Geojit IPO report on Yatharth Hospital and Trauma Care Services Ltd
Yatharth Hospital & Trauma Care Services Ltd. (Yatharth) is a private super-speciality hospital chain established in 2008 and located in the National Capital Region of Delhi. The company operates three super-speciality hospitals in the Delhi NCR, specifically in Noida, Greater Noida, and Noida Extension, Uttar Pradesh. Yatharth has acquired a 305-bedded multi-speciality hospital in Orchha, Madhya Pradesh (commenced operations in FY22), making it one of the largest hospitals in the Jhansi-Orchha-Gwalior region in terms of bed capacity. As of March 31, 2023, Yatharth has a team of 609 doctors, offering healthcare services across various specialities and super-specialities. The Indian healthcare industry is poised to achieve a healthy CAGR of ~11.3% over FY23-27E, driven by strong fundamentals, increasing affordability, and the potential of the Ayushman Bharat scheme (Source: CRISIL Report) • The number of operational beds grew at a CAGR of 27.5% from 864 (FY21) to 1,405 (FY23), and the occupancy rate of beds increased from 42% in FY21 to 45% in FY23. Revenue from operations grew at a CAGR of 51% over FY21-FY23 from Rs.229cr to Rs.520cr in FY23 led by rise in In-patient volumes (~46% CAGR over same period), bed occupancy levels and an increase in average revenue per occupied bed.
Valuation and Outlook
At the upper price band of Rs.300, Yatharth is available at a P/E of 39.2x (on FY23 EPS), which appears to be reasonably priced compared to its peers. Considering its consistent topline growth, stable margins, strategic acquisition, revival of medical tourism, and promising industry outlook, we assign a “Subscribe” rating on a medium to long term basis.
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