Add Artemis Medicare Services Ltd For Target Rs.325 by Choice Institutional Equities Ltd
Multi-year capacity expansion drives high-growth earnings:
ARTMSL is poised to expand its capacity from 700 to nearly 2,000 beds by FY29, supported by major projects in Raipur, South Delhi and Gurugram. Alongside improving international patient revenues, ARPOB, payer mix and case mix, the company is well-positioned for sustained operating leverage. Importantly, our FY29 estimate excludes the proposed INR-7,000 Mn fundraise, while projecting Revenue, EBITDA and PAT CAGR of 29.4%, 29.9% and 33.3%, respectively, over FY26–FY29E.
View and valuation: We value the company on 18x EV/EBITDA for FY28E, implying a PE multiple of 43.8x/31.4x at FY27E EPS/FY28E EPS. Therefore, we maintain the target price of INR 325 and change our rating to an ‘ADD’
Multi-year capacity expansion creates a strong growth runway:
The growth story is now entering its next phase through a large expansion pipeline. The company has operationalised its 300-bed Raipur hospital, announced 200+ additional beds through Tower IV at Gurugram and is progressing with the South Delhi expansion, targeting nearly 2,000 operational beds by FY30. Tower IV is expected to become operational within 18–22 months, while management expects rapid ramp-up due to existing demand. This multi-city expansion significantly increases revenue capacity, strengthens ARTMSL' presence beyond NCR and provides a long runway for sustained earnings growth over the next several years
High-value specialty mix positions ARTMSL for premium revenue growth: Q1FY27 growth was driven by a sustained demand across cardiology, oncology, neurosciences and orthopaedics, while Gurugram's ARPOB increased to INR 85,690 through a richer mix of complex tertiary and quaternary procedures. Building on this momentum, the dedicated 200+ bed women and advanced paediatric super-specialty tower should increase patient referrals, improve procedure intensity, enhance pricing power and sustain premium revenue growth, while strengthening ARTMSL’s competitive positioning in one of India's fastest-growing healthcare markets
Capital-efficient expansion anchored by a trust-land model: ARTMSL continues to pursue a highly capital-efficient expansion strategy by leveraging trust-owned land and asset-light partnerships, significantly lowering capital intensity. The 650-bed South Delhi (VIMHANS) hospital is being developed at an estimated INR 70–80 lakh per bed. The 200-bed Gurugram Tower IV expansion is expected to require only INR 50–55 lakh per bed, disciplined capital allocation and ability to scale up capacity at attractive returns.
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