India’s healthcare system, which includes over 70,000 institutions, is quickly expanding, fueled by a population of more than 1.4 billion. With a market value of $372 billion in 2022, it is expected to grow at a CAGR of 22.87%, driven by growing income levels, improved health awareness, and government efforts.
Global Health Ltd has a market capitalization of Rs 30,748.12 crore, the shares were trading at Rs 1,145.15 per share, increased around 2 percent as compared to the previous closing price of Rs 1,123.45 per share.
Looking forward to the company’s financial performance, revenue grew 14 percent from Rs 707 crore in Q4FY3 to Rs 809 crore in Q4FY24, and during the same period of time, net profit grew 27 percent from Rs 101 crore to Rs 127 crore.
Axis Securities, one of the well-known brokerages in India, gave a ‘Buy’ call on the healthcare stock with a target price of Rs 1,475 apiece indicating a potential upside of 29 percent from Thursday’s price of Rs 1,145.15 per share.
Here’s the explanation for the potential upward target:
● Expansion in Existing Facilities: the company plans to increase its current bed capacity by 1.4 times, adding approximately 1,394 beds to the existing 2,823 beds over the next three years, enhancing its ability to serve more patients.
● New Facility Contributions: The addition of new facilities in Lucknow, Patna, and Noida will contribute 329, 290, and 500 beds respectively, aiming for a total bed count of nearly 4,000 by FY27E, supporting the company’s strategic growth objectives.
● The firm has the greatest FCFF/EBITDA conversion ratio (~60%) in the industry, allowing for self-funded expansion. It intends to earn Rs 900-1,000 crore FCFF annually, with a minimum Capex of Rs 300 crore each year for the next three years. RoIC is expected to improve by 800bps by FY26E.
● Brokerage anticipates that Global Health’s Average Revenue Per Occupied Bed (ARPOB) could achieve a CAGR growth of 4.6%, driven by a significant proportion of complex specialties and an uptick in the volume of international patients from FY24 to FY27E.
Global Health Limited (Medanta) is a multi-specialty tertiary care provider in northern and eastern India. Medanta provides modern, comprehensive healthcare in Delhi, Gurugram, Indore, Ranchi, Patna, and Lucknow via a network of five hospitals, six medicines, diagnostic labs, homecare, and telemedicine services.
Written by:- Abhishek Singh
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