Buy Yatharth Hospital & Trauma Care Services Ltd for the Target Rs.850 by Choice Broking Ltd
Robust Revenue Growth with 30% CAGR outlook
YATHARTH has delivered its highest-ever quarterly revenue and higher ARPOB. We expect this rise will be supported by expansion into the Delhi-NCR market, international patient contribution targeted to reach double digits over the next two years and significant improvement expected in ARPOB (~8%) as well as occupancy (70%).
YATHARTH Set to Surpass 3,000-bed Capacity target by FY28
YATHARTH is on course to surpass its target of 3,000 beds by FY28, driven by a strategic capacity expansion focused on strengthening its footprint in the high-growth Delhi-NCR region. Capex of INR 1,500 Cr has been earmarked for expansion, funded through internal accruals and strategic debt. YATHARTH’s strategic location in underserved NCR regions ensures steady volume improvement, enhancing it’s dominance in advanced tertiary care.
View and Valuation:
Upgrading our valuation multiple to 17x EV/EBITDA (from 14x) on the average of FY27E and FY28E, we revise our target price to INR 850 (earlier INR 640) and maintain our BUY rating. This implies a PE multiple of 25.8x/18.6x on FY27E/FY28E EPS and an implied PEG ratio of 0.7x/0.5x for FY27E/FY28E. We expect growth to be driven by higher ARPOB, improved occupancy levels (aiming for 70% across existing facilities), strategic acquisitions and a sustained revenue increase trajectory of +30%. Additionally, an increasing share of super-specialty services is anticipated to enhance their contribution to YATHARTH’s overall revenues
