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Scaling-up Beds, Wellness and Products to Drive Growth:

SLL is rapidly scaling up its Ayurveda healthcare network through new centres and bed addition, maintaining the target of 7,000–10,000 beds over the next 3–5 years through a capital-efficient expansion model. Deepening insurance penetration, loyalty-led patient acquisition and entry into premium wellness offering further strengthen its growth ecosystem. With these structural drivers, the management targets ~INR 30 Bn revenue, a balanced 50:50 services-products mix and 4– 5x PAT growth over the next 3–5 years, supporting a strong and sustained earnings compounding trajectory. The Q1FY27 EBITDA margin miss was primarily attributable to higher marketing and software expenses, which we expect to normalise going forward

Proven Model Positioned for Multi-year Hyper Growth:

The quarter reinforces that JSLL's integrated Ayurveda ecosystem has already reached an inflection point, with the management now shifting its focus from execution to scale. The company plans to increase operational beds from 2,400 to nearly 3,000 within 3–4 months, while targeting 7,000–10,000 beds over the next 3–5 years. Management has reiterated its ambition of reaching INR 3,000 Cr revenue and expanding PAT by 4–5x over the same period. With a capital-light model requiring only INR 3–4 lakh per bed, less than six-month payback for smaller facilities and 71% three-year ROCE, the company possesses one of the strongest expansion economics in Indian healthcare.

Preventive Healthcare Ecosystem Creates a Long-term Competitive Moat:

Rather than operating as a conventional hospital chain, JSLL is building a preventive healthcare ecosystem where hospitals, clinics, diagnostics, digital consultations and recurring product sales reinforce one another. Management expects healthcare services and products to continue contributing roughly 50:50 even as revenue scales up to INR 3,000 Cr, creating multiple revenue streams from every patient. New specialty programs covering fertility, women's health, pregnancy wellness, Parkinson's, diabetes and chronic diseases, alongside premium wellness centres and Swadeshi Health Card, should further increase patient lifetime value and recurring revenues. This integrated model provides significant scalability while reducing customer acquisition cost through referrals and repeat product consumption

View and valuation:

We expect JSLL to deliver significant Revenue/EBITDA/PAT CAGR of 33.6%/34.9%/39.4% over FY26–29E, respectively. We maintain our ‘BUY’ recommendation on JSLL and maintain our target price of INR 1,000 on the basis of our DCF valuation. This equates to an implied PE of 28x on FY28 EPS and PEG of 0.8x further supports our valuation. Among our coverage universe, JSLL is expected to deliver one of the strongest return ratios over the coming years (refer to Exhibit 1).

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