Global Health Ltd. was incorporated on 13th August 2004 at New Delhi. It is one of the largest private multi-specialty tertiary care providers operating in North and East parts of India. The company currently has 5 hospitals in Gurgaon, Indore, Lucknow, Ranchi and Patna. The 6th hospital is under construction in Noida. The company has a multi-specialty clinic in DLF cyber city, Gurgaon. The company provides facilities such as lever transplant, cardiac sciences, neuro sciences, oncology, digestive orthopaedics, hepatobiliary sciences, kidney and urology under the brand name ‘Medanta’. The company provides healthcare services in over 30 key specialties, with over 1300 doctors and 2467 beds facility in its hospitals. It’s renowned hospital in Gurgaon has 1391 beds as of 30 June 2022. Apart from these services company also provides homecare services where it facilitates delivery of medicine, preventive health check-ups, sample collection, nursing services, etc.
Facilities of Medanta
Entity | Hospital/ Clinics operated by the entity | FY20 | FY21 | FY22 | 30-Jun-22 |
---|---|---|---|---|---|
GHL (standalone) | Medanta – The Medicity, Gurugram | 1472.086 | 1227.398 | 1764.249 | 472.432 |
Medanta Super Speciality Hospital, Indore | |||||
Medanta Abdur Razzaque Ansari Memorial Weavers’ Hospital, Ranchi | |||||
Multi-speciality clinics and outpatient facilities at DLF Cybercity Gurugram, Delhi Airport, south Delhi, Darbhanga, Patna and Subhash Chowk, Gurugram | |||||
MHPL (standalone) | Medanta Lucknow Hospital | 28.491 | 219.632 | 379.331 | 116.99 |
GHPPL (standalone) | Jay Prabha Medanta Super Specialty Hospital, Patna | - | 0.227 | 23.773 | 28.025 |
Consistent strong operational and financial performance with facility of Large
scale hospitals
The Gurgaon hospital is the flagship hospital of the company. In this hospital they
have 40 operating rooms, bed capacity of 1391 and 285 ICUs as of 30 June 2022. In
its Lucknow hospital they have over 473 beds installed whereas in Patna they have
228 beds installed as of 30 June 2022. Overall they have latest technology based
medical equipment’s required to practice high end medical care. In all the
hospitals of Medanta they have provided 30% area to critical care and the chain
has total 70 OPDs. The company is taking strategic innovative moves and is trying
to diversify its services by adapting digital channels for providing healthcare
services. They have upgraded on there telemedicine and home delivery Healthcare
facilities.
Over the years Medanta has become an established brand which is successful in keeping trust of it clients. In FY 20, FY21 and FY22 the patient volumes were 1178230, 2073619 and 440766 respectively. Revenue from operations have increased significantly in FY22 with total sales at Rs 2167 Crores while EBITDA at Rs 490 Crores. There was a slight de growth in FY21 but the company managed to achieve new levels of growth in its financials in FY22
Key Operational and Financial Information
Particulars | FY20 | FY21 | FY22 | 30-Jun-22 |
---|---|---|---|---|
Facility build-up area (in million sq. ft.) | 3.7 | 3.7 | 3.7 | 4.7 |
Bed capacity/installed beds | 2141 | 2176 | 2404 | 2467 |
Operational beds | 1517 | 1579 | 1779 | 1866 |
Total occupied bed | 832 | 814 | 1076 | 1111 |
Average occupancy levels | 54.85% | 51.57% | 60.50% | 59.57% |
Number of operating theatres | 65 | 65 | 69 | 69 |
Number of ICU beds | 489 | 494 | 504 | 523 |
Income from healthcare services (in Rs cr.) | 1480.57 | 1417.84 | 2100.39 | 596.08 |
Average revenue per occupied bed (ARPOB) | 50166.34 | 47730.59 | 54547.29 | 58960.99 |
Average length of stays in hospitals (ALOS) | 3.52 | 3.89 | 3.76 | 3.22 |
OPD volumes | 1305559 | 1101780 | 1971260 | 559125 |
IPD volumes | 83901 | 76450 | 102359 | 31351 |
Revenue from outpatient pharmacy business(in Rs cr.) | - | 11.48 | 53.63 | 18.6 |
Income from healthcare services breakdown
Healthcare services | FY20 | FY21 | FY22 | 30-Jun-22 |
---|---|---|---|---|
Heart Institute | 26.22% | 20.65% | 20.93% | 24.32% |
Institute of Neurosciences | 10.41% | 10.49% | 11.16% | 11.81% |
Institute of Musculoskeletal Disorders and Orthopaedics | 6.30% | 3.68% | 4.48% | 5.86% |
Kidney & Urology Institute | 8.24% | 7.95% | 7.22% | 7.55% |
Cancer Institute(2 | 11.60% | 12.26% | 10.82% | 11.91% |
Institute of Digestive and Hepatobiliary Sciences | 11.84% | 11.71% | 10.19% | 11.66% |
Institute of Liver Transplantation and Regenerative Medicine | 4.35% | 3.98% | 3.56% | 3.69% |
Medanta’s Internal Medicine Division | 5.59% | 10.91% | 11.26% | 5.88% |
Others | 15.45% | 18.37% | 20.37% | 17.36% |
Total | 100.00% | 100.00% | 100.00% | 100.00% |
Increasing revenue on back of operational efficiency
Medanta’s operational efficiency has increased significantly over past 6 years.
Its budding hospitals have contributed well in total income of the company past
three years from 1.92% in FY19 to 23.43% as of June FY22. The company’s matured
hospitals have already build strong footprints in the industry with cost efficiency
in there operations reaching there highest in FY22. The EBITDA margin of the company’s
matured hospitals was 22.81% in FY22 and it was 19.55% for developing hospitals.
Strong cost optimization and strategic approach of increasing the bed capacity aided
in early breakeven of new hospitals. Company managed to grow its ‘Average
revenue per occupied bed’ consistently over the past three fiscal years and
3 months ended June FY22. The occupancy by number of days by patient has also increased
over the years which has supported an upward momentum in revenues of the company.
Revenue from Matured Hospitals with >6 years
Particulars | FY20 | FY21 | FY22 | 30-Jun-22 |
---|---|---|---|---|
Total Income contribution to total income (%) | 98.15% | 84.95% | 81.60% | 76.70% |
EBITDA Margin (%) | 16.97% | 15.67% | 22.81% | 22.62% |
Operational Beds | 1377 | 1284 | 1431 | 1430 |
Average revenue per occupied bed (₹) | 50302.8 | 47682.69 | 54272.99 | 59291.14 |
Revenue from developing Hospitals with <6 years
Particulars | FY20 | FY21 | FY22 | 30-Jun-22 |
---|---|---|---|---|
Total Income contribution to total income (%) | 1.92% | 15.02% | 18.45% | 23.43% |
EBITDA Margin (%) | -81.03% | 15.36% | 19.55% | 22.55% |
Operational Beds | 280 | 295 | 298 | 335 |
Average revenue per occupied bed (₹) | 44223.59 | 48062.62 | 55883.03 | 56499.73 |
Focus on Clinical expertise through research and academics
Company focuses complex cases and provide its super specialization and clinical
expertise. The Medanta group has its own research house in the name of ‘ The
Medanta Institutional Tissue Repository’ , 2017 to promote biomarker along
with other tissue based research. The company is currently working on developing
an algorithm which will help it in diagnosis of radiology scans. This is a significant
move in digital healthcare services.
Prudent expansion by focusing on underserved areas with densely populated regions
The company aims to provide advance healthcare to all and wants to serve the under
served areas with large population where there is scarcity of medical facilities
and resources. It is present in Lucknow and Patna where it was observed that medical
facilities are not accessible to all due to scarcity of resources. In Lucknow total
estimated beds of private key hospitals are 1718 & in Patna this number is 933
beds leaving huge room for company’s services.
Name of Company | Operating Income (Cr.) | Operating Margin % | NPM (%) | ROCE (%) | Bed Capacity | EPS | PE |
---|---|---|---|---|---|---|---|
Global Health Ltd. (Medanta) | 2177.20 | 21.40 | 9.00 | 16.30 | 2404.00 | 7.78 | 43.10 |
Apollo Hospitals Enterprises Ltd. | 14676.90 | 15.00 | 7.60 | 25.50 | 9911.00 | 77.10 | 57.00 |
Fortis Healthcare Ltd. | 5656.70 | 17.90 | 14.00 | 29.70 | NA | 10.50 | 26.90 |
Healthcare Global Enterprises Ltd. | 1397.80 | 17.10 | 2.80 | 13.90 | 1944.00 | 3.90 | 76.66 |
Max Healthcare Institute Ltd. | 5218.00 | 26.70 | 16.00 | NA | 3412.00 | 6.20 | 74.51 |
Narayana Hrudalaya Ltd. | 3701.30 | 17.80 | 9.20 | 27.20 | 6584.00 | 16.70 | 44.70 |
Shalby Ltd. | 702.00 | 17.50 | 7.70 | 8.80 | - | 5.00 | 28.60 |
Note: The prices are taken on the basis of current day. (4th Nov.CY22)
Medanta group is a well established player in hospital chains industry. The company has its focus on providing healthcare services along with super specialised services through remote channels. During FY22 the company was placed at 4th position (in terms of its revenue) in the list of listed peers. It is consistently taking steps to move forward and diversify its healthcare services specially for digital channels. The company’s EV/ Per Operational bed for FY22 stood at 5.29. We believe the growth aspects are good and progressive in nature. At upper band of IPO price of Rs 336 asking valuation is 43.1x of its FY22 earnings.
We recommend ‘Subscribe’ to the IPO offer.
Use of Proceeds:
Book running lead managers:
Kotak Mahindra Capital Company Limited Credit Suisse Securities (India) Private
Limited Jefferies India Private Limited JM Financial Limited
Management:
Dr. Naresh Trehan (Chairman and Managing Director) Sunil Sachdeva (Non-Executive
Director) Pankaj Prakash Sahni (Chief Executive Officer) Sanjeev Kumar (Chief Financial
Officer)
Particulars | FY20 | FY21 | FY22 | 30-Jun-22 |
---|---|---|---|---|
Equity share capital | 49.35 | 49.59 | 50.65 | 50.65 |
Reserves | 1267.69 | 1300.26 | 1565.37 | 1624.91 |
Net worth | 1349.54 | 1382.34 | 1616.01 | 1675.55 |
Revenue from operations | 1500.42 | 1446.74 | 2166.59 | 617.21 |
Revenue growth | - | -3.58% | 49.76% | 27.13% |
EBITDA | 230.45 | 222.85 | 489.76 | 141.65 |
EBITDA Margins % | 15.36% | 15.40% | 22.61% | 22.95% |
PAT | 36.33 | 28.81 | 196.20 | 58.71 |
PAT Margins% | 2.42% | 1.99% | 9.06% | 9.51% |
EPS - Basic (Rs/share) | 1.45 | 1.15 | 7.78 | 2.32 |
RoNW % | 2.69% | 2.08% | 12.14% | 3.50% |
Net asset value (rs) | 54.70 | 55.76 | 63.82 | 66.17 |
Total Borrowings | 551.80 | 568.20 | 783.30 | 740.30 |
Valuation | FY22 |
---|---|
EV/Per operational bed (in Rs cr.) | 5.29 |
Average revenue per operational bed (Rs) | 54272.99 |
EV/EBITDA (x) | 18.7 |
Market cap/sales (x) | 4.2 |
D/E (x) | 0.7 |
P/E (x) | 43.1 |
Note: The valuations are calculated on upper price band of Global Health. & FY22 numbers.