Healthcare Projects · Case study

A hospital that broke even in month fourteen, at half the beds the promoters wanted

A clinician group planning a 130-bed multi-specialty hospital in a district town whose addressable catchment did not support it.

Client: Name withheld
Location: Central Maharashtra
Duration: 19 months
Engagement: Feasibility + DPR project fee

Discuss a similar project

Headline result

Month 14

Operating break-even

Against 24 months projected

The situation

What we walked into

Project Funding & DPR Business & Growth Strategy

Three consultants had produced projections for a 130-bed facility. All three modelled demand from district population rather than realistic addressable catchment and payer mix.

The promoters were experienced clinicians with no project finance experience, and had already commissioned architectural drawings for the larger facility.

No model included a ramp-up reserve, despite occupancy in comparable facilities taking two years to mature.

What we did

The engagement, phase by phase

Including the phase the client least enjoyed, which in most of our case studies is the second one.

Phase 1 · Weeks 1–6
Catchment study the promoters did not enjoy
Competitor bed census, referral pattern mapping across 38 feeder locations, payer mix analysis and realistic addressable population. The defensible answer was 64 beds in phase one, less than half the plan.
Phase 2 · Weeks 5–9
Bed mix and specialty modelling
Revenue per bed-day by specialty and payer, length of stay, theatre and imaging utilisation. Two of the six proposed specialties were removed and a day-care surgical block added, which materially improved projected return on the same footprint.
Phase 3 · Weeks 8–14
DPR with an honest ramp
A project report modelling occupancy maturing over 26 months, with an explicit working capital and interest-servicing reserve, stress-tested at 70% of projected occupancy. The lender's credit note cited the ramp-up reserve as the reason for approval.
Phase 4 · Months 4–19
Phased construction and approvals
Structural provision for a phase two above the day-care block, so expansion would not mean rebuilding. Clinical establishment registration, biomedical waste authorisation, AERB licensing and fire NOC run in parallel from month one.

Measured outcome

The numbers, with their baselines

These are the metrics written into the engagement letter before work started.

₹21.4 Cr

Project funded

Term loan with ramp-up reserve

130 → 64

Phase one beds

Right-sized to addressable catchment

71%

Occupancy, month 18

Against 58% projected

₹19 Cr

Capex avoided

Versus the 130-bed plan

28%

Day-care contribution

Of revenue, from the added block

Approved

Phase two

Funded from operating cash flow

Engagement visual

With an engagementDo-nothing baselineMedian client revenue path (₹ crore)

Being told to halve the project was not what we paid for. Fourteen months in, we are cash positive and building phase two from our own surplus — which is not the conversation our peers in the next district are having.

Managing Trustee · Name withheld at the client's request

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