GPT Healthcare Ltd. – Hospitals for Eastern India

Here are some pointers from my analysis

1. Cost efficient expansion plans – well executed till date and in pipeline contributing to higher ROCE
2. Good execution – track record of achieving EBITDA breakeven for newer hospitals within one year
3. Location focus – Focusing on areas where bed density per 10000 population is low, including new areas like Ranchi and Raipur
4. Specialization focus – in Renal transplants and robotic surgeries gives an edge over peers. Also has 2 Doctors / Directors/ promoter family members who contribute actively in this area. Execution on new Oncology segment in Agartala hospital is yet to be seen.
5. Has decent medical tourism exposure and will continue in future.
6. Revenue mix has lower government scheme exposure which is a low margin and working capital stretching business.

some challenges for future:

1. Key man risk associated with Dr Om Tantia and Dr Aruna Tantia.
2. Ability to expand in a particular specialization requires performing surgeries in that area (Cardiac, Renal, Ortho etc) on a scale to bring growth and establish a brand name. This part is missing and establishing the same can be challenging in future.
3. Cost of doctors is high as majority of the doctors are outside consultants. Which is also the case with all smaller players. The Company is competing with big names AMRI, Narayana and Apollo in Eastern India, so I will still use this as a parameter.

Note: Not Invested. Tracking.