Global Health, operator of the hospital chain Medanta, and ethnic snack maker Bikaji Foods International made an impressive trading debut on November 16, thanks to conducive market conditions and sound financial scorecards reported by both.
Analysts advised investors to hold both stocks. They cited Global Health’s financial performance, increasing number of patients and cost efficiency.
In the case of Bikaji Foods, healthy revenue growth, market leadership in the core states of Rajasthan, Assam and Bihar, an international presence and a strong management team were cited as plus points.
In terms of price performance, Global Health performed better than Bikaji Foods, rising as much as 27 percent to a day's high of Rs 425 after opening at Rs 398.15 against its (Initial Public Offering (IPO) price of Rs 336 per share.
Bikaji Foods International shares opened 7 percent higher at Rs 321, and climbed 11.66 percent to hit an intraday high of Rs 335 on the BSE.
Global Health
Global health is a multi-speciality healthcare centre that operates the Medanta brand. It has reported growth in its revenue except in FY21, the pandemic year.
In the last three fiscal years, Global Health has reported average earnings per share of Rs 4.51 and an average return on networth of 7.21 percent. "We believe investors should hold their positions for a long-term perspective," Mohit Nigam, fund manager and head of portfolio management services at Hem Securities, said.
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The private multi-specialty tertiary care provider, which operates four hospitals in the northern and eastern regions of India, clocked 50 percent growth in consolidated revenue from operations in FY 2021-22. Consolidated profit grew almost seven-fold to Rs 196.2 crore in the same year compared to the previous fiscal.
In the quarter ended June FY23, Medanta registered 27 percent growth in revenue from a year ago, led by an increase in the number of patients, bed occupancy and higher average revenue per occupied bed. Profit jumped 40 percent to Rs 58.7 crore.
The operating performance was also better. Earnings Before Interest, Tax, Depreciation and Amortisation grew at a compound annual growth rate of 55 percent during FY20-FY22 and margin expanded from 12 percent in FY20 to 21 percent in FY22 on better operational efficiencies.
"The issuer has good patient volumes and cost efficiency, and its financial profile also shows an increasing trend. Nevertheless, the promoter shareholding would come down to 33 percent post-IPO,” Parth Nyati, founder of stock trading platform Tradingo, said.
Prashanth Tapse, senior vice president of research at Mehta Equities, said investors allotted shares in the company should focus on the long term, adding that the market always rewards a company that has growth potential.
Global Health, which raised Rs 2,205 crore via its public issue, provides healthcare services in over 30 medical specialties and engaged over 1,300 doctors, led by experienced department heads with operational hospitals having 2,467 installed beds as of June 2022.
The average occupancy level of beds at its hospitals dropped in FY21 to 51.57 percent compared to 54.85 percent in FY20, but there was a gradual recovery in volumes in FY22 and the average occupancy level rose to 60.5 percent.
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Bikaji Foods, which makes Indian snacks and sweets, is among the top three ethnic snack manufacturers with a pan-India presence.
Given its market leadership in the core states of Rajasthan, Assam and Bihar and an international footprint, investors should hold the stock for long-term gains, said Nigam of Hem Securities.
The company has a strong management team and a significant percentage of promoter holding (76 percent post-issue). It generated strong revenue growth in the last three years, when revenue increased to Rs 1,621 crore in FY22 from Rs 1,083 crore in FY20.
Profit rose to Rs 76 crore from Rs 56 crore in the same period although the operating profit margin declined to 8.7 percent in FY22 from 8.8 percent in FY20 (it was 11 percent in FY21).
It had a profit of Rs 15.7 crore on revenue of Rs 424 crore in Q1FY23, against a profit of Rs 12.41 crore on revenue of Rs 337 crore in the same period last fiscal.
Pravesh Gour of Swastika Investmart as well as Tapse of Mehta Equities advised aggressive investors and risk takers to hold the stock for the long term.
They said Bikaji has strong market positioning and a good brand recall with improved market penetration to maintain long-term growth.
Bikaji Foods International raised Rs 881 crore through its public issue.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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