IGI Logo

Robust Expansion Driven by Superior Patient Mix: Growth will be driven by bed capacity expansion, an industry-leading payor mix with negligible government scheme exposure (~1%) and a robust balance sheet, which leads to significant headroom for inorganic growth.

View and Valuation: We expect Revenue/EBITDA/PAT to expand at a CAGR of 25.5%/25.2%/28.7% over FY26–29E. Valuing the stock on DCF (including the BKC expansion plan), we maintain our target price of INR 1,645 and ‘BUY’ rating on the stock.

Healthy revenue growth; profitability remains soft

* Revenue grew 18.7% YoY / 6.2% QoQ to INR 3,878 Mn (vs. CIE estimate: INR 4,030 Mn).

* EBITDA grew 13.9% YoY / 6.9% QoQ to INR 892 Mn (vs. CIE estimate: INR 980 Mn); margin contracted by 96 bps YoY and expanded 16 bps QoQ to 23.0% (vs. CIE estimate: 24.3%)

* Adjusted PAT increased by 9.7% YoY / 3.7% QoQ to INR 491 Mn (vs. CIE estimate: INR 526 Mn), with a PAT margin of 12.7%.

Massive capacity expansion with proven execution: JLHL is set to scale up, from 1,681 beds across 4 hospitals to ~2,900 beds across 7 hospitals, by targeting underserved micro-markets in Western India. Execution remains strongly de-risked, with Dombivli commissioned ahead of schedule and within budget, following successful ramp-ups at Thane, Pune and Indore. Its hub-led tertiary-quaternary care model continues to drive strong occupancy (61.2% in FY26) and ARPOB expansion (11.7% YoY growth), with Dombivli expected to break even EBITDA by end of FY28E.

Premium payor mix driving sustainable cash flows: JLHL maintains a high-quality payor mix with just 1% exposure to government schemes in FY26, while insurance and self-pay contribute 55.4% and 43.6%, respectively. Limited CGHS exposure and absence from common empanelment reflect a purposeful premium positioning strategy. Inflation-linked annual insurance renewals support steady ARPOB expansion from INR 67,700 in FY26, while low debtor days of 18 highlight strong cash conversion and minimal receivable risk. We expect that the upcoming hospitals would to scale within the same payor mix, further strengthening collections and working capital efficiency.

Stock Split: JLHL has announced a 1:5 stock split, wherein each equity share with a face value of INR 10 will be subdivided into five shares of face value INR 2 each, taking the total outstanding equity shares to 327.8 Mn shares after the split. Accordingly, our target price of INR 1,645 per share will adjust to INR 329 per share after the split, with no change in fundamental or valuation. 

For Detailed Report With Disclaimer Visit. https://choicebroking.in/disclaimer

SEBI Registration no.: INZ 000160131