Aspiration for multi-asset transformation…
About the company- Artemis Medicare Services Ltd (Artemis) is a healthcare venture launched by the promoters of the Apollo Tyres Group. It operates a 700-bed super speciality hospital in Gurugram (Delhi-NCR), a 300 bed multi-specialty hospital in Raipur, Chhattisgarh and further expanding to ~2,000 beds in the next few years.
• It also operates smaller units under the brand names of Artemis Cardiac Care, Daffodils (mother & child care) and Artemis Lite.
• FY26 Payor Mix – 32% International Patients; 30% Insured patients; 20% Domestic patients; and 18% Government schemes.
Investment Rationale
• De-risking from a narrow footprint hospital to multi-asset model- As a de-risking move, Artemis is transitioning from a single-asset hospital/narrow footprint hospital to a multi-asset platform. Hospitals with multiple assets such as Apollo Hospitals, KIMS, Aster DM Healthcare, and Narayana Health, among other factors, tend to command better valuation multiples compared to single-asset or narrow footprint hospitals. We believe the former bears higher revenue concentration risk and therefore trade at a discount. Among the narrow footprint hospitals, Artemis trades at a premium (to Indraprastha and Kovai) reflecting its higher exposure to international patients and its ongoing transition to a multi-asset model. Artemis also has two potential brownfield assets on the radar for further expansion. As these developments unfold, we believe the company’s valuation could improve further.
• Aggressive Bed Capacity expansion – Artemis is looking to almost triple the bed capacity from current levels of 700 beds to ~2000+ beds in the next 3-4 years by brownfield expansion and O&M agreements. 300 bedded hospital in Raipur via O&M agreement (required a capex of ~₹30-35 lakh per bed) is expected to be operational in Q1FY27 while in existing Gurugram facility 100 beds in Q3FY27 and 200 beds in FY28 requiring a cumulative capex of ~₹60-65 lakh per bed. This bed capacity expansion will significantly increase footfalls and gradually boost the overall revenues of the company.
• Tailwinds from Medical Value Tourism – Artemis commands an industry leading ARPOB of ₹82,435 per day FY26, as it derives ~32% revenues from international patients. International patient ARPOB ranges from 1.5x-2x that of Domestic patients due to the additional facilitation fees and long stay procedures. From 26% in FY23 the International patient revenues has improved ~500 bps to 31% in FY26 registering a CAGR of 20% during the period. The management intends keep the exposure to similar levels but in absolute terms this will improve due to increased footfall and capacity addition (300 beds) in Gurugram facility and new brownfield expansion in VIMHANS, South Delhi expected to start phase-1 in FY29.
Rating and Target Price
• We value Artemis at ₹340 based on 18x FY28E EBITDA of ₹ 304.3 crore.
