Jupiter Lifeline, Metropolis, Thyrocare Remains ICICI Securities' Top Stock Picks In Healthcare; Know Why

ICICI Securities Report

Hospitals under our coverage posted a strong ~15.1%/29% YoY jump in revenue/Ebitda in a seasonally strong quarter. Average revenue per occupied bed of our coverage multi-specialty hospitals grew between 2–9% driven by better surgical mix and price hikes. Lower average length of stay at Krisha Institute of Medical Science Ltd. and Healthcare Global Enterprises Ltd. dented their occupancies (down 20/1,136 bps) while Apollo and Fortis showed a robust rise of 300–500 bps.

Network expansion remains a key priority across most hospital chains; we believe, KIMS and Jupiter Lifeline are better placed within the pack. Diagnostic chains reported ~14.5%/18.8% YoY jump in revenue/Ebitda in Q2 FY25.

Test volume growth for larger chains such as Dr Lal and Metropolis was modest between 8–9% while organic growth for Vijaya/Thyrocare was faster at 22.1%/14.3%.

Our top picks: Jupiter Lifeline Hospitals, Metropolis and Thyrocare.

Metropolis:

The company is on a rapid expansion spree. Metropolis is also actively scouting for an inorganic opportunity (merger and acquisition), which may increase scale and growth. Impact of network expansion is in its last leg; it is on track to add 25 labs and 500 centres in FY25.

Jupiter Lifeline

• Operationalised 22 beds at Pune hospital and will likely add 75 additional beds at Indore Hospital by Q4 FY25.

• Blended occupancy surged to 67.2% in H1 FY25 versus 62.3% YoY.  ARPOB rose 8.7% YoY (-3.4% QoQ) to Rs 57,700.

• Construction of a greenfield hospital at Dombivli is progressing as per schedule and is expected to commence operations in FY26.

• It is likely to receive all the approvals for its second hospital in Pune in Q4 FY25, and construction is expected to commence by early Q1 FY26.

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