Yatharth Hospital & Trauma Care Services Limited

                     summary of last 3 concalls

Promoter Tone:

1. Optimistic and Confident: The promoters, led by Mr. Yatharth Tyagi (Whole-Time Director), consistently express confidence in the hospital’s performance, focusing on growth through both organic and inorganic means. They are proud of their achievements, such as introducing advanced robotic surgeries and expanding into new specialties like oncology and organ transplants.
2. Growth-Oriented: The tone in each call emphasizes aggressive growth strategies, particularly in expanding bed capacity and enhancing hospital services with advanced medical technologies. The leadership is forward-looking, aiming to double the bed capacity by 2028​.
3. Commitment to Expansion: The promoters consistently highlight strategic acquisitions, including the purchase of hospitals like Asian Fidelis (Faridabad) and their continued efforts to grow in North India. This indicates their commitment to scaling the business rapidly through both greenfield and brownfield projects​.

Growth Guidance:

1. Revenue and Bed Capacity Growth: Yatharth Hospitals has shown consistent double-digit revenue growth across all quarters. For instance, in Q4 FY24, revenue grew by 29%, and the company’s profit after tax surged by 74%​. The promoters have set aggressive targets, aiming to increase bed capacity to 3,000 by FY28 through acquisitions and organic expansions​ .
2. Focus on High-End Procedures: The hospital has successfully integrated robotic surgeries into their service offerings and expanded super-specialty treatments. These high-margin services are expected to drive higher ARPOB (Average Revenue Per Occupied Bed). Hospitals like Noida Extension are already achieving ARPOB as high as INR 37,000, significantly improving revenue per patient​.
3. Strategic Acquisitions: The acquisition of hospitals, such as Asian Fidelis in Faridabad, and plans to acquire one hospital each year until FY26, reflect their ambition to grow rapidly. The company is also exploring partnerships in other healthcare segments, such as medical tourism​.
4. Market Positioning and Expansions: The promoters aim to increase their footprint in regions like Delhi NCR, Uttar Pradesh, and potentially in Bihar and Madhya Pradesh. They are confident in capturing larger market shares in these regions​.

Risks:

1. Inorganic Growth Risks: While acquisitions are an important part of the growth strategy, these carry risks related to integration challenges, financial outlay, and operational disruptions. The Faridabad acquisition is an example, where initial operational losses were incurred, and there is uncertainty regarding how quickly new acquisitions will break even​.
2. High Dependence on Government Receivables: Around 35-40% of revenue comes from government schemes, but this also leads to delayed payments. As of March 2024, 75% of the receivables were from government entities, which can increase cash flow risks​.
3. Debt and Financial Management: The company has reduced its finance costs substantially post-IPO but continues to take on debt for expansions. The strategic use of debt needs to be carefully managed to avoid over-leveraging, especially with upcoming acquisitions​.
4. Operational Risks in New Markets: Expansions into new geographies, such as Bihar or Madhya Pradesh, come with market-specific risks, including competition from established players and regulatory hurdles​.

Disclosure: Invested and biased.