StockAxis

Global Health Ltd

Quarterly Result - Q3FY24

Global Health Ltd

Hospital & Healthcare Services

Current

CMP
Rs. 1268.10
Rating:
Hold
February 08, 2024

Previous

Rating:
Hold

Stock Info

BSE
543654
NSE
MEDANTA
Bloomberg
GLH:AU
Reuters
GLOH. NS
Sector
Hospital & Healthcare Services
Face Value (Rs)
2
Equity Capital (Rs cr)
54
Mkt Cap (Rs cr)
35457.83
52w H/L (Rs)
1305.10 - 447.40
Avg Daily Vol (BSE+NSE)
300,128

Shareholding Pattern

(as on 31-Dec)
%
Promoter
33.05
FIIs
11.36
DIIs
11.15
Public & Others
44.45
Source: Ace equity, StockAxis Research

Price performance

Return (%)
1m
3m
12m
Absolute
25.84
51.28
176.22
Sensex
0.10
9.93
17.74
Source: Ace equity, StockAxis Research

Indexed Stock Performance

Global Health Ltd Sensex
Global Health Ltd
Source: Ace equity, StockAxis Research

Financial Highlights:

Particulars (Rs Crores) Q3FY24 Q3FY23 YoY Q2FY24 QoQ
Revenue 855.00 706.00 21.00% 865.00 -1.00%
EBITDA 234.00 172.00 36.00% 234.00 0.00%
EBITDA Margin (%) 27.39% 24.00% 305 bps 27.00% 37 bps
PAT 124.00 81.00 53.00% 125.00 -1.00%

Source: Company Filings; StockAxis Research

Q3FY24 Financial Performance
Global Health Limited delivered healthy earnings growth for the quarter ended Q3FY24. Consolidated revenue increased by 21% YoY to Rs 855 Crores as against Rs.706 Crores for the same quarter of the previous fiscal year, primarily driven by an increase in patient admissions which saw an increase of 13% YoY to 39,743 in Q3FY24 and the realization growth at the Gurugram unit. Out-patient volume increased by 20% to 662,434. Consolidated EBITDA surged by 36% YoY to Rs 234 Crores, whereas EBITDA margin expanded by 305 bps and stood at 27.4%, led by operating leverage benefits and lower employee costs. Consolidated PAT for the quarter surged by 53% YoY to Rs 123 Crores, and PAT margins stood at 14% on account of better core operation and higher other income. ARPOB (Rs. 60,571- growth of 4% YoY) and Occupancy levels (64% in Q3FY24 vs 59% in Q3FY23) increased by 500 bps due to volume growth in Lucknow and Patna hospitals.

Matured and developing hospitals reported strong revenue growth of 17% and 33% in Q3FY24. Average Occupied bed days increased by 15% YoY, representing an average occupancy of 64% in Q3 FY24. In-patient count increased by 13% YoY and Out-patient count increased by 20% y-o-y in Q3 FY24. ARPOB grew by 4% YoY to Rs 60,571 primarily driven by an increase in realisation at the Gurugram unit.

Developing hospital's revenue share increased from 29% in Q3 FY23 to 32% in Q3 FY24 amounting to Rs 274 Crores. Developing Hospital EBITDA share increased from 37% in Q3 FY23 to 41% in Q3 FY24 amounting to Rs. 97 Crores. Matured hospitals also registered strong revenue growth of 17% YoY and EBITDA growth of 37% YoY amounting to Rs. 588 Crores and Rs 148 Crores respectively.

Revenue from international patients increased by 6% YoY to Rs. 47 Crores, driven by increased volume and realization. OPD pharmacy business continues to register strong growth. Revenue increased by 28% YoY from Rs. 22 Crores in Q3 FY23 to Rs. 29 Crores in Q3 FY24.

Key Conference Call Takeaways

Average Revenue Per Operating Bed (ARPOB) - In 3QFY24, ARPOB grew 4% YoY to INR60k, primarily driven by an increase in volumes, occupied bed days, and realizations at the Gurugram facility.

International Patients - Revenue from international patients increased 6% YoY to Rs.47 cr, driven by higher volumes and realization.

  • IPD/OPD volumes increased 13%/20% YoY for the quarter.
  • OPD Pharmacy revenue increased 28% YoY to INR224m.

Other Highlights

  • EBIDTA margins in mature and developing hospitals improved due to enhanced utilization of beds and increased volumes.
  • Medanta aims to enhance profitability by augmenting patient volume through the addition of new medical indications, expanding capacity, and leveraging technological advancements.
  • Medanta Group achieved a milestone as the first hospital in India to use advanced AI-enabled penumbra lightning technology for treating pulmonary embolism and other blood clots.
  • Medanta Lucknow has launched an advanced NICU ambulance and child development centre.
  • Medanta Patna successfully performed the first bone marrow transplant (BMT) to treat a myeloma patient.
  • The company is focusing on increasing its capacity in north and central India through organic/inorganic opportunities as it wants to deepen its presence in the underpenetrated markets
  • Medanta Noida Hospital is on track with 82% superstructure completed. Mechanical, electrical, and plumbing work is currently under progress with the hospital expected to commence operations by FY2025 end. Expansion plans include adding 140-250 beds in Lucknow and 30-40 beds in Patna by FY24 end.
  • Facility enhancements include converting a floor in Medanta, Gurgaon, into a daycare unit for oncology chemotherapy and adding 50 beds to the mother and child unit. Plans for a 400 bed super specialty hospital in South Delhi are underway through a joint venture with DLF.
  • The strategic onboarding of 253 doctors aims to enhance medical expertise and a significant portion of the total capex was allocated to the Noida Hospital project.
  • Noida Hospital progressing well, 82% superstructure is completed, and operations are expected by FY25 end.
  • Planned addition of 140-250 beds in Lucknow and 30-40 beds in Patna by FY24 end.
  • Planned bed addition of 800-1,300 beds in the next two-three years, with ~60% at existing hospitals. Resulting in lower capex per bed, covering a floor area of 100K+ sq. meters.
  • Medanta and DLF Ltd established GHL Hospitals Ltd as a joint venture to construct and operate the super specialty Medanta Hospital in South Delhi.
  • Capex: Medanta invested Rs.177 Crores in capital expenditures during the nine months, with Rs.117 Crores directed towards the Noida hospital project.

Management Guidance

  • Going ahead, incremental volume growth on a fixed-cost basis for developing hospitals is expected to enhance margins and profitability over the years.
  • ARPOB is expected to increase by 7% YoY driven by case mix improvement and price hike.

Outlook & valuation

Global Health delivered robust earnings growth for the quarter ended Q3FY24.  We believe that with strong demand driving business prospects in Lucknow/ Patna and sustained improvements in the performance of mature hospitals, medanta remains in a good position to deliver consistent growth in earnings on account of the commissioning of new hospitals and the addition of doctors to meet the healthy demand in the respective markets. We believe that Medanta’s developing hospital and new additions are going to provide a long runway for growth.

Medanta plans to add 50 beds in Patna and 120-150 beds in Lucknow in FY24, it further plans to add 100 beds in the Gurgaon unit. The Noida facility will be operationalized in Q4FY25 leveraging its healthy balance sheet & operating cashflows. Beyond FY26, it plans to add 400 beds in South Delhi where both DLF and Medanta will contribute equally.

MEDANTA’s organic bed capacity expansion plan is already in place until FY28, providing robust visibility of volume-led earnings growth over the next five years. We expect Medanta’s earnings momentum will continue as the company has completed the majority of capex in Lucknow and Patna with incremental capex to install beds gradually. We expect EBITDA margin improvement on account of a better therapy mix & price hike.  At CMP of Rs 1468, the stock is trading at 64x its FY25e EPS. We maintain a HOLD rating on the stock.

Quarterly Financials

Particulars (Rs Crores) Q3FY24 Q3FY23 YoY Q2FY24 QoQ
Revenue 855.00 706.00 21.00% 865.00 -1.00%
COGS 191.00 158.00 21.00% 194.00 -2.00%
Gross Profit 664.00 548.00 21.00% 671.00 -1.00%
Gross Profit Margin (%) 78.00% 78.00% 5 bps 78.00% 7 bps
Employee Benefit Expense 185.00 160.00 16.00% 184.00 1.00%
Other Expense 245.00 217.00 13.00% 254.00 -3.00%
EBITDA 234.00 172.00 36.00% 234.00 0.00%
EBITDA Margin (%) 27.39% 24.00% 305 bps 27.00% 37 bps
Depreciation and Amortisation 44.00 39.00 13.00% 43.00 2.00%
EBIT 190.00 133.00 43.00% 191.00 0.00%
EBIT Margin (%) 22.00% 19.00% 339 bps 22.00% 19 bps
Finance Cost 18.00 21.00 -14.00% 20.00 -12.00%
PBT 172.00 112.00 53.00% 171.00 1.00%
Tax 49.00 32.00 53.00% 45.00 7.00%
PAT 124.00 81.00 53.00% 125.00 -1.00%
PAT Margin (%) 14.00% 11.00% 304 bps 14.00% -2 bps
EPS (Rs) 4.61 3.08 50.00% 4.66 -1.00%

Source: Company Filings; StockAxis Research