Add Global Health Ltd For Target Rs. 1,500- Choice Broking Ltd
MEDANTA: Phase of aggressive expansion:
MEDANTA is entering a highgrowth phase, with plans to add 3,000 beds over the next 4–5 years, including the upcoming launch of its 550-bed Noida facility and a new 110-bed hospital in Ranchi. On the strength of strong strategic locations and operational excellence, this expansion will unlock significant long-term value.
View and Valuation: We maintain our estimates and introduce FY28E projections. We forecast revenue/EBITDA/PAT to expand at a CAGR of 18.5%/22.6%/30.5% over FY25–FY28E. Valuing the stock at an EV/EBITDA multiple of 27x (maintained) on the average of FY27 and FY28 estimates, we arrive at a revised target price of INR 1,500 (earlier INR 1,350), maintaining our ADD rating. Higher multiple is the result of MEDANTA’s financial metrics which were better than the peer group (refer Exhibit 1), expansion into new geographies, cash in hand to support expansion and improve margins.
MEDANTA delivered strong growth with highest quarterly revenue and PAT
* Revenue grew by 19.7% YoY /10.7% QoQ to INR 10.3Bn (vs. CIE estimate: INR 9.7Bn), driven by higher patient volume and improved realisation.
* EBITDA grew by 21.8% YoY and 1% QoQ to INR 2.3Bn; margins improved by 38 bps YoY but contracted by 211 bps QoQ to 22% (vs. CIE estimate: 23%).
* PAT grew by 49.6% YoY/57% QoQ to INR 1.6Bn (vs. CIE estimate: INR 1.4Bn).
MEDANTA targets 100% surge in bed capacity by FY30 (3,062 to 6,132):
MEDANTA is aggressively scaling up its infrastructure, with plans to add 1,000 beds by FY27 and a further 2,000 through greenfield projects in Noida, Mumbai, Guwahati and Pitampura, backed by a substantial INR 40,000Mn capex. The recently-operationalised 110-bed Ranchi hospital and the upcoming launch of the 550-bed Noida facility will significantly augment MEDANTA’s capacity in highdemand markets, such as NCR and Eastern India. The other key developments include capacity additions in Lucknow (200 beds) and Patna (160 beds), pushing the total bed count to 4,082 by FY27. We believe that, with new geographies in play and a sharp focus on execution, MEDANTA is well-positioned to sustain its strong growth momentum. It is poised to double its operational scale while preserving its strong EBITDA margin profile of ~25%, reflecting strong market positioning.
Developing hospitals (Lucknow and Patna) drive margin and volume upside:
MEDANTA's developing hospitals delivered a strong performance in Q1FY26, reporting 36% YoY revenue growth and healthy EBITDA margins of 29.3%. Occupancy improved to 64%, while average occupied bed days increased by 39% YoY, indicating strong demand and improved operational efficiency. Looking ahead, we believe that both the hospitals are well-positioned for continued growth. Patna is set to add 100 new beds along with a dedicated mother-and-child floor, while both units will see further specialty expansion. Although ARPOB and margins faced some pressure due to a higher share of scheme patients, this is expected to normalise as patient mix improves and volumes increase. These hospitals are steadily transitioning into mature assets with scalable infrastructure and growing clinical depth.
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