Buy Global Health Ltd For Target Rs. 1,450 by Prabhudas Liladhar Capital Ltd
Noida unit ramp-up on track
Global Health’s (MEDANTA) Q4FY26 EBITDA reported a 6% beat to our estimates with a growth of 13% YoY; largely aided by higher growth across Lucknow and Patna units. Further ramp up in Noida unit on track with losses reducing QoQ. MEDANTA’s reported EBITDA growth of 7% CAGR over FY24-26, due to issues at Lucknow unit and start-up losses related to Noida unit in FY26. It has a total bed capacity of ~3,663 and intends to add ~3,190 beds over the next 3-4 years. With Lucknow unit issues largely resolved and ramp-up in Noida to be visible from Q2FY27E, EBITDA is expected to clock ~24% CAGR over FY26-28E. Our FY27 and FY28E EBITDA stands increased by 6%. Maintain ‘BUY’ rating on MEDANTA with revised TP of Rs1,450/share, valuing at 27x EV/EBITDA on FY28E.
EBITDA beat; Ex-Noida growth was 24% YoY:
MEDANTA reported EBITDA adjusted for ESOPs at INR 2.53bn, up 13% YoY; we estimated at INR 2.37bn. The beat was aided by higher growth in developing units. Further losses from Noida unit came down QoQ to INR236mn vs INR320mn in Q3FY26. Margins were up 160bps QoQ to 21.9%. Mature units EBIDTA ex other income grew by 8% YoY. Adjusted for Noida unit, EBITDA growth was ~24% YoY. PAT decreased 5% YoY to INR1.44bn.
Healthy ARPOB; recovery in occupancy despite new bed additions:
Revenue grew 25% YoY to INR11.6bn, in line with our estimates. ARPOB increased 5% YoY to INR66.7k per day aided by better case mix and reduction in ALOS to 3.06 days from 3.19 days in Q4FY25. For FY26, Matured units ARPOB grew by 10% YoY while developing unit’s ARPOB grew by 4% YoY. Average occupancy was flat YoY to 61% and improved 200 bps QoQ in Q4. During the quarter, MEDANTA operationalized additional 86 beds across Noida and Patna unit. For FY26, Occupancy of mature units declined by 300bps YoY to 61% impacted by Ranchi unit consolidation, while that of new units inclined by 100bps YoY to 60%. IP volumes were up by strong 24% YoY; OP volumes improved by 27% YoY
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