Yatharth Hospital and Trauma Care Ltd. share received a mega target price on expectations of exponential boost in topline and healthy business growth. PhillipCapital India Pvt. on Thursday initiated coverage on the stock with a target of Rs 827, implying an upside potential of 46% over the last closing price of Rs 567.
The multi-specialty tertiary healthcare player's strategic expansion in high population density areas in the northern states which is currently an under-served market would enable the company to post better in-patient volumes than peers, the brokerage said.
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Yatharth Hospital, which went public in August last year, currently operates 1,605 beds across its five hospitals in Noida, Greater Noida, Noida Extension, Jhansi and Faridabad — clusters that sit in between three major population density areas of Delhi NCR, Uttar Pradesh and Madhya Pradesh.
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The company plans to take the capacity to 2,800-3,000 beds via organic and in-organic expansion in three years.
"With increasing cost of surgery in main hubs of Gurugram and NCR, we could witness patient traffic shifting towards Noida as patient on average save 10% on the bill between the two cities," PhillipCapital said in a note.
Moreover, with addition in beds, Yatharth Hospital has further room to expand its occupancies alongside improving occupancy in existing bed network, the brokerage said.
The firm also anticipate growth in average revenue per occupied bed, a key income metric, owing to better therapy, patient and business mix, that will boost the topline of the company. Yatharth Hospital operates at a blended ARPOBs of Rs 30,000, which has improved from Rs 23,000 in fiscal 2022.
PhillipCapital projects a compounded annual growth rate of 5-7% across hospitals in the next three years, which will incrementally add Rs 150 crore to revenues. With changing therapy mix and economies of scale, operating margin may improve.
Yatharth Hospital will also be a beneficiary of Indian healthcare industry's impressive growth, estimated to deliver 12-15% CAGR between fiscal 2023 and 2027 to grow to Rs 18 lakh crore.
"The company has shown prudence in strategically expanding into geographies witnessing high patient footfalls and bed occupancy numbers," the brokerage said.
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