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Global Health Q4Y24: Improved occupancy, mature hospitals drive growth

Global Health Ltd. missed our earnings estimate for Q4 FY24, largely due to subdued performance at Lucknow hospital. This was partly offset by improved occupancy/superior margins in mature hospitals segment.

We cut our earnings estimates by 7%/6% for FY25/FY26 to factor in a gradual pickup in utilization of beds in developing hospitals, higher opex for bed additions, and reduced operating leverage. We value Medanta at 35 times 12 months forward enterprise value/Ebitda to arrive at a target price of Rs 1,620.

Medanta has delivered a four-year CAGR of 17%/33%/59% in revenue/ Ebitda/PAT over FY20-24. It ended FY24 with 25% YoY earnings growth.

Medanta continues to add beds at existing sites (Lucknow/Patna/Gurgaon) and new sites (Noida/Indore/South Delhi). Earnings growth is largely driven by an increasing number of patients seeking treatment and a moderate increase in realization per patient.

This provides robust visibility for earnings growth (22% CAGR over FY24-26). Hence, we maintain Buy.

For full Q4Y24 review click. Motilal Oswal

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