Dr Naresh Trehan, a world-renowned cardiovascular and cardiothoracic surgeon, became a billionaire with shares of Medanta hospital chain operator Global Health Ltd rising over 100 percent this year.
Currently serving as the Chairman and Managing Director of Medanta, Trehan is also the chain's chief cardiac surgeon.
The stock hit a record high of Rs 972.55 a share on November 30, with its market cap surging to Rs 26,010 crore. At closing, it settled at Rs 969 on the BSE, up 5.3 percent from previous close.
Trehan, 77, amassed the wealth due to Global Health's share price skyrocketing by over 182 percent from its issue price of Rs 336 per share since its listing on November 16, 2022.
With this, Trehan's net worth has surged past Rs 8,402.30 crore, or $1 billion. Currently, he has 88.73 million shares or a 33.06 percent stake in Global Health.
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An email sent to the Global Health seeking comment for the story remained unanswered till press time.
After graduating from King George's Medical University in Lucknow, India, Trehan practiced at New York University Medical Center from 1971 to 1988. He later founded the Escorts Heart Institute and Research Centre upon returning to India. Trehan has been the personal surgeon to the President of India since 1991 and has received prestigious awards including the Padma Shri, Padma Bhushan, Lal Bahadur Shastri National Award, and Dr. B. C. Roy Award.
Jefferies in its recent note said Naresh Trehan, Medanta's founder, continues as a significant mentor, actively involved in complex procedures at the main hospital. The strong leadership team he guides has driven Medanta's cardiac divisions in Lucknow and Indore to excel, solidifying the group's reputable brand name.
The stock surged recently following robust September quarter earnings, driven by increased occupancies in both established and new hospitals. Medanta achieved its highest-ever EBITDA margin of 25.9 percent due to operating leverage. The ongoing expansion in Lucknow and Patna resulted in a 38 percent EBITDA contribution during the quarter.
Occupancy rose to 64.9 percent compared to 58.1 percent in the first quarter of FY24 and 59 percent in the second quarter of FY23. The Average Revenue Per Occupied Bed (ARPOB) was Rs 61,000 per day (up 5 percent YoY/down 3 percent QoQ). The strong quarter stemmed from robust growth in both established and new hospitals (Lucknow and Patna).
Medanta aims to invest Rs 1,000-1,100 crore in the next three years, mainly focusing on expanding capacities in Lucknow, Patna, and Noida. Additionally, Rs 60-75 crore will be allocated for equipment and technology upgrades at the Gurugram facility as part of maintenance capex.
Patna Hospital plans to expand from 358 to 410-420 beds by year-end, focusing on increasing critical care capacity with an addition of 50 beds, mostly ICU beds, totaling over 130. Operating theaters have increased from 4 to 8 in 2QFY24. Medanta has initiated a radiation oncology department and is incorporating more daycare beds for oncology and dialysis patients. The facility is seeing visits from state scheme patients, and this traffic is expected to rise in the upcoming quarters.
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Lucknow Hospital currently operates 600 beds, including 200 ICUs, with plans to add 120-150 beds by the end of FY24. To meet strong demand in the Mother & Child segment, more ward beds will be added. The oncology segment maintains robust demand. There have been no price increases at the Lucknow hospital; instead, ARPOBs are influenced by the hospital's case and payor mix.
"We maintain our Buy rating on Medanta, driven by their high growth prospects, clinical excellence, and balanced play between Metros and Tier I. We increase our FY25/26E by 14%/14% on higher margin and occupancy for both mature and developing hospitals. We value Medanta's EV at 25.5x Sep-25E EBITDA", said Jefferies India in its latest note.
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