Buy Artemis Medicare Services Ltd for Target Rs. 325 by Choice Institutional Equities
Key Conference Call Highlights
Operational Updates
* FY26 revenue growth was driven by a strong performance across cardiology, oncology and orthopaedics, supported by an improving payor mix and a rising share of high-complexity procedures.
* Q4FY26 revenue growth was led by higher patient volumes in highmargin specialties.
* Daffodils and Cardiac Care units have started generating small profits.
Expansion pipeline
* Raipur hospital is expected to commence operations in Q1FY27 with 200 beds initially, while all 300 beds are expected to become operational in the next two quarters.
* Additional bed expansion at Gurgaon is under evaluation; the management is considering other brownfield or greenfield projects for expansion.\
* South Delhi 650-bed hospital expansion, planned to be operational by FY29, will be executed in 2 phases: 450 beds initially and 200 beds later.
* The first Mauritius hospital has broken even, while the second Mauritius hospital commenced operations in April 2026.
Capex Plan
* FY27 capex is expected at ~INR 1000 Mn.
* South Delhi Expansion: Estimated capex for the project is INR 5000 Mn, translating to ~INR 75–80 lakh per bed.
Payor Mix
* The management aims to maintain the contribution from international patients at ~30–31% of revenues.
* Middle East patients account for ~30% of international patient revenues.
* International patient inflow witnessed a ~15–18% decline in March due to Middle East geopolitical disruption; however, the impact has largely subsided and the management has indicated ~90% recovery by May.
* The company is witnessing a strong patient inflow from Africa and CIS countries and is also targeting international patients from Canada and Nordic countries.
* Government business mix is expected to remain broadly stable, with no strategic focus on increasing its share
Outlook
* The management is targeting a significant capacity increase to 2,000 beds by 2029.
* ARPOB growth of ~7–8% is expected to sustain, going forward. ? Occupancy is expected to touch ~70% by Q2FY27 for Gurgaon Hospital.
* Raipur is projected to incur losses of ~INR 180–200 Mn in FY27, which could lower blended EBITDA margin by ~100–150 bps for FY27.
* The management expects the Raipur hospital to begin operations with an ARPOB in the range of INR 33,000 to INR 35,000.
* Revenue growth of 15-17% guided for Gurgaon Hospital with 20%+ EBITDA Margin.
* The management indicated that pricing is not being used as a lever to drive growth, with expansion primarily volume and mix-led.
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