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Nirmal Bang Report
The brokerage firm Nirmal Bang remains constructive on Zota Healthcare Ltd., supported by improving storelevel economics, increasing store maturity, and a faster-than-anticipated path to profitability.
Management highlighted that company-owened-company-operated stores are now achieving breakeven in ~15 months compared to 18–24 months earlier, reflecting stronger store ramp-up and a greater focus on profitability.
The brokerage expects revenue/Ebitda to clock a CAGR of ~60%/~227% over FY26–FY28E and forecast PAT of Rs 933 million by FY28E.
Nirmal Bang also expect ROE/ROCE to improve to 12.5%/11.1% by FY28E. Further, the proportion of mature stores is expected to increase significantly over the next two years, supporting operating leverage and margin expansion.
Factoring in the accelerated profitability trajectory, Nirmal Bang has revised our earnings estimates upwards and values the company at 20x EV/Ebitda over FY30E and discount it back to present value, arriving at a revised target price of Rs 1,795.
The brokerage maintains Buy rating on the stock.
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