B&C Medical College revenue rises as expansion continues, But debt burden remains high

KATHMANDU: Financial performance at B&C Medical College Teaching Hospital and Research Center has shown notable growth in recent years, driven by increased hospital services and the launch of medical education programs. However, the institution’s capital structure remains heavily debt-dependent, with liabilities continuing to rise, according to a recent rating report published by CARE Ratings Nepal.

The rating agency assigned the company a ‘CARE-NP BB+’ rating for its long-term bank facilities and ‘CARE-NP A4’ for short-term bank facilities, indicating moderate credit risk and a relatively weaker financial profile compared to higher-rated institutions in Nepal’s private healthcare sector.

Bank Borrowings Cross Rs 4 Billion

According to the latest report, the company’s total sanctioned bank facilities have increased to Rs 4.04 billion, reflecting the institution’s aggressive infrastructure expansion and operational scale-up.

Of the total borrowing:

Rs 3.94 billion is categorized as long-term loans

Rs 100 million is short-term borrowing

This marks a significant rise from the Rs 3.46 billion bank facilities recorded the previous year, highlighting the continued reliance on external financing to support infrastructure, medical equipment, and educational facilities.

The credit rating agency noted that a substantial portion of the borrowing has been used for construction of educational infrastructure, including student hostels and academic facilities, as well as capitalized interest during the development phase.

Revenue Growth Driven by Medical College Operations

Despite the elevated debt exposure, the hospital and medical college have reported consistent revenue growth, signaling expanding demand for healthcare services in eastern Nepal.

Financial data cited in the report show:

Year Revenue
2023 Rs 815 million
2024 Rs 963 million

The increase in revenue is attributed to several factors, including:

Expansion of hospital services

Increased patient inflow

Launch and operation of medical education programs

Broader diagnostic and specialty treatment services

The addition of medical college operations has significantly diversified the institution’s income streams, combining healthcare services with academic revenue from medical education.

Profit Margin Declines Despite Revenue Increase

However, the growth in revenue has not fully translated into higher profitability. CARE Ratings Nepal noted a decline in the PBILDT margin, reflecting higher operational and administrative costs associated with expansion.

FY2024 PBILDT Margin: 26.69%

FY2025 PBILDT Margin: 22.83%

The drop in margin was mainly due to:

Expansion of new facilities

Increased administrative expenses

Operational costs linked to scaling healthcare and academic services

Such cost pressures are typical for hospitals and medical colleges undergoing rapid infrastructure expansion.

Cash Flow Improves After Previous Losses

The report also highlights an improvement in operational cash flows. After experiencing cash deficits in the previous year, the institution reported a gross cash accrual of around Rs 28 million in FY2025.

Operational performance has remained strong into the current year. During the first six months of 2026 alone, the institution generated revenue of Rs 708 million, suggesting that the hospital and medical college are maintaining strong service demand.

Total Debt Continues to Rise

Despite improved revenue and operational cash flow, the company’s overall debt remains high, raising concerns about long-term financial stability.

Total outstanding debt stood at:

FY2024: Rs 3.66 billion

FY2025: Rs 3.90 billion

The continued increase is mainly linked to capital expenditure on academic and residential infrastructure, including hostels and educational facilities necessary for medical college operations.

The rating agency also noted that accumulated losses in FY2024 and FY2025 have weakened the company’s net worth, keeping the capital structure under pressure.

Debt Servicing Capacity Shows Improvement

There are, however, signs of gradual improvement in the company’s ability to service its debt obligations.

The interest coverage ratio improved from:

0.71 times in FY2024
to

1.10 times in FY2025

This improvement reflects:

Lower lending rates in Nepal’s banking sector

Better operational cash flow from hospital services

A ratio above 1 indicates that the institution has begun generating sufficient earnings to meet its interest obligations, although the margin remains relatively thin.

Private Healthcare Expansion in Eastern Nepal

Founded in 2011, B&C Medical College Teaching Hospital and Research Center has emerged as one of the major private healthcare and medical education institutions in eastern Nepal.

Located in Jhapa district, the institution provides:

Multi-specialty hospital services

Modern diagnostic facilities

Medical education programs

The hospital has played a growing role in expanding healthcare infrastructure outside the Kathmandu Valley, particularly in eastern Nepal, where demand for advanced medical services has increased significantly.

The institution is chaired by Dr. Rambabu Giri, while businessman Durga Prasai serves as executive director.

The rating agency noted that while the institution continues to expand its healthcare and academic footprint, high leverage and weak capital structure remain key financial risks that could affect its credit profile in the coming years, especially if debt levels continue to rise faster than profitability.