach programs to gain

market share

� Increase its average income per bed

in use by focusing on high-end

healthcare services, reducing the

average length of stay of in-patients

� Attract and retain clinical staff with

reputations for clinical excellence in their

communities

� Training and skill enhancement

programs

� Adopting latest medical equipment and

technology

� Focusing on evolving a robust IT

platform for seamless integration of

information

19

Execution capabilities –Greenfield projects, M&A deals,

Integration and turnaround

Supply Chain Management, Shared Service Centers

FOS, MOS,

Motivated, Trained and Engaged Staff: Service Excellence,

Academics & Research, HR Processes

19

200

300

400

500

Cash Breakeven

EBITDA Breakeven

Book Breakeven

Other Equip

Land

Indicative Hospital Operating ModelR

ev

en

ues

17%

4x

23%

28%

[1.3x – 1.5x of CAPEX]

13%

12%

Typical Tertiary Care Model (200 Beds - Owned facility)

(100)

0

100

200

Year 1 Year 2 Year 3 Year 4 Year 5

Variable Personnel SG&A Cost EBIDTA

CAPEX

20

Cost of set up is `̀̀̀ 60 – 90 lacs/ bed

Occupancy30% 85%

Building &

Utilities

Medical

Equip

40% 36%31% 29%

27%

28%

28%30%

33%38%

31%23%

20%

38%

x

16%

(16%)

25%

50%

ROCE = 26%ROE = 20%

Debt: Equity – 1:1

200

300

400

500

Cash Breakeven

EBITDAR Breakeven

Book Breakeven

Indicative Hospital Operating Model

Rev

en

ues

17%

4x

8%

28%

[1.3x – 1.5x of CAPEX]

Asset Light Model (200 Beds)

5%

Land 13%

12%Other

Equip

6%

23%

Besides elongated book

breakeven period, Fortis’ to witness higher returns on its

investmentROCE = 51%

(100)

0

100

200

Year 1 Year 2 Year 3 Year 4 Year 5

Variable Personnel SG&A Cost EBIDTAR* Rent

21

Cost of set up is `̀̀̀ 60-90 lacs/ bed Occupancy 85%

*EBITDAR is Earnings before Interest, Tax, Depreciation, Amortisation and Rent/lease

40%36% 31%

29%

27%

28%

28%

30%33%

38%

31%

23%

20%

38%

x

(16%)

Debt: Equity – 1:1

CAPEX

Building &

Utilities

Medical

Equip25%

50%

Equip

30%

18%

11%

16% ROCE = 51%ROE = 39%

Fortis to invest only on Medical

and Other equipment (~37% of project cost).

Medical Program

Pricing

Surgical vs. Non Surgical

Critical Care Beds vs. General Care Beds

Specialties ChosenTotal Revenue

Focus on ARPOB

Average Revenue Per Occupied Bed

(ARPOB)

Average Revenue Per Occupied Bed

(ARPOB)

Average Length of Stay (ALOS)

Volumes Bed Utilization

Patient Turnover

No. of Procedures

Occupied Beds

÷÷÷÷=

22

A Hospital must grow its ARPOB, as when the occupancies go up it ensures that incremental beds are filled with high value added business

41.4

54.5

69.9 78.0

4.3 10.9 13.6 13.4

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

Q3FY08 Q3FY09 Q3FY10 Q3FY11

Fortis has Achieved Growth Both through Successful Acquisitions and Value Added Services

Extracting value from M&A: Escorts Delhi

`̀̀̀ Cr.

Ramp up at an acquired facility – Fortis Malar, Chennai

14.017.9

33.2

64.1

4.1 4.2 1.1

9.414.2

83.3

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

FY07 FY08 FY09 FY10 FY11

Acquired Fortis Malar in February 2008

67% CAGR

`̀̀̀ Cr.

Grown twice on quarterly basis since 2008

Operating Revenue EBITDA

23

FY07 FY08 FY09 FY10 FY11


3.6 5.9

9.0

16.7

20.7

(1.7) (2.2) (0.5)

3.4 4.5

(5.0)

-

5.0

10.0

15.0

20.0

25.0

Q2FY08 Q3FY08 Q3FY09 Q3FY10 Q3FY11


`̀̀̀ Cr.

Performance of a Greenfield facility: Jaipur

25.9

41.2

50.1

61.6

2.9

9.714.6 15.4

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

FY08 FY09 FY10 FY11


Extracting value from M&A: Escorts Amritsar

33% CAGR

`̀̀̀ Cr.

6x growth on quarterly numbers

4x on annual basis since inception

Shortage of skilled medical professionals

High start up costs and capex

requirements

• Focus on CME, research and accolades

• Aligned compensation structure, ESOPs

• Foothold in more than one hospital

• Nursing school and DNB programs

• Competence to strike deals, invest in green field hospitals, acquire hospitals, and O&Ms

• Partnership with government for PPP projects

• Centralising of common services to achieve economies of scale

• Concept and designed to reduce capex per bed

Fortis Approach to Industry Challenges

Key Challenges Fortis Approach

requirements

Lack of standardization /

quality

Technological obsolescence

• Innovative tie ups

• “Center of Excellence” Approach helps recycle technology around the network

• Centralized Specialist group owning technologies across network

Maintaining medical ethics

• Medical Advisory Board; Accreditation committee at each hospital

• Executive counsel taking call on key hospital discussions

• Code of Ethics; Whistle blower policy

• Concept and designed to reduce capex per bed

• Innovative models to finance medical equipments

• Accreditation of hospitals, laboratories, and blood banks by national and international authorities

• Focus on best practices and continuous review by a strong team

24


B. Company Overview


Agenda


D. Financials

SRL Acquisition & Rationale

� Acquisition of strategic stake in SRL – India’s leading diagnostic company

� Acquired 42.7 million equity shares representing 82.2% of the paid up capital as on April 14, 2011

� Post PE investment (AVIGO and Sabre), it would represent 71.5% of expanded capital

� Total purchase price of ~Rs 803.7 Crore on cash basis; valuation based on arm length price paid by AVIGO

for minority stake of 8.9% and lower than 4.2% by Sabre capital

� Fortis-SRL deal valued at 2.2x Sales and 12x EBITDA (FY12E); compares favourably to SRL - PDSPL deal

and Dr Lal Pathlab – TA Associate dealand Dr Lal Pathlab – TA Associate deal

� To become an integrated healthcare player with presence in all major verticals

� To participate in high growth segment of healthcare industry with huge potential

� SRL offers a strong fit due to:

� Geographical Complementarities

� Pan India presence

� Strong talent pool

� Well established brand and strong logistics network

� Synergistic with the hospital business

26

Two-way Synergy – Many New Upsides

• Increased opportunity from repeat customers of Fortis and SRL

• 25 % of the Path and Radiology testing is followed by hospital accessions – OPD/IPD conversions

Patient footfalls in Unified Fortis Network

• Favorable demographic and macroeconomic trend

• Fortis to leverage on SRL’s presence and leadership in 400 cities for its tier II and tier III expansion plan

Geographical Complementarities

• Highly skilled talent pool to help take the hospital diagnostic excellence to the next level

• To result in enhanced Patient safety and better Clinical outcomeQuality Improvement

• Fortis and SRL to cross leverage on SRL’s comprehensive offering of ~3,300 tests and its strong all-modaility experience and expertise in radiology for better managing in-hospital diagnostics.

In-house Radiology & Pathology

• Combined entities will access the large unified customer/patient/doctor database and significantly increase their ability serve the nationwide patient population.

Large Database for CRM, Research and Reach

27

Geographical Presence

North India

Reference Labs 1

Pathology Labs 27

Radiology Labs 1

Wellness Centers 4

Collection Centers 339

East India

Reference Labs 1

Pathology Labs 18

Radiology Labs -

Wellness Centers 1


�Present in ~400 cities in India

�Has won FICCI’s award for Operational

Excellence (2010), Frost & Sullivan Award for

Excellence in Diagnostics (2008 , 2009) and

rated the most innovative diagnostic company

by Business Today

Established and Wide Geographical Presence

Source: Company1 – Includes 1 reference lab in Nepal and a service agreement for a reference lab in Dubai Healthcare City.2 – Includes 25 pathology labs run through franchisees and 875 collection centers run through franchisee.3 – 12 Wellness Centers are in existing labs.

South India

Reference Labs 1

Pathology Labs 69

Radiology Labs 3

Wellness Centers 5


West India

Reference Labs 3

Pathology Labs 50

Radiology Labs 13

Wellness Centers 5


IndiaInternation

alTotal

Reference Labs 6 2 (1) 8

Pathology Labs 164 - 164 (2)

Radiology Labs 17 - 17

Wellness Centers 15 (3) - 15

Collection Centers 865 23 888 (2)

28

Financials: 2010-11 (Scenario)*

Rs 1483 Cr

Revenue

EBITDA

Rs 507 Cr

Fortis +SRL

Rs 1960 Cr

Revenue***

Increases revenue by 32% while impacting EBITDA

Rs 209 Cr Rs 88 Cr

EBITDA

Rs 297 Cr

PAT

Rs 124 Cr Rs 4 Cr**

PAT

Rs 128 Cr

*Financials have been annualized based on Q4FY11 for SRL and include FY11 for Fortis **PAT for SRL is after Interest costs of ~ Rs 45 Cr , which will substantially go down post IPO ***Net of inter-company revenue

32% while impacting profitability marginally

29

29

Recent Deals

1. O&M agreement with O.P. Jindal Hospital, Raigarh, Chhattisgarh

� 100 bed multi-speciality secondary care hospital

� Located within the campus of Jindal Steel & Power Limited

2. Reverse O&M agreement with Vivekanand Hospital Moradabad, Uttar Pradesh

� 150 bed multi-speciality secondary care hospital ; Premises also house a Nursing College and a Nursing School

� Located in Moradabad, North Eastern UP, the hospital was set up under a Trust in 1985.

� Constructed over a 6.3 acre land with a built up area of 198,000 sq ft

3. O&M agreement with East Coast Hospital in Pondicherry

� 100 bedded facility with a plan to expand it to a 250 bed facility

� To be operational by Q1FY12

4. Reverse O&M agreement with Lifeline Hospital, Alwar, Rajasthan

� 100 bedded facility with a plan to expand it to a 150 bed facility

� Constructed over a 3 acre plot with a built up area of 100,000 sq ft

5. Public Private Partnership with State of Uttarakhand

� To set up a 50 bed Cardiac Centre at Deen Dayal Upadhyaya (Coronation) Hospital at Dehradun

� To be operational by Q2FY12

30

Upcoming Greenfield Hospitals

No. Location Beds Area & Land Ownership

Date of Commencement Estimated Capex (INR

Cr)

Status

1. Kangra 100 37,000 sq. ft., B. Lease Q2 FY12 24• Civil and interior work completed• Medical equipment have been ordered• Facility being handed over to operations

2. Dehradun 5027,000 sq.ft, Public Private

PartnershipQ3FY12 15

• Civil construction work of the hospital building is complete

• Some delays in handing over premises• Equipment ordered

3. Gurgaon 450** 11 Acres, Owned Q4 FY12 325• Work on interiors is on• Medical equipment ordered

** Only for Phase – 1, total size of the project is 1000 beds

3. Gurgaon 450** 11 Acres, Owned Q4 FY12 325 • Medical equipment ordered• Rs 235 Cr has been spent till March’11.

4. Ludhiana – 1 200 1,55,000 sq. ft., B. Lease Q2 FY13 50• Construction in full swing. Casting of columns in progress

• Project on schedule

5. Peenya, Bangalore 120 ~70,000 Sq ft; B. Lease FY13 18• Building construction work is delayed by landlord

6. Ludhiana – 2 75 60,000 sq ft. B. Lease FY 13 20• Approval from govt. authorities received; design work underway

7. Gwalior 200 2.5 Acres, L. Lease FY14 72 • CLU permission awaited from authorities

8. Ahmedabad 200 1,55,000 sq. ft., B. Lease FY14 50 • Approval from govt. authorities awaited

Total 1,395 574

31


B. Company Overview


Agenda


D. Financials

329.5337.9

357.8371.4

415.6

29.4

34.5

27.2300.0

350.0

400.0

450.0

24.0

29.0

34.0

39.0

Operating Revenue and PAT

Revenues

124%

�INR Cr.

185.4 190.5

232.520.821.6

21.7

13.0

7.6

100.0

150.0

200.0

250.0

Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY11 Q2FY11 Q3FY11 Q4FY11

4.0

9.0

14.0

19.0

Operating Revenues PAT

3

PAT

3.9x

33

Speciality wise

Revenue breakup

Category wise

Cash, 58%International

ECHS, 7%

CGHS, 3%

TPA, 14%

PSU's, 10% Corprates

and Others,

4%

Cardiac, 35%

Ortho, 8%

Neuro, 6%

Onco, 5%

Gastro, 2%

MSH,

8% OPD, 19%Renal, 4%

Pulmo, 2%

Gynae, 2%

Others, 10%

Other, 16%

3434

SAARC,

15%

Africa, 40%Middle

East, 27%

USA, 7%

Others,

11%

International revenue

International

, 5%

Focus on key specialties Cardiac, Neuro, Ortho, Renal & Onco to continue…

International patients contributes 5% to Fortis’

network revenue

Cash business is ~63% of overall business

63%

68%

74%72%

40%

50%

60%

70%

80%

FY08 FY09 FY10 FY11

Occupancy

Growth Driven by Steadily Increasing Occupancy Rates Leading to Improving Operating Parameters…

35

8.108.30

8.10

7.65

FY08 FY09 FY10 FY11

4.30 4.20 4.103.70

FY08 FY09 FY10 FY11

Average Revenue Per Operating Bed (Rs. Million) Average Length of Stay (days)

2,5303,754

4,553

7,013

0

2,000

4,000

6,000

8,000

FY10 FY11

Knee Replacements THR & Others

+31% +52%7,083

Cardiac Ortho

Significant Increase in No. of Procedures with a Focus on Key Specialty Areas (Cardiac, Neuro, etc.)

6,924 9,777

8,21410,777

20,851

26,8303,662

4,482

-5,000

5,000

15,000

25,000

35,000

45,000

55,000

FY10 FY11

39,651

51,866 10.767

Knee Replacements THR & Others

36

+62%+41%

Neuro Dialysis

CTVS & Pediatrics PTCA CAG Others

4,928

2,709

0

1,000

2,000

3,000

4,000

5,000

FY10 FY11

62,315

44,096

0

10,000

20,000

30,000

40,000

50,000

60,000

FY10 FY11

Summary : Consolidated Profit and Loss – FY 2010-11

FY11

Particulars Base operations

% Parkway Total

(Rs Cr.) (Rs Cr.) (Rs Cr.)

Operating Revenue 1,482.8 94.1% - 1,482.8

Other Income * 92.3 5.9% 366.6 458.9

Total Income 1,575.1 100.0% 366.6 1,941.7

Direct Costs 393.0 24.9% - 393.0

3

Direct Costs 393.0 24.9% - 393.0

Employee Costs 273.1 17.3% - 273.1

Other Costs 607.6 38.5% 161.0 768.6

EBITDA 301.4 19.1% 205.6 507.0

Finance Costs 69.6 4.4% 180.4 250.0

Depreciation & Amortization 104.5 6.6% - 104.5

PAT after minority interest and share in associates

106.4 6.8% 18.0 124.4

Operating EBITDA 209.1 14.1%

• Rs 85 Cr of the Other Income constitutes interest & such income from deployment of surplus fundsNote : The nos. have been restated and realigned to reflect profit from base operations separately

37

FY11 Comparative Financials – Base Operations

Particulars FY11

(Rs Cr.)%

FY10 (Rs Cr.)

% Growth (%)

Operating Revenue 1,482.8 100.0% 937.9 100.0% 58.1%

Direct Costs 393.0 26.5% 262.7 28.0% 49.6%

Employee Costs 273.1 18.4% 195.0 20.8% 40.1%

Other Costs * 607.6 41.0% 339.8 36.2% 78.8%41.0% 36.2% 78.8%

Operating EBITDA 209.1 14.1% 140.4 15.0% 48.9%

Other Income 92.3 6.2% 50.1 5.3% 84.2%

Finance Costs 69.6 4.7% 57.3 6.1% 21.4%

Depreciation & Amortization 104.5 7.0% 59.9 6.4% 74.4%

PAT after minority interest and share in associates

106.4 7.0% 69.5 7.4% 53.1%

EPS for the period** (Rs) 3.23 2.61

3

*Increase in other costs is primarily due to doctor engagement model at newly acquired hospitals. **EPS calculated on reported consolidate net profits for the relevant year

38

Maturity-wise Performance – FY 11: Main Hospitals

MaturityRevenue

Contribution EBITDA

Contribution

Average EBITDA margin *

Average Occupancy

Average ARPOB (Rs

Cr)

5 Years and Above (Four hospitals)

24% 34% 26.0% 80% 1.00

3 years to 5 Years (Nine 58% 62% 20.0% 78% 0.83

14% of operating beds aged 5 years and above contributes 24% to

revenue

51% of operating beds are 3 to 5 years of age and contributes 58% to

Hospitals)58% 62% 20.0% 78% 0.83

One to three Years (Eight Hospitals)

13% 9% 13.9% 57% 0.63

Upto one year (Three Hospitals)

5% (5)% (18.4)% 37% 0.34

Average - - 18.8% 72% 0.81

* Average EBITDA margin has been calculated on Unit basis

years of age and contributes 58% to revenue

16% of operating beds are 1 to 3 years of age and contributes 13% to

revenue

18% of operating beds are up to 1 year of age and contributes just 5% to

revenue

39

Balance Sheet as at March 31, 2011

Balance Sheet Rs Crore

Shareholder’s Equity* 3,313

Foreign Currency Convertible Bonds (FCCB’s)# 446

Debt 642

Total Capital Employed 4,401

Goodwill 885

Net Fixed Assets (including CWIP of Rs 270 Crore) 1,910

Net Cash Surplus*** 854

* Shareholder’s Equity is inclusive of Revaluation Reserve and Minority Interest** Net Current Assets includes Deferred Tax Assets*** Net Cash Surplus excludes FCCB’s

#Fortis issued US$ 100 million,5% convertible bonds due in May 2015 convertible at Rs 167 per equity share; redeemable on or after May 2013

40

Net Fixed Assets (including CWIP of Rs 270 Crore) 1,910

Investments

- in Associates 28

- Deposits (including Inter-Corporate Deposits) 1,348

- Liquid and Mutual Funds 62

Cash and Bank Balances 86

Net Current Assets** 82

Total Fixed Assets 4,401

Summing Up

Healthcare Sector

• Healthcare Sector poised to grow

• Growth led by Lifestyle Diseases and Insurance Penetration

• Government recognizes the need to partner with Private Sector

• Healthcare expenditure estimated to be 6% of GDP by 2012 & employ around 9 million people

Fortis Healthcare

• One of the largest private healthcare delivery player in India

• Aggressively grown from 1 hospital in 2001 to a network of 56* hospitals in 2011 with ~ 8,000*

beds

• Leadership in Cardiac Sciences, Neuro Sciences and Orthopedics

• Evolved the Business Model and high level of Brand Equity

• Proven ability to acquire, integrate and turn around

• Providing attractive value propositions to various segments of market

* Estimated number of hospitals and beds is including hospitals under projects stage

41

Analyst Coverage

Broker* Analyst name Comments

B&K Vikash Singh

B&K maintains its positive outlook on Fortis due to its focus on profitable growth, improvement in realization and operational efficiency across its facilities

Bank of America Prasad DeshmukhExpects strong growth in earnings as majority beds will turn profitable going ahead

Centrum Rahul Gaggar Positive on the company’s growth prospects

CITI Prashant Nair / Anshuman GuptaOver the longer term, CITI forecasts sustained growth & improvement in profitability as the new hospitals scale up

Goldman Sachs Balaji V Prasad / Rishi Jhunjhunwala -Goldman Sachs Balaji V Prasad / Rishi Jhunjhunwala -

ICICI Direct Rashesh ShahFortis’ constant growth focus andstrong management team supports our positive outlook on the company

IDFC Nitin Agarwal / Ritesh ShahFHL continues to pursue its strategy to grow aggressively with sustained focus on operational parameters

JP Morgan Princy Singh / Dinesh S. Harchandani, CFAAsset light strategy to help Fortis scale up at a faster pace and improve its capital return profile.

Morgan Stanley Saniel Chandrawat / Sameer Baisiwala, CFABullish on Fortis’ ability to execute aggressiveexpansion plans

UBS Ajay NandanwarOptimistic about Fortis’ opportunities ahead, its ability to improve the operating performance of its acquired hospitals

* In Alphabetical order

THANK YOU…

Fortis Healthcare (India) Limited

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