Global Health Q1 Results Review - Developing Hospitals Drag Down Earnings: Motilal Oswal

Motilal Oswal Report

Global Health Ltd. (Medanta) delivered a slight miss on earnings in Q1 FY25. Revenue came in higher than expected, led by improved traction in matured hospitals.

The developing hospital segment continued to face challenges, which affected the overall performance in Q1 FY25. The increase in operational costs due to bed additions also hurt profitability.

We reduce our earnings estimates for FY25/FY26 by 2% each to factor in a gradual revival in Lucknow hospital and an additional opex related to bed additions in Gurgaon/Patna.

We value Medanta at 33 times 12 months forward EV/Ebitda to arrive at a target price of Rs 1,380.

Medanta is implementing efforts to scale up operations in Lucknow/Patna, expand bed capacity in new locations, and add talent related to new and existing therapies.

While FY25 is expected to see moderate YoY growth in earnings, it is gearing up for robust growth FY26 onward. Maintain BUY.

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