Commentary from Q2 earnings call was good. From the developments in last 6 months, it it might look like the management is aggressive and trying over the limit of group’s ability. I think in the past they have executed well and maintained operation smoothly. Now the challenge is to harmonise/ synchronization of new additional capacity and getting to efficiency. We will know these metrics in next1-2 years. In 4-5 years they can get to 3000 bed capacity with ARPOB of Rs50000 at group level , with ebidta of 25%, and 85% occupancy, they can achieve an operating profit of over Rs 1000 Cr. There is optimism built in these assumptions.
However, the trajectory looks generally ok, with health care getting more and more organized, and the company’s effort to bring in high quality doctors , improvement in brand recognition. There is decent runway here for bit of expansion in valuation and reasonable growth.
Caveat is “the management will continue the good execution”.
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