SMIFS Predicts 60% Surge for Hospital Stock After 36% IPO Gain: [Coin Name] ($SYMBOL)

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    <li>Yatharth Hospital and Trauma Care Services is poised for significant growth, according to domestic brokerage house SMIFS.</li>
    <li>The brokerage has retained its 'buy' call on the stock with a target price of ₹650, indicating a 60% upside from its current market price of ₹406.75 as of May 27, 2024.</li>
    <li>"Currently, the stock is trading at a comforting valuation on FY26E EV/EBITDA of 12.7x," said the brokerage, highlighting the potential for valuation gap closure with peers.</li>
</ul>
<p><strong>Yatharth Hospital and Trauma Care Services: A Promising Investment with 60% Upside Potential</strong></p>

<h2><strong>SMIFS Retains 'Buy' Call with ₹650 Target Price</strong></h2>
<p>Domestic brokerage house SMIFS has maintained its 'buy' recommendation for Yatharth Hospital and Trauma Care Services, setting a target price of ₹650. This target implies a substantial 60% upside from its current market price of ₹406.75 as of May 27, 2024. The brokerage's confidence stems from the hospital's rising occupancy rates and gains in average Revenue Per Occupied Bed (ARPOB).</p>

<h3><strong>Valuation and Growth Prospects</strong></h3>
<p>SMIFS notes that Yatharth Hospital is currently trading at a favorable valuation of 12.7x FY26E EV/EBITDA. "Given Yatharth's significant growth opportunities in its local market and its pledge to increase revenue without sacrificing return ratios, there's a clear sign that the gap in valuation from peers is likely to wane in the coming times. We value the stock at 20x and arrive at a target price of ₹650 per share," the brokerage stated.</p>

<h2><strong>Strong Performance Since IPO</strong></h2>
<p>The stock, which was listed in August last year, has gained 36% from its issue price of ₹300. It reached a record high of ₹503.90 on February 28, 2024, but has since declined by over 19% from its peak. Despite this, it remains 34% higher than its 52-week low of ₹304, hit on its listing day.</p>

<h3><strong>Quarterly Performance and Future Outlook</strong></h3>
<p>In the March quarter (Q4FY24), Yatharth Hospital reported a 121% year-on-year surge in consolidated net profit to ₹38.3 crore, compared to ₹17.3 crore in the same quarter last year. Revenue from operations also increased by 24% YoY to ₹177.8 crore. Sequentially, net profit grew by 30%, while revenue rose by 7%.</p>

<h2><strong>Operational Highlights and Strategic Initiatives</strong></h2>
<p>Yatharth Tyagi, whole-time director of Yatharth Hospital, stated that the year has been transformative for the company, solidifying its position as a premium super-specialty institution. The hospital has expanded its organ transplant program, attracting international patients for liver transplants, and inaugurated a state-of-the-art radiation oncology department. Additionally, the company commenced operations at their newly acquired hospital in Faridabad, further strengthening its presence in the Delhi NCR market.</p>

<h3><strong>Brokerage Analysis and Future Projections</strong></h3>
<p>Reviewing its March quarter results, SMIFS noted that Yatharth Hospital's operational performance aligned with estimates, while PAT exceeded expectations due to a lower tax outgo attributed to the acquisition of Faridabad Hospital. The brokerage expects occupancy to rise from 54% in FY24 to 64% in FY26E, with ARPOB growing at a CAGR of 6.3% during the same period. The oncology and transplant business has shown strong growth, leading to a significant case mix improvement.</p>

<h3><strong>Conclusion</strong></h3>
<p>Yatharth Hospital and Trauma Care Services presents a compelling investment opportunity with a projected 60% upside. The hospital's robust financial performance, strategic expansions, and favorable valuation metrics make it a standout in the healthcare sector. Investors should consider this stock for its growth potential and strategic initiatives aimed at enhancing revenue and operational efficiency.</p>