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Targeted Delhi-NCR Expansion to Fuel Growth:

YATHARTH’s targeted expansion in the underserved Delhi-NCR region, coupled with its high-end superspecialty offerings, is driving higher ARPOB and stable margins, further strengthening its leadership in advanced tertiary care.

View and Valuation: We introduce FY28E estimates and project revenue/EBITDA/PAT to grow at a CAGR of 33.3%/33.5%/39% over FY25– FY28E. 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 growth trajectory of +30%. Additionally, an increasing share of super-specialty services is anticipated to enhance their contribution to YATHARTH’s overall revenues

Revenue & PAT came below estimates; however EBITDA margin came marginally above estimates

* Revenue grew by 21.7% YoY and 11.2% QoQ at INR 2.6 Bn (vs CIE estimate of INR 2.8 Bn), driven by higher occupancy, ARPOB growth, and an increased share of high-specialty therapies, including oncology.

* ARPOB grew by 6% YoY to INR 32,395, with occupancy at 65%.

* EBITDA grew by 20.2% YoY and 13.1% QoQ at INR 0.6Bn, with margin contracting 32bps YoY and 41bps QoQ at 25%(vs CIE estimate of 24.8%).

* PAT grew by 38.4% YoY and 8.6% QoQ to INR 0.4 Bn (vs CIE of INR 0.4 Bn).

Robust revenue growth with 30% CAGR outlook

YATHARTH has delivered its highest-ever quarterly revenue and higher ARPOB. The Greater Noida West facility turned EBITDA positive within 12 months of operations, contributing 9% to revenues. Management reiterated a +30% annual revenue growth trajectory, supported by scaling up of new hospitals, increasing super-specialty services, and improving payer mix. We expect this growth 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 growth expected in ARPOB (~8%) as well as occupancy (70%). Greater Faridabad has turned net profit positive in Q1FY26, within a year of its operations, which is expected to replicate in the upcoming hospitals.

YATHARTH set to surpass 3,000-bed capacity target by FY28; with strategic expansion in underserved market

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 highgrowth Delhi-NCR region. The new hospitals in Faridabad and New Delhi will offer super-specialty services from day one, ensuring higher ARPOB and enabling a faster ramp-up. With EBITDA breakeven anticipated within 12–15 months of commissioning, this expansion is expected to propel robust volume growth and enhance operating leverage. Capex of INR 1,500 Cr has been earmarked for expansion, funded through internal accruals and strategic debt. Both, the New Delhi and Prithla hospitals (700 beds combined) commenced operations in July-August 2025 and are expected to achieve 25% occupancy in the first year, ramping up to ~70-75% in the medium term. YATHARTH’s strategic location in underserved NCR regions ensures steady volume growth, enhancing it’s dominance in advanced tertiary care.

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