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Growth Anchored by Capacity Expansion:

MEDANTA is entering into a sustained growth phase, supported by a 3,350-bed expansion pipeline, fasterthan-expected Noida breakeven, robust demand for tertiary care and a strong balance sheet funding INR 4,850 Cr of future capex through internal accruals. Rising operating leverage, premium specialty mix and capacity expansion position the company for long-term revenue, margin and earnings compounding.

View and Valuation:

We forecast Revenue/EBITDA/PAT to expand at a CAGR of 19.3%/26.6%/28.5% over FY26–FY29E. Valuing the stock at an EV/EBITDA multiple of 27x (maintained) on the FY28 estimate, we arrive at a revised target price of INR 1,550 (from INR 1,460) and change our rating to ‘ADD’ (from BUY)

Delivered strong top-line growth with improving operating efficiency

* Highest-ever revenue, which grew 26.5% YoY / 12.5% QoQ to INR 13,041 Mn (vs. CIE estimate: INR 12,008 Mn)

* EBITDA grew 26.8% YoY / 17.6% QoQ to INR 2,868 Mn (vs. CIE estimate: INR 2,486 Mn); margin remained flat on YoY and expanded 96 bps QoQ to 22.0% (vs. CIE estimate: 20.7%)

* Reported PAT remained flat on YoY and grew 9.2% QoQ to INR 1,573 Mn (vs. CIE estimate: INR 1,484 Mn), with a PAT margin of 12.1%.

Massive capacity expansion creates a decade-long growth runway:

In this quarter, the company added 72 operational beds, taking the total capacity to 3,737 beds, while significantly expanding its future pipeline. The management increased the planned Guwahati hospital from 400 to 650 beds, taking the total announced expansion pipeline to 3,350 additional beds. Construction is already under way in South Delhi, while other projects are progressing through approvals. This unparalleled expansion pipeline provides long-term visibility on capacity-led growth, allowing MEDANTA to replicate its proven hospital model across underserved markets and sustain a strong revenue growth for several years.

Strong demand and premium case mix support sustainable earnings growth:

MEDANTA's Q1 performance demonstrated that growth remains fundamentally volume-led rather than pricing-driven. The management highlighted continuous investments in robotic surgery, oncology, transplant programs and clinical talent, MEDANTA is well-positioned to capture this longterm demand shift while maintaining premium realisation and industryleading profitability.

Noida’s faster-than-expected ramp-up unlocks operating leverage:

The biggest positive surprise this quarter was MEDANTA Noida's rapid improvement. Revenue increased from INR 52.5 Cr in Q4FY26 to INR 85.5 Cr in Q1FY27, while EBITDA losses narrowed sharply from INR 23.6 Cr to just INR 4.9 Cr within a quarter. Operational beds increased by another 51 beds and the management now expects the hospital to achieve EBITDA breakeven earlier than originally guided. As occupancy rises from the current 30-40% range, Noida is expected to become a significant operating leverage driver, supporting higher consolidated margin and earnings growth over the medium term.

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SEBI Registration no.: INZ 000160131