Shares of healthcare agency Global Health (Medanta) have virtually turned multibaggers within the final 1 yr, surging over 99 % as towards an over 8 % achieve in benchmark Nifty. The inventory has already greater than doubled its investor wealth, surging 167 %, from its difficulty worth of ₹336.

Meanwhile, in 2023 YTD, it has superior over 91 %, giving constructive returns in 9 of the 11 months thus far and unfavourable in simply 2 – April (-2 %) and (January -5.2 %).

The inventory has soared 15 % in November thus far extending beneficial properties for the seventh straight month since May. Between May and November, it has jumped 75 %.

In a latest observe, brokerage home Markets Mojo has picked Medanta as a high choose for November.

“The medical industry has seen significant interest from investors in recent years and is expected to continue going forward. India is highly under-penetrated in terms of good quality hospitals. With awareness of Mediclaim, more and more demand is likely for good quality hospitals. We have identified a stock that got listed on the exchange just last year and has seen expansion at a rapid pace. The name of the stock is Global Health. We believe Global Health will get benefits of the same,” mentioned the brokerage.

The firm’s high quality is sweet, the monetary pattern could be very constructive and the technical suggests a bullish pattern for the inventory and the valuation could be very costly. The rating of the inventory is 77 and the brokerage recommends shopping for it at ₹911.

Investment Rationale

One of the highest performers on this sector: The hospital Industry has been in excessive demand for buyers and much more so after COVID-19. This trade can be consistently present process growth by way of beds and expertise, making buyers anticipate large development within the coming years.

Global Health is one such firm that operates 5 hospitals and gives specialties reminiscent of coronary heart, most cancers, neuro, digestive, and so on, famous the brokerage. It additional said that Q1FY24 reported its highest-ever income and web revenue in 1 / 4 and the corporate not too long ago introduced its monetary outcomes for the quarter ended September 2023 the place it once more reported its highest-ever income and web revenue in 1 / 4. The development within the firm’s financials has been spectacular each on a quarter-on-quarter and a year-on-year foundation because the income noticed a 24 % YoY development and a 9 % QoQ development. Even the online revenue noticed a QoQ development of 23 % and a YoY development of 45 %, said Markets Mojo.

Attractive valuation: As per the brokerage, the corporate is buying and selling at an EV/EBITDA of 28x which appears undervalued compared with listed friends regardless of the corporate having a wholesome ROE of 16 %. Meanwhile, Apollo and Max Healthcare are buying and selling at an EV/EBITDA of 36x and have an ROE of 13 % and 16 %, respectively. An organization with such good monetary metrics ought to ask for increased valuations. The firm additionally enjoys a cash-rich place of ₹604 crores enabling their growth with out burdening their financials, mentioned the brokerage.

Increase in mediclaim: India is seeing a rise within the variety of folks choosing medical insurance lately and it’s only sure to extend going ahead. The retail well being trade dimension elevated from ₹30,700 crore to ₹35,400 crore in FY23, displaying a 15 % development. Medical insurance coverage offers folks an assurance that if one thing occurs, they will go to respected hospitals and obtain high-quality therapy. Usually, insurance coverage firms have tie-ups with such hospitals and folks can be extra open to visiting such hospitals as they won’t need to shell money from their very own pockets. Global Health is anticipated to learn considerably from this. As per a Forbes report, solely 51.4 crore Indians are insured which is simply 37 % of the inhabitants. This leaves important room for development within the variety of medical insurance coverage issued, mentioned the brokerage.

Medical tourism: India is a well-liked vacation spot for a lot of African, Middle Eastern, and residents of different main economies on the lookout for complicated surgical procedures associated to cardiovascular, oncology, organ transplant, and varied surgical procedures that aren’t accessible to them or very expensive in their very own nations. India welcomes 2 million medical vacationers yearly as a consequence of these causes and this quantity is anticipated to extend within the coming years. Global Health specialises in Cardiovascular, Oncology, Digestive, Neuro, Kidney, and Liver Transplants which places it in a very good place to cater to the calls for of such sufferers however the firm solely derives 6 % of its income from worldwide sufferers indicating important room for development on this space as they improve their footprint in new geographies round India, it mentioned.

Disclaimer: The views and proposals made above are these of particular person analysts or broking firms, and never of Mint. We advise buyers to examine with licensed consultants earlier than taking any funding choice.