Q3FY24 results were below our estimates on revenue front. Revenue grew by 19.9% YoY and degrew by -1.3% % QoQ to INR 8,326mn vs our Est. @ INR 8,533mn. EBITDA saw a growth of 32.6% YoY and remained flattish sequentially at INR 2,121mn. EBITDA margin expanded by 243bps YoY and 25bps QoQ to 25.5% vs our Est. @24.5%. PAT grew by 53.3% YoY and degrew by -1.3% QoQ to INR 1,235mn vs our Est. of INR 1,161mn with a PAT margin of 14.8%. growth is led largely by patient volume growth, which is reflected in higher IPT volumes, which increased by 13% year-on-year. Average occupied bed days for the quarter increased by 15% year-on- year, representing an occupancy of 64% for the group.
• Robust Growth in Revenue: Consolidated revenue witnessed a robust 21% YoY growth, attributed to higher patient volumes and increased realization at the Gurugram unit. Both mature and developing units displayed significant revenue growth of 17% and 33% YoY, driven by increased in-patient volume and enhanced realization. Developing hospitals' revenue share rose from 29% in Q3FY23 to 32% in the current quarter. International patient revenue experienced a 6% YoY increase to Rs. 473 million, fueled by higher volumes and realizations. The OPD Pharmacy business exhibited steady growth, with revenue rising by 28% YoY to Rs. 287 million in Q3 FY24.
Expansion Plans: Medanta is making significant progress in its expansion plans, with the Noida hospital superstructure reaching 82% completion and expected to commence operations by the end of FY25. The company aims to add 140-250 beds in Lucknow and approximately 30-40 beds in Patna by the end of FY24. In Medanta, Gurgaon, a floor is being converted into a day care unit for medical oncology chemotherapy procedures, and an additional 50 beds are being added to the mother and child unit. Furthermore, Medanta plans to establish a 400-bed super specialty hospital in South Delhi through the SPV "GHL Hospital Ltd," a joint venture with DLF. This expansion will enhance Medanta's presence and increase its bed count to around 2,400 in the NCR region.
Outlook & Valuation: We maintain our positive view on MEDANTA due to 1) Operating leverage due to the specialized doctor-led model, 2) ROCE improvement over FY23-26E, 3) Focus on underserved markets, 4) a Strong brand identity, 5) Expanding into a new segment Medanta Labs. We expect Medant's revenue/EBITDA/ARPOB to grow at 21.3% / 28.8% / 33.6% CAGR over FY23- 26E and the ROCE expansion of 220bps over FY23-26E. The company is into the capex cycle and we expect the margin to see some pressure in the FY25-27E period when the Noida facility operation starts. We value the stock on PE multiple of 47x on FY26E EPS of INR 29 with a target price of INR 1,362 per share. Due to the marginal upside of 0.9%, we maintain our rating of NEUTRAL on the company.
| Parameter |
Value |
| CMP (Rs) |
1,349.4 |
| Target Price (Rs) |
1,362 |
| Potential Upside (%) |
0.93 |
Company Info
| BB code |
MEDANTA IN |
| ISIN |
INE474Q01031 |
| Face Value (Rs.) |
2.0 |
| 52 Week High (Rs.) |
1,359 |
| 52 Week Low (Rs.) |
451 |
| Mkt Cap (Rs bn.) |
361.85 |
| Mkt Cap ($ bn.) |
4.35 |
| Shares o/s (Mn.)/F. Float (%) |
268/35 |
| TTM EPS (Rs) |
18.4 |
| FY26E EPS (Rs) |
29 |
Shareholding Pattern (%)
|
Dec-23 |
Sept-23 |
Jun-23 |
| Promoters |
33.06 |
33.06 |
33.07 |
| FII's |
11.36 |
10.69 |
10.58 |
| DII's |
11.15 |
10.93 |
10.79 |
| Public |
44.45 |
45.31 |
45.55 |
| YTD |
3Y |
2Y |
1Y |
| FIEM |
56.16 |
25.36 |
20.66 |
| BSE Auto |
196.92 |
99.14 |
42.07 |
Global Health Quarterly Results 2024
| Particulars (Rs.mn) |
Q3FY24 |
Q3FY23 |
YoY (%) |
Q2FY24 |
QoQ (%) |
| Net Sales (incl OOI) |
8,326 |
6,943 |
19.9 |
8,439 |
(1.3) |
| Material Consumed |
1,907 |
1,580 |
20.7 |
1,936 |
(1.5) |
| Gross Profit |
6,419 |
5,364 |
19.7 |
6,504 |
(1.3) |
| Employee Exp |
1,849 |
1,596 |
15.8 |
1,383 |
0.6 |
| Operating Exp |
1,333 |
1,321 |
0.9 |
1,465 |
(0.9) |
| Retains & Cons. Fee |
1,117 |
847 |
13.9 |
1,072 |
(4.1) |
| EBITDA |
649 |
597 |
8.7 |
681 |
(4.7) |
| Depreciation |
2,121 |
1600 |
32.6 |
2,128 |
(0.4) |
| Other Income |
219 |
119 |
84.2 |
208 |
5.7 |
| EBIT |
1900 |
1,331 |
42.2 |
1,907 |
(0.3) |
| Interest Cost |
117 |
207 |
(14.5) |
201 |
(12.0) |
| PBT |
1,724 |
1,124 |
53.3 |
1,706 |
1.0 |
| Tax |
488 |
138 |
53.4 |
454 |
7.4 |
| PAT |
1,235 |
806 |
53.3 |
1,252 |
(1.3) |
| EPS (Rs) |
4.6 |
3.0 |
53.3 |
4.7 |
(1.3) |
| Margin Analysis |
Q3FY24 |
Q3FY23 |
YoY (bps) |
Q2FY24 |
QoQ (bps) |
| Gross Margin (%) |
77.1 |
77.3 |
(15) |
77.1 |
4 |
| Employee Exp. % of Sales |
22.2 |
23.0 |
(78) |
21.8 |
48 |
| Other Op. Exp % of Sales |
16 |
19 |
(302) |
17.4 |
(135) |
| EBITDA Margin (%) |
25.5 |
23.0 |
243 |
25.2 |
25 |
| Tax Rate (%) |
28.3 |
28.3 |
1 |
26.6 |
169 |
| APAT Margin (%) |
14.8 |
11.6 |
323 |
14.8 |
1 |
Source: Company, CEBPL
