Fortis Malar Hospitals Reports Profit of Rs 417.65 Crore in Q1 After Business Sale

Fortis Malar Hospitals Limited , a healthcare services provider, has reported a significant profit for the quarter ended June 30, following the sale of its business operations. The company's financial results, released on August 4, highlight its transition phase and financial position post-divestment.

Key Financial Highlights

• Profit After Tax: Rs 417.65 crore
• Other Income: Rs 460.72 crore
• Earnings Per Share (EPS): Rs 2.23 (not annualized)

Financial Performance

Fortis Malar Hospitals reported a standalone profit after tax of Rs 417.65 crore for the quarter. This substantial profit comes primarily from other income, which stood at Rs 460.72 crore. The company's earnings per share for the quarter were Rs 2.23.

Business Operations and Future Plans

The company disclosed that it no longer has any business operations following a slump sale transaction. Despite this, Fortis Malar maintains a strong financial position with cash and cash equivalents of approximately Rs 3,232.39 crore, which the company believes is sufficient to meet its obligations as they fall due.

Management Strategy

The management and Board of Directors are currently evaluating various corporate restructuring options for the future course of action. While there is no immediate visibility of commencing new business operations, the company is progressing with the finalization of plans for its future direction.

Subsidiary Update

During the quarter, Malar Stars Medicare Limited, the subsidiary company, converted to a Section 8 Company as per the provisions of the Companies Act, 2013. This change became effective from May 14, and the subsidiary's name was changed to Malar Stars Medicare.

Regulatory Compliance

The company has filed appeals against various tax demands, including:

• VAT appeals (tax demand: Rs 254.55 crore)
• GST appeal (tax demand: Rs 4.82 lakh)
• Income tax appeal (tax demand: Rs 150.61 lakh)

Fortis Malar remains confident in its position regarding these matters and considers the possibility of any significant financial exposure to be remote.

Other Developments

Pursuant to a notification issued by the Government of Tamil Nadu regarding the revision of minimum wage rates, the company has reversed a provision of Rs 408.20 crore towards earlier minimum wages payable. This reversal has been considered as other income in the financial results for the quarter.

The unaudited financial results were approved by the Board of Directors at their meeting. The company continues to prepare its financial statements on a going concern basis, supported by its current cash position and projected cash flows.

Fortis Malar Hospitals Limited remains committed to meeting its financial obligations and resolving ongoing legal and tax matters while exploring future opportunities for corporate restructuring and potential new business ventures.