Target: ₹525

CMP: ₹409.35

In Q4FY24, Yatharth Hospital & Trauma Care Services Ltd exhibited strong financial performance across key indicators. The hospital reported a significant growth of 23.6 per cent y-o-y on revenue, reaching ₹1,780 crore for the first time. EBITDA recorded a growth of 21 per cent, but the margin slightly contracted by 58bps, reaching 26.2 per cent. APAT showed robust growth, increasing by 121.6 per cent y-o-y and 30 per cent q-o-q, totaling ₹384 crore, which was primarily driven by lower tax rate during the quarter.

The future growth will be driven by its ongoing commitment to improving the specialty mix, doubling the bed count in next 3 years, adding beds strategically through acquisitions, increasing the share of international patients, and changing the payor mix towards cash. \Over the next two to three years, the company intends to make at least one acquisition of around 200 beds. The intended market is in the North but outside the NCR. The expected capex/bed is ₹65-70 lakh.

Projections for FY24-FY26 show robust growth with a CAGR of 26.2 per cent in revenue, 27 per cent in EBITDA, and 27 per cent in PAT.

The valuation is based on a FY26E EV/EBITDA multiple of 14x, resulting in a target price of ₹525 (unchanged) and maintain our BUY rating on the stock.