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In Q3FY24, Yatharth Hospitals exhibited strong financial performance across key indicators. The hospital reported a notable 21.3% YoY growth in revenue, reaching INR 16.7 billion. EBITDA recorded an impressive 28.7% YoY increase, accompanied by a margin expansion of 159.8bps, reaching 27.83%. APAT showed robust growth, increasing by 38.4% YoY and 6.8% QoQ, totaling INR 2.95 billion. ARPOB stood at INR 29,309, reflecting a 14% YoY and 6% QoQ uptick. Occupancy levels saw positive trends, increasing to 52%, underscoring the hospital's strong operational performance in the quarter.

? Striking Growth Across Specialties: Consolidated revenue witnessed a notable 21.3% YoY increase, driven by robust double-digit growth across various specialties. Gastroenterology and Pulmonology exhibited growth exceeding 50%, Nephrology & Urology and Cardiology grew by over 30%, while Oncology revenues soared over 10 times YoY. The share of internal medicine in the revenue mix decreased to 26%, compared to the previous range of 32-33%. Inpatient revenue reached INR 1,477mn, marking a 22% YoY increase, though volumes remained flat. Outpatient revenues at INR 191mn grew by 18.6% YoY, despite a 12% volume decline. The ARPOB stood at INR 29,309, reflecting a 14% YoY and 6% QoQ increase

? Noida Hospital driving growth: In Q3FY24, the Noida Extension hospital played a pivotal role with the highest share of super specialties, constituting approximately 60%. Notably, the hospital achieved the highest Average Revenue Per Occupied Bed (ARPOB) at Rs. 34,287 during the quarter. The company initiated Robotic Surgeries with the installation of a Surgical and an Orthopedic Robot. Furthermore, liver transplant operations commenced in the quarter, and the radiation oncology line is set to start operations in March 2024, offering a comprehensive range of oncology treatments. The company has secured an adjacent land parcel at the Noida Extension facility, expediting its brownfield expansion plan to increase bed capacity from the current 450 to 700

? Yatharth Hospitals' Acquisition in Haryana: Yatharth Hospitals has entered into a definitive agreement to acquire Asian Fidelis Hospital in Faridabad, Haryana, for a purchase consideration of INR 1,160 million. The hospital, built three years ago with modern facilities, has an operational bed capacity of 175 beds, expandable to 200 beds. This acquisition aligns with Yatharth's strategy to expand its presence in North India and strengthen its position in the Delhi NCR market. The transaction is expected to be completed by March 2024, and the hospital is ready for immediate operations with necessary approvals, NABH accreditations, and empanelment with major insurance/TPAs in place

Outlook and Valuation: Yatharth Hospitals has a positive outlook, driven by its commitment to enhancing specialty mix, doubling bed capacity, strategic bed additions through acquisitions, and planned expansions. Projections for FY23-FY26 show robust growth with a CAGR of 22% in revenue, 25.7% in EBITDA, and 30.9% in PAT. The valuation is based on a FY26E EV/EBITDA multiple of 16.5x, resulting in a target price of INR 527. The stock is rated as "ADD."

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