🧠 At a Glance
Global Health Ltd, aka Medanta, has quietly become one of India’s most efficient hospital businesses. While Apollo was busy running pharmacy chains and Fortis kept changing ownership like cricket franchises, Medanta just focused on doing one thing really well: running hospitals that actually make money. But with a 60x P/E, is this just premium healthcare or premium hopium?
🧬 Part 1: Business Model – Hospital-as-a-Service?
- Founded by Dr. Naresh Trehan, a cardiac surgeon with a god-level reputation (literally).
- Operates 5 high-end hospitals (Gurugram, Lucknow, Indore, Ranchi, Patna), with a Noida facility under construction.
- Focus on complex procedures — cardiac surgery, organ transplants, oncology, neurology.
- Total of 3,008 beds, 1,750+ doctors, and 6 clinics across urban centres.
- Uses a mix of in-patient care + specialty OPD + medical tourism, mainly Tier-1 focused.
This isn’t your neighborhood nursing home. It’s the Taj Mahal of Tertiary Care — but with a higher profit margin.
📊 Part 2: 5-Year Financial Surgery — Very Few Complications
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM (%) | ROCE (%) |
|---|---|---|---|---|
| FY21 | 1,447 | 29 | 14% | 5% |
| FY22 | 2,167 | 196 | 21% | 15% |
| FY23 | 2,694 | 326 | 23% | 17% |
| FY24 | 3,275 | 478 | 24% | 19% |
| FY25 | 3,692 | 481 | 24% | 20% |
🧠 Highlights:
- 5-year Revenue CAGR: 26%
- 5-year PAT CAGR: 87% 😱
- Margins improved every single year post-COVID
- ROCE jumped from 5% to 20% – almost unheard of in healthcare infra.
💡 Translation: They monetized hospitals like a D2C brand, but in ICU.
🏥 Part 3: Quarterly Pulse Check (Mar ’24 – Mar ’25)
| Quarter | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM (%) |
|---|---|---|---|
| Mar ’24 | 809 | 127 | 22% |
| Jun ’24 | 861 | 106 | 22% |
| Sep ’24 | 957 | 131 | 24% |
| Dec ’24 | 943 | 143 | 25% |
| Mar ’25 | 931 | 101 | 24% |
📉 Slight dip in Q4FY25 NP, but margins holding steady.
⚕️ These are hospital margins, not SaaS margins — so anything >20% is elite.
🧾 Part 4: The Balance Sheet — Fit AF
| Metric | FY25 |
|---|---|
| Net Worth | ₹3,333 Cr |
| Borrowings | ₹718 Cr (decreasing trend) |
| Debt/Equity | 0.21x (healthy!) |
| Net Cash Flow | ₹624 Cr |
| Capex (CWIP) | ₹529 Cr (Noida build-out) |
| FCF | Strong and rising 🚀 |
- Cash Conversion Cycle: Negative = ⚡ Efficient
- Debtor Days: 29
- Inventory Days: 28
- Payables: 81
No bloat. No defaults. Just a clean, lean hospital machine.
🩻 Part 5: Valuation – Doctor, This P/E Looks Terminal
- CMP: ₹1,163
- TTM EPS: ₹17.9
- P/E: ~65x
- Book Value: ₹126 → P/B: 9.2x
- ROE: 16.5%
👀 You read that right. Investors are paying ₹65 for every ₹1 of profit.
That’s not a hospital stock, that’s a tech startup with a stethoscope.
💉 Fair Value Calculation
Let’s be fair — high ROCE and asset-light operations deserve a premium.
We assume P/E band: 28x to 36x, on FY25 EPS = ₹17.9
(Same band as Narayana Hrudalaya and Fortis, with better margins)
| Scenario | P/E | FV Estimate |
|---|---|---|
| Conservative | 28x | ₹501 |
| Base Case | 32x | ₹573 |
| Optimistic | 36x | ₹644 |
📉 Fair Value Range: ₹501 – ₹644
⚠️ That’s 45% to 57% downside from CMP of ₹1,163. Risky vitals, no?
🧪 Part 6: Peers – Healthcare Multiples on Steroids
| Company | CMP | P/E | ROCE | Margin | M-Cap |
|---|---|---|---|---|---|
| Max Healthcare | ₹1,163 | 100x | 14.8% | 20% | ₹1.13 Lakh Cr |
| Apollo | ₹7,009 | 70x | 17.1% | 15% | ₹1.00 Lakh Cr |
| Fortis | ₹748 | 67x | 12% | 16% | ₹56,000 Cr |
| Narayana | ₹1,873 | 48x | 20.6% | 18% | ₹38,000 Cr |
| Global Health | ₹1,163 | 60x | 20% | 24% | ₹31,000 Cr |
📌 Medanta has:
- Best margins
- Top-tier ROCE
- But still priced below Max & Apollo
So yes, it’s expensive. But so is the entire private hospital sector. Welcome to the PE-ICU.
🧬 Part 7: Shareholding Pulse
| Category | Dec ’22 | Mar ’25 |
|---|---|---|
| Promoters | 33.08% | 33.03% |
| FIIs | 9.36% | 11.76% |
| DIIs | 12.55% | 11.93% |
| Public | 45% | 43.28% |
🧪 FII holding up nearly 250 bps = Foreign investors like this story.
Promoters? Static at ~33% — not raising, not reducing.
🧾 TL;DR — “Medanta: Best-in-Class Hospitals, Worst-in-Class Valuation?”
- 📈 Revenue & PAT doubled in 3 years
- 💉 Margins are best in sector: 24%+
- 🏗️ Noida expansion could add ~800+ beds
- 📊 ROCE of 20% is excellent for a capex-heavy business
- ⚠️ But stock is trading at 65x P/E = priced for perfection
- 🧮 Fair Value: ₹501–₹644 → CMP of ₹1,163 is fully loaded with ICU-level optimism
✍️ Written by Prashant | 📅 20 June 2025
Tags: Medanta, Global Health, Hospital Stocks, Healthcare India, Private Hospitals, ROCE Leaders, EduInvesting
