Buy Global Health Ltd for the Target Rs. 1,460 by Choice Institutional Equities
Multi-city expansion unlocks long-term value: MEDANTA is entering a strong multi-year growth phase, driven by aggressive capacity expansion, specialty deepening and rapid Noida ramp-up. With ~3,200 upcoming beds, growing international traction and expanding high-complexity therapies, we expect sustained double-digit revenue growth, improving ARPOB and margin expansion in the next 3–5 years.
View and Valuation: We forecast Revenue/EBITDA/PAT to expand at a CAGR of 16.7%/23.8%/25.8% 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 1,460 (from INR 1,350) and maintain our ‘BUY’ rating.
Steady revenue growth coupled with sharp PAT improvement
* Revenue grew 24.5% YoY / 3.4% QoQ to INR 11,590 Mn (vs. CIE estimate: INR 11,323 Mn)
* EBITDA grew 8.5% YoY / 12.2% QoQ to INR 2,438 Mn (vs. CIE estimate: INR 2,242 Mn); margin contracted by 310 bps YoY and expanded 165 bps QoQ to 21.0% (vs. CIE estimate: 19.8%)
* Reported PAT increased by 42.0% YoY and 51.5% QoQ to INR 1,440 Mn (vs. CIE estimate: INR 1,322 Mn), with a PAT margin of 12.4%.
Massive multi-year capacity expansion driving compounding growth:
MEDANTA is entering a powerful expansion cycle with visibility on nearly 3,200 additional beds in the next 3–4 years. The management plans to add ~500 beds across existing hospitals with minimal capex while another ~2,700 beds will come through five greenfield projects. Total pipeline capex stands at ~INR 45 Bn in the next five years. We expect that new projects in Varanasi (400 beds), Guwahati (400 beds), South Delhi (400 beds), Mumbai (750 beds) and Pitampura (750 beds) materially deepen MEDANTA’s presence in highdemand tertiary care markets, positioning the company for sustained doubledigit revenue compounding well into FY30 and beyond.
International business and specialty mix expanding profit pool:
MEDANTA is creating multiple long-term growth drivers beyond bed expansion. International revenue grew 33% YoY to INR2.8bn in FY26, with rising traction from Africa, Southeast Asia and CIS markets. Simultaneously, the company is expanding high-complexity specialties, such as oncology, liver transplants, robotics and mother-child care across key hospitals. We believe deeper specialty mix and gradual tariff normalisation can drive sustained ARPOB improvement alongside strong volume growth.
Noida ramp-up could become major earnings inflection:
The 550-bed Noida hospital is scaling up faster than expected and can become MEDANTA’s next major earnings engine. It is expecting to break even in 2HFY27 as occupancy rises, from current ~30% towards the 40–45% threshold. Upcoming specialties including liver transplant, obstetrics and paediatrics can further accelerate ARPOB and occupancy growth.
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