Buy Jeena Sikho Lifecare Ltd for the Target Rs. 1,000 by Choice Institutional Equities
Building a pan-India network and unlocking OTC at scale: JSLL is rapidly expanding its Ayurveda healthcare network through new centre launches and bed additions, targeting 7,000–10,000 beds in the next 3–5 years while maintaining a highly capital-efficient model. Simultaneously, the OTC business is emerging as a key growth engine with nine recent launches and a robust product pipeline. JSLL is further strengthening its healthcare ecosystem through rising insurance penetration, loyalty-led patient acquisition initiatives and expansion into premium wellness offering. Backed by these growth drivers, the management is targeting ~INR 30 Bn revenue, a balanced 50:50 servicesproducts mix and 4–5x PAT growth in the next 3–5 years, highlighting a strong earnings compounding runway.
View and valuation: We expect JSLL to deliver significant Revenue/EBITDA/PAT CAGR of 33.6%/34.9%/41.6% over FY26–29E, respectively. We maintain our ‘BUY’ recommendation on JSLL while revising our target price to INR 1,000 (from INR 1,200) based on our DCF valuation. While we have raised our FY28E revenue estimate to ~INR 15,000 Mn in line with the management guidance, we have incorporated more conservative long-term assumptions by lowering our FY29E–FY35E revenue CAGR from 30% to 25%.
Strong Growth Momentum; One-off Cost Weighs on Margin
* Revenue grew significantly by 54.8% YoY but declined 2.8% QoQ to INR 2,156 Mn (vs. CIE estimate: INR 2,461 Mn)
* EBITDA grew 70.2% YoY but declined 22.6% QoQ to INR 779 Mn (vs. CIE estimate: INR 1,125 Mn); margin expanded by 328 bps YoY but contracted by 929 bps QoQ to 36.1% (vs. CIE estimate: 45.7%). The sequential decline in margin is on account of one-off employee-related provisions (INR 70 Mn), a one-time ECL provision (INR 50 Mn) and Ind AS transition-related adjustments (INR 90 Mn).
* PAT increased 77.8% YoY but declined 32.3% QoQ to INR 451 Mn (vs. CIE estimate: INR 761 Mn), with a PAT margin of 20.9%.
Hospital expansion: Building a pan-India Ayurveda healthcare network: JSLL is executing one of the most ambitious expansion plans in India’s Ayurveda healthcare space, targeting 7,000–10,000 beds in the next 3–5 years. At present, JSLL has developed 2,861 total beds, of which 2,300 are operational. As a near-term milestone, operational beds are expected to reach 3,000–3,500 by FY27, driven primarily by the activation of 561 non-operational beds in the next 3–5 months, alongside 445 beds under development at present. The model remains highly capital-efficient, requiring only INR 3–4 lakh per bed and delivering payback within 12–18 months for hospitals and less than 6 months for smaller facilities.
OTC business: Potential to become INR-500 Cr revenue vertical: JSLL's OTC segment is rapidly emerging as the company's most scalable growth engine. The flagship Pet Yakrit Pleeha Shuddhi Kit has already surpassed INR 100 Mn in monthly sales, demonstrating strong market acceptance. With nine products currently in the market — most of which were launched in the last 2–3 months — and several new high potential launches planned, the management remains confident of scaling up the OTC business to INR 5,000 Mn in revenue in the next two years. This growth is supported by an expanding distribution network, preventive healthcare demand and a growing product portfolio targeting India’s massive chronic disease market.
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